| | PART I | | |
|---|
| Item 1. | Business | | 5 |
|---|
| Item 1A. | Risk Factors | | 62 |
|---|
| Item 1B. | Unresolved Staff Comments | | 111 |
|---|
| Item 1C. | Cybersecurity | | 111 |
|---|
| Item 2. | Properties | | 112 |
|---|
| Item 3. | Legal Proceedings | | 112 |
|---|
| Item 4. | Mine Safety Disclosures | | 112 |
|---|
| PART II · |
|---|
| Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | | 113 |
|---|
| Item 6. | [Reserved] | | 114 |
|---|
| Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | | 114 |
|---|
| Item 7A. | Quantitative and Qualitative Disclosures About Market Risk | | 131 |
|---|
| Item 8. | Financial Statements and Supplementary Data | | 131 |
|---|
| Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | | 131 |
|---|
| Item 9A. | Controls and Procedures | | 132 |
|---|
| Item 9B. | Other Information | | 133 |
|---|
| Item 9C. | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | | 133 |
|---|
| PART III · |
|---|
| Item 10. | Directors, Executive Officers and Corporate Governance | | 134 |
|---|
| Item 11. | Executive Compensation | | 135 |
|---|
| Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | | 135 |
|---|
| Item 13. | Certain Relationships and Related Transactions, and Director Independence | | 135 |
|---|
| Item 14. | Principal Accountant Fees and Services | | 135 |
|---|
| PART IV · |
|---|
| Item 15. | Exhibits and Financial Statement Schedules | | 136 |
|---|
FORWARD-LOOKING STATEMENTS
| ● | This Annual Report on Form 10-K contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, contained in this Annual Report on Form 10-K, including statements regarding our strategy, future operations, future financial position, future revenues, projected costs, prospects, plans and objectives of management, are forward-looking statements. The words “anticipate”, “believe”, “estimate”, “expect”, “intend”, “designed”, “may”, “might”, “plan”, “predict”, “project”, “target”, “potential”, “goal”, “will”, “would”, “could”, “should”, “continue” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. |
| ● | The forward-looking statements in this Annual Report on Form 10-K include, among other things, statements about: |
| ● | our ongoing clinical trials, including our two Phase 3 clinical trials of AXPAXLI for the treatment of wet age-related macular degeneration, or wet AMD, which we refer to as the SOL-1 and SOL-R trials, and our Phase 3 clinical trial of AXPAXLI for the treatment of non-proliferative diabetic retinopathy, or NPDR, which we refer to as the HELIOS-3 trial; |
| ● | any additional clinical trials we might determine in the future to conduct for AXPAXLI or any other product candidate we determine to develop, including our planned long-term extension study of AXPAXLI for the treatment of wet AMD, which we refer to as the SOL-X trial, a second Phase 3 clinical trial of AXPAXLI for the treatment of NPDR, which we refer to as the HELIOS-2 trial, and any other clinical trials we might conduct for AXPAXLI; |
| ● | determining our next steps for our product candidate OTX-TIC for the treatment of patients with open-angle glaucoma, or OAG, or ocular hypertension, or OHT; |
| ● | our plans and strategies to develop and potentially seek regulatory approval for and commercialize AXPAXLI, OTX-TIC and any other product candidates that we might develop based on our proprietary bioresorbable hydrogel-based formulation technology ELUTYX; |
| ● | our commercialization, marketing and manufacturing plans, capabilities and strategy; |
| ● | our commercialization efforts for our product DEXTENZA; |
| ● | our ability to manufacture DEXTENZA and any of our product candidates, including AXPAXLI, in compliance with Current Good Manufacturing Practices and in sufficient quantities for our clinical trials and commercial use; |
| ● | the timing of and our ability to submit applications and obtain and maintain regulatory approvals for DEXTENZA and any of our product candidates, including AXPAXLI; |
| ● | our estimates regarding future revenue; expenses; the sufficiency of our cash resources; our ability to fund our operating expenses, debt service obligations and capital expenditure requirements; and our needs for additional financing; |
| ● | the potential for us to raise additional capital, including through equity offerings, debt financings, collaborations, strategic alliances, licensing arrangements, royalty agreements and marketing and distribution arrangements; |
| ● | the potential advantages of AXPAXLI and any of our other product candidates as well as DEXTENZA; |
| ● | the rate and degree of market acceptance and clinical utility of our products; |
| ● | our ability to secure and maintain reimbursement for our products as well as the associated procedures to insert, implant or inject our products; |
| ● | our estimates regarding the market opportunity for AXPAXLI and any of our other product candidates as well as DEXTENZA; |
| ● | our license agreement and collaboration with AffaMed Therapeutics Limited under which we are collaborating on the development and commercialization of DEXTENZA and our product candidate OTX-TIC in mainland China, Taiwan, Hong Kong, Macau, South Korea, and the countries of the Association of Southeast Asian Nations; |
| ● | our capabilities and strategy, and the costs and timing of manufacturing, sales, marketing, distribution and other commercialization efforts with respect to DEXTENZA and any additional products for which we may obtain marketing approval in the future, including AXPAXLI; |
| ● | our intellectual property position; |
| ● | the impact of government laws and regulations; and |
| ● | our competitive position. |
| ● | We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. We have included important factors in the cautionary statements included in this Annual Report on Form 10-K, particularly in the section captioned “Risk Factors”, that could cause actual results or events to differ materially from the forward-looking statements that we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, licensing agreements or investments we may make. |
| ● | You should read this Annual Report on Form 10-K and the documents that we have filed as exhibits to this Annual Report on Form 10-K completely and with the understanding that our actual future results may be materially different from what we expect. The forward-looking statements included in this Annual Report on Form 10-K are made as of the date of this Annual Report on Form 10-K. We do not assume, and we expressly disclaim, any obligation or undertaking to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. |
| ● | This Annual Report on Form 10-K includes statistical and other industry and market data that we obtained from industry publications and research, surveys and studies conducted by third parties. All of the market data used in this Annual Report on Form 10-K involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such data. While we believe that the information from these industry publications, surveys and studies is reliable, we have not independently verified such data. The industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of important factors, including those described in the section titled “Risk Factors”. |
| ● | This Annual Report on Form 10-K contains references to our trademarks and service marks and to those belonging to other entities. Solely for convenience, trademarks and trade names referred to in this Annual Report on Form 10-K and the documents incorporated by reference herein may appear without the ® or ™ symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensor to these trademarks and trade names. We do not intend our use or display of other companies' trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by, any other companies. AXPAXLI is a trade name which we use to refer to our OTX-TKI product candidate. The U.S. Food and Drug Administration, or FDA, has not approved AXPAXLI as a product name. |
| ● | Summary of Risks Related to our Business |
| ● | Our business, financial condition, results of operations, future growth prospects and common stock price are subject to numerous risks and uncertainties that you should be aware of before making an investment |
decision, as more fully described under the heading “Risk Factors” and elsewhere in this Annual Report on Form 10-K. These risks include, but are not limited to, the following:
| ● | We have a history of incurring significant losses. Our net losses were $265.9 million and $193.5 million for the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025, we had an accumulated deficit of $1,157.0 million. We expect to incur operating losses over the next several years and may never achieve or maintain profitability. |
| ● | If we are unable to raise additional funds through equity or debt financings or other arrangements when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market products or product candidates that we would otherwise prefer to develop and market ourselves. |
| ● | We have significant indebtedness including under our secured term loan facility pursuant to our credit and security agreement with Barings Finance LLC as administrative agent, and the lenders party thereto. Our significant indebtedness may limit cash flow available to invest in the ongoing needs of our business or otherwise affect our operations. |
| ● | We depend heavily on the success of our product candidate AXPAXLI and our commercial product DEXTENZA. Our ability to generate product revenues sufficient to achieve profitability is dependent on obtaining marketing approval for and successfully commercializing AXPAXLI, and our successful commercialization of DEXTENZA for the treatment of ocular inflammation and pain following ophthalmic surgery and ocular itching associated with allergic conjunctivitis. |
| ● | Clinical trials of our product candidates, including AXPAXLI, may not be successful. If we experience delays or difficulties in enrollment, serious adverse events or side effects are identified, or any other unforeseen events occur in connection with clinical trials of any of our product candidates, or if clinical trials of any of our product candidates fail to demonstrate safety and efficacy to the satisfaction of the FDA or other regulatory authorities or do not otherwise produce favorable results, we may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of such product candidates. |
| ● | We may experience unforeseen events that could delay or prevent our ability to receive marketing approval or commercialize our product candidates. Clinical trials of our product candidates could produce negative or inconclusive results, or regulators could disagree with us regarding clinical trial results or the sufficiency of our proposed data package, for example if the FDA determines not to accept a new drug application for AXPAXLI for the treatment of wet AMD based on a single registrational trial, SOL-1, even if the data are positive, or in the alternative denies such application. We may decide, or regulators may require us, to submit additional clinical data, conduct additional clinical trials or abandon product development programs. Enrollment in clinical trials may be slower than we anticipate. The cost of clinical trials of our product candidates may be greater than we anticipate. |
| ● | We are conducting our SOL-1 trial under a Special Protocol Assessment, or SPA, agreement, and, if needed, will conduct our HELIOS-2 trial under a SPA agreement, in each case agreed to by the FDA. A SPA agreement indicates concurrence by the FDA with the adequacy and acceptability of specific critical elements of the overall protocol design for a clinical trial intended to support a future marketing application, but it does not indicate FDA concurrence on every protocol detail. Moreover, the FDA retains significant discretion in interpreting the terms of a SPA agreement and the data and results from any trial that is the subject of a SPA agreement. A SPA agreement does not ensure the receipt of marketing approval by the FDA or other regulatory authorities or that the approval process will be faster than conventional procedures. Although we expect to realize benefits in connection with utilizing the Section 505(b)(2) regulatory pathway for AXPAXLI, we may not ultimately realize these benefits. |
| ● | We have a single-site manufacturing facility for DEXTENZA, and we have a separate single-site manufacturing facility for product candidates that we use in our clinical trials and other research and development activities, including AXPAXLI. We also depend from time to time on single-source suppliers for certain materials used in the manufacturing of our products and product candidates. If we have a material |
disruption in our manufacturing operations at this facility, or if we are unable to obtain sufficient components of our products and product candidates from our suppliers on acceptable terms or at all, we may not have sufficient quantities of our product candidates to meet our clinical trial requirements or of our product inventory to meet our commercial requirements. Such an event could delay our clinical trials or, particularly because we maintain limited commercial inventory, could reduce our product sales.
| ● | DEXTENZA, and any of our product candidates for which we obtain marketing approval, including AXPAXLI, may become subject to less favorable or unfavorable pricing regulations, third-party coverage or reimbursement practices or healthcare reform initiatives, which could harm our business. For instance, if DEXTENZA ceases to be eligible for reimbursement separate from ophthalmic surgery in the ambulatory surgical center setting or if we are not able to achieve the pricing and reimbursement coverage we anticipate for AXPAXLI, if approved, our net product revenues would be impacted significantly, and our ability to generate revenues from future sales of DEXTENZA or AXPAXLI could be adversely affected. |
| ● | If we are unable to establish and maintain adequate sales, marketing and distribution capabilities, maintain regulatory compliance for our manufacturing operations, obtain and maintain patent protection for or gain market acceptance by physicians, patients and third-party payors and others in the medical community of DEXTENZA or any of our product candidates for which we obtain marketing approval, including AXPAXLI, or experience significant delays in doing so, our business will be materially harmed and our ability to generate revenues from product sales will be materially impaired. |
| ● | Our future success depends on our ability to retain key executives and to attract, retain and motivate qualified personnel. The loss of the services of our executive officers or other key employees could impede the achievement of our research, development and commercialization objectives and seriously harm our ability to successfully implement our business strategy. |
| ● | Our products face and, if approved, our product candidates, including AXPAXLI, will face competition from generic, biosimilar and branded versions of existing drugs, many of which have achieved widespread acceptance among physicians, payors and patients for the treatment of ophthalmic diseases and conditions. In addition, because the active pharmaceutical ingredients in our products and leading product candidates are available off-patent, or are soon to be available off-patent, competitors may be able to prepare and submit applications for abbreviated new drug applications, or ANDAs, or foreign equivalents for generic versions of our products without the need to conduct clinical development and may be able to offer and sell products, whether approved through the ANDA process or otherwise, with the same active pharmaceutical ingredient as our products so long as these competitors do not infringe our the patents that we own or license. |
| ● | Even if we successfully obtain marketing approval for one or more of our product candidates, including AXPAXLI, the approved product will be subject to ongoing review and extensive regulation. |
| ● | Depending on the outcome of our clinical programs, we will likely need additional funding to support future working capital needs and/or expansion of our operating plan. If we are unable to raise capital when needed or on attractive terms, we could be forced to delay, reduce or eliminate our research and development programs or our commercialization efforts. To the extent that we raise additional capital through the sale of equity, preferred equity or convertible debt securities, our stockholders’ ownership interests will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect our existing stockholders’ rights as holders of our common stock. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. |
| ● | Our stock price is volatile and fluctuates substantially. As a result of this volatility, our stockholders may not be able to sell their common stock at or above the price at which they purchased it. We have previously, and we may in the future, be the target of legal proceedings related to declines in our stock price. |
