Aldeyra Therapeutics, Inc.

Previous wording

We are a biotechnology company devoted to discovering and developing innovative therapies designed to treat immune-mediated and metabolic diseases. Our approach is to develop pharmaceuticals that modulate protein systems, instead of directly inhibiting or activating single protein targets, with the goal of optimizing multiple pathways at once while minimizing toxicity. Our late-stage product candidates are reproxalap, a RASP modulator for the potential treatment of dry eye disease and allergic conjunctivitis, and ADX‑2191, a novel formulation of intravitreal methotrexate for the potential treatment of retinitis pigmentosa. Our preclinical RASP platform includes ADX‑248, ADX‑743, ADX‑631, ADX‑246, and other product candidates in development for inflammatory and metabolic diseases.

Current wording

We are a biotechnology company devoted to discovering and developing innovative therapies designed to treat immune-mediated diseases. Our approach is to develop pharmaceuticals that modulate protein systems, instead of directly inhibiting or activating single protein targets, with the goal of optimizing multiple pathways at once while minimizing toxicity. Our product candidates include RASP (reactive aldehyde species) modulators ADX‑248, ADX‑246, and chemically related molecules for the potential treatment of systemic and retinal immune-mediated diseases. Our late-stage product candidates are reproxalap, a RASP modulator for the potential treatment of dry eye disease and allergic conjunctivitis, and ADX‑2191, a novel formulation of intravitreal methotrexate for the potential treatment of primary vitreoretinal lymphoma and retinitis pigmentosa.

Previous wording

In March 2019, we entered into the Hercules Credit Facility, which provided for a term loan of up to $60.0 million, $15.0 million of which has been funded as of September 30, 2024. In April 2021, the Hercules Credit Facility was amended to, among other things, increase the amount which may become available for draw-down prior to May 2023, subject to the satisfaction of certain conditions contained therein, from $10.0 million to $20.0 million. In December 2022, the Hercules Credit Facility was amended to, among other things, (i) extend the expiration of the period in which interest-only payments on borrowings from May 1, 2023 to May 1, 2024; (ii) extend the Maturity Date from October 1, 2023 to October 1, 2024; and (iii) extend the availability of the $20.0 million draw-down from May 2023 to May 2024, subject to the satisfaction of certain conditions contained therein. In April 2024, the Hercules Credit Facility was amended to, among other things, extend the expiration of the period in which interest-only payments on borrowings under the Hercules Credit Facility were to be made from May 1, 2024 to October 1, 2024. In September 2024, the Hercules Credit Facility was amended to, among other things, (i) extend the expiration of the period in which interest-only payments on borrowings under the Loan and Security Agreement are made from October 1, 2024 to April 1, 2026; (ii) extend the Maturity Date from October 1, 2024 to April 1, 2026; and (iii) amend the term loan interest rate to be the greater of (a) the Prime Rate (as defined in the Hercules Credit Facility) plus 3.10%, or (b) 11.10%. The Hercules Credit Facility contains customary affirmative and negative covenants and events of default. Affirmative covenants include, among others, covenants requiring us to maintain our legal existence and governmental approvals, deliver certain financial reports, and maintain insurance coverage. Negative covenants include, among others: restrictions on transferring any part of our business or intellectual property; incurring additional indebtedness; engaging in mergers or acquisitions; paying dividends or making other distributions; making investments; and creating other liens on our assets, in each case subject to customary exceptions. The Hercules Credit Facility, as amended, is described in Note 9 to the notes to the consolidated financial statements contained in this annual report on Form 10-K. As of December 31, 2024, $15.0 million was outstanding under the Hercules Credit Facility, and no amounts remained available for borrowing.

Current wording

In March 2019, we entered into the Hercules Credit Facility which provided for a term loan of up to $60.0 million, $15.0 million of which has been funded as of December 31, 2025. The Hercules Credit Facility (as amended) provides for interest-only payments on borrowings until April 1, 2026; (ii) has a Maturity Date of April 1, 2026; and (iii) accrues interest at a rate of the greater of (a) the Prime Rate (as defined in the Hercules Credit Facility) plus 3.10%, or (b) 11.10%. The Hercules Credit Facility, as amended, is described in Note 9 to the notes to the consolidated financial statements contained in this annual report on Form 10-K. As of December 31, 2025, $15.0 million was outstanding under the Hercules Credit Facility, and no amounts remained available for borrowing.

Previous wording

On October 31, 2023 (the Option Agreement Effective Date), we entered into an exclusive option agreement (the Option Agreement) with AbbVie Inc. (AbbVie), pursuant to which we granted AbbVie an exclusive option (the Option) to obtain (a) a co-exclusive license in the United States to facilitate a collaboration with us to develop, manufacture and commercialize reproxalap in the United States, (b) an exclusive license to develop, manufacture and commercialize reproxalap outside the United States, (c) a right of first negotiation for compounds that are owned or otherwise controlled by us in the field of ophthalmology relating to treating conditions of the ocular surface, and (d) a right to review data for any other compounds that are owned or otherwise controlled by us in the fields of ophthalmology and immunology before such data is shared with any other third party (the Collaboration Agreement). AbbVie has paid us a non-refundable payment of $1.0 million in consideration of the Option (the Option Payment).

Current wording

On October 31, 2023 (the AbbVie Option Agreement Effective Date), we entered into an exclusive option agreement (the AbbVie Option Agreement) with AbbVie Inc. (AbbVie), pursuant to which we granted AbbVie an exclusive option (the AbbVie Option) to obtain (a) a co-exclusive license in the United States to facilitate a collaboration with us to develop, manufacture and commercialize reproxalap in the United States, (b) an exclusive license to develop, manufacture, and commercialize reproxalap outside the United States, (c) a right of first negotiation for compounds that are owned or otherwise controlled by us in the field of ophthalmology relating to treating conditions of the ocular surface, and (d) a right to review data for any other compounds that are owned or otherwise controlled by us in the fields of ophthalmology and immunology before such data is shared with any other third party (the Collaboration Agreement). AbbVie has paid us a non-refundable payment of $1.0 million in consideration of the AbbVie Option (the AbbVie Option Payment).

Previous wording

On December 21, 2023, pursuant to the Option Agreement, AbbVie extended the period during which it may exercise the Option (the Exercise Period Extension) by paying us a non-refundable payment of $5.0 million (the Option Extension Fee). If the Collaboration Agreement is entered into, the Option Payment and the Option Extension Fee will be credited against the upfront cash payment payable by AbbVie.

Current wording

On December 21, 2023, pursuant to the AbbVie Option Agreement, AbbVie extended the period during which it may exercise the AbbVie Option by paying us a non-refundable payment of $5.0 million (the AbbVie Option Extension Fee). If the Collaboration Agreement is entered into, the AbbVie Option Payment and the AbbVie Option Extension Fee will be credited against the upfront cash payment payable by AbbVie.

Previous wording

On November 15, 2024, we entered into the Expansion Side Letter (the Expansion Letter) with AbbVie, which amended certain terms of the Option Agreement. The Expansion Letter makes certain changes to the Option Agreement, among other things, providing that we will conduct certain launch activities, which costs shall not exceed mid-single-digit millions of dollars without AbbVie’s approval, and which costs will be considered allowable expenses pursuant to the Collaboration Agreement upon the delivery of AbbVie’s written notice of exercising the Option and entry into the Collaboration Agreement, such that 60% of our allowable expenses will be reimbursed by AbbVie in the event of exercise. If AbbVie does not deliver a written notice of exercising the Option and we do not execute the Collaboration Agreement, we will remain solely responsible for such launch activities costs. AbbVie has also independently initiated pre-commercialization planning activities. In addition, the Exercise Period (as defined in the Option Agreement) was further modified to ten (10) business days following the date, if any, that we receive approval from the U.S. Food and Drug Administration of the NDA for reproxalap in dry eye disease (the FDA Decision), provided that AbbVie shall provide us notice in case AbbVie determines that it will not exercise the Option.

Current wording

On November 15, 2024, we entered into the Expansion Side Letter (the Expansion Letter) with AbbVie. The Expansion Letter makes certain changes to the AbbVie Option Agreement, among other things, providing that we will conduct certain launch activities, which costs shall not exceed mid-single-digit millions of dollars without AbbVie’s approval, and which costs will be considered allowable expenses pursuant to the Collaboration Agreement upon the delivery of AbbVie’s written notice of exercising the AbbVie Option and entry into the Collaboration Agreement, such that 60% of our allowable expenses will be reimbursed by AbbVie in the event of exercise. If AbbVie does not deliver a written notice of exercising the AbbVie Option and we do not execute the Collaboration Agreement, we will remain solely responsible for such costs. AbbVie has also independently initiated pre-commercialization planning activities. In addition, the Exercise Period (as defined in the AbbVie Option Agreement) was restricted to ten (10) business days following the date, if any, that we receive approval from the U.S. Food and Drug Administration of the NDA for reproxalap in dry eye disease (the FDA Decision), provided that AbbVie shall provide us notice in case AbbVie determines that it will not exercise the AbbVie Option.

Previous wording

Upon AbbVie’s delivery of the agreement execution notice and the parties entering into the Collaboration Agreement, AbbVie would pay us a $100 million upfront cash payment, less the Option Payment and the Option Extension Fee. In addition, we would be eligible to receive up to approximately $300 million in regulatory, and commercial milestone payments, inclusive of a $100 million milestone payment payable if the FDA Decision is received prior to or after the execution of the Collaboration Agreement. In the United States, we would share profits and losses with AbbVie from the commercialization of reproxalap according to a split of 60% for AbbVie and 40% for us. Outside of the United States, we would be eligible to receive tiered royalties on net sales of reproxalap. As of February 28, 2025, AbbVie has not exercised the Option.

Current wording

Upon AbbVie’s delivery of the agreement execution notice and the parties entering into the Collaboration Agreement, AbbVie would pay us a $100.0 million upfront cash payment, less the AbbVie Option Payment and the AbbVie Option Extension Fee. In addition, we would be eligible to receive up to approximately $300.0 million in regulatory and commercial milestone payments, inclusive of a $100.0 million milestone payment payable if the FDA Decision is received prior to or after the execution of the Collaboration Agreement. In the United States, we would share profits and losses with AbbVie from the commercialization of reproxalap according to a split of 60% for AbbVie and 40% for us. Outside of the United States, we would be eligible to receive tiered royalties on net sales of reproxalap. As of February 27, 2026, AbbVie has not exercised the AbbVie Option.

Previous wording

We previously developed ADX‑2191 for the treatment of proliferative vitreoretinopathy pursuant to an Exclusive License Agreement with Massachusetts Eye and Ear Infirmary (MEEI), originally entered into in

Current wording

We previously developed ADX‑2191 for the treatment of proliferative vitreoretinopathy pursuant to an Exclusive License Agreement with Massachusetts Eye and Ear Infirmary (MEEI), originally entered into in July 2016 between MEEI and Helio Vision, Inc. (Helio), as amended, (the MEEI Agreement). We assumed the MEEI Agreement in connection with our 2019 acquisition of Helio.

Previous wording

Substantially all of our research and development expenses to date have been incurred in connection with reproxalap and ADX‑2191, as well as proof of concept trials with ADX‑629. We expect our research and development expenses to increase for the foreseeable future as we advance other compounds through preclinical and clinical development. The process of conducting clinical trials necessary to obtain regulatory approval is costly and time consuming. We are unable to estimate with any certainty the costs we will incur in the continued development of our product candidates. Clinical development timelines, the probability of success, and development costs can differ materially from expectations. We may never succeed in achieving marketing approval for our product candidates.

Current wording

Substantially all of our research and development expenses to date have been incurred in connection with reproxalap and ADX‑2191, as well as proof of concept trials with ADX‑629, which was a signal-finding molecule no longer under development. We expect our research and development expenses to increase for the foreseeable future as we advance other compounds through preclinical and clinical development. The process of conducting clinical trials necessary to obtain regulatory approval is costly and time consuming. We are unable to estimate with any certainty the costs we will incur in the continued development of our product candidates. Clinical development timelines, the probability of success, and development costs can differ materially from expectations. We may never succeed in achieving marketing approval for our product candidates.

Previous wording

We do not expect reproxalap or any of our other product candidates to be commercially available, if at all, before at least the first half of 2025.

Current wording

We do not expect reproxalap or any of our other product candidates to be commercially available, if at all, before at least the second quarter of 2026.

Previous wording

and professional fees for auditing, tax, investor relations, and legal services, including patent-related costs. We expect that general and administrative expenses will increase in the future as we expand our operating activities, continue to incur additional costs associated with being a publicly-traded company, and maintaining compliance with exchange listing and SEC requirements. These increases will likely include higher consulting costs, fees for commercializing our product candidates, legal fees, accounting fees, insurance premiums, and fees associated with investor relations.

Current wording

Our general and administrative expenses consisted primarily of employee-related expenses, including benefits and stock-based compensation for our full-time employees during the years ended December 31, 2025 and 2024. Other general and administrative expenses include insurance premiums; consulting including pre-commercial costs; and professional fees for auditing, tax, investor relations, and legal services, including patent-related costs. We expect that general and administrative expenses will increase in the future as we expand our operating activities, continue to incur additional costs associated with being a publicly-traded company, and maintaining compliance with exchange listing and SEC requirements. These increases will likely include higher consulting costs, fees for commercializing our product candidates, legal fees, accounting fees, insurance premiums, and fees associated with investor relations.

Previous wording

Comprehensive loss is defined as the change in equity during a period from transactions and other events and/or circumstances from non-owner sources. For the year ended December 31, 2024, comprehensive loss is equal to our net loss of $55.9 million and our net unrealized gain on marketable securities of approximately $0.1 million. For the year ended December 31, 2023, comprehensive loss is equal to our net loss of $37.5 million and $0.1 million of losses on marketable securities reclassified to net loss.

Current wording

Comprehensive loss is defined as the change in equity during a period from transactions and other events and/or circumstances from non-owner sources. For the year ended December 31, 2025, comprehensive loss is equal to our net loss of $33.8 million and reclassification of gains on marketable securities to net loss of less than $0.1 million. For the year ended December 31, 2024, comprehensive loss is equal to our net loss of $55.9 million and our net unrealized gain on marketable securities of less than $0.1 million.

Previous wording

As of December 31, 2024, we had federal and state income tax net operating loss (NOL) carryforwards of approximately $272.0 million and $262.9 million, respectively. Federal NOL carryforwards generated through December 31, 2017 and state NOL carryforwards will expire at various dates through 2044. Federal NOLs generated during the years ended December 31, 2018 and thereafter will carry forward indefinitely. As of December 31, 2024, we had federal and state research and development tax credit carryforwards of approximately $12.1 million and $2.8 million, respectively, which will expire at various dates through 2044. Additionally, as of December 31, 2024, we had a federal orphan drug tax credit carryforward of approximately $2.4 million which expires at various dates throughout 2044.

Current wording

As of December 31, 2025, we had federal and state income tax net operating loss (NOL) carryforwards of approximately $327.9 million and $320.8 million,] respectively. Federal NOL carryforwards generated through December 31, 2017 and state NOL carryforwards generated through December 31, 2025 will expire at various dates through 2045. Federal NOLs generated during the years ended December 31, 2018 and thereafter will carry forward indefinitely. As of December 31, 2025, we had federal and state research and development tax credit carryforwards of approximately $13.0 million and $3.1 million, respectively, which will expire at various dates through 2045. Additionally, as of December 31, 2025, we had a federal orphan drug tax credit carryforward of approximately $2.8 million which expires at various dates throughout 2045.

Previous wording

We anticipate that our results of operations will fluctuate for the foreseeable future due to several factors, including the progress of our research and development efforts, the timing and outcome of clinical trials, regulatory requirements, and the exercise, if any, of the Option, including any related commercialization costs. Our limited operating history makes predictions of future operations difficult or impossible. Since our inception, we have incurred significant losses.

Current wording

We anticipate that our results of operations will fluctuate for the foreseeable future due to several factors, including the progress of our research and development efforts, the timing and outcome of clinical trials, regulatory requirements, and the exercise, if any, of the AbbVie Option, including any related commercialization costs. Our limited operating history makes predictions of future operations difficult or impossible. Since our inception, we have incurred significant losses.

Previous wording

Net Loss. Net loss for the years ended December 31, 2024 and 2023 was approximately $55.9 million and $37.5 million, respectively. As of December 31, 2024, we had total stockholders’ equity of $71.0 million. Losses have resulted primarily from costs incurred in our clinical trials, drug manufacturing costs, and other research and development programs, and from our general and administrative expenses.

Current wording

Net Loss. Net loss for the years ended December 31, 2025 and 2024 was approximately $33.8 million and $55.9 million, respectively. As of December 31, 2025, we had total stockholders’ equity of $44.3 million. Losses have resulted primarily from costs incurred in our clinical trials, drug manufacturing costs, and other research and development programs, and from our general and administrative expenses.

Previous wording

Research and Development Expenses. Research and development expenses were $48.2 million for the year ended December 31, 2024 compared to $29.5 million for the same period in 2023. The increase of $18.7 million is primarily related to an increase in $10.1 million in external clinical development costs, $8.3 million in drug product manufacturing costs, and $1.2 million in personnel costs, partially offset by an decrease in $0.6 million in external preclinical development costs and $0.3 million in consulting expenditures.

Current wording

Research and Development Expenses. Research and development expenses were $25.7 million for the year ended December 31, 2025 compared to $48.2 million for the same period in 2024. The decrease of approximately $22.5 million is primarily related to a decrease in $10.5 million in external clinical development costs, $8.5 million in drug product manufacturing costs, $1.6 million in external preclinical development costs, $1.5 million in personnel costs and $0.4 million in consulting expenditures.

Previous wording

For the year ended December 31, 2024, approximately 48% of the total research and development expenses related to the advancement of late-stage product candidates. Of the total late-stage product candidate spend during the year ended December 31, 2024, approximately 45% was attributable to reproxalap and 3% to ADX‑2191. We do not track labor associated with each program and have allocated headcount costs on a pro-rated basis. Management believes the pro rata allocation results is a reasonable estimate of the headcount costs associated with each of the programs noted above.

Current wording

For the year ended December 31, 2025, approximately 33% of the total research and development expenses related to the advancement of late-stage product candidates. As it relates to our late-stage product candidate spend during the year ended December 31, 2025, approximately 19% of research and development expense was attributable to reproxalap and 14% of research and development expense to ADX‑2191. We do not track labor associated with each program and have allocated headcount costs on a pro-rated basis. Management believes the pro rata allocation results is a reasonable estimate of the headcount costs associated with each of the programs noted above.

Previous wording

General and Administrative Expenses. General and administrative expenses were $11.9 million for the year ended December 31, 2024, compared to $13.3 million for the year ended December 31, 2023. The decrease of approximately $1.4 million is primarily related to decreases in consulting and legal expenditures.

Current wording

General and Administrative Expenses. General and administrative expenses were $9.6 million for the year ended December 31, 2025, compared to $11.9 million for the year ended December 31, 2024. The decrease of approximately $2.3 million is primarily related to decreases in personnel and legal expenditures.

Previous wording

Other Income (Expense). Total other income (expense), net, was approximately $4.3 million and $5.3 million for the year ended December 31, 2024 and 2023, respectively, was principally due to a decrease in interest income as a result of decreased interest rates on our investments.

Current wording

Other Income (Expense). Total other income, net, was approximately $1.4 million and $4.3 million for the year ended December 31, 2025 and 2024. The decrease of $2.9 million was principally due to a decrease in interest income as a result of a decrease in investments.

Previous wording

We have funded our operations primarily from the sale of equity securities and convertible equity securities and borrowings under credit facilities. Since inception, we have incurred operating losses and negative cash flows from operating activities and have devoted substantially all our efforts to research and development. At December 31, 2024, we had total stockholders’ equity of approximately $71.0 million and cash, cash equivalents, and marketable securities of $101.2 million. During the year ended December 31, 2024, we had net loss of approximately $55.9 million. We expect to generate operating losses for the foreseeable future.

Current wording

We have funded our operations primarily from the sale of equity securities and convertible equity securities and borrowings under credit facilities. Since inception, we have incurred operating losses and negative cash flows from operating activities and have devoted substantially all our efforts to research and development. At December 31, 2025, we had total stockholders’ equity of approximately $44.3 million and cash, and cash equivalents of $70.0 million. During the year ended December 31, 2025, we had net loss of approximately $33.8 million.

Previous wording

The Loan and Security Agreement contains customary affirmative and negative covenants and events of default. Affirmative covenants include, among others, covenants requiring us to maintain our legal existence and governmental approvals, deliver certain financial reports, and maintain insurance coverage. Negative covenants include, among others: restrictions on transferring any part of our business or intellectual property; incurring additional indebtedness; engaging in mergers or acquisitions; paying dividends or making other distributions; making investments; and creating other liens on our assets, in each case subject to customary exceptions. As of December 31, 2024, $15.0 million was outstanding under the Hercules Credit Facility and no amounts remained available for borrowing.

Current wording

The Hercules Credit Facility contains customary affirmative and negative covenants and events of default. Affirmative covenants include, among others, covenants requiring us to maintain our legal existence and governmental approvals, deliver certain financial reports, and maintain insurance coverage. Negative covenants include, in each case subject to customary exceptions, among others: restrictions on transferring any part of our business or intellectual property; incurring additional indebtedness; engaging in mergers or acquisitions; paying dividends or making other distributions; making investments; and creating other liens on our assets. The Hercules Credit Facility, as amended, is described in Note 9 to the notes to the consolidated financial statements contained in this annual report on Form 10-K. As of December 31, 2025, $15.0 million was outstanding under the Hercules Credit Facility and no amounts remained available for borrowing.

Previous wording

On October 31, 2023 (the Option Agreement Effective Date), we entered into an exclusive option agreement (the Option Agreement) with AbbVie Inc. (AbbVie), pursuant to which we granted AbbVie an exclusive option (the Option) to obtain (a) a co-exclusive license in the United States to facilitate a collaboration with us to develop, manufacture and commercialize reproxalap in the United States, (b) an exclusive license to develop, manufacture and commercialize reproxalap outside the United States, (c) a right of first negotiation for compounds that are owned or otherwise controlled by us in the field of ophthalmology relating to treating conditions of the ocular surface, and (d) a right to review data for any other compounds that are owned or otherwise controlled by us in the fields of ophthalmology and immunology before such data is shared with any other third party (the Collaboration Agreement). AbbVie has paid us a non-refundable payment of $1.0 million in consideration of the Option (the Option Payment).

Current wording

On October 31, 2023 (the AbbVie Option Agreement Effective Date), we entered into an exclusive option agreement (the AbbVie Option Agreement) with AbbVie Inc. (AbbVie), pursuant to which we granted AbbVie an exclusive option (the AbbVie Option) to obtain (a) a co-exclusive license in the United States to facilitate a collaboration with us to develop, manufacture and commercialize reproxalap in the United States, (b) an exclusive license to develop, manufacture, and commercialize reproxalap outside the United States, (c) a right of first negotiation for compounds that are owned or otherwise controlled by us in the field of ophthalmology relating to treating conditions of the ocular surface, and (d) a right to review data for any other compounds that are owned or otherwise controlled by us in the fields of ophthalmology and immunology before such data is shared with any other third party (the Collaboration Agreement). AbbVie has paid us a non-refundable payment of $1.0 million in consideration of the AbbVie Option (the AbbVie Option Payment).

Previous wording

On December 21, 2023, pursuant to the Option Agreement, AbbVie extended the period during which it may exercise the Option (the Exercise Period Extension) by paying us a non-refundable payment of $5.0 million (the Option Extension Fee). If the Collaboration Agreement is entered into, the Option Payment and the Option Extension Fee will be credited against the upfront cash payment payable by AbbVie.

Current wording

On December 21, 2023, pursuant to the AbbVie Option Agreement, AbbVie extended the period during which it may exercise the AbbVie Option by paying us a non-refundable payment of $5.0 million (the AbbVie Option Extension Fee). If the Collaboration Agreement is entered into, the AbbVie Option Payment and the AbbVie Option Extension Fee will be credited against the upfront cash payment payable by AbbVie.

Previous wording

On November 15, 2024, we entered into the Expansion Side Letter (the Expansion Letter) with AbbVie, which amended certain terms of the Option Agreement. The Expansion Letter makes certain changes to the Option Agreement, among other things, providing that we will conduct certain launch activities, which costs shall not exceed mid-single-digit millions of dollars without AbbVie’s approval, and which costs will be considered allowable expenses pursuant to the Collaboration Agreement upon the delivery of AbbVie’s written notice of exercising the Option and entry into the Collaboration Agreement, such that 60% of our allowable expenses will be reimbursed by AbbVie in the event of exercise. If AbbVie does not deliver a written notice of exercising the Option and we do not execute the Collaboration Agreement, we will remain solely responsible for such launch activities costs. AbbVie has also independently initiated pre-commercialization planning activities. In addition, the Exercise Period (as defined in the Option Agreement) was further modified to ten (10) business days following the date, if any, that we receive approval from the U.S. Food and Drug Administration of the new drug application (NDA) for reproxalap in dry eye disease (the FDA Decision), provided that AbbVie shall provide us notice in case AbbVie determines that it will not exercise the Option.

Current wording

On November 15, 2024, we entered into the Expansion Side Letter (the Expansion Letter) with AbbVie. The Expansion Letter makes certain changes to the AbbVie Option Agreement, among other things, providing that we will conduct certain launch activities, which costs shall not exceed mid-single-digit millions of dollars without AbbVie’s approval, and which costs will be considered allowable expenses pursuant to the Collaboration Agreement upon the delivery of AbbVie’s written notice of exercising the AbbVie Option and entry into the Collaboration Agreement, such that 60% of our allowable expenses will be reimbursed by AbbVie in the event of exercise. If AbbVie does not deliver a written notice of exercising the AbbVie Option and we do not execute the Collaboration Agreement, we will remain solely responsible for such costs. AbbVie has also independently initiated pre-commercialization planning activities. In addition, the Exercise Period (as defined in the AbbVie Option Agreement) was restricted to ten (10) business days following the date, if any, that we receive approval from the U.S. Food and Drug Administration of the NDA for reproxalap in dry eye disease (the FDA Decision), provided that AbbVie shall provide us notice in case AbbVie determines that it will not exercise the AbbVie Option.

Previous wording

Upon AbbVie’s delivery of the agreement execution notice and the parties entering into the Collaboration Agreement, AbbVie would pay us a $100 million upfront cash payment, less the Option Payment and the Option Extension Fee. In addition, we would be eligible to receive up to approximately $300 million in regulatory, and commercial milestone payments, inclusive of a $100 million milestone payment payable if the FDA Decision is received prior to or after the execution of the Collaboration Agreement. In the United States, we would share profits and losses with AbbVie from the commercialization of reproxalap according to a split of 60% for AbbVie and 40% for us. Outside of the United States, we would be eligible to receive tiered royalties on net sales of reproxalap.

Current wording

Upon AbbVie’s delivery of the agreement execution notice and the parties entering into the Collaboration Agreement, AbbVie would pay us a $100.0 million upfront cash payment, less the AbbVie Option Payment and the AbbVie Option Extension Fee. In addition, we would be eligible to receive up to approximately $300.0 million in regulatory, and commercial milestone payments, inclusive of a $100.0 million milestone payment payable if the FDA Decision is received prior to or after the execution of the Collaboration Agreement. In the United States, we would share profits and losses with AbbVie from the commercialization of reproxalap according to a split of 60% for AbbVie and 40% for us. Outside of the United States, we would be eligible to receive tiered royalties on net sales of reproxalap.

Previous wording

Based on our current operating plan, we believe that our cash and cash equivalents, as of December 31, 2024, will be sufficient to fund our currently projected operating expenses and debt obligations into 2027, including continued early and late-stage development of our product candidates in ocular and systemic immune-mediated and metabolic diseases. We base our projections of operating capital requirements on our current operating plan, which includes several assumptions that may prove to be incorrect, and we may use all of our available capital resources sooner than we expect. Because of the numerous risks and uncertainties associated with research, development, and commercialization (as applicable) of product candidates, we are unable to estimate the exact amount of our working capital requirements. We will need to secure additional funding in the future, from one or more equity or debt financings, collaborations, or other sources, in order to carry out all of our planned research and development activities and regulatory activities, commence or continue ongoing commercialization, including manufacturing, sales, marketing and distribution for our product candidates, or conduct any substantial additional development requirements requested by the FDA. At this time, due to the risks inherent in the drug development process, we are unable to estimate with any certainty the costs we will incur in the continued clinical development of reproxalap, and our other product candidates. Subsequent trials initiated at a later date will cost considerably more, depending on the results of our prior clinical trials, and feedback from the FDA or other third parties. Accordingly, we will continue to require substantial additional capital to continue our clinical development and potential commercialization activities. The amount and timing of our future funding requirements will depend on many factors, including but not limited to:

Current wording

Based on our current operating plan, we believe that our cash and cash equivalents, as of December 31, 2025, will be sufficient to fund our currently projected operating expenses and debt obligations for at least twelve months from February 27, 2026, including continued early and late-stage development of our product candidates in ocular and systemic immune-mediated diseases. We base our projections of operating capital requirements on our current operating plan, which includes several assumptions that may prove to be incorrect, and we may use all of our available capital resources sooner than we expect. Because of the numerous risks and uncertainties associated with research, development, and commercialization (as applicable) of product candidates, we are unable to estimate the exact amount of our working capital requirements. We will need to secure additional funding in the future, from one or more equity or debt financings, collaborations, or other sources, in order to carry out all of our planned research and development activities and regulatory activities, commence or continue ongoing commercialization, including manufacturing, sales, marketing and distribution for our product candidates, or conduct any substantial additional development requirements requested by the FDA. At this time, due to the risks inherent in the drug development process, we are unable to estimate with any certainty the costs we will incur in the continued clinical development of reproxalap, and our other product candidates. Subsequent trials initiated at a later date will cost considerably more, depending on the results of our prior clinical trials, and feedback from the FDA or other third parties. Accordingly, we will continue to require substantial additional capital to continue our clinical development and potential commercialization activities. The amount and timing of our future funding requirements will depend on many factors, including but not limited to:

Previous wording

Operating Activities. Net cash used in operating activities was $43.2 million in 2024, compared to net cash used in operating activities of $30.3 million in 2023. The primary use of cash was to fund our operations. The increase in the amount of cash used in operating activities for 2024 as compared to 2023 was primarily due to increases in research and development activities, increases in accrued expenses due to the amount and timing of payments for research and development activities, and increases in prepayments, due to changes in working capital needs.

Current wording

Operating Activities. Net cash used in operating activities was $33.3 million in 2025, compared to net cash used in operating activities of $43.2 million in 2024. The primary use of cash was to fund our operations. The decrease in the amount of cash used in operating activities for 2025 as compared to 2024 was primarily due to decreases in research and development activities, and decreases in accrued expenses due to the amount and timing of payments for research and development activities.

Previous wording

Investing Activities. Net cash used in investing activities in 2024 was $44.9 million compared to net cash provided by investing activities in 2023 of $30.0 million. Net cash used in investing activities related to purchases of marketable securities in 2024. Net cash provided by investing activities primarily related to maturities of marketable securities in 2023.

Current wording

Investing Activities. Net cash provided by investing activities in 2025 was $47.7 million compared to net cash used in investing activities in 2024 of $44.9 million. Net cash provided by investing activities primarily related to maturities of marketable securities in 2025. Net cash used in investing activities related to purchases of marketable securities in 2024.

Previous wording

Financing Activities. Net cash used in financing activities was $0.2 million for the year ended December 31, 2024 and consisted of offering costs offset by stock purchases under the employee stock purchase plan. Net cash used in financing activities of $1.3 million for year ended 2023 consisted of stock withheld for tax obligations on option settlement proceeds and repayment of the end of term fee on our long-term debt, offset by proceeds from stock option exercises and stock purchases under the employee stock purchase plan.

Current wording

Financing Activities. Net cash provided by financing activities was $1.1 million for the year ended December 31, 2025 and consisted of proceeds from stock option exercises. Net cash used in financing activities of $0.2 million for year ended 2024 consisted of offering costs offset by stock purchases under the employee stock purchase plan.