Orchestra BioMed Holdings Inc

Our Vision

Our vision is to accelerate medical innovation to patients through risk-reward-sharing partnerships with leading medical device companies.

Our Company

We are a biomedical innovation company accelerating high-impact technologies to patients through risk-reward sharing partnerships with leading medical device companies. Our partnership-enabled business model focuses on forging strategic collaborations with leading medical device companies to drive successful global commercialization of products we develop. We are led by a highly accomplished, multidisciplinary management team and a board of directors with extensive experience in all phases of therapeutic device development. Our business was formed in 2018 by assembling a pipeline of multiple late-stage clinical product candidates originally developed by our founding team. Our lead product candidate is BackBeat Cardiac Neuromodulation Therapy (“BackBeat CNT”) for the treatment of hypertension (“HTN”), the leading risk factor for death worldwide. We have an exclusive license and collaboration agreement with Medtronic, Inc. for the development and commercialization of BackBeat CNT for the treatment of HTN in patients indicated for a cardiac pacemaker. We are also developing the Virtue Sirolimus AngioInfusion Balloon (“Virtue SAB”) for the treatment of atherosclerotic artery disease, the leading cause of mortality worldwide. We have a strategic collaboration with Terumo Medical Corporation (“Terumo”) for the development and commercialization of Virtue SAB for the treatment of coronary and peripheral artery disease.

On January 26, 2023, we consummated the business combination contemplated by the Agreement and Plan of Merger, dated as of July 4, 2022 (as amended, the “Merger Agreement”), by and among HSAC2, a special purpose acquisition company incorporated as a Cayman Islands exempted company in 2020 (“HSAC2”), HSAC Olympus Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of HSAC2 (“Merger Sub”), and Orchestra BioMed, Inc. (“Legacy Orchestra”). Pursuant to the Merger Agreement, (i) HSAC2 deregistered in the Cayman Islands in accordance with the Companies Act (2022 Revision) (As Revised) of the Cayman Islands and domesticated as a Delaware corporation in accordance with Section 388 of the Delaware General Corporation Law (the “Domestication”) and (ii) Merger Sub merged with and into Legacy Orchestra, with Legacy Orchestra as the surviving company in the merger and, after giving effect to such merger, continuing as a wholly owned subsidiary of Orchestra (the “Merger” and, together with the Domestication and the other transactions contemplated by the Merger Agreement, the “Business Combination”). As part of the Domestication, the Company’s name was changed from “Health Sciences Acquisitions Corporation 2” to “Orchestra BioMed Holdings, Inc.”

BackBeat CNT, also known as Atrioventricular Interval Modulation(“AVIM”)therapy, is a bioelectronic therapy candidate designed to substantially and persistently lower blood pressure. BackBeat CNT can be fully integrated as a firmware upgrade to standard cardiac pacemakers which, given HTN is the most common comorbidity in the pacemaker population affecting over 70% of the pacemaker-indicated patients, makes it a potentially attractive therapeutic solution for these patients. Although there is no guarantee BackBeat CNT will be safe andeffective, BackBeat CNT showed encouraging results in MODERATO II, a prospective, multi-center, randomized, double-blind pilot study of pacemaker patients with persistent HTN. Weestimate that the addressable annual marketfor pacemaker-indicated patients with HTN comprises more than 750,000 patients worldwide annually and represents a potential annual revenue opportunity of over $2 billion. We also believe BackBeat CNT may offer therapeutic benefit to select high-risk HTN patients not indicated for a pacemaker. We estimate that this additional addressable annual market for high-risk HTN patients comprises more than 2.4 million patients worldwide and representsa potential annual revenue opportunity of more than $8 billion.

On June 30, 2022, we entered into an exclusive license and collaboration agreement with Medtronic, one of the largest medical device companies in the world, forthe development of BackBeat CNTforthe treatment of HTN in pacemaker-indicated patients (the “Medtronic Collaboration”). The Medtronic Collaboration provides us with development, clinical and regulatory supportforthe BACKBEAT pivotal study. Upon regulatory approval, if received, Medtronic will have the exclusive global rights to commercialize BackBeat CNT(AVIM therapy)forthis target population. If BackBeat CNT isapprovedand successfully commercialized, we will share meaningfully in the revenues generated from Medtronic’s sale of BackBeat CNT-enabled pacing systems. Medtronic has a right of first negotiation with respect to BackBeat CNTforthe treatment of HTN in non-pacemaker patients.

On September 19, 2023, we announced that the FDA granted us investigational device exemption (“IDE”) approval to initiate our planned BACKBEAT (BradycArdia paCemaKer with AVIM forBlood prEssure treAtmenT) pivotal study (the “BACKBEAT pivotal study”) to treat HTN in patients indicated for a pacemaker. On January 8, 2024, we announced that the first patient was enrolled and randomized into the BACKBEAT pivotal study in late December 2023. For a detailed description of the BACKBEAT pivotal study, see “—BIOELECTRONIC PRODUCT CANDIDATES — BackBeat CNT (AVIM Therapy) for Hypertension and CNT-HF for Heart Failure—Clinical Results—Clinical, Regulatory and Commercialization Pathway—The BACKBEAT Global Pivotal Study.”

On February 26, 2024, we announced new data showing sustained, clinically meaningful reduction in 24-hour ambulatory systolic blood pressure (aSBP) in hypertensive pacemaker patients treated with AVIM therapy for over 3 years. Reduction in aSBP measured at 6 months from randomization and therapy activation was the primary endpoint of the MODERATO II study, a European multi-center, double-blind, randomized pilot study involving 47 subjects. Patients randomized to AVIM therapy and antihypertension medication in that study experienced an 11.1 mmHg (p<0.001) reduction in mean aSBP at 6 months follow-up, resulting in a statistically significant difference of 8.1 mmHg compared to control patients who were managed only with antihypertensive medications (p=0.01). Long-term blood pressure results are from a follow-up study of 16 patients originally enrolled in the MODERATO II study. This group included eight patients from the MODERATO II AVIM treatment arm and eight control arm patients that crossed over to AVIM therapy at the end of the 6-month double-blind phase. aSBP was measured in this group of patients an average of 3.6 (±0.6) years following initiation of AVIM therapy. As a group and based on individual paired data, these patients continued to experience a statistically significant, clinically meaningful mean aSBP reduction of 8.9 mmHg at long term follow up which is similar to the mean aSBP reduction of 8.9 mmHg seen in this same group of patients when measured at the 6-month aSBP measurement.

On March 6, 2024, we announced the presentation of results from a pressure-volume (“PV”) loop clinical study of AVIM therapy (also known as BackBeat CNT) in pacemaker-indicated patients with uncontrolled HTN despite the use of antihypertensive medication. The new clinical data demonstrate the favorable hemodynamic impact of AVIM therapy as compared to standard right ventricular (RV) pacing on systolic blood pressure and overall cardiac function when delivered using both conduction system (CSP) as well as standard pacing lead locations. AVIM therapy with pacing leads placed in standard RV (“AVIM RV”) locations, as well as in conduction system pacing (“AVIM CSP”) locations targeting the left bundle branch area (LBBA) regions, respectively, was compared to standard atrial-ventricular (“AV”) sequential pacing (DDD mode pacing or “AV Pacing”). Overall mean results for each variable were calculated using paired measurements for each individual patient using AVIM RV, AVIM CSP and AV Pacing, respectively:

Virtue SAB is a proprietary drug/device combination product candidateforthe treatment of artery disease that is designed to deliver aproprietary, investigational, extended-release formulation of sirolimus (“SirolimusEFR”) to the vessel wall during balloon angioplasty without the needfor balloon coating or a permanent implant. Although there is no guarantee Virtue SAB will prove to be safe and effective, Virtue SAB demonstrated promising three-year clinical data in the treatment of coronary In-Stent Restenois (“ISR”) in the prospective, multi-center SABRE Study.

Virtue SAB was granted Breakthrough Device designation by the FDA, for specific indicat ions relating to the treatment of coronary ISR, coronary small vessel disease and peripheral artery disease below-the-knee. We estimate that these indications will represent an annual global addressable market opportunity of at least $4 billion, based on approximately 3.2 million procedures, as discussed below under*“— FOCAL THERAPIES — Virtue SAB for Artery Disease and SirolimusEFR for Local Inflammation in Multiple Indications. —TargetedUnmet Needs and Market Opportunity for Virtue**SAB.”*

On August 8, 2023, we announced that the FDA granted us investigational device exemption approval with conditions to initiate our planned Virtue ISR-US pivotal study evaluating the efficacy and safety of Virtue SAB for the treatment of patients with coronary ISR. The conditional approval permits us to initiate enrollment of the Virtue ISR-US pivotal study following completion of clinical trial initiation activities, including clinical center Institutional Review Board approvals. We are also required to submit additional information to the FDA.

Wehavea strategic partnership with Terumo, a global leader in medical technology, forthe development and commercialization of Virtue SAB to treat coronary artery disease (“CAD”) or peripheral artery disease (“PAD”). Under the terms of our partnership, it is expected that Terumo will assume financial and execution responsibilityfor substantiallyall future clinical and regulatory development, with the exception of the Virtue ISR-USpivotal study, forwhich we are responsible. Terumo will alsobe responsiblefor device manufacturing, commercial sales, marketing and distributionfor Virtue SABfor coronary and peripheral vascular indications globally. If Virtue SAB is successfully developed and approved, we will share meaningfully in future commercial revenues of Virtue SAB through double-digit royalties on net sales and per unit payments as the exclusive supplier of SirolimusEFR.

As previously disclosed, we have been negotiating with Terumo for mutually agreeable adjustments to our distribution agreement with Terumo (the “Terumo Agreement”) with the purpose of restructuring milestone payments as well as making other potential material modifications to that agreement, including additional financial commitments by Terumo to Orchestra and the Virtue SAB program. We have delayed initiation of our Virtue ISR-US pivotal study until such time as we and Terumo restructure the Terumo Agreement in a manner that provides us with a satisfactory amount of additional capital, whether from milestone payments or other financial arrangements. In addition, in light of the recent FDA approval of Boston Scientific Corporation’s AGENT™ paclitaxel-coated balloon for the treatment of coronary ISR, we and Terumo are reviewing the design for the Virtue ISR-US pivotal study and considering alternative clinical study designs with input from our clinical steering committee for Virtue SAB. If negotiations are not completed to our satisfaction or to the satisfaction of Terumo, clinical study, product development, and commercialization plans for Virtue SAB may continue to be adversely impacted.

History of Caliber and BackBeat

Wewere incorporated in Delawarein January 2017 and were formed to acquire operating and other assets as well as to raise capital to support further development of acquired assets. Wehad limited activity in 2017. In May 2018, we concurrently completed a recapitalization and mergers with Caliber Therapeutics, Inc., a Delaware corporation thathas, among other things, the rights to the Virtue SAB product candidate and BackBeat Medical, Inc., a Delaware corporation thathas, among other things, the rights to the BackBeat CNT product candidate. Caliber Therapeutics, Inc. was incorporated in Delawarein October 2005 and began development of its lead product candidate, Virtue SAB, in 2008. BackBeat Medical, Inc. was incorporated in Delawarein January 2010 and began development of its lead product candidate, BackBeat CNT, that same year.

Conversion of Caliber and BackBeat Limited Liability Companies

On December 26, 2019, we completed the conversions of Caliber Therapeutics, Inc., a Delaware corporation, to Caliber Therapeutics, LLC, a Delaware limited liability company, and BackBeat Medical, Inc., a Delaware corporation, to BackBeat Medical, LLC, a Delaware limited liability company. References in this Annual Report on Form 10-K to “Caliber” refer to Caliber Therapeutics, Inc. prior to its conversion to a limited liability company and to Caliber Therapeutics, LLC after its conversion to a limited liability company, as applicable. References in this Annual Report on Form 10-K to “BackBeat” refer to BackBeat Medical, Inc. prior to its conversion to a limited liability company and to BackBeat Medical, LLC after its conversion to a limited liability company, as applicable.

Partnership-Enabled Business Model

Our business was formed specifically to pursue a partnership-enabled business model that seeks to apply strategies typically used by the biopharmaceutical industry to the medical device market where product developers are typically challenged with the financial and execution burdens of also needing to commercialize the products they are developing in order to achieve a value inflection event for their shareholders.

Our goal is to accelerate and improve the likelihood of its product innovations reaching patients and providers worldwide by sharing the risks and rewards of developing and commercializing these product candidates with established multinational companies, such as Medtronic and Terumo. Using this approach, we believe we can pursue multiple potentially lucrative innovation opportunities by focusing its efforts and resources on advancing promising therapeutic solutions, such as BackBeat CNT and Virtue SAB, through late-stage clinical research and regulatory approvals. Meanwhile, our partners secure substantial new prospective growth opportunities with the potential to reduce risk and expense while leveraging their existing infrastructure to bring our partnered product candidates to global markets quickly and efficiently if regulatory approval is obtained.

We believe our partnership-enabled business model can create value for its stakeholders and partners by:

Our Product Pipeline

Our pipeline is comprised of innovative therapeutic product candidates that we believe have the potential for value creation using our partnership-enabled business model, led by our product candidate, BackBeat CNT, as well as Virtue SAB. We believe our product pipeline has the potential to improve clinical outcomes and provide distinct commercial advantages within two of the largest and well-established global medical device markets: BackBeat CNT in cardiac rhythm management implants, an overall global market that LSI & Grand View Research valued at a $18.0 billion market worldwide in 2022; and Virtue SAB in interventional devices to treat CAD and PAD, an overall global market that LSI & Fortune Business Insights, market research firms, valued at a $20.9 billion market worldwide in 2022. Our pipeline also includes additional product candidates for other significant medical conditions that we believe are attractive candidates for value creation using its partnership-enabled business model.

Our product candidates are based on platform technologies that each have late-stage lead clinical indications with attractive follow-on clinical indications that could add substantial future commercial potential. Moreover, our additional pipeline opportunities, such as Cardiac Neuromodulation Therapy (“CNT”)forheart failure, or potential treatment of clinical indications such as urology or osteoarthritis using SirolimusEFR, and the microporous AngioInfusion balloon technology used in the Virtue SAB leverage the same platform technologies and intellectual property already developedforits flagship product candidates. Generally, our product candidates target large, mature global markets in which there areseveral active multinational and regional corporations with established distribution capabilities in place. These product candidates are designed to potentially offer important clinical, health and economic benefits without changing established treatment paradigms such as physician techniques or patient referral and treatment patterns, providing a select strategic partner a potential means to differentiate their product portfolios from competitors, drive revenue growthand gain market share. Our strategic collaboration agreements with Medtronicfor BackBeat CNT and Terumo for Virtue SAB demonstrate our ability to align with global market leadersforthe long-term development and commercialization of our product candidates.

The following table summarizes our material pipeline programs organized by product platform, as well as target indications, development status, market opportunity, strategic partners/collaborators and next milestones.

Advancing a High-Impact Pipeline

BIOELECTRONIC PRODUCTCANDIDATES— BackBeat CNT**(AVIMTherapy) for Hypertension and CNT-HF for HeartFailure**

We are developing bioelectronic therapies based on patented CNT technology. Our product candidates are designed to use standard active implantable cardiac rhythm management systems, such as pacemakers, with changes to firmware and software only. Our flagship product candidate of the Bioelectronic Therapies Group is BackBeat CNT, also known as AVIM therapy, a patented, potential bioelectronics treatment for HTN, the leading risk factor for death worldwide. We have an exclusive strategic collaboration with Medtronic for the development and commercialization of BackBeat CNT for the treatment of hypertension in patients indicated for a cardiac pacemaker. We also believe BackBeat CNT may offer therapeutic benefit to select high-risk HTN patients not indicated for a pacemaker. Medtronic has a right of first negotiation with respect to BackBeat CNT for the treatment of HTN in non-pacemaker patients.

We are also pursuing CNT-HF, a bioelectronic product candidate that aims to reduce chronic sympathetic nervous system activity in heart failure (“HF”) for which there is an estimated global patient population of 64 million people according to the AME Medical Journal.

BackBeat Cardiac Neuromodulation Therapy (CNT) Product Candidate

In the discussion below and elsewhere in this Annual Report on Form 10 K, we reference p-values, which are statistical calculations that relate to the probability that the observed difference between groups happened by chance, with a p-value of less than 0.05 (i.e., less than 5% probability that the observed difference happened by chance) generally considered as the threshold to indicate statistical significance in clinical trials.

BackBeat CNT is now also known as Atrioventricular Interval Modulation or*“AVIM”therapy.As such, the terms “BackBeat CNT” and“AVIMtherapy” are usedinterchangeably below.With respect to the strategic collaboration agreement with Medtronic described below and the preclinical and clinical results also describedbelow,thetherapyis typicallyreferredto as BackBeat CNT as thiswasterm generally used to describe thetherapyfor such agreement or prior development activities. With respect to theBACKBEATpivotal studyweplan to initiate in the nearfuture,thetherapyisreferredto asAVIM *therapy.

BackBeat CNT is a bioelectronic product candidate for HTN that is designed to substantially reduce blood pressure. BackBeat CNT is delivered through programmed cardiac pacing algorithms and is designed to leverage standard rhythm management device procedures (dual-chamber pacemaker), utilizing the same implant procedure and lead positions while still enabling standard rhythm management (pacing) functions. While BackBeat CNT is designed to achieve certain results as described above, there is no guarantee that BackBeat CNT will prove to be safe and effective.

Clinical studies performed to date have been conducted using our proprietary Moderato system, a pacemaker system, incorporating BackBeat CNT. Clinical results fromtwo European clinical studies, the MODERATO I single-arm clinical study and the MODERATO II double-blind, randomized, controlled pilot study, demonstrated a significant and clinically meaningful reduction in systolic blood pressure in hypertensive patients also indicatedfora pacemaker. In particular, the MODERATO II study met its primary efficacy endpoint, as patients randomized to BackBeat CNT showed a statistically significant 11.1 mmHg (p<0.01) reduction in mean 24-hour ambulatory systolic blood pressure (“aSBP”)atsix months follow-up from activation, resulting in a statistically significant difference of 8.1 mmHg (p=0.01) of aSBP compared to control patients who were managed only with antihypertensive medications. The study alsomet its primary safety endpoint with no clinically meaningful differences in rate of MACE between thetwo groups at six months follow-up. Further details on the results of the BackBeat CNT clinical studies performed to date are provided below.

Strategic Collaboration Agreement with Medtronic

In June 2022, we and Medtronic entered into the Medtronic Agreementforthe development and commercialization of BackBeat CNTforthe treatment of HTN in patients indicatedfora cardiac pacemaker (the “HTN+P population” or the “Primary Field”). Under the terms of the Medtronic Agreement, we are the sponsorforthe BACKBEAT pivotal study to support regulatory approvalin the United States, European Union (the “EU”), Japanand other potential territories of AVIM therapy in the Primary Field and we are financially responsiblefor development, clinical and regulatory costs associated with this pivotal study.

Medtronic has completed integration and associated validation and verification testing of AVIM therapy algorithms as a field downloadable addition to its premium, commercially available dual-chamber pacemaker systemsforuse in thepivotal study. Medtronic isalso providing clinical, regulatory, operational field clinical resources in support of the BACKBEAT pivotal study. Weare reimbursing Medtronicat costfor these development, clinical and regulatory resources. Medtronic will integrate AVIM therapy, atour cost, as a firmware component of a premium pacemakerfor potential regulatory approvaland commercialization of AVIM therapy-enabled commercial devices following a successful outcome of the BACKBEAT pivotal study.

Medtronic is the global market leader in cardiac rhythm management (“CRM”), and pacemaker devices, with over 50% of the U.S. market sharefor such devices and typically havinga leading share inall other global markets. Given Medtronic’s market leadership and the potential therapeutic benefits of BackBeat CNT, we believe BackBeat CNT-enabled pacemakers, if commercially approved, havethe potential to be rapidly adopted into existing pacemaker-indicated patient carefor addressable hypertensive patients. Wefurther believe the substantial potential added clinical valueand differentiation of BackBeat CNT-enabled pacemakers can help Medtronic potentially expand market share andgrow revenue.

Under the terms of the Medtronic Agreement, Medtronic will have exclusive rights in the Primary Field to commercialize BackBeat CNT-enabled pacing systems globally following receipt of regulatory approvals. Medtronic would be entirely responsiblefor global commercialization followingany receipt of regulatory approvals, including manufacturing, sales, marketing and distribution costs.

Under the terms of the Medtronic Agreement, we are expected to receive between $500 and $1,600 per BackBeat CNT-enabled device sold based on a formula of the higher of (1) a fixed dollar amount per BackBeat CNT-enabled device (amount varies materially on a country-by-country basis) or (2) a percentage of the BackBeat CNT generated sales. This estimated range is derived from publicly-available information, our management’s knowledge of the pacemaker market, our discussions with Medtronic, and the terms of the Medtronic Agreement. Based on our discussions with Medtronic, the global market leader inpacemakers, the terms of the Medtronic Agreement and our management’s knowledge of reimbursement codes for medical devices, we believe that BackBeat CNT-enabled pacemakers can be supported by existing reimbursement codes without the needfornew codes.

Under the terms of the Medtronic Agreement, Medtronic has a right of first negotiation through FDA approval of BackBeat CNT for the Primary Field, to expand its global rights to BackBeat CNT for the treatment of HTN patients not indicated for a pacemaker.

In addition to customary early termination provisions, the Medtronic Agreement will terminate on the date no further revenue share payments are due under the Medtronic Agreement and Medtronic’slicense under the Medtronic Agreement would become fully paidup, perpetual, irrevocableand royalty-free. Revenue share payments with respect to each applicable country (or group of countries) are to be paidfora minimum period of time determined by the latest to occur of (a) the expiration of the last valid claim of certain specified patents or (b) the date that is 12 years after the first commercial saleofany Backbeat CNT-enabled pacemakers in the applicable country or group of countries.

Market Needs

Hypertension

HTN is elevated blood pressure that increases risk of major cardiac events like heart attack andstrokeand can contribute to other significant conditions such as heart failure and kidney disease. HTN is the leading global risk factorfor death according to the World Health Organization (the “WHO”). An estimated 1.28 billion adults have HTN worldwide according to the WHO.

In the United States, 119.9 million adults, or approximately 48% of all adults, are estimated to have HTN according to the Centersfor Disease Control and Prevention (the “CDC”). The American Heart Association (the “AHA”) and the American College of Cardiology (“ACC”) established newHypertension Clinical Practice Guidelinesin 2017. According to these guidelines, Stage 1 hypertension is defined for patients with systolic 130 to 139 mmHg or diastolic 80 to 89 mmHg. Stage 2 hypertension now encompasses patients with a systolic BP of at least 140 mmHg or a diastolic BP of at least 90 mmHg. These updated guidelines increased the number of patients believed to have HTN to approximately 47% of all adults from 31.9% under prior guidelines. Global guidelines have yet to be updated to be in line with U.S. clinical practice and generally HTN diagnosis starting at blood pressure at the level of U.S. Stage 2 HTN or above 140 mmHg for systolic BP. Importantly, 77% of U.S. adults over age 65, the age group most likely to need pacemakers, nowhave HTN according to the new guidelines. Further, the guidelines also recommend that a substantial proportion of U.S. adults taking antihypertensive medication undergo a more intensive BP lowering treatment to get their HTN under control.

High blood pressure was a primary or contributing cause of death in 2021 formore than 691,000 people in the United States, nearly 1,850 deaths eachday, according to the CDC. By 2035, the estimated direct cost of high blood pressure could increase to $220.9 billion(annual average), according to the AHA. Cardiovascular risk doublesfor every 10 mmHg increase in office systolic blood pressure and the mortality rate doubles with an increase of 20 mmHg in office systolic blood pressure, according to the National Centerfor Biotechnology Information.

Of U.S. patients aware of their HTN diagnosis, about 76% are believed to be taking antihypertensive medication, but only 52% of those have their condition controlled, according to theJournal of Clinical Hypertension. Therefore, approximately 60% of hypertensive U.S. adults have uncontrolled HTN. Non-adherence to antihypertensive treatment is a critical contributor to suboptimal blood pressure control and another important risk factor for adverse cardiovascular disease outcomes. An estimated 45% of HTN patients are non-adherent to medications, according to the journal*Medicine.*Thus, many medically responsive patients have high blood pressure simply because they do not take their medications and medication non-compliance is one of the biggest challenges of HTN treatment. In addition, since HTN patients are typically older, they are more likelyto use multiple medicationsfor HTN and other medical conditions: polypharmacy (multiple medications) has been shown to be associated with increased risk of adverse events (fall injury, heart failure, etc.), polypharmacy mismanagement, and drug-drug interactions. Furthermore, AHA estimates as much as 15% of theprevalent HTN population is resistant to medical therapy, and these patients are 47% more likelyto suffer the combined outcomes of death, myocardial infarction, heart failure, stroke, or chronic kidney disease overthe median 3.8 years of follow-up than other HTNpatients. Because of the factors mentioned above, there is a significant needfor alternative therapies to treat HTN, particularly, device-based therapies.

Isolated Systolic Hypertension & Pulse Pressure

Based on data from the National Health and Nutrition Examination Survey III, 74.5% of U.S. adults over 60 years oldhave HTN, with over 65% of them suffering from isolated systolic hypertension (“ISH”). ISH patients have elevated systolic blood pressure (>140 mmHg), while their diastolic blood pressure remains normal or low (≤90 mmHg). ISH is a more difficult to treat form of HTN because antihypertensive medications generally impact both systolic and diastolic pressure. It is estimated that over 80% of medical treatment failure patients over 60 years oldhave ISH. ISH patients experience elevated Pulse Pressure (the difference between systolic and diastolic pressures), which is a known significant, independent risk factor forcoronary heart disease. According to published literature, a 10 mmHg increase in Pulse Pressure is associated with a 32% increase in risk of heart failure and a 24% increase in risk ofstroke(after controlling forsystolic BP and other risk factors). In addition, in men ≥60 years old (which happens to be the typical age of pacemaker patients), risk for coronary artery disease is three times larger in patients with Pulse Pressure of ≥70 mmHg compared to those with Pulse Pressure of 60 mmHg.

Hypertension among Patients with Pacemakers

Pacemakers are recommendedforthe management of symptomatic bradycardia (slow heart rate) due to sick sinus syndrome, atrio-ventricular block, a combination of these conditions or other situations in which patients are prone to brady-arrhythmias. Currently available devices have evolved from single-chamber, fixed-rate pacemakers to multi-chamber, rate-responsive units. Over 80% of pacemaker patients receive dual-chamber devices which have wires or leads implanted in the right atrium and right ventricle of the heart capableof sensing and stimulating the heart to control contraction timing of both chambers. There were nearly 1.1 million pacemaker implants performed worldwide in 2021, including an estimated 427,500 in the United States according to LSI & HRI Research. Global sales of pacemakers exceeded $4.5 billion in 2022 according to GlobalData, comprising 25% of theoverall$18.0 billion marketfor implantable cardiac rhythm management devices.

Based on the new ACC/AHA guidelines, we estimate that nearly 80% of U.S. patients that are indicatedforthe implant of a pacemaker have HTN. Among this group of patients, over 60% are estimated tohave uncontrolled HTN based on the treatment goalper the 2017 ACC/AHA guidelines. Further, since theaverageage of pacemaker-indicated patients isapproximately 73 years old and, in consideration of other demographic factors associated with this population, these patients areat elevated risk of ISH (over 80% of patients enrolled in prior clinical studies of BackBeat CNT had ISH). Furthermore, these patients are likely to suffer from other co-morbidities common to this population such as atherosclerosis, hyperlipidemia, diabetes mellitus and chronic kidney disease. We believe these patients could benefit substantially from a HTN therapy like BackBeat CNT that can be administered via an already necessary pacemaker.

Target Patient Populations and Market Opportunity for AVIM Therapy

The initial target marketfor AVIM therapy (BackBeat CNT) is the large population of patients with uncontrolled HTN whoalso require the implant or replacement of a pacemaker (the HTN+P population). Pursuing this patient population takes advantageof the fact that AVIM therapy is designed to address patients whoalready require a pacemaker implant since it can be readily incorporated into standard cardiac rhythm management systems such aspacemakers, as Medtronic hasalready doneforthe BACKBEAT pivotal study. As anovel HTN therapy completely integrated with an established existing commercially-available device patients already requirefora critical medical indication, we believe AVIM therapy can be readily adopted into the existing paradigm of care for hypertensive patients that already require a pacemaker implant. Asalready described above, we believe there is a significant unmet need and commercial opportunityfor more effective treatment of the HTN+P population.

AVIM therapy-enabled pacemakers can be implanted using standard implant procedures, electrical leads and lead positions. Further, we believe any experienced and trained physicians who perform pacemaker implants, such as electrophysiologists and cardiologists, will beableto select a AVIM therapy-enabled pacemakerforan appropriate patient without the needfor another physician referral, ifapproved. AVIM therapy features proprietary algorithms that are designed to enable physicians to non-invasively adjust the therapeutic parameters to optimize chronic blood pressure reduction to individual patient needs. In addition, AVIM therapy is designed to be de-activated or reactivated by the physician as necessary, offering potential efficacy and safety advantages over other device-based therapies. Importantly, the therapeutic effects of AVIM therapy are designed to notrelyon patient adherence or compliance, offering a significant complement to pharmaceutical therapiesfor which adherence and compliance are akey challenge.

Weestimate that the addressable annual marketfor pacemaker-indicated patients with HTN will comprise more than 750,000 patients worldwide by 2025. Weestimate that, ifapproved, commercialization of BackBeat CNT in hypertensive pacemaker patients can increase the commercial valueof the global pacemaker device market byover$2 billion annually. This substantial annual opportunity is based on incorporating BackBeat CNT’spotentially potent and clinically impactful HTN treatment capabilities into a pacemaker to drive a meaningful increase in theaverage selling price(“ASP”)that can be supportedby existing pacemaker procedure codes globally.

Wealso believe BackBeat CNTmay offer therapeutic benefit to select high-risk HTN patients not indicatedfora pacemaker whohave uncontrolled systolic blood pressure despite medical therapy andhave elevated risk factors such as ISH and additional serious medical comorbidities. We estimate that this additional addressable annual marketfor high-risk HTN patients will compriseat least 2.4 million patients worldwide by 2025, orapproximately 0.2% of the global HTN population. Wecalculate this estimated market using information from publicly available third-party sources and only includes those hypertensive patients who are (1) of similar age as the pacemaker-indicated patient population (~73 years old on average), (2) have ISH, (3)have high systolic blood pressure (greater than 150 mmHg oSBP) despite medical therapy, and (4)haveat least one major co-morbidity (such as artery disease, diabetes, kidney disease, etc.). Using similar maximum ASP figures based on existing reimbursement codesfor pacemaker implantation, we estimate that this calculated market represents a global potential annual revenue opportunity ofover$8 billion using similar potential ASPs as BackBeat CNT-enabled pacemakers.

Impact Potential of BackBeat CNT

BackBeat CNT, also known as AVIM therapy, is a bioelectronic product candidatefor HTN that is designed to substantially reduce blood pressure. BackBeat CNT is delivered through programmed cardiac pacing algorithms. These algorithms are specifically designed to reduce blood pressure by (1) lowering cardiac preload (ventricular filling volume) and maintaining reduced blood pressure and by (2) modulating sympathetic tone (the level of activity of the sympathetic nervous system) as well as reducing cardiac afterload (total peripheral resistance). AVIM therapy is designed to leverage standard rhythm management devices (dual-chamber pacemaker), utilizing the same implant procedure and lead positions while still enabling standard rhythm management (pacing) functions. Webelieve that physicians such as implanting cardiologists and electrophysiologists who currently implant pacemakers and are responsibleforthe care of these patients canmakethe medical decision to implant a AVIM therapy-enabled pacemaker in an eligible patient. Further, we believe that AVIM therapy-enabled devices can garner meaningfully higher ASPs that can be supported by existing reimbursement without the needfornew procedure codes. While AVIM therapy is designed to achieve certain results as described above and below, there is no guarantee that AVIM therapy will proveto be safe and effective.

AVIM therapy is designed to deliver cardiac pacing to reduce blood pressure through two essential mechanisms:

Preclinical Data

The goal of the preclinical studies was to evaluate the feasibility of the use of BackBeat CNT in a canine model with surgically induced HTN and to provide a rationale for clinical use to persistently lower blood pressure in patients with HTN. BackBeat CNT was delivered via pacing algorithms in a prototype device in the canine model. Chronic delivery of BackBeat CNT significantly reduced 24-hour aSBP by an average of 32.5 mmHg over a one-month period (n=4).

The reduction occurred immediately upon activation of therapy and was maintainedforthe period that the therapy was active(approximately 30 days). Blood pressure did not meaningfully change in thestudy’ssingle control animal that had a BackBeat CNT device implanted, but not activated. 24-hour aSBP was measured using an implanted blood pressure sensor.

The chart below shows the baseline 24-hour aSBP profile of one of the study animals prior to therapy activation as compared to the 24-hour aSBP profile of the same animal following activation of BackBeat CNT. The results are plotted as a histogram demonstrating the frequency of blood pressure levels overthe course of the 24-hour period. The baseline aSBP histogram shows the percentage frequency of aSBP reaching different levels of pressure ranging from approximately 135 mmHg to 280 mmHg and a most frequent aSBP ofapproximately 180 mmHg. By contrast, the BackBeat CNT aSBP histogram shows the percentage frequency of aSBP reaching different levels of pressure ranging from approximately 120 mmHg to 260 mmHg and a most frequent aSBP of approximately 145 mmHg. The charts demonstrates the significant improvement in the entire 24-hour aSBP profile of the animal driven by BackBeat CNT as the entire aSBP histogram is shifted substantially downwards and to the left in term of frequency of reaching lower SBP levels and thepeak SBP frequency level is reduced byapproximately 35 mmHg. These results are similar in the three BackBeat CNT study animals in terms of substantial improvement of the 24-hour aSBP profile while the one study control animal did not experience a shift in 24-hour aSBP profile.

The chart below on the left shows average aSBP per 24-hour period of the same study animal profiled above overthe entire study period. This chart demonstrates that (1) BackBeat CNTdrovea substantial reduction of 24-hour aSBP from baseline levels (shown in orange with each box representing a full 24-hour period of aSBP measurement); (2) this blood pressure reduction was maintained through the period that BackBeat CNT was active (as reflected in the orange line made up of orange boxes); and (3) blood pressure levels took more than 10 days to return to baseline levels after BackBeat CNT was turnedoff, indicating that sympathetic tone responses and afterload levels were potentially modulated by chronic delivery of BackBeat CNT since aSBP levels would be expected to return immediately to baseline levels if sympathetic tone and afterload were not modulated. These results are similar inall three BackBeat CNT study animals in terms of durable substantial improvement of the 24-hour aSBP profile and slow response over days to baseline aSBP levels. As shown in the chart below on the right, the one study control animal did not experience anysignificant changes in 24-hour aSBP during the study period as illustrated by the chart below.

Clinical Results

Acute Clinical Studies (Nanjing):

A short time-based study of the effects of the BackBeat CNT therapy in 18 patients with HTN who were already scheduled to undergo an invasive electrophysiology procedure was conducted at Jiangsu Province Hospital/The First Affiliated Hospital with Nanjing Medical University, Nanjing, China. The study population consisted of patients with HTN and systolic blood pressure >140 mmHg despite at least one antihypertensive medication.

BackBeat CNT was appliedfor atleast one minute inall patients and up to five minutes in certain patients based on whether the physician managing the primary electrophysiology procedure allowed forlonger duration of treatment based on the time availableto perform the BackBeat CNT acute clinical study versus the primary electrophysiology procedurefor which the patient was being treated. Various signal parameters were evaluated. All patients exhibited reduction of >10 mmHg in systolic blood pressure. Theaverage sustained reduction in blood pressure was 19.7 +/-7.4 mmHg systolic (p<0.001) and 4.3 +/-3.7 mmHg diastolic (p<0.001). No serious adverse effects were observed or reported in these studies. The study also demonstrated that reduction in blood pressure was titrated by modifying BackBeat CNT parameters as needed.

Acute Clinical Study (Prague):

On March 6, 2024, we announced the presentation of results from a PV loop clinical study of AVIM therapy in pacemaker-indicated patients with uncontrolled hypertension despite the use of antihypertensive medication. The new clinical data demonstrate the favorable hemodynamic impact of AVIM therapy as compared to standard right ventricular (RV) pacing on systolic blood pressure and overall cardiac function when delivered using both conduction system as well as standard pacing lead locations. The PV loop study was conducted at Na Homolce Hospital in Prague by Petr Neužil, MD, CSc., FESC and the data were presented by Prof. Karl-Heinz Kuck, M.D., Medical Director at LANS Cardio Hamburg at the Technology and Heart Failure Therapeutics 2024 Meeting.

The PV loop study enrolled 16 patients indicated for a dual-chamber pacemaker that also had uncontrolled hypertension despite antihypertensive medication underwent invasive PV loop testing to evaluate cardiac function, measured by changes in left ventricular (“LV”) volumes and pressures using a pressure-volume catheter placed in the LV. Systolic blood pressure (SBP) was measured using a pressure transducer placed in the aorta, and baseline measurements were recorded using atrial pacing at a fixed rate and normal conduction AVIM therapy with pacing leads placed in AVIM RV locations as well as in AVIM CSP locations targeting the left bundle branch area (LBBA) regions, respectively, was compared to standard AV Pacing.

Overall mean results for each variable were calculated using paired measurements for each individual patient using AVIM RV, AVIM CSP and AV Pacing, respectively:

Chronic Clinical Studies:

MODERATO I Single Arm Study

The 27-patient, MODERATO I clinical study was conducted in Europe and Chile toevaluatethe safety and efficacy of BackBeat CNT therapy using our proprietary Moderato system, capableof delivering BackBeat CNT as well as performing therhythm management function of a standard dual-chamber pacemaker. The Moderato system, comprised of the implantable pulse generator (“IPG”) andprogrammer, was manufactured under an original equipment manufacturer contract by a division of Integer Holdings Corporation (“Integer”), a leading supplier of cardiac rhythm management device components. The Moderato system was European Conformity (“CE”) marked in July 2019. However, we do not plan to commercialize the Moderato device butmay consider utilizing the CE marked system to conduct additional clinical workin the EU.

The results from the MODERATO I study were published in December 2017 in theJournal of the American Heart Association. The main inclusion criteria required patients tohave oSBP >150 mmHg despite takingat leasttwo anti-hypertensive drugs as well ashavinga clinical indicationfora dual-chamber pacemaker implant or replacement. Twenty-seven patients meetingall study entry criteria underwent a Moderato device implant, atwhich time only standard pacemaker functions were activated. Nearly 80% of the patients enrolled had ISH, making them a more difficult group of patients to treat. All enrolled patients were implanted with Moderato devices and then followed fora one-month observation period toevaluateany changes in blood pressure due to either the initiation of standard pacing alone or due to their participation in thestudy. At the end of the one-month period blood pressure was reassessed to ensure oSBP remained >140 mmHgfor eligibility to enter the treatment phase of thestudy. Only 27 patients met the criteria and in these patients BackBeat CNT was activated. Patients were then reevaluated following three months of treatmentfor changes in blood pressure assessed by both office cuff measurements and by 24-hour ambulatory blood pressure recordings. Thestudy’sco-primary efficacy endpoints were changes in oSBP and mean 24-hour aSBP (added as study amendment) from pre-activation through three months post activation oftherapy. All 27 patients completed thestudy’sthree-month activation period and clinical follow-up. Twenty-onepatients consented to befollowed at 6, 12, 18 and 24 months after activation and only oSBP levels were measured at these longer follow-up time points due to the fact that measuring changes in aSBP overtwo- to six-month periods is generally deemed appropriate to assess HTN therapies and because additional aSBP measurements are highly burdensomefor patients that participate in HTN studies as they require wearing a device that takes frequent blood pressure measurements overa 24-hour period. Two-year follow-up data available from these 21 patients was presented for the first time in October 2017 at the Transcatheter Cardiovascular Therapeutics (TCT) conference in Denver, Colorado.

The co-primary efficacy endpoint of changes in mean 24-hour aSBP was met successfully with BackBeat CNT activation driving a significant 11.6 mmHg reduction (p<0.001) from pre-activation levels during the first day of therapy. The reduction was maintained through the three-month activation period, representing a statistically significant reduction of 10.1 mmHg (p=0.007) from the pre-activation aSBP. Seventeen of the 27 study patients participated in the co-primary efficacy endpoint analysis which was included as amendment to the MODERATO I study design following initiation of the study given new evidence from other clinical studies regarding the potential importance of change in mean 24-hour aSBP in assessing the potential efficacy of HTN therapies.

The co-primary efficacy endpoint of changes in oSBP wasalsomet successfully with BackBeat CNT driving a statistically significant reduction in oSBP,16.1 mmHg (p<0.001) from pre-activation levels. This reduction in oSBP was maintained in patients who reached the later follow-up time points with a mean statistically significant reduction of 23.4 mmHg (p<0.001) in oSBP from baseline levels after 24 months of therapy.

Long-term (24-month) data showed results consistent with expected mechanism of action, including statistically significant reduction in heart rate (p<0.05), a key measure of sympathetic nervous system activation, and end-diastolic volume, a key safety measure. In addition, comparison of echocardiograms performed at baseline and following activation up to two years of BackBeat CNT therapy showed that there were no significant changes in cardiac function (ejection fraction).

24-month Data Consistent with Expected Mechanism of Action

During the initial study period for MODERATO I, there were eleven serious adverse events (“SAEs”)** **in seven of the 27 study patients. Nine events in six patients were cardiac related. Two non-cardiac events were urinary tract infection and dyspnea treated with bronchodilator. No events were adjudicated as definitely or probably related to BackBeat CNT. One event was adjudicated as probably related to the implant procedure for the Moderato device. Four events in four patients were adjudicated as possibly related to the Moderato device(atrial fibrillation, myocardial infarction with symptoms of heart failure, cardiac asthma, and arrhythmia due to ventricular oversensing).

During the extended 21-month follow-up period that included 24 patients who continued with BackBeat CNT, there were 25 SAEs in twelve patients. No events were adjudicated as definitely or probably related to BackBeat CNT. Out of 25 events, 17 events in seven patients were cardiac related. There were eight non-cardiac events in eight patients. The non-cardiac events included two orthopedic events, two cases of cancer, a transient ischemic event, and three respiratory related events. Five events in three patients were adjudicated as possibly device related. These included two events of atrial fibrillation in the same patient, pneumonia with cardiac decompensation and dyspnea with cardiac decompensation in one patient, and cardiac decompensation in another patient.

MODERATO II Double-Blind, Randomized Study

The results of the MODERATO II study of BackBeat CNT in hypertensive patients also indicated for a pacemaker were published in August 2021 inthe Journal of the American Heart Association. All patients enrolled in the MODERATO II, a European prospective, multi-center, double-blind, randomized pilot study of BackBeat CNT, had persistent HTN (aSBP ≥ 130 mmHg and oSBP ≥ 140 mmHg) despite one or more anti-hypertensive medications and a pacemaker indication, and were implanted with our Moderato System. Following a 30-dayrun-in period during which patients received only standard pacing along with anti-hypertensive medications, patients who met follow-up screening criteria for daytime aSBP were randomized to BackBeat CNT or control groups.

Prior to randomization, mean aSBPfor both groups was 136.3 mmHg with patients, onaverage, treated with over three prescribed anti-hypertensive drugs.88.5% of the patients in the BackBeat CNT treatment arm had ISH, making them a more challenging group of patients to treat. 71.4% of control arm patients also had ISH. The study met its primary efficacy endpoint of superiority of BackBeat CNT to control in terms of change in mean 24-hour aSBPatsix months following randomization. After six months, mean aSBP was reduced by a statistically significant 11.1 mmHg in the BackBeat CNT group as compared to a non-significant reduction of 3.1 mmHg in the control group, resulting in a statistically significant difference of 8.1 mmHg (p=0.01) between groups.

The treatment group saw a high (85%) overall response rate, with approximately 54% of the BackBeat CNT-treated patients experiencing aSBP reduction at six months of greater than 10 mmHg, an amount associated with a clinically meaningful reduction in risk of heart attack and stroke.

The study met its secondary efficacy endpoint of superiority of BackBeat CNT to control in terms of change in oSBP at six months following randomization. After six months, oSBP was reduced by a statistically significant 12.4 mmHg in the BackBeat CNT group as compared to a non-significant reduction of 0.1 mmHg in the control group, resulting in a statistically significant difference of 12.3 mmHg (p=0.02) between groups.

The MODERATO II study alsomet its primary safety endpoint, which was no significant differences in rates of MACE. There were no MACEin the BackBeat CNT group and three MACEintwo patients in the control group (one death from cancer andtwo cardiac events)atsix months. Additionally, there were no notable differences in echo parameters between thetwo arms. During the randomized phase of thestudy, there were eight SAEs in four patients in the control group (n=21) and none in the treatment group (n=26). Twoof the eight events were cardiac related. During the extended 18-month follow-up period that included treatment patients (n=26) and crossover-to-treatment patients (n=14), there were

26 SAEs in 16 patients. Out of 26 events, only 13 events (in eleven patients) were cardiac related. No events were adjudicated as possibly related to BackBeat CNT. The non-cardiac events included four cancer related events, for gastrointestinal disorder events, one COVID-19 death, one amputation, two inflammatory events, and a transient ischemic event.

BackBeat CNT-treated patients in the MODERATO II study continued to be followed through the 24-month period of the study, including control patients who crossed over to BackBeat CNT after the endof the six-month double-blind period of the study. Only oSBP measurements were taken at follow-up visits after the six-month aSBP primary endpoint was measured. Significant reduction in oSBP, a mean of 17.5 mmHg, was maintained in all BackBeat CNT-treated patients who completed the 24-month follow-up. The results for 24-hour aSBP and oSBP at six months post-randomization, as well as the oSBP results at 24 months are shown in the figure below:

Definitions: Major Adverse Cardiac Events (MACE) included death, heart failure, clinically significant arrhythmias (i.e., persistent or increased atrial fibrillation, serious ventricular arrhythmias), myocardial infarction, strokeand renal failure in treatment group calculated per patient; Office Systolic Blood Pressure (oSBP); and Ambulatory Systolic Blood Pressure (aSBP).

Additionally, as shown in the chart below, the mean pre-activation 24-hour aSBP profile (systolic blood pressure plotted over a 24-hour period) for all 26 BackBeat CNT patients (prior to BackBeat CNT) was significantly reduced at six months following BackBeat CNT activation at all time points.

Following completion of the randomized period and successful achievement of the primary endpoints, 14 control patients crossed overto active BackBeat CNT. Nine of the fourteen patients had ISH. The results in these patients were encouraging and consistent with the reductions in the BackBeat CNT group during the randomized portion of the study and are summarized below:

MODERATO II Long-Term Follow Up Study:

On February 26, 2024, we announced results from a follow-up study that enrolled 16 patients originally enrolled in the MODERATO II study. This group included eight patients from the MODERATO II AVIM treatment arm and eight control arm patients that crossed over to AVIM therapy at the end of the 6-month double-blind phase. Each patient’s aSBP was measured an average of 3.6 (±0.6) years following original initiation of AVIM therapy. As a group and based on individual paired data, these patients continued to experience a statistically significant, clinically meaningful mean aSBP reduction of 8.9 mmHg, identical to the 8.9 mmHg mean reduction in aSBP seen in this same group of patients at the 6-month primary aSBP measurement endpoint of the original study.

BackBeat CNT in Patients with ISH

In a subgroup of patients with ISH, a dangerous and challenging to treat form of HTNprevalentin older patients, treatment with BackBeat CNT resulted in clinically meaningful and statistically significant reductions of 7.4 mmHg in aSBP and 11.9 mmHg in oSBP when compared to control (continued medical therapy) patientsatsix months. Further, in patients with ISH, BackBeat CNTdrove statistically significant reductions of 9.4 mmHg in ambulatory Pulse Pressure and 13.3 mmHg in office Pulse Pressure at six months as compared to control patients.

Clinical, Regulatory and Commercialization Pathway

The BACKBEAT Global Pivotal Study

On September 19, 2023, we announced that the FDA granted us IDE approval to initiate our planned BACKBEAT (BradycArdia paCemaKer with AVIM for Blood prEssure treAtmenT) pivotal study (the “BACKBEAT pivotal study”) to treat HTN in patients indicated for a pacemaker. On January 8, 2024, we announced that the first patient was enrolled and randomized into the BACKBEAT pivotal study in late December 2023. The BACKBEAT pivotal study is a global, multi-center, prospective, randomized, double-blind study investigating the efficacy and safety of AVIM therapy in patients who have recently undergone implantation of a Medtronic dual-chamber cardiac pacemaker and have uncontrolled HTN despite the use of antihypertensive medications. We are actively screening patients for enrollment in the BACKBEAT pivotal study. Site activations are expected to continue throughout 2024 with a target of activating approximately 80 centers in the United States and Europe. The study will randomize approximately 500 patients 1:1 to AVIM therapy combined with continued medical therapy (treatment) or continued medical therapy and standard pacing alone (control). The study’s primary efficacy endpoint will determine at three months post-randomization whether AVIM-treated patients experience a statistically significant reduction in daily average blood pressure (mean 24-hour aSBP) as compared to control patients. The primary safety endpoint will determine at three months post-randomization whether AVIM-treated patients experience serious adverse device effects that are not anticipated with cardiac pacing. Double-blind follow up will continue through 12 months to enable the collection of additional clinical endpoints. All patients will be eligible to cross over upon completion of the 12-month blinded follow-up phase. The design of the BACKBEAT pivotal study is outlined in the chart below:

We utilize a four-pronged approach to support clinical activities for BackBeat CNT: (1) full-time employees to directly manage clinical studies and supervise external providers; (2) an external contact resource organization (“CRO”), that serves as the authorized and legal representative of the study sponsor, submits study protocol for approval by clinical site review boards and ethics committees, and reports adverse events; (3) local part-time independent clinical research associates and field clinical engineers (“FCEs”) sites that can assist with site initiations, clinical study activities and full data monitoring; and (4) FCE and other clinical and regulatory resources from Medtronic, our strategic partner, to assist with certain clinical study activities.

In the third quarter of 2019, the Moderato implantable system that delivers BackBeat CNT for the treatment of HTN while also providing standard pacemaker functions was CE marked in the EU under the Active Implantable Medical Device Directive. We currently do not have plans to commercialize this system in the EU on our own but believe there is a significant opportunity for Medtronic to commercialize AVIM therapy-enabled pacemakers in the EU post-marketing approval. We expect that the BACKBEAT pivotal study will include at least 20 clinical study sites in the EU, including several sites that participated in the MODERATO I and II studies.

Forthe clinical and regulatory development of AVIM therapyfor High-Risk HTN, we will seek to leverage data from the BACKBEAT pivotal study given that age and other demographic factors of the target population are expected to besimilar, the type of hypertension treated will likelybe isolated systolic hypertension which is a predominant form of HTN in the HTN+P population, and other comorbidities arealso expected to be similar to both target populations.

BackBeat CNT & CNT-HF for Heart Failure

Our Bioelectronic Therapies group isalso seeking to develop a pipeline of additional treatmentsfor development and future licensing based on its patented CNTtechnology. The lead follow-on therapy candidate is CNT-HF, a bioelectronic treatmentfor HF. According to the AME Medical Journal, HF affects an estimated 64 million people worldwide. According to the CDC, 6.8 million Americans have HF, which contributed to 1 in 8 deaths in the United States in 2020, while costing nearly $31.0 billion annually. AHA projects the cost of HF will increase by 127% to $69.8 billion in 2030, amounting toapproximately$244 forevery U.S. adult. Approximately halfof the patients with signs and symptoms of heart failure have largely normal left ventricular ejection fraction and are therefore considered Heart Failure patients with Preserved Ejection Fraction (“HFpEF”), according to the AHA. The prevalence of HFpEF compared with prevalence of HF with reduced ejection fraction (“HFrEF”), appears to be increasing over time along with aging of the population and the increasing prevalence of risk factorsfor HFpEF, such asobesity, HTN, and type 2 diabetes as well as improvements in diagnosis, according to the AHA. Those living with HFpEF experience frequent hospitalizations and high mortality rates. Nevertheless, there are currently noapproved disease-modifying therapiesfor HFpEF. The success of existing HF therapies is mostly limited to treatment of HFrEF, not HFpEF, according to GlobalData.

We are exploring the benefits of AVIM therapy (BackBeat CNT) in patients with HTN and/or ISH that are at high risk for the development of HFpEF or have early stage HFpEF. We believe there is a likely physiologic relationship between the cardiovascular strain of chronic HTN and ISH and the development of HF, particularly HFpEF. We believe AVIM therapy may play a beneficial role in the dynamic, helping to prevent progression of HFpEF. We initiated clinical feasibility work with regard to CNT-HF, a modified cardiac neuromodulation therapy algorithm that, like BackBeat CNT, aims to achieve autonomic nervous system modulation with a primary focus on sympathetic down-regulation without substantial impact on blood pressure for the treatment of HFrEF. HFrEF is a syndrome characterized initially by left ventricular dysfunction that triggers countermeasures aimed to restore cardiac output. These responses are compensatoryat first but eventually become part of the disease process itself, leading to further worsening cardiac function. Among these responses is the activation of the sympathetic nervous system (“SNS”), that provides inotropic support to the failing heart increasing stroke volume, and peripheral vasoconstriction to maintain mean arterial perfusion pressure, but eventually accelerates disease progression affecting survival. Activation of SNS has been attributed to the withdrawal of normal restraining influences and the enhancement of excitatory inputs, leading to worsening heart failure symptoms and progression of disease.

We are conducting an ongoing European acute clinical study of CNT-HFforthe treatment of patients with HFrEF. In total, we expect to treat over 20 HFrEF patients acutely with exploratory CNT-HF algorithms. If the results from these acute clinical studies are encouraging, wewill likely seek to initiate a chronic feasibility implant clinical study of CNT-HF using an upgraded version of our Moderato IPG.

If safe and effective, we believe CNT-HF for the treatment of heart failure has the potential to be an attractive therapeutic candidate for licensing and collaboration with strategic partners that have established commercial cardiac rhythm management business. We anticipate that CNT-HF will run on a dual-chamber pacemaker, a three-chamber bi-ventricular pacemaker (also known as a cardiac resynchronization therapy or “CRT” device), as well as, potentially, a combined pacemaker/CRT/defibrillator, allowing potential strategic partners already in the cardiac rhythm management business to provide an entirely new HF treatment leveraging their existing manufacturing and commercialization infrastructure.

FOCAL** THERAPIES — Virtue SAB for Artery Disease and SirolimusEFR for Local Inflammation in Multiple **Indications

We are developing high impact therapeutic product candidates designed to optimize focal drug delivery during well-established interventional procedures with the objective of improving clinical outcomes and reducing complications. Our flagship product candidate of the Focal Therapies group is the Virtue SAB, a drug/device product candidate that is designed to enable targeted delivery ofsirolimus, anapproved pharmaceutical agentfor preventing restenosis during interventional stent treatment of artery disease, the leading cause of death worldwide. Wehavea global strategic partnership with Terumo, one of theworld’slargest medical device companies, for Virtue SAB. Weare also exploring multiple additional applications of SirolimusEFR, ourproprietary, investigational extended focal release formulation of sirolimus used in Virtue SAB. Sirolimus is a widely used anti-proliferative, anti-inflammatory pharmaceutical, which we believe in its unique formulation has the potentialforthe treatment of local inflammation in target tissues other than coronary and peripheral arteries.

Below is a detailed summary of Virtue SAB and an overview of potential future SirolimusEFR-based programs.

Virtue Sirolimus AngioInfusion Balloon

Virtue SAB is anovel, proprietary drug/device combination product candidateforthe treatment of artery disease that is designed to deliver an extended focal release formulation of sirolimus to the vessel wall during balloon angioplasty without the needfor balloon coating or a permanent implant. Virtue SAB utilizestwo keyenabling technologies, ourproprietary, investigational formulation ofsirolimus, SirolimusEFR, and its patented microporous AngioInfusion Balloon, that work synergistically to optimize the clinical performance of the product candidate. Clinical data from the SABRE trial, a multi-center, prospective, independent core lab-adjudicated pilot clinical study of 50 patients conducted in Europe, has positioned Virtue SABfora U.S. pivotal clinical study to support potential FDA approvalforthe treatment of ISR. Wewill sponsor this study, called the Virtue ISR-US. The aim of this study is tohave Virtue SAB be the first approved AngioInfusion Balloon for coronary use in the United States. We believe Virtue SAB has the potentialfor further evaluationin follow-on clinical indications such as treatment ofde**novocoronary small vessel (“SV”) disease, and below-the-knee peripheral disease (“BTK”). According to our current agreement, Terumois responsiblefor executing a global clinical and regulatory development program focused on SV, BTK and coronary indications, except for the Virtue ISR-US trial, forwhich wehave responsibility.

Strategic Partnership with Terumo

In June 2019, we entered into the Terumo Agreement with Terumo, one of the largest medical device companies in the world, with corporate headquarters in Tokyo, Japan, pursuant to which Terumo secured global commercialization rights for Virtue SAB in coronary and peripheral vascular indications (“Subject Indications”). Under the Terumo Agreement, Terumo made an upfront payment to us of $30.0 million and invested a total of $5.0 million in our lasttwo private equity financings andmay potentially make additional future clinical and regulatory milestone payments to us. Further, according to the agreement, which is currently in the process of being renegotiated, it is expected that Terumo will assume financial and execution responsibilityfor substantiallyall future clinical and regulatory development, except for the Virtue ISR-US trial, forwhich we are responsible. Our responsibilities in this regard with respect to the current agreement include completing the development of the product in the United States in support of Terumo filing for premarket approvalby the FDAforthe ISR indication including (i) manufacturing, testing and packaging the drug requiredforthe clinical trials,(ii) supplying Terumo with information related to the design and manufacture of the delivery device and the technology transfer neededfor Terumoto ultimately commence manufacture of the delivery device, and (iii) conducting clinical studies in the United Statesforthe ISR indication, including regulatory activities related to such studies. Terumo will alsobe responsiblefor device manufacturing, commercial sales, marketing and distributionfor Virtue SABfor coronary and peripheral vascular indications globally. The agreement also provides for us to be able to perform research, development, clinical, regulatory, manufacturing and supply activities on behalf of Terumo, if requested, and be reimbursedfor such services or paid on a “cost plus” basisfor supplies. In addition, we will manufacture, orhave manufactured, SirolimusEFR andhave exclusive rights to sell it on a per unit basis to Terumo foruse in the Virtue SAB product, and Terumo may also request other services from us from time to time.

Pursuant to the Terumo Agreement, we share inallof Terumo’s Virtue SABrevenues during the term of the agreement through future royaltiesof 10 – 15% of net sales of Virtue SAB, and additional per unit payments for SirolimusEFR used in Virtue SAB for which we are the sole exclusive supplier. The initial term of the Terumo Agreement expires on the tenth anniversary of the date on which the first pre-market approval application (“PMA”) is obtained from the FDAfor Virtue SABfor ISR, and thereafter automatically extendsfor five-year periods unless terminated by Terumo. Under the Terumo Agreement, we retain the rights to develop and license technology used in Virtue SAB, including SirolimusEFR, forclinical applications outside of coronary and peripheral vascular intervention.

Under the Terumo Agreement, we were initially eligiblefor certain milestone payments in the amount of $65 million from Terumo upon completion of certain minimum enrollments in clinical studies, making certain filings and submissions, and obtaining certain regulatory approvalsand certifications. Of these milestone payments, $35 million relate to achieving certain milestones by specified target achievement dates. As of the date this Annual Report on Form 10-K, the target achievement datefor two$5 million milestone payments hasalready passed. In addition, due to delays in our Virtue SAB program resulting from the COVID-19 pandemic, supply chain issues and unexpected changes to regulatory requirements, including increased testing and other activities related to chemistry, manufacturing, and control, increased nonclinical and good laboratory practice preclinical data requirements, including biocompatibility, as well as a requirement to repeat good laboratory practice preclinical studies already performed based on changes to source of component materials and a change in manufacturing site, the Company is unlikely to beableto complete the remaining time-based milestones by the specified target achievement dates to earn the remaining$25 million in time-based milestone payments pursuant to the Terumo Agreement. Further, Terumo has the right to terminate the agreement, or certain of its obligations thereunder, if certain milestones are not achieved over time.

As previously disclosed, we have been negotiating with Terumo for mutually agreeable adjustments to the Terumo Agreement with the purpose of restructuring milestone payments as well as making other potential material modifications to that agreement including additional financial commitments by Terumo to Orchestra and the Virtue SAB program. We have delayed initiation of our Virtue ISR-US pivotal study, for which we secured conditional IDE approval from the FDA on August 8, 2023, until such time as we and Terumo restructure the Terumo Agreement in a manner that provides us with a satisfactory amount of additional capital, whether from milestone payments or other financial arrangements. In addition, in light of the recent FDA approval of Boston Scientific Corporation’s AGENT™ paclitaxel-coated balloon for the treatment of coronary ISR, we and Terumo are reviewing the design for the Virtue ISR-US pivotal study and considering alternative clinical study designs with input from our clinical steering committee for Virtue SAB. If negotiations are not completed to our satisfaction or to the satisfaction of Terumo, clinical study, product development, and commercialization plans for Virtue SAB may continue to be adversely impacted.

Market Needs — Coronary and Peripheral Artery Disease

Artery disease is caused by atherosclerosis, the hardening and narrowing of the arteries due to the build-up of fatty material and plaque that reduces blood flow through the blood vessels supplying the heart muscle (CAD) or limbs (PAD). CAD reduces blood flow and oxygen supply to the heart muscle and canresult in angina, heart attack and lead to heart failure andarrhythmias. PADcan happen inany blood vessel, but it is more common in the legs than the arms and can lead to pain, muscle weakness, wounds and ulcers that are difficult to heal and, eventually, amputation.

According to the WHO, CAD is the top cause of global death, resulting inover 17.8 million deaths annually worldwide. According to the CDC, CAD was responsible for 695,000 deaths in the United States in 2021. According to the AHA, about 2 in 10 deaths from CAD happen in adults less than 65 years old. About 18.2 million U.S. adults aged 20 and older have CAD (about 6.7%), according to the CDC. Approximately 8.5 million people overage 40 in the United States have PAD, including up to 20% of individuals older than age 60, according to the CDC.

Interventional Cardiology

Interventional cardiology is a medical specialty that uses minimally invasive transcatheter, percutaneous technologies and techniques to treat artery disease andatherosclerosis. Catheter-based interventions using balloon angioplasty, stents and other technologies are the most common medical procedures used to treat artery disease and related conditions. There

were over 6.4 million coronary andover 1.6 million peripheral catheter-based interventional procedures performed worldwide in 2022 according to Global Data & LSI Research. The global marketfor coronary interventional devices used to treat CAD, such as stent and balloon angioplasty systems, wasvalued at approximately$16.2 billion in 2022, and the global marketfor devices used to treat PAD, including angioplasty balloons, drug-coated balloons (“DCBs”), stents and atherectomy systems, wasvalued over$4.7 billion in 2022, according to market research firms LSI Research, Fortune Business Insights, and Global Market Insights.

The Evolution of Available Treatment Options

Balloon angioplasty is a procedure where small balloons integrated into catheters are introduced into the vascular system through a small puncture in the femoral artery in the leg or radial artery in the arm. Using specialized imaging technology called angiography, the balloon catheter is threaded through the vasculature to the site of blockage in an artery in the heart (coronary) or in the peripheral vessels. The balloon is then inflated using high pressures (up to 20 atmospheres) in order to crush the blockage (plaque) and expand the artery to restore blood flow.

While plain balloon angioplasty can offer significant clinical benefits, italso comes with drawbacks, such as elastic recoil, arterial remodeling or vascular smooth muscle cell excessive proliferation resulting in restenosis (vessel renarrowing) in response to balloon injury. These problems drovethe development of bare metal stents (“BMS”) that are permanently implanted to hold a vessel open. These devices helped address elastic recoil and remodeling which helped reduce the impact of restenosis while also limiting the incidence of abrupt closure.

While the use of BMS helped address abrupt closure, it did not fully address the problem of restenosis in response to injury caused by the interventional procedure. Both angioplasty and stenting cause a stretch injury to the artery, resulting in a healing response whereby arterial smooth muscle cells proliferate and may block the artery again, a process known as restenosis. Restenosis can also occur over longer periods of time after a procedure because of the development of new atherosclerosis.

To help address the problems of restenosis, device manufacturers introduced drug-eluting stents (“DES”), which are stents coated with potent pharmaceutical agents that stop excessive cellular proliferation and thereby minimize restenosis within the stent (ISR). The most commonly used drugs were sirolimus, ‘limus analogs and paclitaxel. Paclitaxel is a cytotoxic drug widely used in cancer chemotherapy. Paclitaxel interferes with cell division, leading to cell death. Sirolimus and other ‘limus analogs, on the other hand, are cytostatic drugs widely used as an immunosuppressant to prevent transplant rejection. Sirolimus works by blocking a key pathway critical to cell proliferation while allowing the cell to continue to function when sirolimus is no longer present. Sirolimus and its analogs, or ‘limus agents, can be administered in high doses without adverse effects, resulting in a low toxicity profile.

In a large meta-analysis of 76 studies in patients undergoing percutaneous coronary intervention, ‘limus-eluting stents outperformed paclitaxel-eluting stents. In a meta-analysis of 26 randomized controlled trials, ‘limus-eluting stents demonstrated superior safety and efficacy with significantly lower MACE and target lesion revascularization, rates compared to paclitaxel-eluting stents (see figure below). Thus, ‘limus analog eluting stents have become the clear “gold standard,” with nearly 100% current global market share in the coronary DES marketplace.

One clearly demonstrated requirementforthe use of sirolimus and other ‘limus agents in DESforthe prevention of restenosis is that they bebioavailable for approximately 30 daysatthe treated lesionfor optimal efficacy. This 30-day period is considered the critical healing period following the baseline interventional procedure during which the DES is implanted. Forcommercially successful DES products marketed by leading companies such as Medtronic, Abbott and Johnson & Johnson, the drug elution profile, or rateat which drug is released from the stent, has been specifically engineered and demonstrated in published preclinical results to provide drug availability for approximately 30 days. The critical importance of this 30-plusday elution profilefor sirolimus and ‘limus agents is best demonstrated by Medtronic’sexperience with its first DES product called Endeavor. The Endeavor DES was designed tohavea faster drug release profile resulting an elution period ofapproximately 14 days. Clinical results with the Endeavor product were notfavorableas compared to other commercially available DES. Subsequently, Medtronic developed and commercialized another DES product called Resolute that eluted Zotarolimus, a ‘limus agent proprietary to Medtronic, over more than 30 days. Medtronic conducted head-to-head clinical studies comparing Endeavorto Resolute demonstrating significantly superior clinical outcomesfor Resolute in terms of Late Lumen Loss (“LLL”), and Target Lesion Failure(“TLF”). The figures below show the drug elution profile of the fast-eluting Endeavor DES compared to Resolute and the Cypher DES (Johnson & Johnson) and the Xience DES (Abbott), as well as clinical outcomes comparing Endeavorto Resolute.

While DES offer significant clinical improvements over plain balloon angiosplasty and BMS, they have limitations, including the needfor long-term use ofdual antiplatelet therapy(havingto usetwo types of antiplatelet agents) to address the new issues of late and very late stent thrombosis (formation of a blood clot) caused by delayed healing, local inflammation and impaired endothelial function around the stent. In addition, restenosis within a stent occurs in 5 – 10% of stented patients during the first year and continuesata rate of up to 3% per year thereafter, according to data from the National Cardiovascular Data Registry.

The limitations of DES prompted innovation for improved solutions that enable local delivery of anti-proliferative drugs while not leaving a permanent metal implant in the vessel. Bioabsorbable vascular scaffolds (“BVS”), were developed with the objective of performing like stents while eventually dissolving andleaving nothing behind after a fewyears. In July 2016, the first such device wasapprovedby the FDA, Abbott’s Absorb Everolimus-eluting BVS. Unfortunately, this promising innovation has encountered several setbacks in clinical studies and upon commercialization. In September 2017, Abbott decided to pull Absorb from the market while other device manufacturers halted their in-progress programs. As a result, the attractive concept of“leave nothing behind” drug-eluting interventional therapyfor coronary arteries remains unfulfilled. More recently, these devices are being exploredfor treatment of below-the-knee PAD, a challenging area of unmet needfor which we believe Virtue SABmay warrant further development.

Drug-coated balloons have emerged during the last decade with the goal of providing the mechanical vessel expansion and anti-proliferative drug properties of DES while leaving nothing behind. We believe the concept of combining balloon angioplasty with simultaneous delivery of anti-proliferative medicationmay offer incremental benefits over available interventional therapies by (i) preserving theartery’soriginal anatomy; (ii) enabling treatment of vessels where DES delivery is challenging, such as small and bifurcated vessels; (iii) offering potential clinical improvement in lesions where available interventional devices have shown poor performance, including below-the-knee and restenotic lesions; and (iv) minimizing the dependency on long-term dual antiplatelet therapy and associated bleeding risks.

While having the potential to offer benefits over available interventional therapies, drug-coated balloons face some important challenges:

Comparison of ‘Limus Agents and Paclitaxel by Key Attributes Relevant to Drug-Coated Balloons

In addition, third-party clinical data demonstrated that 50 – 80% of drug was washed or scraped off during transit to the target lesion prior to balloon inflation. Concerns of drug loss in transit and risk of particulates have prompted existing drug-coated balloon manufacturers to recommend balloon inflation within 30 seconds of balloon insertion into the patient, making it challenging for physicians to reach target lesions and ensure proper placement in such a short period of time, particularly in difficult coronary and peripheral lesions such ISR, small vessel disease, and below-the-knee disease.

Despite the limitations of paclitaxel-based DCBs, they are now widely used in the EU and Japan for the treatment of coronary ISR, coronary SV disease and other coronary indications. EU clinical guidelines recommend the use of DCBs for the treatment of coronary ISR based on clinical evidence. We estimate that potentially more than 30 percent of coronary interventions in the EU and Japan utilize a paclitaxel DCB. On March 1, 2024, Boston Scientific Corporation (“BSC”) announced FDA approval for its AGENT™ paclitaxel-coated balloon for the treatment of coronary ISR. This approval follows BSC reporting preliminary results from its US pivotal study comparing the AGENT DCB to plain balloon angioplasty for the treatment of coronary ISR. These results showed statistical superiority for AGENT over plain balloon angioplasty in terms of TLF, the primary endpoint for the study. We believe FDA approval will lead to substantial clinical use of the AGENT DCB and that it will potentially become the new standard of care for coronary ISR. However, we believe the 17.9% reported rate of overall TLF is still high and creates a need and an opportunity for a differentiated, sirolimus-based product like Virtue SAB to demonstrate superior results and improve this standard of care.

Targeted Unmet Needs and Market Opportunity for Virtue SAB

We believe significant unmet needs remain in certain artery disease indications where treatment options are limited or fail to adequately improve patient outcomes, including ISR, SV, high bleeding risk patients undergoing percutaneous revascularization and BTK. We estimate these indications currently represent a total addressable global market opportunity of approximately 3.2 million treatable artery disease lesions. Further, based on its estimation of appropriate regional average selling prices, we estimate that the current aggregate annual global market opportunity for Virtue SAB is at least $4 billion.

Theabove estimates are based on, among other things, our engagement andwork with an established market research firm to conduct market analysis around the Virtue SAB global opportunity. This third party employed both primary and secondary methodsfor data gathering andanalysis. Primary analysis involved multiple Q&A calls with industry-leading key opinion leaders to help assess the addressable patient population and the most addressable patient segments. Secondary data analysis was conducted by mining numerous subscription-based market databases, Medicare data and published literature. After gathering initial disease prevalence data, both we and the third party spent extensive time collaborating on further delineating potential procedure volumesfor coronary ISR, coronary SV disease, and BTK peripheral disease that can be addressed by Virtue SAB, taking into consideration patient treatment pathways, anticipated product benefits, competitive landscape and reimbursement. The market size calculations also took into account patients with high bleeding risk, which overlaps withall three target indications, and we believe will be an important driver of potential adoption. Third-party data mining, for which references were tracked, combined with our knowledge of market dynamics and anticipated product differentiation, helped us arriveatthe global procedure count of 3.2 million. Wedetermined average selling price estimates calculated by country or region based on existing competitive device prices, as well as estimated future pricing for Virtue

SAB and future competitive devices. Wecross-checked these estimates with Terumo, our strategic partnerfor Virtue SAB. Using the specific regional market size calculations by indication and the estimated ASPs, we were ableto calculate that the future addressable market value for Virtue SAB in its target indications to beat least$4 billion.

Impact Potential of Virtue SAB

Virtue SAB is a proprietary drug/device combination product designed to deliver extended focal release sirolimus during angioplasty for the treatment of atherosclerosis and prevention of restenosis. The patented Virtue SAB is specifically designed to perform angioplasty, a well-established interventional procedure where high-pressure balloon inflation mechanically re-opens a clogged artery. It also simultaneously enables protected delivery and extended focal release of therapeutic levels of proven sirolimus over the critical healing period following angioplasty, revolutionizing intra-procedural arterial drug delivery while leaving nothing permanent behind in the artery. While Virtue SAB is designed to achieve certain results as described above and below, there is no guarantee that Virtue SAB will prove to be safe and effective. Virtue SAB is designed to overcome the limitations of drug-coated balloons by:

The differentiated design of Virtue SAB was made possible by combining two key technologies:

Virtue SAB System Components and Deployment

The Virtue SAB product candidate is under development to be provided in two packages:

Since Virtue SAB is designed towork primarily as a balloon angioplasty catheter, the device most commonly used by interventional cardiologists, we believe it should berelatively easyfor physicians to learn, adopt and use the device. The additional steps we expect will be required to reconstitute SirolimusEFR are straightforward and familiar to nurses and technicians. Followingthe standard preparation of the vessel and after identifying the appropriate balloon size, Virtue SAB is designed to be deployed in three easy steps:

Preclinical Data

Wehave conducted extensive preclinical testing of Virtue SAB and itskey enabling technologies (SirolimusEFR and the AngioInfusion Balloon), including feasibility workas well as Good Laboratory Practice (“GLP”) studies in support of regulatory filings and approvals. This work includes a variety of benchtop as well as small and large animal models. Large animal studies have been conducted in a porcine animal model, a widely used model for testing of interventional cardiovascular devices. A particularly important series of preclinical studies involving 130 pigs and over 750 distinct artery treatment sites showed that Virtue SAB provided extended focal release of therapeutic levels of sirolimus through the critical healing period of approximately four weeks. The data from these preclinical studies was published in the peer-reviewed EuroIntervention Journal in 2016 and showed that Virtue SAB successfully delivered and enabled long-term focal delivery at the treatment site of a therapeutic sirolimus dose(abovethe 1ng of drug per mg of tissue). This therapeutic dose level has been clinically proven using DES to be safe and efficaciousat reducing restenosis during the critical healing period ofapproximately 30 days post-procedure. These preclinical studies also showed very low systemic concentrations in cardiac tissue as well as critical organs, such as lung, liver and kidneys, and did not showany adverse local or systemic effects.

Clinical Results

The SABRE, or Sirolimus AngioInfusion (formerly angioplasty)Balloon for Coronary In-Stent REstenosis, first-in-human clinical study was initiated in November 2013 by Caliber Therapeutics, Inc., which is now our subsidiary. SABRE was a prospective, 50-patient feasibility study at nine European centers (Belgium, The Netherlands, Denmark and Latvia), following patients for three years after Virtue SAB treatment, including angiographic follow-up at six months and clinical follow-up at one, two and three years.

Twelve-month follow-up data from the SABRE study, published inJACC**Interventionin October 2017, demonstrated the clinical study performance of Virtue SAB in what we believe was a very challenging patient population with predominantly long, diffuse restenotic lesions within stents that had been implanted, onaverage, nearly four years prior to the study enrollment.

Clinicians in the study reported a 100% procedural success rate on a per patient basis (which was defined as the ability to successfully deliver and deploy the deviceatthe lesion site) with Virtue SAB, suggesting the ease of use of the system. The primary safety endpoint was TLF at 30 days. TLF is commonly defined as a combination of MACE, which include cardiac death, target vessel myocardial infarction, as well as clinically (symptom) driven target lesion revascularization. The primary performance endpoint was six-month in-segment LLL, measured as the difference in the vessel lumen diameter immediately after the procedure compared to the follow-upatsix months.

Revised Per-Protocol Population

A revised per-protocol population was determined based on analysis of procedural data by an independent corelab. This analysis identified 14 cases out the 50 patients treated in the SABRE study that represented serious violations of the established inclusion and exclusion criteria of the protocolforthe study. Eight cases were excluded due to excessive proximity to the aorta or major side branches. Three cases were excluded due to treatment of lesions that were longer than available Virtue SAB devices were designed to treat or multiple lesions in the vessel where there was a target lesion. Finally, three cases were excluded due to previously stented restenosis (i.e., the lesion alreadyhadtwo overlapping treatment stents). The remaining 36 patients are referred to herein as the revised per-protocol, population.

Virtue SAB met the primary performance endpoint of the SABRE study with Virtue SAB demonstratingsix-month in-segment LLL was 0.12 mm, a positive result as compared to the study target of 0.43 mm. Virtue SAB met the primary safety endpoint with zero reported TLFsat 30 days. The secondary performance endpoint of binary restenosis wasalsomet with Virtue SAB achieving a rate of 2.8%. Revised per-protocol analysis showed a low 2.8% rate of TLF at one-year follow-up and 5.6% at three-year follow up. The increase in TLF after one year was because of the death of one study patient which was reported as multiple organ failure non-cardiac death and adjudicated as non-device and non-procedure related. Over the entire three-year period of the SABRE study, a total of 66 SAEs occurred in 32 of the 50 study patients (64.0%). A total of 29 SAEs in 18 patients were cardiac-related, of which:

A total of 37 SAEs in 25 patients were non-cardiac-related, none of them were adjudicated as “highly probable,” “probable,” or “possible” related to either the device treatment procedure or the investigational device. A total of eleven patients had both, cardiac- and non-cardiac-related SAEs.

Intent to Treat Population

The intent-to-treat (“ITT”) population included all the patients enrolled in the study including those treated despite a significant protocol violation as noted above. The ITT analysis of the SABRE study demonstrated 0% MACE and TLF in hospital or at 30 days follow-up, 10.2% MACE and 8.2% TLF atsix months, and 16.3%MACEand 14.3% TLF through three-year follow-up. LLL results were 0.31 mmatsix months. We believe these results were encouraging given that the ITT population had a high percentage of difficult to treat diffuse lesions as well as lesions with average time since original stent implantation of nearly four years which is substantially longer than typical ISR, which is most likely to occur 3 to 12 months after stenting.

Two-year and three-year clinical follow-up results from the SABRE study were presented at the Transcatheter Cardiovascular Therapeutics (“TCT”) conference in 2017 and 2018, respectively. We believe the angiographic and clinical results of the SABRE trial are encouraging and provide the basis for it to conduct the upcoming Virtue ISR-US pivotal clinical study in coronary ISR. The diagrams below summarize the clinical results from this study.

Angiograms of Virtue SAB in Patients

The below images were best matched pairs of baseline and six-month follow-up angiograms identified and are includedfor illustrative purposes only to show the outcome of Virtue SAB administration in successfully treated patients. The below images are not intended to be representative of all the patients treated in the study and their respective outcomes.

Patient 1 (06-03): Patient presented with an 11.54 mm lesion in the mid-left circumflex artery. Lesion was previously treated with a BMS. Thepatient’slesion was pre-dilated (a standard practice in drug-eluting balloon procedures) with a non-compliant balloon (a balloon that expands to one specific size independent of internal pressures commonly used to expand clogged arteries) and was treated with a 3.5 mm x 15 mm Virtue SAB. The patient had an excellent post-procedure outcome which was maintained through angiographic follow-upat 193 days. The LLL was measuredat-0.03 mm.

Patient 2 (11-03): Patient presented with a 17.8 mm diffuse lesion of mid-left arterior descending artery following implantation of a DES seven months prior. After pre-dilatation with a scoring balloon (capable of achieving greater pressures and commonly used to open long, diffuse lesion), the lesion was treated with 3.25mm x 25mm Virtue SAB. The patient had an excellent post-procedure outcome, which was maintained through angiographic follow-up (at 175 days). The LLL was measured at -0.16mm.

Global Clinical and Regulatory Program

Per the terms of the Terumo Agreement, we and Terumo plan to execute a global clinical and regulatory programfor Virtue SABfor multiple indications, with an initial focus on coronary ISR, coronary SV, and peripheral BTK lesions. Under the Terumo Agreement, it is expected that Terumo will assume financial and execution responsibilityfor substantiallyall future clinical and regulatory development except for the Virtue ISR-US trial, the planned U.S. pivotal clinical study to support submission of a PMA application to the FDAfor Virtue SABfor treatment of coronary ISR.

In 2019, the FDA confirmed that Virtue SAB will be regulated as a combination product candidate, with the FDA’s Centerfor Devices and Radiological Health as the lead review center of a marketing application. In addition, Virtue SAB has been granted Breakthrough Device designation in:

In August 2023, we announced that the FDA granted Orchestra IDE approval with conditions to initiate our planned Virtue ISR-US pivotal study evaluating the efficacy and safety of Virtue SAB for the treatment of patients with coronary ISR. We are permitted to begin enrollment of the study upon completion of standard clinical trial initiation activities including clinical center institutional review board (“IRB”) approvals. The conditional approval also requires us to submit additional information to the FDA.

Our IDE approval is currently for a study expected to randomize 300 patients with coronary ISR lesions previously treated with single layer of stents. Patients are to be randomized in a two-to-one ratio of treatment with Virtue SAB versus plain balloon angioplasty. The primary efficacy and safety endpoint will be TLF at 12-month follow-up. In parallel to the randomized arm of the study, we also currently plan to enroll a non-randomized study arm of 100 patients with coronary ISR lesions previously treated with a second layer of stents, or double-layer stent coronary ISR. In light of the recent FDA approval of BSC’s AGENT paclitaxel DCB, we are reviewing the design for the Virtue ISR-US and considering alternative clinical study designs with our clinical steering committee for Virtue SAB.

Subject to our restructuring the Terumo Agreement, we currently expect to enroll patients for the Virtue ISR-US study at up to 50 study centers in the United States which have already been identified and engaged to participate in the study. The Virtue ISR-US study will be further supported by highly qualified third-party resources, including a CRO, an independent core lab and independent imaging analysis lab.

We currently anticipate using SABRE study results as well as Virtue ISR-US results to support regulatory approval for Virtue SAB for the treatment of coronary ISR outside the United States. In accordance with the Terumo Partnership, we and Terumo have established a Joint Steering Committee (“JSC”) to oversee the development and commercialization of Virtue SAB. We have the right to participate in negotiations with regulatory bodies regarding study designs and other requirements for approval. The Terumo Agreement also provides for ways for us to support further clinical and regulatory development through the active involvement of its team and advisors, and it is anticipated that any such support work provided by us would be reimbursed by Terumo. Through the JSC, our role in regulatory negotiations and other active collaboration with Terumo, we expect to influence, monitor and help drive the execution of the global clinical and regulatory program for Virtue SAB.

SirolimusEFR — Additional Focal Therapies Product Candidates and Development Initiatives

We are also seeking to establish a pipeline of additional targeted therapeutic product candidates for development and future licensing based on our proprietary SirolimusEFR formulation as well as, potentially, the microporous AngioInfusion balloon technology used in the Virtue SAB. SirolimusEFR is an investigational, extended focal release formulation of sirolimus enabled by our proprietary Sostenocel technology. We believe the ability of its Sostenocel technology to enable localized, targeted delivery and extended tissue release of sirolimus offers the potential for new and impactful therapeutic applications of SirolimusEFR. Sirolimus, a pharmaceutical agent also known as rapamycin, is a macrolide compound that is used to treat artery disease (drug-eluting stents or drug-coated balloons), prevent organ transplant rejection, treat rare lung disease called lymphangioleiomyomatosis, and shown to be effective against various tumor types. In addition to these approved indications, sirolimus and its analogs have been studiedfor potential clinical benefit in a broad array of medical conditions.

Sirolimus and its analogs act to inhibit the mammalian target of rapamycin, which regulates cellular metabolism, growth, and proliferation. Through its cystostatic mechanism of action, sirolimus prevents cell replication and proliferation while the drug is present in cells and tissues. Unlike cytotoxic agents such as paclitaxel, however, sirolimus does not kill the cells it affects, and these cells return to normal function once the drug is no longer present. This safer anti-proliferative mechanism makes sirolimus a valuable pharmaceutical agent to suppress undesirable immune system activity, which is why systemic use of high doses of sirolimus is the primary treatment to prevent rejection of transplanted organs. It also makes sirolimus useful as an anti-inflammatory and anti-fibrotic agent, which is one of the primary reasons it was chosen as an anti-restenotic drug to coat on the surface of a permanent arterial stent. However, the therapeutics effects of sirolimus are limited by the amount of time sirolimus is present at a therapeutic concentration. The known half-life of sirolimus is short, approximately 62 hours. Sirolimus has an attractive safety profile and a wide therapeutic window which allows for relatively high dosing thresholds before risk of toxicity. However, using systemic delivery of the drug to achieve therapeutic effects in targeted tissues or organs requires regular systemic dosing, increasing the risk of off-target effects and toxicity.

Our proprietary Sostenocel technology is designed to facilitate a localized tissue depot of sirolimus and enable extended focal release of sirolimus over typical critical healing period of approximately 30 days, potentially overcoming the challenges of sirolimus’ short half-life. While our Sostenocel technology is designed to achieve certain results as described above, there is no guarantee that it will prove to be safe and effective.

We retain all rights to develop additional therapies using its proprietary SirolimusEFR to potentially treat focal inflammation outside of coronary and peripheral vascular indications. Further, we are currently working on allchemistry, manufacturing and controls (“CMC”) testing for its IDE submission for the combination product Virtue SAB that includes populating a drug master file (“DMF”). We believe this DMF will be helpful in supporting additional vascular regulatory indications for Virtue SAB as well as future potential non-vascular indications for SirolimusEFR with or without our microporous angioinfusion balloon technology. Depending on the indication, we may be able to leverage some of the biocompatibility and CMC data in the DMF, while providing additional data depending on the indication selected. Leveraging CMC data in the DMF as well as other preclinical, clinical and device testing work related to Virtue SAB may allow us to advance development of additional SirolimusEFR-based product candidates at an accelerated pace and at reduced cost, although no assurances can be given that development will proceed faster or at lower expense than otherwise expected.

We are evaluating the use of SirolimusEFR through a balloon device treatment and delivery system similar to our AngioInfusion Balloon or simply as a direct focal injection for treatment of additional indications associated with major medical conditions for which mature procedure-based markets already exist. We will seek to identify and initiate discussions with potential strategic partners when we believe sufficient data and evidence is available to support a potential business collaboration.

Therapeutic Medical Device Innovation — Opportunities and Challenges

Opportunities

Therapeutic medical device innovations that can help reduce healthcare costs while improving clinical outcomes are a critical component of successful healthcare delivery and offer future opportunities for clinical and commercial value creation. We were founded on the belief that accelerated development and commercialization of such innovations represents an opportunity to generate significant stockholder value while producing substantial clinical benefit to patients suffering from life-threatening and life-diminishing medical conditions. The following summarizes several of the key factors we believe are driving the overall therapeutic device market opportunity:

Challenges

Despite the substantial and growing needfor innovative medical device solutions, significant barriers of cost, time andwork prevent many such innovations from reaching patients. Smaller start-up companies that typically develop novel therapies often strugglefor resources to reach clinical and commercial value inflection, while large multinational medical device companies have constrained research and development budgets that limit investment in innovation and development-stage acquisitions. Based on data tracking medical device startups during the prior decade, companies that raise capital beyond Series A now require anaverageof $60 million in funding. In addition, overthe lasttwo decades, the medical device industry has undergone significant consolidation, with a similar goalof creating efficiencies as well as to maintain strategic relevance with their customers as hospitals and other providers seek to consolidate and extract savings from their supplier base. This global consolidation of the healthcare ecosystem creates significant challenges for emerging medical device companies, including:

Our Growth Strategy

Our growth strategy is primarily focused on the execution of key development initiatives and partnership opportunities within its existing product pipeline, with the objective to advance these product candidates tokey value inflection points and to form strategic partnerships for commercial value realization. This includes advancing clinical study activitiesforour flagship product candidates, as well as moving earlier stage product candidates further into clinical development. In the future, we will look to potentially expand our pipeline through collaborations or spinouts with corporate partners, targeted acquisitions that are made in parallel to forming strategic collaborations, royalty-based research and development partnerships, as well as highly selective organic development or intellectual property licensing.

We intend to carefully screen new opportunities utilizing our focused innovation selection criteria to ensure a fit with its partnership-enabled business model.

Our Team and Innovation History

Weare led by a highly accomplished, multidisciplinary management team with extensive experience and strong expertise inall phases of therapeutic product development. Our senior management team, including the vice president-level and above executives, has over 350 years of combined experience, with anaverage tenure of 25 years in the development and commercialization of procedure-based innovationsfor major clinical indications. Our team’s expertise includes clinical need and market analysis, product design and intellectual property prosecution, clinical and regulatory execution, as well as supply chain and quality system development. Members of our senior management team have been personally involvedin the development and regulatory approvalor clearance ofover 100 products andhave helped author over 600 patent applications. Our executive team is guided by a seasoned and highly accomplished board of directors with knowledge and experience in the healthcare industry, including medical devices, biotechnology and clinical medicine, as well as business operations, strategy, finance and capital markets. Further, our product development efforts are supported by world-renowned medical advisors who are physicians and scientists recognizedfor their knowledge of specific disease states and treatment options available, as well as their ability to quickly assess new technologiesfor clinical feasibility and likelihood of adoption.

All of the product candidates in our pipeline were conceived and developed by our management team and employees through predecessor companies founded by a medical device accelerator, Accelerated Technologies, Inc.(“ATI”). ATIwas originally founded in 2000 and employed active collaboration with industry-leading physicians to identify and purpose-build transformational therapeutic devices. Our founders and senior executives, Mr. Hochman and Mr. Sherman, joined ATIin 2006 and 2008, respectively. Prior to their joining, ATI was associated with the development of approved devices such as transcatheter aortic valve replacement (Percutaneous Valve Technologies, Inc., which was acquired by Edwards Lifesciences Corp. in 2003) and catheter-based temporary ventricular support (Impella CardioSystems AG, which was acquired by ABIOMED, Inc. in 2005). Mr. Hochman and Mr. Sherman assumed control of ATIin 2009 and proceeded to found new companies that developed Virtue SAB (Caliber Therapeutics), BackBeat CNT (BackBeat Medical), and the FreeHold Duo and Trio Retractors (FreeHold Surgical). Legacy Orchestra’s business was formed in May 2018 upon the merger of these three entities and a concurrent recapitalization. ATIwas subsequently acquired by Legacy Orchestra in December 2019.

Our Strategic Holdings

We own outright or maintains ownership of minority equity interests, convertible debt and/or royalty-stream interests in additional therapeutic device assets currently undergoing early-stage commercialization and further product development that we believe have growth and value appreciation potential. Our objective is to create and realize additional stockholder value through ownership in innovative therapeutic product solutions in core, adjacent and synergistic medical segments. Our strategic holdings include:

Targeted* Commercialization *— we estimate over 20,000 procedures using FreeHold devices have been performed in the United States to date, primarily in bariatric (obesity) and foregut (GI, metabolic) surgeries with some initial experience in paraaortic node dissections (gynecologic oncology), nephrectomies (kidney removal) and cholecystectomies (gallbladder removal). FreeHold’s targeted commercial development program involves only two dedicated sales representatives targeting hospitals in the United States to demonstrate clinical utility and commercial demand for FreeHold Devices.

Strategic Potential—we believe FreeHold devices have been optimized for strategic partnership because they are highly differentiated, enabling products that fit into current treatment paradigm, are easy to use with a relatively short learning curve and have sufficiently high profit margins that provide potential for partnering to enable a revenue sharing arrangement.

*Formation and Conversion to a Limited Liability Company —*In May 2018, Legacy Orchestra completed its acquisition of FreeHold Surgical, Inc., a Delaware corporation that has, among other things, the rights to our FreeHold Devices. FreeHold Surgical, Inc. was incorporated in Delaware in May 2010 and began development of its hands-free, intracorporeal retractors for minimally invasive surgery in 2012. In December 2019, Legacy Orchestra converted FreeHold Surgical, Inc., a Delaware corporation, to FreeHold Surgical, LLC, a Delaware limited liability company. References in this annual report to FreeHold refer to FreeHold Surgical, Inc. prior to its conversion to a limited liability company and to FreeHold Surgical, LLC after its conversion to a limited liability company, as applicable.

Motus GI issued a pool ofroyalty certificates that provided an interest in future Motus GIrevenues equal to three percent of net product sales (upon first generating, in the aggregate since its inception, net product sales equal to $20.0 million) and five percent of licensing proceeds (upon first generating, in the aggregate since its inception, licensing proceeds equal to $3.5 million). Royalties with respect to each of net sales and licensing proceeds were cappedata maximum of $30.0 million per year with respect to the entire pool ofroyalty certificates. Weacquired approximately 53% ofallthe royalty certificates issued by Motus GI, representing an interest inapproximately 1.6% of future net sales and 2.7% of future licensing proceeds, in each case subject to the minimum thresholds and caps discussed above. The expiration of this royalty interest was tied to the last valid patent claim covering Motus GI’s products on a country-by-country basis, which expiration with respect to the United States was 2037, which date could have been extended by the issuance of additional patents. On September 12, 2023, Motus GI and the requisite number of holders ofroyalty certificates entered into an Amendment Agreement (the“Amendment Agreement”), pursuant to which theroyalty certificates were amended to terminate the rights ofroyalty certificate holders to receive royaltiesin exchangeforan aggregate of 1,323,323 shares of Motus GI common stock. As a result of the Amendment Agreement, we received 701,522 shares of Motus GI common stock in exchangeforour royalty certificates.

From December 2016 to April 2023, Mr. Hochman, our chief executive officer, served as Chairman of the board of directors of Motus GI, and as a member of the board of directors until September 2023. Mr. Sherman, our president and chief operating officer, also served on the board of directors of Motus GI from December 2016 to September 2023.

Our Research and Development

We invest in research and development efforts that advance and expand its product pipeline. Our goals are to: (1) deliver on clinical, regulatory and commercial development objectives for Virtue SAB set forth in collaboration with our strategic partner, Terumo; (2) deliver on clinical, regulatory and commercial development objectives for BackBeat CNT set forth in collaboration with our strategic partner, Medtronic; and (3) further develop pipeline product candidates towards future partnerships with potential strategic partners. Our research and development expenses totaled $33.8 million for the year ended December 31, 2023, and $21.9 million and $12.9 million for the years ended December 31, 2022 and December 31, 2021, respectively.

We believe our ability to rapidly develop innovative product candidates is attributable to the dynamic product innovation process that we have implemented, the versatility and leveragability of our core technologies and our partnership-enabled business model that drives our innovation objectives and research and development process. We have recruited and retained engineers and scientists with significant experience in the development of medical devices. We have a pipeline of product candidates in various stages of development that are expected to provide additional strategic opportunities. Our research and development efforts are based at our facilities in New Hope, Pennsylvania and Fort Lauderdale, Florida.

Our Manufacturing and Supply

Bioelectronic Therapies (BackBeat CNT and CNT-HF)

Our wholly owned subsidiary, BackBeat Medical previously contracted with a business unit of Integer under an agreement (the “Integer Agreement”), to develop and manufacture the Moderato device, which consists of an IPG, powered by a primary battery and a programming system integrated by a programmer interface and telemetry wand and a software application capableof programming standard pacing functions as well as the different parameters of BackBeat CNT. All intellectual property that Integer developedfor BackBeat Medical during the performance of the Integer Agreement, whether independently orjointly, and that resulted from or uses BackBeat Medical’stechnology or intellectual property are owned by BackBeat Medical. Under the Integer Agreement, Integer provided BackBeat Medical a perpetual, royalty-free, fully paid, assignable, world-wide, non-exclusive licenseforthe device-incorporated Integer property, allowingtheuse of the incorporated Integer property only within BackBeat Medical’sfield of use (electrical therapies, particularly cardiac pacingfor(i) treatment of HTN and (ii)rhythm management in patients that were implanted with a deviceforthe treatment of HTN). Wealso utilize the services of external consultancy firmsfor quality and regulatory services related to Moderato devices to supplement its internal capabilities. As of the date of this filing, we do not anticipate receiving any new Moderato devices under the Integer Agreement.

Medtronic has completed integration and associated validation and verification testing of AVIM therapy algorithms as a field downloadable addition to its premium, commercially available dual-chamber pacemaker systemsforuse in thepivotal study. Medtronic isalso providing clinical and regulatory resources in support of the pivotal study. We are reimbursing Medtronic at cost for these development, clinical and regulatory resources. Medtronic will integrate AVIM therapy, at our cost, as a firmware component of a premium pacemaker for potential regulatory approval and commercialization of AVIM therapy-enabled commercial devices following a successful outcome of the BACKBEAT pivotal study.

In February 2023, we also contracted with MEDICO S.R.L. to develop a dual chamber pacemaker device that meets our specifications for running our cardiac neuromodulation therapies as well as standard pacing algorithms. This new device platform is designed to allow us to conduct CNT program studies for potential expanded indications and populations, including certain heart failure patients. The device development has been completed and initial units are currently expected to be delivered during 2024.

Focal Therapies (Virtue SAB, SirolimusEFR and Sostenocel)

Microporous AngioInfusion Balloon and other device components of Virtue SAB. Under the terms of our agreement with Terumo, Terumo has agreed to assume responsibility for managing the supply chain associated with the Microporous AngioInfusion Balloon and other device components used in Virtue SAB prior to commercialization. Currently, these devices are manufactured by a selected group of third parties contracted by us. We are currently in the process of transitioning management of the device supply chain and its various vendors to Terumo. We expect this process to continue through the completion of the Virtue ISR-US trial. All of Virtue SAB’s key suppliers and vendors carry the proper quality system certification and/or FDA approvals for the activity they are providing in support of the manufacturing, testing, storage and distribution of components, materials, services or final product.

SirolimusEFR. We have internal capabilities for small scale production (300 vials per run), lyophilization, and characterization testing for SirolimusEFR. Clinical and commercial production has been contracted through an established clinical manufacturing organization with large scale current Good Manufacturing Practice (“cGMP”) production capabilities. We have scaled clinical production with an external manufacturing partner to achieve a capacity of approximately 3,000 vials per run with further scaling planned to reach planned commercial production capacity. Additional contract vendors provide polymer synthesis capabilities based on world-class polymer expertise in order to supply enabling components to the Sostenocel technology used to create SirolimusEFR. cGMP syntheses have been performed, with extensive analytical method and quality control development complete. Synthesis of custom polymers has successfully achieved clinical scale with ongoing work to scale processes to commercial scale.

FreeHold Devices

We utilize an FDA-registered and ISO 13485-certified U.S.-based manufacturing partner to manufacture FreeHold Duo and Trio intracorporeal retractors. Our manufacturing partner also provides warehousing and distribution of its products to qualified customers based on orders placed by customers to its FreeHold Surgical subsidiary. Wehave utilized the same manufacturing partner since the time of FDAproduct registration. Further, our manufacturing partner has achieved a greater than 99% on-time order delivery rate to our customers.

Our Competition

The medical device industry is intensely competitive, subject to rapid change and significantly affected by new product introductions and other market activities of industry participants. Wecompete or plan to compete with developers, manufacturers and distributors of cardiovascular and other medical devices. With regard to Virtue SAB, our most notable competitors in the highly competitive interventional cardiology field include Medtronic plc, Becton Dickinson, Boston Scientific Corporation, Philips N.V., B. Braun, Abbott Laboratories, Cordis, BIOTRONIK, Inc., Concept Medical, Inc., MedAlliance S.A., Surmodics, Inc., Cardiovascular Systems, Inc., MicroPort, Mercator MedSystems, Inc. and others. With regard to BackBeat CNT, ourmost notable competitors in the highly competitive field of device therapies for HTN as well as cardiac rhythm management devices include Abbott Laboratories, Boston Scientific Corporation, BIOTRONIK, Inc., MicroPort CRM, ReCor Medical, cvRx, Inc., Vascular Dynamics, Inc., Ablative Solutions, Inc. and others.

Many of these competitors arelarge, well-capitalized companies with significantly greater market share and resources than wehave. As a consequence, they areableto spend more on product development, marketing, sales and other product initiatives than we can. Wealso compete with smaller medical device companies that have single products or a limited range ofproducts. Some of these competitors have:

Webelieve that our proprietary Virtue SAB, BackBeat CNT and other pipeline technologies, our partnership-enabled business model, our strategic partnerships, such as the Terumo Partnershipfor Virtue SAB and the Medtronic Collaborationfor BackBeat CNT, and our organizational culture andstrategy, will be important factors in our future success. Wecompete primarily on the basis that our products are designed toimprove outcomes, reduce complications and provide distinct commercial advantages that can be leveraged by us and our strategic partners. Our continued success depends onour, and in some cases, our strategic partners’ ability to:

Our Intellectual Property

Our success depends in part on our ability to obtain, maintain, protect and enforce our proprietary technology and intellectual property rights, and, in particular, our patent rights, as well as our ability topreserve the confidentiality of our trade secrets, and operate without infringing, misappropriating or otherwise violating the valid and enforceable patents and other intellectual property rights of third parties. We relyon a combination of patent, trademark, trade secret, copyright and other intellectual property rights and take measures to protect the intellectual property rights that we consider important to our business.

The term of individual patents depends upon the legal term for patents in the countries in which they are granted. In most countries, including the United States, the patent term is 20 years from the earliest claimed filing date of a non-provisional patent application in the applicable country. In the United States, a patent’s term can be extended to recapture a portion of the United States Patent and Trademark Office’s (the “USPTO”) delay in processing the patent to issue as well as restore a portion of the term effectively lost as a result of the FDA regulatory review period. However, as to the FDA component, the restoration period cannot be longer than five years and the total patent term including the restoration period must not exceed 14 years following FDA approval. The duration of patents outside of the United States varies in accordance with provisions of applicable local law, but typically is also 20 years from the earliest effective filing date. However, the actual protection afforded by a patent varies on a product-by-product basis, from country to country and depends upon many factors, including the type of patent, the scope of its coverage, the availability of regulatory-related extensions, theavailabilityof legal remedies in a particular country and the validity and enforceability of the patent. Wecannot be sure that our pending patent applications that wehave filed ormay file in the future will result in issued patents, and we can give no assurance thatany patents that have issued or might issue in the future will protect our current or future products, will provide us with any competitive advantage, and will not be challenged, invalidated, or circumvented.

Wealso relyon trade secret know-how and continuing technological innovation to develop and maintain our competitive position. Weseek to protect our proprietary rights through a variety of methods, including confidentiality agreements with suppliers, consultants and others who mayhave access to our proprietary information and proprietary information and inventions agreements with our employees. However, trade secrets and proprietary information can be difficult to protect. While we take measures to protect and preserve our trade secrets and proprietary information, such measures can be breached, and wemaynot have adequate remediesfor anysuch breach. In addition, our competitorsmay independently discover or develop the same trade secrets and proprietary information as us. To the extent that our suppliers, employees, consultants and others use intellectual property owned by others in their work forus, we maybe subject to allegations of infringement and further disputes may arise as to the rights in related or resulting improvements, know-how and inventions.

Our success also depends in part on not infringing the intellectual property rights of third parties. It is uncertain whether the issuance ofany third-party patent would require us to alter our development or commercial strategies, or our product candidates or processes, obtain licenses or cease certain activities. Our breach ofany license agreements or failure to obtain a license to intellectual property rights that wemay require to develop or commercialize our future product candidatesmay havean adverse impact on the business. If third parties have prepared and filed patent applications in the United States prior to March 16, 2013 (the date when U.S. patentlaw changed from granting rights to the first-to-invent to the first-to-file) that also claim technology to which wehave rights, wemay haveto participate in interference proceedings in the USPTO to determine priority of invention. Assuming that other requirementsfor patentability aremet, prior to March 2013, in the United States, the first to invent the claimed invention was entitled to the patent, while outside the United States,

the first to file a patent application was entitled to the patent. After March 2013, under the America Invents Act, enacted in September 2011, the United States transitionedto a first inventor to file system in which, assuming that other requirements forpatentability are met, the first inventor to file a patent application will be entitled to the patent on an invention regardless of whether a third party was the first to invent the claimed invention. Formore information regarding the risks related to our intellectual property, please see the section titled “Risk Factors — Risks Related to Our Intellectual**Property.”

Trademarks

As of December 31, 2023, wehave 6 trademarks that areapprovedin the United States: “Orchestra BioMed,”“Moderato,”“Virtue”, “FreeHold Surgical,”“FreeHold Duo,”and “FreeHold Trio.”A further 11 applicationsfor trademark registration are pending, covering “OBIO,” “SirolimusEFR,” “AngioInfusion,” “Virtue Sirolimus AngioInfusion Balloon,”“BackBeat Medical,” “BackBeat CNT,”“BackBeat Cardiac Neuromodulation Therapy,” and“Sostenocel.” 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, including logos, artwork, and other visual displays, 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 right or the rights of the applicable licensor to these trademarks and trade names. We do not intend our use or display of other entities’ trade names, trademarks, or service marks to imply a relationship with, or endorsement or sponsorship of us by, any other entity.

Material Patents

As of December 31, 2023, we owned 192 patents globally, of which 61 were issued U.S. patents and 131 were patents outside of the United States.

Our issued patents expire between February 2025 and April 2041. Despite the near-term expiration of certain of our material patents, we believe that our other patents, as well as our trade secrets and continuing technological know-how, provide us with sufficient intellectual property protection to develop our product candidates and protect our intellectual property.

Below is a more specific overview of our intellectual property as it relates to our pipeline programs by modality:

Bioelectronic Therapies (BackBeat CNT and CNT-HF)

BackBeat CNT and CNT-HF are protected by an intellectual property portfolio which currently includes 39 issued U.S. patents and 83 issued patents in countries outside of the United States encompassing devices, algorithms, and methods. These issued patents, andany patents granted from such applications, will, or are expectedto, expire between 2025 and 2041, without taking potential patent term extensions or adjustments into account. Additional patent applications are filed on a regular basis. BackBeat issued patents are divided between CNT and CNT-HF as follows: 36 issued U.S. patents and 72 issued patents in countries outside of the United States protect CNT, and which are exclusively licensed to Medtronic in the Primary Field pursuant to the Medtronic Agreement; three issued U.S. patents and 11 issued patents in countries outside of the United States protect CNT-HF; and a further 25 patent applications were filed protecting BackBeat CNT (22 patent applications) and CNT-HF (three patent applications).

In addition to customary early termination provisions, the Medtronic Agreement will terminate on the date no further revenue share payments are due under the Medtronic Agreement and Medtronic’slicense under the Medtronic Agreement would become fully paid up, perpetual, irrevocable and royalty-free. Revenue share payments with respect to each applicable country (or group of countries) are to be paidfora minimum period of time determined by the latest to occur of (a) the expiration of the last valid claim of certain specified patents (as well as any patents claiming priority to, from or through such patents) (the “Patent-Based Expiration”) or (b) the date that is 12 years after the first commercial saleofany Backbeat CNT-enabled pacemakers in the applicable country or group of countries (the “Time-Based Revenue Share Expiration”). While revenue share payments under the Medtronic Agreement could extend beyond the Time-Based Revenue Share Expiration, it is not expected that the first commercial saleof a Backbeat CNT-enabled pacemaker will occur before 2026. Accordingly, to the extent BackBeat CNT-enabled pacemakers receive regulatory approvaland are sold commercially,

Medtronic’sobligation tomake payments to us will extend toat least approximately 2041 under the Time-Based Revenue Share Expiration, regardless of the expirationanyof ourpatents. Further, such date maybe extended up to an additional five years based on the Medtronic Agreement which provides that the Patent-Based Expirationmaybe extended until the expiration of patents thatmaybe issued based on additional patent applications that wehave filed prior to entering into the Medtronic Agreement, although no assurance can be given that such patents will be issued orany claims associated with newly issued patents will bevalid. Tothe extent there arerevenue share payments made under the Medtronic Agreement after the Time-Based Revenue Share Expiration and prior to the Patent-Based Expiration, those payments would likelybe based on intellectual property we develop in the future, and not the current patents held by us.

BackBeat CNT and CNT-HF are also protected by trade secrets and proprietary know-how. We seek to protect its proprietary technology and processes, in part, by confidentiality agreements and invention assignment agreements with its employees, consultants, scientific advisors, contractors and commercial partners.

We will continue to endeavor to obtain and maintain patent protection worldwide on select patentable aspects of BackBeat CNT and CNT-HF as well as to protect our trade secrets and proprietary know-how.

The following table lists our material patents relating to BackBeat CNT and CNT-HF as of December 31, 2023, their jurisdiction and expiration date:

Focal Therapeutics (Virtue SAB, SirolimusEFR and Sostenocel)

We rely on intellectual property protection for Virtue SAB and its enabling technologies, including SirolimusEFR and the AngioInfusion Balloon, based on protection of proprietary particle drug encapsulation technology through trade secrets and proprietary know-how; and through issued patents and patent applications in process covering key aspects of Virtue SAB’s micro-porous balloon system and integration of its drug encapsulation formulation with the device.

Virtue SAB is currently protected by six issued U.S. patents and 21 issued patents outside the United States with additional patent applications pending in the United States and in countries outside of the United States covering key aspects of Virtue SAB product design, clinical application and enabling technology. These issued patents, andany patents granted from such applications, will, or are expectedto, expire between 2028 and 2032, without taking potential patent term extensions or adjustments into account. The foregoing patents are exclusively licensed to Terumo for the Subject Indications during the term of the Terumo Agreement. Wewill continue to selectively advance certain aspects of Virtue SABtoward submission of appropriate patent applications. A further six published patent applications were filed to protect Virtue SAB.

Pursuant to the current Terumo Agreement, we share inallof Terumo’s Virtue SABrevenues during the term of the agreement through future royaltiesof 10 – 15% of net sales of Virtue SAB, and additional per unit payments for SirolimusEFR used in Virtue SAB for which we are the sole exclusive supplier. The initial term of the Terumo Agreement expires on the tenth anniversary of the date on which the first PMA is obtained from the FDAfor Virtue SABfor ISR, and thereafter automatically extendsfor five-year periods unless terminated by Terumo. Payments under the Terumo Agreement are not tied to the expiration of ourpatents.

Our Sostenocel technology and SirolimusEFR are intentionally protected by trade secrets and proprietary know-how, as we believe the design and manufacture of this formulation would be highly difficult to develop or reverse engineer. Seeking patent protectionfor these processes would have required detailed publication of proprietary information without certainty of patent claim issuance or protection.

Development and production of SirolimusEFR have been refined and scaled to support the Virtue ISR-US trial and other trials we plan to conduct to support commercialization of SirolimusEFR. Production scaling and manufacturing processes are central components of the proprietary trade secret and proprietary know-how of the intellectual property protection of Virtue SAB and other future product candidates involving SirolimusEFR.

Virtue SAB isalso protected by trade secrets and proprietary know-how that was intentionally not made public or published in patent applications. Webelieve the strategy toavoid publication of proprietary methods as long as possible has been an important part of maintaining the differentiation and advantages of Virtue SAB. Trade secrets and proprietary know-how include aspects of formulation, materials production, and manufacturing of Virtue SAB. Such trade secrets and proprietary information is used to develop and maintain our competitive position. Weseek to protect our proprietary

technology and processes, in part, by confidentiality agreements and invention assignment agreements with its employees, consultants, scientific advisors, contractors and commercial partners.

We will continue to endeavor to obtain and maintain patent protection worldwide on select patentable aspects of Virtue SAB as well as to protect our trade secrets and proprietary know-how.

The following table lists our material patents relating to Virtue SAB as of December 31, 2023, their jurisdiction and expiration:

FreeHold Devices

Our FreeHold Devices and additional minimally invasive surgery enabling devices are protected by an intellectual property portfolio which currently includes issued U.S. patents and pending U.S. applications and issued patents and pending applications in countries outside of the United States covering methods and apparatusfor intracorporeal retraction andremovalof organs, internal adjustment of device and retraction, as well as design for safe device removal. Specifically, this portfolio includes 16 issued U.S. patents, 27 issued patents in countries outside the United States, andseveral pending applications. These issued patents, andany patents granted from such applications, will, or are expectedto, expire between 2030 and 2037, without taking potential patent term extensions or adjustments into account. A further three published patent applications were filed to protect FreeHold devices.

Government Regulation

Our BackBeat CNT and CNT-HF product candidates and our FreeHold Devices, as well as the PerQSeal and Pure-Vu products, are regulated as medical devices. Our Virtue SAB product candidate is a proprietary drug/device combination

product candidate in developmentforthe treatment of artery disease. In the United States, products composed of constituent parts that individually would be regulated under different regulatory pathways, and frequently by different centersatthe FDA, are known as combination products. In the case of Virtue SAB, if marketed individually, the balloon angioplasty device would be regulated by FDA as a medical device while SirolimusEFR would be regulated by the FDA as a drug. However, under the Federal Food, Drug, and Cosmetic Act (the “FDCA”), the FDAis charged with assigning a center with primary jurisdiction, or a lead center, forreview of a combination product. The designation of a lead center generally obviates the needfor separate approvalof each component of a combination product. The determination of which center will be the lead center is based on the “primary mode of action” of the combination product. Thus, if the primary mode of action of a drug/device combination product is attributable to the device constituent, the FDAcenter responsibleforpre-market review of the device product would have primary jurisdictionforthe combination product. A combination product with a medical-device primary mode of action generally would be reviewed and approved or cleared pursuant to the medical device approval and clearance processes set forth under the FDCA. In reviewing the marketing application for such a product, however, FDA reviewers in the drug center could consult with their counterparts in the device center to ensure that the drug component of the combination product met applicable requirements regarding safety and effectiveness. In addition, under FDAregulations, drug/device combination products are subject to cGMP requirements applicable to both drugs and devices, including the Quality System Regulation (the “QSR”) applicable to medical devices.

In 2019, the FDAconfirmed that Virtue SAB will be regulated as a combination product candidate, with the FDA’s Centerfor Devices and Radiological Health as the lead review center of a marketing application. Weexpect to seek FDA approvalof each proposed indication of Virtue SAB through submission of a PMA, reviewed by the FDA’s Center for Devices and Radiological Health and do not expect thatthe FDAwill require a separate marketing authorizationfor each constituent component of Virtue SAB. Weanticipate that our standalone SirolimusEFR product candidatefor certain potential indications such as ophthalmic inflammatory conditions (uveitis) and chronic joint inflammation (osteoarthritis) will be regulated by the FDAas a drug.

Medical Device Regulation

United States

Medical devices are subject to extensive and ongoing regulation by the FDA under the FDCA and its implementing regulations, as well as other federal and state regulatory bodies in the United States and comparable authorities in other countries under other statutes and regulations. The laws and regulations govern, among other things, product design and development, preclinical and clinical testing, manufacturing, packaging, labeling, storage, recordkeeping and reporting, clearance or approval, marketing, distribution, promotion, import and export and post-marketing surveillance. Failure to comply with applicable requirements may subject a device and/or its manufacturer to a variety of administrative sanctions, such as issuance of warning letters, import detentions, civil monetary penalties and/or judicial sanctions, such as product seizures, injunctions and criminal prosecution.

FDA’s Approval Requirements

Unless an exemption applies, each medical device commercially distributed in the United States will require either FDAclearance of a 510(k) pre-market notification, orapprovalof a PMA application. BackBeat CNT and CNT-HF product candidates will be regulated as Class III medical devices and will require submission of a PMA supplement or a PMA. Weanticipate that our Virtue SAB product candidate will be regulated as a drug/device combination product that will require submission of a PMA.

PMA Pathway

In the United States, medical devices are classified into one of three classes — Class I, Class II or Class III — depending on the degree of risk associated with each medical device and the extent of manufacturing and regulatory control needed to provide reasonable assurance of safety and effectiveness. Class I devices are deemed to be low risk and are those for which safety and effectiveness can be assured by adherence to the FDA’s General Controls for medical devices, which include compliance with the applicable portions of the QSR, facility registration and product listing, reporting of adverse

medical events and truthful and non-misleading advertising and promotion. Most Class I devices are classified as exempt from pre-market notification requirements and therefore may be commercially distributed without obtaining prior authorization from the FDA. Class II devices are subject to the FDA’s General Controls and special controls intended to provide reasonable assurance of safety and effectiveness of the device. Special controls can include performance standards, post-market surveillance, patient registries and guidance documents. Manufacturers of most Class II devices are required to submit to the FDAa pre-market notification under Section 510(k) of the FDCA demonstrating that the device to be marketed is as safe and effective, that is, substantially equivalent, to a legally marketed device andrequesting permission to commercially distribute the device. Devices deemed bythe FDAto pose the greatest risk, such as life-sustaining, life-supporting or implantable devices, devices that utilize newtechnology, or devices deemed not substantially equivalent to a previously cleared 510(k) device, are placed in Class III, generally requiring approvalof a PMA application.

Class III devices such as the BackBeat CNT and CNT-HF product candidates require PMAapproval before they can be marketed, although some pre-amendment Class III devicesfor which FDAhas not yet required a PMA are cleared through the 510(k)process. The PMA application process is much more demanding than the 510(k) clearance process. A PMA application must be supported by extensive data, including but not limited to technical, preclinical, clinical studies, manufacturing and labeling, to demonstrate to the FDA’ssatisfaction reasonable evidence of safety and effectiveness of the device. The PMA application must also contain a full description of the device and its components, a full description of the methods, facilities and controls usedfor manufacturing and proposed labeling.

After a PMA application is submitted, the FDAhas 45 days to determine whether the application is sufficiently complete to permit a substantive review and thus whether the FDAwill file the applicationfor review. The FDA thenhas 180 days under the FDCA to review a filed PMA application, although the review of an application generally occurs overa significantly longer period of time and cantakeup toseveral years. During this review period, the FDA may request additional information or clarification of the information already provided.

Also, an advisory panel of experts from outside the FDAmaybe convened to review andevaluatethe application and provide recommendations to the FDAas to theapprovabilityof thedevice. Although the FDAis not bound by the advisory panel’sdecision, thepanel’srecommendations are important to the FDA’soverall decision-making process. In addition, the FDAmay conduct apreapproval inspection of the manufacturing facility to ensure compliance with the QSR. The agency also mayinspect one or more clinical sites to assure compliance with FDA’s regulations.

Upon completion of the PMA review, the FDA may: (i) approve the PMA which authorizes commercial marketing with specific prescribing information for one or more indications, which can be more limited than those originally sought; (ii) issue anapprovable letter which indicates the FDA’sbelief that the PMA isapprovableand states what additional information the FDArequires, or thepost-approval commitments that must be agreed to prior to approval; (iii) issue a “not approvable” letter which outlines steps required forapproval, but which are typically more onerous than those in an approvable letter, and may require additional clinical studies that are often expensive and time consuming and can delay approval for months or even years; or (iv) deny the application. If the FDA issues an approvable or not approvable letter, the applicant has 180 days to respond, after which the FDA’s review clock is reset.

The FDA will generally approve the new device for commercial distribution if it determines that the data and information in the PMA constitute valid scientific evidence and that there is reasonable assurance that the device is safe and effective for its intended use(s). The FDA may approve a PMA with post-approval conditions intended to ensure the safety and effectiveness of the device, including, among other things, restrictions on labeling, promotion, sale and distribution, and collection of long-term follow-up data from patients in the clinical study that supported PMA approval or requirements to conduct additional clinical studies post-approval. The FDA may condition PMA approval on some form of post-market surveillance when deemed necessary to protect the public’s health or to provide additional safety and efficacy data for the device in a larger population orfora longer period ofuse. In such cases, the manufacturer might be required to follow certain patient groups for a number of years and to make periodic reports to the FDA on the clinical status of those patients. Failure to comply with the conditions of approval can result in material adverse enforcement action, including withdrawalof the approval.

Certain changes to anapproved device, such as changes in manufacturing facilities, methods, or quality control procedures, or changes in the design performance specifications, which affect the safety or effectiveness of the device, require

submission of a PMA supplement. PMA supplements often require submission ofthe same type of information as a PMA, except that the supplement is limited to information needed to support any changes from the device covered by the original PMA and may not require as extensive clinical data or the convening of an advisory panel. Certain other changes to an approved device require the submission of a new PMA, such as when the design change causes a different intended use, mode of operation, and technical basis of operation, or when the design change is so significant that a new generation of the device will be developed, and the data that were submitted with the original PMA are not applicable for the change in demonstrating a reasonable assurance of safety and effectiveness.

Clinical Studies

Clinical studies are almost always required to support pre-market approvaland are sometimes requiredfor 510(k) clearance. All clinical investigations of investigational devices designed to determine safety and effectiveness must be conducted in accordance with the FDA’s IDE regulations, which govern investigational device labeling, prohibit promotion of the investigational device, and specify an array of recordkeeping, reporting and monitoring responsibilities of study sponsors and study investigators. If the device presents a “significant risk” to human health, as defined by the FDA, the FDArequires the device sponsor to submit an IDE application to the FDA, which must become effective prior to commencing human clinical studies. A significant risk device is one that presents a potential for serious risk to the health, safety or welfare of a patient and either is implanted, used in supporting or sustaining human life, substantially important in diagnosing, curing, mitigating or treating disease or otherwise preventing impairment of human health, or otherwise presents a potentialfor serious risk to a subject. An IDE application must be supported by appropriate data, such as animal and laboratory test results, showing that it is safe to test the device in humans and that the testing protocol is scientifically sound. The IDE will automatically become effective 30 days after receipt by the FDA unless the FDA notifies the company that the investigation may not begin. If the FDA determines that there are deficiencies or other concerns with an IDE for which it requires modification, the FDA may permit a clinical study to still proceed under a conditional approval. Acceptance of an IDE for review does not guarantee that the FDA will allow the IDE to become effective and, if itdoes become effective, the FDA may or may not determine that the data derived from the trials support the safety and effectiveness of the device or warrant the continuation of clinical studies.

Regardless of the degree of risk presented by the medical device, clinical studies must beapprovedby, and conducted under the oversight of, an IRB, foreach clinical study site. An IRB is an appropriately constituted group that has been formally designated to review and monitor medical research involving subjects and which has the authority toapprove, require modifications in, ordisapprove research to protect the rights, safety and welfare of human research subjects. If an IDE application isapprovedby the FDAand one or more IRBs, human clinical studiesmay beginata specific number of investigational sites with a specific number of patients, asapprovedby the FDA. If theevaluationof the device presents a non-significant risk to the patient, a sponsormay begin the clinical study after obtaining approvalforthe study by one or more IRBs without separate approval from the FDA. However, the clinical study must still be conducted in compliance with abbreviated IDE and human subject protection requirements, such as monitoring the investigation, ensuring that the investigators obtain informed consent, and labeling and recordkeeping requirements. During astudy, the sponsor is required to comply with the applicable FDArequirements, including, forexample, trial monitoring, selecting clinical investigators and providing them with the investigational plan, ensuring IRBreview, adverse event reporting, recordkeeping, and prohibitions on the promotion of investigational devices or on making safety or effectiveness claimsfor them. The clinical investigators in the clinical study arealso subject to FDAregulations and must obtain patient informed consent, rigorously followthe investigational plan and study protocol, control the disposition of the investigational device, and comply withall reporting and recordkeeping requirements. Additionally, after a trial begins, thesponsor, the FDAor the IRB could suspend or terminate a clinical studyat anytimefor various reasons, including a belief that the risks to study subjects outweigh the anticipated benefits, or failures tofollow applicable regulations.

Sponsors of certain clinical studies of medical devices are required to register their studies with clinicaltrials.gov, a public database of clinical study information. Information related to the device, patient population, phase of investigation, study sites and investigators and other aspects of the clinical study is made public as part of the registration.

Breakthrough Devices Program

Following passage of the 21 st Century Cures Act, the FDA implemented the Breakthrough Devices Program, which is a voluntary program offered to manufacturers of certain medical devices and device-led combination products thatmay providefor more effective treatment or diagnosis of life-threatening or irreversibly debilitating diseases or conditions. Thegoalof the program is to provide patients and healthcare providers with more timely access to qualifying devices by expediting their development, assessment andreview, while preserving the statutory standardsfor PMAapproval,510(k) clearance and denovo classification. The program is available to medical devices that meet certain eligibility criteria, including that the device provides more effective treatment or diagnosis of life-threatening or irreversibly debilitating diseases or conditions, and that the device meets one of the following criteria: (i) the device represents a breakthrough technology,(ii) noapprovedor cleared alternatives exist, (iii) the device offers significant advantages over existing approvedor cleared alternatives, or (iv) theavailabilityof the device is in the best interest of patients. Breakthrough Device designation provides certain benefits to device developers, including more interactive and timely communications with FDAstaff, use of post-market data collection, when scientifically appropriate, to facilitate expedited and efficient development and review of the device, opportunities for efficient and flexible clinical study design, and prioritized review of premarket submissions.

Ongoing Regulation by the FDA

Even after a device receives clearance or approval and is placed on the market, numerous regulatory requirements apply. These include:

Manufacturing of medical devices is required to comply with the applicable portions of the QSR, which cover the methods and the facilities, controlsforthe design, manufacture, testing, production, processes, controls, quality assurance, labeling, packaging, distribution, installation, and servicing of finished devices intendedfor humanuse. The QSRalso requires, among other things, maintenance of a device master file, device history file, and complaint files. As amanufacturer, our facilities, records, and manufacturing processes are subject to periodic scheduled or unscheduled inspections by the FDA. Our failure to maintain compliance with the QSR or other applicable regulatory requirements could result in the shut-down of, or restrictions on, its manufacturing operations and the recall or seizure of its products. The discovery of previously unknown problems with any marketed products, including unanticipated adverse events or adverse events of increasing severity or frequency, whether resulting from the use of the device within the scope of its clearance or off-label by a physician in the practice of medicine, could result in restrictions on the device, including the removal of the product from the market or voluntary or mandatory device recalls.

The FDA has broad regulatory compliance and enforcement powers. If the FDA determines that a manufacturer has failed to comply with applicable regulatory requirements, it can take a variety of compliance or enforcement actions, which may result in any of the following sanctions:

European Union

We believe our Virtue SAB, BackBeat CNT and CNT-HF product candidates as well as our FreeHold Devices would be regulated in the EU as medical devices.

The EU has adopted specific directives and regulations regulating the design, manufacture, clinical investigation, conformity assessment, labeling and adverse event reportingfor medical devices (including active implantable medical devices).

Until May 25, 2021, medical devices (including active implantable medical devices) were regulated by Council Directive 93/42/EEC and Council Directive 90/385/EEC (the “EU Medical Devices Directives”), which have been repealed and replaced by Medical Devices Regulation (EU) No 2017/745 (the “EU Medical Devices Regulation”). Our current certificates have been granted under the EU Medical Devices Directives whose regimes are described below. However, as of May 26, 2021, some of the EU Medical Devices Regulation requirements apply in place of the corresponding requirements of the EU Medical Devices Directives with regard to registration of economic operators and of devices, post-market surveillance and vigilance requirements. If we want to market our medical devices in the EU, it will notably require that our devices be certified under the new regime set forth in the EU Medical Devices Regulation.

Medical Devices* *Directives

Under the EU Medical Devices Directives, allmedical devices (including active implantable medical devices) placed on the market in the EU must meet the relevant essential requirements laid down in Annex I to the EU Medical Devices Directives, including the requirement that a medical device must be designed and manufactured in such away that it will not compromise the clinical condition or safety of patients, or the safety and health of users and others. In addition, the device must achieve the performance intended by the manufacturer and be designed, manufactured, and packaged in a suitable manner. The European Commission has adopted various standards applicable to medical devices. These include standards governing common requirements, such as sterilization and safety of medical electrical equipment and product standardsfor certain types of medical devices. There arealso harmonized standards relating to design and manufacture. While not mandatory, compliance with these standards is viewed as the easiest way to satisfy theessential requirements as a practical matter as it creates arebuttable presumption that the device satisfies that essential requirement.

Todemonstrate compliance with the essential requirements laid down in Annex I to the EU Medical Devices Directives, medical device manufacturers must undergo a conformity assessment procedure, which varies according to the type of medical device and its (risk) classification. As a general rule, demonstration ofconformity of medical devices and their manufacturers with the essential requirements must be based, among other things, on theevaluationof clinical data supporting the safety and performance of the products during normal conditions ofuse. Specifically, a manufacturer must demonstrate that the device achieves its intended performance during normal conditions ofuse, that the known and

foreseeable risks, andany adverse events, are minimized and acceptable when weighed against the benefits of its intended performance, and thatany claims made about the performance and safety of the device are supported by suitable evidence. Except for low-risk medical devices (Class I non-sterile, non-measuring devices), where the manufacturer can self-assess the conformity of its products with the essential requirements (exceptfor anyparts which relate to sterility or metrology), a conformity assessment procedure requires the intervention of a notified body. Notified bodies are independent organizations designated by EU member states to assess the conformity of devices before being placed on the market. A notified body would typically audit and examine a product’s technical dossiers and the manufacturers’ quality system (the notified body must presume that quality systems which implement the relevant harmonized standards — which is ISO 13485:2016 for Medical Devices Quality Management Systems — conform to these requirements). If satisfied that the relevant product conforms to the relevant essential requirements, the notified body issues a certificate of conformity, which the manufacturer uses as a basisforits own declaration ofconformity. The manufacturermay then apply the CE mark to the device, which allowsthe device to be placed on the market throughout the EU.

Throughout the term of the certificate of conformity, the manufacturer will be subject to periodic surveillance audits to verify continued compliance with the applicable requirements. In particular, there will be a new audit by the notified body before it will renew the relevant certificate(s).

Medical Devices Regulation

The regulatory landscape related to medical devices in the EU recently evolved. On April 5, 2017, the EU Medical Devices Regulation was adopted with the aim of ensuring better protection of public health and patient safety. The EU Medical Devices Regulation establishes a uniform, transparent, predictable and sustainable regulatory framework across the EU for medical devices and ensure a high level of safety and health while supporting innovation. Unlike the EU Medical Devices Directives, the EU Medical Devices Regulation is directly applicable in EU member states without the need for member states to implement into national law. This aims at increasing harmonization across the EU.

The EU Medical Devices Regulation became effective on May 26, 2021. The new regulation, among other things:

Devices lawfully placed on the market pursuant to the EU Medical Devices Directives prior to May 26, 2021 may generally continue to be made available on the market or put into service until May 26, 2025, provided that the requirements of the transitional provisions are fulfilled. In particular, the certificate in question must still be valid. However, even in this case, manufacturers must comply with a number of new or reinforced requirements set forth in the EU Medical Devices Regulation, in particular the obligations described below. The EU Medical Devices Regulation requires that before placing a device, other than a custom-made device, on the market, manufacturers (as well as other economic operators such as

authorized representatives and importers) must register by submitting identification information to the electronic system (Eudamed), unless they have already registered. The information to be submitted by manufacturers (and authorized representatives) also includes the name, address and contact details of the person or persons responsiblefor regulatory compliance. The new regulation also requires that before placing a device, other than a custom-made device, on the market, manufacturers must assign a unique identifier to the device and provide it along with other core data to the unique device identifier (“UDI”) database. These new requirementsaimat ensuring better identification and traceability of the devices. Each device — and asapplicable, each package — will have a UDI composed of two parts: a device identifier specific to a device, and a production identifier to identify the unit producing thedevice. Manufacturers arealso notably responsiblefor entering the necessary data on Eudamed, which includes the UDIdatabase, andfor keeping it up todate. The obligationsfor registration in Eudamed will become applicableata later date (as Eudamed is not yet fully functional). Until Eudamed is fully functional, the corresponding provisions of the EU Medical Devices Directive continue to applyforthe purpose of meeting the obligations laid down in the provisions regarding exchange of information, including, and in particular, information regarding registration of devices and economic operators.

All manufacturers placing medical devices on the market in the EU must comply with the EU medical device vigilance system which has been reinforced by the EU Medical Devices Regulation. Under this system, serious incidents and Field Safety Corrective Actions (“FSCAs”) must be reported to the relevant authorities of the EU member states. These reports will haveto be submitted through Eudamed — once functional — and aim to ensure that, in addition to reporting to the relevant authorities of the EU member states, other actors such as the economic operators in the supply chain will alsobe informed. Until Eudamed is fully functional, the corresponding provisions of the EU Medical Devices Directives continue to apply. A serious incident is defined as any malfunction or deterioration in the characteristics or performance of a device made availableon the market, including use-error due to ergonomic features, as well asany inadequacy in the information supplied by the manufacturer andany undesirable side-effect, which, directly orindirectly, might haveled or might lead to the death of a patient or user or of other persons or to a temporary or permanent serious deterioration of apatient’s, user’sor other person’sstate of health or a serious public health threat. Manufacturers are required totake FSCAs defined asany corrective actionfor technical or medical reasons to prevent or reduce a risk of a serious incident associated with the use of a medical device that is made available on the market. An FSCA may include the recall, modification, exchange, destruction or retrofitting of thedevice. FSCAs must be communicated by the manufacturer or its legal representative to its customers and/or to the end users of the device through Field Safety Notices. For similar serious incidents that occur with the same device or device type andfor which the root cause has been identified or a FSCA implemented or where the incidents are common and well documented, manufacturersmay provide periodic summary reports instead of individual serious incident reports.

The advertising and promotion of medical devices is subject to some general principles set forth in EU legislation. According to the EU Medical Devices Regulation, only devices that are CE-marked may be marketed and advertised in the EU in accordance with their intended purpose. Directive 2006/114/EC concerning misleading and comparative advertising and Directive 2005/29/EC on unfair commercial practices, while not specific to the advertising of medical devices, also apply to the advertising thereof and contain general rules, for example, requiring that advertisements are evidenced, balanced and not misleading. Specific requirements are defined at a national level. EU member states’ laws related to the advertising and promotion of medical devices, which vary between jurisdictions, may limit or restrict the advertising and promotion of products to the general public and may impose limitations on promotional activities with healthcare professionals.

Many EU member states have adopted specific anti-gift statutes that further limit commercial practicesfor medical devices, in particular vis-à-vis healthcare professionals and organizations. Additionally, therehas been a recent trend of increased regulation of payments and transfers of value provided to healthcare professionals or entities and many EU member states have adopted national “Sunshine Acts” which impose reporting and transparency requirements (often on an annual basis), similar to the requirements in the United States, on medical device manufacturers. Certain countries also mandate implementation of commercial compliance programs.

The aforementioned EU rules are generally applicable in the European Economic Area (the “EEA”), which consists of the 27 EU Member States plus Norway, Liechtenstein and Iceland.

United Kingdom

In the United Kingdom (“UK”), the medical devices market is regulated by the Medicines and Healthcare products Regulatory Agency, which performs market surveillance of medical devices on the UK market. Devices are regulated under the Medical Devices Regulations 2002, which gave effect in UK law to the following EU directives: Directive 90/385/EEC on active implantable medical device; Directive 93/42/EEC on medical devices; and Directive 98/79/EC on in vitro diagnostic medical devices. The UK Conformity Assessed(“UKCA”)marking is a UK product marking usedfor medical devices being placed on the Great Britain market. It is not recognized in the EU, so these products require a CE marking as well. CE marketed devices will be accepted on the Great Britain market until June 30, 2023. From July 1, 2023, devices placed on the Great Britain market will need to conform to UKCA marketing requirements.

We may need to support clinical and/or regulatory requirements in the UK for its BackBeat CNT product candidate, and potentially others.

Other Regions

Most major markets have different levels of regulatory requirements for medical devices. Modifications to the approved or certified products may require a new regulatory submission in all major markets. The regulatory requirements, and the review time, vary significantly from country to country. Products can also be marketed in other countries that have minimal requirements for medical devices.

Drug Regulation

United States

In the United States, our SirolimusEFR product candidate is subject to extensive regulation by the FDA, which regulates drugs under the FDCA and its implementing regulations, and other federal, state, and local regulatory authorities. The process of obtaining regulatory approvalsand certifications and the subsequent compliance with appropriate federal, state, local and foreign statutes and regulations requires the expenditure of substantial time and financial resources. Failureto comply with the applicable U.S. requirementsat anytime during the product development process, approval process or after approval, maysubject an applicant to a variety of administrative or judicial sanctions, such as the FDA’srefusal toapprove pending applications, withdrawalof anapproval, imposition of a clinical hold, issuance of warning or untitled letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement or civil or criminal penalties.

The process required by the FDA before a drug may be marketed in the United States generally involves the following:

Wehave performed CMC testing in support of our IDEapprovalforthe combination product Virtue SAB that includes populating a DMF. Weintend tofollowup post-IDEapprovalforthe Virtue SAB with exploring additional pre-clinical work to support additional indications. Depending on the indication, we maybe ableto leverage some of the biocompatibility and CMC data in the DMF, while providing additional data depending on the indication selected.

Preclinical Studies

Preclinical studies include laboratory evaluation of product chemistry, toxicity and formulation, as well as animal studies to assess potential safety and efficacy. An IND sponsor must submit the results of the preclinical tests, together with manufacturing information, analytical data and any available clinical data or literature, among other things, to the FDA as part of an IND. Some preclinical testing may continue even after the IND is submitted. An IND automatically becomes effective and a clinical study proposed in the IND may begin 30 days after the FDA receives the IND, unless before that time the FDA raises concerns or questions related to one or more proposed clinical studies and places the clinical study on a clinical hold. In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical study can begin. As a result, submission of an INDmaynot result in the FDAallowing clinical studies to commence.

Webelieve that additional preclinical studies will be necessaryfor evaluating SirolimusEFR in new indications.

Clinical Studies

Clinical studies involve the administration of the investigational new drug to human subjects under the supervision of qualified investigators in accordance with GCP and human subject protection requirements, which include the requirement thatall research subjects provide their informed consent in writingfor their participation inany clinical study. Clinical studies are conducted under protocols detailing, among other things, the objectives of the trial, the parameters to be used in monitoring safety, and the effectiveness criteria to be evaluated. A protocolfor each clinical study and any subsequent protocol amendments must be submitted to the FDA as part of the IND. An IRB at each institution participating in the clinical study must review and approve the plan for any clinical study before it commences at that institution, and the IRB must continue to oversee theclinical study while it is being conducted. Some trials also include oversight by an independent group of qualified experts organized by the clinical study sponsor, known as a Data Safety Monitoring Board, which provides authorization for whether or not a study may move forward at designated check points based on access to certain data from the study and may halt the clinical study based on prespecified criteria, for example, if it determines that there is an unacceptable safety risk for subjects or other grounds, such as no demonstration of efficacy. Information about certain clinical studies must be submitted within specific timeframes to the National Institutes of Health for public dissemination on theirwww.clinicaltrials.govwebsite.

Human clinical studies are typically conducted in three or four sequential phases, which may overlap or be combined:

and safety of the product for approval, to establish the overall risk-benefit profile of the product, and to provide adequate information for the labeling of the product.

Progress reports detailing the results of the clinical studies, among other information, must be submittedat least annuallyto the FDA, and more frequently if serious adverse events occur. Furthermore, the FDAor the sponsormay suspend or terminate a clinical studyat anytime on various grounds, including a finding that the research subjects are being exposed to an unacceptable health risk or the failure to meet thetrial’sobjectives. Similarly, an IRB can suspend or terminate approvalof a clinical studyatits institution if the clinical study is not being conducted in accordance with the IRB’srequirements or if the drug has been associated with unexpected serious harm to patients.

Concurrent with clinical studies, companies usually complete additional animal studies and must also develop additional information about the chemistry andphysical characteristics of the product and finalize a processfor manufacturing the product in commercial quantities in accordance with cGMP requirements. The manufacturing process must becapableof consistently producing quality batches of the product candidate and, among other things, the manufacturer must develop methodsfor testing the identity, strength, quality and purity of the final product. Additionally, appropriate packaging must be selected and testedand stability studies must be conducted to demonstrate that the product candidate does not undergo unacceptable deterioration overits shelf life.

Webelieve that additional clinical studies will be necessaryfor evaluating SirolimusEFR in new indications.

Marketing Approval

Assuming successful completion of the required clinical testing in accordance with all applicable regulatory requirements, the results of the preclinical and clinical studies, together with detailed information relating to the product’s chemistry, manufacture, controls and proposed labeling, among other things, are submitted to the FDA as part of an NDA requesting approval to market the product for one or more indications. In most cases, the submission of an NDA is subject to a substantial application user fee. Under the Prescription Drug User Fee Act guidelines that are currently in effect, the FDA has agoalof 10 months to review and act on an NDAdesignedfor standard review and six months to review and act on an NDAdesignedfor priority review, measured from the “filing” dateforan NDAfora new molecular entity (“NME”) or from the receipt dateforan NDAfora non-NME product. Measuring from the “filing” date typically adds approximately two months to the timeline for review and decision, because the FDAhas sixty days from receipt to make a “filing” decision, as described below.

In addition, under the Pediatric Research Equity Act of 2003 as amended and reauthorized, certain NDAs or supplements to an NDA must contain data that are adequate to assess the safety and effectiveness of the drug for the claimed indications in all relevant pediatric subpopulations, and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective. The FDA may, on its own initiative or at the request of the applicant, grant deferrals for submission of some or all pediatric data until after approval of the product for use in adults, or full or partial waivers from the pediatric data requirements as relevant.

Under certain circumstances, the FDA also may require submission of a risk evaluationand mitigation strategy (“REMS”) plan to ensure that the benefits of the drug outweigh its risks. The REMS plan could include medication guides, physician communication plans, assessment plans, and/or elements to assure safe use, such as restricted distribution methods, patient registries, or other risk minimization tools.

The FDA conducts a preliminary review of all NDAs within the first 60 days after submission, before accepting them for filing, to determine whether they are sufficiently complete to permit substantive review. The FDAmay request additional information rather than accept an NDAfor filing. In this event, the application must be resubmitted with the additional

information. The resubmitted application is also subject to review before the FDA accepts it for filing. Once the submission is accepted for filing, the FDA begins an in-depth substantive review. The FDA reviews an NDA to determine, among other things, whether the drug is safe and effective and whether the facility in which it is manufactured, processed, packaged or held meets standards designed to assure the product’s continued safety, quality and purity.

The FDAmay refer an application to an advisory committee. An advisory committee is a panel of independent experts, including clinicians and other scientific experts, that reviews, evaluatesand provides a recommendation as to whether the application should be approved and under what conditions. The FDAis not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions.

Before approving an NDA, the FDA typically will inspect the facility or facilities where the product is manufactured. The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications. Additionally, before approving an NDA, the FDA may inspect one or more clinical study sites to assure compliance with GCP requirements.

The FDA generally accepts data from foreign clinical studies in support of an NDA if the trials were conducted under an IND. If a foreign clinical study is not conducted under an IND, the FDA nevertheless may accept the data in support of an NDA if the study was conducted in accordance with GCP requirements and the FDA is able to validate the data through an on-site inspection, if deemed necessary. The FDA may accept foreign clinical data as the sole clinical basis for marketing approval if (1) the foreign data are demonstrated to be applicable to the U.S. population and U.S. medical practice, (2) the studies were performed by clinical investigators with recognized competence, and (3) the data may be considered valid without the need for an on-site inspection or, if the FDA considers the inspection to be necessary, the FDA is able to validate the data through anon-site inspection or other appropriate means.

After evaluatingthe NDAandall related information, including the advisory committee recommendation, ifany, and inspection reports regarding the manufacturing facilities and clinical study sites, if any, the FDA may issue an approval letter, or, in some cases, a Complete Response Letter. A Complete Response Letter indicates that the review cycle of the application is complete, and the application will not beapprovedin its present form. A Complete Response Letter contains a statement of all deficiencies identified in the NDA and the specific conditions that must be met to secure final approvalof the NDAandmay require additional clinical testing, preclinical testing, manufacturing or formulation modifications or other changes in orderforthe FDAto reconsider the application. Even with submission of this additional information, the FDAultimatelymay decide that a resubmitted application does not satisfy the regulatory criteriafor approval. If and when those conditions have been met to the FDA’ssatisfaction, the FDAwill typically issue anapproval letter. Anapproval letter authorizes commercial marketing of the drug with specific prescribing informationfor specific indications.

Even if the FDAapprovesa product, itmay limit theapproved indications or other conditions of useforuse of the product, require that contraindications, warnings or precautions be included in the product labeling, require that post-approval studies, including Phase 4 clinical studies, be conducted to further assess adrug’ssafety after approval, require testing and surveillance programs to monitor the product after commercialization, or impose other conditions, including distribution and use restrictions or other risk management mechanisms under a REMS, which can materially affect the potential market and profitability of the product. The FDAmay take steps toprevent or limit further marketing of a product based on the results of post-marketing studies or surveillance programs. After approval, some types of changes to theapproved product, such as adding new indications, manufacturing changes, and additional labeling claims, may be subject to further testing requirements and FDAreview and approval.

SirolimusEFR is the drug product component of our combination product Virtue SAB. We have yet to receive IDE approval for Virtue SAB.

The Hatch-Waxman Amendments

Our current regulatory strategy is to pursue development of its standalone SirolimusEFR product candidatefor potential indications such as ophthalmic inflammatory conditions (uveitis) and chronic joint inflammation (osteoarthritis)

as a Section 505(b)(2)NDA. As an alternative path to FDA approvalfor modifications to formulations or uses of drugs previously approvedby the FDA, an applicantmay submit an NDAunder Section 505(b)(2) of the FDCA. Section 505(b)(2) was enacted as part of the Hatch-Waxman Amendments. A Section 505(b)(2)NDAis an application that contains full reports of investigations of safety and effectiveness, but where at least some of the information required for approval comes from studies not conductedby, orfor, the applicant andfor which the applicant has not obtained a right of reference or use from the person by orfor whom the investigations were conducted. This type of application permits reliancefor such approvalson literature or on the FDA’sprevious findings ofsafety, effectiveness or bothforan approved drug product. As such, under Section 505(b)(2), the FDAmay rely, forapprovalof an NDA, on data not developed by orforthe applicant andfor which the applicant does not contain a right of reference. If the 505(b)(2) applicant can establish that reliance on FDA’sprevious findings of safety and effectiveness is scientifically appropriate, itmay eliminate the need to conduct certain preclinical or clinical studies of the product candidate. The FDAmay also require companies to perform additional bridging studies or measurements, including clinical studies, to support the change from theapproved branded reference drug. The FDAmay then approvethe new product candidatefor all, or some, of thelabeled indications and conditions of usefor which the branded reference drug has been approved, as well as for any new indications and conditions of use sought by the 505(b)(2) applicant.

Orange Book Listing

In seeking approvalfora drug through an NDA, including a 505(b)(2)NDA, applicants are required to list with the FDAcertain patents whose claims cover the applicant’s product. Upon approvalof an NDA, each of the patents listed in the applicationforthe drug is then published in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations, known as the Orange Book. Anyapplicant who files an Abbreviated New Drug Application(“ANDA”)seeking approvalof a generic equivalent version of a drug listed in the Orange Book or a 505(b)(2)NDAreferencing a drug listed in the Orange Book must certify, foreach patent listed in the Orange Bookforthe referenced drug, to the FDAthat (1) no patent information on the drug product that is the subject of the application has been submitted to the FDA,(2) such patent has expired, (3) the date on which such patent expires or (4) such patent isinvalidor will not be infringed upon by the manufacture, use or sale of the drug productfor which the application is submitted. The fourth certification described aboveis known as a paragraph IV certification. A notice of the paragraph IV certification must be provided to each owner of the patent that is the subject of the certification and to the holder of the approved NDA to which the ANDA or 505(b)(2) application refers. The applicant may also elect to submit a “section viii” statement certifying that its proposed label does not contain (or carves out)anylanguage regarding the patented method-of-use rather than certify to a listed method-of-use patent. This section viii statement does not require notice to the patent holder or NDA owner. There might alsobe no relevant patent certification.

If the reference NDAholder and patent owners assert a patent challenge directed to one of the Orange Book listed patents within 45 days of the receipt of the paragraph IV certification notice, the FDAis prohibited from approvingthe application until the earlier of 30 months from the receipt of the paragraph IV certification expiration of the patent, settlement of the lawsuit, or a decision in the infringement case thatis favorableto the applicant. Even if the 45 days expire, a patent infringement lawsuit can be brought and could delay market entry, but it would not extend the FDA-related 30-month stay of approval.

The ANDA or 505(b)(2) application also will not be approved until any applicable non-patent exclusivity listed in the Orange Bookforthe branded reference drug has expired. Specifically, the holder of the NDAforthe listed drugmaybe entitled to a period of non-patent exclusivity, during which the FDAcannot approvean ANDAor 505(b)(2) application that relies on the listed drug. Forexample, a pharmaceutical manufacturermay obtain five years of non-patent exclusivity upon NDA approvalof a NCE, which is a drug that contains an active moiety that has not been approvedby FDAinany other NDA. An “active moiety” is defined as the molecule or ion responsible for the drug substance’s physiological or pharmacologic action. During the five-year NCE exclusivity period, the FDAcannot acceptfor filing and cannot approve any ANDA seeking approvalof a generic version of that drug orany 505(b)(2)NDAforthe same active moiety and that relies on the FDA’sfindings regarding that drug, except that the FDAmay accept an applicationfor filing after four years (andmay initiate a review of the application, but stillmaynot approveitfor five years) if the follow-on applicant makesa paragraph IV certification. This exclusivity periodmaybe extended by an additional six months if certain requirements are met to qualify the productfor pediatric exclusivity, including the receipt of a written request from the FDAthat the

NDAholder conduct certain pediatric studies, the submission of study reports from such studies to the FDAafter receipt of the written request and satisfaction of the conditions specified in the written request.

In addition, a drug, including oneapproved under Section 505(b)(2), may also obtain a three-year period of market exclusivityfora particular condition ofapproval, or change to a marketed product, such as a new formulationfora previously approved product, if one or more new clinical studies (other than bioavailabilityor bioequivalence studies) was essential to theapprovalof the application and was conducted/ sponsored by the applicant. Should this occur, the FDAwould be precluded from approving any ANDAor 505(b)(2) application that relies on the information supporting theapprovalof the drug, or the change to the drugfor which the information was submitted and the exclusivity granted, until after that three-year exclusivity period has run. However, unlike for NCE exclusivity, the FDA can accept an application and begin the review process during the exclusivity period.

Post-Approval Requirements

Drugs manufactured or distributed pursuant to FDA approvalsare subject to pervasive and continuing regulation by the FDAand other government authorities, including, among other things, requirements relating to recordkeeping, periodic reporting, product sampling and distribution, advertising and promotion and reporting of adverse experiences with the product. After approval, most changes to theapproved product, such as adding new indications, manufacturing changes or other labeling claims, are subject to prior FDAreview andapproval. There alsoare continuing annual program fee requirementsfor anymarketed products.

The FDAmay impose a number ofpost-approval requirements as a condition ofapprovalof an NDA. For example, the FDA may require post-marketing testing, including Phase 4 clinical studies, and surveillance to further assess and monitor theproduct’ssafety and effectiveness after commercialization.

In addition, drug manufacturers and other entities involvedin the manufacture and distribution ofapproved drugs are required to register their establishments with the FDAand state authorities and are subject to periodic unannounced inspections by the FDA and these state authorities for compliance with cGMP requirements. Changes to the manufacturing process are strictly regulated and often require prior FDA approval before being implemented. FDA regulations also require investigation and correction of anydeviations from cGMP requirements and impose reporting and documentation requirements upon the sponsor and any third-party manufacturers that the sponsor may decide to use. Accordingly, manufacturers must continue to expend time, money, and effort in the area of production and quality control to maintain cGMP compliance.

Once anapprovalis granted, the FDAmay withdraw theapprovalif certain conditions are met, for example, if clinical or other experience, tests, or other scientific data show that such drug is unsafe for use. Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in mandatory revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical studies to assess new safety risks; or imposition of distribution or other restrictions under a REMS program.

Other potential consequences include, among other things:

The FDAstrictly regulates marketing, labeling, advertising and promotion of products that are placed on the market. A company generally canmake only claims with respect to FDA-approved uses of a drug and in accordance with the provisions of theapproved label. The FDAand other agencies actively enforce thelawsand regulations prohibiting the promotion of off-label uses. Failureto comply with these requirements can result in, among other things, adverse publicity, warning letters, corrective advertising and potential civil and criminal penalties. Physicians may prescribe, in their independent professional medical judgment, legally available productsfor uses that are not described in theproduct’slabeling and that differ from those tested by us andapprovedby the FDA. Physiciansmay believe that such off-label uses are the best treatmentfor many patients in varied circumstances. The FDAdoes not regulate thebehaviorof physicians in their choice of treatments. The FDAdoes, however, restrict manufacturer’s communications on the subject of off-label use of their products. The federal government has levied large civil and criminal fines against companiesfor alleged improper promotion of off-label use and has enjoined companies from engaging in off-label promotion. The FDAand other regulatory agencies have also required that companies enter into consent decrees or permanent injunctions under which specified promotional conduct is changed or curtailed. However, companies may share truthful and not misleading information that is otherwise consistent with aproduct’s FDA-approved labeling.

In addition, the distribution of prescription pharmaceutical products is subject to the Prescription Drug Marketing Act (the“PDMA”), which regulates the distribution of drugs and drug samplesatthe federal level and sets minimum standards for the registration and regulation of drug distributors by the states. Both the PDMA and state laws limit the distribution of prescription pharmaceutical product samples and impose requirements to ensure accountability in distribution.

Foreign Regulation

In addition to regulations in the United States, we will be subject to a variety of foreign regulations governing clinical studies and commercial sales and distribution of itsproducts. Whether or not we obtain FDA approvalfora product, it must obtain approvalor certification by the comparable regulatory authorities of foreign countries before it can commence clinical studies, andapprovalor certification from regulatory authorities in foreign countries, such as the EU, before itmay market products in those countries. The requirements and process governing the conduct of clinical studies, approval process, product licensing, pricing and reimbursement vary from country to country. Failure to comply with applicable foreign regulatory requirements, maybe subjectto, among other things, fines, suspension orwithdrawalof regulatory approvals, product recalls, seizure of products, operating restrictions and criminal prosecution.

Non-clinical studies and clinical studies

Similarly to the United States, the various phases of non-clinical and clinical research in the EU are subject to significant regulatory controls.

Non-clinical studies are performed to demonstrate the health or environmental safety of new chemical or biological substances. Non-clinical studies must be conducted in compliance with the principles of GLP as set forth in EU Directive 2004/10/EC. In particular, non-clinical studies, both in vitro and in vivo, must be planned, performed, monitored, recorded, reported and archived in accordance with the GLP principles, which define a set of rules and criteria for a quality system for the organizational process and the conditions for non-clinical studies. These GLP standards reflect the Organization for Economic Co-operation and Development requirements.

Clinical studies of medicinal products in the EU must be conducted in accordance with EU and national regulations and the International Conference on Harmonization’s GCPs, as well as the applicable regulatory requirements and the ethical principles that have their origin in the Declaration of Helsinki. If the sponsor of the clinical study is not established within the EU, it must appoint an EU entity to act as its legal representative. The sponsor must takeout a clinical study insurance policy, and in most EU member states, the sponsor is liable to provide ‘no fault’ compensation toany study subject injured in the clinical study.

The regulatory landscape related to clinical study in the EU has been subject to recent changes. The EU Clinical Trials Regulation (“CTR”), which was adopted in April 2014 and repeals the EU Clinical Trials Directive (the “Clinical Trials Directive”), became applicable on January 31, 2022. Unlike directives, the CTR is directly applicable inall EU member states without the needfor member states to further implement it into nationallaw. The CTRnotably harmonizes the assessment and supervision processesfor clinical studies throughout the EU via a Clinical Trials Information System, which contains a centralized EU portal and database.

While the Clinical Trials Directive required a separate clinical trial application(“CTA”)to be submitted in each member state, to both the competent national health authority and an independent ethics committee, much like the FDAand IRBrespectively, the CTR introduces a centralized process and only requires the submission of a single application to all member states concerned. The CTR allows sponsors to make a single submission to both the competent authority and an ethics committee in each member state, leading to a single decision per member state. The CTAmust include, among other things, a copy of the trial protocol and an investigational medicinal product dossier containing information about the manufacture and quality of the medicinal product under investigation. The assessment procedure of the CTAhas been harmonized as well, including a joint assessment byall member states concerned, and a separate assessment by each member state with respect to specific requirements related to its own territory, including ethics rules. Each member state’sdecision is communicated to the sponsor via the centralized EU portal. Once the CTAis approved, clinical study developmentmay proceed.

The CTR foresees a three-year transition period. The extent to which ongoing and new clinical studies will be governed by the CTR varies. For clinical studies whose CTA was made under the Clinical Trials Directive before January 31, 2022, the Clinical Trials Directive will continue to apply on a transitional basis for three years. Additionally, sponsors may still choose to submit a CTA under either the Clinical Trials Directive or the CTR until January 31, 2023 and, if authorized, those will be governed by the Clinical Trials Directive until January 31, 2025. By that date, all ongoing trials will become subject to the provisions ofthe CTR.

Medicines used in clinical studies must be manufactured in accordance with GMP. Other national and EU-wide regulatory requirements may also apply.

Marketing Authorization

In order to market our future product candidates in the EU and many other foreign jurisdictions, we must obtain separate regulatory approvals. More concretely, in the EU, medicinal product candidates can only be commercialized after obtaining a marketing authorization (“MA”). To obtain regulatory approval of a product candidate under EU regulatory systems, we must submit a MA application(“MAA”). The process for doing this depends, among other things, on the nature of the medicinal product. There are twotypes of MAs:

various member states through the decentralized procedure. Under the decentralized procedure an identical dossier is submitted to the competent authorities of each of the member states in which the MA is sought, one of which is selected by the applicant as the reference member state.

Under the centralized procedure the maximum timeframe for the evaluation of a MAA by the EMA is 210 days.

In exceptional cases, the CHMP might perform an accelerated review of a MAA in no more than 150 days (not including clock stops). Innovative products that target an unmet medical need and are expected to be of major public health interestmaybe eligiblefora number of expedited development andreview programs, such as the Priority Medicines (“PRIME”) scheme, which provides incentives similar to thebreakthrough therapy designation in the U.S. In March 2016, the EMA launched an initiative, the PRIME scheme, a voluntary scheme aimed at enhancing the EMA’s support for the development of medicines that target unmet medical needs. It is based on increased interaction and early dialogue with companies developing promising medicines, to optimize their product development plans and speed up their evaluationto help them reach patients earlier. Product developers that benefit from PRIME designation can expectto be eligible for accelerated assessment but this is not guaranteed. Many benefits accrue to sponsors of product candidates with PRIME designation, including but not limited to, early and proactive regulatory dialogue with the EMA, frequent discussions on clinical study designs and other development program elements, and accelerated MAA assessment once a dossier has been submitted. Importantly, a dedicated contact and rapporteur from the CHMP is appointed early in the PRIME scheme facilitating increased understanding of the product at EMA’s committee level. An initial meeting initiates these relationships and includes a team of multidisciplinary experts at the EMA to provide guidance on the overall development and regulatory strategies.

Moreover, in the EU, a “conditional” MAmaybe granted in cases whereallthe required safety and efficacy data are not yetavailable. The conditional MA is subject to conditions to be fulfilledfor generating the missing data or ensuring increased safety measures. It isvalid forone year and has to be renewed annually until fulfillment ofallthe conditions. Once the pending studies are provided, it can become a “standard” MA. However, if the conditions are not fulfilled within the timeframe set by the EMA, the MA ceases to be renewed. Furthermore, MAmay alsobe granted “under exceptional circumstances” when the applicant can show that it is unable to provide comprehensive data on the efficacy and safety under normal conditions of use even after the product has been authorized and subject to specific procedures being introduced. Thismay arise in particular when the intended indications are very rare and, in the present state of scientific knowledge, it is not possible to provide comprehensive information, or when generating datamaybe contrary to generally accepted ethical principles. This MA is close to the conditional MA as it is reserved to medicinal products to beapproved forsevere diseases or unmet medical needs and the applicant does not hold the complete data set legally requiredforthe grant of a MA. However, unlike the conditional MA, the applicant does nothaveto provide the missing data and will never haveto. Although the MA “under exceptional circumstances” is granted definitively, the risk-benefit balance of the medicinal product is reviewed annuallyand the MA is withdrawn in case the risk-benefit ratio is no longer favorable.

MAs have an initial duration of five years. After these five years, the authorization may be renewed for an unlimited period on the basis of a reevaluation of the risk-benefit balance.

Data and marketing exclusivity

The EUalso provides opportunitiesfor market exclusivity. Upon receiving MA, reference products generally receive eight years of data exclusivity and an additional two years of market exclusivity. If granted, the data exclusivity period prevents generic or biosimilar applicants from relying on the pre-clinical and clinical study data contained in the dossier of the reference product when applying for a generic or biosimilar MA in the EU during a period of eight years from the date on which the reference product was first authorized in the EU. The market exclusivity period prevents a successful generic or biosimilar applicant from commercializing its product in the EU until 10 years have elapsed from the initial MA of the reference product in the EU. The overall 10-year market exclusivity period can be extended to a maximum ofeleven years if, during the first eight years of those 10 years, the MA holder obtains an authorization forone or more new therapeutic indications which, during the scientific evaluation prior to their authorization, are held to bring a significant clinical benefit in comparison with existing therapies. However, there is no guarantee that a product will be considered by the EU’s regulatory authorities to be a new chemical entity, and products may not qualify for data exclusivity.

Post-Approval Requirements

Similar to the United States, both MA holders and manufacturers of medicinal products are subject to comprehensive regulatory oversight by the EMA, the European Commission and/or the competent regulatory authorities of the member states. The holder of a MA must establish and maintain a pharmacovigilance system and appoint an individual qualified personfor pharmacovigilance who is responsiblefor oversight of that system. Keyobligations include expedited reporting of suspected serious adverse reactions and submission of periodic safety update reports (“PSURs”).

All new MAAs must include a risk management plan describing the risk management system that the company will put in place and documenting measures to prevent or minimize the risks associated with the product. The regulatory authorities may also impose specific obligations as a condition of the MA. Such risk-minimization measures or post-authorization obligations may include additional safety monitoring, more frequent submission of PSURs, or the conduct of additional clinical studies or post-authorization safety studies.

The advertising and promotion of medicinal products is also subject to laws concerning promotion of medicinal products, interactions with physicians, misleading and comparative advertising and unfair commercial practices. All advertising and promotional activities for the product must be consistent with the approved summary of product characteristics, and therefore all off-label promotion is prohibited. Direct-to-consumer advertising of prescription medicines is also prohibited in the EU. Although general requirementsfor advertising and promotion of medicinal products are established under EU directives, the details are governed by regulations in each member state and can differ from one country to another.

The aforementioned EU rules are generally applicable in the EEA.

Failure to comply with EU and member state laws that apply to the conduct of clinical studies, manufacturing approval, MA of medicinal products and marketing of such products, both before and after grant of the MA, manufacturing of pharmaceutical products, statutory health insurance, bribery and anti-corruption or with other applicable regulatory requirements may result in administrative, civil or criminal penalties. These penalties could include delays or refusal to authorize the conduct of clinical studies, or to grant MA, product withdrawals and recalls, product seizures, suspension, withdrawal or variation of the MA, total or partial suspension of production, distribution, manufacturing or clinical studies, operating restrictions, injunctions, suspension of licenses, fines and criminal penalties.

Regulation of Combination Products in the EU

The EU regulates medical devices and medicinal products separately, through different legislative instruments, and the applicable requirements will vary depending on the type of drug-device combination product. EU guidance has been published to help manufacturers select the right regulatory framework.

Drug-delivery products intended to administer a medicinal product where the medicinal product and the device form a single integral product are regulated as medicinal products in the EU. The EMA is responsiblefor evaluatingthe quality, safety and efficacy of MAAs submitted through the centralized procedure, including the safety and performance of the medical device in relation to its use with the medicinal product. The EMA or the EU member state national competent authority will assess the product in accordance with the rulesfor medicinal products described abovebut the device part must comply with the EU Medical Devices Regulation (including the general safety and performance requirements providedin Annex I). The MAA must include — where available— the results of the assessment of the conformity of the device part with the Medical Devices Regulation contained in the manufacturer’s EU declaration of conformity of the device or the relevant certificate issued by a notified body. If the MAA does not include the results of the conformity assessment and whereforthe conformity assessment of the device, if used separately, the involvement of a notified body is required, the competent authority must require the applicant to provide a notified body opinion on the conformity of the device.

By contrast, in case of drug-delivery products intended to administer a medicinal product where the device and the medicinal product do not form a single integral product (but aree.g., co-packaged), the medicinal product is regulated in

accordance with the rulesfor medicinal products described above while the device part is regulated as a medical device and will haveto comply withallthe requirements set forth by the EU Medical Devices Regulation.

The characteristics of non-integral devices usedforthe administration of medicinal productsmay impact thequality, safety and efficacy profile of the medicinal products. Tothe extent that administration devices are co-packaged with the medicinal productor, in exceptional cases, where the use of a specific type of administration device is specifically providedforin the product information of the medicinal product, additional informationmay need to be provided in the MAAforthe medicinal product on the characteristics of the medical device(s) thatmay impact on thequality, safety and/or efficacy of the medicinal product.

The requirements regarding quality documentation for medicinal products when used with a medical device, including single integral products, co-packaged and referenced products, are outlined in the EMA guideline of July 22, 2021, which became applicable as of January 1, 2022.

The aforementioned EU rules are generally applicable in the EEA.

Coverage and Reimbursement

Sales of any pharmaceutical and medical device product depend, in part, on the extent to which such product will be covered by third-party payors, such as federal, state and foreign government healthcare programs, commercial insurance and managed healthcare organizations, and the level of reimbursement for such product by third-party payors. Significant uncertainty exists as to the coverage and reimbursement status of any newly approved product. Decisions regarding the extent of coverage and amount of reimbursement to be provided are made on a plan-by-plan basis. One third-party payor’s decision to cover a particular product does not ensure that other payors will also provide coverage for the product. As a result, the coverage determination process can require manufactures to provide scientific and clinical supportforthe use of a product to each payor separately and can be a time-consuming process, with no assurance that coverageand adequate reimbursement will be applied consistently or obtained in the first instance. Forproducts administered under the supervision of aphysician, obtaining coverageand adequate reimbursementmaybe particularly difficult because of the higher prices often associated with such drugs. Additionally, separate reimbursementforthe product itself or the treatment or procedure in which the product is usedmaynot beavailable, whichmay impact physician utilization.

In addition, third-party payorsare increasingly reducing reimbursementsfor medical devices, pharmaceutical products and services. The U.S. government and state legislatures have continued implementing cost-containment programs, including price controls, restrictions oncoverageand reimbursement and requirementsfor substitution of generic products. Third-party payorsare more and more challenging the prices charged, examining the medical necessity and reviewing the cost-effectiveness of medical devices and pharmaceutical products, in addition to questioning their safety andefficacy. Adoption of price controls and cost-containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could further limit sales ofany product. Decreases in third-party reimbursementfor anyproduct or a decision by a third-party payornot to cover a product could reduce physician usage and patient demandforthe product.

In international markets, reimbursement and healthcare payment systems vary significantly by country, and many countries have instituted price ceilings on specific products and therapies. For example, the EU provides optionsforits member states to restrict the range of medicinal productsfor which their national health insurance systems provide reimbursement and to control the prices of medicinal productsfor humanuse. A member statemay approvea specific priceforthe medicinal product or itmay instead adopt a system of direct or indirect controls on the profitability of the company placing the medicinal product on the market. Pharmaceutical productsmay face competition from lower-priced products in foreign countries that have placed price controls on pharmaceutical products andmay also compete with imported foreign products. Furthermore, there is no assurance that a product will be considered medically reasonable and necessaryfora specific indication, will be considered cost-effective by third-party payors, that an adequate level of reimbursement will be established even ifcoverageis availableor that the third-party payors’reimbursement policies will not adversely affect the ability for manufacturers to sell products profitably.

Fraud and Abuse and Other Healthcare Regulations

Federal and state governmental agencies and equivalent foreign authorities subject the healthcare industry to intense regulatory scrutiny, including heightened civil and criminal enforcement efforts. These laws constrain the sales, marketing and other promotional activities of medical device manufacturers by limiting the kinds of financial arrangements we may have with hospitals, physicians and other potential purchasers of its products. Federal healthcare fraud and abuse laws apply to our business when a customer submits a claim for an item or service that is reimbursed under Medicare, Medicaid or other federally funded healthcare programs. Patient privacy statutes and regulations by foreign, federal and state governmentsmay also apply in the locations in which we do business. Descriptions of some of the U.S. laws and regulations thatmay affect our ability to operate follow.

Federal Healthcare Anti-Kickback Statute

The federal Anti-Kickback Statute prohibits, among other things, persons or entities from knowingly and willfully soliciting, offering, receiving or paying any remuneration, directly or indirectly, overtly or covertly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchasing, leasing, ordering, or arranging for or recommending the purchase, lease, or order of any good or service for which payment may be made, in whole or in part, by federal healthcare programs, such as the Medicareand Medicaid programs. The term “remuneration” has been broadly interpreted to include anything of value, and the government can establish a violation of the Anti-Kickback Statute without proving that a personor entity had actual knowledge of thelawor a specific intent to violate it. In addition, the governmentmay assert that a claim, including items or services resulting from a violation of the Anti-Kickback Statute, constitutes a false or fraudulent claimfor purposes of the federal civil False Claims Act. The Anti-Kickback Statute is subject to evolving interpretations and has been applied by government enforcement officials to a number of common business arrangements in the medical device industry. There are a number of statutory exceptions and regulatory safe harbors protecting certain business arrangements from prosecution under the Anti-Kickback Statute; however, those exceptions and safe harbors aredrawn narrowly and there is no exception or safe harbor for many common business activities, such as reimbursement support programs, educational and research grants or charitable donations. The failure of a transaction or arrangement to fit precisely within one or more applicable statutory exceptions or regulatory safe harbors does not necessarily mean that it is illegal or that prosecution will be pursued. However, conduct and business arrangements that do not fully satisfyall requirements of an applicable safe harbormay result in increased scrutiny by government enforcement authorities and will be evaluated on a case-by-case basis based on a cumulative review ofall facts and circumstances.

Federal Civil False Claims Act

The federal civil False Claims Act prohibits, among other things, persons or entities from knowingly presenting, or causing to be presented, a false or fraudulent claimfor payment of government funds, or knowingly making, using or causing to be made or used a false record or statement material to a false or fraudulent claim toavoid, decrease or conceal an obligation topay money to the federal government. A claim including items or services resulting from a violation of the Anti-Kickback Statute constitutes a false or fraudulent claimfor purposes of the federal civil False Claims Act. Actions under the federal civil False Claims Actmaybe brought by the government or as a qui tam action by a private individual in the name of the government. These individuals, sometimes known as “relators”or, more commonly, as“whistleblowers,” mayshare inany amounts paid by the entity to the government in fines or settlement. The number of filings of qui tam actions has increased significantly in recent years. Qui tam actions are filed under sealand impose a mandatory duty on the U.S. Department of Justice to investigate such allegations. Most private citizen actions are declined by the Department of Justice or dismissed by federal courts. However, the investigation costsfora company can be significant and material even if the allegations are without merit. Various states have adopted laws similar to the federal civil False Claims Act, and many of these state laws are broader in scope and apply toall payors, andtherefore, are not limited to only those claims submitted to the federal government. Medical device manufacturers and other healthcare companies alsoare subject to other federal false claims laws, including, among others, federal criminal healthcare fraud and false statement statutes that extend to non-government health benefit programs.

Healthcare Fraud Statute

The Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technologyfor Economic and Clinical Health Act of 1996(“HIPAA”) and its implementing regulations created federal criminal statutes that prohibit, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, including private third-party payors knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement or representation, or making or usingany false writing or document knowing the same to containany materially false, fictitious or fraudulent statement orentry, in connection with the delivery of or paymentfor healthcare benefits, items or services. Similar to the Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation.

Sunshine Act

The federal Physician Payments Sunshine Act requires certain manufacturers of drugs, devices, biologics and medical suppliesfor which payment isavailable under Medicare, Medicaid or the Children’s Health Insurance Program to report annually with certain exceptions to the Centers for Medicare & Medicaid Services, or CMS, information related to payments or other transfers ofvalue made to physicians (as defined by statute), certain non-physician practitioners, including physician assistants, nurse practitioners, clinical nurse specialists, certified nurse anesthetists, anesthesiology assistants and certified nurse-midwives, and teaching hospitals, either directly or indirectly through a third partyatthe request of such physician, non-physician practitioner or teaching hospital, as well as ownership and investment interests held by physicians and their immediate family members.

Other State Laws

Certain states also mandate implementation of commercial compliance programs, impose restrictions on device manufacturer marketing practices and/or require tracking and reporting of gifts, compensation and other remuneration to healthcare professionals and entities.

State and federal regulatory and enforcement agencies continue to actively investigate violations of healthcare laws and regulations, and the U.S. Congress continues to strengthen the arsenal of enforcement tools. The Bipartisan Budget Act of 2018 (the “BBA”) increased the criminal and civil penalties that can be imposed for violating certain federal healthcare laws, including the Anti-Kickback Statute. Enforcement agencies also continue to pursue novel theories of liability under these laws. In particular, government agencies recently have increased regulatory scrutiny and enforcement activity with respect to manufacturer reimbursement support activities and other patient support programs, including bringing criminal charges or civil enforcement actions under the Anti-Kickback Statute, federal civil False Claims Act and violations of healthcare fraud and HIPAA privacy provisions.

Enforcement and Penalties for Noncompliance with Fraud and Abuse Laws and Regulations

Compliance with these federal and state lawsand regulations requires substantial resources. If our operations are found to be in violation ofanyof thelaws described aboveorany other governmental regulations that apply to it, wemaybe subject to significant civil, criminal and administrative penalties, damages, fines, imprisonment, disgorgement, exclusion from participation in government healthcare programs such as the Medicare and Medicaid programs, reputational harm, administrative burdens, diminished profits and future earnings, and the curtailment or restructuring of its operations. Companies settling federal civil False Claims Act, Anti-Kickback Statute and other fraud andabuse cases also maybe required to enter into a Corporate Integrity Agreement with the U.S. Department of Health and Human Services Office of Inspector General in order toavoid exclusion from participation (i.e., loss ofcoverage fortheir products) in federal healthcare programs such as Medicare and Medicaid. Corporate Integrity Agreements typically impose substantial costs on companies to ensure compliance.

Foradditional information regarding obligations under federal healthcare statues and regulations, please see the section titled “Risk* Factors — Risks Related to Government Regulation and Our Industry — Ourrelationships with physicians, patients and payors in the United States and elsewhere may be subject, directlyor indirectly, to applicable anti-kickback, fraud and abuse, false claims, transparency, and other healthcare laws and regulations*.”

United States Healthcare Reform

There have been and continue to be proposals by the federal government, state governments, regulators and third-party payors to control or manage the increased costs of healthcare and, more generally, to reform the U.S. healthcare system.

Forexample, in the United States, in March 2010, the Patient Protection and the Affordable Care Act, as amended by the Health Care and Education and Reconciliation Act(collectively, the“ACA”), was enacted. The ACAcontained a number of significant provisions, including those governing enrollment in federal healthcare programs, reimbursement changes and fraud and abuse measures, all of which impacted existing government healthcare programs and resulted in the development of newprograms. The ACA also imposed an excise tax of 2.3% on the sale of most medical devices, which was suspended, effective January 1, 2016, and subsequently repealed, effective January 1, 2020.

In addition, other legislative changes have been proposed and adopted since the ACAwas enacted. On August 2, 2011, the Budget Control Act of 2011 was signed intolaw, which, among other things, includes reductions to Medicare payments to providers, which went into effect on April 1, 2013 and, due to subsequent legislative amendments to the statute, including the BBA, will remain in effect through 2031, with the exception of a temporary suspension from May 1, 2020 through March 31, 2022, unless additional Congressional action istaken. On January 2, 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, reduced Medicare payments to several providers, including hospitals, and increased the statute of limitations periodforthe government to recover overpayments to providers from three to five years.

Further, recently there has been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in several U.S. Congressional inquiries and proposed and enacted federal and state legislation designed to bring transparency to product pricing and reduce the cost of products and services under government healthcare programs. Additionally, regional healthcare authorities and individual hospitals are increasingly using bidding procedures to determine what products to purchase and which suppliers will be included in their healthcare programs.

We expect additional state, federal and foreign healthcare reform measures to be adopted in the future, any of which could limit the amounts that federal, state and foreign governments will pay for healthcare products and services, which could result in reduced demand for our products or additional pricing pressure.

Forinstance, in December 2021, the EU Regulation No 2021/2282 on Health Technology Assessment (the“HTA”), amending Directive 2011/24/EU, was adopted. This regulation which entered into forcein January 2022 intends to boost cooperation among EU member states in assessing health technologies, including some medical devices, and providing the basis for cooperation at the EU level for joint clinical assessments in these areas. The regulation foresees a three-year transitional period and will permit EU member states to use common HTAtools, methodologies, and procedures across the EU, working together in four main areas, including joint clinical assessment of theinnovative health technologies with the most potential impactfor patients, joint scientific consultations whereby developers can seek advice from HTAauthorities, identification of emerging health technologies to identify promising technologies early, and continuing voluntary cooperation in other areas. Individual EU member states will continue to be responsiblefor assessing non-clinical (e.g., economic, social, ethical) aspects of health technologies, and making decisions on pricing and reimbursement.

Data Privacy and Security Laws

Numerous state, federal and foreign laws, regulations and standards govern the collection, use, accessto, confidentiality and security of health-related and other personal information, and could apply now or in the future to our operations or the operations of our partners. In the United States, numerous federal and state lawsand regulations, including data breach notification laws, health information privacy and security lawsand consumer protection lawsand regulations govern the collection, use, disclosure, and protection of health-related and other personal information. In addition, certain foreign laws govern the privacy and security of personal data, including health-related data. Privacy and security laws, regulations, and other obligations are constantly evolving, mayconflict with each other to complicate compliance efforts, and can result in

investigations, proceedings, or actions that lead to significant civil and/or criminal penalties and restrictions on data processing.

Our Employees

As of December 31, 2023, we had 56 employees engaged in finance, clinical, research and development, engineering, regulatory and administration functions. We anticipate that the number of employees will grow as we scale our research and development and clinical organizational capabilities. In addition, we utilize and will continue to utilize consultants, clinical research organizations and third parties to perform our analytical and test method development, component and sub-assembly design and manufacturing, as well as preclinical studies, clinical studies, manufacturing and regulatory functions. We will use consultants and third-party analytical and design houses to complement internal capabilities and will utilize external manufacturing partners that have extensive experience in medical devices and dealing with regulatory bodies to provide components, assemblies and final product. Our suppliers will have ISO 13485 approved quality systems (or have been approved for GMP manufacturing of pharmaceutical products).

None of our employees are represented by a labor union or covered under a collective bargaining agreement. We consider our employee relations to be good.