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| PART I | | 1 |
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| Item 1 | Business | 1 |
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| Item 1A | Risk Factors | 71 |
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| Item 1B | Unresolved Staff Comments | 119 |
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| Item 1C | Cybersecurity | 119 |
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| Item 2 | Properties | 120 |
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| Item 3 | Legal Proceedings | 120 |
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| Item 4 | Mine Safety Disclosures | 121 |
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| PART II | | 121 |
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| Item 5 | Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities | 121 |
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| Item 6 | [Reserved] | 121 |
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| Item 7 | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 122 |
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| Item 7A | Quantitative and Qualitative Disclosures About Market Risk | 138 |
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| Item 8 | Financial Statements and Supplementary Data | 139 |
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| Item 9 | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 212 |
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| Item 9A | Controls and Procedures | 212 |
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| Item 9B | Other Information | 213 |
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| Item 9C | Disclosure Regarding Foreign Jurisdictions That Prevent Inspections | 213 |
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| PART III | | 214 |
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| Item 10 | Directors, Executive Officers and Corporate Governance | 214 |
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| Item 11 | Executive Compensation | 214 |
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| Item 12 | Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters | 214 |
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| Item 13 | Certain Relationships and Related Transactions, and Director Independence | 214 |
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| Item 14 | Principal Accountant Fees and Services | 214 |
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| PART IV | | 215 |
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| Item 15 | Exhibits and Financial Statement Schedules | 215 |
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| Signatures | 220 | |
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i
Unless the context indicates otherwise, references in this Annual Report on Form 10-K to the “Company,” “Orchestra,” “we,” “us,” “our” and similar terms refer to Orchestra BioMed Holdings, Inc., a Delaware corporation formerly known as Health Sciences Acquisitions Corporation 2, and its consolidated subsidiaries. “Legacy Orchestra” refers to Orchestra BioMed, Inc., the private Delaware corporation that is now our wholly owned subsidiary. References to “HSAC2” refer to Health Sciences Acquisitions Corporation 2, our predecessor company prior to the consummation of the Business Combination (as defined herein).
Certain information contained in this Annual Report on Form 10-K relates to or is based on studies, publications, surveys and other data obtained from third-party sources and our own internal estimates and research. While we believe these third-party sources to be reliable as of the date of this Annual Report on Form 10-K, we have not independently verified the market and industry data contained in this Annual Report on Form 10-K or the underlying assumptions relied on therein. Finally, while we believe our own internal research is reliable, such research has not been verified by any independent source. Notwithstanding the foregoing, we are liable for the information provided in this Annual Report on Form 10-K. The industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of factors, including those referred to in “Part I, Item 1A. Risk Factors” in this Annual Report on Form 10-K. These and other factors could cause results to differ materially from those expressed in the estimates made by the independent parties and by us.
ii
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K contains forward-looking statements. All statements other than statements of historical facts contained in this report, including statements regarding our future results of operations and financial position, business strategy, product candidates, planned preclinical studies and clinical trials, results of clinical trials, research and development costs, regulatory approvals, timing, and likelihood of success, as well as plans and objectives of management for future operations, are forward-looking statements. These statements involve known and unknown risks, uncertainties, and other important factors that are in some cases beyond our control and may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements.
In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “would,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential,” or “continue” or the negative of these terms or other similar expressions. Forward-looking statements contained in this report include, but are not limited to, statements about:
| ● | our ability to raise financing in the future, including our ability to borrow additional funds under our current debt financing arrangements; |
| ● | our success in retaining or recruiting, or changes required in, our officers, key employees or directors; |
| ● | our ability and/or the ability of third-party vendors and partners to manufacture our product candidates; |
| ● | our ability to source critical components or materials for the manufacture of our product candidates; |
| ● | our ability to achieve and sustain profitability; |
| ● | our ability to achieve our projected development and commercialization goals; |
| ● | the rate of progress, costs and results of our clinical studies and research and development activities, including, among other things, the date by which we expect to complete enrollment of our BACKBEAT global pivotal study; |
| ● | market acceptance of our product candidates, if approved; |
| ● | our ability to compete successfully with larger companies in a highly competitive industry; |
| ● | changes in our operating results, which make future operations results difficult to predict; |
| ● | serious adverse events, undesirable side effects that could halt the clinical development, regulatory approval or certification, of our product candidates; |
| ● | our ability to manage growth or control costs related to growth; |
| ● | economic conditions that may adversely affect our business, financial condition and stock price; |
| ● | our reliance on third parties to drive successful marketing and sale of our initial product candidates, if approved; |
| ● | our reliance on third parties to manufacture and provide important materials and components for our products and product candidates; |
iii
| ● | our and our partners’ abilities to obtain necessary regulatory approvals and certifications for our product candidates in an uncomplicated and inexpensive manner; |
| ● | our ability to maintain compliance with regulatory and post-marketing requirements; |
| ● | adverse medical events, failure or malfunctions in connection with our product candidates and possible subjection to regulatory sanctions; |
| ● | healthcare costs containment pressures and legislative or administrative reforms which affect coverage and reimbursement practices of third-party payors; |
| ● | our ability to protect or enforce our intellectual property, unpatented trade secrets, know-how and other proprietary technology; |
| ● | our ability to obtain necessary intellectual property rights from third parties; |
| ● | our ability to protect our trademarks, trade names and build our name recognition; |
| ● | our ability to maintain the listing of our common stock on The Nasdaq Stock Market LLC (“Nasdaq”); |
| ● | the success of our licensing agreements; and |
| ● | our public securities’ liquidity and trading. |
We have based these forward-looking statements largely on our current expectations and projections about our business, the industry in which we operate and financial trends that we believe may affect our business, financial condition, results of operations, and prospects, and these forward-looking statements are not guarantees of future performance or development. These forward-looking statements speak only as of the date of this report and are subject to a number of risks, uncertainties, and assumptions described under the heading “Item 1A. Risk Factors” in Part I of this Annual Report on Form 10-K. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. We do not plan to publicly update or revise any forward-looking statements contained herein whether as a result of any new information, future events, or otherwise, except as required by law.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this report, and, while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and you are cautioned not to unduly rely upon these statements.
iv
SUMMARY OF RISK FACTORS
The following is a summary of some of the risks and uncertainties that could materially adversely affect our business, financial condition and results of operations. This summary should be read together with the more detailed description of each risk factor disclosed under “Item 1A Risk Factors” contained in Part I of this Annual Report on Form 10-K.
| ● | We have a history of net losses, and we expect to continue to incur losses for the foreseeable future. If we ever achieve profitability, we may not be able to sustain it. |
| ● | We may need substantial additional funding. Our ability to timely raise capital in the future may be limited, or may be unavailable on acceptable terms, if at all. Since our cash, cash equivalents and short-term investments as of December 31, 2024 are not sufficient to fund our operations for at least the next twelve months from the date of issuance of the consolidated financial statements included elsewhere in this Annual Report on Form 10-K, there is substantial doubt about our ability to continue as a going concern. See “Liquidity and Capital Resources—Funding Requirements” in Item 7 of this Annual Report on Form 10-K. |
| ● | The clinical study process required to obtain regulatory approvals or certifications carries substantial risks and is lengthy and expensive with uncertain outcomes. If our clinical studies are unsuccessful or significantly delayed, or if we do not complete our clinical studies, our business may be harmed. |
| ● | Failures or perceived failures in our clinical studies will delay and may prevent our product candidate development and regulatory approval or certification process, damage our business prospects and negatively affect our reputation and competitive position. |
| ● | Even if we obtain all necessary U.S. Food and Drug Administration (“FDA”) approvals, our product candidates may not achieve or maintain market acceptance and may be subject to additional regulatory requirements post-approval. |
| ● | We may be unable to compete successfully with larger companies in highly competitive industries. |
| ● | The sizes of the markets for product candidates have not been established with precision, and may be smaller than we estimate. |
| ● | Interim, “top-line” and preliminary data from our clinical studies that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data. |
| ● | Our product candidates have in the past and may in the future be associated with serious adverse events, undesirable side effects or have other properties that could halt their clinical development, prevent their regulatory approval or certification, limit their commercial potential or result in significant negative consequences. |
| ● | We, in conjunction with our partners, intend to expand sales of our products internationally in the future, but we and our partners may experience difficulties in obtaining regulatory approval or certification or in successfully marketing and distributing our products internationally even if approved or certified. |
| ● | We may expend our limited resources to pursue a particular product or indication and fail to capitalize on products or indications that may be more profitable or for which there is a greater likelihood of success. |
| ● | We are, and expect to continue to be, highly dependent on partners to drive the successful marketing and sale of our initial product candidates. There is no assurance that we will be able to form and properly manage partnerships. There is no assurance that partnerships will be successful. |
v
| ● | We and Terumo (as defined below) have yet been unable to come to agreement with respect to amending the Terumo Agreement (as defined below). While we and Terumo are pursuing mediation, we cannot provide assurance that such efforts will be successful or that we or Terumo will not seek to terminate the Terumo Agreement. |
| ● | We expect to be highly dependent on partners and third-party vendors to manufacture and provide important materials and components for our products and product candidates. There is no assurance that we will be able properly manage our supply chain. Further, we currently do not have redundancy built into our supply chain. |
| ● | We have limited pharmaceutical manufacturing experience and our contract manufacturing organizations (“CMOs”) may experience development or manufacturing problems or delays in producing our products and planned or future products that could limit or prevent the potential growth of our revenue or increase our losses. |
| ● | Even if a product candidate receives regulatory approval or certification, our products will remain subject to regulatory scrutiny and post-marketing requirements. Failure to comply with post-marketing regulatory requirements could subject us or our partners to enforcement actions, including substantial penalties, and might require us or our partners to recall or withdraw a product from the market. |
| ● | Our medical device products, if approved or certified, may cause or contribute to adverse medical events or be subject to failures or malfunctions that we are required to report to the FDA or similar foreign regulatory authorities, and if we fail to do so, we would be subject to sanctions that could harm our reputation, business, financial condition and results of operations. |
| ● | Healthcare cost-containment pressures and legislative or administrative reforms resulting in restrictive coverage and reimbursement practices of third-party payors could decrease the demand for our products, the prices that customers are willing to pay for those products and the number of procedures performed using our devices, which could have an adverse effect on our business. |
| ● | Our information technology systems, or those of any of our CROs, manufacturers, other contractors, consultants, collaborators or potential future collaborators, may fail or suffer security or data privacy breaches or other unauthorized or improper access to, use of, or destruction of our proprietary or confidential data, employee data, or personal data, which could result in additional costs, loss of revenue, significant liabilities, harm to our brand and material disruption of our operations. |
| ● | We may not effectively be able to protect or enforce our intellectual property, which could have a material adverse effect on our business, financial condition, results of operations and prospects. |
| ● | If we cannot protect and control unpatented trade secrets, know-how and other proprietary technology, we may suffer competitive harm. |
| ● | We may be involved in litigation or other proceedings relating to patent, trade secret and other intellectual property rights, which could cause substantial costs and liability. |
| ● | We may need to obtain intellectual property rights from third parties, and may not be successful in obtaining necessary rights to develop any future product through acquisitions and in-licenses. |
| ● | If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected. |
| ● | The future sales, or the perception of future sales, of shares by existing stockholders and future exercise of registration rights may adversely affect the market price of our common stock. |
vi
