OCULAR THERAPEUTIX INC

Previous wording

We are a biopharmaceutical company committed to improving vision in the real world through the development and commercialization of innovative therapies for retinal diseases and other eye conditions. AXPAXLI (axitinib intravitreal implant, also known as OTX-TKI), our product candidate for retinal disease, is based on our ELUTYX proprietary bioresorbable hydrogel-based formulation technology. AXPAXLI is currently in two Phase 3 clinical trials for wet age-related macular degeneration, or wet AMD, which we refer to as the SOL-1 trial and the SOL-R trial, respectively. We have also completed a Phase 1 clinical trial of AXPAXLI for the treatment of non-proliferative diabetic retinopathy, or NPDR, which we refer to as the HELIOS trial.

Current wording

We are a fully-integrated biopharmaceutical company committed to redefining the retina experience. AXPAXLI (also known as OTX-TKI), our investigational product candidate for retinal disease, is an axitinib intravitreal hydrogel based on our ELUTYX proprietary bioresorbable hydrogel-based formulation technology. AXPAXLI is currently in two repeat-dosing Phase 3 clinical trials for the treatment of wet age-related macular degeneration, or wet AMD, which we refer to as the SOL-1 and the SOL-R trials. We have also completed a Phase 1 clinical trial of AXPAXLI for the treatment of non-proliferative diabetic retinopathy, or NPDR, which we refer to as the HELIOS trial. We are currently planning our next steps for AXPAXLI for the treatment of NPDR and diabetic macular edema, or DME.

Previous wording

Our pipeline also leverages the ELUTYX technology in our commercial product DEXTENZA, a corticosteroid approved by the U.S. Food and Drug Administration, or FDA, for the treatment of ocular inflammation and pain following ophthalmic surgery and ocular itching associated with allergic conjunctivitis, and in our product candidate PAXTRAVA (travoprost intracameral implant also known as OTX-TIC), which is currently in a Phase 2 clinical trial for the treatment of open-angle glaucoma, or OAG, or ocular hypertension, or OHT.

Current wording

We also leverage the ELUTYX technology in our commercial product DEXTENZA, a corticosteroid approved by the U.S. Food and Drug Administration, or FDA, for the treatment of ocular inflammation and pain following ophthalmic surgery in adults and pediatric patients and for the treatment of ocular itching associated with allergic conjunctivitis in adults and pediatric patients aged two years or older, and in our investigational product candidate PAXTRAVA (also known as OTX-TIC), which is a travoprost intracameral injection that is currently in a Phase 2 clinical trial for the treatment of open-angle glaucoma, or OAG, or ocular hypertension, or OHT.

Previous wording

We are currently conducting the SOL-1 trial, a registrational Phase 3 clinical trial for the treatment of wet AMD. The SOL-1 trial is designed as a prospective, multi-center, randomized, parallel-group trial that involves over 100 trial sites located in the U.S. and Argentina. The SOL-1 trial is designed as a superiority trial comparing a single optimized implant of AXPAXLI with a drug load of 450 µg of axitinib to a single injection of aflibercept 2 mg and assessing the safety and efficacy of AXPAXLI in subjects with wet AMD by measuring Best Corrected Visual Accuity, or BCVA, and central subfield thickness. We are conducting the SOL-1 trial in accordance with a Special Protocol Agreement, or SPA, letter we received in October 2023 from the FDA regarding the proposed clinical trial protocol and the statistical analysis plan and a subsequent SPA modification letter we received from the FDA in January 2024 regarding the formulation of AXPAXLI to be used and the trial’s inclusion criteria.

Current wording

We are currently conducting the SOL-1 trial, a repeat-dosing registrational Phase 3 clinical trial for the treatment of wet AMD. The SOL-1 trial is designed as a prospective, multi-center, randomized, parallel-group trial that involves more than 100 trial sites located in the United States and Argentina. The SOL-1 trial is designed as a superiority trial comparing a single optimized dose of AXPAXLI with a drug load of 450 µg of axitinib to a single injection of aflibercept 2 mg and assessing the safety and efficacy of AXPAXLI in subjects with wet AMD. The primary endpoint is the proportion of subjects who maintain visual acuity, defined as a Best Corrected Visual Acuity, or BCVA, loss of fewer than 15 letters on the Early Treatment of Diabetic Retinopathy Study, or ETDRS, letters chart from baseline at Week 36. This superiority trial has an 8-week loading segment with two monthly aflibercept 2 mg intravitreal injections prior to randomization, thereafter a 52-week treatment segment followed by a 52-week safety segment with re-dosing at Weeks 52 and 76. We believe the inclusion of re-dosing in the design of the SOL-1 trial enhances the potential of the trial to support a 6 - 12 month dosing label for AXPAXLI for the treatment of wet AMD and also should provide insights into the long-term durability of AXPAXLI.

Previous wording

The SOL-1 trial is intended to randomize approximately 300 evaluable treatment-naïve subjects with a diagnosis of wet AMD in the study eye with good visual acuity and a diagnosis of macular choroidal neovascularization at screening. Under the study protocol, after initial screening, enrolled subjects in the trial will receive two aflibercept 2 mg loading doses between the screening visit and Day 1: one at Week -8 and another at Week -4. Subjects reaching approximately 20/20 vision or experiencing an improvement of 10 Early Treatment of Diabetic Retinopathy Study, or ETDRS, letters after these injections, in addition to satisfying other criteria, will then be randomized in the trial at Day 1 to receive either one implant of AXPAXLI in the investigational arm or one injection of aflibercept 2 mg in the control arm. Those subjects who fail randomization will then be eligible to be enrolled in the SOL-R trial. All subjects who are successfully randomized in the SOL-1 trial will then be followed every month and rescued as needed with supplemental anti-VEGF treatment based on pre-specified criteria. The primary endpoint is the proportion of subjects who maintain visual acuity, defined as a BCVA loss of less than 15 letters on the ETDRS chart at week 36. Our pre-specified rescue criteria are a loss of 15 or more letters on the ETDRS chart compared to baseline, or a new hemorrhage that is deemed to be likely to

Current wording

The SOL-1 trial completed the randomization of 344 subjects with a diagnosis of active macular choroidal neovascularization at screening in December 2024. Under the study protocol, after initial screening, every enrolled subject received two aflibercept 2 mg loading doses between the screening visit and Day 1: one at Week -8 and another at Week -4. Subjects reaching approximately 20/20 Snellen equivalent vision or experiencing an improvement of at least 10 ETDRS letters after these injections, in addition to satisfying other criteria, were randomized in the trial at Day 1 to receive either one dose of AXPAXLI 450 µg in the investigational arm or one injection of aflibercept 2 mg in the control arm. At Week 52 and at Week 76, all subjects that were randomized in the trial at Day 1, including subjects who

Previous wording

In June 2024, we initiated the SOL-R trial, a repeat-dosing registrational Phase 3 clinical trial for the treatment of wet AMD. The SOL-R trial is designed as a multi-center, double-masked, randomized (2:2:1), three-arm trial that will involve sites located in the U.S. and the rest of the world. The trial is intended to randomize approximately 825 subjects that are either treatment naïve or have been diagnosed with wet AMD within three months prior to enrollment in the study eye. This non-inferiority trial reflects a patient enrichment strategy that includes five loading doses of aflibercept 2 mg and monitoring to exclude those subjects with significant retinal fluid fluctuations. In the first arm, subjects will receive a single dose of AXPAXLI at Day 1 and be re-dosed at Week 24. In the second arm, subjects will receive aflibercept 2 mg on-label every 8 weeks. In the third arm, subjects will receive a single dose of aflibercept 8 mg (Eylea HD), at Day 1 and will be re-dosed at Week 24, aligned with the AXPAXLI dosing regimen in the first arm and serving as adequate masking pursuant to FDA guidance. The clinical trial protocol requires that, during the trial, subjects in any arm meeting pre-specified rescue criteria will receive a supplemental dose of aflibercept 2 mg. The primary endpoint is non-inferiority in mean BCVA change from baseline between the AXPAXLI and on-label aflibercept 2 mg arms at one year. The first subjects were enrolled in the SOL-R trial in July 2024. Initially, subjects enrolled in the SOL-R trial included only subjects that constituted loading or randomization failures from the SOL-1 trial. On November 14, 2024, we announced that, as the SOL-1 trial nears the completion of randomization, trial sites can now directly enroll eligible subjects into the SOL-R trial.

Current wording

In June 2024, we initiated the SOL-R trial, a repeat-dosing registrational Phase 3 clinical trial for the treatment of wet AMD. The SOL-R trial is designed as a multi-center, double-masked, randomized (2:2:1), three-arm trial that includes sites located in the U.S. and the rest of the world. The trial is intended to randomize approximately 555 subjects that are either treatment naïve or have been diagnosed with wet AMD in the study eye within about four months prior to enrollment. This non-inferiority trial reflects a patient enrichment strategy over the six months prior to randomization that includes three screening doses of any anti-VEGF therapy, excluding brolucizumab-dbll, and monitoring to exclude those subjects with significant retinal fluid fluctuations. Subjects that continue to meet eligibility will enter a run-in period and receive two loading doses of aflibercept 2 mg prior to Day 1. In the first arm, subjects will receive a 450 µg dose of AXPAXLI at Day 1 and be re-dosed at Weeks 24, 48, and every 24 weeks through the end of year 2. In the second arm, subjects will receive aflibercept 2 mg on-label every 8 weeks. In the third arm, subjects will receive an 8 mg dose of aflibercept (Eylea HD) at Day 1 and will be re-dosed at Weeks 24, 48, and every 24 weeks, corresponding with the AXPAXLI dosing regimen in the first arm to serve as adequate masking pursuant to current FDA guidance. Subjects will be followed for safety until Week 104. Throughout the trial, subjects are assessed monthly. The primary endpoint is non-inferiority in mean change in BCVA from baseline between the AXPAXLI and on-label aflibercept 2 mg arms at Week 56. As per the protocol agreed to by the FDA, the non-inferiority margin for the lower bound is -4.5 letters of mean BCVA when compared to aflibercept 2 mg dosed every eight weeks. The first subject was enrolled in the SOL-R trial in July 2024.

Previous wording

In August 2024, we received a Type C written response in which the FDA agreed that the SOL-R clinical trial is appropriate as an adequate and well-controlled trial in support of a potential NDA and product label. The FDA also noted that the use of one superiority trial and one non-inferiority trial is generally acceptable as the basis of an eventual NDA in wet AMD.

Current wording

In a written Type C response received in August 2024, and a subsequent written response received in December 2024, the FDA agreed that the SOL-R repeat dosing wet AMD trial, with a primary endpoint at Week 56, should be appropriate as an adequate and well-controlled trial in support of a potential new drug application, or NDA, and product label for AXPAXLI for the treatment of wet AMD. The FDA also noted that the use of one superiority trial and one non-inferiority trial is generally acceptable as the basis of an eventual NDA in wet AMD.

Previous wording

Consistent bioresorption of the implant coupled with the durable effect observed in the Phase 2 trial suggests redosing could be possible without the risk of stacking implants. We are conducting a pilot repeat-dose sub-study in the Phase 2 clinical trial to evaluate the safety of a repeat, sustained-release dose in a small subset of subjects with OAG or OHT.

Current wording

We are conducting a pilot repeat-dose sub-study in the Phase 2 clinical trial to evaluate the safety of a repeat, sustained release dose of PAXTRAVA 26 μg in a small subset of subjects with OAG or OHT. Once we have completed the pilot repeat-dose sub-study, we plan to evaluate whether an end-of-Phase 2 meeting with the FDA is appropriate for determining our next steps for PAXTRAVA for the treatment of OAG or OHT.

Previous wording

Our net product revenue is generated from the sale of DEXTENZA to specialty distributors, or SDs, for resale to certain ambulatory surgery centers, or ASCs, certain hospital outpatient departments, or HOPDs, and certain physicians’ offices, and from the direct sale by us to ASCs and physicians’ offices. Our net product revenue was $15.3 million for the three months ended September 30, 2024, reflecting an increase of $0.3 million or 2.7% over the three months ended September 30, 2023, and a decrease of $1.0 million or 6.5% over the three months ended June 30, 2024.

Current wording

Our net product revenue is generated from the sale of DEXTENZA to specialty distributors, or SDs, for resale to certain ambulatory surgery centers, or ASCs, certain hospital outpatient departments, or HOPDs, and certain physicians’ offices, and from the direct sale by us to ASCs and physicians’ offices. Our net product revenue was $10.6 million for the three months ended March 31, 2025, reflecting a decrease of $4.1 million or 27.7% over the three months ended March 31, 2024. We believe that the decrease in net revenue is primarily attributable to the impact of our pricing strategy on distributor stocking patterns and buying patterns by ASCs, HOPDs and physicians’ offices, as well as the recent inclusion of DEXTENZA into the cost performance category of the Centers for Medicare & Medicaid Services’ Merit-based Incentive Payment System, or MIPS, for 2025. We anticipate that net revenue on a quarterly basis should increase for the remainder of 2025, driven primarily by expected increases in the number of units sold. This potential increase is based on our expectations that clinicians should adjust to the impact of MIPS, and our plans to increase sales efforts directed towards HOPDs, which receive separate payment for DEXTENZA in 2025 after being ineligible for separate payments in 2024.

Previous wording

In-Market Sales, defined as unit sales from the SDs to ASCs, HOPDs, and physicians’ offices, and unit sales made directly by us to ASCs and physicians’ offices, exceeded 42,000 units in the three months ended September 30, 2024, an increase of more than 6,000 units compared to the three months ended September 30, 2023, and an increase of nearly 1,000 units compared to the three months ended June 30, 2024. Differences between the development of DEXTENZA’s

Current wording

In-Market Sales, defined as unit sales from the SDs to ASCs, HOPDs, and physicians’ offices, and unit sales made directly by us to ASCs and physicians’ offices, were approximately 40,000 units in the three months ended March 31, 2025, a small decrease of approximately 1,000 units compared to the three months ended March 31, 2024. Differences between DEXTENZA’s net product revenue as recognized in our unaudited condensed consolidated financial statements and In-Market Sales figures are attributable to distributor stocking patterns.

Previous wording

In June 2024, we submitted the CSR for our clinical trial to evaluate DEXTENZA in pediatric subjects following cataract surgery to the FDA. We anticipate receiving the FDA’s decision on the pediatric labeling for DEXTENZA during the second quarter of 2025.

Current wording

In June 2024, we submitted the data for our clinical trial to evaluate DEXTENZA in pediatric subjects following cataract surgery to the FDA to fulfill a post-approval requirement of the FDA in connection with the FDA’s prior approval of DEXTENZA for the treatment of inflammation and pain following ophthalmic surgery in adults. We received approval of the supplemental NDA for DEXTENZA on April 7, 2025. Therefore, DEXTENZA is now also approved for use in pediatric patients for the treatment of ocular inflammation and pain following ophthalmic surgery, and in pediatric patients aged 2 years and older for the treatment of ocular itching associated with allergic conjunctivitis. The approval of this supplemental NDA provides for pediatric label expansion. We do not expect to generate significant revenue from the use of DEXTENZA in pediatric patients.

Previous wording

We recognize product revenue when we sell DEXTENZA in the United States to a network of SDs who then resell the product to ASCs, HOPDs, and physicians’ offices, and when we sell DEXTENZA on a direct basis to a small number of ASCs and physicians’ offices. We record DEXTENZA product sales net of estimated chargebacks, rebates, distribution fees and product returns. These deductions are generally referred to as gross-to-net deductions.

Current wording

We record DEXTENZA product sales net of estimated chargebacks, rebates, distribution fees and product returns. These deductions are generally referred to as gross-to-net deductions.

Previous wording

Our direct research and development expenses are tracked on a program-by-program basis and consist primarily of external costs, such as fees paid to investigators, consultants, central laboratories and CROs in connection with our clinical trials and regulatory fees. We do not allocate employee and contractor-related costs, costs associated with our proprietary bioresorbable hydrogel-based formulation technology ELUTYX, costs related to manufacturing or purchasing clinical trial materials, and facility expenses, including depreciation or other indirect costs, to specific product development programs because these costs are deployed across multiple product development programs and, as such, are not separately classified. We use internal resources in combination with third-party CROs, including clinical monitors and clinical research associates, to manage our clinical trials, monitor patient enrollment and perform data analysis for many of our clinical trials. These employees work across multiple development programs and, therefore, we do not track their costs by program.

Current wording

clinical trials and regulatory fees. We do not allocate employee and contractor-related costs, costs associated with our proprietary bioresorbable hydrogel-based formulation technology ELUTYX, costs related to manufacturing or purchasing clinical trial materials, and facility expenses, including depreciation or other indirect costs, to specific product development programs because these costs are deployed across multiple product development programs and, as such, are not separately classified. We use internal resources in combination with third-party CROs, including clinical monitors and clinical research associates, to manage our clinical trials, monitor patient enrollment and perform data analysis for many of our clinical trials. These employees work across multiple development programs and, therefore, we do not track their costs by program.

Previous wording

Selling and marketing expenses consist primarily of salaries and related costs for personnel in selling and marketing functions as well as consulting, advertising and promotion costs.

Current wording

Selling and marketing expenses consist primarily of salaries and related costs, including stock-based compensation, for personnel in selling and marketing functions as well as consulting, advertising and promotion costs.

Previous wording

Interest Expense. Interest expense is incurred on our debt. In August 2023, we entered into a credit and security agreement, or the Barings Credit Agreement, with Barings Finance LLC, or Barings, as administrative agent, and the lenders party thereto, providing for a secured term loan facility, or the Barings Credit Facility, in the aggregate principal amount of $82.5 million.

Current wording

Interest Expense. Interest expense is incurred on our debt. In August 2023, we entered into a credit and security agreement, or the Barings Credit Agreement, with Barings Finance LLC, or Barings, as administrative agent, and the lenders party thereto, providing for a secured term loan facility, or the Barings Credit Facility, in the aggregate principal amount of $82.5 million. For the three months ended March 31, 2025, our interest-bearing debt included the Barings Credit Facility ($82.5 million outstanding principal). For the three months ended March 31, 2024, our interest-bearing debt included the Barings Credit Facility ($82.5 million outstanding principal) and our $37.5 million unsecured senior

Previous wording

For the three months ended September 30, 2024, our interest-bearing debt included the Barings Credit Facility ($82.5 million outstanding principal). For the three months ended September 30, 2023, our interest-bearing debt included the Barings Credit Facility (from August 2, 2023), the Convertible Notes, and our obligations under a credit and security agreement with MidCap Financial Trust, as administrative agent, and other lenders that we entered into in 2014, or, as amended, the MidCap Credit Agreement, establishing a credit facility, or the MidCap Credit Facility ($25.0 million outstanding principal through August 2, 2023, no outstanding principal thereafter).

Current wording

subordinated convertible notes, or the Convertible Notes ($37.5 million outstanding principal through March 28, 2024, no outstanding principal thereafter).

Previous wording

and then are required to measure at the end of each reporting period until the embedded derivative is settled. In 2019, in connection with the issuance of our Convertible Notes, we identified an embedded derivative liability, which we were required to measure at fair value at inception and then at the end of each reporting period until the embedded derivative was settled. The settlement of the derivative liability related to the Convertible Notes occurred on March 28, 2024. The changes in fair value of these derivative liabilities are recorded through the condensed consolidated statement of operations and comprehensive loss and are presented under the caption “change in fair value of derivative liabilities”.

Current wording

*Change in Fair Value of Derivative Liabilities.*In August 2023, in connection with entering into the Barings Credit Agreement, we identified an embedded derivative liability, which we were required to measure at fair value at inception and then are required to measure at the end of each reporting period until the embedded derivative is settled. In 2019, in connection with the issuance of our Convertible Notes, we identified an embedded derivative liability, which we were required to measure at fair value at inception and then at the end of each reporting period until the embedded derivative was settled. The settlement of the derivative liability related to the Convertible Notes occurred on March 28, 2024. The changes in fair value of these derivative liabilities are recorded through the condensed consolidated statements of operations and comprehensive loss and are presented under the caption “change in fair value of derivative liabilities”.

Previous wording

Gains and Losses on Extinguishment of Debt. In March 2024, the holder of the Convertible Notes converted the Convertible Notes. In connection with the conversion, our obligations under the Convertible Notes extinguished, resulting in a loss on extinguishment.

Current wording

Loss on Extinguishment of Debt. In March 2024, the holder of the Convertible Notes converted the Convertible Notes. In connection with the conversion, our obligations under the Convertible Notes extinguished, resulting in a loss on extinguishment.

Previous wording

Our product revenue, net was $15.3 million and $15.0 million for the three months ended September 30, 2024 and 2023, respectively, reflecting an increase of $0.3 million year-over-year. All of our product revenue, net, was attributable to sales of DEXTENZA.

Current wording

Our product revenue, net was $10.6 million and $14.7 million for the three months ended March 31, 2025 and 2024, respectively, reflecting a decrease of $4.1 million year-over-year. All of our product revenue, net, was attributable to sales of DEXTENZA.

Previous wording

Our total gross-to-net provisions, or GTN Provisions, for the three months ended September 30, 2024 and 2023 were 39.0% and 29.8%, respectively, of gross DEXTENZA product sales. Effective October 2024, we increased the wholesale acquisition cost, or WAC, and we concurrently increased the off-invoice discount, or OID, for DEXTENZA as part of our overall pricing strategy. The OID amounts are generally determined at the time of resale by SD or direct sales to ASCs or physicians’ offices by us. The total GTN Provisions for the three months ended September 30, 2024 includes timing effects related to this increase, as units that we sold to SDs under the pre-October 2024 OID will be subject to the increased OID to the extent that such units are subsequently sold as In-Market Sales. We expect that the GTN Provisions relative to gross DEXTENZA product sales will increase as a result of this change and any additional anticipated OID increases, and we expect that GTN Provisions relative to gross DEXTENZA product sales will remain at an elevated level for 2024 and beyond.

Current wording

Provisions for the three months ended March 31, 2025 therefore include timing effects related to the increased WAC and OID, as units that we sold to SDs under the pre-April 2025 WAC and OID will be subject to the increased WAC and OID to the extent that such units are subsequently sold as In-Market Sales. The GTN Provisions relative to gross DEXTENZA product sales increased as a result of these changes and are expected to increase with any additional anticipated OID increases. We expect that GTN Provisions relative to gross DEXTENZA product sales will remain at this increased level, or might increase further, for the remainder of 2025 and beyond.

Previous wording

Research and development expenses were $37.1 million and $15.0 million for the three months ended September 30, 2024 and 2023, respectively, reflecting an increase of $22.1 million year-over-year.

Current wording

Research and development expenses were $42.9 million and $20.7 million for the three months ended March 31, 2025 and 2024, respectively, reflecting an increase of $22.1 million year-over-year.

Previous wording

Within research and development expenses, expenses for clinical programs increased $13.8 million, unallocated expenses increased $8.3 million, and expenses for preclinical programs decreased $0.1 million.

Current wording

Within research and development expenses, expenses for clinical programs increased $17.4 million, unallocated expenses increased $5.3 million, and expenses for preclinical programs decreased $0.5 million.

Previous wording

For the three months ended September 30, 2024, we incurred $18.2 million in direct research and development expenses for our products and product candidates compared to $4.5 million for the three months ended September 30, 2023. The increase of $13.7 million is primarily related to timing and conduct of our clinical trials of AXPAXLI for wet AMD, including the SOL-1 trial and the SOL-R trial, partially offset by a decrease in costs associated with the HELIOS clinical trial which we have completed, subject to finalization of the CSR, and our Phase 2 clinical trial of PAXTRAVA as we shifted to the smaller repeat dose sub-study.

Current wording

For the three months ended March 31, 2025, we incurred $25.5 million in direct research and development expenses for our products and product candidates compared to $8.7 million for the three months ended March 31, 2024. The increase of $16.8 million is related to timing and conduct of our various clinical trials for our product candidates, including the progression of the SOL-1 trial, the initiation and progression of the SOL-R trial, and the completion of the HELIOS trial.

Previous wording

We expect that direct research and development expenses for our products and product candidates will increase significantly for the remainder of 2024 and beyond as we progress with the SOL-1 trial and the SOL-R trial; complete our other ongoing clinical trials; and initiate any other clinical trials of our product candidates that we might determine in the future to conduct, partially offset by reduced costs related to preclinical programs as a result of the Strategic Restructuring. We expect that personnel costs will increase for the remainder of 2024 and beyond, as we have recently strengthened and continue to strengthen our leadership team and our clinical teams dedicated to the SOL-1 and SOL-R trials with the addition of several retinal disease experts and other key professionals. The anticipated increase will be partially offset by reduced personnel costs as a result of the Strategic Restructuring.

Current wording

We expect that direct research and development expenses for our products and product candidates will continue to increase significantly for the remainder of 2025 and beyond as we progress with the SOL-1 and the SOL-R trials; complete our other ongoing clinical trials; and initiate any other clinical trials of our product candidates that we might determine in the future to conduct. We expect that personnel costs will continue to increase for the remainder of 2025 and beyond.

Previous wording

The increase was primarily due to an increase in professional fees of $0.7 million; an increase in personnel-related costs, including stock-based compensation, of $0.3 million; and an increase in facility-related and other costs of $0.2 million.

Current wording

The increase was primarily due to an increase in professional fees of $2.3 million; an increase in personnel-related costs, including stock-based compensation, of $1.4 million; and an increase in facility-related and other costs of $0.3 million.

Previous wording

We expect our selling and marketing expenses to remain stable or increase slightly for the remainder of 2024 and beyond as we continue to support the commercialization of DEXTENZA.

Current wording

We expect our selling and marketing expenses to increase for the remainder of 2025 and beyond as we continue to support the commercialization of DEXTENZA and as we initiate marketing-related precommercial activities for AXPAXLI.

Previous wording

We anticipate that the level of our general and administrative expenses may continue to increase for the remainder of 2024 and beyond, as we have recently strengthened, and as we continue to further strengthen, our leadership team and other certain functions that support our clinical trials of AXPAXLI, including the SOL-1 trial and the SOL-R trial, and our business in general.

Current wording

We anticipate that our general and administrative expenses will increase for the remainder of 2025 and beyond, as we continue to further strengthen our leadership team and other certain functions that support our clinical trials of AXPAXLI, including the SOL-1 trial and the SOL-R trial, and our business in general.

Previous wording

Interest Income. Interest income was $5.7 million and $1.2 million for the three months ended September 30, 2024 and 2023, respectively, reflecting an increase of $4.5 million year-over-year. The increase is primarily due to a higher average balance of cash and cash equivalents held by us, and higher interest rates.

Current wording

Interest Income. Interest income was $3.8 million and $3.9 million for the three months ended March 31, 2025 and 2024, respectively, reflecting a decrease of $0.1 million year-over-year.

Previous wording

Interest Expense. Interest expense was $10.5 million and $7.2 million for the nine months ended September 30, 2024 and 2023, respectively, reflecting an increase of $3.3 million year-over-year. The increase is primarily due to higher average balances of debt outstanding as a result of us drawing $82.5 million of debt under the Barings Credit Facility in August 2023, partially offset by us paying off the MidCap Credit Facility, of $25.0 million in August 2023, and the conversion of the Convertible Notes of $37.5 million in March 2024.

Current wording

Interest Expense. Interest expense was $3.0 million and $4.1 million for the three months ended March 31, 2025 and 2024, respectively, reflecting a decrease of $1.1 million year-over-year. The decrease is primarily due to lower average balances of debt outstanding as a result of the conversion of the Convertible Notes in March 2024.

Previous wording

*Change in Fair Value of Derivative Liabilities.*We recognized a non-cash loss from the change in fair values of our derivative liabilities of $1.1 million for the nine months ended September 30, 2024, compared to a gain of $1.3 million for the nine months ended September 30, 2023. The net loss for the nine months ended September 30, 2024 is comprised of a loss of $2.1 million from the change in the fair value of the derivative liability related to the Barings Credit Agreement and a $1.6 million expense related to royalty fees under the Barings Credit Agreement that we paid or accrued, partially offset by a gain of $2.6 million from the change in the fair value of the derivative liability related to a conversion option embedded in the Convertible Notes. The net gain for the nine months ended September 30, 2023 is comprised of a gain of $1.7 million from the change in the fair value of the derivative liability related to a conversion option embedded in the Convertible Notes, partially offset by a $0.4 million expense related to royalty fees under the Barings Credit Agreement that we paid or accrued. We cannot predict how the fair value of the derivative liability related to the Barings Credit Agreement will change in 2024 and beyond.

Current wording

*Change in Fair Value of Derivative Liabilities.*We recognized a net loss from the change in fair values of our derivative liabilities of $1.0 million and $5.2 million for the three months ended March 31, 2025 and 2024, respectively. The net loss for the three months ended March 31,2025 is comprised of a loss of $0.6 million from the change in the fair value of the derivative liability related to the Barings Credit Agreement, and an expense of $0.4 million related to royalty fees under the Barings Credit Agreement that we paid or accrued. The net loss for the three months ended March 31, 2024 is comprised of a loss of $7.2 million from the change in the fair value of the derivative liability related to the Barings Credit Agreement, and $0.5 million related to royalty fees under the Barings Credit Agreement that we paid or accrued, partially offset by a gain of $2.6 million from the change in the fair value of the derivative liability related to a conversion option embedded in the Convertible Notes. We cannot predict how the fair value of the derivative liability related to the Barings Credit Agreement will change in the remainder of 2025 and beyond.

Previous wording

Gains and Losses on Extinguishment of Debt, Net. We recognized a non-cash loss on extinguishment of debt of $28.0 million for the nine months ended September 30, 2024, compared to a gain, net, on extinguishment of debt of $14.2 million for the nine months ended September 30, 2023. The net loss for the nine months ended September 30, 2024 results from the conversion of the Convertible Notes in March 2024. The net gain for the nine months ended September 30, 2023 results from the accounting for the Convertible Notes Amendment, which resulted in a non-cash gain on extinguishment of debt of $14.9 million, and for the extinguishment of our obligations under the MidCap Credit Agreement, which resulted in a loss on extinguishment of debt of $0.7 million.

Current wording

Loss on Extinguishment of Debt. We recognized a non-cash loss on extinguishment of debt of $28.0 million for the three months ended March 31, 2024, resulting from the conversion of the Convertible Notes in March 2024.

Previous wording

We have financed our operations primarily through private placements of our preferred stock, public offerings and private placements of our common stock and pre-funded warrants to purchase our common stock, borrowings under credit facilities, the private placements of our convertible notes, and sales of our products.

Current wording

We have financed our operations primarily through private placements of our preferred stock, public offerings and private placements of our common stock and pre-funded warrants to purchase our common stock, borrowings under credit facilities, private placements of our convertible notes, and sales of our products.

Previous wording

As of September 30, 2024, we had cash and cash equivalents of $427.2 million, and outstanding notes payable with a principal amount of $82.5 million par value under the Barings Credit Facility.

Current wording

As of March 31, 2025, we had cash and cash equivalents of $349.7 million, and outstanding notes payable with a principal amount of $82.5 million par value under the Barings Credit Facility.

Previous wording

In February 2024, we sold 32,413,560 shares of our common stock at $7.52 per share and, in lieu of common stock to certain investors, pre-funded warrants to purchase up to an aggregate of 10,805,957 shares of our common stock at a price of $7.519 per pre-funded warrant for total net proceeds of approximately $316.4 million, after deducting placement agent fees and other offering expenses, in the 2024 Private Placement. Each pre-funded warrant has an exercise price of $0.001 per share, is currently exercisable and will remain exercisable until exercised in full.

Current wording

In February 2024, we sold 32,413,560 shares of our common stock at $7.52 per share and, in lieu of common stock to certain investors, pre-funded warrants to purchase up to an aggregate of 10,805,957 shares of our common stock at a price of $7.519 per pre-funded warrant for total net proceeds of approximately $316.4 million, after deducting placement agent fees and other offering expenses, in a private placement. Each pre-funded warrant has an exercise price of $0.001 per share, is currently exercisable and will remain exercisable until exercised in full.

Previous wording

amount of $82.5 million at closing and received proceeds of $77.3 million, after the application of an original issue discount and fees.

Current wording

In August 2023, we borrowed $82.5 million under the Barings Credit Facility and received proceeds of $77.3 million, after the application of an original issue discount and fees.

Previous wording

In August 2021, we entered into an Open Market Sale Agreement, or the 2021 Sales Agreement, with Jefferies LLC, or Jefferies, under which we may offer and sell shares of our common stock having an aggregate offering price of up to $100.0 million from time to time through Jefferies, acting as agent. We did not offer or sell shares of our common stock under the 2021 Sales Agreement during the three and nine months ended September 30, 2024. During the three and nine months ended September 30, 2023, we sold 144,718 and 1,514,926 shares of common stock, respectively, under the 2021 Sales Agreement, resulting in net proceeds to us, after accounting for issuance costs, of $0.7 million and $9.5 million, respectively.

Current wording

In August 2021, we entered into an Open Market Sale Agreement, or the 2021 Sales Agreement, with Jefferies LLC, or Jefferies, under which we may offer and sell shares of our common stock having an aggregate offering price of up to $100.0 million from time to time through Jefferies, acting as agent. In November 2023, we filed a prospectus in connection with the 2021 Sales Agreement for the issuance and sale of common stock having an aggregate offering price of up to $100.0 million thereunder, or the Sales Agreement Prospectus. We have not offered or sold shares under the 2021 Sales Agreement since the filing of the Sales Agreement Prospectus. During the year ended December 31, 2023, we sold 1,514,926 shares of common stock under the 2021 Sales Agreement, resulting in net proceeds to us, after accounting for issuance costs, of $9.5 million.

Previous wording

We have a history of incurring significant operating losses. Our net losses were $36.5 million for the three months ended September 30, 2024, $145.1 million for the nine months ended September 30, 2024, and $80.7 million and $71.0 million for the years ended December 31, 2023 and 2022, respectively. As of September 30, 2024, we had an accumulated deficit of $842.7 million.

Current wording

We have a history of incurring significant operating losses. Our net losses were $64.1 million for the three months ended March 31, 2025, and $193.5 million, $80.7 million, and $71.0 million for the years ended December 31, 2024, 2023 and 2022, respectively. As of March 31, 2025, we had an accumulated deficit of $955.1 million.

Previous wording

Based on our current operating plan, which includes estimates of anticipated cash inflows from DEXTENZA product sales and cash outflows from operating expenses and capital expenditures and reflects our observance of the minimum liquidity covenant of $20.0 million under the Barings Credit Agreement, we believe that our existing cash and cash equivalents as of September 30, 2024 will enable us to fund our planned operating expenses, debt service obligations and capital expenditure requirements into 2028. We have based our estimates on assumptions that may prove to be wrong, and we could use our capital resources sooner than we currently expect.

Current wording

Based on our current operating plan, which includes estimates of anticipated cash inflows from DEXTENZA product sales and cash outflows from operating expenses and capital expenditures and reflects our observance of the minimum liquidity covenant of $20.0 million under the Barings Credit Agreement, we believe that our existing cash and cash equivalents as of March 31, 2025 will enable us to fund our planned operating expenses, debt service obligations and capital expenditure requirements into 2028. Our planned operating expenses do not include the expenses necessary to conduct a clinical trial of AXPAXLI for NPDR and DME, or to build out our manufacturing capabilities beyond the buildout of our existing manufacturing facilities. We have based our estimates on assumptions that may prove to be wrong, and we could use our capital resources sooner than we currently expect.

Previous wording

Operating activities. Net cash used in operating activities was $95.2 million for the nine months ended September 30, 2024, primarily resulting from our net loss of $145.1 million and net unfavorable changes in operating assets and liabilities of $11.1 million, partially offset by non-cash adjustments of $61.0 million. Our net loss was primarily attributed to operating expenses of $167.8 million, which we incurred primarily for research and development activities, selling and marketing activities, and general and administrative activities, and non-operating expenses of $23.9 million, partially offset by $46.6 million of revenue. Non-cash adjustments primarily include losses on extinguishment of debt of $28.0 million, stock-based compensation expense of $25.9 million, non-cash interest expense of $3.2 million, depreciation and amortization expense of $2.8 million, and non-cash expenses related to changes in the fair value of our derivative liabilities of $1.1 million. Net cash used by net unfavorable changes in our operating assets and liabilities during the nine months ended September 30, 2024 consisted primarily of increases of prepaid expenses and other current assets of $5.4 million, increases of accounts receivable of $4.1 million, and other increases, net, of $1.7 million.

Current wording

Operating activities. Net cash used in operating activities was $44.7 million for the three months ended March 31, 2025, primarily resulting from our net loss of $64.1 million, partially offset by non-cash adjustments of $13.9 million and net favorable changes in operating assets and liabilities of $5.5 million. Our net loss was primarily attributed to operating expenses of $74.6 million, which we incurred primarily for research and development activities, selling and marketing activities, and general and administrative activities, partially offset by $10.7 million of revenue. Non-cash adjustments primarily include stock-based compensation expense of $10.5 million, non-cash interest expense of $1.4 million, depreciation and amortization expense of $1.0 million, and a net non-cash loss related to changes in the fair value of our derivative liability of $1.0 million. Net cash provided by net favorable changes in our operating assets and liabilities during the three months ended March 31, 2025 consisted primarily of decreases of accounts receivable of $7.2 million, resulting primarily from decreased sales of DEXTENZA, and decreases of prepaid expenses and other current assets of $3.9 million, resulting predominantly from our clinical development activities, partially offset by decreases in accrued expenses of $5.1 million, resulting predominantly from our clinical development activities, and other changes, net, of $0.4 million.

Previous wording

Net cash used in operating activities was $47.8 million for the nine months ended September 30, 2023, primarily resulting from our net loss of $51.5 million and net unfavorable changes in operating assets and liabilities of $0.9 million, partially offset by non-cash adjustments of $4.6 million. Our net loss was primarily attributed to operating expenses of $106.0 million, which we incurred primarily for research and development activities, selling and marketing activities, and general and administrative activities, partially offset by $43.6 million of revenue and a net non-operating income of $10.8 million. Non-cash adjustments primarily include a net gain on extinguishment of debt of $14.2 million, stock-based compensation expense of $13.5 million, non-cash interest expense of $4.6 million, depreciation and amortization expense of $2.0 million, and non-cash income related to changes in the fair value of our derivative liabilities of $1.3 million. Net cash used by net unfavorable changes in our operating assets and liabilities during the nine months ended September 30, 2023 consisted primarily of increases of accounts receivables of $2.3 million and increases of other items, net, of $0.6 million, partially offset by increases of accrued expenses of $2.0 million.

Current wording

Net cash used in operating activities was $33.9 million for the three months ended March 31, 2024, primarily resulting from our net loss of $64.8 million and net unfavorable changes in operating assets and liabilities of $13.0 million, partially offset by non-cash adjustments of $44.0 million. Our net loss was primarily attributed to operating expenses of $46.4 million, which we incurred primarily for research and development activities, selling and marketing activities, and general and administrative activities, and net non-operating expenses of $33.2 million, resulting predominantly from the loss on debt extinguishment, partially offset by $14.8 million of revenue. Non-cash adjustments primarily include a loss on extinguishment of debt of $28.0 million, stock-based compensation expense of $8.0 million, a non-cash loss related to changes in the fair value of our derivative liabilities of $5.2 million, non-cash interest expense of $2.0 million, and depreciation and amortization expense of $0.9 million. Net cash used by net unfavorable changes in our operating assets and liabilities during the three months ended March 31, 2024 consisted primarily of decreases of accrued expenses of $14.0 million, partially offset by other changes, net, of $1.0 million.

Previous wording

Investing activities. Net cash used in investing activities was $1.1 million for the nine months ended September 30, 2024, consisting of cash used to purchase property and equipment and leasehold improvements. Net cash used in investing activities was $5.6 million for the nine months ended September 30, 2023, consisting of cash used to purchase property and equipment, primarily consisting of leasehold improvements.

Current wording

Investing activities. Net cash used in investing activities was $1.9 million for the three months ended March 31, 2025, consisting of cash used to purchase property and equipment and leasehold improvements. Net cash used in investing activities was $0.3 million for the three months ended March 31, 2024, consisting of cash used to purchase property and equipment, primarily consisting of leasehold improvements.