Vivani Medical Inc

Risk Factors

Our business is subject to numerous material and other risks. You should carefully consider the risks and uncertainties described below together with all of the other information contained in this Form 10-Q, including our consolidated financial statements and the related notes, and in our other filings with the SEC. If any of the stated risks actually occur, our business, prospects, operating results, and financial condition could suffer materially. In such event, the trading price of our common stock could decline and you might lose all or part of your investment. The material risks associated with our business were most recently discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 that we filed on March 26, 2024. There have been no material changes from the risk factors previously disclosed in such filing, expect as noted below:

We will require substantial additional financing to pursue our business objectives, which may not be available on acceptable terms, or at all. A failure to obtain this necessary capital when needed could force us to delay, limit, reduce or terminate our product development, commercialization efforts or other operations.

Developing pharmaceutical products, including conducting preclinical studies and clinical trials, is a very time-consuming, expensive, and uncertain process that takes years to complete. Our operations have consumed substantial amounts of cash, and we expect our expenses to increase in connection with our ongoing activities, particularly as we conduct clinical trials of our product candidates. Even if one or more of our product candidates is approved for commercial sale, we will incur significant costs associated with sales, marketing, manufacturing, and distribution activities. Our expenses could increase beyond expectations if required by the FDA, the EMA or other regulatory agencies to perform clinical trials or preclinical studies in addition to those that we currently anticipate. For example, on June 13, 2024, the FDA lifted the full clinical hold that they had previously implemented on the LIBERTATE-1 study on August 18, 2023 and have cleared us to initiate the LIBERATE-1 TMPhase 1 clinical trial to assess the safety, tolerability and pharmacokinetics of NPM-119 (exenatide), our miniature, six-month GLP-1 implant in development for treatment of type 2 diabetes. Other unanticipated costs may also arise. Because the design and outcome of our planned and anticipated clinical trials are highly uncertain, we cannot reasonably estimate the actual amount of resources and funding that will be necessary to successfully complete the development and commercialization of any product candidate. We are not permitted to market or promote any product candidate before it receives marketing approval from the regulatory authorities. Accordingly, we will need to obtain substantial additional funding in order to continue our operations and pursue our business objectives.

Risks Related to Product Development, Clinical Testing and Commercialization

Clinical development involves a lengthy and expensive process with uncertain outcomes. We may incur additional costs and experience delays in developing our product candidates, and our clinical development efforts may not yield favorable results.

To receive regulatory approval for our product candidates, adequate and well-controlled clinical trials must be conducted to demonstrate safety and efficacy in humans to the satisfaction of the FDA, the EMA, and comparable foreign authorities. We have not yet conducted clinical trials for our current product candidates and clinical testing of such product candidates may not yield results to support continued development or seeking regulatory approval. The development process is expensive, can take many years and has an uncertain outcome. Failure can occur at any stage of the process. We may experience numerous unforeseen events during, or as a result of, the development process that could delay or prevent development and approval of our product candidates, including the following:

For example, on June 13, 2024, the FDA lifted the full clinical hold that they had previously implemented on the LIBERTATE-1 study on August 18, 2023 and have cleared us to initiate the LIBERATE-1 TMPhase 1 clinical trial to assess the safety, tolerability and pharmacokinetics of NPM-119 (exenatide), our miniature, six-month GLP-1 implant in development for treatment of type 2 diabetes. The LIBERATE-1 study will be conducted in Australia and is anticipated to be initiated in the fourth quarter of 2024 after the HREC approval.

We could experience delays in the commencement or completion of clinical trials, which could result in increased costs or otherwise impair our research and development efforts.

Delays in the commencement or completion of clinical trials could significantly impact our drug development costs and otherwise impair our research and development efforts. We do not know whether planned clinical trials will begin on time or be completed on schedule, if at all. The commencement of clinical trials can be delayed for a variety of reasons, including, but not limited to, delays related to:

For example, on June 13, 2024, the FDA lifted the full clinical hold that they had previously implemented on the LIBERTATE-1 study on August 18, 2023 and have cleared us to initiate the LIBERATE-1 TMPhase 1 clinical trial to assess the safety, tolerability and pharmacokinetics of NPM-119 (exenatide), our miniature, six-month GLP-1 implant in development for treatment of type 2 diabetes. The LIBERATE-1 study will be conducted in Australia and is anticipated to be initiated in the fourth quarter of 2024 after the HREC approval.

Our product candidates are subject to extensive regulation under the FDA, the EMA and comparable foreign authorities, and must undergo extensive clinical testing that can be costly and time consuming, with no assurance that regulatory approval will be obtained for any of our product candidates.

The clinical development, manufacturing, labeling, storage, record-keeping, advertising, promotion, export, marketing, and distribution of our product candidates are subject to extensive regulation by the FDA and other U.S. regulatory agencies, the EMA, or comparable authorities in foreign markets. In the U.S., neither we nor any collaborators are permitted to conduct clinical testing in humans with our product candidates unless and until clearance is received to conduct clinical investigations under an IND from the FDA or receive similar authorizations abroad. For example, on June 13, 2024, the FDA lifted the full clinical hold that they had previously implemented on the LIBERTATE-1 study on August 18, 2023 and have cleared us to initiate the LIBERATE-1 TMPhase 1 clinical trial to assess the safety, tolerability and pharmacokinetics of NPM-119 (exenatide), our miniature, six-month GLP-1 implant in development for treatment of type 2 diabetes. The LIBERATE-1 study will be conducted in Australia and is anticipated to be initiated in the fourth quarter of 2024 after the HREC approval. In addition, marketing of such product candidates may not occur unless and until approval of a new drug application (“NDA”) from the FDA or similar approvals by comparable foreign regulatory authorities are secured.

With respect to one or more of our product candidates, we may seek regulatory approval in the U.S. by filing an NDA under Section 505(b)(2) of the Federal Food, Drug, and Cosmetic Act, which is referred to as the 505(b)(2) pathway. The 505(b)(2) pathway allows at least some of the information required for NDA approval, such as safety and efficacy information on the active ingredient, to come from studies not conducted by or for the applicant. For our exenatide implants for example, we may intend to rely on certain information from Bydureon® and/or Bydureon BCise®, AstraZeneca’s exenatide extended-release injectable products. If we are unable to reference data generated for Bydureon® and/or Bydureon BCise®, additional clinical studies, including a cardiovascular outcomes (“CVOT”) study, may be required and would add significant additional costs and a significant delay in our efforts to seek and secure marketing approval. Further, if a CVOT study were conducted, there can be no assurance that the study would generate favorable results and support regulatory approval.

Because we became a reporting company under the Exchange Act by means other than a traditional underwritten initial public offering, we may not be able to attract the attention of research analysts at major brokerage firms.

Vivani resulted from the August 2022 business combination of Second Sight and NPM. Vivani’s main priority is the further development of the Company’s lead program NPM-115, which is a miniature, six-month, GLP-1 implant candidate for the treatment of chronic weight management and the balance of the Company’s emerging portfolio of miniature, long-acting, GLP-1 implant candidates. In parallel, Vivani’s management team remained committed to identifying and exploring strategic options for the Neuromodulation Division (formerly Second Sight) that will enable further development of its pioneering neurostimulation systems to help patients recover critical body functions.

Because the NPM business did not become a reporting company by conducting an underwritten initial public offering of our common stock, security analysts of brokerage firms may not provide coverage of our company. In addition, investment banks may be less likely to agree to underwrite secondary offerings on our behalf than they might if we became a public reporting company by means of an underwritten initial public offering, because they may be less familiar with our company as a result of more limited coverage by analysts and the media, and because we became public at an early stage in our development. The failure to receive research coverage or support in the market for our shares will have an adverse effect on our ability to develop a liquid market for our common stock.

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