Outlook Therapeutics, Inc. (OTLK) 2021年年度報告「NASDAQ」.pdf

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1、Table of ContentsUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON,D.C.20549FORM 10-KANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended September 30,2021ORTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT

2、 OF 1934For the transition period from to Commission File Number:001-37759OUTLOOK THERAPEUTICS,INC.(Exact name of registrant as specified in its charter)Delaware 38-3982704(State or other jurisdiction of incorporation or organization)(I.R.S.Employer Identification No.)485 Route 1 SouthBuilding F,Sui

3、te 320Iselin,New Jersey08852(Address of principal executive offices)(Zip Code)(609)619-3990(Registrants telephone number,including area code)Securities registered pursuant to Section 12(b)of the Act:Title of each class Trading Symbol(s)Name of each exchange on which registeredCommon StockOTLKThe Nas

4、daq Stock Market LLCSeries A WarrantsOTLKWThe Nasdaq Stock Market LLCSecurities Registered Pursuant to Section 12(g)of the Act:NoneIndicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act.Yes No Indicate by check mark if the registrant is

5、not required to file reports pursuant to Section 13 or Section 15(d)of the Act.Yes No Indicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during the preceding 12 months(or forsuch shorter period than

6、the registrant was required to file such reports),and(2)has been subject to such filing requirements for the past 90 days.Yes No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T(232.

7、405 of this chapter)during the preceding 12 months(or for such shorter period that the registrant was required to submit such files).Yes No Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,a smaller reporting company,or an emergi

8、ng growth company.See the definition of“large accelerated filer,”“accelerated filer,”“smaller reporting company,”and“emerging growth company”in Rule 12b-2 of the Exchange Act.Large accelerated filerAccelerated filerNon-accelerated filerSmaller reporting companyEmerging growth companyIf an emerging g

9、rowth company,indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standardsprovided pursuant to Section 13(a)of the Exchange Act.Indicate by check mark whether the registrant has filed a report on a

10、nd attestation to its managements assessment of the effectiveness of its internal control over financial reporting under Section404(b)of the Sarbanes-Oxley Act(15 U.S.C.7262(b)by the registered public accounting firm that prepared or issued its audit report.Indicate by check mark whether registrant

11、is a shell company(as defined in Rule 12b-2 of the Exchange Act).Yes No The aggregate market value of the registrants common stock,held by non-affiliates of the registrant as of March 31,2021(which is the last business day of registrants most recently completedsecond fiscal quarter)based upon the cl

12、osing market price of such stock on The Nasdaq Capital Market on that date,was approximately$199.5 million.As of December 20,2021,the registrant had outstanding 224,260,602 shares of common stock,par value$0.01 per share.DOCUMENTS INCORPORATED BY REFERENCEPart III of this report incorporates informa

13、tion by reference from the Companys definitive proxy statement,which proxy statement is due to be filed with the Securities and Exchange Commissionnot later than 120 days after September 30,2021.Table of ContentsOUTLOOK THERAPEUTICS,INC.ANNUAL REPORT ON FORM 10-KTABLE OF CONTENTSPageCautionary Note

14、Regarding Forward-Looking Statements and Industry DataiiSelected Risks Affecting Our BusinessiiiPART I1ITEM 1.Business1ITEM 1A.Risk Factors21ITEM 1B.Unresolved Staff Comments64ITEM 2.Properties64ITEM 3.Legal Proceedings64ITEM 4.Mine Safety Disclosures64PART II65ITEM 5.Market for Registrants Common E

15、quity,Related Stockholder Matters,and Issuer Purchases of Equity Securities65ITEM 6.Selected Financial Data66ITEM 7.Managements Discussion and Analysis of Financial Condition and Results of Operations67ITEM 7A.Quantitative and Qualitative Disclosures about Market Risk80ITEM 8.Consolidated Financial

16、Statements and Supplementary Data81ITEM 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure112ITEM 9A.Controls and Procedures112ITEM 9B.Other Information112PART III113ITEM 10.Directors,Executive Officers and Corporate Governance113ITEM 11.Executive Compensation113I

17、TEM 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters113ITEM 13.Certain Relationships and Related Transactions,and Director Independence113ITEM 14.Principal Accounting Fees and Services114PART IV115ITEM 15.Exhibits and Financial Statement Schedules115I

18、TEM 16.Form 10-K Summary119In this report,unless otherwise stated or as the context otherwise requires,references to“Outlook Therapeutics,”“Outlook,”“the Company,”“we,”“us,”“our”and similar references refer to Outlook Therapeutics,Inc.(formerly known as Oncobiologics,Inc.)and its consolidatedsubsidi

19、aries.The Outlook logo,Oncobiologics logo,LYTENAVA and other trademarks or service marks of Outlook Therapeutics,Inc.appearing in this report are the property of Outlook Therapeutics,Inc.This report also contains registered marks,trademarks and tradenames of other companies.All other trademarks,regi

20、stered marks and trade names appearing in this report are the property of theirrespective holders.Convenience translations between Swiss Francs,or CHF,and U.S.dollars provided herein are based on the noon buying rate in New YorkCity for cable transfers in foreign currencies as certified for customs

21、purposes by the Federal Reserve Bank of New York on September 30,2021,or CHF 0.9339=$1.00.We do not represent that CHF were,could have been,or could be,converted into U.S.dollars at such rate orat any other rate.Table of ContentsiiCAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS AND INDUSTRY DAT

22、AThis Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933,asamended,and Section 21E of the Securities Exchange Act of 1934,as amended.Forward-looking statements are based on our managementsbeliefs and assumptions and on infor

23、mation currently available to our management.All statements other than statements of historical factsare“forward-looking statements”for purposes of these provisions,including those relating to future events or our future financialperformance and financial guidance.In some cases,you can identify forw

24、ard-looking statements by terminology such as“may,”“might,”“will,”“should,”“expect,”“plan,”“anticipate,”“project,”“believe,”“estimate,”“predict,”“potential,”“intend,”“continue,”the negative ofterms like these or other comparable terminology,in connection with any discussion of future operating or fi

25、nancial performance.Thesestatements are only predictions.All forward-looking statements included in this Annual Report on Form 10-K are based on informationavailable to us on the date hereof,and we assume no obligation to update any such forward-looking statements.Any or all of our forward-looking s

26、tatements in this document may turn out to be wrong.Actual events or results may differ materially.Our forward-lookingstatements can be affected by inaccurate assumptions we might make or by known or unknown risks,uncertainties and other factors.Wediscuss many of these risks,uncertainties and other

27、factors in this Annual Report on Form 10-K in greater detail in Item 1A under theheading“Risk Factors.”We caution investors that our business and financial performance are subject to substantial risks and uncertainties.This Annual Report on Form 10-K also contains estimates,projections and other inf

28、ormation concerning our industry,our business,and themarkets for certain diseases,including data regarding the estimated size of those markets,and the incidence and prevalence of certainmedical conditions.Information that is based on estimates,forecasts,projections,market research or similar methodo

29、logies is inherentlysubject to uncertainties and actual events or circumstances may differ materially from events and circumstances reflected in this information.Unless otherwise expressly stated,we obtained this industry,business,market and other data from reports,research surveys,studies andsimila

30、r data prepared by market research firms and other third parties,industry,medical and general publications,government data andsimilar sources.Table of ContentsiiiSELECTED RISKS AFFECTING OUR BUSINESSInvesting in our common stock involves numerous risks,including the risks described in“Part I,Item 1A

31、.Risk Factors”of this AnnualReport on Form 10-K,any one of which could materially adversely affect our business,financial condition,results of operations,andprospects.These risks include,among others,the following:We have incurred significant losses and negative cash flows from operations since our

32、inception and expect to continue toincur significant losses and negative cash flows from operations for at least the next 12 months;We have never generated any revenue from product sales and may never be profitable;We will need to raise substantial additional funding to complete the development of O

33、NS-5010(LYTENAVA(bevacizumab-vikg)and support our operations after the planned launch in early 2023 until we are able to generatesufficient revenue.This additional funding may not be available on acceptable terms or at all.Failure to obtain thisnecessary capital when needed may force us to delay,lim

34、it or terminate our product development efforts or otheroperations;Raising additional capital may cause dilution to our securityholders,restrict our operations or require us to relinquishrights to our technologies or product candidates;We are highly dependent on the success of ONS-5010,our only prod

35、uct candidate in active development,and if ONS-5010 does not successfully complete clinical development or receive regulatory approval,or is not successfullycommercialized,our business may be harmed;We may not be successful in our efforts to enter into a strategic partnership for ONS-5010;Due to our

36、 limited resources and access to capital,we have,and will continue to need to,prioritize development of certainproduct candidates;and these decisions may prove to have been wrong and may harm our business.We are currentlyrepaying our recently received Paycheck Protection Program,or PPP,loan,and our

37、application for the PPP loan could inthe future be determined to have been impermissible or could result in damage to our reputation;Clinical drug development is a lengthy and expensive process and we may encounter substantial delays in our clinicaltrials or may fail to demonstrate safety and effica

38、cy to the satisfaction of applicable regulatory authorities;If product liability lawsuits are brought against us,we may incur substantial liabilities and may be required to limitcommercialization of our current or future product candidates,and our existing insurance coverage may not be sufficientto

39、satisfy any liability that may arise;The development and commercialization of pharmaceutical products is subject to extensive regulation,and we may notobtain regulatory approvals for ONS-5010 in any of the indications for which we plan to develop it,or any future productcandidates,on a timely basis

40、or at all;Any delays in the commencement or completion,or termination or suspension,of our planned or future clinical trialscould result in increased costs to us,delay or limit our ability to generate revenue and adversely affect our commercialprospects;We face intense competition and rapid technolo

41、gical change and the possibility that our competitors may developtherapies that are similar,more advanced or more effective than ours.Other products may be approved and successfullycommercialized before ours,which may adversely affect our financial condition and our ability to successfullycommercial

42、ize our product candidates;We currently have no marketing and sales organization.If we are unable to establish sales and marketing capabilities injurisdictions for which we choose to retain commercialization rights,we may be unable to generate any revenue and willdepend on the efforts of our licensi

43、ng partners,if any;We rely on third parties to manufacture and test ONS-5010,conduct our preclinical and clinical trials and perform othertasks for us.If these third parties do not successfully carry out their contractual duties,meet expected deadlines or complywith regulatory requirements,we may no

44、t be able to obtain regulatory approval for or commercialize our productcandidates and our business could be harmed;We currently engage single source suppliers for clinical trial services and multiple source suppliers for future drugsubstance manufacturing,fill-finish manufacturing and product testi

45、ng of ONS-5010.The loss of any of these suppliers,or any future single source suppliers,could harm our business;Table of ContentsivIf we infringe or are alleged to infringe intellectual property rights of third parties,our business could be harmed.Third-party claims of intellectual property infringe

46、ment may prevent or delay our development and commercialization efforts;We may become involved in lawsuits to protect or enforce any future patents,which could be expensive,time-consumingand unsuccessful;If we are unable to obtain and maintain effective patent rights for our product candidates or an

47、y future product candidates,we may not be able to prevent competitors from using technologies we consider important in our successful developmentand commercialization of our product candidates,resulting in loss of any potential competitive advantage our patents mayhave otherwise afforded us;If we ar

48、e unable to maintain effective proprietary rights for our product candidates or any future product candidates,wemay not be able to compete effectively in our markets;If we fail to comply with our obligations in the agreements under which we license intellectual property and other rightsfrom third pa

49、rties or otherwise experience disruptions to our business relationships with our licensors,we could loselicense rights that are important to our business;Our business could be adversely affected by the effects of health pandemics or epidemics,including the ongoing COVID-19 global pandemic,in regions

50、 where we or third parties on which we rely have significant manufacturing facilities,concentrations of clinical trial sites or other business operations,or materially affect our operations,including at ourheadquarters in New Jersey and at our clinical trial sites,as well as the business or operatio

51、ns of our manufacturers,contract research organizations(“CROs”)or other third parties with whom we conduct business;We are highly dependent on the services of our key executives and personnel,and if we are not able to retain thesemembers of our management or recruit additional management,clinical an

52、d scientific personnel,our business will suffer;The trading price of our securities is likely to be volatile,and purchasers of our securities could incur substantial losses;andBioLexis has beneficial ownership of a significant percentage of our common stock,together with its affiliates has theright

53、to designate members of our board of directors proportionate to its ownership,and is able to exert significant controlover matters subject to stockholder approval,preventing new investors from influencing significant corporate decisions.Table of Contents1PART IItem 1.BusinessWe are a late clinical-s

54、tage biopharmaceutical company working to develop and launch the first ophthalmic formulation of bevacizumabapproved by the U.S.Food and Drug Administration,or FDA,for use in retinal indications.Our goal is to launch ONS-5010(LYTENAVA(bevacizumab-vikg)as the first and only approved ophthalmic bevaci

55、zumab directly in the United States,and either directly or through astrategic partner in the United Kingdom,Europe,Japan and other markets for the treatment of wet age-related macular degeneration,or wetAMD,diabetic macular edema,or DME,and branch retinal vein occlusion,or BRVO.ONS-5010,our sole pro

56、duct candidate in active clinical development,is an investigational ophthalmic formulation of bevacizumab,whichwe are developing to be administered as an intravitreal injection for the treatment of wet AMD and other retinal diseases.Bevacizumab is afull-length,humanized anti-VEGF(Vascular Endothelia

57、l Growth Factor)recombinant monoclonal antibody,or mAb,that inhibits VEGF andassociated angiogenic activity.The study design for our Phase 3 clinical program to evaluate ONS-5010 as an ophthalmic formulation ofbevacizumab was reviewed at an end of Phase 2 meeting with the FDA in April 2018,and we fi

58、led our investigational new drug application,or IND,with the FDA in the first quarter of calendar 2019.Our initial clinical program for ONS-5010 in wet AMD involves three clinical trials,which we refer to as NORSE ONE,NORSE TWO andNORSE THREE.All of these clinical trials are now complete.We reported

59、 achieving the anticipated safety and efficacy and positive proof-of-concept topline results from NORSE ONE,a clinical experience study,in August 2020.NORSE TWO is our pivotal Phase 3 clinical trialcomparing ONS-5010 to ranibizumab(LUCENTIS).Positive results for NORSE TWO were reported in August 202

60、1 and November 2021and showed that ONS-5010 met its primary and secondary endpoints with highly statistically significant results.NORSE THREE is an open-label safety study we conducted to ensure the adequate number of safety exposures to ONS-5010 are available for the initial ONS-5010Biologics Licen

61、se Application,or BLA,submission with the FDA.In March 2021 we reported that the results from NORSE THREEprovided a positive safety profile for ONS-5010.In addition,we have received agreements from the FDA on three Special Protocol Assessments,or SPAs,for three additional registrationclinical trials

62、 for our ongoing Phase 3 program for ONS-5010.These SPAs cover the protocols for NORSE FOUR,a registration clinicaltrial evaluating ONS-5010 to treat BRVO,and NORSE FIVE and NORSE SIX,two registration clinical trials to evaluate ONS-5010 to treatDME.We currently intend to initiate these studies in 2

63、023 following submission and potential approval of our BLA for wet AMD.InNovember 2021,we began enrolling patients in our NORSE SEVEN clinical trial.The study will compare the safety of ophthalmicbevacizumab in vials versus pre-filled syringes in subjects diagnosed with a retinal condition that woul

64、d benefit from treatment withintravitreal injection of bevacizumab,including exudative age-related macular degeneration,diabetic macular edema,or branch retinal veinocclusion.Subjects will be treated for three months and the enrollment of subjects in the arm of the study receiving ONS-5010 in vials

65、hasbeen completed.Currently,the cancer drug Avastin(bevacizumab)is used off-label for the treatment of wet AMD and other retinal diseases such as DMEand BRVO even though Avastin has not been approved by regulatory authorities for use in these diseases.If the ONS-5010 clinical programis successful,it

66、 will support our plans to submit for regulatory approval in multiple markets beginning in 2022,beginning with the UnitedStates and in Europe,to be followed by submissions in other regions as soon as practicable.Because there are no approved ophthalmicbevacizumab products for the treatment of retina

67、l diseases in the major markets,we are developing ONS-5010 as a standard BLA and notusing the biosimilar drug development pathway that would be required if Avastin were an approved ophthalmic drug for the targeteddiseases.If approved,we believe ONS-5010 has potential to mitigate risks associated wit

68、h off-label use of unapproved bevacizumab.Off-label use of unapproved bevacizumab is currently estimated to account for at least 50%of all wet AMD prescriptions in the United States.Table of Contents2Our StrategyOur goal is to launch ONS-5010 as the first,and only,approved bevacizumab for ophthalmic

69、 use in the United States,United Kingdom,Europe,and other markets.We plan to do this directly in the United States and either directly or through a strategic partner outside of theUnited States.In order to achieve this goal,we have adopted a streamlined clinical and regulatory strategy to quickly an

70、d efficientlycomplete the process required to submit a BLA with the FDA at the earliest opportunity.The key elements of our strategy include:Leveraging the ophthalmic drug development and commercialization expertise of our leadership team.Members of ourexecutive team have extensive expertise in deve

71、loping and commercializing treatments for retinal diseases,such as wet AMD.Weintend to leverage their collective experience to further the development of,and execute an optimal commercial strategy for,ONS-5010,including potentially licensing rights to ONS-5010 to a strategic partner outside the Unit

72、ed States.Engaging with regulatory agencies to establish clear guidelines for potential approval.We have continued our approach to workclosely with regulatory authorities to develop and conduct clinical trials that we believe will appropriately support approval of ourproduct candidates if our clinic

73、al trials are successful.As an ophthalmic formulation of bevacizumab,we believe ONS-5010 has awell-defined regulatory pathway.Conducting and efficiently executing clinical trials inside and outside of the United States to support potential approval.Wehave designed our ONS-5010 clinical program to ta

74、ke advantage of reduced costs for clinical trials conducted outside of the UnitedStates,as appropriate,such as our NORSE ONE study.We intend to further this strategy,in a manner that will support a BLAsubmission in the United States at the earliest opportunity for ONS-5010.Reducing and managing cost

75、s to minimize additional investment to complete our development programs and plan for apotential commercial launch.We have made the strategic decision to outsource the commercial manufacturing and future clinicaltrial supply manufacturing for our product candidates.We believe this will significantly

76、 reduce future overhead costs not directlyrelated to our ONS-5010 program.Our Product Candidate PortfolioWe are actively developing ONS-5010(LYTENAVA(bevacizumab-vikg)for use in the treatment of retina diseases such as wet AMD,DME and BRVO.We continue to hold the developed market commercialization r

77、ights for two legacy biosimilar product candidates,butcurrently have no plans to further develop these assets.ONS-5010 Bevacizumab for Ophthalmic UseONS-5010 is an investigational ophthalmic formulation of bevacizumab under development to be administered as an intravitreal injectionfor the treatment

78、 of wet AMD and other retinal diseases.We currently intend to commercialize in both vials and pre-filled syringes,ifapproved.Bevacizumab is a full-length,humanized anti-VEGF recombinant mAb that inhibits VEGF and associated angiogenic(the growth of newblood vessels)activity.With wet AMD,abnormally h

79、igh levels of VEGF are secreted in the eye.VEGF is a protein that promotes the growthof new abnormal blood vessels.Anti-VEGF injection therapy blocks this growth.Since the advent of anti-VEGF therapy,it has become thestandard of care treatment option within the retina community,globally.Previously,w

80、e were developing ONS-5010 as a biosimilar of the cancer drug Avastin for use in oncology indications(ONS-1045).In theONS-1045 program,our bevacizumab met the primary and secondary endpoints in a three-arm single-dose pharmacokinetic,or PK,Phase 1clinical trial.All the PK endpoints met the bioequiva

81、lency criteria of the geometric mean ratios within 90%confidence interval of 80-125%when compared to both U.S.-and E.U.-sourced Avastin reference products.We are developing ONS-5010 as an ophthalmic formulation ofbevacizumab for a BLA submission and not using the biosimilar drug development pathway.

82、The following figure demonstrates theconcentration-time profile of ONS-Table of Contents31045,U.S.-licensed Avastin,and E.U.-licensed Avastin as the mean.The vertical line at time zero denotes dosing.These results suggest ahigh degree of similarity among the three products.Comparative Potency of ONS

83、-1045 versus Avastin(U.S.and E.U.)Market OpportunityAge-related macular degeneration,or AMD,is a common eye condition and a leading cause of vision loss among people age 50 and older.Wet AMD is a form of“late stage”AMD and is also called neovascular AMD.In wet AMD,abnormal blood vessels grow underne

84、ath theretina.These vessels can leak fluid and blood,which may lead to swelling and damage of the macula causing vision loss.With wet AMD,abnormally high levels of VEGF are secreted in the eyes.VEGF is a protein that promotes the growth of new abnormal blood vessels.Anti-VEGF injection therapy block

85、s this growth.Since the advent of anti-VEGF therapy,it has become the standard of care treatment optionwithin the retina community,globally.Wet AMD is a significant disease worldwide,with an estimated prevalence of over 2.9 millionpatients diagnosed in the United States,European countries and Japan

86、alone in 2020(GlobalData).Although bevacizumab is not currentlyFDA-approved for use in treating wet AMD,it is believed that bevacizumab currently accounts for at least 50%of all wet AMD intravitrealinjections in the United States,where Avastin is repackaged through compounding pharmacies and prescri

87、bed off-label.If approved,webelieve ONS-5010 has potential to mitigate risks associated with off-label repackaging of bevacizumab including,but not limited to,variability in potency,safety and sterility adverse events and syringe-related adverse events.DME is caused by a complication of diabetes cal

88、led diabetic retinopathy.Diabetic retinopathy is the most common diabetic eye disease andthe leading cause of irreversible blindness in working age Americans.Diabetic retinopathy usually affects both eyes and is caused byongoing damage to the small blood vessels of the retina.The leakage of fluid in

89、to the retina may lead to swelling of the surrounding tissue,including the macula.DME is the most common cause of vision loss in people with diabetic retinopathy.DME can occur at any stage ofdiabetic retinopathy,although it is more likely to occur in later stages of the disease.There were approximat

90、ely 8.6 million patients withDME in the United States,European countries and Japan alone in 2020(GlobalData).In BRVO,retinal vein occlusions occur when there is a blockage of veins carrying blood with needed oxygen and nutrients away from thenerve cells in the retina.A blockage in the main vein of t

91、he retina is referred to as a central retinal vein occlusion,or CRVO,while ablockage in a smaller vein is called a branch retinal vein occlusion,or BRVO.Per the American Academy of Ophthalmology,retinal veinocclusions are the second most common retinal vascular disorder afterTable of Contents4diabet

92、ic retinopathy.There were an estimated 0.3 million patients with BRVO in the United States,European countries and Japan alone in2020(Guidehouse Triangulation of Global Data,Market Scope and Investor Forecasts(2020).Annual revenue(worldwide)for anti-VEGF therapies was estimated to be$13.1 billion in

93、2020(GlobalData).Clinical Development StatusThe study design for our Phase 3 clinical program to evaluate ONS-5010 as an ophthalmic formulation of bevacizumab was reviewed withthe FDA at an end of Phase 2 meeting in April 2018,and we filed our IND with the FDA in the first quarter of calendar 2019.O

94、urregistration plans for wet AMD,the initial indication planned for ONS-5010,consists of three clinical trials which we refer to as NORSEONE,NORSE TWO and NORSE THREE.All three clinical trials have been completed.We reported achieving the anticipated safety andefficacy and positive proof-of-concept

95、topline results from NORSE ONE,a clinical experience study,in August 2020.NORSE TWO is ourpivotal Phase 3 clinical trial comparing ONS-5010 to ranibizumab(LUCENTIS)that reported highly statistically significant topline resultsin August 2021.NORSE THREE is an open-label safety study conducted to ensu

96、re the adequate number of safety exposures to ONS-5010are available for the initial ONS-5010 BLA submission with the FDA.We have also received agreement from the FDA on three SPAs for three additional registration clinical trials for our ongoing Phase 3program for ONS-5010.The agreements reached wit

97、h the FDA on these SPAs cover the protocols for NORSE FOUR,a registration clinicaltrial to treat BRVO,and NORSE FIVE and NORSE SIX,two registration clinical trials to treat DME.We intend to initiate these studies in2023 after planned approval of ONS-5010 for wet AMD.In November 2021,we began enrolli

98、ng patients in our NORSE SEVEN clinical trial.Patients will be treated for three months and theenrollment of patients in the arm of the study receiving ONS-5010 in vials has been completed.The study will compare the safety ofophthalmic bevacizumab in vials versus pre-filled syringes in subjects diag

99、nosed with a retinal condition that would benefit from treatmentwith intravitreal injection of bevacizumab,including exudative age-related macular degeneration,diabetic macular edema,or branch retinalvein occlusion.NORSE ONENORSE ONE is designed as a randomized,masked clinical experience trial and s

100、erves as the first of our two required registration clinicaltrials to support our planned BLA submission with the FDA for ONS-5010 for the treatment of wet AMD.A total of 61 treatment nave andpreviously treated patients were enrolled in the study at nine sites in Australia and randomized onto treatm

101、ent arms of ONS-5010 orranibizumab.The primary endpoint for the study is the difference in proportion of subjects gaining 15 letters of BCVA at Day 330 for ONS-5010 dosed on a monthly basis compared to ranibizumab dosed using the PIER alternative dosing regimen of three monthly doses followedby quar

102、terly dosing.In August 2020,we reported positive proof-of-concept topline results for ONS-5010 as it achieved anticipated safety and efficacyexpectations.In the analysis of treatment nave patients who had a baseline visual acuity of 15 letters at Day 330.This subgroup isthe relevant patient populati

103、on for our ongoing pivotal clinical trial of ONS-5010.Additionally,in a key secondary endpoint for the relevantpatient population,the ONS-5010 patients achieved a mean improvement in BCVA of 8.3 letters.NORSE TWONORSE TWO is a masked,randomized,pivotal Phase 3 clinical trial that serves as the secon

104、d of our two required clinical trials evaluatingONS-5010 against ranibizumab for wet AMD.A total of 227 primarily treatment nave patients were enrolled at 39 clinical trial sites in theUnited States.Patients enrolled in the study were randomized to either ONS-5010 or ranibizumab arms and were treate

105、d for 11 months.Theprimary endpoint for the study is the difference in proportion of subjects gaining 15 letters of BCVA at Day 330 for ONS-5010 dosed on amonthly basis compared to ranibizumab dosed using the PIER alternative dosing regimen.We reported topline results for NORSE TWO inAugust 2021.Tab

106、le of Contents5The topline results reported from NORSE TWO in August 2021,in addition to the full results reported in November 2021,showed thatONS-5010 met the primary and key secondary endpoint for efficacy with clinically impactful change observed for treated patients.TheNORSE TWO primary endpoint

107、 difference in proportion of subjects gaining at least 15 letters BCVA was met and was highly statisticallysignificant and clinically relevant.In the intent-to-treat(ITT)primary dataset,the percentage of patients who gained at least 15 letters whowere treated with ranibizumab was 23.1%,and the perce

108、ntage of patients who gained at least 15 letters who were treated with ONS-5010was 41.7%(p=0.0052).The primary endpoint was also statistically significant and clinically relevant in the secondary per-protocol(PP)dataset(p=0.04)where the percentages were almost identical,at 24.7%with ranibizumab and

109、41.0%with ONS-5010.The key secondaryendpoint BCVA score change from baseline to month 11 in the primary ITT dataset was also highly statistically significant and clinicallyrelevant(p=0.0043).A mean change in BCVA was observed with ranibizumab of 5.8 letters and the mean change with bevacizumab-vikgw

110、as 11.2 letters.The results were also statistically significant in the secondary PP dataset(p=0.05)with a mean change in letters withranibizumab of 7.0 letters and with bevacizumab-vikg 11.1 letters.Results were also positive for the remaining secondary endpoints with56.5%(p=0.0016)of ONS-5010 subje

111、cts gaining 10 letters of vision and 68.5%(p=0.0116)of ONS-5010 subjects gaining 5 letters ofvision.Table of Contents6NORSE THREENORSE THREE is an open-label safety study we conducted to ensure the adequate number of safety exposures to ONS-5010 are availablefor the initial ONS-5010 BLA submission w

112、ith the FDA.In March 2021 we reported that the results from NORSE THREE provided apositive safety profile for ONS-5010.NORSE SEVENNORSE SEVEN was initiated to support our ongoing development program for delivering ONS-5010 using a pre-filled syringe.It is a threemonth study designed to compare the s

113、afety of ophthalmic bevacizumab in vials versus pre-filled syringes in subjects diagnosed with aretinal condition that would benefit from treatment with intravitreal injection of bevacizumab,including exudative age-related maculardegeneration,diabetic macular edema,or branch retinal vein occlusion.A

114、 total of 120 patients are expected to be enrolled in the study with60 patients receiving ONS-5010 packaged in vials and 60 patients receiving ONS packaged in a pre-filled syringe.Subjects will be treatedfor three months and the enrollment of subjects in the arm of the study receiving ONS-5010 in vi

115、als has been completed.The study isexpected to be completed in December 2022.Commercialization,Sales and MarketingOur commercialization strategy is to maximize the revenue potential of ONS-5010.If approved,we currently intend to launch and marketLYTENAVA(bevacizumab-vikg)ourselves in the United Stat

116、es.Outside of the United States,we intend to either market and launchourselves or work through a strategic partner.We currently own all of the development and commercialization rights to ONS-5010 and havelicensed rights only to our joint venture in the Peoples Republic of China,or PRC,for the greate

117、r China market(see“Collaboration andLicense AgreementsSyntone-Private Placement and PRC Joint Venture”).If approved,we believe that LYTENAVA(bevacizumab-vikg)will be entitled to 12 years regulatory exclusivity granted in the United States against biosimilar competition,and up to 10 years in Europe.F

118、or many years,anti-VEGF therapy has been the standard of care for many ophthalmic diseases,including wet AMD,DME and BRVO.However,although multiple branded drugs have been approved for these indications(e.g.,LUCENTIS,EYLEA and BEOVU),they are veryexpensive.Doctors who wish to treat their retinal pat

119、ients with a less expensive anti-VEGF drug often use bevacizumab.But because thereis no FDA-approved ophthalmic formulation of bevacizumab,doctors must use repackaged bevacizumab(Avastin)provided bycompounding pharmacists that is not required to meet the standards for ophthalmic use necessary for an

120、 approved product.Despiteclinicians widespread acceptance and use of bevacizumab to treat ophthalmic diseases such as wet AMD,DME and BRVO,nomanufacturer has previously sought approval of bevacizumab for these diseases from the FDA.The repackaged bevacizumab that is provided by compounding pharmacie

121、s is not required to meet ophthalmic drug standards and can carryknown risks of contamination(including silicone oil droplet contamination from syringes)and inconsistent potency,with potentially severeconsequences,as leading retinal societies have reported.For these reasons,the retina community and

122、payors have shown interest in thedevelopment of an ophthalmic formulation of bevacizumab that could be an on-label alternative to repackaged bevacizumab fromcompounding pharmacists.To meet this retinal market need,we are developing ONS-5010 as an investigational ophthalmic formulation of bevacizumab

123、.If approved,itwill provide an FDA-approved and European Agency-approved,viable treatment option across the spectrum of anti-VEGF ophthalmic drugsthat treat wet AMD,DME and BRVO.Additionally,if approved,it would avoid the safety,sterility,potency,availability and syringedrawbacks that can occur with

124、 repackaged bevacizumab from compounding pharmacies.Furthermore,if ONS-5010 is approved and commercialized,we expect that it will be able to help mitigate the high cost of treatment forretinal diseases.Both in the United States and globally,the high cost of treating retinal diseases such as wet AMD,

125、DME and BRVO canresult in patients receiving an insufficient number of treatments,or potentially no treatment at all.Our commercial strategy for ONS-5010includes providing an option as a first-line therapy for retinal diseases including step therapy where an anti-VEGF therapy is indicated.Steptherap

126、y is a type of prior authorization for drugs thatTable of Contents7begins treatment for a medical condition with the most preferred drug therapy and progresses to other therapies only if necessary.By ensuring the consistent availability of safe,sterile and fully potent on-label bevacizumab for intra

127、vitreal injection,at a responsible price,ONS-5010,if approved,has the potential to become the anti-VEGF cornerstone of care for retinal diseases.It may also provide synergieswith future long-acting agents and adjunct therapies for advanced treatment of wet AMD,DME and BRVO.ONS-5010 has the potential

128、,ifapproved and commercialized,to help lower the aggregate costs of treating retinal diseases for the overall healthcare system.Collaboration and License AgreementsWe enter into collaboration and license agreements in the ordinary course of our business.We have in-licensed certain technology fromSel

129、exis SA,or Selexis,that we used to research and develop our product candidates.For product candidates developed using the Selexistechnology,we enter into commercial license agreements with Selexis that give us rights to commercialize,file investigational new drugs,orINDs and enter into collaborative

130、 arrangements with third parties for the further development and commercialization of such biosimilarproduct candidates.Although we are no longer working on our biosimilar development program,we have licensed rights to these biosimilarproduct candidates(ONS-3010,ONS-1045 and ONS-1050)in other market

131、s.MTTR Strategic Partnership Agreement(ONS-5010)In February 2018,we entered into a strategic partnership agreement with MTTR LLC,or MTTR,to advise on regulatory,clinical andcommercial strategy and assist in obtaining approval of ONS-5010.In January 2020,we agreed to terminate this arrangement and in

132、connection therewith,following receipt of necessary stockholder approval,in March 2020,we issued an aggregate of 7,244,739 shares ofour common stock to the four principals of MTTR(who include two of our named executive officers,Mr.Dagnon and Mr.Evanson)pursuant to individual consulting agreements we

133、 entered into with each of them,and paid MTTR a one-time settlement fee of$110,000.Theconsulting agreements also include terms setting the respective compensation arrangements of each of the principals,including for Mr.Dagnon and Mr.Evanson,who have been serving as executive officers since November

134、2018.We did not pay Mr.Dagnon or Mr.Evanson any direct compensation as consultants or as employees during the year ended September 30,2019 nor during the period from October 1,2019 through March 19,2020.During this time,Mr.Dagnon and Mr.Evanson werecompensated directly by MTTR for services provided

135、to us,including as executive officers.We began compensating Mr.Dagnon and Mr.Evanson directly as consultants effective March 19,2020.Mr.Dagnon and Mr.Evanson have also agreed to provide consulting services toan affiliate of BioLexis Pte.Ltd.(“BioLexis”)pursuant to a separate arrangement.MTTR and its

136、 four principals under the strategicpartnership agreement and the subsequent individual consulting agreements earned an aggregate$1,089,408 and$1,294,089 during the yearended September 30,2021 and 2020,respectively,which includes monthly consulting fees and expense reimbursement,but excludes stock-b

137、ased compensation related to restricted stock.Syntone Private Placement and PRC Joint VentureIn May 2020,we entered into a stock purchase agreement with Syntone Ventures LLC,or Syntone,pursuant to which we sold and issued,ina private placement in June 2020,16,000,000 shares of our common stock at a

138、purchase price of$1.00 per share,for aggregate grossproceeds of$16.0 million.In connection with the entry into the stock purchase agreement,we entered into a joint venture agreement withSyntones PRC-based affiliate,pursuant to which we agreed to form a PRC joint venture that would be 80%owned by Syn

139、tones PRC-affiliate and 20%owned by us.Upon formation of the PRC joint venture in April 2021,we entered into a royalty-free license with the PRCjoint venture for the development,commercialization and manufacture of ONS-5010 in the greater China market,which includes HongKong,Taiwan and Macau.We used

140、 approximately$0.9 million of the proceeds from the May 2020 private placement to Syntone Ventures to fund our initial capitalcontribution to the PRC joint venture,and expect to be required to make an additional capital contribution to the PRC joint venture ofapproximately$2.1 million within the nex

141、t four years.Table of Contents8Selexis Humira(ONS-3010),Avastin(ONS-5010 and ONS-1045)and Herceptin(ONS-1050)In October 2011,we entered into a research license agreement with Selexis,whereby we acquired a non-exclusive license to conductresearch internally or in collaboration with third parties to d

142、evelop recombinant proteins from cell lines created in mammalian cells using theSelexis expression technology,or the Selexis Technology.The research license expired on October 9,2018,and accordingly,we are nolonger using the Selexis Technology in our research.Selexis also granted us a non-transferra

143、ble option to obtain a perpetual,non-exclusive,worldwide commercial license under the SelexisTechnology to manufacture,or have manufactured,a recombinant protein produced by a cell line developed using the Selexis Technologyfor clinical testing and commercial sale.We exercised this option in April 2

144、013 and entered into three commercial license agreements withSelexis for ONS-1045(which covers ONS-5010),and two of our biosimilar product candidates,ONS-3010 and ONS-1050(which are nolonger in active clinical development).We paid an upfront licensing fee to Selexis for each commercial license and a

145、lso agreed to pay afixed milestone payment for each licensed product.In addition,we are required to pay a single-digit royalty on a final product-by-finalproduct and country-by-country basis,based on worldwide net sales of such final products by us or any of our affiliates or sub-licenseesduring the

146、 royalty term.At any time during the term,we have the right to terminate our royalty payment obligation by providing writtennotice to Selexis and paying Selexis a royalty termination fee.Commercial License AgreementsOn April 11,2013,following the exercise of our option to enter a commercial license

147、under the Selexis research license,we entered intocommercial license agreements with Selexis for each of ONS-1045,ONS-3010 and ONS-1050.Under the terms of each commercial licenseagreement,we acquired a non-exclusive worldwide license under the Selexis Technology to use the cell lines developed under

148、 the researchlicense and related materials,to manufacture and commercialize licensed and final products,with a limited right to sublicense.We were required to pay an upfront licensing fee of CHF 65,000(approximately$0.1 million)to Selexis for each commercial license andalso agreed to pay up to CHF 3

149、65,000(approximately$0.4 million)in milestone payments for each licensed product.In addition,we arerequired to pay a single-digit royalty on a final product-by-final product and country-by-country basis,based on worldwide net sales of suchfinal products by us or any of our affiliates or sublicensees

150、 during the royalty term.The royalty term for each final product in each country isthe period commencing from the first commercial sale of the applicable final product in the applicable country and ending on the expirationof the specified patent coverage.At any time during the term,we have the right

151、 to terminate our royalty payment obligation by providingwritten notice to Selexis and paying Selexis a royalty termination fee of CHF 1,750,000(approximately$1.8 million).The initiation of ourPhase 3 clinical program for ONS-5010 in fiscal 2019 triggered a CHF 65,000(approximately$0.1 million)miles

152、tone payment to Selexisunder the commercial license agreement,which we paid in November 2019.As of September 30,2021,we have paid Selexis an aggregateof approximately$0.4 million under the commercial license agreements.Each of our commercial agreements with Selexis will expire in its entirety upon t

153、he expiration of all applicable Selexis patent rights.Thelicensed patent rights consist of two patent families.The first patent family relates to methods of transferring cells,and is filed in the UnitedStates,Australia,Canada,Europe,Japan and Singapore.This patent family will begin to expire worldwi

154、de in 2022.The second patentfamily claims DNA compositions of matter useful for having protein production increasing activity.This patent family is filed in the UnitedStates,Australia,Canada,China,Europe,Hong Kong,Israel,India,Japan,South Korea,Russia,Singapore and South Africa.This patentfamily wil

155、l begin to expire worldwide in 2025.Either party may terminate the related agreement in the event of an uncured material breachby the other party or in the event the other party becomes subject to specified bankruptcy,winding up or similar circumstances.Either party may also terminate the related ag

156、reement under designated circumstances if the Selexis Technology infringes third-partyintellectual property rights.In addition,we have the right to terminate each of the commercial agreements at any time for our convenience;however,with respect to the agreements relating to ONS-3010 and ONS-1045,thi

157、s right is subject to the consent of Laboratories Liomont,S.A.de C.V.,or Liomont(a licensing partner in Mexico for ONS-3010 and ONS-1045)pursuant to a corresponding letter we executed inconjunction with the standby agreement entered into between Selexis and Liomont on November 11,2014.The standby ag

158、reement permitsLiomont to assume the license underTable of Contents9the applicable commercial agreement for Mexico upon specified triggering events involving our bankruptcy,insolvency or similarcircumstances.Ex-U.S.Collaboration and License AgreementsIn addition to pursuing potential strategic colla

159、borations and partnerships for ONS-5010,we have entered into strategic collaborations forour legacy biosimilar drug product candidates that are no longer in active clinical development.Currently,we have a joint participationagreement in place for ONS-3010 with Zhejiang Huahai Pharmaceutical Co.,Ltd.

160、,or Huahai,whereby we share any future post-Phase 1development costs with Huahai,and proportionately share the revenues from commercialization of ONS-3010 in the United States,Canada,European Union,or E.U.,Japan,Australia and New Zealand.We could also be required to form a joint venture to further d

161、evelop andcommercialize ONS-3010 with Huahai in the agreed countries,if so,requested by Huahai.However,we do not have any other developmentand commercialization agreements for the United States or for major ex-U.S.markets,such as the E.U.and Japan.For emerging markets opportunities,in 2012 and 2013,

162、we established early country-specific partnerships for ONS-3010 and ONS-1045 inChina with Huahai,in India with IPCA Laboratories Limited,or IPCA,and in Mexico with Liomont,and in September 2017 we entered intoan agreement with BioLexis Pte.Ltd.,or BioLexis,our controlling stockholder,providing for t

163、he license of rights to ONS-3010 and ONS-1045 in emerging markets excluding China,India and Mexico.The Liomont agreement was terminated in April 2021.To date,theseagreements have collectively provided an aggregate of$29.0 million in payments as of September 30,2021.Until such time as we may enter in

164、to a strategic partnership for ONS-5010,aside from our joint participation agreement in place for ONS-3010 with Huahai,whereby we agreed to share post-Phase 1 clinical development costs,and proportionately share the revenues fromcommercialization of ONS-3010 in the United States,Canada,E.U.and Japan

165、,among other markets,and under which we could be requiredto form a joint venture with Huahai for ONS-3010 if so requested by Huahai,we do not have any commercial license or developmentagreements for the United States or for major ex-U.S.markets,such as the E.U.or Japan.We currently have collaboratio

166、n and licenseagreements for smaller ex-U.S.markets and,collectively,such agreements have provided an aggregate of$29.0 million in payments as ofSeptember 30,2021 for our most advanced biosimilar product candidates.Our contracts include agreements with IPCA(for ONS-3010,ONS-1045 and ONS-1050 in India

167、 and other regional markets),Liomont(for ONS-3010 and ONS-1045 in Mexico),Huahai(for ONS-3010and ONS-1045 in China)and BioLexis(for ONS-3010 and ONS-1045 in emerging markets excluding China,India and Mexico).We havealso agreed to license ONS-5010 to our PRC-joint venture with Syntone when formed,whi

168、ch is discussed above.Our arrangements withthese partners for our biosimilar product candidates generally include a strategic license for a defined territory for agreed biosimilar productcandidates and may also include agreements to assist with research and development to assist our contract counter

169、party in establishing theirown mAb research,development and manufacturing capabilities.Under our existing strategic licensing agreements,we generally receivedan upfront payment upon execution,and have the ability to earn additional regular milestone payments and the right to receive royalties(genera

170、lly a mid-single digit to low-teens percentage rate)based on net sales in the agreed territory.Our existing agreements to assist withresearch and development also included an upfront payment upon execution,and we have the ability to earn additional regular milestonepayments,and the right to receive

171、royalties(generally a mid-single digit to low-teens percentage rate)based on net sales in the agreedterritory.Generally,our agreements expire on a product-by-product basis on the date of the expiration of the royalty revenue term for all products inthe territory.The royalty revenue term is 10 years

172、from the date of first commercial sale and any renewal is subject to good faith negotiation.The license term for the agreed territory is perpetual.Either party may terminate the agreement in its entirety or with respect to a particularproduct if the other party materially breaches the agreement,subj

173、ect to specified notice and cure periods.In addition,we have the right toterminate the agreement in connection with any interference,opposition or challenge of our patent rights.If the agreement is terminated dueto our breach,our contract counterparty is generally free to use all applicable technolo

174、gy and know-how that we have provided under theagreement.As noted above,our collaboration agreements with Huahai also includes a joint participation agreement,which provides for the co-fundingof development of ONS-3010 in the United States,Canada,E.U.,Japan,Australia and New Zealand and the proporti

175、onate sharing of therevenues from commercialization of ONS-3010 in the agreed countries,and alsoTable of Contents10provides for the formation of a joint venture with Huahai to further develop and commercialize ONS-3010 with Huahai in the agreedcountries,if so requested by Huahai.In the event Huahai

176、funds its proportionate share of development costs incurred after completion of the“Phase-3 Ready Package,”Huahaiwould be entitled to retain its 51%value ownership,with us entitled to retain our 49%value ownership,of ONS-3010 in the agreedcountries.Similarly,revenues from the commercialization of ON

177、S-3010 in the agreed countries(including major markets such as the UnitedStates and the E.U.,among others),would also be shared based on such proportional ownership interests.In the event that Huahai does notfund its proportionate share of such development costs,the joint participation agreement pro

178、vides for a proportionate adjustment to ourrespective value ownership interests based on our respective investments in such development costs,which would increase our valueownership interest in ONS-3010.Throughout the term of the joint participation agreement,we and our affiliates are prohibited fro

179、m,directly or indirectly,conducting orhaving conducted or funding any discovery,research,development,regulatory,manufacturing or commercialization activity,alone or incollaboration with a third party,of any biosimilar product having the same reference product as the ONS-3010 compound or correspondin

180、gproducts,for use in the United States,Canada,E.U.,Japan,Australia and New Zealand,other than ONS-3010 with Huahai pursuant to thejoint participation agreement.Unless terminated early upon mutual agreement of the parties,or due to a material breach of either party that is uncured,the jointparticipat

181、ion agreement will terminate upon entry into a mutually acceptable collaboration agreement between us and Huahai for ongoingdevelopment and commercialization of ONS-3010 in the agreed countries,or we and Huahai enter into an agreed license with a third partyfor such ongoing development and commercia

182、lization of ONS-3010 in the agreed countries.If the joint participation agreement is terminatedfor cause due to our breach,we could be required to refund Huahai any amounts funded by Huahai to develop ONS-3010,as well as payHuahai a 6%royalty on net sales made by us or an affiliate,as well as 25%of

183、revenues we receive from a sublicensee for commercial salesof ONS-3010 until the aggregate of such payments is equal to 10 times the amount Huahai funded for the development of ONS-3010.Furthermore,if we were to file a voluntary petition in bankruptcy,or have an involuntary petition filed that we co

184、uld not dismiss within 120days,then Huahai would be granted an exclusive license to continue the development and commercialization of ONS-3010 in the agreedcountries.As of September 30,2021,we have received an aggregate of$5.0 million of payments from IPCA under our various agreements,anaggregate of

185、$3.0 million of payments from Liomont under our various agreements,an aggregate of$16.0 million of payments from Huahaiunder our various agreements,$10.0 million of which were pursuant to the joint participation agreement,and an aggregate of$5.0 millionfrom BioLexis under our joint development and l

186、icensing agreement.ManufacturingWe are working with FujiFilm Diosynth Biotechnologies,or Fuji,and Ajinomoto Bio-pharma Services,or AjiBio,to provide productmanufacturing in current Good Manufacturing Practices,or cGMP,manufacturing facilities.We have also executed a supply agreement for abest-in-cla

187、ss pre-filled ophthalmic syringe,which we believe will provide both ease-of-use for clinicians and add to ONS-5010s safetyprofile over the current unapproved therapies that have caused problems related to syringe malfunction,contamination,etc.We will screenother contract manufacturers to meet our cl

188、inical,commercial and regulatory supply requirements as needed.For a discussion of risksrelated to our sources and availability of supplies,please see“Risk FactorsPreviously,we manufactured bulk drug substance forpreclinical and clinical supplies of our product candidates in our in-house facility.Ou

189、r business could be harmed if our new contractmanufacturer is unable to manufacture our product candidates at the necessary quantity or quality levels,.”and“Risk FactorsWe currentlyengage single source suppliers for clinical trial services and multiple source suppliers for future drug substance manu

190、facturing,fill-finishmanufacturing and product testing of ONS-5010.The loss of any of these suppliers,or any future single source suppliers,could harm ourbusiness.”Table of Contents11CompetitionCompetition in the area of pharmaceutical research and development is intense and significantly depends on

191、 scientific and technologicalfactors.These factors include the availability of patent and other protection for technology and products,the ability to commercializetechnological developments and the ability to obtain regulatory approval for testing,manufacturing and marketing.Our competitors includem

192、ajor pharmaceutical and specialized biotechnology companies,many of which have financial,technical and marketing resourcessignificantly greater than ours.In addition,many biotechnology companies have formed collaborations with large,established companies tosupport research,development and commercial

193、ization of products that may be competitive with ours,and we may also compete againstother biotechnology companies in our efforts to find a potential strategic partner for ONS-5010.Academic institutions,governmentalagencies and other public and private research organizations are also conducting rese

194、arch activities and seeking patent protection and maycommercialize products on their own or through joint ventures.We are aware of certain other products manufactured or under developmentby competitors that are used for the treatment of the health conditions that we have targeted for product develop

195、ment.We can provide noassurance that developments by others will not render our technology obsolete,noncompetitive or harm our development strategy,that wewill be able to keep pace with new technological developments,that our technology will be able to supplant established products andmethodologies

196、in the therapeutic areas that are targeted by us or that we will be able to enter into a strategic partnership arrangement forONS-5010.The foregoing factors could have a material adverse effect on our business,prospects,financial condition and results ofoperations.These companies,as well as academic

197、 institutions,governmental agencies and private research organizations,also compete withus in recruiting and retaining highly qualified scientific personnel and consultants.We will encounter competition from existing firms that offer competitive solutions in ocular diseases.These competitive compani

198、es coulddevelop products that are superior to,or have greater market acceptance,than the products being developed by us.We will have to competeagainst other biotechnology and pharmaceutical companies with greater market recognition and greater financial,marketing and otherresources.Wet-AMD MarketAMD

199、 is a medical condition that usually affects older adults and generally results in a loss of vision.AMD occurs in“dry”(non-exudative)and“wet”(exudative)forms.Wet AMD is the advanced form of macular degeneration that involves the formation of abnormal and leakyblood vessels in the back of the eye beh

200、ind the retina,through a process known as choroidal neovascularization.While the wet formaccounts for approximately 15%of all AMD cases,according to the National Eye Institute,it is responsible for 90%of severe vision lossassociated with AMD.The National Eye Institute also estimates that the prevale

201、nce of wet AMD among adults 40 years or older in theUnited States is approximately 1.75 million people.In addition,more than 200,000 new cases are diagnosed annually in North America.Competitive LandscapeOff-label use of bevacizumab(Avastin)is estimated to be at least 50%of the overall market in the

202、 United States.The current FDA approvedmarket leaders for the treatment of wet AMD are VEGF inhibitors,including LUCENTIS,EYLEA and BEOVU.Annual revenue(worldwide)for anti-VEGF therapies was estimated to be$13.1 billion in 2020(Guidehouse Triangulation of Global Data,Market Scopeand Investor Forecas

203、ts(2020).Bevacizumab,LUCENTIS,EYLEA and BEOVU are all administered via frequent intravitreal injectionsdirectly into the eye.We are developing ONS-5010 as an approved ophthalmic formulation of bevacizumab for the treatment of wet AMD,as well as DME and BRVO.In addition to the other treatments used i

204、n patients with wet AMD,there are various other companies with product candidates in Phase 1,2and 3 clinical trials for the treatment of wet AMD.Programs currently in Phase 2 or Phase 3 clinical trials include,but are not limited to:RG7716,a bispecific antibody to both VEGF-A and Ang2 being develope

205、d by Hoffman-La Roche AG;SB-11,BYOOVI,ranibizumab biosimlar being developed by Samsung Bioepis Co.,Ltd.and Biogen Inc.;FYB-201j,ranibizumab biosimilar being developed by Formycon AG and Bioeq GmbH;Table of Contents12Xlucanej,ranibizumab biosimilar being developed by Bausch&Lomb and Xbrane Biopharma

206、AB;andRanibizumab PDS GR40548,ranibizumab port delivery system being developed by Hoffmann-La Roche AG.All of these product candidates in clinical development,with the exception of PDS GR40548 which is a refillable port delivery system,usean intravitreal route of administration much like the current

207、 standards of care.We believe that ONS-5010 has potential competitiveadvantages through the familiarity of patients and physicians in using off-label Avastin.We also believe we have reduced the risk in ourclinical program by leveraging our prior work in developing a biosmilar drug product candidate

208、for Avastin as a treatment for cancer.However,clinical trial data from other clinical programs may negatively impact our ability to garner future financing or businesscollaborations,combinations or transactions with other pharmaceutical and biotechnology companies.Intellectual PropertyOur commercial

209、 success depends in part on our ability to avoid infringing the proprietary rights of third parties,our ability to obtain andmaintain proprietary protection for our technologies where applicable and to prevent others from infringing our proprietary rights.We seekto protect our proprietary technologi

210、es by,among other methods,evaluating relevant patents,establishing defensive positions,monitoringE.U.oppositions and pending intellectual property rights,preparing litigation strategies in view of the U.S.legislative framework and filingU.S.and international patent applications on technologies,inven

211、tions and improvements that are important to our business.As of December1,2021,we own two U.S.patents,ten foreign patents,five pending U.S.non-provisional applications,and 41 pending internationalapplications that were nationalized from seven Patent Cooperation Treaty,or PCT,applications,which relat

212、e to formulations developed forONS-3010 and ONS-5010/ONS-1045,methods of antibody purification,methods for purifying antibodies to separate isoforms,methods ofuse,methods of reducing high molecular weight species,and modulating afucosylated species as well as efficiently determining the aminoacid se

213、quence of antibodies.Our first PCT application was nationalized in April 2016 in Australia,Canada,China,Europe,Hong Kong,India,Japan,Mexico and the United States.If granted,patents issuing from these nine applications are expected to expire in 2034,absentany adjustments or extensions.Our second PCT

214、application was nationalized in July 2017 in Europe and the United States.If granted,patents issuing from these two applications are expected to expire in 2036,absent any adjustments or extensions.Our third PCT applicationwas nationalized in June 2018 in Australia,Canada,China,Europe,India,Japan,Mex

215、ico and the United States.If granted,patents issuingfrom these eight applications are expected to expire in 2036,absent any adjustments or extensions.Our fourth PCT application wasnationalized in July 2018 in Australia,Canada,China,Europe,India,Japan,Mexico and the United States.If granted,patents i

216、ssuing fromthese eight applications are expected to expire in 2037,absent any adjustments or extensions.Our fifth PCT application was nationalized inAugust 2018 in Australia,Canada,China,Europe,India,Japan,Mexico and the United States.If granted,patents issuing from these eightapplications are expec

217、ted to expire in 2037,absent any adjustments or extensions.Our sixth PCT application was nationalized in August2018 in Australia,Canada,China,Europe,India,Japan,Mexico and the United States.If granted,patents issuing from these eightapplications are expected to expire in 2037,absent any adjustments

218、or extensions.Our seventh PCT application was nationalized in October2020 in Australia,Brazil,Canada,China,Europe,Israel,Japan,Korea,Mexico,New Zealand,Russian Federation,Singapore,South Africaand the United States.If granted,patents issuing from these fourteen applications are expected to expire in

219、 2039,absent any adjustments orextensions.We also rely on trade secrets,know-how and continuing technological innovation to develop and maintain our proprietaryposition.The term of individual patents depends upon the legal term of the patents in countries in which they are obtained.In most countries

220、,including the United States,the patent term is generally 20 years from the earliest date of filing a non-provisional patent application in theapplicable country.In the United States,a patents term may,in certain cases,be lengthened by patent term adjustment,which compensates apatentee for administr

221、ative delays by the United States Patent and Trademark Office in examining and granting a patent or may be shortenedif a patent is terminally disclaimed over a commonly owned patent or a patent naming a common inventor and having an earlier expirationdate.Table of Contents13RegulatoryGovernment Regu

222、lation and Product ApprovalThe FDA and other regulatory authorities at federal,state,and local levels,as well as in foreign countries,extensively regulate,among otherthings,the research,development,testing,manufacture,quality control,import,export,safety,effectiveness,labeling,packaging,storage,dist

223、ribution,record keeping,approval,advertising,promotion,marketing,post-approval monitoring,and post-approval reporting ofbiologics such as those we are developing.We,along with third-party contractors,will be required to navigate the various preclinical,clinical and commercial approval requirements o

224、f the governing regulatory agencies of the countries in which we wish to conduct studies orseek approval or licensure of our product candidates.The process required by the FDA before biologic product candidates may be marketed in the United States generally involves the following:completion of precl

225、inical laboratory tests and animal studies performed in accordance with the FDAs current Good LaboratoryPractices,or GLP,regulation;submission to the FDA of an IND,which must become effective before clinical trials may begin and must be updated annually orwhen significant changes are made;approval b

226、y an independent Institutional Review Board,or IRB,or ethics committee at each clinical site before the trial iscommenced;performance of adequate and well-controlled human clinical trials to establish the safety,purity and potency of the proposedbiologic product candidate for its intended purpose;pr

227、eparation of and submission to the FDA of a BLA after completion of all pivotal clinical trials;a determination by the FDA within 60 days of its receipt of a BLA to file the application for review;satisfactory completion of an FDA Advisory Committee review,if applicable;satisfactory completion of an

228、 FDA pre-approval inspection of the manufacturing facility or facilities at which the proposed productis produced to assess compliance with cGMP and to assure that the facilities,methods and controls are adequate to preserve thebiological products continued safety,purity and potency,and of selected

229、clinical investigation sites to assess compliance withGood Clinical Practices,or GCP;andFDA review and approval of the BLA to permit commercial marketing of the product for particular indications for use in theUnited States.Preclinical and Clinical DevelopmentPrior to beginning the first clinical tr

230、ial with a product candidate in the United States,we must submit an IND to the FDA.An IND is arequest for authorization from the FDA to administer an investigational new drug product to humans.The central focus of an INDsubmission is on the general investigational plan and the protocol(s)for clinica

231、l studies.The IND also includes results of animal and in vitrostudies assessing the toxicology,pharmacokinetics,pharmacology,and pharmacodynamic characteristics of the product;chemistry,manufacturing,and controls information;and any available human data or literature to support the use of the invest

232、igational product.AnIND must become effective before human clinical trials may begin.The IND automatically becomes effective 30 days after receipt by theFDA,unless the FDA,within the 30-day time period,raises safety concerns or questions about the proposed clinical trial.In such a case,theIND may be

233、 placed on clinical hold and the IND sponsor and the FDA must resolve any outstanding concerns or questionsTable of Contents14before the clinical trial can begin.Submission of an IND therefore may or may not result in FDA authorization to begin a clinical trial.Clinical trials involve the administra

234、tion of the investigational product to human subjects under the supervision of qualified investigators inaccordance with GCPs,which include the requirement that all research subjects provide their informed consent for their participation in anyclinical study.Clinical trials are conducted under proto

235、cols detailing,among other things,the objectives of the study,the parameters to beused in monitoring safety and the effectiveness criteria to be evaluated.A separate submission to the existing IND must be made for eachsuccessive clinical trial conducted during product development and for any subsequ

236、ent protocol amendments.Furthermore,an independentIRB for each site proposing to conduct the clinical trial must review and approve the plan for any clinical trial and its informed consent formbefore the clinical trial begins at that site and must monitor the study until completed.Regulatory authori

237、ties,the IRB or the sponsor maysuspend a clinical trial at any time on various grounds,including a finding that the subjects are being exposed to an unacceptable health riskor that the trial is unlikely to meet its stated objectives.Some studies also include oversight by an independent group of qual

238、ified expertsorganized by the clinical study sponsor,known as a data safety monitoring board,which provides authorization for whether or not a studymay move forward at designated check points based on access to certain data from the study and may halt the clinical trial if it determinesthat there is

239、 an unacceptable safety risk for subjects or other grounds,such as no demonstration of efficacy.There are also requirementsgoverning the reporting of ongoing clinical studies and clinical study results to public registries.For purposes of BLA approval,human clinical trials are typically conducted in

240、 three sequential phases that may overlap.Phase 1 The investigational product is initially introduced into healthy human subjects or patients with the target disease orcondition.These studies are designed to test the safety,dosage tolerance,absorption,metabolism and distribution of theinvestigationa

241、l product in humans,the side effects associated with increasing doses,and,if possible,to gain early evidence oneffectiveness.Phase 2 The investigational product is administered to a limited patient population with a specified disease or condition toevaluate the preliminary efficacy,optimal dosages a

242、nd dosing schedule and to identify possible adverse side effects and safetyrisks.Multiple Phase 2 clinical trials may be conducted to obtain information prior to beginning larger and more expensive Phase 3clinical trials.Phase 3 The investigational product is administered to an expanded patient popu

243、lation to further evaluate dosage,to providestatistically significant evidence of clinical efficacy and to further test for safety,generally at multiple geographically dispersedclinical trial sites.These clinical trials are intended to establish the overall risk/benefit ratio of the investigational

244、product and toprovide an adequate basis for product approval.In some cases,the FDA may require,or companies may voluntarily pursue,additional clinical trials after a product is approved to gain moreinformation about the product.These so-called Phase 4 studies may be made a condition to approval of t

245、he BLA.Concurrent with clinicaltrials,companies may complete additional animal studies and develop additional information about the biological characteristics of theproduct candidate and must finalize a process for manufacturing the product in commercial quantities in accordance with cGMPrequirement

246、s.The manufacturing process must be capable of consistently producing quality batches of the product candidate and,amongother things,must develop methods for testing the identity,strength,quality and purity of the final product,or for biologics,the safety,purityand potency.Additionally,appropriate p

247、ackaging must be selected and tested,and stability studies must be conducted to demonstrate that theproduct candidate does not undergo unacceptable deterioration over its shelf life.BLA Submission and ReviewAssuming successful completion of all required testing in accordance with all applicable regu

248、latory requirements,the results of productdevelopment,nonclinical studies and clinical trials are submitted to the FDA as part of a BLA requesting approval to market the product forone or more indications.The BLA must include all relevant data available from pertinent preclinical and clinical studie

249、s,including negativeor ambiguous results as well as positive findings,together with detailed information relating to the products chemistry,manufacturing,controls,and proposed labeling,among other things.The submission of a BLA requires payment of a substantial application user fee toFDA,unless a wa

250、iver or exemption applies.Table of Contents15Once a BLA has been submitted,the FDAs goal is to review standard applications within ten months after it accepts the application forfiling,or,if the application qualifies for priority review,six months after the FDA accepts the application for filing.In

251、both standard andpriority reviews,the review process is often significantly extended by FDA requests for additional information or clarification.The FDAreviews a BLA to determine,among other things,whether a product is safe,pure and potent and the facility in which it is manufactured,processed,packe

252、d,or held meets standards designed to assure the products continued safety,purity and potency.The FDA may convene anadvisory committee to provide clinical insight on application review questions.Before approving a BLA,the FDA will typically inspect thefacility or facilities where the product is manu

253、factured.The FDA will not approve an application unless it determines that the manufacturingprocesses and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product withinrequired specifications.Additionally,before approving a BLA,the FDA will typ

254、ically inspect one or more clinical sites to assure compliancewith GCP.If the FDA determines that the application,manufacturing process or manufacturing facilities are not acceptable,it will outlinethe deficiencies in the submission and often will request additional testing or information.Notwithsta

255、nding the submission of any requestedadditional information,the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval.After the FDA evaluates a BLA and conducts inspections of manufacturing facilities where the investigational product and/or its drugsub

256、stance will be produced,the FDA may issue an approval letter or a Complete Response letter.An approval letter authorizes commercialmarketing of the product with specific prescribing information for specific indications.A Complete Response letter will describe all of thedeficiencies that the FDA has

257、identified in the BLA,except that where the FDA determines that the data supporting the application areinadequate to support approval,the FDA may issue the Complete Response letter without first conducting required inspections,testingsubmitted product lots,and/or reviewing proposed labeling.In issui

258、ng the Complete Response letter,the FDA may recommend actions thatthe applicant might take to place the BLA in condition for approval,including requests for additional information or clarification.The FDAmay delay or refuse approval of a BLA if applicable regulatory criteria are not satisfied,requir

259、e additional testing or information and/orrequire post-marketing testing and surveillance to monitor safety or efficacy of a product.If regulatory approval of a product is granted,such approval will be granted for particular indications and may entail limitations on theindicated uses for which such

260、product may be marketed.For example,the FDA may approve the BLA with a Risk Evaluation andMitigation Strategy,or REMS,to ensure the benefits of the product outweigh its risks.A REMS is a safety strategy to manage a known orpotential serious risk associated with a product and to enable patients to ha

261、ve continued access to such medicines by managing their safe use,and could include medication guides,physician communication plans,or elements to assure safe use,such as restricted distribution methods,patient registries and other risk minimization tools.The FDA also may condition approval on,among

262、other things,changes to proposedlabeling or the development of adequate controls and specifications.Once approved,the FDA may withdraw the product approval ifcompliance with pre-and post-marketing requirements is not maintained or if problems occur after the product reaches the marketplace.TheFDA ma

263、y require one or more Phase 4 post-market trials and surveillance to further assess and monitor the products safety andeffectiveness after commercialization and may limit further marketing of the product based on the results of these post-marketing studies.Post-Approval RequirementsAny products manu

264、factured or distributed by us pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA,including,among other things,requirements relating to record-keeping,reporting of adverse experiences,periodic reporting,productsampling and distribution,and advertising and promotio

265、n of the product.After approval,most changes to the approved product,such asadding new indications or other labeling claims,are subject to prior FDA review and approval.There also are continuing user feerequirements,under which FDA assesses an annual program fee for each product identified in an app

266、roved BLA.Biologic manufacturersand their subcontractors are required to register their establishments with the FDA and certain state agencies and are subject to periodicunannounced inspections by the FDA and certain state agencies for compliance with cGMP,which impose certain procedural anddocument

267、ation requirements upon us and our third-party manufacturers.Changes to the manufacturing process are strictly regulated,and,depending on the significance of the change,may require prior FDA approval before being implemented.FDA regulations also requireinvestigation and correction of any deviations

268、from cGMP and impose reporting requirements upon us and any third-party manufacturersthat we may decide to use.Accordingly,manufacturers must continue to expend time,Table of Contents16money and effort in the area of production and quality control to maintain compliance with cGMP and other aspects o

269、f regulatorycompliance.The FDA may withdraw approval if compliance with regulatory requirements and standards is not maintained or if problems occur after theproduct reaches the market.Later discovery of previously unknown problems with a product,including adverse events of unanticipatedseverity or

270、frequency,or with manufacturing processes,or failure to comply with regulatory requirements,may result in revisions to theapproved labeling to add new safety information;imposition of post-market studies or clinical studies to assess new safety risks;orimposition of distribution restrictions or othe

271、r restrictions under a REMS program.Other potential consequences include,among otherthings:restrictions on the marketing or manufacturing of a product,complete withdrawal of the product from the market or productrecalls;fines,warning letters or holds on post-approval clinical studies;refusal of the

272、FDA to approve pending applications or supplements to approved applications,or suspension or revocation ofexisting product approvals;product seizure or detention,or refusal of the FDA to permit the import or export of products;orinjunctions or the imposition of civil or criminal penalties.The FDA cl

273、osely regulates the marketing,labeling,advertising and promotion of biologics.A company can make only those claims relatingto safety and efficacy,purity and potency that are approved by the FDA and in accordance with the provisions of the approved label.TheFDA and other agencies actively enforce the

274、 laws and regulations prohibiting the promotion of off-label uses.Failure to comply with theserequirements can result in,among other things,adverse publicity,warning letters,corrective advertising and potential civil and criminalpenalties.Physicians may prescribe legally available products for uses

275、that are not described in the products labeling and that differ fromthose tested by us and approved by the FDA.Such off-label uses are common across medical specialties.Physicians may believe that suchoff-label uses are the best treatment for many patients in varied circumstances.The FDA does not re

276、gulate the behavior of physicians in theirchoice of treatments.The FDA does,however,restrict manufacturers communications on the subject of off-label use of their products.Biosimilars and Reference Product ExclusivityThe Patient Protection and Affordable Care Act,as amended by the Health Care and Ed

277、ucation Reconciliation Act,or collectively,the ACA,signed into law in 2010,includes a subtitle called the Biologics Price Competition and Innovation Act of 2009,or BPCIA,which created anabbreviated approval pathway for biological products that are biosimilar to or interchangeable with an FDA-approve

278、d reference biologicalproduct.To date,a number of biosimilars have been licensed under the BPCIA,and numerous biosimilars have been approved in Europe.The FDA has issued several guidance documents outlining an approach to review and approval of biosimilars.Biosimilarity,which requires that there be

279、no clinically meaningful differences between the biological product and the reference product interms of safety,purity,and potency,can be shown through analytical studies,animal studies,and a clinical study or studies.Interchangeability requires that a product is biosimilar to the reference product

280、and the product must demonstrate that it can be expected toproduce the same clinical results as the reference product in any given patient and,for products that are administered multiple times to anindividual,the biologic and the reference biologic may be alternated or switched after one has been pr

281、eviously administered withoutincreasing safety risks or risks of diminished efficacy relative to exclusive use of the reference biologic.Complexities associated with thelarger,and often more complex,structures of biological products,as well as the processes by which such products are manufactured,po

282、sesignificant hurdles to implementation of the abbreviated approval pathway that are still being worked out by the FDA.Table of Contents17Under the BPCIA,an application for a biosimilar product may not be submitted to the FDA until four years following the date that thereference product was first li

283、censed by the FDA.In addition,the approval of a biosimilar product may not be made effective by the FDAuntil 12 years from the date on which the reference product was first licensed.During this 12-year period of exclusivity,another companymay still market a competing version of the reference product

284、 if the FDA approves a full BLA for the competing product containing thatapplicants own preclinical data and data from adequate and well-controlled clinical trials to demonstrate the safety,purity and potency of itsproduct.The BPCIA also created certain exclusivity periods for biosimilars approved a

285、s interchangeable products.Other U.S.Healthcare Laws and Compliance RequirementsAlthough we currently do not have any products on the market,our current and future arrangements with healthcare professionals,principalinvestigators,consultants,customers and third-party payors expose us to broadly appl

286、icable healthcare regulation and enforcement by thefederal government and the states and foreign governments in which we conduct our business.These laws include,without limitation,stateand federal anti-kickback,fraud and abuse,false claims,privacy and security and physician sunshine laws and regulat

287、ions.The federal Anti-Kickback Statute prohibits,among other things,any person or entity from knowingly and willfully offering,soliciting,receiving or providing remuneration,directly or indirectly,in cash or in kind,either to induce or award the referral of an individual,for anitem or service or the

288、 purchasing,recommending or ordering of a good or service,for which payment may be made under federal healthcareprograms such as the Medicare and Medicaid programs.The federal Anti-Kickback Statute is subject to evolving interpretations.In the past,the government has enforced the federal Anti-Kickba

289、ck Statute to reach large settlements with healthcare companies based on,in certaincases,sham consulting and other financial arrangements with physicians.Further,the Patient Protection and Affordable Care Act,asamended by the Health Care and Education Reconciliation Act,or collectively,the Affordabl

290、e Care Act,among other things,amends theintent requirement of the federal Anti-Kickback Statute and the criminal statutes governing healthcare fraud.A person or entity no longerneeds to have actual knowledge of these statutes or specific intent to violate them in order to commit a violation.In addit

291、ion,the AffordableCare Act provides that the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the civil False Claims Act or federal civil monetary penalties statute.A

292、dditionally,the federal false claims and civil monetary penalties laws,including the civil False Claims Act prohibit,among other things,knowingly presenting or causing the presentation of a false,fictitious or fraudulent claim for payment to the U.S.government,or making afalse statement to avoid,dec

293、rease,or conceal an obligation to pay money to the federal government.Actions under the civil False ClaimsAct may be brought by the Attorney General or as a qui tam action by a private individual in the name of the government.The federalgovernment has used the civil False Claims Act,and the accompan

294、ying threat of significant liability,in its investigation and prosecution ofpharmaceutical and biotechnology companies throughout the country,for example,in connection with the promotion of products forunapproved uses and other illegal sales and marketing practices.The federal Health Insurance Porta

295、bility and Accountability Act of 1996,or HIPAA,created additional federal criminal statutes thatprohibit,among other actions,knowingly and willfully executing,or attempting to execute,a scheme to defraud any healthcare benefitprogram,including private third-party payors,knowingly and willfully embez

296、zling or stealing from a healthcare benefit program,willfullyobstructing a criminal investigation of a healthcare offense,and knowingly and willfully falsifying,concealing or covering up a material factor making any materially false,fictitious or fraudulent statement in connection with the delivery

297、of or payment for healthcare benefits,itemsor services.HIPAA,as amended by the Health Information Technology for Economic and Clinical Health Act,or HITECH,and their implementingregulations,imposes requirements regarding the privacy and security of individually identifiable health information,includ

298、ing mandatorycontractual terms,for covered entities,or certain healthcare providers,health plans,and healthcare clearinghouses,and their businessassociates that provide services to the covered entity that involve individually identifiable health information and their subcontractors thatuse,disclose

299、or otherwise process individually identifiable health information.HITECH also increased the civil and criminal penalties thatmay be imposed against covered entities and business associates and gave state attorneys general new authority to file civil actions fordamages or injunctions in federal court

300、s to enforce HIPAA.Table of Contents18In addition,there has been a recent trend of increased federal and state regulation of payments made to physicians and other healthcareproviders.The Affordable Care Act,among other things,via the Physician Payments Sunshine Act,imposes annual reporting requireme

301、ntson certain manufacturers of drugs,devices,biologics,and medical supplies for which payment is available under Medicare,Medicaid,or theChildrens Health Insurance Program,with specific exceptions,for payments made by them to physicians(defined to include doctors,dentists,optometrists,podiatrists an

302、d chiropractors)and teaching hospitals,as well as ownership and investment interests held by physiciansand their immediate family members.Beginning in 2022,applicable manufacturers will also be required to report information related topayments and other transfers of value provided in the previous ye

303、ar to physician assistants,nurse practitioners,clinical nurse specialists,certified registered nurse anesthetists,and certified nurse midwives.Certain states also impose restrictions on pharmaceutical manufacturer marketing practices and/or require the tracking and reporting of gifts,compensation an

304、d other remuneration to physicians.Certain states and local governments require the registration of pharmaceutical salesrepresentatives.Additionally,analogous state and foreign laws and regulations,such as state anti-kickback and false claims laws,may applyto sales or marketing arrangements and clai

305、ms involving healthcare items or services reimbursed by non-governmental third-party payors,including private insurers.State laws may also apply that require pharmaceutical companies to comply with the pharmaceutical industrysvoluntary compliance guidelines and the relevant compliance guidance promu

306、lgated by the federal government or otherwise restrictpayments that may be made to healthcare providers or other potential referral sources.In addition,certain states require drug manufacturersto report information related to payments and other transfers of value to physicians and other healthcare p

307、roviders or marketing expendituresor drug pricing.In addition,state and local laws may require the registration of pharmaceutical sales representatives.We may also be subjectto state and foreign laws governing the privacy and security of health information in certain circumstances,many of which diff

308、er from eachother in significant ways and often are not preempted by HIPAA,thus complicating compliance efforts.The shifting commercial compliance environment and the need to build and maintain robust systems to comply with different complianceand/or reporting requirements in multiple jurisdictions

309、increase the possibility that a healthcare company may violate one or more of therequirements.If our operations are found to be in violation of any of such laws or any other governmental regulations that apply to us,wemay be subject to significant penalties,including,without limitation,civil,crimina

310、l and administrative penalties,damages,fines,disgorgement,additional reporting requirements and oversight if we become subject to a corporate integrity agreement or similar agreementto resolve allegations of non-compliance with these laws,the curtailment or restructuring of our operations,exclusion

311、from participation infederal and state healthcare programs and individual imprisonment,any of which could adversely affect our ability to operate our businessand our financial results.Healthcare ReformThe Affordable Care Act has had,and is expected to continue to have,a significant impact on the hea

312、lthcare industry.The Affordable CareAct was designed to expand coverage for the uninsured while at the same time containing overall healthcare costs.With regard topharmaceutical products,among other things,the Affordable Care Act expanded and increased industry rebates for drugs covered underMedicai

313、d programs and made changes to the coverage requirements under the Medicare prescription drug benefit.There have been judicial,Congressional and executive branch challenges to certain aspects of the Affordable Care Act,and we expect there will be additionalchallenges and amendments to the Affordable

314、 Care Act in the future.While Congress has not passed comprehensive repeal legislation,it hasenacted laws that modify certain provisions of the Affordable Care Act such as removing or delaying penalties,starting January 1,2019,fornot complying with the Affordable Care Acts individual mandate to carr

315、y health insurance,delaying the implementation of certainAffordable Care Act-mandated fees,and increasing the point-of-sale discount that is owed by pharmaceutical manufacturers who participatein Medicare Part D.Additionally,on June 17,2021 the U.S.Supreme Court dismissed a challenge on procedural g

316、rounds that argued theAffordable Care Act is unconstitutional in its entirety because the“individual mandate”was repealed by Congress.Thus,the AffordableCare Act will remain in effect in its current form.Further,prior to the U.S.Supreme Court ruling,on January 28,2021,President Bidenissued an execut

317、ive order that initiated a special enrollment period for purposes of obtaining health insurance coverage through theAffordable Care Act marketplace,which began on February 15,2021 and remained open through August 15,2021.The executive order alsoinstructed certain governmental agencies to review and

318、reconsider their existing policies and rules that limit access to healthcare,includingamong others,reexamining Medicaid demonstration projects and waiver programs that include workTable of Contents19requirements,and policies that create unnecessary barriers to obtaining access to health insurance co

319、verage through Medicaid or theAffordable Care Act.It is possible that the Affordable Care Act will be subject to judicial or Congressional challenges in the future.Accordingly,we continue to evaluate the effect that the Affordable Care Act has on our business.Other legislative changes have been prop

320、osed and adopted in the United States since the Affordable Care Act was enacted.For example,through the process created by the Budget Control Act of 2011,there are automatic reductions of Medicare payments to providers up to 2%per fiscal year,which went into effect in April 2013 and,due to subsequen

321、t legislative amendments,including the Infrastructure Investmentand Jobs Act,will remain in effect through 2031 unless additional Congressional action is taken.However,the novel coronavirus(“COVID-19”)relief legislation suspended the 2%Medicare sequester from May 1,2020 through December 31,2021.In J

322、anuary 2013,PresidentObama signed into law the American Taxpayer Relief Act of 2012,which,among other things,further reduced Medicare payments toseveral providers.Additionally,on March 11,2021,President Biden signed the American Rescue Plan Act of 2021 into law,whicheliminates the statutory Medicaid

323、 drug rebate cap,currently set at 100%of a drugs average manufacturer price,for single source andinnovator multiple source drugs,beginning January 1,2024.In addition,Congress is considering additional health reform measures as partof the budget reconciliation process.In addition,there has been heigh

324、tened governmental scrutiny recently over the manner in which drug manufacturers set prices for theirmarketed products,which have resulted in several Congressional inquiries and proposed and enacted federal and state legislation designedto,among other things,bring more transparency to product pricin

325、g,review the relationship between pricing and manufacturer patientprograms,and reform government program reimbursement methodologies for drug products.At the federal level,the Trump administrationused several means to propose or implement drug pricing reform,including through federal budget proposal

326、s,executive orders and policyinitiatives.For example,on July 24,2020 and September 13,2020,President Trump announced several executive orders related toprescription drug pricing that seek to implement several of the administrations proposals.The FDA also released a final rule on September24,2020 pro

327、viding guidance for states to build and submit importation plans for drugs from Canada.Further,on November 20,2020,theDepartment of Health and Human Services,or HHS,finalized a regulation removing safe harbor protection for price reductions frompharmaceutical manufacturers to plan sponsors under Par

328、t D,either directly or through pharmacy benefit managers,unless the pricereduction is required by law.The implementation of the rule has been delayed by the Biden administration from January 1,2022 to January1,2023 in response to ongoing litigation.The rule also creates a new safe harbor for price r

329、eductions reflected at the point-of-sale,as well asa safe harbor for certain fixed fee arrangements between pharmacy benefit managers and manufacturers,the implementation of which havealso been delayed until January 1,2023.In July 2021,the Biden administration released an executive order,“Promoting

330、Competition in theAmerican Economy,”with multiple provisions aimed at prescription drugs.In response to Bidens executive order,on September 9,2021,HHS released a Comprehensive Plan for Addressing High Drug Prices that outlines principles for drug pricing reform and sets out a varietyof potential leg

331、islative policies that Congress could pursue as well as potential administrative actions HHS can take to advance theseprinciples.No legislation or administrative actions have been finalized to implement these principles.In the coming years,additionallegislative and regulatory changes could be made t

332、o governmental health programs that could significantly impact pharmaceuticalcompanies and the success of our product candidates.At the state level,legislatures have increasingly passed legislation and implementedregulations designed to control pharmaceutical and biological product pricing,including

333、 price or patient reimbursement constraints,discounts,restrictions on certain product access and marketing cost disclosure and transparency measures,and,in some cases,designed toencourage importation from other countries and bulk purchasing.The Affordable Care Act,as well as other federal,state and foreignhealthcare reform measures that have been and may be adopted in the future,could harm our fut