UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31, 2026
OR
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number: 001-36554
Ocular Therapeutix, Inc.
(Exact name of registrant as specified in its charter)
Delaware | 20-5560161 |
(State or other jurisdiction of | (I.R.S. Employer |
incorporation or organization) | Identification Number) |
14 Crosby Drive, 3rd Floor | |
Bedford, MA | 01730 |
(Address of principal executive offices) | (Zip Code) |
(781) 357-4000
(Registrant’s 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 registered | ||
Common Stock, $0.0001 par value per share | OCUL | The Nasdaq Global Market |
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 for such shorter period that 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 (§232.405 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 emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☒ | Accelerated filer | ☐ |
Non-accelerated filer | ☐ | Smaller reporting company | ☐ |
Emerging growth company | ☐ |
If an emerging growth 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 standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of May 1, 2026, there were 218,960,358 shares of Common Stock, $0.0001 par value per share, outstanding.
Ocular Therapeutix, Inc.
INDEX
FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, contained in this Quarterly Report on Form 10-Q, including statements regarding our strategy, future operations, future financial position, future revenues, projected costs, prospects, plans and objectives of management, are forward-looking statements. The words “anticipate”, “believe”, “estimate”, “expect”, “intend”, “designed”, “may”, “might”, “plan”, “predict”, “project”, “target”, “potential”, “goal”, “will”, “would”, “could”, “should”, “continue” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.
The forward-looking statements in this Quarterly Report on Form 10-Q include, among other things, statements about:
| ● | our ongoing registrational clinical trials, including our two Phase 3 clinical trials of AXPAXLI for the treatment of wet age-related macular degeneration, or wet AMD, which we refer to as the SOL-1 and SOL-R trials; and our Phase 3 clinical trial of AXPAXLI for the treatment of non-proliferative diabetic retinopathy, or NPDR, which we refer to as the HELIOS-3 trial; and our long-term extension study for AXPAXLI for the treatment of wet AMD, which we refer to as the SOL-X trial; |
| ● | any additional clinical trials we might determine in the future to conduct for AXPAXLI or any other product candidate we determine to develop, including a potential second Phase 3 clinical trial of AXPAXLI for the treatment of NPDR, which we refer to as the HELIOS-2 trial, and any other clinical trials we might conduct for AXPAXLI; |
| ● | determining our next steps for our product candidate OTX-TIC for the treatment of patients with open-angle glaucoma, or OAG, or ocular hypertension, or OHT; |
| ● | our plans and strategies to develop and seek regulatory approval for and commercialize AXPAXLI, OTX-TIC and any other product candidates that we might develop based on our proprietary bioresorbable hydrogel-based formulation technology ELUTYX; |
| ● | our commercialization, marketing and manufacturing plans, capabilities and strategy, including our commercialization efforts for our product DEXTENZA; |
| ● | our ability to manufacture DEXTENZA and any of our product candidates, including AXPAXLI, in compliance with Current Good Manufacturing Practices and in sufficient quantities for our clinical trials and commercial use; |
| ● | the timing of and our ability to submit applications and obtain and maintain regulatory approvals for DEXTENZA and any of our product candidates, including AXPAXLI; |
| ● | our estimates regarding future revenue; expenses; the sufficiency of our cash resources; our ability to fund our operating expenses, debt service obligations and capital expenditure requirements; and our needs for additional financing; |
| ● | the potential for us to raise additional capital, including through equity offerings, debt financings, collaborations, strategic alliances, licensing arrangements, royalty agreements and marketing and distribution arrangements; |
| ● | the potential advantages of AXPAXLI and any of our other product candidates as well as DEXTENZA; |
| ● | the rate and degree of market acceptance and clinical utility of our products; |
| ● | our ability to secure and maintain reimbursement for our products as well as the associated procedures to insert, implant or inject our products; |
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| ● | our estimates regarding the market opportunity for AXPAXLI and any of our other product candidates as well as DEXTENZA; |
| ● | our license agreement and collaboration with AffaMed Therapeutics Limited under which we are collaborating on the development and commercialization of DEXTENZA and our product candidate OTX-TIC in mainland China, Taiwan, Hong Kong, Macau, South Korea, and the countries of the Association of Southeast Asian Nations; |
| ● | our capabilities and strategy, and the costs and timing of manufacturing, sales, marketing, distribution and other commercialization efforts with respect to DEXTENZA and any additional products for which we may obtain marketing approval in the future, including AXPAXLI; |
| ● | our intellectual property position; |
| ● | the impact of government laws and regulations; and |
| ● | our competitive position. |
We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. We have included important factors in the cautionary statements included in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2025, that was filed with the Securities and Exchange Commission, or the SEC, on February 5, 2026, in each case, particularly in the section captioned “Risk Factors,” that could cause actual results or events to differ materially from the forward-looking statements that we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, licensing agreements or investments we may make.
You should read this Quarterly Report on Form 10-Q and the documents that we have filed as exhibits to this Quarterly Report on Form 10-Q and our other periodic reports completely and with the understanding that our actual future results may be materially different from what we expect. The forward-looking statements included in this Quarterly Report on Form 10-Q are made as of the date of this Quarterly Report on Form 10-Q. We do not assume, and we expressly disclaim, any obligation or undertaking to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.
This Quarterly Report on Form 10-Q includes statistical and other industry and market data that we obtained from industry publications and research, surveys and studies conducted by third parties. All of the market data used in this Quarterly Report on Form 10-Q involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such data. While we believe that the information from these industry publications, surveys and studies is reliable, we have not independently verified such data. The industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of important factors, including those described in the section titled “Risk Factors.”
This Quarterly Report on Form 10-Q contains references to our trademarks and service marks and to those belonging to other entities. Solely for convenience, trademarks and trade names referred to in this Quarterly Report on Form 10-Q and the documents incorporated by reference herein may appear without the ® or ™ symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensor to these trademarks and trade names. We do not intend our use or display of other companies’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by, any other companies. AXPAXLI is a trade name which we use to refer to our OTX-TKI product candidate. The U.S. Food and Drug Administration, or FDA, has not approved AXPAXLI as a product name.
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PART I—FINANCIAL INFORMATION
Item 1. | Financial Statements. |
Ocular Therapeutix, Inc.
Condensed Consolidated Balance Sheets
(In thousands, except share and per share data)
(Unaudited)
March 31, | December 31, | |||||
2026 | 2025 | |||||
Assets | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | 666,699 | $ | 737,060 | ||
Accounts receivable, net | 24,347 | 30,650 | ||||
Inventory | 3,737 | 3,564 | ||||
Prepaid expenses and other current assets | 11,212 | 10,855 | ||||
Total current assets |
| 705,995 |
| 782,129 | ||
Property and equipment, net | 18,425 | 19,676 | ||||
Restricted cash | 1,614 | 1,614 | ||||
Operating lease assets | 6,495 | 4,638 | ||||
Total assets | $ | 732,529 | $ | 808,057 | ||
Liabilities and Stockholders’ Equity | ||||||
Current liabilities: | ||||||
Accounts payable | $ | 8,026 | $ | 4,154 | ||
Accrued expenses and other current liabilities | 36,487 | 43,835 | ||||
Operating lease liabilities | 3,170 | 2,817 | ||||
Total current liabilities |
| 47,683 |
| 50,806 | ||
Other liabilities: | ||||||
Operating lease liabilities, net of current portion | 4,230 | 2,815 | ||||
Derivative liability | 12,071 | 13,903 | ||||
Deferred revenue | 14,000 | 14,000 | ||||
Notes payable, net | 72,062 | 71,336 | ||||
Other non-current liabilities | 909 | 887 | ||||
Total liabilities |
| 150,955 |
| 153,747 | ||
Commitments and contingencies (Note 14) | ||||||
Stockholders’ equity: | ||||||
Preferred stock, $0.0001 par value; 5,000,000 shares authorized and no shares issued or outstanding at March 31, 2026 and December 31, 2025, respectively | ||||||
Common stock, $0.0001 par value; 400,000,000 and 400,000,000 shares authorized and 218,896,915 and 215,927,600 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively | 22 | 22 | ||||
Additional paid-in capital | 1,827,187 | 1,811,311 | ||||
Accumulated deficit | (1,245,635) | (1,157,023) | ||||
Total stockholders’ equity |
| 581,574 |
| 654,310 | ||
Total liabilities and stockholders’ equity | $ | 732,529 | $ | 808,057 | ||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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Ocular Therapeutix, Inc.
Condensed Consolidated Statements of Operations and Comprehensive Loss
(In thousands, except share and per share data)
(Unaudited)
Three Months Ended | |||||||
March 31, | |||||||
2026 | | 2025 | | ||||
Revenue: |
| ||||||
Product revenue, net | $ | 10,785 | $ | 10,634 | |||
Collaboration revenue | — | 64 | |||||
Total revenue, net | 10,785 |
| 10,698 | ||||
Costs and operating expenses: | |||||||
Cost of product revenue | 1,329 | 1,262 | |||||
Research and development | 66,213 | 42,857 | |||||
Selling and marketing | 16,577 | 14,148 | |||||
General and administrative | 20,006 | 16,348 | |||||
Total costs and operating expenses | 104,125 |
| 74,615 | ||||
Loss from operations | (93,340) |
| (63,917) | ||||
Other income (expense): | |||||||
Interest income | 6,050 | 3,826 | |||||
Interest expense | (2,777) | (2,984) | |||||
Change in fair value of derivative liabilities | 1,455 | (978) | |||||
Total other income (expense), net | 4,728 |
| (136) | ||||
Net loss | $ | (88,612) | $ | (64,053) | |||
Net loss per share, basic | $ | (0.40) | $ | (0.38) | |||
Weighted average common shares outstanding, basic |
| 224,099,410 |
| 169,396,989 | |||
Net loss per share, diluted | $ | (0.40) | $ | (0.38) | |||
Weighted average common shares outstanding, diluted | 224,099,410 | 169,396,989 | |||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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Ocular Therapeutix, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Three Months Ended | ||||||
March 31, | ||||||
| 2026 | | 2025 | |||
Cash flows from operating activities: |
|
| | |||
Net loss | $ | (88,612) | $ | (64,053) | ||
Adjustments to reconcile net loss to net cash used in operating activities |
|
| ||||
Stock-based compensation expense |
| 15,582 |
| 10,456 | ||
Non-cash interest expense |
| 1,381 |
| 1,436 | ||
Change in fair value of derivative liabilities | (1,455) | 978 | ||||
Depreciation and amortization expense |
| 1,283 |
| 981 | ||
Loss on disposal of items of property and equipment | 4,866 | — | ||||
Changes in operating assets and liabilities: | ||||||
Accounts receivable, net |
| 6,303 |
| 7,167 | ||
Prepaid expenses and other current assets |
| (357) |
| 3,934 | ||
Inventory |
| (173) |
| (229) | ||
Accounts payable |
| 3,719 |
| 7 | ||
Operating lease assets | (1,857) | 117 | ||||
Accrued expenses |
| (8,441) |
| (5,145) | ||
Deferred revenue | — | (64) | ||||
Operating lease liabilities |
| 1,768 |
| (256) | ||
Net cash used in operating activities |
| (65,993) |
| (44,671) | ||
Cash flows from investing activities: |
| |
| |||
Purchases of property and equipment |
| (4,662) |
| (1,933) | ||
Net cash used in investing activities |
| (4,662) |
| (1,933) | ||
Cash flows from financing activities: |
| |
| |||
Proceeds from exercise of stock options |
| 294 |
| 4,183 | ||
Net cash provided by financing activities |
| 294 |
| 4,183 | ||
Net (decrease) increase in cash, cash equivalents and restricted cash |
| (70,361) |
| (42,421) | ||
Cash, cash equivalents and restricted cash at beginning of period |
| 738,674 |
| 393,716 | ||
Cash, cash equivalents and restricted cash at end of period | $ | 668,313 | $ | 351,295 | ||
Supplemental disclosure of cash flow information: |
| |
| |||
Cash paid for interest | $ | 2,189 | $ | 2,140 | ||
Supplemental disclosure of non-cash investing and financing activities: |
| |
| |||
Change in right-of-use asset as a result of new, modified, and terminated leases | $ | 2,512 | $ | — | ||
Additions to property and equipment included in accounts payable and accrued expenses | $ | 1,327 | $ | 564 | ||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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Ocular Therapeutix, Inc.
Condensed Consolidated Statements of Stockholders’ Equity
(In thousands, except share data)
(Unaudited)
Additional | Total | |||||||||||||
Common Stock | Paid-in | Accumulated | Stockholders’ | |||||||||||
Shares | | Par Value | | Capital | | Deficit | | Equity | ||||||
Balances at December 31, 2025 | 215,927,600 | $ | 22 | $ | 1,811,311 | $ | (1,157,023) | $ | 654,310 | |||||
Issuance of common stock upon exercise of stock options | 50,379 |
| — |
| 294 |
| — |
| 294 | |||||
Issuance of common stock upon vesting of restricted stock units | 1,169,636 |
| — |
| — |
| — |
| — | |||||
Issuance of common stock upon exercise of pre-funded warrants | 1,749,300 | — | — | — | — | |||||||||
Stock-based compensation expense | — |
| — |
| 15,582 |
| — |
| 15,582 | |||||
Net loss | — |
| — |
| — |
| (88,612) |
| (88,612) | |||||
Balances at March 31, 2026 | 218,896,915 | $ | 22 | $ | 1,827,187 | $ | (1,245,635) | $ | 581,574 | |||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
6
Ocular Therapeutix, Inc.
Condensed Consolidated Statements of Stockholders’ Equity
(In thousands, except share data)
(Unaudited)
Additional | Total | |||||||||||||
Common Stock | Paid-in | Accumulated | Stockholders’ | |||||||||||
Shares | | Par Value | | Capital | | Deficit | | Equity | ||||||
Balances at December 31, 2024 | 157,749,490 | $ | 16 | $ | 1,206,412 | $ | (891,084) | $ | 315,344 | |||||
Issuance of common stock upon exercise of stock options | 880,115 |
| — |
| 4,183 |
| — |
| 4,183 | |||||
Issuance of common stock upon vesting of restricted stock units | 632,419 |
| — |
| — |
| — |
| — | |||||
Stock-based compensation expense | — |
| — |
| 10,456 |
| — |
| 10,456 | |||||
Net loss | — |
| — |
| — |
| (64,053) |
| (64,053) | |||||
Balances at March 31, 2025 | 159,262,024 | $ | 16 | $ | 1,221,051 | $ | (955,137) | $ | 265,930 | |||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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Ocular Therapeutix, Inc.
Notes to the Condensed Consolidated Financial Statements
(Amounts in thousands, except share and per share data)
(Unaudited)
1. Nature of the Business
Ocular Therapeutix, Inc. (the “Company”) was incorporated on September 12, 2006 under the laws of the State of Delaware. The Company is an integrated biopharmaceutical company committed to redefining the retina experience. AXPAXLI (also known as OTX-TKI), the Company’s investigational, bioresorbable, intravitreal hydrogel incorporating axitinib, a small molecule, multi-target, tyrosine kinase inhibitor with anti-angiogenic properties. AXPAXLI is currently being evaluated in a Phase 3 registrational program for wet age-related macular degeneration (“wet AMD”), and a Phase 3 registrational program for diabetic retinal disease, including non-proliferative diabetic retinopathy (“NPDR”).
The Company also leverages the ELUTYX technology in its commercial product DEXTENZA, a corticosteroid approved by the U.S. Food and Drug Administration (“FDA”) for the treatment of ocular inflammation and pain following ophthalmic surgery in adults and pediatric patients and for the treatment of ocular itching associated with allergic conjunctivitis in adults and pediatric patients aged two years or older, and in its investigational product candidate OTX-TIC, which is a travoprost intracameral hydrogel for which the Company completed a Phase 2 clinical trial for the treatment of open-angle glaucoma (“OAG”) or ocular hypertension (“OHT”). The Company is evaluating next steps for the OTX-TIC program.
The Company is subject to risks common to companies in the biotechnology industry including, but not limited to, new technological innovations, protection of proprietary technology, dependence on key personnel, dependence on specific programs, compliance with government regulations, regulatory approval and compliance, reimbursement, uncertainty of market acceptance of products and the need to obtain additional financing. Product candidates currently under development will require significant additional research and development efforts, including extensive preclinical and clinical testing and regulatory approval, prior to commercialization. Approved products will require significant sales, marketing and distribution support. There can be no assurance that the Company’s research and development will be successfully completed, that adequate protection for the Company’s intellectual property will be obtained, that any products developed will obtain necessary government regulatory approval and adequate reimbursement or that any approved products will be commercially viable. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will generate significant revenue from product sales. The Company operates in an environment of rapidly changing technology and substantial competition from pharmaceutical and biotechnology companies. In addition, the Company is dependent upon the services of its employees and consultants. The Company may not be able to generate significant revenue from sales of any product for several years, if at all. Accordingly, the Company will need to obtain additional capital to finance its operations.
The Company has incurred losses and negative cash flows from operations since its inception, and the Company expects to continue to generate operating losses and negative cash flows from operations in the foreseeable future. As of March 31, 2026, the Company had an accumulated deficit of $1,245,635. Based on its current operating plan which includes estimates of anticipated cash inflows from product sales and cash outflows from operating expenses and capital expenditures, the Company believes that its existing cash and cash equivalents of $666,699 as of March 31, 2026, will enable it to fund its planned operating expenses, debt service obligations and capital expenditures at least through the next 12 months from the issuance date of these unaudited condensed consolidated financial statements while the Company observes a minimum liquidity covenant of $20,000 in its credit facility (Note 7).
The future viability of the Company is dependent on the Company’s ability to generate cash flows from the sales of the Company’s product candidates, such as AXPAXLI, if and as approved, and the sales of DEXTENZA, and to raise additional capital to finance its operations. The Company will need to finance its operations through public or private securities offerings, debt financings, collaborations, strategic alliances, licensing agreements, royalty agreements, or marketing and distribution agreements. Although the Company has been successful in raising capital in the past, there is no assurance that it will be successful in obtaining such additional financing on terms acceptable to the Company, if at all. If the Company is unable to obtain funding on a timely basis, in sufficient amounts, or at all, the Company could be forced to delay, reduce or eliminate some or all of its research and development programs for product candidates,
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product portfolio expansion or commercialization efforts, any of which could adversely affect its business prospects, or the Company may be unable to continue operations.
2. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The significant accounting policies used in preparation of these unaudited condensed consolidated financial statements are consistent with those described in Note 2 — Summary of Significant Accounting Policies in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, filed with the Securities and Exchange Commission (“SEC”) on February 5, 2026. The following information updates, and should be read in conjunction with, the significant accounting policies described in Note 2 — Summary of Significant Accounting Policies in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 5, 2026.
Use of Estimates
The preparation of these unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of these unaudited condensed consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods. Significant estimates and assumptions reflected in these unaudited condensed consolidated financial statements include, but are not limited to, the measurement and recognition of reserves for variable consideration related to product sales, revenue recognition related to a collaboration agreement that contains multiple promises, the fair value of derivatives, stock-based compensation, and realizability of net deferred tax assets. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Actual results could differ from the Company’s estimates.
Unaudited Interim Financial Information
The balance sheet at December 31, 2025 was derived from the Company’s audited consolidated financial statements but does not include all disclosures required by GAAP. The accompanying unaudited condensed consolidated financial statements as of March 31, 2026 and for the three months ended March 31, 2026 and 2025 have been prepared by the Company, pursuant to the rules and regulations of the SEC for interim financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements and the notes thereto for the year ended December 31, 2025 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 5, 2026. In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of the Company’s financial position as of March 31, 2026, the results of operations for the three months ended March 31, 2026 and 2025, and cash flows for the three months ended March 31, 2026 and 2025 have been made. The results of operations for the three months ended March 31, 2026 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2026.
Recently Issued Accounting Pronouncements
In November 2024, the FASB issued ASU No. 2024-03 Disaggregation of Income Statement Expenses. The new standard requires disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses and is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. The Company is currently evaluating the impact of the amendment but does not expect the adoption to have a significant impact on the disclosures related to its consolidated financial statements.
In September 2025, the FASB issued ASU No. 2025-06 Intangibles – Goodwill and Other – Internal-Use Software. The amendments change (i) the criteria regarding the timing of the capitalization of costs for internal-use software and
9
(ii) the accounting for website development costs. The amendments are effective for annual periods beginning after December 15, 2027. The Company is currently evaluating the impact of the amendments on its consolidated financial statements.
In September 2025, the FASB issued ASU No. 2025-07 Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract (“ASU 2025-07”). The amendments provide for a new scope exception to the derivatives guidance for certain contracts with variables based on the operations or activities specific to one of the parties to the contract, and also clarifies that share-based noncash consideration received from a customer as consideration for the transfer of goods or services in a revenue contract is subject to the revenue guidance and not the financial instruments guidance unless and until the company’s right to receive or retain the share-based noncash consideration is unconditional as defined in ASU 2025-07. The amendments are effective for annual reporting periods beginning after December 15, 2026, including interim periods within those fiscal years. Early adoption is permitted. The Company does not expect the adoption of the amendments to have a significant impact on its consolidated financial statements.
Recently Adopted Accounting Pronouncements
In July 2025, the FASB issued ASU No. 2025-05 Financial Instruments – Credit Losses. For public business entities, the amendments provide for the election of a practical expedient to be used in developing reasonable and supportable forecasts as part of estimating future expected credit losses for current accounts receivable and current contract assets. The amendments are effective for annual reporting periods beginning after December 31, 2025, including interim periods within those fiscal years. The Company adopted ASU No. 2025-05 in the first quarter of 2026 with no significant impact on its consolidated financial statements.
3. Licensing Agreements and Deferred Revenue
Incept License Agreement (in-licensing)
On September 13, 2018, the Company entered into a second amended and restated license agreement with Incept, LLC (“Incept”) to use and develop certain intellectual property (the “Incept License Agreement”). Under the Incept License Agreement, as amended and restated, the Company was granted a worldwide, perpetual, exclusive license to use specific Incept technology to develop and commercialize products that are delivered to or around the human eye for diagnostic, therapeutic or prophylactic purposes relating to ophthalmic diseases or conditions. The Company is obligated to pay low single-digit royalties on net sales of commercial products developed using the licensed technology, commencing with the date of the first commercial sale of such products and until the expiration of the last to expire of the patents covered by the license.
The terms and conditions of the Incept License Agreement are described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 5, 2026.
Royalties paid under the Incept License Agreement related to product sales (the “Incept Royalties”) were $397 and $511 for the three months ended March 31, 2026 and 2025, respectively. The Incept Royalties are charged to cost of product revenue when accrued.
AffaMed License Agreement (out-licensing)
On October 29, 2020, the Company entered into a license agreement (“AffaMed License Agreement”) with AffaMed Therapeutics Limited (“AffaMed”) for the development and commercialization of the Company’s DEXTENZA product regarding ocular inflammation and pain following cataract surgery and allergic conjunctivitis and for the Company’s OTX-TIC product candidate (collectively, the “AffaMed Licensed Products”) regarding OAG or OHT, in each case in mainland China, Taiwan, Hong Kong, Macau, South Korea, and the countries of the Association of Southeast Asian Nations. The Company retains development and commercialization rights for the AffaMed Licensed Products in the rest of the world.
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The terms and conditions of the AffaMed License Agreement are described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 5, 2026.
As of June 30, 2025, the Company had recognized the full amount of the transaction price that was allocated to the performance obligation regarding the conduct of a Phase 2 clinical trial of OTX-TIC (the “Phase 2 Clinical Trial of OTX-TIC performance obligation”) as collaboration revenue, as this performance obligation is fully satisfied. The remaining deferred revenue balance represents payments related to initial upfront payments and regulatory milestones for which the performance obligation has not been fully satisfied. Accordingly, no collaboration revenue was recognized for the three months ended March 31, 2026. The Company recognized collaboration revenue of $64 for the three months ended March 31, 2025.
Deferred revenue activity for the three months ended March 31, 2026 was as follows:
| Deferred Revenue | ||
Deferred revenue at December 31, 2025 | $ | 14,000 | |
Amounts recognized into revenue | |||
Deferred revenue at March 31, 2026 | $ | 14,000 | |
4. Cash Equivalents and Restricted Cash
The Company’s unaudited condensed consolidated statements of cash flows include restricted cash with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on such statements. A reconciliation of the cash, cash equivalents, and restricted cash reported within the balance sheets that sum to the total of the same amounts shown in the unaudited condensed consolidated statement of cash flows is as follows:
The Company's restricted cash as of March 31, 2026 consisted of $1,500 in a collateral money market fund and $114 for a letter of credit, both established in connection with the Company's real estate leases.
5. Inventory
Inventory consisted of the following:
March 31, | December 31, | |||||
| 2026 | | 2025 | |||
Raw materials | $ | 287 | $ | 202 | ||
Work-in-process | 1,242 | 1,721 | ||||
Finished goods |
| 2,208 |
| 1,641 | ||
$ | 3,737 | $ | 3,564 | |||
6. Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consisted of the following:
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7. Financial Liabilities
Barings Credit Agreement
On August 2, 2023 (the “Closing Date”), the Company entered into a credit and security agreement (the “Barings Credit Agreement”) with Barings Finance LLC (“Barings”), as administrative agent, and the lenders party thereto, providing for a secured term loan facility for the Company (the “Barings Credit Facility”) in the aggregate principal amount of $82,474 (the “Total Credit Facility Amount”). The Company borrowed the full amount of $82,474 at closing and received proceeds of $77,290, after the application of an original issue discount and fees. Indebtedness under the Barings Credit Facility matures on the six-year anniversary of the Closing Date. Indebtedness under the Barings Credit Facility incurs interest based on the Secured Overnight Financing Rate (“SOFR”), subject to a minimum 1.50% floor, 6.75%. The Company is obligated to make interest payments on its indebtedness under the Barings Credit Facility on a monthly basis, commencing on the Closing Date; to pay annual administration fees; and to pay, on the maturity date, any principal and accrued interest that remains outstanding as of such date. In addition, the Company is obligated to pay a fee in an amount equal to the Total Credit Facility Amount, which amount shall be reduced by the total amount of interest and principal prepayment fees paid under the Barings Credit Agreement (such fee, the “Barings Royalty Fee”).
The Company is required to pay the Barings Royalty Fee in installments to Barings, for the benefit of the lenders, on a quarterly basis in an amount equal to three and one-half percent (3.5%) of the net sales of DEXTENZA occurring during such quarter, subject to the terms, conditions and limitations specified in the Barings Credit Agreement, until the Barings Royalty Fee is paid in full. The Barings Royalty Fee is due and payable upon a change of control of the Company. The Company may, at its option, prepay any or all of the Barings Royalty Fee at any time without penalty. In connection with the Barings Credit Agreement, the Company granted the lenders thereto a first-priority security interest in all assets of the Company, including its intellectual property, subject to certain agreed-upon exceptions. The Barings Credit Agreement includes customary affirmative and negative covenants and requires the Company to maintain a minimum liquidity amount of $20,000.
The Company has determined that the embedded obligation to pay the Barings Royalty Fee (the “Barings Royalty Fee Obligation”) is required to be separated from the Barings Credit Facility and accounted for as a freestanding derivative instrument subject to derivative accounting. The allocation of proceeds to the Barings Royalty Fee Obligation resulted in a discount on the Barings Credit Facility. The Company is amortizing the discount to interest expense over the term of the Barings Credit Facility using the effective interest method. Accrued or paid Barings Royalty Fees are included in the change in fair value of derivative liabilities on the condensed consolidated statements of operations and comprehensive loss (Note 9).
A summary of the Barings Credit Facility at March 31, 2026 and December 31, 2025 is as follows:
March 31, | December 31, | |||||
2026 | | 2025 | ||||
Barings Credit Facility | $ | 82,474 | 82,474 | |||
Less: unamortized discount | (10,412) | (11,138) | ||||
Total | $ | 72,062 | 71,336 | |||
As of March 31, 2026, the full principal for the Barings Credit Facility of $82,474 was due for repayment in 2029.
8. Derivative Liability
Barings Credit Agreement
The Barings Credit Agreement (Note 7) contains the embedded Barings Royalty Fee Obligation, which meets the criteria to be bifurcated and accounted for separately from the Barings Credit Facility (the “Royalty Fee Derivative Liability”). The Royalty Fee Derivative Liability was recorded at fair value upon the entering into the Barings Credit Facility and is subsequently remeasured to fair value at each reporting period. The Royalty Fee Derivative Liability was initially valued and is remeasured using a “with-and-without” method. The “with-and-without” methodology involves valuing the whole instrument on an as-is basis with the embedded Barings Royalty Fee Obligation and then valuing the
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instrument without the embedded Barings Royalty Fee Obligation. Royalty payments are estimated using a Monte Carlo simulation. Refer to Note 9 for details regarding the determination of fair value.
A roll-forward of the Royalty Fee Derivative Liability is as follows:
As of | |||
Balance at December 31, 2025 | $ | 13,903 | |
Change in fair value | (1,832) | ||
Balance at March 31, 2026 | $ | 12,071 | |
9. Risks and Fair Value
Concentration of Credit Risk and of Significant Suppliers and Customers
Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. The Company has its cash and cash equivalents balances at three accredited financial institutions, in amounts that exceed federally insured limits. The Company does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships.
The Company is dependent on a small number of third-party manufacturers to supply products for research and development activities in its preclinical and clinical programs and for sales of its products. The Company’s development programs as well as revenue from future product sales could be adversely affected by a significant interruption in the supply of any of the components of these products.
Three specialty distributor customers accounted for the following percentages of the Company’s total revenue:
Three Months Ended | |||||||
March 31, | |||||||
2026 | 2025 | | |||||
Customer 1 | 38 | % | 39 | % | |||
Customer 2 | 28 | 24 | |||||
Customer 3 | 7 | 8 | |||||
Three specialty distributor customers accounted for the following percentages of the Company’s accounts receivable, net:
As of | |||||||
March 31, | December 31, | ||||||
2026 | 2025 | ||||||
Customer 1 | 44 | % | 47 | % | |||
Customer 2 | 28 | 25 | |||||
Customer 3 | 9 | 10 | |||||
Change in Fair Value of Derivative Liabilities
Other income (expenses) from the change in the fair values of derivative liabilities as presented on the Company’s consolidated statements of operations and comprehensive loss includes the following:
Three Months Ended | |||||||
March 31, | |||||||
2026 | | 2025 | | ||||
1,832 | (606) | ||||||
Barings Royalty Fee | (377) | (372) | |||||
Total | $ | 1,455 | $ | (978) | |||
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Fair Value of Financial Assets and Liabilities
The following tables present information about the Company’s financial assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2026 and December 31, 2025 and indicate the level of the fair value hierarchy utilized to determine such fair value:
Fair Value Measurements as of | ||||||||||||
March 31, 2026 Using: | ||||||||||||
| Level 1 | | Level 2 | | Level 3 | | Total | |||||
Assets: |
| |
| |
| |
| | ||||
Cash equivalents: |
| |
| |
| |
| | ||||
Money market funds | $ | 650,297 | $ | — | $ | — | $ | 650,297 | ||||
Liability: | ||||||||||||
$ | — | $ | — | $ | 12,071 | $ | 12,071 | |||||
Fair Value Measurements as of | ||||||||||||
December 31, 2025 Using: | ||||||||||||
| Level 1 | | Level 2 | | Level 3 | | Total | |||||
Assets: |
| |
| |
| |
| | ||||
Cash equivalents: |
| |
| |
| |
| | ||||
Money market funds | $ | 722,002 | $ | — | $ | — | $ | 722,002 | ||||
Liability: |
| |
| |
| |
| | ||||
$ | — | $ | — | $ | 13,903 | $ | 13,903 | |||||
Barings Credit Agreement and Royalty Fee Derivative Liability
At March 31, 2026, the Barings Credit Facility, net of the Royalty Fee Derivative Liability, was carried at amortized cost totaling $72,778, comprised of the $72,062 non-current liability (Note 7) and $716 accrued interest (Note 6). The estimated fair value of the Barings Credit Facility, without the Royalty Fee Derivative Liability, was $77,769 at March 31, 2026. At December 31, 2025, the Barings Credit Facility, net of the Royalty Fee Derivative Liability, was carried at amortized cost totaling $72,090, comprised of the $71,336 non-current liability (Note 7) and $754 accrued interest (Note 6). The estimated fair value of the Barings Credit Facility, without the Royalty Fee Derivative Liability, was $78,940 at December 31, 2025. The fair value of the Royalty Fee Derivative Liability is estimated using a Monte Carlo simulation. The use of this approach requires the use of Level 3 unobservable inputs. The main inputs when determining the fair value of the Royalty Fee Derivative Liability are the amount and timing of the expected future revenue of the Company, the estimated volatility of these revenues, and the discount rate corresponding to the risk of revenue. The estimated fair value presented is not necessarily indicative of an amount that could be realized in a current market exchange. The use of alternative inputs and estimation methodologies could have a material effect on these estimates of fair value.
The main inputs to valuing the Royalty Fee Derivative Liability are as follows:
As of | |||||||
March 31, | December 31, | ||||||
2026 | 2025 | ||||||
Revenue volatility | 65.5 | % | 62.0 | % | |||
Revenue discount rate | 14.3 | % | 14.0 | % | |||
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10. Equity
In February 2024, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with certain institutional accredited investors (the “Investors”), pursuant to which the Company issued and sold to the Investors in a private placement an aggregate of 32,413,560 shares of the Company’s common stock, par value $0.0001 per share (the “Shares”), at a price of $7.52 per share, and, to certain Investors in lieu of Shares, pre-funded warrants to purchase 10,805,957 shares of the Company’s common stock (the “Pre-Funded Warrants”), at a price of $7.519 per Pre-Funded Warrant (the “2024 Private Placement”). Each Pre-Funded Warrant issued in the 2024 Private Placement that remains outstanding has an exercise price of $0.001 per share, is currently exercisable and will remain exercisable until the Pre-Funded Warrant is exercised in full. During the three months ended March 31, 2026, Pre-Funded Warrants to purchase 1,749,453 shares of the Company’s common stock were exercised via cashless exercise for 1,749,300 shares of the Company’s common stock. As of March 31, 2026, 5,818,592 Pre-Funded Warrants remained outstanding. There were no exercises of Pre-Funded Warrants during the three months ended March 31, 2025.
11. Stock-Based Awards
For the three months ended March 31, 2026, the Company had three stock-based compensation plans under which it was able to grant stock-based awards, the 2021 Stock Incentive Plan, as amended (the “2021 Plan”), the 2019 Inducement Stock Incentive Plan, as amended (the “2019 Inducement Plan”), and the Amended and Restated 2014 Employee Stock Purchase Plan (the “ESPP”) (collectively, the “Stock Plans”). The 2021 Plan and the 2019 Inducement Plan provide for the grant of non-statutory stock options, restricted stock awards, restricted stock units (“RSUs”), performance stock units (“PSUs”), stock appreciation rights and other stock-based awards. The 2021 Plan also provides for the grant of incentive stock options.
The terms and conditions of the Stock Plans are described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 5, 2026.
As of March 31, 2026, 1,647,820, 1,094,395, and 2,183,378 shares of common stock remained available for issuance under the 2021 Plan, the 2019 Inducement Plan, and the ESPP, respectively.
Stock options, RSUs and PSUs
During the three months ended March 31, 2026, the Company granted options to purchase 4,940,029 shares of common stock at a weighted exercise price of $11.68 per share. Of these, options to purchase 4,450,004 and 490,025 shares of common stock were granted under the 2021 Plan and 2019 Inducement Plan, respectively.
During the three months ended March 31, 2026, the Company granted 1,638,068 RSUs. Of these, 1,477,493 and 160,575 were granted under the 2021 Plan and 2019 Inducement Plan, respectively.
On February 11, 2025, the Company granted 1,500,000 PSUs to its Executive Chairman, President and Chief Executive Officer under the 2021 Plan. Each PSU is settleable for one share of common stock upon vesting. The PSUs are allocated equally across four tranches, which can be earned during a five-year performance period commencing on the grant date (the “PSU Performance Period”), if the Company’s consecutive 60-day closing stock price average meets or exceeds per share price hurdles of $15.00, $20.00, $25.00 and $30.00, as applicable. All PSUs are subject to a service condition. The PSUs earned during the first three years of the PSU Performance Period are subject to additional service-based vesting requirements through February 11, 2028.
On February 11, 2025, the Company granted 2,750,000 performance stock options to the Company’s Executive Chairman, President and Chief Executive Officer under the 2021 Plan (the “Performance Option Award”). The Performance Option Award was contingent upon the approval by the Company’s stockholders of Amendment No. 4 to the 2021 Plan. The stockholders of the Company approved Amendment No. 4 to the 2021 Plan on June 11, 2025. In accordance with the guidance of Accounting Standards Codification Topic 718 Compensation—Stock Compensation, the Performance Option Award was deemed granted for financial accounting purposes as of June 11, 2025 when shareholder approval was obtained. The Performance Option Award is allocated equally across four tranches, which can be earned during a five-year performance period commencing on February 11, 2025 (the “Option Award Performance Period”), if the Company’s consecutive 60-day closing stock price average meets or exceeds per share price hurdles of $15.00,
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$20.00, $25.00 and $30.00, as applicable. All performance stock options are subject to a service condition. The performance stock options earned during the first three years of the Option Award Performance Period are subject to additional service-based vesting requirements through February 11, 2028.
The fair value of each tranche of the PSUs and each tranche of the Performance Option Award was estimated using a Monte Carlo simulation. The main inputs to valuing each tranche include the risk-free interest rate, expected volatility, the contractual term of five years, and no expected dividend yield. The requisite service period for each tranche was derived from the Monte Carlo simulation, taking into account the three-year minimum service requirement.
During the three months ended March 31, 2026, 419,676 stock options and 52,466 RSUs expired or were forfeited.
Stock-based Compensation
The Company recorded stock-based compensation expense related to stock options, RSUs and PSUs in the following expense categories of its unaudited condensed consolidated statements of operations and comprehensive loss:
Three Months Ended | |||||||
March 31, | |||||||
2026 | | 2025 | | ||||
Research and development | $ | 5,457 | $ | 3,018 | |||
Selling and marketing |
| 2,237 |
| 1,177 | |||
General and administrative |
| 7,888 |
| 6,261 | |||
$ | 15,582 | $ | 10,456 | ||||
As of March 31, 2026, the Company had an aggregate of $115,175 of unrecognized stock-based compensation cost, which is expected to be recognized over a weighted average period of 2.62 years.
12. Net Loss Per Share
Basic net loss per share was calculated as follows for the three months ended March 31, 2026 and 2025:
For the three months ended March 31, 2026 and 2025, respectively, there was no dilutive impact from potentially issuable common shares. Therefore, diluted net loss per share was the same as basic net loss per share. As of March 31, 2026 and March 31, 2025, 5,818,592 and 10,805,957, respectively, outstanding Pre-Funded Warrants (Note 10) are included in the calculation of basic and diluted net loss per share.
The Company excluded the following potentially issuable common shares, outstanding as of March 31, 2026 and 2025, respectively, from the computation of diluted net loss per share for the three months ended March 31, 2026 and 2025, respectively, because they had an anti-dilutive impact:
Three Months Ended | |||||||
March 31, | |||||||
2026 | | 2025 | | ||||
Options to purchase common stock | 26,357,791 | 21,182,163 | |||||
RSUs | 4,775,337 | 4,968,304 | |||||
PSUs | 1,500,000 | 1,500,000 | |||||
32,633,128 | 27,650,467 | ||||||
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13. Segment Reporting
The Company operates as a single operating segment. Its operations consist of developing and commercializing innovative therapies for retinal diseases and other eye conditions based on its ELUTYX proprietary bioresorbable hydrogel-based formulation technology.
Resources are allocated and performance is assessed by the Company’s Chief Executive Officer, who the Company has determined to be the Company’s Chief Operating Decision Maker (“CODM”).
The accounting policies for the Company’s one segment are the same as those described in Note 2. The CODM evaluates the performance of its one segment and allocates resources based on Net Loss.
The following table provides information about the Company’s single segment:
| (a) | excluding stock-based compensation, depreciation, and facilities expenses |
| (b) | excluding stock-based compensation and depreciation |
14. Commitments and Contingencies
Legal Proceedings
EyePoint Litigation
On March 20, 2026, plaintiff EyePoint, Inc. filed a lawsuit against us in Middlesex County Superior Court of Massachusetts. The plaintiff alleges that the Company has made certain false and defamatory statements about EyePoint and its DURAVYU product candidate. The complaint asserts counts of (1) defamation; (2) commercial disparagement; (3) unfair or deceptive practices in violation of Massachusetts General Laws c. 93A, §§ 2, 11; and (4) tortious interference with advantageous business relations. The plaintiff is seeking, among other things, injunctive relief, damages, and attorneys’ fees.
On March 23, 2026, EyePoint filed a Motion for Temporary Restraining Order and Preliminary Injunction, seeking, among other things, to enjoin the Company from disseminating allegedly false and misleading statements. On April 13, 2026, the court denied the plaintiff’s motion for temporary restraining order. A hearing on the plaintiff’s motion for preliminary injunction is scheduled to be held on May 5, 2026.
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The Company has assessed and evaluated the matter under ASC 450, Contingencies, and, based on the current assessment, has determined no accrual associated with the matter has been incurred as of March 31, 2026.
Indemnification Agreements
In the ordinary course of business, the Company enters into agreements that may include indemnification provisions. Pursuant to such agreements, the Company may indemnify, hold harmless and defend indemnified parties for losses suffered or incurred by the indemnified party. Some of the provisions will limit losses to those arising from third-party actions. In some cases, the indemnification will continue after the termination of the agreement. The maximum potential amount of future payments the Company could be required to make under these provisions is not determinable. To date, the Company has not incurred any material costs as a result of such indemnifications.
15. Related Party Transactions
The Company has engaged Boston Image Reading Center LLC (“BIRC”) to provide certain clinical development-related services. Nadia Waheed, M.D. M.P.H., the Company’s Chief Medical Officer, is a Director of BIRC. For the three months ended March 31, 2026 and 2025, the Company incurred fees of $145 and $26, respectively. As of March 31, 2026 and December 31, 2025, there was $253 and $126 recorded in accounts payable for BIRC, respectively. As of March 31, 2026 and December 31, 2025, there was $145 and $590 recorded in accrued expenses for BIRC, respectively. The Company engages BIRC in the ordinary course of our business on an arm's length basis.
Jeffrey Heier, M.D., the Company’s Chief Scientific Officer, and Peter Kaiser, M.D., the Company’s Chief Development Officer, are each a shareholder of i2Vision, Inc. The Company had engaged i2Vision to provide services with respect to the clinical advancement of AXPAXLI. For the three months ended March 31, 2026, no costs for services rendered by i2Vision were incurred. For the three months ended March 31, 2025, the Company recorded a net credit of $165 related to services previously rendered by i2Vision.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 5, 2026. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties and should be read together with the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2025 for a discussion of important factors that could cause actual results to differ materially from the results described in, or implied by, the forward-looking statements contained in the following discussion and analysis.
Overview
Our Company
We are an integrated biopharmaceutical company committed to redefining the retina experience. AXPAXLI, also known as OTX-TKI, our investigational, bioresorbable, intravitreal hydrogel incorporating axitinib, a small molecule, multi-target, tyrosine kinase inhibitor with anti-angiogenic properties. AXPAXLI is currently being evaluated in a Phase 3 registrational program for wet age-related macular degeneration, or wet AMD, which we refer to as the SOL program. AXPAXLI is currently also being evaluated in a Phase 3 registrational program for diabetic retinal disease, including non-proliferative diabetic retinopathy, or NPDR, which we refer to as the HELIOS program.
We also leverage the ELUTYX technology in our commercial product DEXTENZA, a corticosteroid approved by the U.S. Food and Drug Administration, or FDA, for the treatment of ocular inflammation and pain following ophthalmic surgery in adults and pediatric patients and for the treatment of ocular itching associated with allergic conjunctivitis in adults and pediatric patients aged two years or older, and in our product candidate OTX-TIC, which is a travoprost intracameral hydrogel that has completed a Phase 2 clinical trial for the treatment of open-angle glaucoma, or OAG, or ocular hypertension, or OHT. We are evaluating next steps for the OTX-TIC program.
Key Business and Financial Developments
AXPAXLI for Wet AMD
The SOL-1 Trial
In February 2026, we announced positive topline Week 52 results for the SOL-1 trial, a repeat-dosing registrational Phase 3 clinical trial, to assess the safety and efficacy of AXPAXLI in subjects with wet AMD. The SOL-1 trial is designed as a prospective, multi-center, double-masked, randomized (1:1), parallel-group, two-arm superiority trial comparing a single injection of AXPAXLI with a drug load of 450 µg of axitinib, or AXPAXLI 450 µg, to a single injection of aflibercept 2 mg.
The SOL-1 trial involves more than 100 trial sites located in the United States and Argentina. In December 2024, the SOL-1 trial completed the randomization of 344 subjects with a diagnosis of wet AMD in the study eye at screening. Under the trial protocol, subjects were eligible for enrollment in the SOL-1 trial if they were treatment-naïve for wet AMD in the study eye; had central subfield thickness, or CSFT, of less than or equal to 500 microns; and had a Best Corrected Visual Acuity, or BCVA, of at least 54 letters as measured by the Early Treatment of Diabetic Retinopathy Study, or ETDRS, letters chart (approximately 20/80 Snellen equivalent vision). After initial screening, every enrolled subject received two aflibercept 2 mg loading doses between the screening visit and Day 1: one at Week -8 and another at Week -4. Subjects reaching either a BCVA of greater than or equal to 84 ETDRS letters (approximately 20/20 Snellen equivalent vision) or experiencing an improvement of at least 10 ETDRS letters with a reduction in CSFT to no greater than 350 microns in the study eye after these injections were randomized in the trial on Day 1 (Baseline).
Retention in the SOL-1 trial continues to be outstanding, with greater than 95% of randomized subjects remaining on trial to date, and rescues reviewed under masking show greater than 95% of rescue events to date have met pre-established protocol defined criteria. All subjects have completed their Week 52 visit and have been re-dosed according
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to their baseline treatment assignment. Oversight by an independent data and safety monitoring committee has not identified any safety signals in the SOL-1 trial to date.
The primary endpoint of the SOL-1 trial is the proportion of subjects who maintained visual acuity, defined as a loss of fewer than 15 ETDRS letters from baseline, at Week 36. One of the key secondary endpoints is the proportion of subjects who maintained visual acuity measured at Week 52. At Weeks 52 and 76, all subjects that were randomized in the trial at Day 1, including subjects who previously received supplemental anti-vascular endothelial growth factor, or anti-VEGF treatment, are eligible to be re-dosed with their respective initial treatment of a single injection of AXPAXLI 450 μg in the investigational arm or a single injection of aflibercept 2 mg in the control arm.
Subjects who were successfully randomized in the SOL-1 trial on Day 1 are being followed every month and will receive a supplemental dose of aflibercept 2 mg as needed based on pre-specified criteria. Our pre-specified rescue criteria are a loss of 15 or more letters on the ETDRS chart compared to baseline due to wet AMD, or a new hemorrhage that is deemed to be likely to cause irreversible vision loss due to progression of wet AMD. The first time a subject is observed to have lost 15 or more ETDRS letters in BCVA in the study eye due to wet AMD at any time up to Week 36 in the trial would be considered as a treatment failure. Subjects will be followed for safety until the end of Week 104. Trial subjects and designated trial personnel will remain masked through the end of Week 104.
We are conducting the SOL-1 trial in accordance with a special protocol assessment, or SPA, agreement with the FDA.
SOL-1 Topline Results
Primary Endpoint (Week 36)
AXPAXLI met its primary endpoint with statistical significance. The proportion of subjects who maintained visual acuity, defined as a loss of fewer than 15 ETDRS letters from baseline at Week 36 was 74.1% in the AXPAXLI arm compared to 55.8% in the aflibercept 2 mg arm, with a risk difference of 17.5% and a p-value of 0.0006 per the pre-specified statistical model, and with an observed difference of 18.3%. The risk difference is the difference in the probability of maintaining vision in the treatment arm compared to the control arm as per the pre-specified statistical model. The observed difference is the numerical difference of the observed event rate between the two arms.
Key Secondary Endpoint (Week 52 Durability)
AXPAXLI also met a key secondary pre-specified endpoint measuring the proportion of subjects who maintained visual acuity at Week 52, using the same analysis as the primary endpoint, with high statistical significance. The proportion of subjects who maintained vision at Week 52 was 65.9% in the AXPAXLI arm compared to 44.2% in
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the aflibercept 2 mg arm, with a risk difference of 21.1%, and a p-value of <0.0001 per the pre-specified statistical model compared to aflibercept 2 mg subjects, and with an observed difference of 21.7%.
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Safety Overview
As of the Week 52 database lock on February 5, 2026, AXPAXLI was generally well-tolerated in the SOL-1 trial. No treatment-related ocular or systemic serious adverse events were observed. No cases of endophthalmitis, occlusive retinal vasculitis, non-occlusive retinal vasculitis, retinal detachment, or implant migration to the anterior chamber were observed in the AXPAXLI arm. As previously noted, in accordance with the trial design, subjects will continue to be followed for safety through Week 104, with re-dosing at Week 52 and Week 76. A summary of the safety results is included in the following tables:
In the AXPAXLI treatment arm, there were 3 subjects (1.8%) with iritis, and 3 subjects (1.8%) with uveitis (one was bilateral and recurrent). All cases were mild to moderate in severity and resolved with topical treatment. There
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was one subject (0.6%) with vitreous cells, mild in severity, that resolved without treatment. There were no observed cases of endophthalmitis or occlusive or non-occlusive retinal vasculitis, confirmed by fluorescein angiography in the uveitis cases.
On Protocol Rescue-Free Rates
As a pre-specified exploratory endpoint, we evaluated the proportion of subjects who did not require rescue injections as specified by the SOL-1 trial protocol rescue criteria. The rescue-free rates in the AXPAXLI arm were 80.6%, 74.7%, and 68.8% at Weeks 24, 36, and 52, respectively, compared to 72.1%, 56.4%, and 47.7% in the aflibercept 2 mg arm at the same time periods. The observed differences were 8.5%, 18.3%, and 21.1% in favor of the AXPAXLI arm at Weeks 24, 36, and 52, respectively.
Fluid Control
As a post hoc analysis, we evaluated the proportion of subjects maintaining CSFT within 30 μm from baseline. At Weeks 36 and 52, subjects in the AXPAXLI arm demonstrated superior and sustained CSFT control as compared to subjects in the aflibercept 2 mg arm. At Week 36, 55.9% of subjects treated with AXPAXLI maintained CSFT within 30 μm from baseline compared to 37.8% of subjects in the aflibercept 2 mg arm, representing a risk difference of 17.1% in favor of AXPAXLI and a nominal p-value of 0.0013. At Week 52, 44.1% of subjects treated with AXPAXLI maintained CSFT within 30 μm from baseline compared to 34.9% of subjects in the aflibercept 2 mg arm representing a risk difference of 8.4% and a nominal p-value of 0.1094.
SOL-1 Rescue Free Analysis Using SOL-R Rescue Criteria
We also conducted a pre-specified exploratory analysis of the SOL-1 data in which we applied the SOL-R trial protocol rescue criteria, which are designed to align more closely with real-world clinical practice as compared to the protocol rescue criteria in the SOL-1 trial. The SOL-R trial protocol has established rescue criteria of >5 ETDRS letter loss in BCVA plus a ≥75 μm increase in CSFT. When applied to the SOL-1 trial results, AXPAXLI demonstrated a 77.1% rescue-free rate at Week 24. Week 24 was selected as the timepoint for this analysis to align with the re-dosing interval being used in the SOL-R trial. The SOL-R trial's streamlined rescue criteria reflect our strategic design decision to more closely replicate real-world clinical practice, and we believe the complementary designs of the SOL-1 and SOL-R trials, taken together, are intended to provide physicians with a comprehensive picture of the durability, flexibility, and repeatability of AXPAXLI across a range of dosing intervals and patient populations.
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The SOL-R Trial
We are also conducting the SOL-R trial, a repeat-dosing registrational Phase 3 clinical trial to evaluate the non-inferiority of AXPAXLI 450 μg dosed every 24 weeks for the treatment of wet AMD compared to aflibercept 2 mg dosed on-label every eight weeks. The SOL-R trial includes sites located in the U.S., Argentina, India, and Australia. The SOL-R trial is designed as a multi-center, double-masked, randomized (2:2:1), three-arm trial requiring subjects that were either treatment naïve or have been diagnosed with wet AMD in the study eye within about four months prior to screening. To qualify for screening in the SOL-R trial, a subject’s study eye must have had a BCVA of at least 34 ETDRS letters (approximately 20/200 Snellen equivalent vision).
Over the six month screening and lead-in period prior to Baseline (Day 1) randomization, enrolled subjects were given three screening doses and two loading doses of any anti-VEGF therapy, excluding brolucizumab-dbll, and monitored to exclude subjects demonstrating early persistent fluid or significant retinal fluid fluctuations. Subjects maintaining a CSFT of no greater than 350 microns at Weeks -12 and -8, and not experiencing a CSFT increase of greater than 35 microns at Week -8 from their lowest CSFT at any prior visit, then received two loading doses of aflibercept 2 mg at Weeks -8 and -4 prior to randomization on Day 1.
Subjects in the first arm of the SOL-R trial received a single dose of AXPAXLI 450 μg at Day 1 and are re-dosed with AXPAXLI 450 μg at Weeks 24, 48, and 72. Subjects in the second arm received aflibercept 2 mg on Day 1 and per label every eight weeks thereafter. Subjects in the third arm received a single dose of aflibercept 8 mg at Day 1 and are re-dosed at Weeks 24, 48, and 72. Subjects will be followed for safety until Week 96. Trial subjects and designated trial personnel will remain masked through the end of Week 96.
The primary endpoint of the SOL-R trial is to demonstrate non-inferiority in mean BCVA change from baseline between the AXPAXLI and on-label aflibercept 2 mg arms at Week 56. The third arm (aflibercept 8 mg) of the SOL-R trial, which has only been included for masking purposes, is not part of the non-inferiority analysis. Based on FDA guidance, the non-inferiority margin for the lower bound for the trial has been established at -4.5 letters of mean BCVA.
In a written Type C response received in August 2024, and a subsequent written response received in December 2024, the FDA agreed that the SOL-R repeat dosing wet AMD trial, with a primary endpoint at Week 56, should be appropriate as an adequate and well-controlled trial in support of a potential new drug application, or NDA, and for a potential product label for AXPAXLI for the treatment of wet AMD. The FDA also noted that the use of one superiority trial and one non-inferiority trial is generally acceptable as the basis of an eventual NDA in wet AMD.
On November 4, 2025, we announced that the SOL-R trial achieved its randomization target of 555 subjects. We continued to allow randomization of previously enrolled subjects that were still in the loading phase when we achieved target randomization to maintain our commitment to both patients and investigators. We have now completed randomization of the SOL-R trial with a total of 631 subjects randomized. Subject retention in the SOL-R trial remains high. Topline data for the SOL-R trial are expected to be available in the first quarter of 2027.
The SOL-X Trial
In April 2026, the first patient was enrolled in the SOL-X trial, a multi-center, open-label, long-term safety extension clinical trial to evaluate subjects who have completed their two-year safety follow-up visits in either the SOL-1 or SOL-R trial for an additional three years. The primary objectives of the SOL-X trial are to evaluate the long-term safety of AXPAXLI; to explore long-term visual outcomes, including visual acuity and the incidence and/or progression of fibrosis and macular atrophy; and to evaluate the impact of delayed initiation of AXPAXLI in patients who initially were randomized to receive aflibercept in either the SOL-1 or SOL-R trial. Subjects enrolled in the SOL-X trial will receive AXPAXLI 450 μg every 24 weeks and are to be evaluated at Week 4, Week 12, and every 12 weeks thereafter.
Plans for Registration
We plan to submit an NDA with the FDA for marketing approval of AXPAXLI for the treatment of wet AMD based on the Week 52 data from the SOL-1 trial, subject to ongoing formal discussions with the FDA. Because axitinib is FDA-approved for non-ophthalmic indications, we plan to leverage the 505(b)(2) NDA review pathway which has the potential to shorten the review timeline for AXPAXLI by up to two months compared to the traditional review pathway for new molecular entities. If approved, AXPAXLI would be the first tyrosine kinase inhibitor commercialized for the
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treatment of wet AMD. AXPAXLI has the potential to receive a superiority label as compared to a single injection of anti-VEGF, with redosing potentially as infrequently, if approved, as every 12 months, based on the SOL-1 trial results. We will continue to conduct the SOL-R trial as planned, with topline data expected in the first quarter of 2027.
AXPAXLI for Diabetic Eye Disease
Diabetic Retinopathy Program Highlights
In September 2025, we announced plans for two superiority registrational trials of AXPAXLI for the treatment of NPDR, which we refer to as the HELIOS-2 and HELIOS-3 trials. We plan to target a broad label in diabetic retinopathy, or DR, by including subjects with non-center-involved diabetic macular edema, or non-CI-DME.
The potential HELIOS-2 trial and the ongoing HELIOS-3 trial are designed to leverage a novel ordinal primary endpoint of 2 or more steps on the diabetic retinopathy severity scale, or DRSS. Historically, DR trials have relied on binary endpoints measuring either an improvement of 2 or more steps in DRSS or the prevention of a 2 or more step DRSS worsening. The HELIOS program is the first time an ordinal endpoint is being used in a DR trial, which means the statistical analysis will measure changes across the DRSS spectrum, including disease improvement, stability, and worsening. These are all clinically meaningful measures for retina specialists in the context of a disease that gets progressively worse if untreated. The use of the novel ordinal endpoint means that every patient will contribute data to the statistical analysis, allowing for a smaller trial size to achieve statistically significant outcomes relative to the size required for a binary analysis. We believe the ordinal DRSS endpoint enables a higher probability of success with smaller, shorter, more relevant, and less expensive trials, relative to other potential endpoints.
In August 2025, we received written agreement regarding the overall design of the HELIOS-2 clinical trial, including the proposed novel ordinal endpoint and statistical analysis plan, from the FDA under an SPA agreement.
The HELIOS-3 Trial
On November 24, 2025, we announced that the first subject in the HELIOS-3 trial was randomized. The ongoing HELIOS-3 trial is evaluating the safety and efficacy of AXPAXLI and is intended to randomize approximately 930 subjects with moderately severe to severe NPDR without center-involved diabetic macular edema, or CI-DME. The HELIOS-3 trial is a multi-center, double-masked, randomized (1:1:1), three-arm superiority trial comparing two dosing regimens of AXPAXLI 450 μg to a sham comparator.
In February 2026, we amended the HELIOS-3 trial protocol to, among other things, extend the primary endpoint assessment from Week 52 to Week 56, update the subject assessment schedule to approximately every four weeks through Week 56 and every eight weeks thereafter through Week 96. The primary endpoint of the HELIOS-3 clinical trial is subjects' ordinal 2-step DRSS change status from baseline, comparing whether subjects have experienced at least a two-step improvement, at least a two-step worsening, or less than a two-step change in either direction, assessed at Week 56.
Eligible subjects in the HELIOS-3 trial are randomized as follows: subjects in the first arm will receive a single injection of AXPAXLI 450 μg at Day 1 and will be re-dosed with AXPAXLI 450 μg at Weeks 24, 48 and 72; subjects in the second arm will receive a single injection of AXPAXLI 450 μg at Day 1 and Week 48, and a sham injection at Weeks 24, and 72; and subjects in the third arm will receive sham injections at Day 1, and Weeks 24, 48 and 72. Subjects will be assessed every four weeks through Week 56, and every eight weeks thereafter through Week 96. The study subjects and designated trial personnel will remain masked through the end of Week 96.
The HELIOS-2 Trial
Our potential second Phase 3 trial for the treatment of diabetic retinal disease, HELIOS-2, has not yet been initiated.
The HELIOS-2 trial is designed to evaluate the safety and efficacy of AXPAXLI in approximately 432 subjects with moderately severe to severe NPDR without CI-DME. This multi-center, double-masked, superiority trial is designed to randomize subjects (1:1), in parallel-groups comparing a single injection of AXPAXLI 450 μg to a single injection of ranibizumab 0.3 mg. We expect that this trial would also include subjects with non-CI-DME.
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According to the planned trial design, eligible subjects in the HELIOS-2 trial would be randomized to receive either a single dose of AXPAXLI 450 μg or a single dose of ranibizumab 0.3mg. At Week 52, all subjects would be re-dosed with their respective initial assigned study treatments at Day 1. Subjects would be assessed monthly through Year 1 and every other month thereafter for safety through the end of Year 2. Subjects and designated trial personnel would remain masked through the end of Year 2.
The primary endpoint of the HELIOS-2 trial would be identical to the primary endpoint of the HELIOS-3 trial, subjects' ordinal 2-step DRSS change status from baseline, but would be assessed at Week 52.
Commercial
Our net product revenue is generated from the sale of DEXTENZA to specialty distributors, or SDs, for resale to certain ambulatory surgery centers, or ASCs, certain hospital outpatient departments, or HOPDs, and certain physicians’ offices, and from the direct sale by us to ASCs and physicians’ offices, or Direct Sales.
Our net product revenue was $10.8 million for the three months ended March 31, 2026, reflecting an increase of $0.2 million or 1.9% over the three months ended March 31, 2025, as unit growth was partially offset by increased year over year gross to net adjustments and increases in OID following a price increase implemented in the second quarter of 2025.
Demand for DEXTENZA is determined by In-Market Sales, defined as unit sales from the SDs to ASCs, HOPDs, and physicians’ offices, and Direct Sales. We recorded In-Market Sales of approximately 42,000 units in the three months ended March 31, 2026, an increase of approximately 2,000 units compared to the three months ended March 31, 2025. Differences between In-Market Sales figures and the number of units of DEXTENZA sold by us to SDs and through Direct Sales as included in net product revenue recognized in our unaudited condensed consolidated financial statements are attributable to distributor stocking patterns. For the remainder of 2026, we expect to see continued revenue growth from increased sales efforts directed toward HOPDs, partially offset by a slightly higher gross to net adjustments based on the increases in OID described above.
Components of our Financial Performance
Revenue
We record DEXTENZA product sales net of applicable reserves for variable consideration, including off-invoice discounts, or OIDs, estimated chargebacks, rebates, distribution fees, product returns, and other incentives. Collectively, these discounts, allowances and other reserves are generally referred to as gross-to-net provisions, or GTN Provisions.
Operating Expenses
Cost of Product Revenue
Cost of product revenue consists primarily of costs of DEXTENZA product revenue, which include:
| ● | Direct materials costs; |
| ● | Royalties; |
| ● | Direct labor, which includes employee-related expenses, including salaries, related benefits and payroll taxes, and stock-based compensation expense for employees engaged in the production process; |
| ● | Manufacturing overhead costs, which includes rent, depreciation, and indirect labor costs associated with the production process; |
| ● | Transportation costs; and |
| ● | Cost of scrap material. |
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Research and Development Expenses
Research and development expenses consist primarily of costs incurred for the development of our product candidates, which include:
| ● | expenses incurred in connection with the clinical trials of our product candidates, including expenses associated with the investigative sites that conduct our clinical trials and other agreements with contract research organizations, or CROs; |
| ● | employee-related expenses, including salaries, related benefits and payroll taxes, travel and stock-based compensation expense for employees engaged in research and development, clinical and regulatory and other related functions; |
| ● | expenses relating to regulatory activities, including filing fees paid to the FDA for our submissions for product approvals; |
| ● | expenses associated with developing our pre-commercial manufacturing capabilities and manufacturing clinical study materials; |
| ● | ongoing research and development activities relating to our core bioresorbable hydrogel technology and improvements to this technology; |
| ● | facilities, depreciation and other expenses, which include direct and allocated expenses for rent and maintenance of facilities, insurance and supplies; |
| ● | costs relating to the supply and manufacturing of product inventory, prior to approval by the FDA or other regulatory agencies of our products; and |
| ● | expenses associated with preclinical development activities. |
We expense research and development costs as incurred. We recognize external development costs based on an evaluation of the progress to completion of specific tasks using information provided to us by our vendors and our clinical investigative sites.
Our direct research and development expenses are tracked on a program-by-program basis and consist primarily of external costs, such as fees paid to investigators, consultants, central laboratories and CROs in connection with our clinical trials and regulatory fees. We do not allocate employee and contractor-related costs, costs associated with our proprietary bioresorbable hydrogel-based formulation technology ELUTYX, costs related to manufacturing or purchasing clinical trial materials, and facility expenses, including depreciation or other indirect costs, to specific product development programs because these costs are deployed across multiple product development programs and, as such, are not separately classified. We use internal resources in combination with third-party CROs, including clinical monitors and clinical research associates, to manage our clinical trials, monitor patient enrollment and perform data analysis for many of our clinical trials. These employees work across multiple development programs and, therefore, we do not track their costs by program.
The successful development and commercialization of our products or product candidates is highly uncertain. This is due to the numerous risks and uncertainties associated with product development and commercialization, including the uncertainty of:
| ● | the scope, progress, outcome and costs of our clinical trials and other research and development activities; |
| ● | the timing, receipt and terms of any marketing approvals; |
| ● | the efficacy and potential advantages of our products or product candidates compared to alternative treatments, including any standard of care; |
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| ● | the market acceptance of our products or product candidates; and |
| ● | significant and changing government regulation. |
Any changes in the outcome of any of these variables with respect to the development of our product candidates in clinical and preclinical development could mean a significant change in the costs and timing associated with the development of these product candidates. For example, if the FDA or another regulatory authority were to require us to conduct clinical trials or other testing beyond those that we currently expect or if we experience significant delays in enrollment in any of our clinical trials, we could be required to expend significant additional financial resources and time on the completion of clinical development of that product candidate. We anticipate that our research and development expenses will increase in the future as we support our continued development of our product candidates.
Selling and Marketing Expenses
Selling and marketing expenses consist primarily of salaries and related costs, including stock-based compensation, for personnel in selling and marketing functions as well as consulting, advertising and promotion costs.
General and Administrative Expenses
General and administrative expenses consist primarily of salaries and related costs, including stock-based compensation, for personnel in executive, finance, information technology, human resources and administrative functions. General and administrative expenses also include insurance, facility-related costs and professional fees for legal, patent, consulting and accounting and audit services.
Other Income (Expense)
Interest Income. We earn interest income primarily from investments of our cash and cash equivalents in money market funds.
Interest Expense. Interest expense is incurred on our debt. In August 2023, we entered into a credit and security agreement, or the Barings Credit Agreement, with Barings Finance LLC, or Barings, as administrative agent, and the lenders party thereto, providing for a secured term loan facility, or the Barings Credit Facility, in the aggregate principal amount of $82.5 million. For the three months ended March 31, 2026 and 2025, our interest-bearing debt included the Barings Credit Facility ($82.5 million outstanding principal).
Change in Fair Value of Derivative Liabilities. In August 2023, in connection with entering into the Barings Credit Agreement, we identified an embedded derivative liability, which we were required to measure at fair value at inception and then are required to measure at the end of each reporting period until the embedded derivative is settled. The change in fair value of any derivative liabilities are recorded through the unaudited condensed consolidated statements of operations and comprehensive loss and are presented under the caption “change in fair value of derivative liabilities”.
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Results of Operations
Comparison of the Three Months Ended March 31, 2026 and 2025
The following table summarizes our results of operations for the three months ended March 31, 2026 and 2025:
Three Months Ended | |||||||||
March 31, | Increase | ||||||||
| 2026 | | 2025 | | (Decrease) | ||||
(in thousands) | |||||||||
Revenue: |
| |
| |
| | |||
Product revenue, net | $ | 10,785 | $ | 10,634 | $ | 151 | |||
Collaboration revenue |
| — |
| 64 |
| (64) | |||
Total revenue, net |
| 10,785 |
| 10,698 |
| 87 | |||
Costs and operating expenses: |
| |
| |
| | |||
Cost of product revenue |
| 1,329 |
| 1,262 |
| 67 | |||
Research and development |
| 66,213 |
| 42,857 |
| 23,356 | |||
Selling and marketing |
| 16,577 |
| 14,148 |
| 2,429 | |||
General and administrative |
| 20,006 |
| 16,348 |
| 3,658 | |||
Total costs and operating expenses |
| 104,125 |
| 74,615 |
| 29,510 | |||
Loss from operations |
| (93,340) |
| (63,917) |
| (29,423) | |||
Other income (expense): |
| |
| |
| | |||
Interest income |
| 6,050 |
| 3,826 |
| 2,224 | |||
Interest expense |
| (2,777) |
| (2,984) |
| 207 | |||
Change in fair value of derivative liabilities | 1,455 |
| (978) | 2,433 | |||||
Total other income (expense), net |
| 4,728 |
| (136) |
| 4,864 | |||
Net loss | $ | (88,612) | $ | (64,053) | $ | (24,559) | |||
Product Revenue, net
Our product revenue, net, was $10.8 million and $10.6 million for the three months ended March 31, 2026 and 2025, respectively, reflecting an increase of $0.2 million year-over-year. All of our product revenue, net, was attributable to sales of DEXTENZA.
Our total GTN Provisions for the three months ended March 31, 2026 and 2025 were 54.1% and 49.4%, respectively, of gross DEXTENZA product sales. We are required to estimate the expected GTN Provisions when we sell DEXTENZA to SDs, ASCs and physicians’ offices and accrue for them at that time. We adjust the OID, a significant component of the GTN Provisions for DEXTENZA from time to time and typically on a quarterly basis as part of our overall pricing strategy. The actual OID amounts are generally determined at the time of resale by SDs or direct sales to ASCs or physicians’ offices by us. Compared to the three months ended March 31, 2025, the GTN Provisions relative to gross DEXTENZA product sales increased during the three months ended March 31, 2026, primarily as a result of the changes in the OID. We expect that GTN Provisions relative to gross DEXTENZA product sales will remain at this increased level or may increase further, for the remainder of 2026 and beyond.
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Research and Development Expenses
Three Months Ended | |||||||||
March 31, | Increase | ||||||||
| 2026 | | 2025 | (Decrease) | |||||
| (in thousands) | ||||||||
Direct research and development expenses by program: |
| |
| | | ||||
AXPAXLI | $ | 42,460 | $ | 24,647 | $ | 17,813 | |||
OTX-TIC | 1 | 168 | (167) | ||||||
DEXTENZA |
| 757 |
| 714 |
| 43 | |||
OTX-DED |
| — |
| 5 |
| (5) | |||
Preclinical programs | — | 2 | (2) | ||||||
Unallocated expenses: |
|
|
| ||||||
Personnel costs (including stock-based compensation) |
| 18,433 |
| 12,001 |
| 6,432 | |||
All other costs |
| 4,562 |
| 5,320 |
| (758) | |||
Total research and development expenses | $ | 66,213 | $ | 42,857 | $ | 23,356 | |||
Research and development expenses were $66.2 million and $42.9 million for the three months ended March 31, 2026 and 2025, respectively, reflecting an increase of $23.4 million year-over-year. Within research and development expenses, expenses for clinical programs increased $17.7 million, unallocated expenses increased $5.7 million, and expenses for preclinical programs remained constant.
For the three months ended March 31, 2026, we incurred $43.2 million in direct research and development expenses for our products and product candidates compared to $25.5 million for the three months ended March 31, 2025. The increase of $17.7 million is related to timing and scale of our various clinical trials for our product candidates, including the progression of the SOL-1, SOL-R, SOL-X and HELIOS-3 clinical trials as well as a one-time cost and the disposal of fixed assets as we transitioned back to the two-piece injector used in the SOL-1 trial to support a potential NDA filing based on SOL-1 Week 52 data.
We expect that direct research and development expenses for our products and product candidates will continue to increase significantly for the remainder of 2026 and beyond as we prepare for the planned NDA submission for AXPAXLI for wet AMD, progress the SOL-R trial toward topline data expected in the first quarter of 2027, enroll additional patients in the SOL-X and HELIOS-3 trials; and perform increased registration-enabling manufacturing scale-up activities for AXPAXLI. We expect that personnel costs will continue to increase for the remainder of 2026 and beyond as we plan to hire additional personnel to support our planned clinical trials, NDA preparation activities, and pre-commercial manufacturing scale-up.
Selling and Marketing Expenses
Selling and marketing expenses were $16.6 million and $14.1 million for the three months ended March 31, 2026 and 2025, respectively, reflecting an increase of $2.5 million year-over-year.
The increase is due to an increase in personnel-related costs, including stock-based compensation, of $2.0 million, primarily reflecting the expansion of our pre-commercial team to prepare for a potential AXPAXLI wet AMD launch; an increase in professional fees of $0.1 million, including costs related to our corporate branding; and an increase in facility-related and other costs of $0.4 million with the associated headcount expansion.
We expect our selling and marketing expenses to increase for the remainder of 2026 and beyond as we continue to invest in additional AXPAXLI pre-launch activities and support ongoing DEXTENZA commercialization efforts.
General and Administrative Expenses
General and administrative expenses were $20.0 million and $16.3 million for the three months ended March 31, 2026 and 2025, respectively, reflecting an increase of $3.7 million year-over-year.
The increase was due to an increase in personnel-related costs, including stock-based compensation, of $2.6 million, an increase in facility-related and other costs of $0.2 million, and an increase in professional fees of $0.9 million.
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We anticipate that our general and administrative expenses will increase for the remainder of 2026 and beyond, as we continue to further strengthen operations and processes that support our clinical trials of AXPAXLI, including the SOL-1 trial, the SOL-R trial, the SOL-X trial and the HELIOS-3 trial.
Other Income (Expense), Net
Interest Income. Interest income was $6.1 million and $3.8 million for the three months ended March 31, 2026 and 2025, respectively, reflecting an increase of $2.3 million year-over-year. The increase is attributable primarily to a higher average balance of interest-generating cash and cash equivalents as a result of our October 2025 equity financing.
Interest Expense. Interest expense was $2.8 million and $3.0 million for the three months ended March 31, 2026 and 2025, respectively, reflecting a decrease of $0.2 million year-over-year.
Change in Fair Value of Derivative Liabilities. We recognized a net gain from the change in fair value of our derivative liability related to the Barings Credit Agreement of $1.5 million for the three months ended March 31, 2026. We recognized a net loss from the change in fair value of our derivative liability related to the Barings Credit Agreement of $1.0 million for the three months ended March 31, 2025. The net gain for the three months ended March 31, 2026 is comprised of a non-cash gain of $1.8 million from the change in the fair value of the derivative liability, partially offset by an expense of $0.4 million related to DEXTENZA royalty fees under the Barings Credit Agreement that we paid or accrued. The net loss for the three months ended March 31, 2025 is comprised of a non-cash loss of $0.6 million from the change in the fair value of the derivative liability and an expense of $0.4 million expense related to royalty fees under the Barings Credit Agreement that we paid or accrued. We cannot predict how the fair value of the derivative liability related to the Barings Credit Agreement will change in the remainder of 2026 and beyond.
Liquidity and Capital Resources
Sources of Liquidity
We have financed our operations primarily through private placements of our preferred stock, public offerings and private placements of our common stock and pre-funded warrants to purchase our common stock, borrowings under credit facilities, private placements of our convertible notes, and sales of our products.
As of March 31, 2026, we had cash and cash equivalents of $666.7 million, and outstanding notes payable with a principal amount of $82.5 million par value under the Barings Credit Facility.
In October 2025, we completed an underwritten offering of 37,909,018 shares of our common stock, resulting in net proceeds to us of $445.6 million after deducting underwriting discounts and commissions and other offering expenses.
In August 2021, we entered into an Open Market Sale Agreement, or the 2021 Sales Agreement, with Jefferies LLC, or Jefferies, under which we may offer and sell shares of our common stock from time to time through Jefferies, acting as agent. In November 2023, we filed a prospectus in connection with the 2021 Sales Agreement for the issuance and sale of common stock having an aggregate offering price of up to $100.0 million thereunder. In June 2025, we sold 11,548,364 shares of our common stock under the 2021 Sales Agreement, resulting in gross proceeds to us of $96.8 million and net proceeds, after accounting for issuance costs, of $94.0 million. We did not sell any shares of our common stock under the 2021 Sales Agreement for the three months ended March 31, 2026.
In February 2024, we sold 32,413,560 shares of our common stock at $7.52 per share and, in lieu of common stock to certain investors, pre-funded warrants to purchase up to an aggregate of 10,805,957 shares of our common stock at a price of $7.519 per pre-funded warrant for total net proceeds of approximately $316.4 million, after deducting placement agent fees and other offering expenses, in a private placement. Each pre-funded warrant that remains outstanding has an exercise price of $0.001 per share, is currently exercisable and will remain exercisable until exercised in full. During the three months ended March 31, 2026, pre-funded warrants to purchase 1,749,453 shares of our common stock were exercised via cashless exercise for 1,749,300 shares of our common stock. As of March 31, 2026, 5,818,592 pre-funded warrants remained outstanding.
In August 2023, we borrowed $82.5 million under the Barings Credit Facility and received proceeds of $77.3 million, after the application of an original issue discount and fees.
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Funding Requirements
We have a history of incurring significant operating losses. Our net losses were $88.6 million for the three months ended March 31, 2026, and $265.9 million, $193.5 million, and $80.7 million for the years ended December 31, 2025, 2024 and 2023, respectively. As of March 31, 2026, we had an accumulated deficit of $1,245.6 million.
We expect to continue to incur losses in connection with our ongoing activities, particularly as we advance the clinical trials of our product candidates in development, specifically the SOL-1, SOL-R, SOL-X and HELIOS-3 trials; if and as we initiate new clinical trials, including the potential HELIOS-2 trial; and as we support the commercialization of DEXTENZA and the potential commercialization of AXPAXLI and our other product candidates, subject to receiving FDA approval.
We anticipate we will incur substantial expenses if and as we:
| ● | continue our ongoing registrational programs, including the SOL registrational program of AXPAXLI for the treatment of wet AMD, and the HELIOS registrational program of AXPAXLI for the treatment of diabetic retinal disease, including NPDR; |
| ● | continue our ongoing SOL-X trial, our long-term extension study of AXPAXLI for the treatment of wet AMD; |
| ● | initiate any additional clinical trials we might determine in the future to conduct for our product candidates; |
| ● | scale up our manufacturing processes and capabilities to support sales of commercial products, clinical trials of our product candidates, including AXPAXLI, and commercialization of any of our product candidates for which we obtain marketing approval, and expand our facilities to accommodate this scale up and any corresponding growth in personnel; |
| ● | scale up our sales, marketing and distribution capabilities to prepare for commercialization of any product candidates for which we intend to obtain marketing approval; |
| ● | continue to monitor subjects according to the applicable clinical trial protocols, or prepare submission documentation such as clinical study reports, for our clinical trials that have been completed; |
| ● | seek marketing approvals for any of our product candidates that successfully complete clinical development |
| ● | continue to commercialize DEXTENZA in the United States; |
| ● | maintain, expand and protect our intellectual property portfolio; |
| ● | expand our operational, quality assurance, financial, administrative and management systems and personnel to support our clinical development, manufacturing and commercialization efforts; |
| ● | defend ourselves against legal proceedings; |
| ● | make investments to improve our defenses against cybersecurity threats and establish and maintain cybersecurity insurance; |
| ● | increase our product liability and clinical trial insurance coverage as we expand our clinical trials and commercialization efforts; and |
| ● | continue to operate as a public company. |
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The amount and timing of these expenses determine our future capital requirements.
Based on our current operating plan, which includes estimates of anticipated cash inflows from DEXTENZA product sales and cash outflows from operating expenses and capital expenditures and reflects our observance of the minimum liquidity covenant of $20.0 million under the Barings Credit Agreement, we believe that our existing cash and cash equivalents as of March 31, 2026, will enable us to fund our planned operating expenses, debt service obligations and capital expenditure requirements into 2028. Although we believe our current and available cash resources are sufficient to fund the potential approval of AXPAXLI for the treatment of wet AMD by the FDA, additional funding will likely be required to support the commercialization of AXPAXLI, if approved. These estimates are subject to various assumptions, including assumptions as to the revenues and expenses associated with the commercialization of DEXTENZA, the pace of our research and clinical development programs, the timing of commencement of dosing and enrollment of our clinical trials, the progress of our manufacturing validation and scale-up and other aspects of our business. We have based our estimates on assumptions that may prove to be wrong, and we could use our capital resources sooner than we currently expect.
Our future capital requirements will depend on many factors, including:
| ● | the progress, costs and outcomes of our ongoing SOL and HELIOS registrational programs of AXPAXLI for the treatment of wet AMD and for the treatment of diabetic retinal disease, including NPDR, respectively; |
| ● | the timing, scope, progress, costs and outcome of our SOL-X trial, our long-term extension study of AXPAXLI for the treatment of wet AMD; |
| ● | the costs, timing and outcome of regulatory review of AXPAXLI or our other product candidates by the FDA, the European Medicines Agency, or EMA, or other regulatory authorities; |
| ● | the scope, progress, costs and outcome of preclinical development and any additional clinical trials we might determine in the future to conduct for our other product candidates, including OTX-TIC for the reduction of intraocular pressure in patients with OAG or OHT; |
| ● | the costs of sales, marketing, distribution and other commercialization efforts with respect to DEXTENZA and any of our product candidates for which we obtain marketing approval in the future, such as AXPAXLI, including potential cost increases due to inflation; |
| ● | the costs of developing, validating and scaling up our manufacturing processes and capabilities to support sales of commercial products, clinical trials of our product candidates, including AXPAXLI, and commercialization of any of our product candidates for which we may obtain marketing approval, including AXPAXLI, and expansion of our manufacturing facilities to accommodate this scale up and any corresponding growth in personnel; |
| ● | the level of product sales from DEXTENZA and any additional products for which we obtain marketing approval in the future, such as AXPAXLI, and the level of third-party reimbursement of such products; |
| ● | cost increases due to inflation; |
| ● | the extent of our debt service obligations and our ability, if desired, to refinance any of our existing debt on terms that are more favorable to us; |
| ● | the amounts we are entitled to receive, if any, as reimbursements for clinical trial expenditures, development, regulatory, and sales milestone payments, and royalty payments under our license agreement with AffaMed; |
| ● | the extent to which we choose to establish additional collaboration, distribution or other marketing arrangements for our products and product candidates; |
| ● | the costs and outcomes of any legal actions and proceedings; |
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| ● | the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims; and |
| ● | the extent to which we acquire or invest in other businesses, products and technologies. |
Until such time, if ever, as we can generate product revenues sufficient to achieve profitability, we expect to finance our cash needs through equity offerings, debt financings, collaborations, strategic alliances, licensing arrangements, royalty agreements, and marketing and distribution arrangements. We do not have any committed external source of funds, although our license agreement with AffaMed provides for AffaMed’s reimbursement of certain clinical expenses incurred by us in connection with our collaboration and for our potential receipt of development and sales milestone payments and royalty payments. To the extent that we raise additional capital through the sale of equity, preferred equity or convertible debt securities, our securityholders’ ownership interests will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect our existing securityholders’ rights as holders or beneficial owners of our common stock. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. The covenants under the Barings Credit Facility and our pledge of our assets as collateral to secure our obligations under the Barings Credit Facility pursuant to which we have a total borrowing capacity of $82.5 million, which has been fully drawn down, may limit our ability to obtain additional debt or other financing. If we raise additional funds through collaborations, strategic alliances, licensing arrangements, royalty agreements or marketing and distribution arrangements, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs, products or product candidates or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings or other arrangements when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market products or product candidates that we would otherwise prefer to develop and market ourselves.
Cash Flows
The following table summarizes our sources and uses of cash for each of the periods presented:
Three Months Ended | ||||||
March 31, | ||||||
2026 | | 2025 | ||||
Cash used in operating activities | $ | (65,993) | $ | (44,671) | ||
Cash used in investing activities |
| (4,662) |
| (1,933) | ||
Cash provided by financing activities |
| 294 |
| 4,183 | ||
Net (decrease) increase in cash and cash equivalents | $ | (70,361) | $ | (42,421) | ||
Operating activities. Net cash used in operating activities was $66.0 million for the three months ended March 31, 2026, primarily resulting from our net loss of $88.6 million, partially offset by non-cash adjustments of $21.7 million and net favorable changes in operating assets and liabilities of $1.0 million. Our net loss was attributed to operating expenses of $104.1 million, which we incurred for research and development activities, selling and marketing activities, general and administrative activities, and cost of product revenue, and net non-operating income of $4.7 million, partially offset by $10.8 million of net revenue. Non-cash adjustments primarily include stock-based compensation expense of $15.6 million, non-cash interest expense of $1.4 million, depreciation and amortization expense of $1.3 million, loss on disposal of equipment of $4.9 million, and a net non-cash gain related to changes in the fair value of our derivative liability of $1.5 million. Net cash provided by net favorable changes in our operating assets and liabilities during the three months ended March 31, 2026 consisted primarily of increases of prepaid expenses and other current assets of $0.4 million, decreases of accounts receivable, net, of $6.3 million, resulting primarily from decreased sales of DEXTENZA, and decreases of accrued expenses of $8.4 million, resulting primarily from the payout of accrued bonus compensation in the first quarter of 2026, partially offset by other changes, net, of $3.5 million.
Net cash used in operating activities was $44.7 million for the three months ended March 31, 2025, primarily resulting from our net loss of $64.1 million, partially offset by non-cash adjustments of $13.9 million and net favorable changes in operating assets and liabilities of $5.5 million. Our net loss was primarily attributed to operating expenses of $74.6 million, which we incurred primarily for research and development activities, selling and marketing activities, and general and administrative activities, partially offset by $10.7 million of revenue. Non-cash adjustments primarily
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include stock-based compensation expense of $10.5 million, non-cash interest expense of $1.4 million, depreciation and amortization expense of $1.0 million, and a net non-cash loss related to changes in the fair value of our derivative liability of $1.0 million. Net cash provided by net favorable changes in our operating assets and liabilities during the three months ended March 31, 2025 consisted primarily of decreases of accounts receivable of $7.2 million, resulting primarily from decreased sales of DEXTENZA, and decreases of prepaid expenses and other current assets of $3.9 million, resulting predominantly from our clinical development activities, partially offset by decreases in accrued expenses of $5.1 million, resulting predominantly from our clinical development activities, and other changes, net, of $0.4 million.
Investing activities. Net cash used in investing activities was $4.7 million for the three months ended March 31, 2026, consisting of cash used to purchase property and equipment and leasehold improvements. Net cash used in investing activities was $1.9 million for the three months ended March 31, 2025, consisting of cash used to purchase property and equipment, primarily consisting of leasehold improvements.
Financing activities. Net cash provided by financing activities for the three months ended March 31, 2026 was $0.3 million and consisted of total net proceeds from the exercise of stock options. Net cash provided by financing activities for the three months ended March 31, 2025 was $4.2 million and consisted of total net proceeds from the exercise of stock options.
Contractual Obligations and Commitments
Less Than | 1 to 3 | 3 to 5 | More than | ||||||||||||
| Total | | 1 Year | | Years | | Years | | 5 Years | ||||||
(in thousands) | |||||||||||||||
Operating lease commitments | $ | 8,910 | $ | 4,031 | 3,506 | 1,373 | — | ||||||||
Barings Credit Agreement |
| 82,474 |
| — | — | 82,474 | — | ||||||||
Total | $ | 91,384 | $ | 4,031 | $ | 3,506 | $ | 83,847 | $ | — | |||||
The table above includes our enforceable and legally binding obligations and future commitments at March 31, 2026, as well as obligations related to contracts that we are likely to continue, regardless of the fact that they may be cancelable at March 31, 2026. Some of the figures that we include in this table are based on management’s estimates and assumptions about these obligations, including their duration, and other factors. Because these estimates and assumptions are necessarily subjective, the amounts we will actually pay in future periods may vary from those reflected in the table.
We enter into contracts in the normal course of business to assist in the performance of our research and development activities, including agreements with clinical research organizations regarding the SOL-1 trial, the SOL-R trial, the SOL-X trial, and the HELIOS-3 trial, and other services and products for operating purposes. These contracts generally provide for termination on notice and therefore are cancelable contracts which are not included in contractual obligations and commitments.
Operating lease commitments represent payments due under our leases of office, laboratory and manufacturing space in Bedford, Massachusetts, which expire in July 2027, July 2028, and March 2031, and leases of equipment that expire between 2026 and 2028.
In January 2026, we entered into a sublease for office space at 14 Crosby Drive in Bedford, Massachusetts, which now serves as our corporate headquarters. The sublease expires March 30, 2031. We are obligated to pay monthly fixed rent commencing March 1, 2026, following a two-month rent-free period, at rates subject to annual escalation over the lease term, in addition to our proportionate share of operating cost and real estate tax increases above a 2026 base year and all utilities for the subleased premises. Aggregate undiscounted fixed rent payments remaining under this sublease as of March 31, 2026 are approximately $3.3 million.
The commitments under the Barings Credit Agreement represent repayment of principal only. Future payments of interest under the Barings Credit Agreement depend on the level of the Secured Overnight Financing Rate, or SOFR, and future payments of royalty fees depend on our future revenue from DEXTENZA, both of which cannot be estimated at this time.
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We have in-licensed a significant portion of our intellectual property from Incept, LLC, or Incept, an intellectual property holding company, under an amended and restated license agreement, or the License Agreement, that we entered into with Incept in January 2012, which was most recently amended in September 2018. We are obligated to pay Incept a royalty equal to a low-single-digit percentage of net sales made by us or our affiliates of any products, devices, materials, or components thereof, or the Licensed Products, including or covered by Original IP (as defined in the License Agreement), excluding the Shape-Changing IP (as defined in the License Agreement), in the Ophthalmic Field of Use (as defined in the License Agreement). We are obligated to pay Incept a royalty equal to a mid-single-digit percentage of net sales made by us or our affiliates of any Licensed Products including or covered by Original IP, excluding the Shape-Changing IP, in the Additional Field of Use (as defined in the License Agreement). We are obligated to pay Incept a royalty equal to a low-single-digit percentage of net sales made by us or our affiliates of any Licensed Products including or covered by Incept IP (as defined in the License Agreement) or Joint IP (as defined in the License Agreement) in the field of drug delivery. Any sublicensee of ours also will be obligated to pay Incept a royalty on net sales of Licensed Products made by it and will be bound by the terms of the agreement to the same extent as we are. We are obligated to reimburse Incept for our share of the reasonable fees and costs incurred by Incept in connection with the prosecution of the patent applications licensed to us under the agreement. Our share of these fees and costs is equal to the total amount of such fees and costs divided by the total number of Incept’s exclusive licensees of the patent application. We have not included in the table above any payments to Incept under this license agreement as the amount, timing and likelihood of such payments are not known.
Off-Balance Sheet Arrangements
We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations of the Securities and Exchange Commission, such relationships with unconsolidated entities or financial partnerships, which are often referred to as structured finance or special purpose entities, established for the purpose of facilitating financing transactions that are not required to be reflected on our balance sheets.
Critical Accounting Policies and Significant Judgments and Estimates
Our unaudited condensed consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America.
We define our critical accounting policies as those accounting policies that require us to make subjective estimates and judgments about matters that are uncertain and have had or are likely to have a material impact on our financial condition and results of operations, as well as the specific manner in which we apply those policies. Our critical accounting policies, which relate to revenue recognition and our derivative liabilities, are described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Significant Judgments and Estimates” in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 5, 2026.
The preparation of our unaudited condensed consolidated financial statements and related disclosures requires us to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, revenue, costs and expenses, and the disclosure of contingent assets and liabilities in our consolidated financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to revenue recognition, accrued research and development expenses and stock-based compensation. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
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Recently Issued Accounting Pronouncements
Information regarding new accounting pronouncements is included in Note 2 – Summary of Significant Accounting Policies to the current period’s unaudited condensed consolidated financial statements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
We are exposed to market risk related to changes in interest rates. As of March 31, 2026, we had cash and cash equivalents of $666.7 million, which includes cash in operating bank accounts and investments in money market funds. We have policies requiring us to invest in high-quality issuers, limit our exposure to any individual issuer, and ensure adequate liquidity. Our primary exposure to market risk related to our cash and cash equivalents is interest-rate sensitivity, which is affected by changes in the general level of U.S. interest rates, particularly because our investments are in short-term securities. Due to the short-term duration of our investment portfolio and the low risk profile of our investments, an immediate 100 basis point change in interest rates would not have a material effect on the fair market value of our portfolio.
We do not enter into financial instruments for trading or speculative purposes.
As of March 31, 2026, we had a secured term loan facility with a principal amount of $82.5 million under a credit and security agreement with Barings Finance LLC and the lenders party thereto, or the Barings Credit Agreement. Expected cash outflows from this financial instrument fluctuate based on changes in the Secured Overnight Financing Rate, or SOFR, which is, among other factors, affected by the general level of U.S. and international central bank interest rates. As of March 31, 2026, an immediate 100 basis point increase or decrease in the SOFR would not have a material effect on the anticipated cash outflows from this instrument.
We account for the obligation to pay royalty fees embedded in the Barings Credit Agreement as a separate financial instrument, measured at fair value, using a Monte Carlo simulation, which we refer to as the Royalty Fee Derivative Liability. As of March 31, 2026, the Royalty Fee Derivative Liability was valued at $12.1 million. As of March 31, 2026, a 10% increase or decrease of the interest rate used in the valuation model would not have a material effect on the fair value of the Royalty Fee Derivative Liability. Changes in the fair value of the Royalty Fee Derivative Liability have no impact on anticipated cash outflows related to this liability.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our principal executive officer and our principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2026. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management, including our principal executive officer and our principal financial officer, recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of March 31, 2026, our principal executive officer and our principal financial officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.
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Changes in Internal Control Over Financial Reporting
No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the three months ended March 31, 2026 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II – OTHER INFORMATION
Item 1. Legal Proceedings.
From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.
EyePoint Litigation
On March 20, 2026, plaintiff EyePoint, Inc. filed a lawsuit against us in Middlesex County Superior Court of Massachusetts. The plaintiff alleges that we have made certain false and defamatory statements about EyePoint and its DURAVYU product candidate. The complaint asserts counts of (1) defamation; (2) commercial disparagement; (3) unfair or deceptive practices in violation of Massachusetts General Laws c. 93A, §§ 2, 11; and (4) tortious interference with advantageous business relations. The plaintiff is seeking, among other things, injunctive relief, damages, and attorneys’ fees.
On March 23, 2026, EyePoint filed a Motion for Temporary Restraining Order and Preliminary Injunction, seeking, among other things, to enjoin us from disseminating allegedly false and misleading statements. On April 13, 2026, the court denied the plaintiff’s motion for temporary restraining order. A hearing on the plaintiff’s motion for preliminary injunction is scheduled to be held on May 5, 2026.
We intend to vigorously defend this case. However, we cannot provide any assurance as to the outcome of this matter and cannot predict with any degree of certainty the extent of any potential liability.
Item 1A. Risk Factors.
We are subject to a number of risks that could materially and adversely affect our business, financial condition, and results of operations and future growth prospects, including those identified under the heading “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025, which was filed with the Securities and Exchange Commission, or SEC, on February 5, 2026, which we refer to as our Annual Report on Form 10-K. Any of the risks and uncertainties described in our Annual Report on Form 10-K could materially and adversely affect our business, financial condition, results of operations and future growth prospects, and such risks and uncertainties are not the only ones we face. Additional risks and uncertainties not presently known to us or that we presently deem less significant may also impair our business operations.
Item 5. Other Information.
Director and Officer Trading Arrangements
A portion of the compensation of our directors and officers (as defined in Rule 16a-1(f) under the Securities Exchange Act of 1934, as amended, or the Exchange Act) is in the form of equity awards, including stock options and restricted stock units, or RSUs, and, from time to time, directors and officers engage in open-market transactions with respect to the securities acquired pursuant to such equity awards or other of our securities, including to satisfy tax withholding obligations when equity awards vest or are exercised, and for diversification or other personal reasons.
Transactions in our securities by directors and officers are required to be made in accordance with our insider trading policy, which requires that the transactions be in accordance with applicable U.S. federal securities laws that prohibit trading while in possession of material nonpublic information. Rule 10b5-1 under the Exchange Act provides an
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affirmative defense that enables directors and officers to prearrange transactions in our securities in a manner that avoids concerns about initiating transactions while in possession of material nonpublic information.
The following table describes, for the quarterly period covered by this report, each trading arrangement for the sale or purchase of our securities adopted or terminated by our directors and officers that is either (1) a contract, instruction or written plan intended to satisfy the affirmative defense conditions of Rule 10b5-1(c), or a “Rule 10b5-1 trading arrangement”, or (2) a “non-Rule 10b5-1 trading arrangement” (as defined in Item 408(c) of Regulation S-K):
| (1) | The number of shares subject to covered RSUs that will be sold to satisfy applicable tax withholding obligations upon vesting is unknown as the number will vary based on the extent to which vesting conditions are satisfied, the market price of the Company’s common stock at the time of settlement and the potential future grant of additional RSUs subject to this arrangement. This trading arrangement, which applies to RSUs that have or may be granted, provides for the automatic sale of shares that would otherwise be issuable on each settlement date of a covered RSU in an amount sufficient to satisfy the applicable withholding obligation, with the proceeds of the sale delivered to the Company in satisfaction of the applicable withholding obligation. |
Item 6. Exhibits.
The exhibits filed as part of this Quarterly Report on Form 10-Q are set forth on the following Exhibit Index.
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Exhibit Index
Incorporated by Reference | ||||||||||||
Exhibit | | Description of Exhibit | | Form | | File Number | | Date of Filing | | Exhibit Number | | Filed Herewith |
10.1 | S-8 | 333-293220 | 2/5/2026 | 99.6 | ||||||||
10.2 | X | |||||||||||
10.3 | Employment Agreement by and between the Registrant and David Robinson, dated as of January 20, 2026 | X | ||||||||||
10.4 | Employment Agreement by and between the Registrant and Jason S. Robins, dated as of April 15, 2026 | X | ||||||||||
31.1 | X | |||||||||||
31.2 | X | |||||||||||
32.1 | X | |||||||||||
32.2 | X | |||||||||||
101.INS | Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document) | X | ||||||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document | X | ||||||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | X | ||||||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Database | X | ||||||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | X | ||||||||||
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101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | X | ||||||||||
104 | The cover page from this Quarterly Report on Form 10-Q, formatted in Inline XBRL and contained in Exhibit 101 | X |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| OCULAR THERAPEUTIX, INC. | ||
Date: May 5, 2026 | By: | /s/ Jason S. Robins | |
Jason S. Robins | |||
Interim Chief Financial Officer | |||
(Principal Financial and Accounting Officer) | |||
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