UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 20-F
(Mark One)
☐
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2025
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
☐
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of event requiring this shell company report
Commission File Number: 001-41636
OCULIS HOLDING AG
(Exact name of Registrant as specified in its charter)
Not applicable
Switzerland
(Translation of Registrant’s name into English)
(Jurisdiction of incorporation or organization)
Bahnhofstrasse 20
CH-6300
Zug, Switzerland
(Address of principal executive offices)
Riad Sherif, MD
Bahnhofstrasse 20, CH-6300 Zug, Switzerland
+41-41-711-3960
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
Securities registered or to be registered pursuant to Section 12(b) of the Act:
Title of each class
Trading
Symbol(s)
Name of each exchange
on which registered
Ordinary Shares
OCS
The Nasdaq Stock Market LLC
Warrants
OCSAW
The Nasdaq Stock Market LLC
Securities registered or to be registered pursuant to Section 12(g) of the Act: None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the
annual company report:
57,984,438 Ordinary Shares
and
2,104,906 Warrants to purchase Ordinary Shares
.
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes
☒
No
☐
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934. Yes
☐
No
☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or 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, or an emerging growth
company. See definition of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☒
Accelerated filer
☐
Non-accelerated filer
☐
Emerging growth company
☐
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant
has elected 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.
☐
†
The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its
Accounting Standards Codification after April 5, 2012.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its
internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting
firm that prepared or issued its audit report.
☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements.
☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based
compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).
☐
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
US GAAP
☐
International Financial Reporting Standards as issued
Other
☐
by the International Accounting Standards Board
®
☒
If “Other” has been checked in response to the previous question indicate by check mark which financial statement item the registrant
has elected to follow. Item17
☐
Item18
☐
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
☐
No
☒
1
TABLE OF CONTENTS
............................................................................................................................
GENERAL INFORMATION
3
...............................................
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
3
.................................................................................................................................................................
PART I
5
.....................................................................
Item 1. Identity of Directors, Senior Management and Advisers
5
..............................................................................................
Item 2. Offer Statistics and Expected Timetable
5
...................................................................................................................................
Item 3. Key Information
5
A.
....................................................................................................................................
[Reserved]
5
B.
...................................................................................................
Capitalization and indebtedness
5
C.
....................................................................................
Reasons for the offer and use of proceeds
5
D.
...................................................................................................................................
Risk factors
5
................................................................................................................
Item 4. Information on the Company
77
A.
..................................................................................
History and Development of the Company
77
B.
.......................................................................................................................
Business Overview
77
C.
..............................................................................................................
Organizational Structure
118
D.
...................................................................................................
Property, Plants and Equipment
119
..............................................................................................................
Item 4A. Unresolved Staff Comments
119
...................................................................................
Item 5. Operating and Financial Review and Prospects
119
A.
.........................................................................................................................
Operating Results
126
B.
..................................................................................................
Liquidity and Capital Resources
128
C.
...............................................................
Research and Development, Patents and Licenses, etc.
134
D.
........................................................................................................................
Trend Information
134
E.
.................................................................................
Critical Accounting Policies and Estimates
134
...................................................................................
Item 6. Directors, Senior Management and Employees
135
A.
................................................................................................
Directors and senior management
135
B.
...............................................................................................................................
Compensation
138
C.
.............................................................................................................................
Board Practices
141
D.
....................................................................................................................................
Employees
145
E.
..........................................................................................................................
Share Ownership
145
F.
...............
Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation
145
............................................................................
Item 7. Major Shareholders and Related Party Transactions
145
A.
......................................................................................................................
Major Shareholders
145
B.
...........................................................................................................
Related Party Transactions
147
C.
..................................................................................................
Interests of Experts and Counsel
148
...........................................................................................................................
Item 8. Financial Information
148
A.
.........................................................
Consolidated Statements and Other Financial Information
148
B.
......................................................................................................................
Significant Changes
148
...........................................................................................................................
Item 9. The Offer and Listing
149
A.
..............................................................................................................
Offer and Listing Details
149
B.
......................................................................................................................
Plan of Distribution
149
C.
.........................................................................................................................................
Markets
149
2
D.
.....................................................................................................................
Selling Shareholders
149
E.
.........................................................................................................................................
Dilution
149
F.
...................................................................................................................
Expenses of the Issue
149
.......................................................................................................................
Item 10. Additional Information
149
A.
................................................................................................................................
Share Capital
149
B.
...................................................................................
Memorandum and Articles of Association
149
C.
........................................................................................................................
Material Contracts
149
D.
.......................................................................................................................
Exchange Controls
150
E.
........................................................................................................................................
Taxation
150
F.
......................................................................................................
Dividends and Paying Agents
159
G.
....................................................................................................................
Statement by Experts
159
H.
.................................................................................................................
Documents on Display
159
I.
.................................................................................................................
Subsidiary Information
160
J.
..............................................................................................
Annual Report to Security Holders
160
...........................................................
Item 11. Quantitative and Qualitative Disclosures About Market Risk
160
......................................................................
Item 12. Description of Securities Other than Equity Securities
160
A.
.............................................................................................................................
Debt Securities
160
B.
.....................................................................................................................
Warrants and Rights
160
C.
............................................................................................................................
Other Securities
160
D.
........................................................................................................
American Depositary Shares
160
...............................................................................................................................................................
PART II
160
.............................................................................
Item 13. Defaults, Dividend Arrearages and Delinquencies
160
................................
Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds
160
.....................................................................................................................
Item 15. Controls and Procedures
160
...........................................................................................................................................
Item 16. [Reserved]
161
..................................................................................................
Item 16A. Audit Committee Financial Expert
161
..................................................................................................................................
Item 16B. Code of Ethics
161
..........................................................................................
Item 16C. Principal Accountant Fees and Services
161
......................................................
Item 16D. Exemptions from the Listing Standards for Audit Committees
162
..........................................
Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers
162
................................................................................
Item 16F. Change in Registrant’s Certifying Accountant
162
.....................................................................................................................
Item 16G. Corporate Governance
162
....................................................................................................................
Item 16H. Mine Safety Disclosure
163
..............................................
Item 16I. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
163
....................................................................................................................
Item 16J. Insider Trading Policies
163
...................................................................................................................................
Item 16K. Cybersecurity
163
..............................................................................................................................................................
PART III
166
...........................................................................................................................
Item 17. Financial Statements
166
...........................................................................................................................
Item 18. Financial Statements
166
...............................................................................................................................................
Item 19. Exhibits
166
3
GENERAL INFORMATION
Unless context otherwise requires, all references in this Annual Report on Form 20-F (the “
Annual Report
”) to
“Oculis,” the “Company,” “we,” “us” and “our” refer to Oculis and, where appropriate, its consolidated subsidiaries.
Unless otherwise stated or unless the context otherwise requires, references to “Oculis” or the “Company” are to the
registrant named “Oculis Holding AG” and its subsidiaries.
This Annual Report includes trademarks, trade names and service marks, certain of which belong to us and others
that are the property of other organizations. Solely for convenience, trademarks, trade names and service marks
referred to in this Annual Report appear without the
®
, ™ and
SM
symbols, but the absence of those symbols is not
intended to indicate, in any way, that we will not assert our rights or that the applicable owner will not assert its
rights to these trademarks, trade names and service marks to the fullest extent under applicable law. We do not
intend our use or display of other parties’ trademarks, trade names or service marks to imply, and such use or
display should not be construed to imply, a relationship with, or endorsement or sponsorship of us by, these other
parties.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report contains or may contain forward-looking statements as defined in Section 27A of the Securities
Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), that involve significant risks and uncertainties. All statements other than statements
of historical facts are forward-looking statements. These forward-looking statements include information about our
possible or assumed future results of operations or our performance. Words such as “may,” “might,” “will,” “could,”
“would,” “should,” “expects,” “intends,” “plans,” “believes,” “anticipates,” “estimates,” “potential,” “continue,”
“ongoing,” “targets,” “possible,” “project,” and “predict” and variations of such words and similar expressions are
intended to identify the forward-looking statements. Forward-looking statements in this Annual Report may include,
for example, statements about:
•
our financial performance;
•
the ability to maintain the listing of our ordinary shares and public warrants on the Nasdaq Global
Market and the Nasdaq Iceland Main Market;
•
timing and expected outcomes of clinical trials, preclinical studies, regulatory submissions and
approvals, as well as commercial outcomes;
•
timing of expected milestones in connection with our in-licensed assets;
•
our expectations regarding the potential market size and the size of the patient populations for our
product candidates, if approved for commercial use;
•
expected benefits of our business and scientific approach and technology;
•
the potential safety and efficacy of our product candidates;
•
our ability to successfully develop, advance, and partner or commercialize our pipeline of product
candidates;
•
our ability to establish and maintain arrangements for the manufacture of our product candidates;
•
the effectiveness and profitability of our collaborations and partnerships, our ability to maintain current
collaborations and partnerships and enter into new collaborations and partnerships;
•
expectations related to future milestone and royalty payments and other economic terms under our
collaborations and partnerships;
4
•
estimates regarding cash runway, future revenue, expenses, capital requirements, financial condition and
need for additional financing;
•
estimates of market opportunity for our product candidates;
•
the effects of increased competition as well as innovations by new and existing competitors in our
industry;
•
our strategic advantages and the impact those advantages may have on future financial and operational
results;
•
our expansion plans and opportunities;
•
our ability to grow our business in a cost-effective manner;
•
our expectations regarding our ability to obtain and maintain intellectual property protection and not
infringe on the rights of others;
•
the impact of any macroeconomic factors and other global events on our business;
•
changes in applicable laws or regulations; and
•
the outcome of any known and unknown litigation and regulatory proceedings.
These forward-looking statements are based on information available as of the date of this Annual Report, and
current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties.
Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent
date, and we do not undertake any obligation to update forward-looking statements to reflect events or
circumstances after the date they were made, whether as a result of new information, future events or otherwise,
except as may be required under applicable securities laws. Accordingly, you should not place undue reliance on
these forward-looking statements in deciding to invest in our securities. As a result of a number of known and
unknown risks and uncertainties, our actual results or performance may be materially different from those expressed
or implied by these forward-looking statements. You should refer to the section titled “
Item 3.D Risk Factors
” for a
discussion of important factors that may cause our actual results to differ materially from those expressed or implied
by our forward-looking statements. As a result of these factors, we cannot assure you that the forward-looking
statements in this Annual Report will prove to be accurate. Furthermore, if our forward-looking statements prove to
be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking
statements, you should not regard these statements as a representation or warranty by us or any other person that we
will achieve our objectives and plans in any specified time frame, or at all. We undertake no obligation to publicly
update any forward-looking statements, whether as a result of new information, future events or otherwise, except as
required by law. You should, therefore, not rely on these forward-looking statements as representing our views as of
any date subsequent to the date of this Annual Report.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant
subject. These statements are based on information available to us as of the date of this Annual Report. And while
we believe such information provides a reasonable basis for these statements, such information may be limited or
incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or
review of, all relevant information. These statements are inherently uncertain, and you are cautioned not to unduly
rely on these statements.
5
PART I
Item 1.
Identity of Directors, Senior Management and Advisers
Not applicable.
Item 2.
Offer Statistics and Expected Timetable
Not applicable.
Item 3.
Key Information
A.
[Reserved]
B.
Capitalization and indebtedness
Not applicable.
C.
Reasons for the offer and use of proceeds
Not applicable.
D.
Risk factors
An investment in our securities carries a significant degree of risk. In addition to the other information contained in
this Annual Report on Form 20-F, including the matters addressed under the heading “Forward-Looking
Statements,” you should carefully consider the following risk factors in deciding whether to invest in our securities.
The occurrence of one or more of the events or circumstances described in these risk factors, alone or in
combination with other events or circumstances, may have a material adverse effect relating to our business,
financial condition, and results of operations and future prospects, in which event the market price of our securities
could decline, and you could lose part or all of your investment. Additional risks and uncertainties of which we are
not presently aware or that we currently deem immaterial could also affect our business operations and financial
condition.
Summary Risk Factors
Our business is subject to a number of risks and uncertainties. If any of the following risks are realized, our business,
financial condition and results of operations could be materially and adversely affected. You should carefully review
and consider the full discussion of our risk factors in this section titled “
Risk Factors
” in Part I, Item 3.D. of this
Annual Report. Set forth below is a summary list of the principal risk factors as of the date of the filing of this
Annual Report:
•
We have a limited operating history and no products approved for commercial sale, which may make it
difficult to evaluate our current business and predict our future success and viability.
•
We have incurred significant net losses in each period since our inception and anticipate that we will
continue to incur significant and increasing net losses for the foreseeable future.
•
Drug development is a highly uncertain undertaking and involves a substantial degree of risk. We have
never generated any revenue from product sales, and we may never generate revenue or be profitable.
•
If we fail to obtain additional financing, we may be unable to complete the development and, if
approved, commercialization of our product candidates.
•
We have not yet received any marketing approvals or commercialized any pharmaceutical products,
which may make it difficult to evaluate our future prospects.
6
•
We depend significantly on our product candidates,OCS-01, Licaminlimab (OCS-02) and Privosegtor
(OCS-05), which we are developing for treatment of multiple diseases. If we are unable to complete the
clinical development of any of these product candidates, if we are unable to obtain marketing approvals
for any of these product candidates, or if any of these product candidates are approved and we fail to
successfully commercialize the product candidate or experience significant delays in doing so, our
business will be materially harmed.
•
Our product candidates may cause undesirable side effects or have other unexpected properties that
could delay or prevent their regulatory approval, limit the commercial profile of an approved label, or
result in post-approval regulatory action.
•
The manufacture of Licaminlimab, a biologic, is highly complex, costly and requires substantial lead
time to produce.
•
The results of previous clinical trials may not be predictive of future results, and the results of our
current and planned clinical trials may not satisfy the requirements of the FDA or non-U.S. regulatory
agencies.
•
Interim, topline and preliminary data from our clinical trials may change as more patient data becomes
available and are subject to audit and verification procedures that could result in material changes in the
final data.
•
Even if a product candidate obtains regulatory approval, it may fail to achieve the broad degree of
physician and patient adoption and use necessary for commercial success.
•
Even if we receive marketing approvals for OCS-01, Licaminlimab, Privosegtor, or any future product
candidate, we may not be able to successfully commercialize our product candidates due to unfavorable
pricing regulations or third-party coverage and reimbursement policies, which could make it difficult for
us to sell our product candidates profitably.
•
We face substantial competition, which may result in others discovering, developing or commercializing
products before or more successfully than we do.
•
We rely completely on third-party contractors to supply, manufacture and distribute clinical drug
supplies for our product candidates, which may include sole-source suppliers and manufacturers; we
intend to rely on third parties for commercial supply, manufacturing and distribution if any of our
product candidates receives regulatory approval and for any future product candidates.
•
Our rights to develop and commercialize our technology are subject, in part, to the terms and conditions
of licenses granted to us by others. In particular, we depend on licenses for development and
commercialization rights to Licaminlimab and Privosegtor. If these rights are terminated or we fail to
comply with our obligations under these agreements or any other license, collaboration or other
agreement, we may be required to pay damages and we could lose intellectual property rights that are
necessary for the development and protection of our product candidates.
•
If we are unable to obtain, maintain, protect and enforce patent or other intellectual property protection
for our current and future technology and product candidates, or if the scope of the patent or other
intellectual property protection obtained is not sufficiently broad, we may not be able to compete
effectively in our markets.
•
The regulatory approval processes of the FDA and non-U.S. regulatory agencies are highly complex,
lengthy, and inherently unpredictable. If we are unable to obtain regulatory approval for our product
candidates, or to do so in a timely manner, we will be unable to generate product revenue and our
business will be substantially harmed.
•
If the FDA does not conclude that OCS-01 satisfies the requirements for the Section 505(b)(2)
regulatory approval pathway, or if the requirements under Section 505(b)(2) are not as we expect, the
7
approval pathway for OCS-01 will likely take significantly longer, cost significantly more and entail
significantly greater complications and risks than anticipated, and in either case may not be successful.
Risk Factors
Risks related to our business, financial condition, capital requirements, or financial operations
We have a limited operating history and no products approved for commercial sale, which may make it difficult
to evaluate our current business and predict our future success and viability.
We are a late clinical stage biopharmaceutical company specializing in novel therapeutics to treat ophthalmic,
neuro-ophthalmic and neurological diseases. We commenced operations in October 2003 and formed Oculis SA in
December 2017, have no products approved for commercial sale and have not generated any revenue from product
sales. Drug development is a highly uncertain undertaking and involves a substantial degree of risk. To date, we
have not obtained marketing approval for any product candidates, manufactured a commercial scale product, or
conducted sales and marketing activities necessary for successful product commercialization.
Our limited operating history as a company and pre-commercial stage make any assessment of our future success
and viability subject to significant uncertainty. We will encounter risks and difficulties frequently experienced by
clinical-stage biopharmaceutical companies in rapidly evolving fields, and we have not yet demonstrated an ability
to successfully overcome such risks and difficulties. If we do not address these risks and difficulties successfully,
our business, financial condition, results of operations and growth prospects may be impaired.
We have incurred significant net losses in each period since our inception and anticipate that we will continue to
incur significant and increasing net losses for the foreseeable future.
We have incurred net losses in each reporting period since our inception, including net losses of CHF 99.0 million
and CHF 85.8 million for the fiscal years ended December 31, 2025 and 2024, respectively. As of December 31,
2025, we had accumulated losses of CHF 384.5 million.
We have invested significant financial resources in research and development activities, including for our product
candidates. We do not expect to generate revenue from product sales in the foreseeable future, if at all. The amount
of our future net losses will depend, in part, on the level of our future expenditures and our ability to generate
revenue. Moreover, our net losses may fluctuate significantly from quarter to quarter and year to year, such that a
period-to-period comparison of our results of operations may not be a good indication of our future performance
quarter to quarter or year to year due to factors including the timing of clinical trials, any litigation that we may file
or that may be filed against us, the execution of collaboration, licensing or other agreements and the timing of any
payments we make or receive thereunder.
We expect to continue to incur significant and increasingly higher expenses and operating losses for the foreseeable
future. We anticipate that our expenses will increase substantially if and as we:
•
progress our current and any future product candidates through preclinical and clinical development;
•
work with our contract manufacturers to scale up the manufacturing processes for our product
candidates, if approved, or, in the future, maintain outsourced manufacturing or establish and operate a
manufacturing facility;
•
continue our development, research and discovery activities;
•
initiate and conduct additional preclinical, clinical or other studies for our product candidates;
•
change or add contract manufacturers or suppliers;
•
seek regulatory approvals and marketing authorizations for our product candidates;
8
•
establish sales, marketing and distribution infrastructure to commercialize any products for which we
obtain approval;
•
acquire or in-license product candidates, intellectual property and technologies;
•
make milestone, royalty or other payments due under any current or future collaboration or license
agreements;
•
obtain, maintain, expand, protect and enforce our intellectual property portfolio;
•
attract, hire and retain high quality personnel;
•
experience any delays or encounter other issues related to our operations;
•
meet the requirements and demands of being a dual-listed public company; and
•
defend against any product liability claims or other lawsuits related to our products.
Our prior losses and expected future losses have had and will continue to have an adverse effect on our
shareholders’ deficit and working capital. In any particular quarter or quarters, our operating results could be below
the expectations of securities analysts or investors, which could cause the share price of our ordinary shares to
decline.
As of December 31, 2025, we had cash, cash equivalents and short-term financial assets of CHF 213.0 million. We
believe that these cash, cash equivalents and short-term financial assets will be sufficient to enable us to fund our
current operations for at least the next twelve months.
Drug development is a highly uncertain undertaking and involves a substantial degree of risk. We have never
generated any revenue from product sales, and we may never generate revenue or be profitable.
We have no products approved for commercial sale and have not generated any revenue from product sales. We do
not anticipate generating any revenue from product sales until after we have successfully completed clinical
development and received regulatory approval for the commercial sale of a product candidate, if ever.
Our ability to generate revenue, alone or with strategic collaboration, and achieve profitability depends significantly
on many factors, including:
•
successfully completing research, preclinical, nonclinical and clinical development of our product
candidates;
•
obtaining regulatory approvals and marketing authorizations for product candidates for which we
successfully complete clinical development and clinical trials;
•
developing a sustainable and scalable manufacturing process for our product candidates, as well as
establishing and maintaining commercially viable supply relationships with third parties that can
provide adequate products and services to support clinical activities and any commercial demand for our
product candidates;
•
identifying, assessing, acquiring and/or developing new product candidates;
•
negotiating favorable terms in any collaboration, licensing or other arrangements into which we may
enter;
•
launching and successfully commercializing product candidates for which we obtain regulatory and
marketing approval, either by collaborating with a partner or, if launched independently, by establishing
a sales, marketing and distribution infrastructure;
9
•
obtaining and maintaining a sustainable price for our product candidates, both in the United States and
in other countries where our products are commercialized;
•
obtaining adequate reimbursement for our product candidates from third-party payors;
•
obtaining market acceptance of our product candidates as viable treatment options;
•
addressing any competing technological and market developments;
•
maintaining, protecting, expanding and enforcing our portfolio of intellectual property rights, including
patents, trade secrets and know-how; and
•
attracting, hiring and retaining high quality personnel.
Because of the numerous risks and uncertainties associated with drug development, we are unable to predict the
timing or amount of our expenses, or when we will be able to generate any meaningful revenue or achieve or
maintain profitability, if ever. In addition, our expenses could increase beyond our current expectations if we are
required by the FDA or non-U.S. regulatory agencies to perform studies in addition to those that we currently
anticipate, or if there are any delays in any of our or our future collaborators’ clinical trials or the development of
any of our product candidates. Even if one or more of our product candidates is approved for commercial sale, we
anticipate incurring significant costs associated with commercializing any approved product candidate and ongoing
compliance efforts.
Even if we are able to generate revenue from the sale of any approved products, we may not become profitable, and
we will need to obtain additional funding through one or more debt or equity financings in order to continue
operations. Revenue from the sale of any product candidate for which regulatory approval is obtained will be
dependent, in part, upon the size of the markets in the territories for which we gain regulatory approval, the accepted
price for the product, the ability to get reimbursement at any price and whether we own the commercial rights for
that territory. If the number of addressable patients is not as significant as we anticipate, the indication approved by
regulatory agencies is narrower than we expect, or the reasonably accepted population for treatment is narrowed by
competition, physician choice or treatment guidelines, we may not generate significant revenue from sales of such
products, even if approved. Even if we do achieve profitability, we may not be able to sustain or increase
profitability on a quarterly or annual basis.
Our failure to become and remain profitable could decrease the value of our Company and could impair our ability
to raise capital, expand our business, maintain our research and development efforts, diversify our pipeline of
product candidates or continue our operations and cause a decline in the value of our ordinary shares, all or any of
which may adversely affect our viability.
If we fail to obtain additional financing, we may be unable to complete the development and, if approved,
commercialization of our product candidates.
Our operations have required substantial amounts of cash since inception. To date, we have financed our operations
primarily through the sale of equity securities. Developing our product candidates is expensive, and we expect to
substantially increase our spending as we advance our product candidates in clinical trials. Even if we are successful
in developing our product candidates, obtaining regulatory approvals and launching and commercializing any
product candidate will require substantial additional funding.
As of December 31, 2025, we had CHF 213.0 million in cash, cash equivalents and short-term financial assets.
Although we believe that our existing cash, cash equivalents and short-term financial assets will be sufficient to fund
our projected operations through at least the next 12 months, our estimate as to how long we expect our existing
cash, cash equivalents and short-term financial assets to fund our operations is based on assumptions that may prove
inaccurate, and we could use our available capital resources sooner than we currently expect. In addition, changing
circumstances may cause us to increase our spending significantly faster than we currently anticipate, and we may
need to spend more money than currently expected because of circumstances beyond our control. We may need to
raise additional funds sooner than we anticipate if we choose to expand more rapidly than we presently foresee.
10
We will require additional capital for the further development and, if approved, commercialization of our product
candidates. Additional capital may not be available when we need it, on terms acceptable to us or at all. We have no
committed source of additional capital. If adequate capital is not available to us on a timely basis, we may be
required to significantly delay, scale back or discontinue our research and development programs or the
commercialization of any product candidates, if approved, or be unable to continue or expand our operations or
otherwise capitalize on our business opportunities, as desired, which could materially affect our business, financial
condition and results of operations and cause the price of ordinary shares to decline.
Our future success depends on our ability to retain key executives and to attract, retain and motivate qualified
personnel.
We are highly dependent on the research and development, clinical and business development expertise of our chief
executive officer as well as other principal members of our management, scientific and clinical team. Although we
have entered into employment agreements with our executive committee members, each of them may terminate their
employment with us at any time.
Laws and regulations on executive compensation, including legislation in our home country, Switzerland, may
restrict our ability to attract, motivate and retain the required level of qualified personnel. In Switzerland, legislation
affecting public companies is in force that, among other things, (i) imposes an annual binding shareholders’ “say on
pay” vote with respect to the compensation of our executive committee and board of directors, (ii) generally
prohibits severance, advances, transaction premiums and similar payments to members of our executive committee
and board of directors, and (iii) requires companies to specify certain compensation-related matters in their articles
of association, thus requiring them to be approved by a shareholders’ vote.
Recruiting and retaining qualified scientific, clinical, manufacturing and sales and marketing personnel will also be
critical to our success. The loss of the services of our executive committee members or other key employees could
impede the achievement of our research, development and commercialization objectives and seriously harm our
ability to successfully implement our business strategy. Furthermore, replacing executive committee members and
key employees may be difficult and may take an extended period of time because of the limited number of
individuals in our industry with the breadth of skills and experience required to successfully develop, gain regulatory
approval of and commercialize products. Competition to hire from this limited pool is intense, and we may be
unable to hire, train, retain or motivate these key personnel on acceptable terms given the competition among
numerous pharmaceutical and biotechnology companies for similar personnel. We also experience competition for
the hiring of scientific and clinical personnel from universities and research institutions. In addition, we rely on
consultants and advisors, including scientific, medical, clinical and regulatory advisors, to assist us in formulating
our research and development and commercialization strategy. Our consultants and advisors may be employed by
employers other than us and may have commitments under consulting or advisory contracts with other entities that
may limit their availability to us. If we are unable to continue to attract and retain high quality personnel, our ability
to pursue our growth strategy will be limited.
We will continue to incur significant expenses and devote other significant resources and management time as a
result of being a dual-listed public company, which may negatively impact our financial performance and could
cause our results of operations and financial condition to suffer.
We will continue to incur significant legal, accounting, insurance and other expenses as a result of being a public
company with shares listed both on the Nasdaq Global Market in the United States and the Nasdaq Main Market in
Iceland (together, “
Nasdaq
”). The rules implemented by the SEC and Nasdaq in the US, the Financial Supervisory
Authority and Nasdaq in Iceland, and Swiss corporate law require us to adhere to certain corporate governance
practices, and these requirements may change over time. We expect that ongoing compliance with these laws, rules
and regulations will continue to substantially increase our expenses as a result of being a dual-listed public
company, including our legal, accounting and information technology costs and expenses, and make some activities
more time consuming and costly. These obligations require attention from our executive officers and senior
management and could divert their attention away from the day-to-day management of our business. These laws,
rules and regulations have made, and we expect will continue to make, it more expensive for us to obtain director
and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur
substantially higher costs to obtain the same or similar coverage. Due to increased risks and exposure it may be
more difficult for us to attract and retain qualified persons to serve on our board of directors or as officers. As a
11
result of the foregoing, we expect to continue to experience a substantial increase in legal, accounting, insurance and
certain other expenses in the future, which will negatively impact our financial performance and could cause our
results of operations and financial condition to suffer. Furthermore, if we are unable to satisfy our obligations as a
public company, we could be subject to delisting of our ordinary shares, fines, sanctions and other regulatory action
and potentially civil litigation, which could adversely impact our business, results of operation, financial condition
and the price of our ordinary shares.
We have been and will need to continue to expand our organization and we may experience difficulties in
managing this growth, which could disrupt our operations.
As of December 31, 2025, we had 60 employees. Additionally, we may rely on a number of temporary workers and
contractors from time-to-time as needed. As our development and commercialization plans and strategies develop,
we expect to need additional managerial, operational, sales, marketing, financial, legal and other resources. Our
management may need to divert a disproportionate amount of our attention away from our day-to-day activities and
devote a substantial amount of time to managing these growth activities. We may not be able to effectively manage
the expansion of our operations, which may result in weaknesses in our infrastructure, operational mistakes, loss of
business opportunities, loss of employees and reduced productivity among remaining employees. In addition, our
success depends on our ability to attract and retain a talented workforce with a specialized set of skills. Our expected
growth could also require significant capital expenditures and may divert financial resources from other projects,
such as the development of our current and potential future product candidates. If our management is unable to
effectively manage our growth, our expenses may increase more than expected, our ability to generate and/or grow
revenue could be reduced and we may not be able to implement our business strategy. Our future financial
performance and our ability to commercialize product candidates and compete effectively will depend, in part, on
our ability to effectively manage any future growth.
If we fail to maintain proper and effective internal controls, our ability to produce accurate financial statements
on a timely basis could be impaired.
The Sarbanes-Oxley Act of 2002 requires, among other things, that we maintain effective disclosure controls and
procedures and internal control over financial reporting. Our internal control over financial reporting will not
prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide
only reasonable, not absolute, assurance that the control system’s objectives will be met. Because of the inherent
limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to
error or fraud will not occur or that all control issues and instances of fraud will be detected.
If we are not able to comply with the requirements of
Section 404
of the Sarbanes-Oxley Act in a timely manner, or
if we are unable to maintain proper and effective internal controls, we may not be able to produce timely and
accurate financial statements. If that were to happen, the market price of our ordinary shares could decline, and we
could be subject to sanctions or investigations by Nasdaq, the SEC, or other regulatory authorities.
Economic, financial, geopolitical, epidemiological, or other conditions could result in business disruptions which
could seriously harm our future revenue and financial condition and increase our costs and expenses.
Concerns over inflation, geopolitical issues, conflicts such as the Russia-Ukraine war, the U.S. financial markets,
foreign exchange rates, the impact of trade policies including the implementation of tariffs, capital and exchange
controls, unstable global credit markets and financial conditions, supply chain disruptions and economic issues, have
led to periods of significant economic instability, declines in consumer confidence and discretionary spending,
diminished expectations for the global economy and expectations of slower global economic growth going forward,
and increased unemployment rates. Our general business strategy may be adversely affected by any such economic
downturns, volatile business environments and continued unstable or unpredictable economic and market
conditions. If these conditions continue to deteriorate or do not improve, it may make any necessary debt or equity
financing more difficult to complete, more costly and more dilutive. In addition, there is a risk that one or more of
our current or future service providers, manufacturers, suppliers and other partners could be negatively affected by
difficult economic times, which could adversely affect our ability to attain our operating goals on schedule and on
budget or meet our business and financial objectives. We could also be affected by current or future tariffs or other
restrictive trade measures between the United States and other countries, and any retaliatory tariffs by those other
12
countries. If our activities, or those of our current or future service providers, manufacturers, suppliers and other
partners, fall within the scope of any of these or other tariffs, our costs may increase significantly.
Trade disputes, trade restrictions, tariffs and other geopolitical tensions between the United States and other
countries may also exacerbate unfavorable macroeconomic conditions including inflationary pressures, foreign
exchange volatility, financial market instability, and economic recessions or downturns, which may also limit our
access to capital, or otherwise negatively impact our business and operations. Ongoing tariff, trade restrictions and
macroeconomic uncertainty has and may continue to contribute to volatility in the price of our ordinary shares.
Our operations, and those of our contract research organizations (
“CROs”
), contract manufacturing organizations
(
“CMOs”
), suppliers, and other third-party contractors and consultants upon which we rely, could be subject to
wildfires, earthquakes, tsunamis, power shortages or outages, floods or monsoons, public health crises, such as
pandemics and epidemics, political crises, such as terrorism, war (including trade wars), political instability or other
conflicts, and other natural or man-made disasters or other events outside of our control that could disrupt our
business.
In addition, our available cash, cash equivalents and investments (short-term financial assets) are held in accounts
managed by third party financial institutions and consist of cash in our operating accounts and cash invested in
money market funds. At any point in time, the funds in our U.S. operating accounts may exceed the Federal Deposit
Insurance Corporation insurance limits. While we monitor the cash balances in our operating accounts and adjust the
cash balances as appropriate, these cash balances could be impacted if the underlying financial institutions fail. Our
active treasury strategy is to minimize risk through natural hedging of currencies, bank diversification and cash
preservation. To date, we have experienced no loss or lack of access to cash in our operating accounts or our
invested cash, cash equivalents or investments; however, we can provide no assurances that access to our operating
cash or invested cash, cash equivalents or investments will not be impacted by adverse conditions in the financial
markets.
The occurrence of any of these business disruptions could seriously harm our operations and financial condition and
increase our costs and expenses. For example, we rely on third-party manufacturers to produce our product
candidates. Our ability to obtain supplies of our product candidates, or other necessary supplies, could be disrupted
if the operations of our suppliers are affected by a man-made or natural disaster or other business interruption.
Damage or extended periods of interruption to our corporate, development or research facilities due to fire, natural
disaster, power loss, communications failure, unauthorized entry or other events could cause us to cease or delay the
marketing or development of some or all of our product candidates. Although we maintain property damage and
business interruption insurance coverage, our business, financial condition, and results of operations may be
seriously harmed should the losses we suffer as a result of such property damage and/or business interruption
substantially exceed our insurance coverage and we are required to make up for this shortfall.
If our information technology systems or those of third parties with whom we work or provide our data, are or
were compromised, we could experience adverse consequences resulting from such compromise, including but
not limited to regulatory investigations or actions; litigation; fines and penalties; disruptions of our business
operations; reputational harm; loss of revenue or profits; and other adverse consequences.
In the ordinary course of our business, we and the third parties with whom we work, collect, receive, store, process,
generate, use, transfer, disclose, make accessible, protect, secure, dispose of, transmit, and share (collectively,
process) proprietary, confidential, and sensitive data, including personal information, intellectual property, trade
secrets, protected health information, and data we collect about trial participants in connection with clinical trials
(collectively, sensitive information).
Cyber-attacks, malicious internet-based activity, online and offline fraud, and other similar activities threaten the
confidentiality, integrity, and availability of our sensitive information and information technology systems, and
those of the third parties with whom we work. Such threats are prevalent and continue to rise, are increasingly
difficult to detect, and come from a variety of sources, including traditional computer “hackers,” threat actors,
“hacktivists,” organized criminal threat actors, personnel (such as through theft or misuse), sophisticated nation
states, and nation-state-supported actors. Some actors now engage and are expected to continue to engage in cyber-
attacks, including without limitation nation-state actors, for geopolitical reasons and in conjunction with military
conflicts and defense activities. During times of war and other major conflicts, we, and the third parties with whom
13
we work, may be vulnerable to a heightened risk of these attacks, including retaliatory cyber-attacks, that could
materially disrupt our systems and operations, supply chain, and product development programs.
We and the third parties with whom we work are subject to a variety of evolving threats, including but not limited to
social-engineering attacks (including through deep fakes, which may be increasingly more difficult to identify as
fake, and phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced
persistent threat intrusions), denial-of-service attacks, credential stuffing attacks, credential harvesting, personnel
misconduct or error, ransomware attacks, supply-chain attacks, software bugs, server malfunctions, software or
hardware failures, loss of data or other information technology assets, adware, telecommunications failures, attacks
enhanced or facilitated by AI, and other similar threats.
In particular, severe ransomware attacks are becoming increasingly prevalent and could lead to significant
interruptions in our operations, ability to provide our products or services, loss of sensitive data, reputational harm,
and diversion of funds. Extortion payments may alleviate the negative impact of a ransomware attack, but we may
be unwilling or unable to make such payments due to, for example, applicable laws or regulations prohibiting such
payments.
It may be difficult and/or costly to detect, investigate, mitigate, contain, and remediate a security incident. Our
efforts to do so may not be successful. Actions taken by us or the third parties with whom we work to detect,
investigate, mitigate, contain, and remediate a security incident could result in outages, data losses, and disruptions
of our business. Threat actors may also gain access to other networks and systems after a compromise of our
networks and systems. Remote work has increased risks to our information technology systems and data, as more of
our employees utilize network connections, computers and devices outside our premises or network, including
working at home, while in transit and in public locations.
Future or past business transactions (such as acquisitions or integrations) could expose us to additional cybersecurity
risks and vulnerabilities, as our systems could be negatively affected by vulnerabilities present in acquired or
integrated entities’ systems and technologies. Furthermore, we may discover security issues that were not found
during due diligence of such acquired or integrated entities, and it may be difficult to integrate companies into our
information technology environment and security program.
We rely on third parties to operate critical business systems to process sensitive information in a variety of contexts,
including, without limitation, cloud-based infrastructure, contract research organizations, data center facilities,
encryption and authentication technology, employee email, and other functions. Our ability to monitor these third
parties’ information security practices is limited, and these third parties may not have adequate information security
measures in place. If the third parties with whom we work experience a security incident or other interruption, we
could experience adverse consequences. While we may be entitled to damages if the third parties with whom we
work fail to satisfy their privacy or security-related obligations to us, any award may be insufficient to cover our
damages, or we may be unable to recover such award. In addition, supply-chain attacks have increased in frequency
and severity, and we cannot guarantee that third parties’ infrastructure in our supply chain or that of the third parties
with whom we work have not been compromised.
While we have implemented security measures designed to protect against security incidents, there can be no
assurance that these measures will be effective. We take steps designed to detect, mitigate, and remediate
vulnerabilities in our information systems (such as our hardware and/or software, including that of third parties with
whom we work). We have not and may not in the future, however, detect and remediate all such vulnerabilities
including on a timely basis. Further, we have (and may in the future) experienced delays in deploying remedial
measures and patches designed to address identified vulnerabilities. Vulnerabilities could be exploited and result in a
security incident.
Certain of the previously identified or similar threats have in the past and may in the future cause a security incident
or other interruption that could result in unauthorized, unlawful, or accidental acquisition, modification, destruction,
loss, alteration, encryption, disclosure of, or access to our sensitive information or our information technology
systems, or those of the third parties with whom we work. For example, we have been the target of unsuccessful
phishing attempts in the past and expect such attempts will continue in the future. A security incident or other
interruption could disrupt our ability (and that of third parties with whom we work) to provide our services. For
14
example, the loss of clinical trial data from completed, ongoing or planned clinical trials could result in delays in our
regulatory approval efforts and significantly increase our costs to recover or reproduce the data.
We may expend significant resources or modify our business activities (including our clinical trial activities) to try
to protect against security incidents. Certain data privacy and security obligations have required us to implement and
maintain specific security measures or industry-standard or reasonable security measures to protect our information
technology systems and sensitive information.
Applicable data privacy and security obligations may require us, or we may voluntarily choose, to notify relevant
stakeholders, including affected individuals, clinical trial patients, regulators, and investors, of security incidents, or
to take other actions, such as providing credit monitoring and identity theft protection services. Such disclosures and
related actions can be costly, and the disclosure or the failure to comply with such applicable requirements could
lead to adverse consequences.
If we (or a third party with whom we work) experience a security incident or are perceived to have experienced a
security incident, we may experience material adverse consequences, such as government enforcement actions (for
example, investigations, fines, penalties, audits, and inspections); additional reporting requirements and/or
oversight; restrictions on processing sensitive information (including personal information); litigation (including
class claims); indemnification obligations; negative publicity; reputational harm; monetary fund diversions;
diversion of management attention; interruptions in our operations (including availability of clinical trial data);
financial loss; and other similar harms. Security incidents and attendant material consequences may delay the
development of future product candidates, deter new customers from using our products in the future, and negatively
impact our ability to grow and operate our business.
Our contracts may not contain limitations of liability, and even where they do, there can be no assurance that
limitations of liability in our contracts are sufficient to protect us from liabilities, damages, or claims related to our
data privacy and security obligations. We cannot be sure that our insurance coverage will be adequate or sufficient
to protect us from or to mitigate liabilities arising out of our privacy and security practices, that such coverage will
continue to be available on commercially reasonable terms or at all, or that such coverage will pay future claims.
In addition to experiencing a security incident, third parties may gather, collect, or infer sensitive information about
us from public sources, data brokers, or other means that reveals competitively sensitive details about our
organization and could be used to undermine our competitive advantage or market position. Additionally, our
sensitive information could be leaked, disclosed, or revealed as a result of or in connection with our employees’,
personnel’s, or vendors’ use of generative AI technologies.
We, and the third parties with whom we work, are subject to stringent and evolving U.S. and foreign laws,
regulations, and rules, contractual obligations, industry standards, policies and other requirements related to
data privacy and security. Our (or the third parties with whom we work) actual or perceived failure to comply
with such obligations could lead to regulatory investigations or actions; litigation (including class claims) and
mass arbitration demands; fines and penalties; disruptions of our business operations; reputational harm; loss of
revenue or profits; and other adverse business consequences.
The global data protection landscape is rapidly evolving, and our data processing activities subject us to numerous
data privacy and security obligations, such as U.S. and foreign laws, regulations, industry standards, external and
internal privacy and security policies, contractual requirements, and other requirements governing the processing of
personal information, including information that we collect about trial participants in connection with clinical trials
in the United States and abroad. Implementation standards and enforcement practices are likely to remain uncertain
for the foreseeable future, and we cannot yet determine the impact future laws, regulations, standards or
requirements may have on our business. This evolution may create uncertainty in our business, affect our ability or
that of third parties with whom we work to operate in certain jurisdictions or to collect, store, transfer, use and share
personal information, necessitate the acceptance of more onerous obligations in our contracts, result in liability or
impose additional costs on us. Any failure or perceived failure by us or a third party with whom we work to comply
with applicable obligations related to data privacy and security could result in negative publicity, government
investigations, enforcement actions, and claims by third parties, any of which could have a material adverse effect
on our business, results of operations and financial condition.
15
In the United States, numerous federal and state laws and regulations, including data breach notification laws, health
information privacy laws, and consumer protection laws and regulations that govern the collection, processing, use,
disclosure, and protection of health-related and other personal information apply to our operations or the operations
of the third parties with whom we work. For example, in the United States, the Health Insurance Portability and
Accountability Act of 1996 (“
HIPAA
”), as amended by the Health Information Technology for Economic and
Clinical Health Act (“
HITECH
”), imposes among other things, certain standards relating to the privacy, security,
transmission and breach reporting of individually identifiable health information. Entities that are found to be in
violation of HIPAA, whether as the result of a breach of unsecured PHI, a complaint about privacy practices, or an
audit by the U.S. Department of Health and Human Services (“
HHS”
), may be subject to significant civil, criminal,
and administrative fines and penalties and/or additional reporting and oversight obligations if required to enter into a
resolution agreement and corrective action plan with HHS to settle allegations of HIPAA non-compliance.
Depending on the facts and circumstances, we could be subject to penalties if we violate HIPAA.
Even when HIPAA does not apply, according to the Federal Trade Commission (the
“FTC”
) failing to take
appropriate steps to keep consumers’ personal information secure may constitute unfair acts or practices in or
affecting commerce in violation of the Federal Trade Commission Act. The FTC expects a company’s data security
measures to be reasonable and appropriate in light of the sensitivity and volume of consumer information it holds,
the size and complexity of its business, and the cost of available tools to improve security and reduce vulnerabilities.
Individually identifiable health information is considered sensitive data that merits stronger safeguards.
In addition, numerous U.S. states have enacted comprehensive privacy laws that impose certain obligations on
covered businesses, some of which may be more stringent, broader in scope or offer greater individual rights with
respect to protected health information than HIPAA, many of which may differ from each other, thus, complicating
compliance efforts. Certain states also impose stricter requirements for processing certain personal information,
including sensitive personal information, such as conducting data privacy impact assessments. These state laws
allow for statutory fines for noncompliance. For example, the California Consumer Privacy Act of 2018 (“
CCPA
”)
applies to the personal information of consumers, business representatives, and employees who are California
residents, and requires businesses to provide specific disclosures in privacy notices and honor requests of such
individuals to exercise certain privacy rights. The CCPA provides for fines and allows private litigants affected by
certain data breaches to recover significant statutory damages. The CCPA and other comprehensive U.S. state
privacy laws exempt some data processed in the context of clinical trials and PHI, but these developments may
further complicate compliance efforts, and increase legal risk and compliance costs for us and the third parties with
whom we work. Similar laws are being considered in several other states, as well as at the federal and local levels,
and we expect more states to pass similar laws in the future.
Further, we are subject to international data protection laws and regulations, including the European Union’s
General Data Protection Regulation (
“EU GDPR”
) and the United Kingdom’s GDPR (“
UK GDPR
”) (collectively,
“
GDPR
”), which applies to health-related and other personal data obtained outside of the United States and imposes
strict requirements for collection, control, sharing, disclosure, transfer, use and other processing of the personal data
of individuals located in the European Economic Area (“
EEA
”) and United Kingdom (“
UK
”), including clinical trial
data, as well as potential fines for noncompliant companies. For example, under the GDPR, companies may face
temporary or definitive bans on data processing and other corrective actions; fines of up to 20 million Euros under
the EU GDPR, 17.5 million pounds sterling under the UK GDPR or, in each case, 4% of annual global revenue,
whichever is greater; or private litigation related to processing of personal data brought by classes of data subjects or
consumer protection organizations authorized at law to represent their interests.
The GDPR also imposes strict requirements relating to obtaining consent, providing information to individuals
regarding data processing activities, implementing safeguards to protect the security and confidentiality of personal
data, providing notification of data breaches, taking certain measures when engaging third-party processors.
Compliance with the GDPR may increase our cost of doing business or require us to change our business practices,
and despite those efforts, there is a risk that we may be subject to fines and penalties, litigation, and reputational
harm in connection with our activities carried out in the context of our EEA operations.
In the ordinary course of business, we transfer personal data from Europe and other jurisdictions to the United States
or other countries. Europe and other jurisdictions have enacted laws requiring data to be localized or limiting the
transfer of personal data to other countries. In particular, the EEA and the UK have significantly restricted the
16
transfer of personal data to the United States and other countries whose privacy laws it generally believes are
inadequate. Other jurisdictions may adopt or have already adopted similarly stringent data localization and cross-
border data transfer laws. On December 19, 2025, the European Commission renewed an adequacy decision from
2021 permitting flows of personal data between the European Union (
“EU”
) and the UK to continue without
additional requirements. Although there are currently various mechanisms that may be used to transfer personal data
from the EEA and UK to the United States in compliance with law, such as the EU standard contractual clauses, the
UK’s International Data Transfer Agreement / Addendum, and the EU-U.S. Data Privacy Framework and the UK
extension thereto (which allows for transfers to relevant U.S.-based organizations who self-certify compliance and
participate in the Framework), these mechanisms are subject to legal challenges, and there is no assurance that we
can satisfy or rely on these measures to lawfully transfer personal data to the United States.
If there is no lawful manner for us to transfer personal data from the EEA, the UK or other jurisdictions to the
United States, or if the requirements for a legally-compliant transfer are too onerous, we could face significant
adverse consequences, including the interruption or degradation of our operations, the need to relocate part of or all
of our business or data processing activities to other jurisdictions at significant expense, increased exposure to
regulatory actions, substantial fines and penalties, the inability to transfer data and work with partners, vendors and
other third parties, and injunctions against our processing or transferring of personal data necessary to operate our
business. Additionally, companies that transfer personal data out of the EEA and UK to other jurisdictions,
particularly to the United States, are subject to increased scrutiny from regulators, individual litigants, and activist
groups. Some European regulators have ordered certain companies to suspend or permanently cease certain transfers
out of Europe for allegedly violating the GDPR’s cross-border data transfer limitations. Regulators in the United
States such as the Department of Justice are also increasingly scrutinizing certain personal data transfers and have
proposed and may enact certain data localization requirements, for example, the Biden Administration’s executive
order Preventing Access to Americans’ Bulk Sensitive Personal Data and United States Government-Related Data
by Countries of Concern.
EU data protection laws also require opt-in consent to send marketing emails or use cookies and similar technologies
for advertising, analytics and other purposes – activities on which our marketing strategies may rely. Enforcement of
these requirements has increased and a new regulation that has been proposed in the EU, known as the Privacy
Regulation, may make these requirements more stringent and increase the penalties for violating them. Such
restrictions could increase our exposure to regulatory enforcement action, increase our compliance costs, and
adversely affect our business. The relationship between the UK and the EU in relation to certain aspects of data
protection law remains unclear, and it is unclear how UK data protection laws and regulations will develop in the
medium to longer term, and how data transfers to and from the UK will be regulated in the long term. These changes
will lead to additional costs and increase our overall risk exposure.
The Network and Information Security Directive (“
NIS2
”) regulates resilience and incident response capabilities of
entities operating in a number of sectors, including the health sector. Non-compliance with NIS2 may lead up to
administrative fines of a maximum of 10 million Euros or up to 2% of the total worldwide revenue of the preceding
fiscal year.
The Swiss Federal Act on Data Protection (
“DPA”
) also applies to the collection and processing of personal data by
companies located in Switzerland, or in certain circumstances, by companies located outside of Switzerland. The
DPA, which was revised along with its ordinances, with effect per September 1, 2023 may lead to an increase in our
costs of compliance, risk of noncompliance and penalties for noncompliance.
In addition to data privacy and security laws, we are contractually subject to industry standards adopted by industry
groups and, we are, and may become in the future, subject to such obligations. We are also bound by other
contractual obligations related to data privacy and security, and our efforts to comply with such obligations may not
be successful.
We publish privacy policies, marketing materials, and other statements, such as compliance with certain
certifications or self-regulatory principles, concerning data privacy and security. Regulators in the United States are
increasingly scrutinizing these statements, and if these policies, materials or statements are found to be deficient,
lacking in transparency, deceptive, unfair, misleading, or misrepresentative of our practices, we may be subject to
investigation, enforcement actions by regulators, or other adverse consequences.
17
Obligations related to data privacy and security (and consumers’ data privacy expectations) are quickly changing,
becoming increasingly stringent, and creating uncertainty. Compliance with applicable United States and foreign
data protection, privacy and security laws, regulations and standards could require us to take on more onerous
obligations in our contracts, require us to engage in costly compliance exercises, restrict our ability to collect, use
and disclose data, or in some cases, impact our ability, or that of third parties with whom we work, to operate in
certain jurisdictions. Each of these constantly evolving laws can also be subject to varying applications and
interpretations, which may be inconsistent or conflict among jurisdictions. We may at times fail (or be perceived to
have failed) in our efforts to comply with our data privacy and security obligations. Moreover, despite our efforts,
our personnel or third parties with whom we work may fail to comply with such obligations, which could negatively
impact our business operations.
If we or the third parties with whom we work fail, or are perceived to have failed, to address or comply with
applicable data privacy and security obligations, we could face significant consequences, including but not limited
to: government investigations and enforcement actions (which could include civil or criminal penalties), fines,
private litigation (including class-action claims) and mass arbitration demands, additional reporting requirements
and/or oversight, bans or restrictions on processing personal information, orders to destroy or not use personal
information, imprisonment of company officials, and/or adverse publicity, and could negatively affect our operating
results and business. In particular, plaintiffs have become increasingly more active in bringing privacy-related
claims against companies, including class claims and mass arbitration demands. Some of these claims allow for the
recovery of statutory damages on a per violation basis, and, if viable, carry the potential for monumental statutory
damages, depending on the volume of data and the number of violations. Moreover, patients about whom we or our
partners obtain information, as well as the providers who share this information with us, may contractually limit our
ability to use and disclose the information. Claims that we have violated individuals’ privacy rights, failed to comply
with applicable data protection laws, or breached our contractual obligations, even if we are not found liable, could
be expensive and time-consuming to defend, interrupt or stop our business operations (including, as relevant, our
clinical trials), limit our ability to develop or commercialize our products, and result in adverse publicity that could
materially harm our business.
We may not realize the benefits of acquired assets or other strategic transactions.
We evaluate various strategic transactions on an ongoing basis. We may acquire other businesses, products or
product candidates, intellectual property, or technologies as well as pursue joint ventures or investments in
complementary businesses. The success of any potential future strategic transaction depends on various risks and
uncertainties, including:
•
unanticipated liabilities related to investee companies or joint ventures;
•
conflicts in economic or business interests with our joint ventures or investee companies;
•
difficulties integrating acquired personnel, technologies, and operations into our existing business;
•
retention of key employees;
•
diversion of management’s time and focus from operating our business to management of strategic
alliances or joint ventures or acquisition integration challenges;
•
increases in our expenses and reductions in our cash available for operations and other uses;
•
disruption in or termination of our relationships with collaborators or suppliers as a result of such a
transaction; and
•
possible write-offs or impairment charges, including relating to investee companies or joint ventures.
Foreign acquisitions and joint ventures are subject to additional risks, including those related to regulatory or
compliance issues, integration of operations across different cultures and languages, currency risks, potentially
adverse tax consequences of overseas operations, and the particular economic, political, and regulatory risks
associated with specific countries.
18
Future acquisitions or dispositions could result in potentially dilutive issuances of our equity securities, the
incurrence of debt, contingent liabilities, or amortization expenses or write-offs of goodwill, any of which could
harm our financial condition. We could also incur losses resulting from undiscovered liabilities that are not covered
by the indemnification we may obtain from the seller.
For existing in-licensed or future in-license product candidates or products or acquire businesses, we may not be
able to realize the benefit of those transactions if we are unable to successfully integrate them with our existing
operations and company culture. We cannot be certain that, following a strategic transaction or license, we will
achieve the results, revenue, or specific net income that justifies the transaction. Future acquisitions or dispositions
could result in potentially dilutive issuances of our equity securities, the incurrence of debt, contingent liabilities, or
amortization expenses or write-offs of goodwill, any of which could harm our financial condition.
The terms of our loan facility place restrictions on our operating and financial flexibility.
On July 31, 2025, we entered into an amended and restated agreement for our loan facility (the
“Amended Loan
Agreement”
) with Kreos Capital VII (UK) Limited (
“Kreos”
or the
“Lender”
), which are funds and accounts
managed by BlackRock, Inc., that replaced the prior loan agreement between the Company and the Lender
previously entered into on May 29, 2024. The Amended Loan Agreement is structured to provide the EUR
equivalent of up to CHF 75.0 million in borrowing capacity (which may be increased to up to the EUR equivalent of
CHF 100.0 million), comprising tranches 1, 2 and 3, in the amounts of the EUR equivalents of CHF 25.0 million
each, as well as an additional loan of the EUR equivalent of up to CHF 25.0 million, which may be made available
by the Lender to us if mutually agreed in writing by us and the Lender. See Note 5 of our consolidated financial
statements for additional information about the Amended Loan Agreement.
The Amended Loan Agreement contains certain representations and warranties, affirmative covenants, negative
covenants, events of default and other provisions and conditions that are customarily required for similar financings.
Failure to maintain compliance with covenants under the Amended Loan Agreement would result in an event of
default under the Amended Loan Agreement, which could result in enforcement action, including acceleration of
amounts due under the Amended Loan Agreement. In the event there is an acceleration of our liabilities under the
Amended Loan Agreement as a result of an event of default or otherwise, we may not have sufficient funds or may
be unable to arrange for additional financing to repay the liabilities or to make any accelerated payments, and the
Lender could seek to enforce security interests in the collateral securing the Amended Loan Agreement, which
would have a material adverse effect on our business, financial condition and results of operations.
In addition, our obligations in connection with the Amended Loan Agreement could have additional significant
adverse consequences, including, among other things:
•
restricting our activities, including limitations on transferring certain of our assets, engaging in certain
transactions, terminating certain agreements, incurring certain additional indebtedness, creating certain
liens, paying cash dividends or making certain other distributions and investments;
•
limiting our flexibility in planning for, or reacting to, changes in our business and our industry;
•
placing us at a possible competitive disadvantage compared to our competitors who have a smaller
amount of debt (if we decide to draw down on the loan) or competitors with comparable debt at more
favorable interest rates; and
•
limiting our ability to borrow additional amounts for working capital, capital expenditures, research and
development (
“R&D”
) efforts, acquisitions, debt service requirements, execution of our business
strategy and other purposes.
Any of these factors could materially and adversely affect our business, financial condition and results of operations.
We could be subject to securities class action litigation.
In the past, securities class action litigation has often been brought against a company following a decline in the
market price of its securities. This risk is especially relevant for us because biopharmaceutical companies have
19
experienced significant stock price volatility in recent years. If we face such litigation, it could result in substantial
costs and a diversion of management’s attention and resources, which could harm our business.
Risks related to development and regulatory approval of our investigational therapies
The success of our product candidates, and our ability to generate revenue in the future, will depend upon a
number of factors, many of which are beyond our control.
The success of our business, including our ability to finance and generate revenue in the future, primarily depends
on the successful development, regulatory approval and commercialization of OCS-01, Licaminlimab and
Privosegtor. The clinical and commercial success of our product candidates depends on a number of factors,
including the following:
•
Our innovations to the treatments of ophthalmic, neuro-ophthalmic and neurological diseases are
unproven, and we do not know whether we will be able to successfully develop our product candidates
targeting these diseases and their symptoms.
•
Drug development is a lengthy, highly uncertain undertaking and involves a substantial degree of risk.
The outcome of preclinical testing and earlier clinical trials may not be predictive of the success of later
clinical trials. In addition, the regulatory approval processes of the Food and Drug Administration
(“
FDA
”), and non-U.S. regulatory agencies are highly complex, lengthy, and inherently unpredictable,
and the results of our clinical trials may not satisfy the requirements of the FDA or other regulatory
agencies.
•
Our business depends on the successful development and commercialization of OCS-01, Licaminlimab,
Privosegtor and our other pipeline product candidates. To the extent these pipeline products are not
commercially successful, our business, financial condition, and results of operations may be adversely
affected.
•
Our products may fail to achieve the degree of market acceptance by physicians, patients, third-party
payors and others in the medical community necessary for commercial success, and the market
opportunity for these products may be smaller than we estimated.
•
We have no experience manufacturing any of our product candidates at a commercial scale. We, or our
CMOs, may be unable to successfully scale up manufacturing of our product candidates in sufficient
quality and quantity, which would delay or prevent us from developing our product candidates and
commercializing approved products, if any.
•
The manufacturing of Licaminlimab, a biologic, and certain of our other product candidates is complex
and highly regulated, and there are particular risks associated with manufacturing the products to
commercial scale, including our reliance on third parties. Therefore, we may not have sufficient
quantities of our products or product candidates or such quantities at an acceptable cost, which could
delay, prevent or impair the commercialization or development efforts.
•
If our patent position does not adequately protect our product candidates, others could compete against
us more directly, which would harm our business.
•
If we fail to comply with our obligations under any license, collaboration or other agreements, including
our license agreements with Novartis Technology LLC (“
Novartis
”) and Accure Therapeutics SL
(
“Accure”
), such agreements may be terminated, we may be required to pay damages and we could lose
intellectual property rights that are necessary for the development and protection of our product
candidates.
•
We will need substantial additional funding to support our operations and pursue our growth strategy. If
we are unable to raise capital when needed, or on acceptable terms, we may be forced to delay, reduce
or eliminate future commercialization efforts or one or more of our research and development programs.
In addition, raising additional capital may cause dilution to our shareholders or restrict our operations.
20
The sizes of the market opportunities for our product candidates have not been established with precision and
may be smaller than we estimate, possibly materially. If we overestimate the sizes of these markets, our sales
growth may be adversely affected. We may also not be able to grow the markets for our product candidates as
intended or at all.
Our assessment of the potential market opportunity for the product candidates that we develop is based on industry
and market data that we obtained from industry publications and research, surveys and studies conducted by third
parties and our own internal epidemiology and market research studies. Industry publications and third-party
research, surveys and studies generally indicate that their information has been obtained from sources believed to be
reliable, although they do not guarantee the accuracy or completeness of such information. While we believe these
industry publications and third-party research, surveys and studies are reliable, we have not independently verified
such data. Similarly, although the studies we have conducted are based on information that we believe to be
complete and reliable, we cannot guarantee that such information is accurate or complete. The potential market
opportunities of our product candidates are difficult to precisely estimate. Therefore, our estimates of the potential
market opportunities for our product candidates include several key assumptions based on our industry knowledge,
industry publications, third-party research and our own epidemiology studies and market research, which may be
based on a small sample size and fail to accurately reflect market opportunities. While we believe that our internal
assumptions, the bases of the studies, and research we have conducted are reasonable, no independent source has
verified such assumptions or bases. If any of our assumptions or estimates, or these publications, research, surveys
or studies prove to be inaccurate, then the actual market for our product candidates may be smaller than we expect,
and as a result our product revenue may be limited and it may be more difficult for us to achieve or maintain
profitability.
Our future growth may depend, in part, on our ability to penetrate foreign markets, where we would be subject to
additional regulatory burdens and other risks and uncertainties.
Our future profitability may depend, in part, on our ability to commercialize our product candidates in foreign
markets where we lack familiarity with local regulations, environment and procedures and for which we may rely on
collaboration with third parties. We are evaluating the opportunities for the development and commercialization of
our product candidates in other foreign markets. We are not permitted to market or promote any of our product
candidates before we receive regulatory approval from the applicable regulatory authority in that foreign market,
and we may never receive such regulatory approval for any of our product candidates. To obtain separate regulatory
approvals in other countries we may be required to comply with numerous and varying regulatory requirements of
such countries regarding the safety and efficacy of our product candidates and governing, among other things,
clinical trials and commercial sales, pricing and distribution of our product candidates, and we cannot predict
success in these jurisdictions. If we obtain approval of our product candidates and ultimately commercialize our
product candidates in foreign markets, we would be subject to additional risks and uncertainties, including:
•
our commercial partners’ ability to obtain reimbursement for our product candidates in foreign markets;
•
our inability to directly control commercial activities if we are relying on third parties;
•
the burden of complying with complex and changing foreign regulatory, tax, accounting and legal
requirements;
•
different medical practices and customs in foreign countries affecting acceptance in the marketplace;
•
import or export licensing requirements;
•
longer accounts receivable collection times;
•
longer lead times for shipping and supply chain logistics;
•
language barriers for technical training and the need for language translations;
•
reduced protection of intellectual property rights in some foreign countries;
21
•
the existence of additional potentially relevant third-party intellectual property rights;
•
foreign currency exchange rate fluctuations;
•
the interpretation of contractual provisions governed by foreign laws in the event of a contract dispute;
•
imposition of restrictions on currency conversion or the transfer of funds;
•
anti-competitive policies or anti-competitive practices which are condoned and the imposition of
restrictions on investments and other measures that may be taken to protect the local industry in these
foreign markets; and
•
actions by non-U.S. regulators, governments, companies, or other entities which prevent us from
entering into or benefiting from licensing agreements or other collaborations with non-U.S. companies,
universities, research institutes, or other entities.
Our approach to the treatment of retinal disease with OCS-01 is unproven, and we do not know whether we will
be able to successfully develop OCS-01.
OCS-01 is designed to deliver therapeutic drug levels to the retinal tissue by a topical route of administration as an
eye drop formulation. There are currently no FDA-approved therapies that treat retinal diseases by a topical route of
administration. Our future success partially depends on the successful development of OCS-01 which is based on
this novel therapeutic approach. We have not yet obtained marketing approval of any product candidate. In Stage 2
of our DIAMOND-1 and DIAMOND-2 Phase 3 clinical trials in diabetic macular edema (“
DME”
), OCS-01 may
not demonstrate in patients any or all of the pharmacological benefits we believe it may possess. If we are
unsuccessful in our development efforts, we may not be able to advance the development and commercialization of
OCS-01.
Our approach to use Licaminlimab for the treatment of dry eye disease (“DED”) in patients identified with a
biomarker is unproven, and we do not know whether we will be able to successfully confirm the role of the
biomarker and successfully develop Licaminlimab.
Licaminlimab is in development for treating ophthalmic diseases including DED. One of our strategies for
Licaminlimab is also to develop it for patients identified with a biomarker to predict patients that may respond well
to Licaminlimab treatment. There are currently no FDA-approved therapies that treat DED using this “precision
medicine” approach. If we choose to utilize this biomarker strategy, then our future success partially depends on the
successful development of both Licaminlimab and a companion diagnostic for the biomarker and our ability to
demonstrate that patients with that biomarker are likely to respond well to Licaminlimab treatment. We have not yet
demonstrated efficacy and safety for Licaminlimab or any other product candidates in patients with or without a
biomarker in a pivotal trial or obtained marketing approval for any of our product candidates. The registrational trial
for Licaminlimab, PREDICT-1, may not demonstrate in patients with or without the biomarker any or all of the
pharmacological benefits we believe it may possess. If we are unsuccessful in our development efforts, we may not
be able to advance the development and commercialization of Licaminlimab.
Our approach to the treatment of optic neuropathies and other neuro-ophthalmic diseases with Privosegtor is
unproven, and we do not know whether we will be able to successfully develop Privosegtor.
Privosegtor is intended to prevent or reverse nerve damage (
“neuroprotection”
) in neuro-ophthalmic and
neurological diseases in which patients lose vision due to nerve damage. There are currently no FDA-approved
therapies that treat ophthalmic diseases in this “neuroprotective” way. Our future success partially depends on the
successful development of Privosegtor which is based on this novel therapeutic approach. Although Privosegtor
demonstrated its potential as a novel neuroprotective product candidate in optic neuritis (
“ON”
) in the positive
Phase 2 ACUITY trial results announced in January 2025, we have not yet demonstrated efficacy and safety for
Privosegtor in a pivotal trial. In our PIONEER clinical trials, Privosegtor may not demonstrate in patients any or all
of the pharmacological benefits we believe it may possess. If we are unsuccessful in our development efforts, we
may not be able to advance the development and commercialization of Privosegtor.
22
We have not yet received any marketing approvals or commercialized any pharmaceutical products, which may
make it difficult to evaluate our future prospects.
Our operations to date have been limited to financing and staffing our company, developing our technology and
conducting preclinical research as well as Phase 1, Phase 2 and Phase 3 clinical trials for our product candidates. We
have not yet demonstrated an ability to obtain marketing approvals, manufacture a commercial-scale product or
arrange for a third party to do so on our behalf, or conduct sales and marketing activities necessary for successful
product commercialization. Accordingly, you should consider our prospects in light of the costs, uncertainties,
delays and difficulties frequently encountered by clinical-stage biopharmaceutical companies such as ours. Any
predictions made about our future success or viability may not be as accurate as they could be if we had a longer
operating history or a history of successfully developing and commercializing pharmaceutical products.
We may encounter unforeseen expenses, difficulties, complications, delays and other known or unknown factors in
achieving our business objectives. We will eventually need to transition from a company with a development focus
to a company capable of supporting commercial activities. We may not be successful in such a transition.
We depend significantly on our product candidates, OCS-01, Licaminlimab, and Privosegtor, which are being
developed for the treatment of multiple diseases. If we are unable to complete the development of any of these
product candidates, if we are unable to obtain marketing approvals for any of these product candidates, or if any
of these product candidates are approved and we fail to successfully commercialize the product candidate or
experience significant delays in doing so, our business will be materially harmed.
We depend significantly on the success of OCS-01, which we are developing for the treatment of patients with
DME, Licaminlimab, which we are developing for the treatment of DED, and Privosegtor, which we are initially
developing for the treatment of ON and NAION.
To date, we have invested a significant portion of our efforts and financial resources in the development of OCS-01
for the treatment of patients with DME. Despite consultation with regulatory agencies, no assurance can be provided
that the FDA or non-U.S. regulatory agencies would consider the Phase 3 DIAMOND clinical trials to be sufficient
to serve as the basis for approval in DME, with such a final determination only made by the FDA or non-U.S.
regulatory agencies following review of the NDA.
We cannot accurately predict when or if any of our product candidates will prove effective or safe in humans or
whether these product candidates will receive marketing approval. Our ability to generate product revenues
sufficient to achieve profitability will depend heavily on our obtaining marketing approval for and commercializing
OCS-01, Licaminlimab and Privosegtor.
The success of OCS-01, Licaminlimab, Privosegtor, and other product candidates will depend on many factors,
including:
•
successfully and timely completing preclinical studies, nonclinical studies and clinical trials that
demonstrate to the satisfaction of the FDA, the European Medicines Agency (
“EMA”
), the European
Commission, or comparable non-U.S. regulatory agencies that our product candidates are safe and
effective for any of their proposed indications;
•
the scope of the label that may be approved by applicable regulatory agencies, including the specific
indication for which the product may be approved;
•
whether we are required by the FDA or similar non-U.S. regulatory agencies to conduct additional
studies beyond those planned to support the approval and commercialization of OCS-01, Licaminlimab
and Privosegtor;
•
acceptance of our products, if and when approved, by patients, the medical community and third-party
payors, including relative to alternative and competing treatments;
•
effectively competing with other therapies;
23
•
maintaining a continued acceptable safety profile of our products both prior to and following any
marketing approval of our product candidates;
•
demonstrating consistent therapeutic efficacy of our products following approval;
•
obtaining and maintaining coverage and adequate reimbursement from third-party payors;
•
applying for and receiving marketing approvals from applicable regulatory agencies for our product
candidates;
•
achieving and maintaining, and, where applicable, ensuring that our third-party contractors achieve and
maintain compliance with their contractual obligations and with all regulatory requirements applicable
to our product candidates;
•
scaling up our manufacturing processes and capabilities to support additional or larger clinical trials of
our product candidates and commercialization of any of our product candidates for which we obtain
marketing approval;
•
developing, validating and maintaining a commercially viable manufacturing process that is compliant
with current good manufacturing practices;
•
developing and expanding our sales, marketing and distribution capabilities and launching commercial
sales of our product candidates, if and when approved, whether alone or in collaboration with others;
•
obtaining and maintaining patent, trade secret and other intellectual property protection and regulatory
exclusivity; and
•
protecting and enforcing our rights in our intellectual property portfolio.
If we do not achieve one or more of these factors in a timely manner or at all, we could experience significant delays
or an inability to successfully commercialize our product candidates, which would materially harm our business,
financial condition, results of operations and growth prospects.
The results of previous clinical trials may not be predictive of future results, and the results of our current and
planned clinical trials and any required nonclinical studies may not satisfy the requirements of the FDA or non-
U.S. regulatory agencies.
The results from the prior preclinical studies and clinical trials for OCS-01, Licaminlimab and Privosegtor may not
necessarily be predictive of the results of future clinical trials. Even if we are able to complete our planned clinical
trials of our product candidates according to our current development timelines, the results from our prior clinical
trials of our product candidates may not be replicated in these future trials. Many companies in the pharmaceutical
and biotechnology industries (including those with greater resources and experience than us) have suffered
significant setbacks in late-stage clinical trials after achieving positive results in early-stage development, and we
cannot be certain that we will not face similar setbacks. These setbacks have been caused by, among other things,
preclinical findings made while clinical trials were underway or safety or efficacy observations made in clinical
trials, including previously unreported adverse events. Moreover, preclinical and clinical data are often susceptible
to varying interpretations and analyses, and many companies that believed their product candidates performed
satisfactorily in preclinical studies and clinical trials nonetheless have failed to obtain FDA or non-U.S.-regulatory
authority approval. If we fail to produce positive results in our clinical trials of any of our product candidates, the
development timelines, regulatory approvals and commercialization prospects for our product candidates, as well as
our business and financial prospects, would be adversely affected. For example, in May 2023, we announced topline
data for Stage 1 of the DIAMOND Phase 3 clinical trial of OCS-01 in DME. Although OCS-01 met the primary and
secondary endpoints in Stage 1 of the DME trial with robust statistical significance, there is no guarantee that these
results will be replicated in Stage 2, which is the pivotal part of the trial. Similarly, in January 2025, we announced
topline data in our Phase 2 ACUITY trial of Privosegtor in ON. Although Privosegtor met the primary safety
endpoint and key secondary efficacy endpoints, there is no guarantee that these results will be replicated in our
PIONEER development program.
24
We also may be required by the FDA or non-U.S. regulatory agencies to conduct nonclinical studies to support
marketing applications. For example, Privosegtor is a new molecular entity (“NME”) and as such, we are required to
conduct, and have begun conducting, nonclinical studies to support a potential future marketing application. These
nonclinical studies may yield unexpected safety, toxicology or pharmacology findings that could prompt regulators
to request additional data, impose new requirements or delay review of or negatively impact our submission. Any
inability to complete these nonclinical studies on our planned timelines or the emergence of any unforeseen results
could adversely affect our ability to obtain marketing approval for the product candidate. Even at advanced stages of
development, regulatory agencies may determine that our nonclinical package is insufficient, which could lead to
substantial delays, increased costs or the need for further studies before commercialization, or could result in failing
to achieve marketing authorization altogether.
Further, our product candidates may not be approved even if they achieve their respective primary endpoints in
Phase 3 registration trials. The FDA or non-U.S. regulatory agencies may disagree with our trial designs or our
interpretation of data from preclinical studies and clinical trials. In addition, any of these regulatory agencies may
change requirements for the approval of a product candidate even after reviewing and providing comments or advice
on a protocol for a pivotal clinical trial that has the potential to result in approval by the FDA or another regulatory
agency. Furthermore, any of these regulatory agencies may also approve our product candidates for fewer or more
limited indications than it requests or may grant approval contingent on the performance of costly post-marketing
clinical trials.
Some of our clinical data results come from previous trials of less than 100 patients each, including a Phase 2a
clinical trial of Licaminlimab for the treatment of DED and the Phase 2 ACUITY trial of Privosegtor, making it
difficult to predict whether the favorable results from such trials will be repeatable in larger, more advanced clinical
trials. Moreover, preclinical and clinical data are often susceptible to varying interpretations and analyses, and many
companies that have believed their product candidates performed satisfactorily in preclinical studies and clinical
trials have nonetheless failed to obtain marketing approval of their products.
We cannot assure you that the FDA or non-U.S. regulatory agencies would consider our completed and planned
clinical trials and any required nonclinical studies used for an NDA submission or comparable foreign submissions
to be sufficient to serve as the basis for approval of our product candidates for any indication. Even if the results of
future Phase 3 clinical trials are positive, the FDA and non-U.S. regulatory agencies retain broad discretion in
evaluating the results of our clinical trials and in determining whether the results demonstrate that our product
candidates are safe and effective. If we are required to conduct clinical trials or nonclinical of our product candidates
in addition to those we have planned prior to approval, we will need substantial additional funds, and cannot assure
you that the results of any such trials or studies will be sufficient for approval.
If we experience any of a number of possible unforeseen events in connection with our clinical trials, potential
marketing approval or commercialization of our product candidates could be delayed or prevented.
We may experience numerous unforeseen events during, or as a result of, clinical trials that could delay or prevent
our ability to receive marketing approval or commercialize any product candidate that we may develop, including:
•
clinical trials of our product candidates may not produce statistically significant, conclusive, or
anticipated results, and we may decide, or regulators may require us, to conduct additional clinical trials,
amend product development programs, or abandon product development programs entirely;
•
the number of patients required for clinical trials of our product candidates may be larger than we
anticipate, enrollment in these clinical trials may be slower than we anticipate or participants may drop
out of these clinical trials at a higher rate than we anticipate;
•
our contractors may fail to comply with regulatory requirements or meet their obligations to us in a
timely manner, or at all;
•
regulators, institutional review boards (
“IRBs”
), or ethics committees may not authorize us or our
investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site;
25
•
we may experience delays in reaching, or fail to reach, agreement on acceptable clinical trial contracts
or clinical trial protocols with prospective trial sites;
•
we may decide, or regulators, IRBs, or ethics committees may require us, to suspend or terminate
clinical research for various reasons, including noncompliance with regulatory requirements or a finding
that the participants are being exposed to unacceptable health risks;
•
the cost of clinical trials of our product candidates may be greater than we anticipate; and
•
the supply or quality of our clinical trial material or other materials necessary to conduct clinical trials of
our product candidates may be insufficient or inadequate.
If we are required to conduct additional clinical trials or other testing of our product candidates beyond those that we
currently contemplate, if we are unable to successfully complete clinical trials or other testing of our product
candidates, if the results of these trials or other tests are not favorable or are only modestly favorable or if there are
safety concerns, we may:
•
be delayed in obtaining or unable to obtain marketing approval for our product candidates;
•
obtain approval for indications or patient populations that are not as broad as intended or desired;
•
obtain approval with labeling that includes significant use or distribution restrictions or safety warnings;
•
be subject to additional post-marketing testing requirements; or
•
have the product removed from the market after obtaining marketing approval.
Our product development costs will also increase if we experience delays in testing or marketing approvals. We do
not know whether any of our preclinical studies or clinical trials will begin as planned, will need to be restructured
or will be completed on schedule, or at all. Significant preclinical or clinical trial delays also could shorten any
periods during which we may have the exclusive right to commercialize our product candidates or allow our
competitors to bring products to market before we do and impair our ability to successfully commercialize our
product candidates.
We may be required, or choose, to suspend, vary, repeat or terminate our clinical trials if they are not conducted
in accordance with regulatory requirements, the results are negative or inconclusive, the trials are not well-
designed, or research participants experience adverse safety outcomes.
Regulatory agencies, IRBs, ethics committees or data safety monitoring boards may, at any time, recommend the
temporary or permanent discontinuation of our clinical trials, request that we vary clinical trials or cease using
investigators in the clinical trials if they believe that the clinical trials are not being conducted in accordance with
applicable regulatory requirements, or that they present an unacceptable safety risk to participants. Clinical trials
must be conducted in accordance with Good Clinical Practices (
“GCPs”
) and other applicable non-U.S. regulatory
authority guidelines. Clinical trials are subject to oversight by the FDA, non-U.S. regulatory agencies, IRBs and
ethics committees at the study sites where the clinical trials are conducted. In addition, clinical trials must be
conducted with product candidates produced in accordance with applicable current good manufacturing practices.
Clinical trials may be placed on a full or partial clinical hold by the FDA, non-U.S. regulatory agencies, or us for
various reasons, including, but not limited to: deficiencies in the conduct of the clinical trials, including failure to
conduct the clinical trial in accordance with regulatory requirements or clinical protocols; deficiencies in the clinical
trial operations or trial sites; deficiencies in the trial designs necessary to demonstrate efficacy; fatalities or other
adverse effects arising during a clinical trial due to medical problems that may or may not be related to clinical trial
treatments; the product candidates may not appear to be more effective than current therapies; or the quality or
stability of the product candidates may fall below acceptable standards.
If we elect or are forced to suspend, vary or terminate a clinical trial of any of our current or future product
candidates, the commercial prospects for that product may be harmed and our ability to generate product revenue
from that product may be delayed or eliminated. Furthermore, any of these events could prevent us or our partners
26
from achieving or maintaining market acceptance of the affected product and could substantially increase the costs
of commercializing our product candidates and impair our ability to generate revenue from the commercialization of
these products either by us or by our collaboration partners.
Any additional serious adverse events (
“SAEs”
) could result in the FDA or non-U.S. regulatory agencies delaying
our clinical trials or denying or delaying clearance or approval of a product. Even though an adverse effect may not
be the result of the failure of our drug candidate, the FDA, non-U.S. regulatory agency, IRB or ethics committee
could delay or halt a clinical trial for an indefinite period of time while an adverse effect is reviewed, and likely
would do so in the event of multiple such events. Any delay or termination of our current or future clinical trials as a
result of the risks summarized above, including delays in obtaining or maintaining required approvals from IRBs, or
positive opinions from ethics committees, delays in patient enrollment, the failure of patients to continue to
participate in a clinical trial, and delays or termination of clinical trials as a result of protocol modifications or
adverse effects during the trials, may cause an increase in costs and delays in the submission of any NDAs to the
FDA, or comparable foreign submissions to non-U.S. regulatory agencies, delay the approval and commercialization
of our products or result in the failure of the clinical trial, which could adversely affect our business, financial
condition, results of operations and growth prospects. Lengthy delays in the completion of clinical trials of our
products would adversely affect our business and prospects and could cause us to cease operations.
If preliminary data demonstrate that any of our product candidates has an unfavorable safety profile and is unlikely
to receive regulatory approval or be successfully commercialized, we may voluntarily suspend or terminate future
development of such product candidate. Any one or a combination of these events could prevent us from obtaining
approval and achieving or maintaining market acceptance of the affected product or could substantially increase the
costs and expenses of commercializing the product candidate, which in turn could delay or prevent us from
generating significant revenues from the sale of the product.
Our product candidates may cause undesirable side effects or have other unexpected properties that could delay
or prevent their regulatory approval, limit the commercial profile of an approved label, or result in post-approval
regulatory action.
Unforeseen side effects varying in severity (from minor reactions to death) and frequency (infrequent or prevalent)
from OCS-01, Licaminlimab or Privosegtor could arise either during clinical development or, if approved, after
marketing. Undesirable side effects could cause us, any partners with which we may collaborate, or regulatory
agencies to interrupt, extend, modify, delay or halt clinical trials and could result in a more restrictive or narrower
label or the delay or denial of regulatory approval by the FDA or comparable foreign agencies.
During the conduct of clinical trials, subjects report changes in their health, including illnesses, injuries, and
discomforts, to their study doctor. Often, it is not possible to determine whether or not the product candidate being
studied caused these conditions. It is possible that as we test our product candidates in larger, longer and more
extensive clinical trials, or as use of these product candidates becomes more widespread if they receive regulatory
approval, illnesses, injuries, discomforts and other adverse events that were not observed in earlier trials, as well as
conditions that did not occur or went undetected in previous trials, will be reported by subjects. Many times, side
effects are only detectable after investigational products are tested in large-scale, Phase 3 clinical trials or, in some
cases, after they are made available to subjects on a commercial scale after approval.
If OCS-01, Licaminlimab or Privosegtor or any of our other product candidates are associated with SAEs or other
undesirable side effects in clinical trials or have characteristics that are unexpected, we may need to abandon their
development or limit development to more narrow uses or subpopulations in which the SAEs, undesirable side
effects or other characteristics are less prevalent, less severe or more acceptable from a risk-benefit perspective.
Results of clinical trials could reveal a high and unacceptable severity and prevalence of side effects. In such an
event, trials could be suspended, varied or terminated, and the FDA or comparable non-U.S. regulatory agencies
could order us to cease further development of or deny approval of a product candidate for any or all targeted
indications. Such adverse event findings also could require us or our collaboration partners to perform additional
studies or halt development or sale of these product candidates or expose us to product liability lawsuits which
would harm our business, financial condition, results of operations and growth prospects. In such an event, we could
be required by the FDA or other comparable regulatory agencies to conduct additional animal or human studies
regarding the safety and efficacy of our product candidates which we have not planned or anticipated or our studies
27
could be suspended, varied or terminated, and the FDA or comparable regulatory agencies could order us to cease
further development of or deny, vary, or withdraw approval of our product candidates for any and all intended
indications. The drug-related side effects could also affect patient recruitment or the ability of enrolled patients to
complete the trial. There can be no assurance that we will resolve any issues related to any product-related adverse
events to the satisfaction of the FDA or any comparable regulatory agency in a timely manner, if ever, and any of
these occurrences may harm our business, financial condition, results of operations and prospects.
Additionally, if we or others identify undesirable side effects, or other previously unknown problems, caused by a
product after obtaining U.S. or non-U.S. regulatory approval, a number of potentially negative consequences could
result, including but not limited to, regulatory agencies suspending, withdrawing or varying approvals of such
product, regulatory agencies requiring additional warnings on the label or otherwise requiring labeling to be updated
or narrowed, us becoming liable for harm caused to patients and the diminution of our reputation, which could
prevent us or our potential partners from achieving or maintaining market acceptance of the product candidate, if
approved, and could substantially increase the costs of commercializing such product, which would have a material
adverse effect on our business, results of operation, financial condition and prospects.
If any of our product candidates receives approval, regulatory agencies, including the FDA and other non-U.S.
regulatory agencies, will require that we regularly report certain information, including information about adverse
events that may have caused or contributed by those products. The timing of adverse event reporting obligations
would be triggered by the date we become aware of the adverse event as well as the nature of the event. We may fail
to report adverse events we become aware of within the prescribed timeframe especially if it is not reported to us as
an adverse event or if it is an adverse event that is unexpected or removed in time from the use of our products. If we
fail to comply with our reporting obligations, the FDA or other regulatory agencies could take action that may
include criminal prosecution, the imposition of civil monetary penalties, seizure of our products, or suspension of
market approval, and delay in approval or clearance of future products.
Interim, topline and preliminary data from our clinical trials may change as more patient data becomes available
and are subject to audit and verification procedures that could result in material changes in the final data.
From time to time, we may publicly disclose preliminary, interim or topline data from our clinical trials. These
interim updates are based on a preliminary analysis of then-available data, and the results and related findings and
conclusions may be subject to change following a more comprehensive review of the data. We also may use
assumptions and estimates as part of our preliminary analyses of the data, and we may not have received or had the
opportunity to fully and carefully evaluate all data. Topline data also remain subject to audit and verification
procedures before they can be finalized. In addition, the information we choose to publicly disclose regarding a
particular study or clinical trial is typically selected from a more extensive amount of available information. For
example, we may report interim analyses of only certain endpoints of the clinical trial, rather than all of the
endpoints. Additional disclosure of interim data by us or by our competitors in the future could result in volatility in
the price of our ordinary shares. Further, investors may not agree with what we determine is the material or
otherwise appropriate information to include in our public disclosures, and any information we determine not to
disclose may ultimately be deemed significant by us or, if subsequently disclosed, by investors, with respect to
future decisions, conclusions, views, activities or otherwise regarding a particular product candidate or our business.
Further, others, including regulatory agencies and investors may not accept our conclusions regarding such
preliminary or interim analyses, which could impact the value of a particular program or the approval or
commercialization of the particular product candidate, or result in volatility in the price of our ordinary shares.
The topline results that we report may differ significantly from the final results of the same studies, or different
conclusions or considerations may qualify such results, once additional data have been received and fully evaluated.
As a result, topline and interim data from clinical trials are subject to the risk that one or more of the reported
clinical outcomes may materially change, and should be viewed with caution until the final data are available. For
example, in June 2024, we announced topline data for our Phase 2b RELIEF clinical trial of Licaminlimab in DED
and in January 2025, we announced topline results from the Phase 2 ACUITY proof-of-concept clinical trial of
Privosegtor in ON and NAION. These topline results may differ from the final results of the RELIEF and ACUITY
trials. As a result, topline and interim data from clinical trials are subject to the risk that one or more of the reported
clinical outcomes may materially change, and should be viewed with caution until the final data are available. If the
preliminary or topline data that we report differ from the final results, or if others, including regulatory agencies,
disagree with our conclusions, then our ability to obtain approval for, and to successfully commercialize our product
28
candidates may be harmed, which could materially affect our business, financial condition, results of operations and
growth prospects.
We may encounter substantial delays in our clinical trials, or may not be able to conduct or complete our clinical
trials on the timelines we expect, if at all.
Clinical testing is expensive, time consuming, and subject to uncertainty. We cannot guarantee that any clinical trials
will be conducted as planned or completed on schedule, if at all. We cannot be sure that submission of an IND, or a
clinical trial application (
“CTA”
), will result in the FDA or comparable non-U.S. regulatory agencies, or any other
regulatory authority as applicable, allowing clinical trials to begin in a timely manner, if at all. Moreover, even if
these trials begin, issues may arise that could suspend or terminate such clinical trials. A failure of one or more
clinical trials can occur at any stage of testing, and our future clinical trials may not be successful.
Any difficulties we experience relating to the initiation or completion of patient visits in clinical trials, could delay
regulatory approval for our product candidates. Identifying and qualifying subjects to participate in clinical trials of
our product candidates is critical to our success. The timing of clinical trials depends on our ability to recruit
subjects to participate, as well as the completion of required follow-up periods. Patients may be unwilling to
participate in clinical trials because of negative publicity from adverse events related to the biotechnology or
pharmaceutical fields, competitive clinical trials for similar patient populations, the existence of current treatments
or for other reasons. The timeline for recruiting patients, conducting studies and obtaining regulatory approval of our
product candidates may be delayed, which could result in increased costs, delays in advancing our product
candidates, delays in testing the effectiveness of our product candidates or termination of the clinical trials
altogether. Patient enrollment for any of our future clinical trials may be affected by other factors, including:
•
inability to generate sufficient preclinical, toxicology, or other
in vivo
or
in vitro
data to support the
initiation or continuation of clinical trials;
•
delays in reaching a consensus with regulatory agencies on study design;
•
the determination by the reviewing regulatory authority to require more costly or lengthy clinical trials
than we currently anticipate;
•
delays in reaching agreement on acceptable terms with prospective contract research organizations and
clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly
among different CROs and clinical trial sites;
•
delays in identifying, recruiting and training suitable clinical investigators;
•
delays in obtaining required IRB approval, or a positive ethics committee opinion at each clinical trial
site;
•
imposition of a temporary or permanent clinical hold by regulatory agencies for a number of reasons,
including after review of an investigational new drug (
“IND”
) or amendment, CTA or amendment, or
equivalent application or amendment; as a result of a new safety finding that presents unreasonable risk
to clinical trial participants; a negative finding from an inspection of our clinical trial operations or study
sites; developments on trials conducted by competitors for related technology that raises FDA, or
comparable non-U.S. regulatory agencies, or any other regulatory authority concerns about risk to
patients of the technology broadly; or if the FDA, national competent agencies of EU member states,
National Medical Products Administration (
“NMPA”
), or any other regulatory authority finds that the
investigational protocol or plan is clearly deficient to meet its stated objectives;
•
delays in identifying, recruiting and enrolling suitable patients to participate in our clinical trials, and
delays caused by patients withdrawing from clinical trials or failing to return for post-treatment follow-
up;
•
difficulty collaborating with patient groups and clinical trial investigators;
29
•
perceived risks and benefits of the product candidate under study;
•
failure by our CROs, other third parties, or us to adhere to clinical trial requirements;
•
failure to perform in accordance with the
FDA’s
or any other regulatory
authority’s
cGCPs,
requirements, or applicable regulatory guidelines in other countries;
•
occurrence of adverse events associated with the product candidate that are viewed to outweigh its
potential benefits;
•
availability of competing treatments and clinical trials;
•
changes in regulatory requirements and guidance that require amending or submitting new clinical
protocols;
•
changes in the standard of care on which a clinical development plan was based, which may require new
or additional trials;
•
the cost of clinical trials of our product candidates being greater than we anticipate, including as a result
of volatility in currency exchange rates;
•
clinical trials of our product candidates producing negative or inconclusive results, which may result in
our deciding, or regulators requiring us, to conduct additional clinical trials or abandon development of
such product candidates;
•
transfer of manufacturing processes to larger-scale facilities operated by a CMO or by us, and delays or
failure by our CMOs or us to make any necessary changes to such manufacturing process; and
•
delays in manufacturing, testing, releasing, validating, or importing/exporting sufficient stable quantities
of our product candidates for use in clinical trials or the inability to do any of the foregoing.
Any inability to successfully initiate or complete clinical trials could result in additional costs to us or impair our
ability to generate revenue. In addition, if we make manufacturing or formulation changes to our product candidates,
we may be required to or we may elect to conduct additional studies to bridge our modified product candidates to
earlier versions. Clinical trial delays could also shorten any periods during which our products have patent
protection and may allow our competitors to bring products to market before we do, which could impair our ability
to successfully commercialize our product candidates and may harm our business and results of operations.
We could also encounter delays if a clinical trial is suspended or terminated by us, by the data safety monitoring
board for such trial or by the FDA, or comparable non-U.S. regulatory agencies, or any other regulatory authority, or
if the IRBs or ethics committees of the institutions in which such trials are being conducted suspend or terminate the
participation of their clinical investigators and sites subject to their review. Such agencies may suspend, vary or
terminate a clinical trial due to a number of factors, including failure to conduct the clinical trial in accordance with
regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA,
or comparable non-U.S. regulatory agencies, or other regulatory agencies resulting in the imposition of a clinical
hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a product
candidate, changes in governmental regulations or administrative actions or lack of adequate funding to continue the
clinical trial.
Delays in the commencement or completion of any clinical trial of our product candidates will increase our costs,
slow down our product candidate development and approval process and delay or potentially jeopardize our ability
to commence product sales and generate revenue. In addition, many of the factors that cause, or lead to, a delay in
the commencement or completion of clinical trials may also ultimately lead to the denial of regulatory approval of
our product candidates.
We do, and may in the future, conduct clinical trials for our product candidates outside the United States, and the
FDA and applicable non-U.S. regulatory agencies may not accept data from such trials.
30
We and investigator sponsors have conducted clinical trials, are conducting clinical trials, and may in the future
choose to conduct one or more clinical trials outside of the United States. Although the FDA or applicable non-U.S.
regulatory agencies may accept data from clinical trials conducted outside the United States or the applicable
jurisdiction, acceptance of such study data by the FDA or applicable non-U.S. regulatory agency may be subject to
certain conditions or exclusions. Where data from foreign clinical trials are intended to serve as the basis for
marketing approval in the United States, the FDA will not approve the application on the basis of foreign data alone
unless such data are applicable to the U.S. population and U.S. medical practice; the studies were performed by
clinical investigators of recognized competence; and the data are considered valid without the need for an on-site
inspection by the FDA or, if the FDA considers such an inspection to be necessary, the FDA is able to validate the
data through an on-site inspection or other appropriate means. Many non-U.S. regulatory agencies have similar
requirements. In addition, such non-U.S. studies would be subject to the applicable local laws of the jurisdictions
where the studies are conducted. There can be no assurance the FDA or applicable non-U.S. regulatory agency will
accept data from trials conducted outside of the United States or the applicable home country. If the FDA or
applicable non-U.S. regulatory agency does not accept such data, it would likely result in the need for additional
trials, which would be costly and time-consuming and delay aspects of our business plan.
We rely on and expect to continue to rely on third-party CROs and other third parties to conduct and oversee our
clinical trials. If these third parties do not meet our requirements or otherwise conduct clinical trials as required,
we may not be able to satisfy our contractual obligations or obtain regulatory approval for, or commercialize, our
product candidates.
We rely on, and expect to continue to rely on, third-party CROs to conduct and oversee our clinical trials and other
aspects of product development. We also expect to rely on various medical institutions, clinical investigators and
contract laboratories to conduct our trials in accordance with our clinical protocols and applicable regulatory
requirements, including the FDA’s regulations and good clinical practice, or GCP requirements, and equivalent non-
U.S. and international standards, which are international standards meant to protect the rights and health of patients
and to define the roles of clinical trial sponsors, administrators and monitors, and national, supranational, and state
regulations governing the handling, storage, security and recordkeeping for drug and biologic products. These CROs
and other third parties are expected to play a significant role in the conduct of these trials and the subsequent
collection and analysis of data from the clinical trials. We expect to rely heavily on these parties for the execution of
our clinical trials and preclinical studies and will control only certain aspects of their activities. We and our CROs
and other third-party contractors will be required to comply with GCP and good laboratory practice (
“GLP”
),
requirements, which are regulations and guidelines enforced by the FDA and comparable non-U.S. regulatory
agencies. Regulatory agencies enforce these GCP and GLP requirements through periodic inspections of trial
sponsors, principal investigators and trial sites. If we or any of these third parties fail to comply with applicable GCP
and GLP requirements, or reveal noncompliance from an audit or inspection, the clinical data generated in our
clinical trials may be deemed unreliable and the FDA or other comparable non-U.S. regulatory agencies may require
us to perform additional clinical trials before approving our or our partners’ marketing applications. We cannot
provide assurance that upon inspection by a given regulatory authority, such regulatory authority will determine
whether or not any of our clinical or preclinical trials comply with applicable GCP and GLP requirements. In
addition, our clinical trials generally must be conducted with product produced under current good manufacturing
practice (“
cGMP
”) regulations. Our failure to comply with these regulations and policies may require us to repeat or
terminate clinical trials, which would delay the regulatory approval process, and adversely affect our operations.
If any of our CROs or clinical trial sites terminate their involvement in one of our clinical trials for any reason, we
may not be able to enter into arrangements with alternative CROs or clinical trial sites or do so on commercially
reasonable terms. In addition, if our relationship with clinical trial sites is terminated, we may experience the loss of
follow-up information on patients enrolled in our ongoing clinical trials unless we are able to transfer the care of
those patients to another qualified clinical trial site. In addition, principal investigators for our clinical trials may
serve as scientific advisors or consultants to it from time to time and could receive cash or equity compensation in
connection with such services. If these relationships and any related compensation result in perceived or actual
conflicts of interest, the integrity of the data generated at the applicable clinical trial site may be questioned by the
FDA and comparable non-U.S. regulatory agencies, which could delay the regulatory approval process and
adversely affect our operations.
31
Even if we obtain regulatory approval for a product candidate, our products will remain subject to continuous
subsequent regulatory obligations and scrutiny.
If our product candidates are approved, they will be subject to ongoing regulatory requirements for
pharmacovigilance, manufacturing, labeling, packaging, storage, advertising, promotion, sampling, record-keeping,
conduct of post-marketing studies (if any) and submission of other post-market information, including both federal
and state requirements in the United States and equivalent requirements of comparable regulatory agencies.
Manufacturers and manufacturers’ facilities are required to comply with extensive FDA, and comparable regulatory
authority requirements, including ensuring that quality control and manufacturing procedures conform to cGMP
regulations. As such, we and our contract manufacturers will be subject to continual review and inspections to assess
compliance with cGMP regulations and adherence to commitments made in any marketing authorization application
(
“MAA”
). Accordingly, we and others with whom we work must continue to expend time, money and effort in all
areas of regulatory compliance, including manufacturing, production and quality control.
Any regulatory approvals that we or our collaboration partners receive for our product candidates may be subject to
limitations on the approved conditions of use for which the product may be marketed or to the conditions of
approval or may contain requirements for potentially costly additional data generation, including clinical trials. We
will be required to report certain adverse reactions and production problems, if any, to the FDA and comparable
regulatory agencies, and to conduct surveillance to monitor the safety and efficacy of the product candidate. Any
new legislation addressing drug safety or biologics issues could result in delays in product development or
commercialization or increased costs to assure compliance.
We will have to comply with requirements concerning advertising and promotion for our product candidates, if
approved. Promotional communications with respect to prescription drugs are subject to a variety of legal and
regulatory restrictions that vary throughout the world and must be consistent with the information in the product’s
approved label. As such, we may promote our products in ways that are not consistent with FDA-approved labeling,
e.g., for indications or uses for which they do not have approval.
If a regulatory authority discovers previously unknown problems with one of our products such as adverse events of
unanticipated severity or frequency, or if there are problems with the facility where the product is manufactured or
the regulatory authority disagrees with the advertising, promotion, marketing or labeling of a product, such
regulatory agency may impose restrictions on that product or us. If we fail to comply with applicable regulatory
requirements, a regulatory authority such as FDA may, among other things:
•
issue warning or untitled letters;
•
refer a case to the U.S. Department of Justice or the competent equivalent foreign authority to impose
civil or criminal penalties;
•
begin proceedings to suspend, vary or withdraw regulatory approval;
•
issue an import alert;
•
total or partial suspension of production, distribution or manufacturing for our ongoing clinical studies
or trials;
•
refuse to approve pending applications (including supplements to approved applications) submitted by
us;
•
ask us to initiate a product recall;
•
suspend licenses;
•
impose fines; or
32
•
refer a case to the U.S. Department of Justice or the competent equivalent foreign authority to seize and
forfeit products or obtain an injunction imposing restrictions on our operations.
Any government investigation of alleged violations of law or regulations could require us to expend significant time
and resources in response and could generate negative publicity. Any failure to comply with ongoing regulatory
requirements may significantly and adversely affect our ability to commercialize and generate revenue from our
products. If regulatory sanctions are applied or if regulatory approval is suspended, varied or withdrawn, the value
of us and our operating results will be adversely affected. The U.S. Supreme Court’s June 2024 decision in
Loper
Bright Enterprises v. Raimondo
overturned the longstanding
Chevron
doctrine, under which courts were required to
give deference to regulatory agencies’ reasonable interpretations of ambiguous federal statutes. The
Loper
decision
could result in additional legal challenges to regulations and guidance issued by federal agencies, including the
FDA, on which we rely. Any such legal challenges, if successful, could have a material impact on our business.
Additionally, the
Loper
decision may result in increased regulatory uncertainty, inconsistent judicial interpretations,
and other impacts to the agency rulemaking process, any of which could adversely impact our business and
operations. We cannot predict the likelihood, nature or extent of government regulation that may arise from future
legislation or administrative action or as a result of legal challenges, either in the United States or abroad. If we are
slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we
are not able to maintain regulatory compliance, our business could be materially harmed.
If we are not successful in discovering, developing, and commercializing additional product candidates beyond
our current portfolio, our ability to expand our business and achieve our strategic objectives would be impaired.
A key element of our strategy is to discover, develop, and potentially commercialize additional product candidates
beyond our current portfolio to treat various conditions in a variety of therapeutic areas. We intend to do so by
investing in our own drug discovery efforts, exploring potential strategic alliances for the development of new
products, and in-licensing technologies. Identifying new product candidates requires substantial technical, financial,
and human resources. We may fail to identify promising product candidates and, even if we do identify such product
candidates, we may fail to successfully develop and commercialize such product candidates for many reasons,
including:
•
competitors may develop alternatives that render our product candidates obsolete;
•
product candidates we develop may be covered by third parties’ patents or other intellectual property
and proprietary rights;
•
a product candidate may, on further study, be shown to have harmful side effects or other characteristics
that indicate it is unlikely to be effective or otherwise does not meet applicable regulatory criteria;
•
we may be incapable of producing a product candidate in commercial quantities at an acceptable cost, or
at all; and
•
an approved product may not be accepted as safe and effective by patients, the medical community or
third-party payors.
We have several early-stage programs in preclinical development as we seek to expand our pipeline. Preclinical
development programs in the biotechnology industry carry high risk of failure. If any of these programs fails due to,
among others, adverse formulation, pharmacokinetic, pharmacodynamics, or safety, we may need to terminate the
program. If we are unsuccessful in identifying and developing additional product candidates and progressing those
into clinical development, our potential for growth may be impaired.
We may expend our limited resources to pursue a particular product candidate or indication and fail to capitalize
on product candidates or indications that may be more profitable or for which there is a greater likelihood of
success.
Because we have limited financial and managerial resources, we focus on research programs and product candidates
that we identify for specific indications. As a result, we may forego or delay pursuit of opportunities with other
product candidates or for other indications that later prove to have greater commercial potential. Our resource
33
allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market
opportunities. Our spending on current and future research and development programs and product candidates for
specific indications may not yield any commercially viable products. If we do not accurately evaluate the
commercial potential or target market for a particular product candidate, we may relinquish valuable rights to that
product candidate through collaboration, licensing or other royalty arrangements in cases in which it would have
been more advantageous for us to retain sole development and commercialization rights to such product candidate.
As a result of the foregoing, our business, operations and prospects could be materially adversely affected.
We may choose to discontinue developing or commercializing any of our product candidates, or may choose not
to commercialize product candidates in approved indications, at any time during development or after approval,
which would reduce or eliminate our potential return on investment for those product candidates.
At any time, we may decide to discontinue the development of any of our product candidates for a variety of
reasons, including the appearance of new technologies that make our product candidates obsolete, competition from
a competing product, cost concerns, manufacturing challenges, analysis of preclinical and clinical trial results or
changes in or failure to comply with applicable regulatory requirements. If we terminate a program in which we
have invested significant resources, we will not receive any return on our investment and we will have missed the
opportunity to have allocated those resources to potentially more productive uses. As a result, our business, financial
condition, results of operations and growth prospects may be adversely affected.
Risks related to our manufacturing activities
We have no experience manufacturing any of our product candidates at a commercial scale. If we or any of our
third-party manufacturers encounter difficulties in production, or fail to meet rigorously enforced regulatory
standards, our ability to provide supply of our product candidates for clinical trials or our products for patients, if
approved, could be delayed or stopped, or we may be unable to establish a commercially viable cost structure.
In order to conduct clinical trials of our product candidates, or supply commercial products, if approved, we need to
manufacture them in small and large quantities. The manufacturing processes for Privosegtor and Licaminlimab
have never been tested at commercial scale, and the process validation requirement (the requirement to consistently
produce the active pharmaceutical ingredient used in these drug candidates in commercial quantities and of specified
quality on a repeated basis and document our ability to do so) for each of OCS-01, Licaminlimab and Privosegtor
has not yet been satisfied. Our manufacturing partners may be unable to successfully increase the manufacturing
capacity for any of our product candidates in a timely or cost-effective manner, or at all. In addition, quality issues
may arise during scale-up activities. If our manufacturing partners are unable to successfully scale up the
manufacture of our product candidates in sufficient quality and quantity, the development, testing and clinical trials
of our product candidates may be delayed or become infeasible, and regulatory approval or commercial launch of
any resulting product may be delayed or not obtained, which could significantly harm our business. The same risks
would apply to any internal manufacturing facilities, should we in the future decide to build internal manufacturing
capacity.
In addition, the manufacturing process for any products that we may develop is subject to FDA, competent agencies
of EU member states, NMPA and other non-U.S. regulatory authority approval processes and continuous oversight.
We will need to contract with manufacturers who can meet all applicable FDA, European Commission, EMA,
NMPA and other non-U.S. regulatory authority requirements, including complying with cGMPs on an ongoing
basis. If we or our third-party manufacturers are unable to reliably produce products to specifications acceptable to
the FDA, EU, NMPA or other regulatory agencies, we may not obtain or maintain the approvals we need to
commercialize such products. Even if we obtain regulatory approval for any of our product candidates, there is no
assurance that either we or our CMOs will be able to manufacture the approved product to specifications acceptable
to the FDA, European Commission, EMA, NMPA or other regulatory agencies, to produce it in sufficient quantities
to meet the requirements for the potential launch of the product, or to meet potential future demand. Any of these
challenges could delay completion of clinical trials, require bridging clinical trials or the repetition of one or more
clinical trials, increase clinical trial costs, delay approval of our product candidate, impair commercialization efforts,
increase our cost of goods, and have an adverse effect on our business, financial condition, results of operations and
growth prospects.
34
In the event that we need to change
our
CMOs, our clinical trials or the commercialization of our product
candidates could be delayed, adversely affected or terminated, or such a change may result in significantly higher
costs.
Various steps in the manufacture of our product candidates may need to be sole-sourced. In accordance with cGMP,
changing manufacturers may require the re-validation of manufacturing processes and procedures, and may require
further clinical trials to show comparability between the materials produced by different manufacturers. Changing
our current or future CMOs may be difficult for us and could be costly, which could result in our inability to
manufacture our product candidates for an extended period of time and therefore a delay in the development of our
product candidates. Further, in order to maintain our development time lines in the event of a change in our CMOs,
we may incur significantly higher costs to manufacture our product candidates.
The manufacture of Licaminlimab, a biologic, is highly complex, costly and requires substantial lead time to
produce.
Manufacturing Licaminlimab, a biologic, involves complex processes, including developing cells or cell systems to
produce the biologic, growing large quantities of such cells, and harvesting and purifying the biologic produced by
them. These processes require specialized facilities, highly specific raw materials and other production constraints.
As a result, the cost to manufacture a biologic is generally far higher than traditional small molecule chemical
compounds, and the biologics manufacturing process is less reliable and is difficult to reproduce. Because of the
complex nature of this product candidate, we need to oversee manufacture of multiple components that require a
diverse knowledge base and specialized personnel.
Moreover, unlike chemical pharmaceuticals, the physical and chemical properties of a biologic such as
Licaminlimab generally cannot be adequately characterized prior to manufacturing the final product. As a result, an
assay of the finished product is not sufficient to ensure that the product will perform in the intended manner.
Accordingly, we expect to employ multiple steps to attempt to control our manufacturing process to assure that the
process works and the product or product candidate is made strictly and consistently in compliance with the process.
Manufacturing biologics is highly susceptible to product loss due to contamination, equipment failure, improper
installation or operation of equipment, vendor or operator error, improper storage or transfer, inconsistency in yields
and variability in product characteristics. Even minor deviations from normal manufacturing, distribution or storage
processes could result in reduced production yields, product defects and other supply disruptions. Some of the raw
materials required in our manufacturing process are derived from biological sources. Such raw materials are difficult
to procure and may also be subject to contamination or recall. A material shortage, contamination, recall or
restriction on the use of biologically derived substances in the manufacture of our product candidates could
adversely impact or disrupt commercialization. Production of additional drug substance and drug product for
Licaminlimab may require substantial lead time. In the event of significant product loss and materials shortages, we
may be unable to produce adequate amounts of our product candidates or products for our operational needs, which
would materially adversely affect our business, financial condition and results of operations.
Further, as product candidates are developed through preclinical studies to late-stage clinical trials towards approval
and commercialization, it is common that various aspects of the development program, such as manufacturing
methods, are altered along the way in an effort to optimize processes and results. Such changes carry the risk that
they will not achieve these intended objectives, and any of these changes could cause our product candidates to
perform differently and affect the results of planned clinical trials or other future clinical trials. We and our third-
party manufacturing partner are engaged in efforts to reduce the expected costs for Licaminlimab. In the future, if
the proposed manufacturing plans to reduce Licaminlimab costs do not succeed when producing Licaminlimab at
commercial scale, we may not be able to proceed with Licaminlimab commercialization, if approved.
Any of the foregoing could potentially materially adversely affect our business, financial condition, results of
operations and growth prospects.
Risks related to our future commercialization activities
Even if a product candidate obtains regulatory approval, it may fail to achieve the broad degree of physician and
patient adoption and use necessary for commercial success.
35
The commercial successes of OCS-01, Licaminlimab or Privosegtor, if approved, will depend significantly on
attaining broad adoption and use of the products by physicians and patients for approved indications, and any of
these product candidates may not be commercially successful even if shown to be effective in clinical trials. The
degree and rate of physician and patient adoption of a product, if approved, will depend on a number of factors,
including but not limited to:
•
patient demand for approved products that treat the indication for which they are approved;
•
efficacy and potential advantages compared to alternative treatments, including the existing standard of
care;
•
the availability of coverage and adequate reimbursement from managed care plans and other healthcare
payors;
•
the cost of treatment in relation to alternative treatments and willingness to pay on the part of patients;
•
insurers’ willingness to see the applicable indication as a disease worth treating;
•
proper administration by physicians or patients;
•
patient satisfaction with the results, administration and overall treatment experience;
•
limitations or contraindications, warnings, precautions or approved indications for use different than
those sought by us that are contained in the final FDA-approved, or comparable non-U.S. regulatory
agencies-approved labeling for the applicable product;
•
any FDA or comparable non-U.S. regulatory authority’s requirement to undertake a risk evaluation and
mitigation strategy or comparable foreign strategy;
•
the effectiveness of our sales, marketing, pricing, reimbursement and access, government affairs, and
distribution efforts;
•
adverse publicity about a product or favorable publicity about competitive products;
•
new government regulations and programs, including price controls and/or limits or prohibitions on
ways to commercialize drugs, such as increased scrutiny on direct-to-consumer advertising of
pharmaceuticals; and
•
potential product liability claims or other product-related litigation.
Even if we receive marketing approvals for OCS-01, Licaminlimab, Privosegtor, or any future product candidate,
we may not be able to successfully commercialize our product candidates due to unfavorable pricing regulations
or third-party coverage and reimbursement policies, which could make it difficult for us to sell our product
candidates profitably.
Obtaining coverage and reimbursement approval for a product from a government or other third-party payor is a
time consuming and costly process that could require us to provide supporting scientific, clinical and cost
effectiveness data to the payor. There may be significant delays in obtaining such coverage and reimbursement for
newly approved products, and coverage may be more limited than the purposes for which the product is approved by
the FDA or comparable non-U.S. regulatory agencies. Moreover, eligibility for coverage and reimbursement does
not imply that a product will be paid for in all cases or at a rate that covers costs, including research, development,
intellectual property, manufacture, sale and distribution expenses. Interim reimbursement levels for new products, if
applicable, may also not be sufficient to cover costs and may not be made permanent. Reimbursement rates may
vary according to the use of the product and the clinical setting in which it is used, may be based on reimbursement
levels already set for lower cost products and may be incorporated into existing payments for other services. Net
prices for products may be reduced by mandatory discounts or rebates required by government healthcare programs
36
or private payors, by any future laws limiting drug prices and by any future relaxation of laws that presently restrict
imports of product from countries where they may be sold at lower prices than in the United States.
There is significant uncertainty related to the insurance coverage and reimbursement of newly approved products.
Third-party payors in the United States often rely upon Medicare coverage policy and payment limitations in setting
reimbursement policies, but also have their own methods and approval process apart from Medicare coverage and
reimbursement determinations. Pricing and reimbursement outside of the United States vary widely and are
constantly evolving, with requirements and limitations becoming increasingly strict.
Coverage and reimbursement by a third-party payor or competent foreign authority may depend upon a number of
factors, including the third-party payor’s or competent foreign authority’s determination that use of a product is:
•
a covered benefit under its health plan;
•
safe, effective and medically necessary;
•
appropriate for the specific patient;
•
cost-effective; and
•
neither experimental nor investigational.
We cannot be sure that coverage and reimbursement will be available for any product that we commercialize and, if
coverage and reimbursement are available, what the level of reimbursement will be. Our inability to promptly obtain
coverage and adequate reimbursement rates from both government-funded and private payors for any approved
products that we develop could have a material adverse effect on our operating results, our ability to raise capital
needed to commercialize products and our overall financial condition.
Reimbursement may impact the demand for, and the price of, any product for which we obtain marketing approval.
Assuming we obtain coverage for a given product by a third-party payor, the resulting reimbursement payment rates
may not be adequate or may require co-payments that patients find unacceptably high. Patients who are prescribed
medications for the treatment of their conditions, and their prescribing physicians, generally rely on third-party
payors or competent foreign authorities to reimburse all or part of the costs associated with those medications.
Patients are unlikely to use our products unless coverage is provided and reimbursement is adequate to cover all or a
significant portion of the cost of our products. Therefore, coverage and adequate reimbursement is critical to new
product acceptance. Coverage decisions may depend upon clinical and economic standards that disfavor new
products when more established or lower cost therapeutic alternatives are already available or subsequently become
available. Coverage policies and third-party reimbursement rates may change at any time. Even if favorable
coverage and reimbursement status is attained for one or more products for which we receive regulatory approval,
less favorable coverage policies and reimbursement rates may be implemented in the future.
We expect to experience pricing pressures in connection with the sale of any of our product candidates due to the
trend toward managed healthcare, the increasing influence of health maintenance organizations, and additional
legislative changes. The downward pressure on healthcare costs in general, particularly prescription medicines,
medical devices and surgical procedures and other treatments, has become very intense. As a result, increasingly
high barriers are being erected to the successful commercialization of new products. For example, HHS imposes
rebates on many Medicare Part B and Medicare Part D products to penalize price increases that outpace inflation on
an annual basis. HHS has also been empowered to negotiate the price of certain single-source drugs that have been
on the market for at least seven (7) years covered under Medicare as part of the Medicare Drug Price Negotiation
Program. Each year up to twenty (20) products will be selected by HHS for the Medicare Drug Price Negotiation
Program. Products subject to the Medicare Drug Price Negotiation Program are expected to experience a significant
reduction in reimbursement from the Medicare program on a per unit basis. Further, the adoption and
implementation of any future governmental cost containment or other health reform initiative may result in
additional downward pressure on the price that we may receive for any approved product.
Outside of the United States, many countries require approval of the sale price of a product before it can be
marketed and the pricing review period only begins after marketing approval is granted. To obtain reimbursement or
37
pricing approval in some of these countries, we may be required to conduct a clinical trial that compares the cost-
effectiveness of our product candidate to other available therapies. In some foreign markets, prescription
pharmaceutical pricing remains subject to continuing governmental control even after initial approval is granted. As
a result, we might obtain marketing approval for a product candidate in a particular country, but then be subject to
price regulations that delay our commercial launch of the product, possibly for lengthy time periods, and negatively
impact the revenues, if any, we are able to generate from the sale of the product in that country. Adverse pricing
limitations may hinder our ability to recoup our investment in one or more product candidates, even if such product
candidates obtain marketing approval.
If, in the future, we are unable to establish sales and marketing capabilities or enter into agreements with third
parties to sell and market any product candidates we may develop, we may not be successful in commercializing
those product candidates if and when they are approved.
We do not have a sales or marketing infrastructure and have no experience in the sale, marketing or distribution of
pharmaceutical products. To achieve commercial success for any approved product for which we retain sales and
marketing responsibilities, we must either develop a sales and marketing organization or outsource these functions
to third parties. In the future, we may choose to build a focused sales, marketing and commercial support
infrastructure to sell, or participate in sales activities with our collaborators for, some of our product candidates if
and when they are approved.
There are risks involved with both establishing our own commercial capabilities and entering into arrangements with
third parties to perform these services. For example, recruiting and training a sales force or reimbursement
specialists is expensive and time consuming and could delay any product launch. If the commercial launch of a
product candidate for which we recruit a sales force and establish marketing and other commercialization
capabilities is delayed or does not occur for any reason, we would have prematurely or unnecessarily incurred these
commercialization expenses. This may be costly, and our investment would be lost if we cannot retain or reposition
our commercialization personnel.
Factors that may inhibit our efforts to commercialize any approved product on our own include:
•
our inability to recruit and retain adequate numbers of effective sales, marketing, reimbursement,
customer service, medical affairs and other support personnel;
•
the inability of sales personnel to obtain access to physicians or educate adequate numbers of physicians
about any future approved products;
•
the inability of reimbursement professionals to negotiate arrangements for formulary access,
reimbursement, and other acceptance by payors;
•
the inability to price our products at a sufficient price point to ensure an adequate and attractive level of
profitability;
•
restricted or closed distribution channels that make it difficult to distribute our products to segments of
the patient population;
•
the lack of complementary products to be offered by sales personnel, which may put us at a competitive
disadvantage relative to companies with more extensive product lines; and
•
unforeseen costs and expenses associated with creating an independent commercialization organization.
If we enter into arrangements with third parties to perform sales, marketing, commercial support and distribution
services, our product revenue or the profitability of product revenue may be lower than if we were to market and sell
any products we may develop ourselves. In addition, we may not be successful in entering into arrangements with
third parties to commercialize our product candidates or may be unable to do so on terms that are favorable to us.
We may have little control over such third parties, and any of them may fail to devote the necessary resources and
attention to sell and market our products effectively. If we do not establish commercialization capabilities
successfully, either on our own or in collaboration with third parties, we will not be successful in commercializing
38
our product candidates if approved, which would materially adversely affect our business, results of operations,
financial condition and growth prospects.
We face substantial competition, which may result in others discovering, developing or commercializing products
before or more successfully than we do.
The development and commercialization of new drug products are highly competitive. We face competition with
respect to our product candidates that we may seek to develop or commercialize, from major pharmaceutical
companies, specialty pharmaceutical companies and biotechnology companies worldwide. Potential competitors
may also include academic institutions, government agencies and other public and private research organizations
that conduct research, seek patent protection and establish collaborative arrangements for research, development,
manufacturing and commercialization.
The DME market is already served by multiple approved products, such as ranimizumab, aflibercept, brolucizumab,
faricimab vascular endothelial growth factor (“
VEGF
”) inhibitors as well as dexamethasone and fluocinolone
acetonide intravitreal implants. These drugs are well established therapies and are widely accepted by physicians,
patients and third-party payors. This, as well as the introduction of biosimilars or generics, may make it difficult to
educate these parties on the benefits of switching to OCS-01. Companies that we are aware are commercializing or
are developing therapeutics for DME include large companies with significant financial resources, such as Roche
(Genentech), Novartis, Bayer, Regeneron, Abbvie (Allergan), Boehringer Ingelheim and ANI Pharmaceuticals,
among others. In addition, OCS-01 will compete with the current status quo practice of treating DME, which is often
observing and not treating milder patients before they often progress to invasive treatments.
The DED market is already served by multiple approved products, such as cyclosporine ophthalmic emulsion and
solution, lifitegrast ophthalmic solution, loteprednol etabonate ophthalmic suspension, varenicline solution and
perfluorohexyloctane ophthalmic solution. These drugs are well established therapies and are widely accepted by
physicians, patients and third-party payors. This, as well as the emerging development of generics, may make it
difficult to educate these parties on the benefits of switching to Licaminlimab. Companies that we are aware are
commercializing or are developing therapeutics for DED include large companies with significant financial
resources, such as Abbvie (Allergan), Bausch + Lomb, Alcon, Sun Pharmaceuticals, Harrow and Viatris, among
others. In addition, over the counter products are currently available for the treatment of DED which may impact
sales of our products.
There are no currently approved neuroprotective treatments for Optic Neuritis and NAION with significant unmet
needs remaining. Companies that we are aware, and which are commercializing or developing therapeutics for
neuro-ophthalmic disorders, include some with significant financial resources such as Amgen and Dompé, among
others.
In addition to competition from other companies targeting the diseases which we target, any products we may
develop may also face competition from other types of therapies, such as gene-editing therapies or drug delivery
devices. Our commercial opportunity for any of our product candidates could also be reduced or eliminated if our
competitors develop and commercialize new products that are safer, more effective, are more convenient, or are less
expensive than our products. The competitors also may obtain FDA or other non-U.S. regulatory approval for their
products more rapidly than we may obtain approval for our candidates, which could result in competitors
establishing a strong market position before we are able to enter the market for a new product candidate. If our
product candidates are not perceived as more effective, safe, cost-effective, or otherwise medically beneficial than
current practices or products in their respective target market segments, then our commercial opportunities will be
negatively impacted. If we are unable to demonstrate the value of our product candidates based on our clinical data,
patient experience, or real-world evidence, future successful commercialization of such product candidates could be
adversely affected.
In addition, our ability to compete may be affected in many cases by insurers or other third-party payors, including
Medicare and equivalent foreign health insurance programs, seeking to encourage the use of generic or biosimilar
products. For example, a generic version of Restasis
®
to treat DED received FDA approval and was launched in
2022. Generic products are generally offered at lower prices than branded products, and consequently, after the
introduction of a generic competitor, a significant percentage of the sales of any branded product may be lost to the
generic product. Accordingly, competition from generic products could have a material adverse impact on our
39
ability to successfully commercialize Licaminlimab for DED or any other product candidate or indication, if
approved, or negatively impact sales or pricing of our products or our ability to gain market acceptance or market
share.
Many of our current and future competitors have significantly greater financial resources and expertise in research
and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals and
marketing approved products than we do. Mergers and acquisitions in the pharmaceutical and biotechnology
industries may result in even more resources being concentrated among a smaller number of our competitors.
Smaller and other early-stage companies may also prove to be significant competitors, including through
collaborative arrangements with large and established companies. These third parties compete with us in recruiting
and retaining qualified scientific and management personnel, establishing clinical trial sites and patient registration
for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs.
Product liability lawsuits against us could cause us to incur substantial liabilities and to limit commercialization
of any products that we develop.
We face an inherent risk of product liability exposure related to the use of our product candidates that we develop in
clinical trials. We face an even greater risk for any products we develop and sell commercially. Off-label use or
misuse of our products if and when commercialized may harm our reputation in the marketplace, result in injuries
that lead to costly product liability suits, or subject us to penalties if we fail to comply with regulatory requirements
or experience unanticipated problems with any product. If we cannot successfully defend ourselves against claims
that our product candidates or products caused injuries, we will incur substantial liabilities. Regardless of merit or
eventual outcome, liability claims may result in:
•
decreased demand for any product candidates that we develop;
•
injury to our reputation and significant negative media attention;
•
withdrawal or delay of recruitment or decreased enrollment rates of clinical trial participants;
•
termination or increased government regulation of clinical trial sites or entire trial programs;
•
product recall or withdrawal from the market or labeling, marketing or promotional restrictions;
•
significant costs to defend the related litigation;
•
significant delays in product launch;
•
substantial monetary awards to trial participants or patients;
•
loss of revenue;
•
reduced time and attention of our management to pursue our business strategy; and
•
the inability to commercialize any products that we develop.
We may need to purchase insurance coverage as we expand our clinical trials and should we eventually realize sales
of any product candidate for which we obtain marketing approval. Insurance coverage is increasingly expensive,
restrictive and narrow. We may not be able to maintain insurance coverage at a reasonable cost, upon adequate
terms or in a sufficient amount necessary to protect us against losses due to product liability or other similar legal
actions that may arise. A successful product liability claim or series of claims brought against us which substantially
exceeds our insurance coverage will require us to make up the shortfall, which may in turn require us to drawdown
on our cash reserve, and harm our business, financial condition, results of operations and growth prospects.
40
Risks related to our reliance on third parties
We may enter into collaborations with third parties for the development and commercialization of our product
candidates. If our collaborations are not successful, we may not be able to capitalize on the market potential of
these product candidates.
We may enter into a combination of exclusive and non-exclusive collaboration arrangements with third parties to
develop or commercialize some or all of our product candidates. We also may enter into arrangements with third
parties to perform these services in the United States and other jurisdictions if we do not establish our own sales,
marketing and distribution capabilities in the United States and other jurisdictions for our product candidates or if
we determine that such arrangements are otherwise beneficial. We also may seek collaborators for development and
commercialization of other product candidates. Our likely collaborators for any sales, marketing, distribution,
development, licensing or broader collaboration arrangements include large and mid-size pharmaceutical companies,
regional and national pharmaceutical companies and biotechnology companies. While we are not currently party to
any such arrangement, our ability to generate revenues from these arrangements will depend on our collaborators’
abilities and efforts to successfully perform the functions assigned to them in the future in these arrangements.
Collaborations that we enter into may pose a number of risks, including the following:
•
collaborators may have significant discretion in determining the amount and timing of efforts and
resources that they will apply to these collaborations;
•
collaborators may not perform their obligations as expected;
•
collaborators may not pursue development and commercialization of our product candidates that receive
marketing approval or may elect not to continue or renew development or commercialization programs
based on results of clinical trials or other studies, changes in the collaborators’ strategic focus or
available funding or external factors, such as an acquisition, that divert resources or create competing
priorities;
•
collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a
clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new
formulation of a product candidate for clinical testing;
•
collaborators could independently develop, or develop with third parties, products that compete directly
or indirectly with our products or product candidates if the collaborators believe that competitive
products are more likely to be successfully developed or can be commercialized under terms that are
more economically attractive than ours;
•
product candidates discovered in collaboration with us may be viewed by our collaborators as
competitive with their own product candidates or products, which may cause collaborators to cease to
devote resources to the commercialization of our product candidates;
•
a collaborator with marketing and distribution rights to one or more of our product candidates that
achieve regulatory approval may not commit sufficient resources to the marketing and distribution of
such product or products;
•
disagreements with collaborators, including disagreements over intellectual property or proprietary
rights, contract interpretation or the preferred course of development, might cause delays or termination
of the research, development or commercialization of product candidates, might lead to additional
responsibilities for us with respect to product candidates, or might result in litigation or arbitration, any
of which would divert management attention and resources and be time-consuming and expensive;
•
collaborators may not properly maintain or defend our intellectual property or proprietary rights or may
use our intellectual property or proprietary rights in such a way as to invite litigation that could
jeopardize or invalidate our intellectual property or proprietary rights or expose us to potential litigation
and liability;
41
•
collaborators may infringe, misappropriate or otherwise violate the intellectual property rights of third
parties, which may expose us to litigation and potential liability; and
•
collaborations may be terminated for the convenience of the collaborator and, if terminated, we could be
required to raise additional capital to pursue further development or commercialization of the applicable
product candidates.
Collaboration agreements may not lead to development or commercialization of product candidates in the most
efficient manner, or at all. If any collaborations that we enter into do not result in the successful development and
commercialization of products or if one of our collaborators terminates its agreement with us, we may not receive
any future research funding or milestone or royalty payments, or be able to recover any costs and expenses incurred
by us under the collaboration arrangement. If we do not receive the funding we expect, or recover any costs and
expenses incurred under these agreements, our development of our product candidates could be delayed and we may
need additional resources to develop our product candidates. All of the risks relating to product development,
regulatory approval and commercialization described herein also apply to the activities of our collaborators.
Additionally, subject to its contractual obligations to us, if a collaborator of ours were to be involved in a business
combination, it might deemphasize or terminate the development or commercialization of any product candidate
licensed to it by us. If one of our collaborators terminates its agreement with us, we may find it more difficult to
attract new collaborators and our perception in the business and financial communities could be harmed.
We rely completely on third-party contractors to supply, manufacture and distribute clinical drug supplies for our
product candidates, which may include sole-source suppliers and manufacturers; we intend to rely on third
parties for commercial supply, manufacturing and distribution if any of our product candidates receives
regulatory approval and for any future product candidates.
We do not currently have, nor do we plan to acquire, the infrastructure or capability to supply, store, manufacture or
distribute preclinical, clinical or commercial quantities of drug substances or products. Additionally, we have not
entered into a long-term commercial supply agreement to provide us with such drug substances or products. As a
result, our ability to develop our product candidates is dependent, and our ability to supply our products
commercially will depend, in part, on our ability to obtain the active pharmaceutical ingredients (“
APIs”
), and other
substances and materials used in our product candidates successfully from third parties and to have finished products
manufactured by third parties in accordance with regulatory requirements and in sufficient quantities for preclinical
and clinical testing and commercialization. If we fail to develop and maintain supply and other technical
relationships with these third parties, and if we are unable to seek suitable replacements in a timely manner or at all,
we may face delays or be unable to continue to develop or commercialize our products and product candidates.
We have limited control over whether or not our contract suppliers and manufacturers will maintain current pricing
terms, be willing to continue supplying us with APIs and finished products or maintain adequate capacity and
capabilities to serve our needs, including quality control, quality assurance and qualified personnel. We are
dependent on our contract suppliers and manufacturers for day-to-day compliance with applicable laws and cGMP
regulations for production of both APIs and finished products. If the safety or quality of any product or product
candidate or component is compromised due to a failure to adhere to applicable laws or for other reasons, we may
not be able to commercialize or obtain regulatory approval for the affected product or product candidate
successfully, and we may be held liable for injuries sustained as a result.
We may be unable to establish any further agreements with third-party manufacturers or to do so on acceptable
terms. Even if we are able to establish agreements with third-party manufacturers, reliance on third-party
manufacturers entails additional risks, including:
•
the possible breach of the manufacturing agreement by the third party or us;
•
the possible termination or non-renewal of the agreement by the third party at a time that is costly or
inconvenient for us;
•
the possible early termination of the agreement by us at a time that requires us to pay a cancellation fee;
42
•
reliance on the third party for regulatory compliance, quality assurance, safety and pharmacovigilance
and related reporting; and
•
the inability to produce required volume in a timely manner and to quality standards.
Third-party manufacturers may not be able to comply with cGMP regulations or similar regulatory requirements
outside the United States. We, or our contract manufacturers, or any future collaborators and their contract
manufacturers could be subject to periodic unannounced inspections by the FDA, competent authorities of EU
member states, or other comparable foreign regulatory agencies, to monitor and ensure compliance with cGMP.
Despite our efforts to audit and verify regulatory compliance, one or more of our third-party manufacturing vendors
may be found on regulatory inspection by the FDA, competent agencies of EU member states, or other comparable
foreign regulatory agencies to be noncompliant with cGMP regulations. Our failure, or the failure of our third-party
manufacturers, to comply with applicable regulations could result in clinical holds on our trials, sanctions being
imposed on us, including shutdown of the third-party vendor or invalidation of drug product lots or processes, fines,
injunctions, civil penalties, delays, suspension, variation or withdrawal of approvals, license revocations, seizures or
recalls of product candidates or medicines, operating restrictions, and criminal prosecutions, any of which could
significantly and adversely affect supplies of our products and harm our business, financial condition, results of
operations, and prospects.
Any products that we may develop may compete with other product candidates and products for access to
manufacturing facilities. There are a limited number of manufacturers that operate under cGMP regulations and that
might be capable of manufacturing our products or product candidates.
Any performance failure on the part of our existing or future manufacturers could delay clinical development or
marketing approval. We do not currently have arrangements in place for redundant supply for any of our product
candidates. If any one of our current contract manufacturers cannot perform as agreed, we may be required to
replace that manufacturer and may incur added costs and delays in identifying and qualifying any such replacement.
Furthermore, securing and reserving production capacity with contract manufacturers may result in significant costs.
By relying on third-party manufacturers for outsourced, custom manufacturing, we may encounter difficulties in
production, particularly with respect to formulation, process development or scaling up of manufacturing
capabilities. If we, or our CMOs, encounter such difficulties, our ability to provide supply of our product candidates
for preclinical studies, clinical trials or our products for patients, if approved, could be delayed or halted, or we may
be unable to maintain a commercially viable cost structure, which would materially adversely affect our business,
results of operations and financial condition.
If third-party suppliers on which we rely fail to successfully scale up their production of our product candidates,
we may face delays and lost opportunities with our development or future commercialization efforts.
In order to conduct larger or late-stage clinical trials for a product candidate and supply sufficient commercial
quantities of the resulting drug product and its components, if that product candidate is approved for sale, our
contract manufacturers and suppliers will need to produce our drug substances and product candidates in larger
quantities more cost-effectively and, in certain cases, at higher yields than they currently achieve. If our third-party
contractors are unable to scale up the manufacture of any of our product candidates successfully in sufficient quality
and quantity and at commercially reasonable prices, or are shut down or put on clinical hold by government
regulators, and we are unable to find one or more replacement suppliers or manufacturers capable of production at a
substantially equivalent cost in substantially equivalent volumes and quality, and we are unable to transfer the
processes successfully on a timely basis, the development of that product candidate and regulatory approval or
commercial launch for any resulting products may be delayed, or there may be a shortage in supply, either of which
could significantly harm our business, financial condition, operating results and prospects.
We expect to continue to depend on third-party contract suppliers and manufacturers for the foreseeable future. Our
supply and manufacturing agreements do not guarantee that a contract supplier or manufacturer will provide services
adequate for our needs. Additionally, any damage to or destruction of our third-party manufacturers’ or suppliers’
facilities or equipment, may significantly impair our ability to have our products and product candidates
manufactured on a timely basis. Our reliance on contract manufacturers and suppliers further exposes us to the
possibility that they, or third parties with access to their facilities, will have access to and may misappropriate our
43
trade secrets or other proprietary information. In addition, the manufacturing facilities of certain of our suppliers
may be located outside of the United States. This may give rise to difficulties in importing our products or product
candidates or their components into the United States or other countries.
We rely on third-party suppliers for key raw materials used in our manufacturing processes, and the loss of these
third-party suppliers or their inability to supply us with adequate raw materials could harm our business.
We rely on third-party suppliers for the raw materials required for the production of our product candidates. Our
reliance on these third-party suppliers and the challenges we may face in obtaining adequate supplies of raw
materials involve several risks, including limited control over pricing, availability, quality and delivery schedules.
As a small company, our negotiation leverage is limited and we are likely to get lower priority than our competitors
who are larger than we are. We cannot be certain that our suppliers will continue to provide us with the quantities of
these raw materials that we require or satisfy our anticipated specifications and quality requirements. Any supply
interruption in limited or sole sourced raw materials could materially harm our ability to manufacture our product
candidates until a new source of supply, if any, could be identified and qualified. We may be unable to find a
sufficient alternative supply channel in a reasonable time or on commercially reasonable terms. Any performance
failure on the part of our suppliers could delay the development and potential commercialization of our product
candidates, including limiting supplies necessary for clinical trials and regulatory approvals, which would have a
material adverse effect on our business.
Our rights to develop and commercialize our technology are subject, in part, to the terms and conditions of
licenses granted to us by others. In particular, we depend on licenses for development and commercialization
rights to Privosegtor and Licaminlimab. If these rights are terminated or we fail to comply with our obligations
under these agreements or any other license, collaboration or other agreement, we may be required to pay
damages and we could lose intellectual property rights that are necessary for the development and protection of
our product candidates.
We currently and may in the future license from third parties certain intellectual property relating to current and
future product candidates. For example, we are party to various license agreements, including with Accure and
Novartis, that we depend on for rights to Privosegtor and Licaminlimab, respectively. These agreements impose, and
other potential agreements we may enter into with third parties may impose, diligence, development and
commercialization timelines and milestone payment, royalty, insurance and other obligations on us. Under the
Novartis Agreement (as defined below) and Accure Agreement (as defined below), for example, we are obligated to
make payments to the counterparty upon us achieving certain development or commercialization milestones and to
make royalty payments to Accure and Novartis on net product sales of Privosegtor and Licaminlimab, respectively.
We also have diligence and development obligations under the Novartis Agreement and Accure Agreement.
Generally, these diligence obligations require us to use commercially reasonable efforts to develop, manufacture,
seek regulatory approval for and commercialize the licensed products. If we fail to comply with our obligations
under current or future license agreements, use the licensed intellectual property in an unauthorized manner or
otherwise breach a license agreement, our counterparties may have the right to terminate these agreements, in which
event we might not have the rights or the financial resources to develop, manufacture or market any licensed product
that is covered by these agreements. Future counterparties also may have the right to convert an exclusive license to
non-exclusive in the territory in which we fail to satisfy our diligence obligations, which could materially adversely
affect the value of the product candidate being developed under any such agreement. Termination of these
agreements or reduction or elimination of our rights under these agreements may result in our having to negotiate
new or reinstated agreements with less favorable terms, seek alternative sources of financing or cause us to lose our
rights under these agreements, including our rights to Privosegtor, Licaminlimab or other important intellectual
property or technology. Any of the foregoing could prevent us from commercializing Privosegtor or Licaminlimab
or cause a competitor to gain access to the licensed technology, which could have a material adverse effect on our
operating results and overall financial condition.
Our license agreements are, and future license agreements are likely to be, complex, and certain provisions in such
agreements may be susceptible to multiple interpretations. The resolution of any contract interpretation
disagreement that may arise could narrow what we believe to be the scope of our rights to the relevant intellectual
property or technology, or increase what we believe to be our financial or other obligations under the relevant
agreement, either of which could have a material adverse effect on our business, financial condition, results of
operations and prospects. Disputes may arise between us and our licensors or future licensors, including:
44
•
the scope of rights granted under the license agreement and other interpretation-related issues;
•
our financial or other obligations under the license agreement;
•
whether and the extent to which our technology and processes infringe, misappropriate or otherwise
violate intellectual property of the licensor that is not subject to the licensing agreement;
•
our right to transfer or assign the license, or to sublicense patents and other intellectual property rights to
third parties;
•
our diligence obligations and what activities satisfy those diligence obligations;
•
the inventorship and ownership of inventions and know-how resulting from the joint creation or use of
intellectual property by any of our licensors and us and our partners; and
•
the priority of invention of patented technology.
If disputes over intellectual property that we have licensed from third parties prevent or impair our ability to
maintain our current licensing arrangements on acceptable terms, we may be unable to successfully develop and
commercialize our product candidates.
The licensing or acquisition of third-party intellectual property rights is a competitive area, and several more
established companies may pursue strategies to license or acquire third-party intellectual property rights that we may
consider attractive or necessary. These established companies may have a competitive advantage over us due to their
size, capital resources and greater clinical development and commercialization capabilities. In addition, companies
that perceive us to be a competitor may be unwilling to assign or license rights to us. If we are unable to license such
technology, or if we are forced to license such technology on unfavorable terms, our business could be harmed. If
we are unable to obtain a necessary license, we may be unable to develop or commercialize the affected product
candidates, which could harm our business, and the third parties owning such intellectual property rights could seek
either an injunction prohibiting sales or an obligation on our part to pay royalties and/or other forms of
compensation. Even if we are able to obtain a license, it may be non-exclusive, thereby giving our competitors
access to the same technologies licensed to us.
Additionally, our licensors may have relied on third-party consultants or collaborators or on funds from third parties
such that our licensors are not the sole and exclusive owners of the patents we in-licensed. Some of our in-licensed
patent rights are sublicensed to us pursuant to parent license agreements we are not a party to. If any such parent
licenses terminate, whether due to our licensor’s breach of the parent license agreement or for other reasons outside
of our control, we could lose our rights to such sublicensed patent rights. Furthermore, if other third parties have
ownership rights to our in-licensed patents, the license granted to us in jurisdictions where the consent of a co-owner
is necessary to grant such a license may not be valid, in any case, and such co-owners may be able to license such
patents to our competitors, and our competitors could market competing products and technology. In addition,
certain of our in-licensed patent rights are dependent, in part, on inter-institutional or other operating agreements
between the joint owners of such in-licensed patent rights. If one or more of such joint owners breaches such inter-
institutional or operating agreements, our rights to such in-licensed patent rights may be adversely affected. Any of
these events could have a material adverse effect on our competitive position, business, financial conditions, results
of operations and prospects.
Our current and future licenses may not provide us with exclusive rights to use the licensed intellectual property and
technology, or may not provide us with exclusive rights to use such intellectual property and technology in all
relevant fields of use and in all territories in which we may wish to develop or commercialize our technology.
Patents licensed to us could be put at risk of being invalidated or interpreted narrowly in litigation filed by or against
our licensors or another licensee or in administrative proceedings brought by or against our licensors or another
licensee in response to such litigation or for other reasons. As a result, we may not be able to prevent competitors or
other third parties from developing and commercializing competitive products, including in territories covered by
our licenses. Some of our in-licensed patent rights are subject to pre-existing rights granted by the licensor to third
parties and our acquired technologies and current or future licensed technology may also be subject to retained
rights. Our predecessors or licensors may retain certain rights under their agreements with us, including the right to
use the underlying technology for noncommercial academic and research use, to publish general scientific findings
45
from research related to the technology, and to make customary scientific and scholarly disclosures of information
relating to the technology. It is difficult to monitor whether our predecessors or future licensors limit their use of the
technology to these uses, and we could incur substantial expenses to enforce our rights to our licensed technology in
the event of misuse.
In addition, certain of our current or future agreements with third parties may limit or delay our ability to
consummate certain transactions, may impact the value of those transactions, or may limit our ability to pursue
certain activities. If we are limited in our ability to utilize acquired technologies or current or future licensed
technologies, or if we lose our rights to critical acquired or in-licensed technology, we may be unable to successfully
develop, out-license, market and sell our products, which could prevent or delay new product introductions. Our
business strategy depends on the successful development of acquired technologies, and current or future licensed
technology, into commercial products. Therefore, any limitations on our ability to utilize these technologies may
impair our ability to develop, out-license or market and sell our product candidates.
For more information on our license agreements with third parties, please see the section entitled “
Business
Overview—Material Licenses, Partnerships and Collaborations
.”
Risks related to our intellectual property
If we are unable to obtain, maintain, protect and enforce patent or other intellectual property protection for our
current and future technology and products, or if the scope of the patent or other intellectual property protection
obtained is not sufficiently broad, we may not be able to compete effectively in our markets.
We rely upon a combination of patents, trademarks, trade secrets and confidentiality agreements to protect the
intellectual property related to our development programs and product candidates. These legal measures afford only
limited protection, and competitors or others may gain access to our intellectual property and proprietary
information. Our success depends in part on our ability to obtain, maintain, expand, enforce and defend the scope of
our intellectual property protection in the United States and other countries with respect to our product candidates.
We have sought and will continue to seek to protect our proprietary position by filing patent applications in the
United States and abroad related to our development programs and product candidates. However, the patent
prosecution process is expensive and time-consuming, and we may not be able to file, prosecute, maintain, enforce
or license all necessary or desirable patents or patent applications at a reasonable cost, in a timely manner, or in all
jurisdictions where protection may be commercially advantageous, or we may not be able to protect our proprietary
rights at all. Additionally, in some instances, we have submitted and expect to submit provisional patent
applications. Corresponding non-provisional patent applications must be filed not later than 12 months after the
provisional application filing date. While we intend to timely file non-provisional patent applications relating to our
provisional patent applications, we cannot predict whether any such patent applications will result in the issuance of
patents that provide us with competitive advantage. Any failure to obtain or maintain patent and other intellectual
property protection with respect to our product candidates could harm our business, financial condition and results
of operations. Additionally, although we seek to enter into non-disclosure and confidentiality agreements with
parties who have access to patentable aspects of our research and development output, any of these parties may
breach the agreements and disclose such output before a patent application is filed, thereby jeopardizing our ability
to seek patent protection.
The patents and patent applications that we own or in-license may fail to result in issued patents with claims that
protect our product candidates in the United States or in other foreign countries. There is no assurance that all of the
potentially relevant prior art relating to our patents and patent applications has been found, which can prevent a
patent from issuing from a pending patent application, or be used to invalidate a patent. Even if patents do
successfully issue and even if such patents cover our product candidates, third parties may challenge their validity,
enforceability or scope, which may result in such patents being narrowed, invalidated or held unenforceable. Any
successful opposition to these patents or any other patents owned by or licensed to us could deprive us of rights
necessary for the successful commercialization of any product candidates that we may develop. Further, if we
encounter delays in regulatory approvals, the period of time during which we could market a product candidate
under patent protection could be reduced.
46
The patent application process is subject to numerous risks and uncertainties, and there can be no assurance that we
or any of our licensors will be successful in protecting our product candidates by obtaining, maintaining, enforcing
and defending patents. These risks and uncertainties include the following:
•
the U.S. Patent and Trademark office (
“USPTO”
), and various foreign governmental patent agencies
require compliance with a number of procedural, documentary, fee payment and other provisions during
the patent process, the noncompliance with which can result in abandonment or lapse of a patent or
patent application, and partial or complete loss of patent rights in the relevant jurisdiction;
•
patent applications may not result in any patents being issued;
•
patents may be challenged, invalidated, modified, revoked, circumvented, found to be unenforceable or
otherwise may not provide any competitive advantage;
•
our competitors, many of whom have substantially greater resources than we do and many of whom
have made significant investments in competing technologies, may seek or may have already obtained
patents that will limit, interfere with or block our ability to make, use and sell our products and product
candidates;
•
there may be significant pressure on the U.S. government and international governmental bodies to limit
the scope of patent protection both inside and outside the United States for disease treatments that prove
successful, as a matter of public policy regarding worldwide health concerns; and
•
countries other than the United States may have patent laws less favorable to patentees than those
upheld by U.S. courts, allowing foreign competitors a better opportunity to create, develop and market
competing products.
We may also choose not to seek patent protection for certain innovations and may choose not to pursue patent
protection in certain jurisdictions, and under the laws of certain jurisdictions, patents or other intellectual property
rights may be unavailable or limited in scope. It is also possible that we will fail to identify patentable aspects of our
research and development output before it is too late to obtain patent protection. If we fail to timely file for patent
protection in any jurisdiction, we may be precluded from doing so at a later date.
Moreover, we are, and could become in the future, a licensee of a third party’s patents or patent applications and we
may not have the right to control the preparation, filing or prosecution of such patent applications, or to maintain,
enforce or protect the patents in-licensed from those third parties. We may also require the cooperation of our
licensors in order to enforce the licensed patent rights, and such cooperation may not be provided. Therefore, any
licensed patents or patent applications may not be prosecuted, maintained, enforced or protected in a manner
consistent with the best interests of our business. We also cannot be certain that patent prosecution and maintenance
activities by any of our licensors will be conducted in compliance with applicable laws and regulations, which may
affect the validity and enforceability of such patents or any patents that may issue from such applications. If any of
our licensors fail to do so, this could cause us to lose rights in any applicable intellectual property, and as a result our
ability to develop and commercialize products or product candidates may be adversely affected and we may be
unable to prevent competitors from making, using and selling competing products. In addition, even where we have
the right to control the prosecution of patents and patent applications under a license from third parties, we may still
be adversely affected or prejudiced by actions or inactions of our predecessors or licensors and their counsel that
took place prior to us assuming control over patent prosecution. If our current or future licensors are not fully
cooperative or disagree with us as to the prosecution, maintenance or enforcement of any patent rights, such patent
rights could be compromised. If disputes over intellectual property that we license prevents or impairs our ability to
maintain our licensing arrangements on acceptable terms, we may not be able to successfully develop and
commercialize the affected product candidates. Any of these outcomes could impair our ability to prevent
competition from third parties, which may have an adverse impact on our business.
If the patent applications we own, license, or may own or license in the future with respect to our development
programs and product candidates fail to issue, if their breadth or strength of protection is threatened, or if they fail to
provide meaningful exclusivity for our product candidates, it could dissuade other companies from collaborating
with us to develop product candidates, and threaten our ability to commercialize our product candidates, if approved.
Any such outcome could have a materially adverse effect on our business.
47
The patent position of biotechnology and pharmaceutical companies generally is highly uncertain, involves complex
legal and factual questions, and has been and will continue to be the subject of litigation and new legislation. In
addition, the laws of foreign countries may not protect our rights to the same extent as the laws of the United States.
For example, many countries restrict the patentability of methods of treatment of the human body. Publications in
scientific literature often lag behind the actual discoveries, and patent applications in the United States and other
jurisdictions are typically not published until 18 months after filing, or in some cases not at all. Therefore, there is a
risk that we cannot know with certainty whether we or our licensors were the first to make the inventions claimed in
our owned or in-licensed patents or pending patent applications, or that we or our licensors were the first to file for
patent protection of such inventions. As a result of these and other factors, the issuance, scope, validity,
enforceability, and commercial value of our owned and in-licensed patent rights are highly uncertain. Our owned
and in-licensed pending and future patent applications may not result in patents being issued which protect our
technology or products, in whole or in part, or which effectively prevent others from commercializing competitive
technologies and products. Changes in either the patent laws or interpretation of the patent laws in the United States
and other countries may diminish the value of our owned and in-licensed patents or narrow the scope of patent
protection for our product candidates.
Moreover, we or our licensors may be subject to a third-party pre-issuance submission of prior art to the USPTO or
become involved in opposition, derivation, reexamination, inter partes review, post-grant review or interference
proceedings challenging our owned or in-licensed patent rights or the patent rights of others. In particular, the costs
of defending patents or enforcing our proprietary rights in post-issuance administrative proceedings and litigation
can be substantial and the outcome can be uncertain. An adverse determination in any such submission, proceeding
or litigation could reduce the scope of, or invalidate, our owned or in-licensed patent rights, allow third parties to
commercialize our technology or products and compete directly with us, without payment to us, or result in our
inability to manufacture or commercialize products without infringing third-party patent rights. In addition, if the
breadth or strength of protection provided by our owned or in-licensed patents and patent applications is threatened,
it could dissuade companies from collaborating to license, develop or commercialize current or future product
candidates. We may not be aware of all third-party intellectual property rights potentially relating to our products,
product candidates or their intended uses, and as a result the impact of such third-party intellectual property rights
upon the patentability of our owned and in-licensed patents and patent applications, as well as the impact of such
third-party intellectual property upon our freedom to operate, is highly uncertain. We cannot ensure that we do not
infringe, misappropriate or otherwise violate any patents or other intellectual property or proprietary rights held by
others or that we will not infringe, misappropriate or otherwise violate intellectual property or proprietary rights held
by others in the future. If our products were found to infringe, misappropriate or otherwise violate any proprietary
intellectual property or right of another party, we could be required to pay significant damages or license fees to
such party and/or cease production, marketing and distribution of those products. Litigation may also be necessary
to defend infringement, misappropriation or other violation claims of third parties or to enforce patent or other
intellectual property rights we hold or protect trade secrets or techniques or other intellectual property we own.
Further, third parties may seek approval to market their own products similar to or otherwise competitive with our
products. In these circumstances, we may need to defend and/or assert our patents or other intellectual property,
including by filing lawsuits alleging patent infringement. In any of these types of proceedings, a court or agency
with jurisdiction may find our owned or in-licensed patents invalid, unenforceable, or not infringed; competitors
may then be able to market products and use manufacturing and analytical processes that are substantially similar.
Even if we own or in-license valid and enforceable patents, these patents still may not provide protection against
competing products or processes sufficient to achieve our business objectives.
The issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability, and patents in
which we or our licensors have an interest may be challenged in the courts or patent offices in the United States and
abroad. Such challenges may result in loss of exclusivity or in patent claims being narrowed, invalidated or held
unenforceable, in whole or in part, which could limit our ability to stop others from using or commercializing
similar or identical technology and products, or limit the duration of the patent protection of our technology and
products. Generally, issued patents are granted a term of 20 years from the earliest claimed non-provisional filing
date. In certain instances, patent terms can be adjusted to recapture a portion of delay incurred by the USPTO in
examining the patent application (patent term adjustment). The scope of patent protection may also be limited. In
addition, the laws of foreign jurisdictions may not protect our rights to the same extent as the laws of the U.S. For
example, certain countries outside of the U.S. do not allow patents for methods of treating the human body. This
48
may preclude us from obtaining method patents outside of the U.S. having similar scope to those we have obtained
or may obtain in the future in the U.S.
It is possible that defects of form in the preparation or filing of our owned or in-licensed patents or patent
applications may exist, or may arise in the future, for example with respect to proper priority claims, inventorship,
claim scope, or requests for patent term adjustments. The acquisition or licensing of third-party intellectual property
rights is a competitive area, and our competitors may pursue strategies to acquire or license third-party intellectual
property rights that we may consider attractive or necessary, and our competitors could market competing products
and technology. Our competitors may have a competitive advantage due to their size, capital resources and greater
development and commercialization capabilities. In addition, companies may be unwilling to assign or license rights
to us. We also may be unable to acquire or license third-party intellectual property rights on terms that would allow
us to make an appropriate return on our investment or at all. If we are unable to successfully obtain rights to required
third-party intellectual property rights or maintain the existing intellectual property rights we have, we may have to
abandon development of the relevant product, and our customers may be forced to stop using the relevant products.
If we or our current or future licensors fail to establish, maintain or protect such patents and other intellectual
property rights, such rights may be reduced or eliminated. If there are material defects in the form, preparation,
prosecution, or enforcement of our patents or patent applications, such patents may be invalid and/or unenforceable,
and such applications may never result in valid, enforceable patents. Any of these outcomes could impair our ability
to prevent competition from third parties, which may have an adverse impact on our business.
Without patent protection for our current or future product candidates, we may be open to competition from generic
versions of such products. Given the amount of time required for the development, testing, and regulatory review of
new product candidates, patents protecting such candidates might expire before or shortly after such candidates are
commercialized. As a result, our patent portfolio may not provide us with sufficient rights to exclude others from
commercializing products similar or identical to our own.
Depending upon the timing, duration and specifics of FDA marketing approval of future product candidates, one or
more of our U.S. patents may be eligible for limited patent term restoration under the Drug Price Competition and
Patent Term Restoration Act of 1984, referred to as the Hatch-Waxman Amendments. The Hatch-Waxman
Amendments permit a patent restoration term of up to five years beyond the normal expiration of the patent as
compensation for patent term lost during drug development and the FDA regulatory review process, which is limited
to the approved indication (or any additional indications approved during the period of extension). A patent term
extension cannot extend the remaining term of a patent beyond 14 years from the date of product approval. This
extension is based on the first approved use of a product and is limited to only one patent that covers the approved
product, the approved use of the product, or a method of manufacturing the product. However, the applicable
agencies, including the FDA and the USPTO in the U.S., and any equivalent regulatory authority in other countries,
may not agree with our assessment of whether such extensions are available, and may refuse to grant extensions to
our patents, or may grant more limited extensions than we request. We may not be granted an extension because of,
for example, failing to apply within applicable deadlines, failing to apply prior to expiration of relevant patents or
otherwise failing to satisfy applicable requirements. Moreover, the applicable time-period or the scope of patent
protection afforded could be less than we request. If we are unable to extend the expiration date of our existing
patents or obtain new patents with longer expiry dates, our competitors may be able to take advantage of our
investment in development and clinical trials by referencing our clinical and preclinical data to obtain approval of
competing products following our patent expiration and launch our product earlier than might otherwise be the case.
Obtaining and maintaining intellectual property, including patent protection, depends on compliance with
various procedural, document submission, fee payment, and other requirements imposed by domestic and
international governmental agencies, and our intellectual property, including patent protection, could be reduced
or eliminated for noncompliance with these requirements.
The patent prosecution process is expensive, time-consuming and complex. Periodic maintenance, renewal, annuity
and various other fees on any issued patent are due to be paid to the USPTO and other foreign governmental
agencies in several stages over the lifetime of the intellectual property. The USPTO and various national or
international agencies require compliance with a number of procedural, documentary, fee payment, and other similar
provisions during the application process. While an inadvertent lapse can in many cases be cured by payment of a
late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance can
result in abandonment or lapse of the intellectual property, resulting in partial or complete loss of rights in the
49
relevant jurisdiction. Noncompliance events that could result in abandonment or lapse of rights include, but are not
limited to, failure to timely file national and regional stage patent applications based on our international application,
failure to respond to official actions within prescribed time limits, non-payment of fees, and failure to properly
legalize and submit formal documents. If we or any of our licensors fail to maintain the intellectual property
covering our product candidates, our competitors may be able to enter the market, which would have an adverse
effect on our business, financial condition and results of operations.
We may not identify relevant third-party patents or may incorrectly interpret the relevance, scope or expiration of
a third-party patent, which might adversely affect our ability to develop and market our products.
We cannot guarantee that any of our patent searches or analyses, including the identification of relevant patents, the
scope of patent claims or the expiration of relevant patents, are complete or thorough, nor can we be certain that we
have identified each and every third-party patent and pending application in the United States and abroad that is
relevant to or necessary for the commercialization of our current and future product candidates in any jurisdiction.
The scope of a patent claim is determined by an interpretation of the law, the written disclosure in a patent and the
patent’s prosecution history. Our interpretation of the relevance or the scope of a patent or a pending application
may be incorrect, which may negatively impact our ability to market our product candidates, if approved. We may
incorrectly determine that our products are not covered by a third-party patent or may incorrectly predict whether a
third-party’s pending application will issue with claims of relevant scope. Our determination of the expiration date
of any patent in the United States or abroad that we consider relevant may be incorrect, and our failure to identify
and correctly interpret relevant patents may negatively impact our ability to develop and market our products. Also,
because the claims of published patent applications can change between publication and patent grant, there may be
published patent applications that may ultimately issue with claims that we infringe. As the number of competitors
in the market grows and the number of patents issued in this area increases, the possibility of patent infringement
claims escalates. Moreover, in recent years, individuals and groups that are non-practicing entities, commonly
referred to as “patent trolls,” have purchased patents and other intellectual property assets for the purpose of making
claims of infringement in order to extract settlements. From time to time, we may receive threatening letters, notices
or “invitations to license,” or may be the subject of claims that our products and business operations infringe,
misappropriate or otherwise violate the intellectual property rights of others. The defense of these matters can be
time consuming, costly to defend in litigation, divert management’s attention and resources, damage our reputation
and brand and cause us to incur significant expenses or make substantial payments.
We may become subject to third-party claims or litigation alleging infringement, misappropriation or other
violation of such third party’s patents or other intellectual property or proprietary rights, or seeking to invalidate
our patents or other intellectual property or proprietary rights, which could be costly, time consuming, and, if
successfully asserted against us, may delay or prevent the development and commercialization of any of our
product candidates.
Our commercial success depends in part on us and our licensors avoiding infringement, misappropriation and other
violations of the patents and other intellectual property or proprietary rights of third parties. There is a substantial
amount of litigation, both within and outside the U.S., involving patent and other intellectual property rights in the
biotechnology and pharmaceutical industries, including patent infringement lawsuits, interferences, derivation, and
administrative law proceedings, inter partes review, and post-grant review before the USPTO, as well as oppositions
and similar processes in foreign jurisdictions. Such challenges may result in loss of exclusivity or freedom to operate
or in patent claims being narrowed, invalidated or held unenforceable, in whole or in part, which could limit our
ability to stop others from using or commercializing similar or identical products and techniques without payment,
or limit the duration of the patent protection of our technology. Numerous U.S. and foreign issued patents and
pending patent applications, which are owned by third parties, exist in the fields in which we and our collaborators
are developing product candidates. As the biotechnology and pharmaceutical industries expand and more patents are
issued, and as we gain greater visibility and market exposure as a public company, the risk increases that our product
candidates or other business activities may be subject to claims of infringement of the patent and other proprietary
rights of third parties. Third parties may assert that we are infringing, misappropriating or otherwise violating their
patents or other intellectual property or proprietary rights or employing their proprietary technology without
authorization.
50
Also, there may be third-party patents or patent applications with claims to materials, formulations, methods of
manufacture or methods of treatment related to the use or manufacture of our current and future product candidates.
Because patent applications can take many years to issue, there may be currently pending patent applications which
may later result in issued patents that our current or future product candidates may infringe.
In addition, third parties may obtain patent rights in the future and claim that use of our technologies infringes upon
their rights. If any third-party patents were held by a court of competent jurisdiction to cover the manufacturing
process of any of our product candidates, any molecules formed during the manufacturing process, methods of
treating certain diseases or conditions that we are pursuing with our product candidates, our formulations including
combination therapies, or any final product itself, the holders of any such patents may be able to block our ability to
commercialize such product candidate unless we obtained a license under the applicable patents, or until such
patents expire. Such a license may not be available on commercially reasonable terms or at all. In addition, we may
be subject to claims that we are infringing, misappropriating or otherwise violating other intellectual property rights,
such as trademarks or copyrights, or misappropriating the trade secrets of others, and to the extent that our
employees, consultants or contractors use intellectual property or proprietary information owned by others in their
work for us, disputes may arise as to the rights in related or resulting know-how and inventions.
Parties making claims against us may obtain injunctive or other equitable relief, which could effectively block our
ability to further develop and commercialize one or more of our current and future product candidates. Defense of
these claims, regardless of their merit, would involve substantial litigation expense and would be a substantial
diversion of employee resources from our business. In the event of a successful infringement or other intellectual
property claim against us, we may have to pay substantial damages, including treble damages and attorneys’ fees for
willful infringement, obtain one or more licenses from third parties, pay royalties or redesign our affected products,
which may be impossible or require substantial time and monetary expenditure. We cannot predict whether any such
license would be available at all or whether it would be available on commercially reasonable terms. Furthermore,
even in the absence of litigation, we may need to obtain licenses from third parties to advance our research or allow
commercialization of our product candidates, and we have done so from time to time. We may fail to obtain any of
these licenses at a reasonable cost or on reasonable terms, if at all. In that event, we would be unable to further
develop and commercialize one or more of our product candidates, which could harm our business significantly. We
cannot provide any assurances that third-party patents or other intellectual property or proprietary rights do not exist
which might be enforced against our product candidates, resulting in either an injunction prohibiting sales, or, with
respect to our sales, an obligation on our part to pay royalties or other forms of compensation to third parties.
During the course of any intellectual property litigation, there could be public announcements of the initiation of the
litigation as well as results of hearings, rulings on motions, and other interim proceedings in the litigation. If
securities analysts or investors regard these announcements as negative, the perceived value of our existing product
candidates, programs or intellectual property could be diminished. Accordingly, the market price of our ordinary
shares may decline. Such announcements could also harm our reputation or the market for future products, which
could have a material adverse effect on our business.
Lawsuits or other proceedings to protect or enforce our patents, the patents of any licensors or our other
intellectual property rights could be expensive, time consuming, and unsuccessful.
Competitors may infringe or otherwise violate our patents, the patents of our licensors or our other intellectual
property rights. To counter infringement or unauthorized use or misappropriations, we may be required to file legal
claims, which can be expensive and time-consuming. In addition, in an infringement proceeding, a court may decide
that one or more patents of us or any of our current or future licensors is not valid or is unenforceable, or may refuse
to stop the other party from using the technology at issue on the grounds that our patents do not cover the technology
in question. An adverse result in any litigation or defense proceedings could put one or more of our patents at risk of
being invalidated or interpreted narrowly and could put our patent applications at risk of not issuing. The initiation
of a claim against a third party may also cause the third party to bring counterclaims against us, such as claims
asserting that our patents are invalid or unenforceable. In patent litigation in the U.S., defendant counterclaims
alleging invalidity or unenforceability are commonplace. Grounds for a validity challenge could be an alleged
failure to meet any of several statutory requirements, including lack of novelty, obviousness, non-enablement or lack
of statutory subject matter. Grounds for an unenforceability assertion could be an allegation that someone connected
with prosecution of the patent withheld relevant material information from the USPTO, or made a materially
misleading statement, during prosecution. Third parties may also raise similar validity claims before the USPTO in
51
post-grant proceedings such as ex parte reexaminations, inter partes review, post-grant review or oppositions or
similar proceedings outside the U.S., in parallel with litigation or even outside the context of litigation. The outcome
following legal assertions of invalidity and unenforceability is unpredictable. We cannot be certain that there is no
invalidating prior art, of which we and the patent examiner were unaware during prosecution. Additionally, for any
patents and patent applications that we license from third parties, we may have limited or no right to participate in
the defense of such licensed patents against challenge by a third-party. If a defendant were to prevail on a legal
assertion of invalidity or unenforceability, we would lose at least part, and perhaps all, of the patent protection on
our current or future product candidates. Such a loss of patent protection could harm our business.
Furthermore, even if our patents or other intellectual property or proprietary rights are found to be valid and
infringed, a court may refuse to grant injunctive relief against the infringer and instead award us monetary damages
or ongoing royalties. Such monetary compensation may be insufficient to adequately offset the damage to our
business caused by the infringer’s competition in the market. Because of the expense and uncertainty of litigation,
we may conclude that even if a third party is infringing our current or future owned or in-licensed patents, any
patents that may be issued as a result of our current or future owned or in-licensed patent applications, or other
intellectual property rights, the risk-adjusted cost of bringing and enforcing such a claim or action may be too high
or not in the best interest of us or our shareholders. In such cases, we may decide that the more prudent course of
action is to simply monitor the situation or initiate or seek some other non-litigious action or solution. Moreover,
even if we are successful in any litigation, we may incur significant expense in connection with such proceedings,
and the amount of any monetary damages may be inadequate to compensate us for damage as a result of the
infringement and the proceedings.
In addition, third parties may assert infringement claims against our customers. These claims may require us to
initiate or defend protracted and costly litigation on behalf of our customers or indemnify our customers for any
costs associated with their own initiation or defense of infringement claims, regardless of the merits of these claims.
If any of these claims succeed or settle, we may be forced to pay damages or settlement payments on behalf of our
customers or may be required to obtain licenses for the products they use. If we cannot obtain all necessary licenses
on commercially reasonable terms or at all, our customers may be forced to stop using our products.
We may not be able to prevent, alone or with our licensors, infringement, misappropriation or other violation of our
intellectual property or other proprietary rights, particularly in countries where the laws may not protect those rights
as fully as in the United States. Our business could be harmed if in litigation the prevailing party does not offer us a
license on commercially reasonable terms or at all. Any litigation or other proceedings to enforce our intellectual
property or proprietary rights may fail, and even if successful, may result in substantial costs and distract the
management and other employees.
Furthermore, because of the substantial amount of discovery required in connection with intellectual property
litigation, there is a risk that some of our confidential information could be compromised by disclosure during this
type of litigation. There could also be public announcements of the results of hearings, motions or other interim
proceedings or developments. If securities analysts or investors perceive these results to be negative, it could have
an adverse effect on the price of our ordinary shares.
Changes in U.S. or foreign patent laws or their interpretations could diminish the value of patents in general,
thereby impairing our ability to protect our products.
The United States government has enacted and implemented wide-ranging patent reform legislation. The U.S.
Supreme Court has ruled on several patent cases in recent years, either narrowing the scope of patent protection
available in certain circumstances or weakening the rights of patent owners in certain situations. In addition to
increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has
created uncertainty with respect to the value of patents, once obtained. Depending on actions by Congress, the
federal courts, and the USPTO, the laws and regulations governing patents could change in unpredictable ways that
would weaken our ability to obtain new patents or to enforce patents that we have licensed or that we might obtain
in the future. Similarly, changes in patent law and regulations in other countries or jurisdictions or changes in the
governmental bodies that enforce them or changes in how the relevant governmental authority enforces patent laws
or regulations may weaken our ability to obtain new patents or to enforce patents that we have licensed or that we
may obtain in the future.
52
In 2011, the Leahy-Smith America Invents Act (the “
Leahy-Smith Act
”) was signed into law. The Leahy-Smith Act
includes a number of significant changes to U.S. patent law. These include provisions that affect the way patent
applications are prosecuted and also affect patent litigation. These also include provisions that switched the U.S.
from a “first-to-invent” system to a “first-to-file” system, allow third-party submission of prior art to the USPTO
during patent prosecution and set forth additional procedures to attack the validity of a patent by the USPTO
administered post grant proceedings. Under a first-to-file system, assuming the other requirements for patentability
are met, the first inventor to file a patent application generally will be entitled to the patent on an invention
regardless of whether another inventor had made the invention earlier. The USPTO recently developed new
regulations and procedures to govern administration of the Leahy-Smith Act, and many of the substantive changes to
patent law associated with the Leahy-Smith Act, and in particular, the first to file provisions, only became effective
on March 16, 2013. A third-party that files a patent application in the USPTO after March 2013, but before the
Company could therefore be awarded a patent covering an invention even if the Company had made the invention
before it was made by such third-party. This will require the Company to be cognizant of the time from invention to
filing of a patent application. Since patent applications in the U.S. and most other countries are confidential for a
period of time after filing or until issuance, the Company cannot be certain that it was the first to file any patent
application related to its products or invent any of the inventions claimed in its patents or patent applications.
The Leahy-Smith Act also includes a number of significant changes that affect the way patent applications will be
prosecuted and also may affect patent litigation. These include allowing third-party submission of prior art to the
USPTO during patent prosecution and additional procedures to attack the validity of a patent by USPTO
administered post-grant proceedings, including post-grant review, inter partes review and derivation proceedings.
Because of a lower evidentiary standard in USPTO proceedings compared to the evidentiary standard in U.S. federal
courts necessary to invalidate a patent claim, a third-party could potentially provide evidence in a USPTO
proceeding sufficient for the USPTO to hold a claim invalid even though the same evidence would be insufficient to
invalidate the claim if first presented in a district court action. Accordingly, a third-party may attempt to use the
USPTO procedures to invalidate the Company’s patent claims that would not have been invalidated if first
challenged by the third-party as a defendant in a district court action. Therefore, the Leahy-Smith Act and its
implementation could increase the uncertainties and costs surrounding the prosecution of the Company’s patent
applications and the enforcement or defense of our issued patents. In addition, future actions by the U.S. Congress,
the federal courts and the USPTO could cause the laws and regulations governing patents to change in unpredictable
ways. The Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding the
prosecution of our patent applications and the enforcement or defense of our issued patents, all of which could have
a material adverse effect on the Company’s business, financial condition, and results of operations.
We may not be able to protect our intellectual property rights throughout the world, which could impair our
business.
Filing, prosecuting, and defending patents covering our product candidates throughout the world would be
prohibitively expensive. Furthermore, the requirements for patentability and obtaining other intellectual property
protection may differ in certain countries, particularly developing countries. In addition, the laws of many foreign
countries will not protect our intellectual property or other proprietary rights to the same extent as the laws of the
United States. Competitors may use our technologies in jurisdictions where we have not obtained patent or other
intellectual property protection to develop their own products and, further, may export otherwise infringing products
to territories where we may have or obtain patent or other intellectual property protection, but where patent or other
intellectual property enforcement is not as strong as that in the United States. These unauthorized products may
compete with our products in such jurisdictions and take away our market share where we do not have any issued or
licensed patents or other intellectual property protection and any future patent claims or other intellectual property
rights may not be effective or sufficient to prevent them from so competing. Our ability to protect and enforce our
intellectual property rights may be adversely affected by unforeseen changes in foreign intellectual property laws.
Our reliance on third parties may require us to share our trade secrets, which increases the possibility that a
competitor will discover them or that our trade secrets will be misappropriated or disclosed.
Because we rely on third parties for a wide variety of services, including the manufacture and continuing
development of our product candidates, we must, at times, share trade secrets with them. We seek to protect our
trade secrets in part by entering into agreements containing confidentiality and use restrictions and obligations prior
to disclosing proprietary information. These agreements typically limit the rights of the third parties to use or
53
disclose our confidential information, including our trade secrets. Despite the contractual provisions employed when
working with third parties, the need to share trade secrets and other confidential information increases the risk that
such trade secrets become known by our competitors, are inadvertently incorporated into the technology of others,
or are disclosed or used in violation of these agreements. Given that our proprietary position is based, in part, on our
know-how and trade secrets, a competitor’s discovery of our trade secrets or other unauthorized use or disclosure
could impair our competitive position and may have an adverse effect on business and results of operations.
Despite our efforts to protect our trade secrets, our competitors may discover our trade secrets, either through breach
of agreements with third parties, independent development or publication of information by any of the third-party
collaborators. A competitor’s discovery of our trade secrets could impair our competitive position and have an
adverse impact on our business.
If we fail to protect the confidentiality of our trade secrets and other proprietary information, the value of our
product candidates and our business and competitive position may be harmed.
In addition to patent protection, we also rely on other proprietary rights, including protection of trade secrets, know-
how or other proprietary information that is not patentable or that we elect not to patent. Trade secrets can be
difficult to protect, and some courts are less willing or unwilling to protect trade secrets. To maintain the
confidentiality of our trade secrets and proprietary information, we rely heavily on confidentiality provisions that we
have in contracts with our employees, consultants, collaborators and others upon the commencement of their
relationship with us. However, we cannot guarantee that we have entered into such agreements with each party that
may have or has had access to our trade secrets or proprietary technology and processes and we may not enter into
such agreements with all employees, consultants and third parties who have been involved in the development of our
intellectual property rights. In addition, monitoring unauthorized use and disclosure of our intellectual property
rights by employees, consultants and other third parties who have access to such intellectual property or other
proprietary rights is difficult. Therefore, we may not be able to prevent the unauthorized disclosure or use of our
technical knowledge or other trade secrets by such employees, consultants, advisors or third parties, despite the
existence generally of these confidentiality restrictions. There can be no assurance that such employees, consultants,
advisors or third parties will not breach their agreements with us, that we will have adequate remedies for any
breach, or that our trade secrets will not otherwise become known or independently developed by third parties,
including our competitors.
We may be subject to claims that our employees, consultants or independent contractors have infringed,
misappropriated or otherwise violated the intellectual property of a third party, including trade secrets or know-
how of their former employers or other third parties.
We may be subject to claims that our employees or consultants have wrongfully used for our benefit or disclosed to
us confidential information of third parties. We employ individuals who were previously employed at other
biotechnology or pharmaceutical companies, or at research institutions. Some of these employees, consultants and
contractors may have executed proprietary rights, non-disclosure and non-competition agreements in connection
with such previous employment. Although we try to ensure that our employees and consultants do not use the
intellectual property rights, proprietary information, know-how or trade secrets of others in their work for us and
seek to protect our ownership of intellectual property rights by ensuring that our agreements with employees,
collaborators, and other third parties with whom we do business include provisions requiring such parties to assign
rights in inventions to us, we may be subject to claims that we or our employees, consultants or independent
contractors have inadvertently or otherwise used or disclosed confidential information of our employees’ former
employers or other third parties. To the extent that our employees, consultants or contractors use intellectual
property rights or proprietary information owned by others in their work for us, disputes may arise as to the rights in
any related or resulting know-how and inventions. We may also be subject to claims that former employers or other
third parties have an ownership interest in our patents or other intellectual property or proprietary rights. Litigation
may be necessary to defend against any of these claims. There is no guarantee of success in defending these claims,
and if we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable
intellectual property rights, such as exclusive ownership of, or right to use, valuable intellectual property. In
addition, we may lose personnel as a result of such claims and any such litigation or the threat thereof may adversely
affect our ability to hire employees or contract with independent contractors. Even if we are successful, litigation
could result in substantial cost and be a distraction to our management and other employees.
54
If we fail to validly execute invention assignment agreements with our employees and contractors involved in the
development of intellectual property, the value of our products, business and competitive position may be harmed.
Our patent rights and other intellectual property may also be subject to priority, ownership or inventorship
disputes, interferences, and similar proceedings.
To maintain the confidentiality of our trade secrets, proprietary information and other intellectual property rights, we
generally have confidentiality and invention assignment provisions in place with our employees, consultants,
suppliers, contract manufacturers, collaborators, and others upon the commencement of a relationship. However, we
may not enter into such agreements with each party that may have or have had access to our trade secrets or
proprietary technology and processes or who conceives or develops intellectual property rights that we regard as our
own. Moreover, even when we obtain agreements assigning intellectual property to us, the assignment of intellectual
property rights may not be self-executing, and we may be forced to bring claims against third parties or defend
claims that they may bring against us to determine the ownership of what we regard as our intellectual property.
There can be no assurance that such agreements will be upheld in the face of a potential challenge or that third
parties will not breach their agreements with us, or that we will have adequate remedies for any breach.
We may also be subject to claims that former employees, collaborators, or other third parties have an interest in our
current or future patents and patent applications or other intellectual property rights, including as an inventor or co-
inventor. If we are unable to obtain an exclusive license to any such third-party co-owners’ interest in such patents
and patent applications, such co-owners rights may be subject, or in the future subject, to assignment or license to
other third parties, including competitors. In addition, we may need the cooperation of any such co-owners to
enforce any such patents and any patents issuing from such patent applications against third parties, and such
cooperation may not be provided. Additionally, we may be subject to claims from third parties challenging our
ownership interest in or inventorship of intellectual property we regard as our own, for example, based on claims
that our agreements with employees or consultants obligating them to assign intellectual property rights to us are
ineffective or in conflict with prior or competing contractual obligations to assign inventions to another employer, to
a former employer, or to another person or entity, despite the inclusion of valid, present-tense intellectual property
assignment obligations. Litigation may be necessary to defend against claims, and it may be necessary or we may
desire to enter into a license to settle any such claim.
If we or our licensors are unsuccessful in any priority, validity (including any patent oppositions), ownership or
inventorship disputes to which we or they are subject, we may lose valuable intellectual property rights through the
loss of one or more of our patents, or such patent claims may be narrowed, invalidated, or held unenforceable, or
through loss of exclusive ownership of or the exclusive right to use our owned or in-licensed patents. In the event of
loss of patent rights as a result of any of these disputes, we may be required to obtain and maintain licenses from
third parties, including parties involved in any such interference proceedings or other priority or inventorship
disputes. Such licenses may not be available on commercially reasonable terms or at all, or may be non-exclusive. If
we are unable to obtain and maintain such licenses, we may need to cease the development, manufacture, and
commercialization of one or more of the product candidates we may develop. An inability to incorporate
technologies, features or other intellectual property that are important or essential to our products could have a
material adverse effect on our business and competitive position. The loss of exclusivity or the narrowing of our
patent claims could limit our ability to stop others from using or commercializing similar or identical technology and
product candidates. Even if we are successful in priority, inventorship or ownership disputes, such disputes could
result in substantial costs and be a distraction to management and other employees. Any litigation or the threat
thereof may adversely affect our ability to hire employees or contract with independent sales representatives. Any of
the foregoing could result in a material adverse effect on our business, financial condition, results of operations or
prospects.
Intellectual property rights do not necessarily address all potential threats to our competitive advantage.
The degree of future protection afforded by our intellectual property rights is uncertain because intellectual property
rights have limitations, and may not adequately protect our business, or permit us to maintain our competitive
advantage. The following examples are illustrative:
•
others may be able to make products that are similar to our current and future product candidates we
intend to commercialize that are not covered by the patents that we exclusively licensed and have the
right to enforce;
55
•
we or any of our future licensors or collaborators might not have been the first to make the inventions
covered by the issued patents or pending patent applications that we own or license;
•
we or any of our current or future licensors or collaborators might not have been the first to file patent
applications covering certain of our or their inventions;
•
others may independently develop similar or alternative technologies or duplicate any of our
technologies without infringing, misappropriating or otherwise violating our owned or in-licensed
intellectual property rights;
•
others may have access to the same intellectual property rights licensed to us on a nonexclusive basis;
•
it is possible that our future patent applications will not lead to issued patents;
•
issued patents that we own or in-license may not provide us with any competitive advantages, or may be
held invalid or unenforceable as a result of legal challenges;
•
our competitors might conduct research and development activities in countries that provide a safe
harbor from patent infringement claims for certain research and development activities, as well as in
countries where we do not have patent rights, and then use the information learned from such activities
to develop competitive products for sale in our major commercial markets;
•
we may choose not to seek patent protection for some of our proprietary technology to maintain certain
trade secrets or know-how, and a third party may subsequently file a patent covering such trade secrets
or know-how; and
•
we may not develop additional proprietary technologies that are patentable.
Should any of these events occur, they could have a material adverse effect on our business, financial condition,
results of operations and prospects.
If our current and future trademarks and trade names are not adequately protected, then we may not be able to
build name recognition in our markets and markets of interest and our business may be adversely affected.
We intend to use registered or unregistered trademarks or trade names to brand and market our products. Our
trademarks or trade names may be challenged, infringed, circumvented or declared generic or determined to be
infringing on other marks. We may not be able to protect our rights to these trademarks and trade names, which we
need to build name recognition among potential partners or customers in the markets of interest. During trademark
registration proceedings, we may receive rejections of our applications by the USPTO or in other foreign
jurisdictions. Although we would be given an opportunity to respond to those rejections, we may be unable to
overcome such rejections. In the event that our trademarks are successfully challenged, we could be forced to
rebrand our products, which could result in loss of brand recognition, and could require us to devote resources to
advertising and marketing new brands. In addition, in the USPTO and in comparable agencies in many foreign
jurisdictions, third parties are given an opportunity to oppose pending trademark applications and to seek to cancel
registered trademarks. Opposition or cancellation proceedings may be filed against our trademarks, and our
trademarks may not survive such proceedings. At times, competitors may adopt trade names or trademarks similar to
us, thereby impeding our ability to build brand identity and possibly leading to market confusion. In addition, there
could be potential trade name or trademark infringement claims brought by owners of other trademarks or
trademarks that incorporate variations of our registered or unregistered trademarks or trade names. Over the long
term, if we are unable to establish name recognition based on our trademarks and trade names, then we may not be
able to compete effectively and our business may be adversely affected. We may license our trademarks and trade
names to third parties, such as distributors. Though these license agreements may provide guidelines for how
trademarks and trade names may be used, a breach of these agreements or misuse of such trademarks and trade
names by our licensees may jeopardize our rights in or diminish the goodwill associated with our trademarks and
trade names. Our efforts to enforce or protect our proprietary rights related to trademarks, trade names, trade secrets,
domain names, copyrights or other intellectual property may be ineffective and could result in substantial costs and
56
diversion of resources and could adversely affect our business, growth prospects, operating results and financial
condition.
Risks related to government regulations
The regulatory approval processes of the FDA and non-U.S. regulatory agencies are highly complex, lengthy,
and inherently unpredictable. If we are unable to obtain regulatory approval for our product candidates, or to do
so in a timely manner, we will be unable to generate product revenue and our business will be substantially
harmed.
The processes that must be followed to obtain approval by the FDA and non-U.S. regulatory agencies to market a
pharmaceutical product are highly complex and unpredictable, and typically take many years following the
commencement of clinical trials. A company’s ability to obtain such an approval, and the time necessary to obtain it,
depends upon numerous factors, including the type, complexity and novelty of the product candidates involved. In
addition, approval policies, regulations or the type and amount of clinical data necessary to gain approval may
change during the course of a product candidate’s clinical development and may vary among jurisdictions, which
may cause delays in the approval or the decision not to approve an application. Regulatory agencies have substantial
discretion in the approval process and may refuse to accept any application or may decide that our data is
insufficient for approval and require additional preclinical, clinical or other data. Even if we eventually complete
clinical testing and receive approval of any regulatory filing for our product candidates, the FDA and non-U.S.
regulatory agencies may approve our product candidates for a more limited indication or a narrower patient
population than we originally requested.
Further, development of a company’s product candidates and/or regulatory approval may be impacted or delayed by
events beyond our control. For example, our competitors may file citizens’ petitions with the FDA in an attempt to
persuade the FDA that our product candidates, or the clinical trials that support their approval, contain deficiencies.
Such actions by our competitors could delay or even prevent the FDA from approving any of our NDAs or biologics
license applications (
“BLAs”
).
Applications for our product candidates could fail to receive regulatory approval for many reasons, including the
following:
•
the FDA or non-U.S. regulatory agencies may disagree with the design, implementation, or results of
our clinical trials;
•
the FDA or non-U.S. regulatory agencies may determine that our product candidates are not safe and
effective, are insufficiently effective or have undesirable or unintended side effects, toxicities or other
characteristics that preclude our obtaining marketing approval or prevent or limit commercial use;
•
the population studied in the clinical trial may not be sufficiently broad or representative to assure
efficacy and safety in the full population for which we seek approval;
•
the FDA or non-U.S. regulatory agencies may disagree with our interpretation of data from preclinical
studies or clinical trials;
•
the data collected from clinical trials of our product candidates may not be sufficient to support the
submission to obtain regulatory approval;
•
we may be unable to demonstrate to the FDA or non-U.S. regulatory agencies that a product candidate’s
risk-benefit ratio for our proposed indication is acceptable;
•
the FDA or non-U.S. regulatory agencies may fail to approve the manufacturing processes, test
procedures and specifications or facilities of third-party manufacturers with which we contract for
clinical and commercial supplies; and
•
the approval policies or regulations of the FDA or non-U.S. regulatory agencies may significantly
change in a manner rendering our clinical data insufficient for approval.
57
This complex and lengthy approval process, as well as the unpredictability of the results of clinical trials, may result
in us failing to obtain regulatory approval to market any of our product candidates, or a failure to obtain such
approval in a timely manner, which could materially adversely affect our business, financial condition, results of
operations and growth prospects.
We may face difficulties in commercializing and achieving reimbursement of our products from changes to
current regulations and future legislation.
In the United States, the European Union and other jurisdictions there have been a number of legislative and
regulatory changes and proposed changes to the healthcare system that could affect our future results of operations.
We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or
administrative action, either in the United States or abroad. If we are slow or unable to adapt to changes in existing
requirements or the adoption of new requirements or policies, or if we are unable to maintain regulatory compliance,
we may be unable to successfully commercialize our products, and may not achieve or sustain profitability.
For example, the Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education
Reconciliation Act of 2010 (or collectively, the “
ACA
”), substantially affects the way healthcare is financed by both
the government and private insurers, and significantly impacts the U.S. pharmaceutical industry. There have been
extensive judicial, Congressional and executive branch challenges to certain aspects of the ACA, as well as efforts
and proposals to revise or repeal the law and its application, to control the prices at which pharmaceutical products
are sold, and to implement other healthcare reform measures. For example, on July 4, 2025, the One Big Beautiful
Bill Act (the “
OBBBA
”) was signed into law, which narrowed access to ACA marketplace exchange enrollment and
declined to extend the ACA enhanced advanced premium tax credits that expired at the end of 2025, which, among
other provisions in the law, are anticipated to reduce the number of Americans with health insurance. The OBBBA
also is expected to reduce Medicaid spending and enrollment by implementing work requirements for some
beneficiaries, capping state-directed payments, reducing federal funding, and limiting provider taxes used to fund
the program. Congress is considering proposed legislation intended to further reduce healthcare costs with
alternatives to replace the expired ACA subsidies.
Additional health reform measures may continue and affect our business in unknown ways. The current
administration is pursuing policies to reduce regulations and expenditures across government including at the U.S.
Department of Health and Human Services (“
HHS”
), the FDA, the Centers for Medicare & Medicaid Services
(
“CMS”
), and related agencies. These actions, presently directed by executive orders or memoranda from the Office
of Management and Budget, may propose policy changes that create additional uncertainty for our business. For
example, the current administration has announced agreements with several pharmaceutical companies that require
the drug manufacturers to offer, through a direct to consumer platform (“
TrumpRx
”), U.S. patients and Medicaid
programs prescription drug Most-Favored Nation pricing equal to or lower than those paid in other developed
nations, with additional mandates for direct-to-patient discounts and repatriation of foreign revenues. Other recent
actions, for example, include (1) directing agencies to reduce agency workforce and cut programs; (2) directing
HHS and other agencies to lower prescription drug costs through a variety of initiatives; (3) imposing tariffs on
imported pharmaceutical products; and (4) as part of the Make America Healthy Again (“
MAHA
”) Commission’s
Strategy Report released in September 2025, working across government agencies to increase enforcement on
direct-to-consumer pharmaceutical advertising. Additionally, the current administration recently called on Congress
to enact "The Great Healthcare Plan," to codify and expand Most-Favored Nation pricing, lower government
subsidies to private insurance companies, increase healthcare price transparency, expand pharmaceutical drugs
available for over-the-counter purchase, and enact restrictions on pharmacy benefit manager (“
PBM
”) payment
methodologies, among other things. These actions and policies may significantly reduce U.S. drug prices, potentially
impacting manufacturers’ global pricing strategies and profitability, while increasing their operational costs and
compliance risks. In June 2024, the U.S. Supreme Court’s Loper Bright decision greatly reduced judicial deference
to regulatory agencies, which could increase successful legal challenges to federal regulations affecting our
operations. Congress may introduce and ultimately pass health care related legislation that could impact the drug
approval process and make changes to the Medicare Drug Price Negotiation Program.
Individual states in the United States have also become increasingly active in passing legislation and implementing
regulations designed to control pharmaceutical and biological product pricing, including price or patient
reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and
transparency measures, and, in some cases, designed to encourage importation from other countries and bulk
58
purchasing. Legally mandated price controls on payment amounts by third-party payors or other restrictions could
materially and adversely affect our business, financial condition, results of operations and prospects. In addition,
regional healthcare authorities and individual hospitals are increasingly using bidding procedures to determine what
pharmaceutical products and which suppliers will be included in their prescription drug and other healthcare
programs. This could reduce the ultimate demand for our product candidates or put pressure on our product pricing.
We expect that healthcare reform measures that have been adopted, or may be adopted in the future, could result in
more rigorous healthcare insurance coverage criteria and in additional downward pressure on the price that we
receive for any approved product. Any reduction in reimbursement from Medicare or other government programs
may result in a similar reduction in payments from private payors. The implementation of cost containment
measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability or
commercialize our product candidates, if approved.
In the European Union and other countries, similar political, economic and regulatory developments may affect our
ability to profitably commercialize our product candidates, if approved. We cannot predict the likelihood, nature or
extent of government regulation that may arise from future legislation or administrative action, either in the United
States or abroad. As an example, the regulatory landscape related to clinical trials in the EU has evolved. The EU
Clinical Trials Regulation, or CTR, which was adopted in April 2014 and repeals the EU Clinical Trials Directive,
became applicable on January 31, 2022. The CTR permits trial sponsors to make a single submission to both the
competent authority and an ethics committee in each EU member state, leading to a single decision for each EU
member state. The assessment procedure for the authorization of clinical trials has been harmonized as well,
including a joint assessment of some elements of the application by all EU member states in which the trial is to be
conducted, and a separate assessment by each EU member state with respect to specific requirements related to its
own territory, including ethics rules. Each EU member state’s decision is communicated to the sponsor through a
centralized EU portal, the Clinical Trial Information System, or CTIS. The CTR foresaw a three-year transition
period that ended on January 31, 2025. Since this date, all new or ongoing trials are subject to the provisions of the
CTR.
In addition to continuing pressure on prices and cost containment measures, legislative developments at the
European Union or at the EU member state level may result in significant additional requirements or obstacles that
may increase our operating costs. In many EU member states, healthcare budgetary constraints have resulted in
restrictions on the pricing and reimbursement of medicines by relevant health service providers. This could prevent
or delay marketing approval of our product candidates, restrict or regulate post-approval activities and affect our
ability to commercialize our product candidates, if approved. Moreover, in the European Union, some EU member
states may require the completion of additional studies that compare the cost-effectiveness of a particular medicinal
product to currently available therapies. This Health Technology Assessment (
“HTA”
), which is currently governed
by the national laws of the individual EU member states, is the procedure according to which the assessment of the
public health impact, therapeutic impact and the economic and societal impact of use of a given medicinal product in
the national healthcare systems of the individual country is conducted. The outcome of HTA regarding specific
medicinal product will often influence the pricing and reimbursement status granted to these products by the
competent agencies of individual EU member states. On December 15, 2021, the Health Technology Regulation
(
“HTA Regulation”
), was adopted. The HTA Regulation is intended to boost cooperation among EU member states
in assessing health technologies, including new medicinal products, and providing the basis for cooperation at EU
level for joint clinical assessments in these areas. The HTA Regulation, which began to apply on January 12, 2025,
through a phased implementation, is intended to harmonize the clinical benefit assessment of HTA across the
European Union.
In addition, on December 11, 2025, the European Commission, the Parliament and the European Council reached a
political agreement on a comprehensive overhaul of EU pharmaceutical legislation (the
“Pharma Package”
). The
reform has been under negotiation since the European Commission submitted its proposal in April 2023. This
package - comprised of a new directive and regulation to replace existing legislation – aims to modernize the EU
framework. The political agreement is still subject to formal approval by the European Parliament and Council. If
approved in the form proposed, the Pharma Package will, among other changes, reduce the baseline market
protection period by one year, with limited opportunities for extensions; reshape the incentives regime for orphan
medicinal products; and expand the Bolar exemption. A decrease in data and market exclusivity opportunities for
our product candidates in the EU could make them open to generic or biosimilar competition earlier than is currently
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the case with a related reduction in reimbursement status. We cannot be sure whether additional legislative changes
will be enacted, or whether FDA, European Union, or other jurisdictions’ regulations, guidance or interpretations
will be changed, or what the impact of such changes on the marketing approvals of our product candidates, if any,
may be. In addition, increased scrutiny by, for example, United States Congress of the FDA approval process may
significantly delay or prevent marketing approval, as well as subject us to more stringent product labeling and post-
marketing testing and other requirements.
If the FDA does not conclude that OCS-01 satisfies the requirements for the Section 505(b)(2) regulatory
approval pathway, or if the requirements under Section 505(b)(2) are not as we expect, the approval pathway for
OCS-01 will likely take significantly longer, cost significantly more and entail significantly greater complications
and risks than anticipated, and in either case may not be successful.
We plan to seek FDA approval through the Section 505(b)(2) regulatory pathway for OCS-01. The Hatch-Waxman
Amendments added Section 505(b)(2) (“
Section 505(b)(2)
”) to the Federal Food, Drug and Cosmetic Act (the
“
FDCA
”). Section 505(b)(2) permits the submission of an NDA where at least some of the information required for
approval comes from studies that were not conducted by or for the applicant and for which the applicant has not
obtained a right of reference. Section 505(b)(2), if applicable to us under the FDCA, would allow an NDA to rely in
part on data in the public domain or the FDA’s prior conclusions regarding the safety and effectiveness of approved
drug products, which could expedite the development program for OCS-01 by potentially decreasing the amount of
preclinical or clinical data that we would need to generate in order to obtain FDA approval.
If we cannot pursue the Section 505(b)(2) regulatory pathway for OCS-01, we may need to conduct additional
clinical trials, provide additional data and information, and meet additional standards for regulatory approval. If this
were to occur, the time and financial resources required to obtain FDA approval for OCS-01, and complications and
risks associated with OCS-01, would likely substantially increase. Moreover, our inability to pursue the Section
505(b)(2) regulatory pathway would likely result in new competitive products reaching the market more quickly
than OCS-01, which would likely adversely impact our competitive position and prospects. Even if we can pursue
the Section 505(b)(2) regulatory pathway, we cannot assure you that OCS-01 will receive the requisite approvals for
commercialization.
In addition, notwithstanding the approval of products by the FDA under Section 505(b)(2), certain pharmaceutical
companies and others have objected to the FDA’s interpretation of Section 505(b)(2). If the FDA’s interpretation of
Section 505(b)(2) is successfully challenged, the FDA may change its 505(b)(2) policies and practices, which could
delay or even prevent the FDA from approving any NDA that we submit under Section 505(b)(2). In addition, the
pharmaceutical industry is highly competitive, and Section 505(b)(2) NDAs are subject to special requirements
designed to protect the patent rights of sponsors of previously approved drugs that are referenced in a Section
505(b)(2) NDA. These requirements may give rise to patent litigation and mandatory delays in approval of our
NDAs for up to thirty (30) months or longer depending on the outcome of any litigation. It is not uncommon for the
owner of the NDA of an approved product to file a citizen petition with the FDA seeking to delay approval of, or
impose additional approval requirements for, pending competing products. If successful, such petitions could
significantly delay, or even prevent, the approval of a new product. However, even if the FDA ultimately denies
such a petition, the FDA may substantially delay approval while it considers and responds to the petition. In
addition, even if we are able to utilize the Section 505(b)(2) regulatory pathway, there is no guarantee this would
ultimately lead to earlier approval.
Moreover, even if OCS-01 is approved under Section 505(b)(2), the approval may be subject to limitations on the
indicated uses for which the product may be marketed or to other conditions of approval, or may contain
requirements for costly post-marketing testing and surveillance to monitor the safety or efficacy of the product.
We may not be able to obtain orphan drug designation or exclusivity for our current or future product
candidates, and even if we do, that designation may not provide an expedited development or regulatory review or
approval process and any orphan drug exclusivity we may receive for approved products may not prevent the
FDA or the European Commission from approving other competing products.
We received orphan drug designation from the FDA and the European Commission for Privosegtor for the treatment
of optic neuritis. Under the Orphan Drug Act, the FDA may designate a product candidate as an orphan drug if it is a
drug or biologic intended to treat a rare disease or condition. A similar regulatory scheme governs approval of
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orphan product candidates by the European Commission in the European Union. Generally, if a product with an
orphan drug designation subsequently receives the first marketing approval for the indication for which it has such
designation, the product is entitled to a period of marketing exclusivity, which precludes the FDA or the European
Commission (as applicable) from approving another marketing authorizations application for another similar
product candidate for the same orphan therapeutic indication for that time period. The applicable period is seven
years in the United States and ten years in the European Union (which can be extended to 12 years if the sponsor
complies with an agreed upon pediatric investigation plan). The exclusivity period in the European Union can be
reduced to six years if at the end of the fifth year it is determined that a product no longer meets the criteria for
orphan designation, including if the product is sufficiently profitable so that market exclusivity is no longer justified.
In order for the FDA to grant orphan drug exclusivity to one of our current or future product candidates, the agency
must find that the product candidate is indicated for the treatment of a condition or disease that affects fewer than
200,000 individuals in the United States or that affects 200,000 or more individuals in the United States and for
which there is no reasonable expectation that the cost of developing and making the product candidate available for
the disease or condition will be recovered from sales of the product in the United States. The FDA may conclude
that the condition or disease for which we seek orphan drug exclusivity does not meet this standard. Even if we
obtain orphan drug exclusivity for a product candidate, that exclusivity may not effectively protect the product
candidate from competition because different product candidates can be approved for the same condition. In
addition, even after an orphan drug is approved, the FDA can subsequently approve the same product candidate for
the same condition if the FDA concludes that the later product candidate is clinically superior in that it is shown to
be safer, more effective or makes a major contribution to patient care compared with the product that has orphan
exclusivity. Orphan drug exclusivity may also be lost if the FDA or EMA determines that the request for designation
was materially defective or if the manufacturer is unable to assure sufficient quantity of the product to meet the
needs of the patients with the rare disease or condition.
The FDA may reevaluate the Orphan Drug Act and its regulations and policies. We do not know if, when, or how
the FDA may change the orphan drug regulations and policies in the future, and it is uncertain how any changes
might affect our business. In addition, the European Commission introduced a legislative proposal in April 2023
that, if implemented, could reduce the current 10-year marketing exclusivity period in the EU for certain orphan
medicines. Depending on what changes the FDA and the European Commission may make to its orphan drug
regulations and policies, our business could be adversely impacted.
Breakthrough Therapy designation from the FDA may not lead to a faster development or regulatory review and
does not assure ultimate approval.
We have received Breakthrough Therapy designation from the FDA for Privosegtor for the treatment of ON. FDA
may grant Breakthrough Therapy designation to a drug that is intended, alone or in combination with one or more
other drugs, to treat a serious or life
‑
threatening disease or condition, and preliminary clinical evidence indicates
that the drug may demonstrate substantial improvement over existing therapies on one or more clinically significant
endpoints. For drugs that have been designated as breakthrough therapies, prioritized interaction and communication
between the FDA and the sponsor can help to identify the most efficient path for clinical development. The receipt
of Breakthrough Therapy designation for a product candidate may not result in a faster development process, review
or approval compared to drugs considered for approval under conventional FDA procedures and does not assure
ultimate approval by the FDA. In addition, the FDA may later revoke Breakthrough Therapy designation.
The U.S. Government and non-U.S. regulatory agencies actively enforce laws and regulations regarding the
promotion of pharmaceutical products, and if we are found to have violated any such laws or regulations, we may
be subject to significant liability.
The FDA and other U.S. Government agencies and non-U.S. regulatory agencies strictly regulate the manner in
which medicinal products may be marketed. In particular, a medicinal product may not be promoted for uses that are
not approved by the FDA or such other regulatory agencies as reflected in the product’s approved labeling. In
addition, sales, marketing and business arrangements in the health care industry are subject to extensive laws and
regulations intended to prevent fraud, misconduct, kickbacks, self-dealing and other abusive practices. These laws
and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales
61
commission, customer incentive programs and other business arrangements. Such laws, and the application of those
laws, are complex and evolving.
If we are found to have improperly promoted the sale of any of our product candidates, if approved, such as through
the promotion of the off-label use of those products, or through kickbacks or fraud, or through any other conduct or
activity deemed to be unlawful, then we may become subject to significant liability. For example, if we receive
marketing approval for a product as a treatment for a disease, physicians may nevertheless choose to prescribe the
product for their patients in a manner that is inconsistent with the approved label. If we are found to have promoted
such off-label uses, we may become subject to significant liability. The U.S. federal government has levied large
civil and criminal fines against companies for alleged improper promotion of off-label use and has enjoined several
companies from engaging in off-label promotion. The FDA has also requested that companies enter into consent
decrees or permanent injunctions under which specified promotional conduct is changed or curtailed. If we cannot
successfully manage the promotion of our product candidates, if approved, we could become subject to significant
liability, which would materially adversely affect our business, growth prospects, operating results and financial
condition.
In the EU, the advertising and promotion of medicinal products are subject to both EU and EU member states’ laws
governing promotion of medicinal products, interactions with physicians and other healthcare professionals,
misleading and comparative advertising and unfair commercial practices. Although general requirements for
advertising and promotion of medicinal products are established under EU legislation, the details are governed by
regulations in individual EU member states and can differ from one country to another. For example, applicable
laws require that promotional materials and advertising in relation to medicinal products comply with the product’s
Summary of Product Characteristics (
“SmPC”
), as approved by the competent agencies in connection with a
marketing authorization. The SmPC is the document that provides information to physicians concerning the safe and
effective use of the product. Promotional activity that does not comply with the SmPC is considered off-label and is
prohibited in the EU. Direct-to-consumer advertising of prescription medicinal products is also prohibited in all EU
member states. The competent regulatory agencies of the EU member states actively enforce the laws and
regulations governing promotion of medicinal products. If we are found to have undertaken improper promotional
activities we may be subject to significant civil, criminal and administrative penalties, as well as reputational harm,
which could materially adversely affect our business, financial condition, results of operations and growth prospects.
Our employees, independent contractors, consultants, principal investigators, CROs, suppliers and vendors may
engage in misconduct or other improper activities, including noncompliance with regulatory standards and
requirements.
We are exposed to the risk that our employees, independent contractors, consultants, principal investigators, CROs,
suppliers, vendors and other third parties with which we do business may engage in misconduct or other improper
activities. Misconduct by these parties could include failures to comply with federal and state health care fraud and
abuse laws and regulations and equivalent foreign laws, FDA regulations and equivalent regulations of foreign
agencies, requirements to provide accurate information to the FDA or equivalent foreign agencies, data privacy and
security laws and requirements to accurately report financial information or data or to disclose unauthorized
activities to us. Misconduct by these parties could also involve the improper use of information obtained in the
course of clinical trials, which could result in regulatory sanctions and serious harm to our reputation. Although we
have adopted a code of business conduct and ethics with respect to our employees, agents and contractors, it is not
always possible to identify and deter misconduct by these parties, and the precautions we take to detect and prevent
this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from
governmental investigations or other actions or lawsuits stemming from a failure to comply with these laws or
regulations. Additionally, we are subject to the risk that a person or government could allege such fraud or other
misconduct, even if none occurred. If any such actions are instituted against us, and we are not successful in
defending or asserting our rights, those actions could have a significant impact on our business, including the
imposition of significant penalties, including civil, criminal and administrative penalties, damages, fines,
disgorgement, individual imprisonment, exclusion from participation in government funded healthcare programs,
such as Medicare and Medicaid and equivalent foreign health insurance programs, integrity oversight and reporting
obligations, contractual damages, reputational harm, diminished profits and future earnings and the curtailment or
restructuring of our operations.
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Obtaining and maintaining regulatory approval of our product candidates in one jurisdiction does not mean that
we will be successful in obtaining regulatory approval of our product candidates in other jurisdictions. The FDA
and non-U.S. regulatory agencies may not accept data from trials conducted in locations outside of their
jurisdiction.
Obtaining and maintaining regulatory approval of our product candidates in one jurisdiction does not guarantee that
we will be able to obtain or maintain regulatory approval in any other jurisdiction. For example, even if the FDA
approves a drug candidate for an indication in the U.S., comparable regulatory agencies in foreign jurisdictions must
also approve the manufacturing, marketing and promotion and reimbursement of the product in those countries. In
addition, a failure or delay in obtaining regulatory approval in one jurisdiction may have a negative effect on the
regulatory approval process in others. Approval procedures vary among jurisdictions and can involve requirements
and administrative review periods different from those in the U.S., including additional preclinical studies or clinical
trials, since clinical trials conducted in one jurisdiction may not be accepted by regulatory agencies in other
jurisdictions. In many jurisdictions outside the U.S., a product candidate must be approved for reimbursement before
it can be approved for sale in that jurisdiction. In some cases, the price that we intend to charge for our products is
also subject to approval.
Obtaining non-U.S. regulatory approvals and establishing and maintaining compliance with non-U.S. regulatory
requirements could result in significant difficulties and costs for us and could delay or prevent the introduction of
our product candidates, if approved, in certain countries. If we or any future collaborator fail to comply with the
regulatory requirements in international markets or fail to receive applicable marketing approvals, then our target
market will be reduced and our ability to realize the full market potential of our product candidates, if approved, will
be harmed.
Our business operations and current and future relationships with healthcare professionals, clinical
investigators, consultants, patient organizations, commercial partners, customers, CROs and third-party payors
in connection with our current and future business activities may be subject to federal, state and foreign
healthcare fraud and abuse laws, false claims laws, transparency laws, government price reporting, and health
information privacy and security laws, which could expose us to, among other things, criminal sanctions, civil
penalties, contractual damages, exclusion from governmental healthcare programs, reputational harm,
administrative burdens and diminished profits and future earnings.
Healthcare providers and third-party payors play a primary role in the recommendation and prescription of any
product candidates for which we obtain marketing approval. Our current and future arrangements with healthcare
professionals, including physicians, clinical investigators, CROs, third-party payors and customers may expose it to
broadly applicable fraud and abuse and other healthcare laws and regulations that may constrain the business or
financial arrangements and relationships through which we market, sell and distribute our products for which we
obtain marketing approval. Restrictions under applicable healthcare laws and regulations include the following:
•
the federal Anti-Kickback Statute prohibits, among other things, persons and entities from knowingly
and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or
in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase,
order or recommendation of, any good or service, for which payment may be made under a federal
healthcare program such as Medicare and Medicaid. Moreover, the ACA provides that the government
may assert that a claim including items or services resulting from a violation of the federal Anti-
Kickback Statute constitutes a false or fraudulent claim for purposes of the civil False Claims Act;
•
the federal civil and criminal false claims laws, including the civil False Claims Act, which can be
enforced by private citizens through civil whistleblower or qui tam actions, and civil monetary penalties
laws prohibit individuals or entities from, among other things, knowingly presenting, or causing to be
presented, to the federal government, claims for payment that are false or fraudulent, or making a false
statement to avoid, decrease or conceal an obligation to pay money to the federal government;
•
the federal Food Drug and Cosmetic Act, which prohibits, among other things, the adulteration or
misbranding of drugs, biologics and medical devices;
63
•
analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws
which may apply to sales or marketing arrangements and claims involving healthcare items or services
reimbursed by non-governmental third-party payors, including private insurers, state laws that require
biotechnology companies to comply with the biotechnology industry’s voluntary compliance guidelines
and the relevant compliance guidance promulgated by the federal government and may require drug
manufacturers to report information related to payments and other transfers of value to physicians and
other healthcare providers or marketing expenditures, state laws that require biotechnology companies
to report information on the pricing of certain drug products, state and local laws that require the
registration of pharmaceutical sales representatives;
•
HIPAA prohibits, among other things, executing or attempting to execute a scheme to defraud any
healthcare benefit program or making false statements relating to healthcare matters;
•
federal consumer protection and unfair competition laws, which broadly regulate marketplace activities
and activities that potentially harm consumers;
•
the federal Physician Payments Sunshine Act requires applicable manufacturers of covered drugs,
devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the
Children’s Health Insurance Program, with specific exceptions, to annually report to CMS information
regarding payments and other transfers of value to physicians (defined to include doctors, dentists,
optometrists, podiatrists and chiropractors), other healthcare professionals (such as physicians assistants
and nurse practitioners), and teaching hospitals as well as information regarding ownership and
investment interests held by physicians and their immediate family members;
•
HIPAA, as amended by HITECH and their implementing regulations, also imposes obligations,
including mandatory contractual terms, on “covered entities,” including certain healthcare providers,
health plans, healthcare clearinghouses, and their respective “business associates” that create, receive,
maintain or transmit individually identifiable health information for or on behalf of a covered entity as
well as their covered subcontractors, with respect to safeguarding the privacy, security and transmission
of individually identifiable health information, as well as analogous state and foreign laws that govern
the privacy and security of health information in some circumstances, many of which differ from each
other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts;
and
•
Foreign equivalents to the above-mentioned rules.
•
Certain state and local jurisdictions require certain regulatory licenses to manufacture or distribute
pharmaceutical products commercially and/or the registration of pharmaceutical sales representatives.
State and foreign laws require biotechnology companies to comply with the biotechnology industry’s
voluntary compliance guidelines and the relevant compliance guidance promulgated by the government
and may require drug manufacturers to report information related to payments and other transfers of
value to physicians and other healthcare providers or marketing expenditures. Some state and foreign
laws require biotechnology companies to report information on the pricing of certain drug products.
State, federal and foreign laws also govern the privacy and security of health information in some
circumstances, many of which differ from each other in significant ways and often are not preempted by
HIPAA, thus complicating compliance efforts.
•
Efforts to ensure that our current and future business arrangements with third parties will comply with
applicable healthcare laws and regulations will involve ongoing substantial costs. It is possible that
governmental agencies will conclude that our business practices, including the provision of
compensation for consulting services to physicians and other healthcare providers, some of whom may
be in a position to recommend, purchase and/or prescribe our product candidates, if approved, may not
comply with current or future statutes, regulations or case law involving applicable fraud and abuse or
other healthcare laws and regulations. If our operations are found to be in violation of any of these laws
or any other governmental regulations that may apply to it, we may be subject to significant penalties,
including civil, criminal and administrative penalties, damages, fines, disgorgement, imprisonment,
exclusion from participation in government funded healthcare programs, such as Medicare and
Medicaid or similar programs in other countries or jurisdictions, integrity oversight and reporting
64
obligations, contractual damages, reputational harm, diminished profits and future earnings and the
curtailment or restructuring of our operations. Defending against any such actions can be costly, time-
consuming and may require significant financial and personnel resources. Therefore, even if we are
successful in defending against any such actions that may be brought against it, our business may be
impaired. Further, if any of the physicians or other healthcare providers or entities with whom we expect
to do business is found to be not in compliance with applicable laws, they may be subject to criminal,
civil or administrative sanctions, including exclusions from government funded healthcare programs,
which could have an adverse effect on our business and reputation.
Our business activities are subject to the FCPA and similar anti-bribery and anti-corruption laws of other
countries in which we operate, as well as U.S. and certain foreign export controls, trade sanctions, and import
laws and regulations. Compliance with these legal requirements could limit our ability to compete in foreign
markets and subject us to liability if we violate them.
We may conduct clinical trials in countries other than the United States. In addition, we have entered into a license
agreement with Accure, a biotechnology company headquartered in Barcelona, Spain. Our business activities are
subject to the U.S. Foreign Corrupt Practices Act (
“FCPA”
), and similar anti-bribery or anti-corruption laws,
regulations or rules of Switzerland and other countries in which we operate. Anti-corruption laws, including the
FCPA, generally prohibit offering, promising, giving or authorizing others to give anything of value, either directly
or indirectly, to a government official in order to influence official action or otherwise obtain or retain business. The
FCPA also requires public companies to make and keep books and records that accurately and fairly reflect the
transactions of the corporation and to devise and maintain an adequate system of internal accounting controls. Our
business is heavily regulated and therefore involves significant interaction with public officials, potentially including
officials of foreign governments. Additionally, although none of our product candidates is yet approved for sale in
any country, in many countries other than the U.S., the healthcare providers who prescribe pharmaceuticals like our
product candidates are employed by their government, and the purchasers of pharmaceuticals are government
entities. Therefore, any future dealings by us with these prescribers and purchasers may be subject to regulation
under the FCPA and other applicable anti-corruption laws.
There is no certainty that all of our employees, agents or contractors, or those of our affiliates, will comply with all
applicable anti-corruption laws and regulations, particularly given the high level of complexity of these laws.
Violations of these laws and regulations could result in fines, criminal sanctions against us, our officers or our
employees, the closing down of our facilities, cessation of business activities in certain countries, implementation of
compliance programs and prohibitions on the conduct of our business. Any such violations could include
prohibitions on our ability to offer our products, if approved, in one or more countries and could materially damage
our reputation, our brand, international activities, our ability to attract and retain employees and our business,
growth prospects, operating results and financial condition.
In addition, our products may be subject to U.S. and foreign export controls, trade sanctions and import laws and
regulations. Governmental regulation of the import or export of our products, or our failure to obtain any required
import or export authorization for our products, when applicable, could harm our international sales and adversely
affect our revenue. Compliance with applicable regulatory requirements regarding the export of our products may
create delays in the introduction of our products in international markets or, in some cases, prevent the export of our
products to some countries altogether. Furthermore, export control laws and economic sanctions may prohibit the
shipment of certain products and services to specified countries, governments, and persons. If we fail to comply with
export and import regulations and such economic sanctions, we may be fined or other penalties could be imposed,
including a denial of certain export privileges. Moreover, any new export or import restrictions, new legislation or
shifting approaches in the enforcement or scope of existing regulations, or in the countries, persons, or technologies
targeted by such regulations, could result in decreased use of our products by, or in our decreased ability to export
products to existing or potential customers with international operations. Any decreased use of our products or
limitation on our ability to export or sell access to our products could adversely affect our business.
Disruptions at the FDA, the SEC and other government agencies and comparable non-U.S. regulatory agencies
caused by funding shortages or global health concerns could hinder their ability to hire and retain key leadership
and other personnel, prevent new products and services from being developed or commercialized in a timely
manner, or otherwise prevent those agencies from performing normal business functions on which the operation
of our business may rely, which could negatively impact our business.
65
The ability of the FDA and comparable non-U.S. regulatory agencies to review and approve new products can be
affected by a variety of factors, including government budget and funding levels, their ability to hire and retain key
personnel and accept the payment of user fees, statutory, regulatory, and policy changes, and other events that may
otherwise affect the ability of the FDA and comparable non-U.S. regulatory agencies to perform routine functions.
Average review times at the FDA and comparable non-U.S. regulatory agencies have fluctuated in recent years as a
result. In addition, government funding of the SEC and other government agencies on which our operations may
rely, including those that fund research and development activities, is subject to the political process, which is
inherently fluid and unpredictable.
Disruptions at the FDA, other agencies and comparable non-U.S. regulatory agencies, including government budget
and funding levels, statutory, regulatory, and policy changes, layoffs, their ability to hire and retain key personnel as
well as impacts resulting from broader market conditions may affect the such agency’s ability to perform routine
functions thereby extending the time necessary for new product candidates or modifications to be cleared, or
approved products to be reviewed and approved by necessary government agencies. Over the last several years, the
U.S. government has shut down multiple times and certain regulatory agencies, such as the FDA, have had to
furlough critical FDA and other government employees and stop critical activities. If funding for the FDA or other
regulatory authorities is reduced, priorities change, a prolonged government shutdown occurs, or current or future
global health concerns prevent the FDA or other regulatory authorities from conducting regulator inspections,
reviews or other activities, it could significantly impact the ability of the FDA or other regulatory authorities to
timely review and process our regulatory submissions, which could have a material adverse effect on our business.
The current Trump administration is pursuing policies to reduce regulations and expenditures across government
including at the U.S. Department of HHS, FDA, Center for Medicare and Medicaid Services and related
agencies. These actions, presently directed by executive orders or memoranda from the Office of Management and
Budget, may propose policy changes that create additional uncertainty for our business and could affect the FDA’s
relationship with the pharmaceutical industry, transparency in decision making and ultimately the cost and
availability of prescription drugs, which could have a material adverse effect on our business.
Further, in our operations as a public company, future government disruptions or shutdowns could impact our ability
to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations.
If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines
or penalties or incur costs that could have a material adverse effect on our business.
We and any contract manufacturers and suppliers we engage are subject to numerous federal, state, and local
environmental, health, and safety laws, regulations, and permitting requirements, including those governing
laboratory procedures; the generation, handling, use, storage, treatment, and disposal of hazardous and regulated
materials and waste; the emission and discharge of hazardous materials into the ground, air, and water; and
employee health and safety. Our operations may involve the use of hazardous and flammable materials, including
chemicals and biological and radioactive materials. Our operations also may produce hazardous waste. We generally
contract with third parties for the disposal of these materials and wastes. We cannot eliminate the risk of
contamination or injury from these materials. In the event of contamination or injury resulting from our use of
hazardous materials, we could be held liable for any resulting damages, and any liability could exceed our resources.
Under certain environmental laws, we could be held responsible for costs relating to any contamination at our
current or past facilities and at third-party facilities. We also could incur significant costs associated with civil or
criminal fines and penalties.
Compliance with applicable environmental laws and regulations may be expensive, and current or future
environmental laws and regulations may impair our research, product development and manufacturing efforts. In
addition, we cannot entirely eliminate the risk of accidental injury or contamination from these materials or waste.
Although we maintain workers’ compensation insurance to cover us for costs and expenses we may incur due to
injuries to our employees resulting from the use of hazardous materials, this insurance may not provide adequate
coverage against potential liabilities. We do not currently maintain insurance for environmental liability or toxic tort
claims that may be asserted against us in connection with storage or disposal of hazardous and flammable materials,
including chemicals and biological materials. Accordingly, in the event of contamination or injury, we could be held
liable for damages or be penalized with fines in an amount exceeding our resources, and our clinical trials or
regulatory approvals could be suspended, which could have a material adverse effect on business, financial
condition, results of operations and growth prospects.
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In addition, we may incur substantial costs in order to comply with current or future environmental, health and
safety laws and regulations. These current or future laws and regulations may impair research, development or
commercialization efforts. Failure to comply with these laws and regulations also may result in substantial fines,
penalties or other sanctions that could have a material adverse effect on our business, reputation and growth
prospects.
Risks related to domicile in Switzerland and being foreign private issuer
We are a Swiss stock corporation. The rights of its shareholders may be different from the rights of shareholders
in companies governed by the laws of U.S. jurisdictions.
We are a Swiss stock corporation. Our corporate affairs are governed by our articles of association and by the laws
governing companies, including listed companies, incorporated in Switzerland. The rights of our shareholders and
the responsibilities of members of our board of directors may be different from the rights and obligations of
shareholders and directors of companies governed by the laws of the United States. In the performance of its duties,
our board of directors is required by Swiss law to consider the interests of the Company, and may also have regard
to the interests of our shareholders, our employees and other stakeholders, in all cases with due observation of the
principles of reasonableness and fairness. It is possible that some of these parties will have interests that are different
from, or in addition to, your interests as a shareholder. Swiss corporate law limits the ability of our shareholders to
challenge resolutions made or other actions taken by our board of directors in court.
Our shareholders generally are not permitted to file a suit to reverse a decision or an action taken by our board of
directors, but are instead only permitted to seek damages for breaches of fiduciary duty. As a matter of Swiss law,
shareholder claims against a member of our board of directors for breach of fiduciary duty would have to be brought
to the competent courts at our registered office, currently in Zug, Switzerland. In addition, under Swiss law, any
claims by shareholders against the Company must be brought exclusively to the competent courts at our registered
office, currently in Zug, Switzerland. U.S.-style class actions and derivative actions are not available under Swiss
law. There can be no assurance that Swiss law will not change in the future, which could adversely affect the rights
of our shareholders, or that Swiss law will protect our shareholders in a similar fashion as under U.S. corporate law
principles.
Our ordinary shares are not listed in Switzerland, our home jurisdiction. As a result, certain Swiss law provisions
designed to protect shareholders in the event of a public takeover offer or change of control transaction will not
apply.
The Swiss rules that require investors to disclose their interest in a company if they reach, exceed or fall below
certain ownership thresholds only applies to issuers that have a listing (including a secondary listing) for their equity
securities in Switzerland. Since our ordinary shares are listed exclusively on the United States Nasdaq Global
Market and the Nasdaq Iceland Main Market, the disclosure obligations regarding major shareholdings according to
art. 120 of the Swiss Financial Markets Infrastructure Act and its implementing provisions do not apply to us.
Likewise, the Swiss takeover regime does not apply to us. In particular, the duty to make a mandatory bid offer for
all outstanding listed equity securities of a company by any person or group of persons that acquires more than one
third of a company’s voting rights does not apply to us. In addition, the Swiss takeover regime imposes certain
restrictions and obligations on bidders in a voluntary public takeover offer that are designed to protect shareholders.
However, these protections are applicable only to issuers that list their equity securities in Switzerland and, because
our ordinary shares are listed exclusively on the United States Nasdaq Global Market and the Nasdaq Iceland Main
Market, are not applicable to us. Furthermore, since Swiss law restricts our ability to implement rights plans or U.S.-
style “poison pills,” our ability to resist an unsolicited takeover attempt or to protect minority shareholders in the
event of a change of control transaction may be limited. Therefore, our shareholders may not be protected in the
same degree in a public takeover offer or a change-of-control transaction as are shareholders in a Swiss company
listed in Switzerland.
U.S. shareholders may not be able to obtain judgments or enforce civil liabilities against us or our executive
committee members or members of our board of directors.
We are a corporation organized and incorporated under the laws of Switzerland with registered office and domicile
in Zug, Switzerland, and the majority of its assets are located within Switzerland. Moreover, a number of our
67
directors and executive committee members are not residents of the United States, and all or a substantial portion of
the assets of such persons are or may be located outside the United States. As a result, investors may not be able to
effect service of process within the United States upon us or upon such persons, or to enforce judgments obtained
against us or such persons in U.S. courts, including judgments in actions predicated upon the civil liability
provisions of the federal securities laws of the United States. There is doubt that a lawsuit based upon United States
federal or state securities laws could be brought in an original action in Switzerland and that a judgment of a U.S.
court based upon United States securities laws would be enforced in Switzerland.
The United States and Switzerland currently do not have a treaty providing for the reciprocal recognition and
enforcement of judgments, other than arbitration awards, in civil and commercial matters. Consequently, a final
judgment for payment given by a court in the United States, whether or not predicated solely upon U.S. securities
laws, may not be enforceable in Switzerland, please see the section entitled “
Enforcement of Civil Liabilities
.”
Our status as a Swiss stock corporation means that our shareholders enjoy certain rights that may limit its
flexibility to raise capital, issue dividends and otherwise manage ongoing capital needs.
Swiss law reserves for approval by shareholders certain corporate actions over which a board of directors would
have authority in some other jurisdictions. For example, the payment of dividends and the cancellation of treasury
shares must be approved by shareholders. Swiss law also requires that our shareholders themselves resolve to, or
authorize its board of directors to, increase our share capital. While its shareholders may introduce a capital band
pursuant to which share capital that can be issued by its board of directors without additional shareholder approval,
Swiss law limits this capital band to 50% of the share capital registered in the commercial register at the time of the
introduction of the capital band. The capital band, furthermore, has a limited duration of up to five years and must be
renewed by the shareholders from time to time thereafter in order to be available for raising capital. Additionally,
subject to specified exceptions, including exceptions explicitly described in our articles of association, Swiss law
grants pre-emptive rights to existing shareholders to subscribe for new issuances of shares, which may be limited or
withdrawn under certain conditions. Swiss law also does not provide as much flexibility in the various rights and
regulations that can attach to different classes of shares as do the laws of some other jurisdictions. These Swiss law
requirements relating to our capital management may limit our flexibility, and situations may arise where greater
flexibility would have provided benefits to its shareholders.
Shareholders outside of the United States may not be able to exercise pre-emptive rights in future issuances of
equity or other securities that are convertible into equity.
Under Swiss corporate law, shareholders may receive certain pre-emptive rights to subscribe on a pro-rata basis for
issuances of equity securities or other securities that are convertible into equity securities. Due to the laws and
regulations in certain jurisdictions, however, shareholders who are not residents of the United States may not be able
to exercise such rights unless we take action to register or otherwise qualify the rights offering, including, for
example, by complying with prospectus requirements under the laws of that jurisdiction. There can be no assurance
that we will take any action to register or otherwise qualify an offering of subscription rights or shares under the
laws of any jurisdiction other than the United States where the offering of such rights is restricted. If shareholders in
such jurisdictions were unable to exercise their subscription rights, their ownership interest in the Company will be
diluted.
Anti-takeover provisions in our articles of association could make an acquisition of the Company, which may be
beneficial to its shareholders, more difficult.
Our articles of association contain provisions that may have the effect of discouraging, delaying or preventing a
change in control of the Company that shareholders may consider favorable, including transactions in which its
shareholders may receive a premium for their shares. Our articles of association include provisions that:
•
in certain cases, allow our board of directors to place such number of new ordinary shares corresponding
to up to 27,266,837 ordinary shares (capital band) and to place rights to acquire such number of new
shares corresponding to up to an additional 6,750,000 of new ordinary shares (conditional capital for
bonds and similar debt instruments) respectively, of the expected outstanding share capital, with
affiliates or third parties, without existing shareholders having statutory pre-emptive rights in relation to
this share placement;
68
•
allow our board of directors not to record any acquirer of ordinary shares, or several acquirers acting in
concert, in our share register as a shareholder with voting rights with respect to more than 15.0% of our
share capital registered in the commercial register;
•
restrict shareholders from exercising voting rights with respect to own or represented shares in excess of
15% of our share capital registered in the commercial register;
•
limit the size of our board of directors to nine members; and
•
require two-thirds of the votes represented at a general meeting of shareholders for amending or
repealing the above-mentioned registration and voting restrictions, the provision setting a maximum
board size, and the provision for indemnification of the members of our board of directors and our
executive committee as set forth in our articles of association, and for dismissing the chairman or any
member of the our board of directors or any member of our remuneration committee before the end of
his or her term of office.
These and other provisions of our articles of association, alone or together, could delay or prevent takeovers and
changes in control. Please see the sections entitled “
Description of Securities
” and “
Comparison of Shareholder
Rights
.” Any provision of the articles of association that has the effect of delaying or preventing a change in control
could limit the opportunity for shareholders to receive a premium for their shares of our share capital and could also
affect the price that some investors are willing to pay for ordinary shares.
We are a foreign private issuer and, as a result, not subject to U.S. proxy rules and are subject to Exchange Act
reporting obligations that, to some extent, are more lenient and less frequent than those of a U.S. domestic public
company.
We report under the Exchange Act as a non-U.S. company with foreign private issuer status. Because we qualify as
a foreign private issuer under the Exchange Act, we are exempt from certain provisions of the Exchange Act that are
applicable to U.S. domestic public companies, including: (i) the sections of the Exchange Act regulating the
solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act; (ii) the
sections of the Exchange Act requiring insiders to file public reports of their share ownership and trading activities
and liability for insiders who profit from trades made in a short period of time; and (iii) the rules under the Exchange
Act requiring the filing with the SEC of quarterly reports on Form 10-Q containing unaudited financial and other
specified information, or current reports on Form 8-K, upon the occurrence of specified significant events. In
addition, foreign private issuers are not required to file their annual report on Form 20-F until four months after the
end of each financial year, while U.S. domestic issuers that are accelerated filers are required to file their annual
report on Form 10-K within 75 days after the end of each fiscal year. Foreign private issuers are also exempt from
the Regulation Fair Disclosure, aimed at preventing issuers from making selective disclosures of material
information. As a result of the above, you may not have the same protections afforded to shareholders of companies
that are not foreign private issuers.
As a foreign private issuer and as permitted by the listing requirements of Nasdaq, we have the option to follow
certain home country governance practices rather than the corporate governance requirements of Nasdaq.
We are a foreign private issuer. As a result, in accordance with U.S. Nasdaq Listing Rule 5615(a)(3), we may
choose, and have chosen, to comply with home country governance requirements and certain exemptions thereunder
rather than complying with certain of the corporate governance requirements of the Nasdaq.
Swiss law does not require that a majority of our board of directors consist of independent directors. Its board of
directors therefore may include fewer independent directors than would be required if we were subject to U.S.
Nasdaq Listing Rule 5605(b)(1). In addition, we are not subject to U.S. Nasdaq Listing Rule 5605(b)(2), which
requires that independent directors regularly have scheduled meetings at which only independent directors are
present.
Although Swiss law also requires that we set up a remuneration committee, we may follow home country
requirements with respect to such committee. Among other things, Swiss law does not require that all or a majority
of the remuneration committee consist of independent directors.
69
We may also choose to take advantage of other exemptions including but not limited to the exemption from the
requirement to obtain shareholder approval for certain issuances of securities, including shareholder approval of
share option plans using conditional share capital approved by the shareholders.
Our articles of association provide for an independent proxy elected by its shareholders, who may represent its
shareholders of record at a general meeting of shareholders, and it must provide shareholders of record with an
agenda and other relevant documents for the general meeting of shareholders. However, Swiss law does not have a
regulatory regime for the solicitation of proxies, thus our practice may vary from the requirement of U.S. Nasdaq
Listing Rule 5620(b), which sets forth certain requirements regarding the solicitation of proxies. Furthermore, in
accordance with Swiss law and generally accepted business practices, our articles of association do not provide
quorum requirements generally applicable to general meetings of shareholders. Our practice thus varies from the
requirement of U.S. Nasdaq Listing Rule 5620(c), which requires an issuer to provide in its bylaws for a generally
applicable quorum, and that such quorum may not be less than one-third of the outstanding voting stock.
For an overview of our corporate governance principles, please see the section entitled “
Corporate Governance
.” As
a result of the above, you may not have the same protections afforded to shareholders of companies that are not
foreign private issuers.
We may lose our foreign private issuer status, which would then require us to comply with the domestic reporting
requirements of the Exchange Act and cause us to incur significant legal, accounting and other expenses.
We are a foreign private issuer and therefore are not required to comply with all of the periodic disclosure and
current reporting requirements of the Exchange Act applicable to U.S. domestic issuers. In order to maintain our
status as a foreign private issuer, either (i) a majority of its ordinary shares must be either directly or indirectly
owned of record by non-residents of the United States; or (ii) (a) a majority of its executive officers or directors may
not be United States citizens or residents, (b) more than 50.0% of its assets cannot be located in the United States,
and (c) its business must be administered principally outside the United States. If we lost this status, we would be
required to comply with the Exchange Act reporting and other requirements applicable to U.S. domestic issuers,
which are more detailed and extensive than the requirements for foreign private issuers. Among other things, we
would be required under current SEC rules to prepare its financial statements in accordance with generally accepted
accounting principles in the United States, rather than IFRS Accounting Standards, which would involve significant
time and cost and could result in variations, which could be material, between historical financial results reported
under IFRS Accounting Standards and as reported under U.S. GAAP. We may also be required to make changes in
our corporate governance practices in accordance with various SEC and stock exchange rules. The regulatory and
compliance costs to us under U.S. securities laws if we are required to comply with the reporting requirements
applicable to a U.S. domestic issuer may be significantly higher than the cost we would incur as a foreign private
issuer. As a result, we expect that a loss of foreign private issuer status would increase our legal and financial
compliance costs and would make some activities highly time-consuming and costly. If we lose our foreign private
issuer status and are unable to devote adequate funding and the resources needed to maintain compliance with U.S.
securities laws, while continuing our operations, we could be forced to deregister with the SEC. A deregistration
would substantially reduce or effectively terminate the trading of our securities in the United States. We also expect
that if we were required to comply with the rules and regulations applicable to U.S. domestic issuers, it would make
it more difficult and expensive for us to obtain director and officer liability insurance, and we may be required to
accept reduced coverage or incur substantially higher costs to obtain coverage. These rules and regulations could
also make it more difficult for us to attract and retain qualified members of our board of directors.
As a result of changes in tax laws, treaties, rulings, regulations or agreements, or their interpretation, of
Switzerland or any other country in which we operate, the loss of a major tax dispute or a successful challenge to
our operating structure, intercompany pricing policies or the taxable presence of our key subsidiaries in certain
countries, or other factors, our effective income tax rates may increase in the future, which could adversely affect
our net income and cash flows.
We operate in multiple jurisdictions and our profits are taxed pursuant to the tax laws of these jurisdictions. The tax
laws applicable to our business activities, however, are subject to changes in interpretation. Our tax position could
be adversely impacted by changes in tax rates, tax laws, tax practice, tax treaties or tax regulations or changes in the
interpretation thereof by the tax authorities in jurisdictions in which we do business. Our effective income tax rate
70
may be affected by changes in or interpretations of tax laws, treaties, rulings, regulations or agreements in any given
jurisdiction, the resolution of issues arising from any future tax audits with various tax authorities, utilization of net
operating loss and tax credit carryforwards, changes in geographical allocation of income and expense, and changes
in management’s assessment of matters such as the realizability of deferred tax assets. In the past, we have
experienced fluctuations in our effective income tax rate. Our actual tax rate may vary from our expectation and that
variance may be material. Our effective income tax rate in a given fiscal year reflects a variety of factors that may
not be present in the succeeding fiscal year or years. There is no assurance that our effective income tax rate will not
change in future periods.
We file Swiss and non-Swiss tax returns. We are subject to tax audits, examinations and assessments in various
jurisdictions. If any tax authority successfully challenges our operational structure, allocation of income by tax
jurisdiction, or amounts paid between our affiliated companies pursuant to our intercompany arrangements or
transfer pricing policies, if any tax authority successfully asserts that we are subject to income, withholding or other
taxes in a jurisdiction by reason of our activities and operations or our other taxable presence in such jurisdiction, if
the terms of certain income tax treaties are interpreted in a manner that is adverse to our structure, or if we lose a
material tax dispute in any country, our effective income tax rate could increase. A tax authority may take the
position that material income or other tax liabilities, interest and penalties are payable by us, in which case, we
expect that we might contest such assessment. Contesting such an assessment may be lengthy and costly and if we
were unsuccessful in disputing the assessment, the implications could increase our anticipated effective tax rate,
which could adversely affect our profitability. If our effective income tax rate increases in future periods, our net
income and cash flows could be adversely affected, including in future tax years.
All Swiss cantons, including the Canton of Zug and the Canton of Vaud, have abolished the cantonal tax privileges.
Therefore, since January 1, 2020, we are subject to standard cantonal taxation. The standard effective corporate tax
rate in Zug, Canton of Zug and Lausanne, Canton of Vaud, can change from time to time. The standard combined
(federal, cantonal, communal) effective corporate income tax rate, except for dividend income for which we could
claim a participation exemption, for 2025 in Zug, Canton of Zug will be approximately 11.9% and in Lausanne,
Vaud will be approximately 14.7%.
We urge our shareholders to consult with their legal and tax advisors with respect to the potential tax consequences
of investing in or holding our ordinary shares.
Exchange rate fluctuations or abandonment of the euro currency may materially affect our results of operations
and financial condition.
Due to the international scope of our operations, our assets, earnings and cash flows are influenced by movements in
exchange rates of several currencies, particularly regarding U.S. dollars, euros and Swiss francs. Our functional
currency is the Swiss franc and the majority of our operating expenses are paid in Swiss francs. Further, potential
future revenue may be derived from abroad, particularly from the United States and the European Union. As a result,
our business and share price may be affected by fluctuations in foreign exchange rates between the Swiss franc, the
euro, the U.S. dollar and these other currencies, which may also have a significant impact on our reported results of
operations and cash flows from period to period. Besides our natural hedging, currently, we do not have any
exchange rate hedging arrangements in place.
In addition, the possible abandonment of the euro by one or more members of the European Union could materially
affect our business in the future. Despite measures taken by the European Union to provide funding to certain
European Union member states in financial difficulties and by a number of European countries to stabilize their
economies and reduce their debt burdens, it is possible that the euro could be abandoned in the future as a currency
by countries that have adopted its use. This could lead to the re-introduction of individual currencies in one or more
European Union member states, or in more extreme circumstances, the abandonment of the euro or the dissolution
of the European Union. The effects on our business of a potential dissolution of the European Union, the exit of one
or more European Union member states from the European Union or the abandonment of the euro as a currency, are
impossible to predict with certainty, and any such events could have a material adverse effect on our business,
financial condition and results of operations.
71
Risks Related to Ownership of our Ordinary Shares and Warrants and our Status as a Dual-Listed Public
Company
We have and will continue to incur increased costs as a result of operating as a dual-listed public company, and
our management will devote substantial time to new compliance initiatives.
We have and will continue to incur significant legal, accounting and other expenses. As a U.S. public company, we
are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Wall Street
Reform and Consumer Protection Act, as well as rules adopted, and to be adopted, by the SEC and Nasdaq. As a
company listed on the Nasdaq Iceland Main Market, we are subject to reporting requirements under various
Icelandic laws, including those implementing EU legislation. This includes, but is not limited to, Regulation (EU)
No 596/2014 of the European Parliament and of the Council of 16 April 2014, on market abuse (“
MAR
”) and the
Directive 2004/109/EC of the European Parliament and of the Council of 15 December 2004 on the harmonization
of transparency requirements in relation to information about issuers whose securities are admitted to trading on a
regulated market (the “
Transparency Directive
”). Our management and other personnel have and will need to
devote a substantial amount of time to these reporting compliance initiatives. Moreover, we expect that compliance
with these rules and regulations will continue to substantially increase our legal and financial compliance costs and
to make some activities more time consuming and costly. As we are no longer an “emerging growth company” as of
December 31, 2025, as defined in Section 2(a) of the Securities Act, these expenses may increase even more as we
implement the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act. For example, we
expect these rules and regulations will continue to make it more difficult and more expensive for us to obtain
director and officer liability insurance and we may be forced to accept reduced policy limits or incur substantially
higher costs to maintain the same or similar coverage. We cannot predict or estimate the amount or timing of
additional costs we may incur to respond to these requirements. The impact of these requirements could also make it
more difficult for us to attract and retain qualified persons to serve on our board of directors or executive committee.
The market price and trading volume of our ordinary shares and warrants may be volatile and could decline
significantly, and may make it more difficult for you to sell your ordinary shares.
The United States Nasdaq Global Market, on which our ordinary shares and warrants are listed under the symbols
“OCS” and “OCSAW,” respectively, and the Nasdaq Iceland Main Market on which our ordinary shares trade under
the symbol “OCS,” have from time to time experienced significant price and volume fluctuations. The market price
of our ordinary shares and warrants may be volatile and could decline significantly. Generally, securities of
biopharmaceutical companies tend to be volatile and experience significant price and volume fluctuations.
In addition, the trading volume in our ordinary shares and warrants may fluctuate and cause significant price
variations to occur. The average trading volume of our ordinary shares traded per day from January 1, 2025 to
December 31, 2025 on the Nasdaq Global Market was approximately 58,114 shares per day. The average trading
volume of our ordinary shares can be very sporadic and may impair the ability of holders of our ordinary shares to
sell their shares at the time they wish to sell them or at a price that they consider reasonable. A low trading volume
may also reduce the fair market value of our ordinary shares. Also, due to the low volume of shares traded on any
trading day, persons buying or selling in relatively small quantities may easily influence prices of our ordinary
shares. Accordingly, there can be no assurance that the price of our ordinary shares will reflect our actual value.
There can be no assurance that the daily trading volume of our ordinary shares will increase or improve.
We cannot assure you that the market price of the ordinary shares and warrants will not fluctuate widely or decline
significantly in the future in response to a number of factors, including, among others, the following:
•
the realization of any of the risk factors presented in this annual report;
•
actual or anticipated differences in our estimates, or in the estimates of analysts, for our revenues, results
of operations, liquidity or financial condition;
•
additions and departures of key personnel;
•
failure to comply with the requirements of the United States Nasdaq Global Market or Nasdaq Iceland
Main Market;
72
•
failure to comply with the Sarbanes-Oxley Act or other laws or regulations in the United States,
Switzerland and Iceland;
•
future issuances, sales or resales, or anticipated issuances, sales or resales, of our ordinary shares;
•
publication of research reports about us;
•
the performance and market valuations of other similar companies;
•
broad disruptions in the financial markets, including sudden disruptions in the credit markets;
•
speculation in the press or investment community;
•
actual, potential or perceived control, accounting or reporting problems; and
•
changes in accounting principles, policies and guidelines.
In the past, securities class-action litigation has often been instituted against companies following periods of
volatility in the market price of their shares. This type of litigation could result in substantial costs and divert our
management’s attention and resources, which could have a material adverse effect on us.
The dual listing of our ordinary shares may adversely affect the liquidity and value of those ordinary shares.
Our ordinary shares are listed on the United States Nasdaq Global Market and on the Nasdaq Iceland Main Market.
The trading of our ordinary shares in these markets takes place in different currencies (U.S. dollars on Nasdaq
Global Market and Icelandic Krona on Nasdaq Iceland Main Market), at different times (resulting from different
time zones, different trading days and different public holidays in the United States and Iceland) and with different
settlement mechanics. The trading prices of ordinary shares on these two markets may differ due to these and other
factors. Any decrease in the price of ordinary shares on Nasdaq Iceland Main Market could cause a decrease in the
trading price of ordinary shares on Nasdaq Global Market and vice versa. Investors could seek to sell or buy
ordinary shares to take advantage of any price differences between the markets through a practice referred to as
arbitrage. Any arbitrage activity could create unexpected volatility in both the trading prices on one exchange and
ordinary shares available for trading on the other exchange. Further, the dual listing of ordinary shares may reduce
the liquidity of these securities in one or both markets and may adversely affect the development of an active trading
market for ordinary shares in the United States.
The listing of ordinary shares on Nasdaq Iceland Main Market may result in increased additional compliance
risk, which could have a material effect on our business, results of operations and financial condition, or may
delay or discourage a takeover attempt.
The Nasdaq Iceland Main Market is a regulated market in Iceland operated by Nasdaq Iceland hf., the Icelandic
stock exchange. Issuers on Nasdaq Iceland Main Market are subject to the rules of Nasdaq Iceland Main Market and
the relevant rules and regulations given the fact that the securities of the issuer are admitted to trading on a regulated
market.
As a dual-listed Swiss company listed on Nasdaq Iceland Main Market and Nasdaq Global Market, we are subject to
reporting requirements discussed above as well as certain other applicable requirements under Swiss law, U.S. law
and Icelandic law, including, but not limited to:
Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014, on market abuse, as
amended, as implemented into Icelandic law with Act No. 60/2021 (“MAR”)
. MAR imposes specific requirements
on Oculis, members of the Board and management, as well as persons closely associated with members of the Board
and management, including (i) public disclosure of inside information, (ii) procedural requirements on both the
disclosing participant and the receiving participant related to market soundings, (iii) requirements to draw up and
maintain insider lists, and (iv) requirements that persons within Oculis that discharge managerial responsibilities and
persons closely associated with them notify Oculis and the Financial Supervisory Authority of the Central Bank of
73
Iceland of any transactions relating to shares or any debt instruments of Oculis or to derivatives or other financial
instruments linked thereto, and Oculis shall in turn disclose the information to the public.
Further, MAR imposes restrictions on all insiders and persons performing or conducting transactions in financial
instruments issued by Oculis. It is prohibited for any person to make use of inside information by acquiring or
disposing of, for its own account or for the account of a third party, directly or indirectly, financial instruments to
which that information relates, as well as an attempt thereto (insider dealing). In addition, it is prohibited for any
person to disclose inside information to anyone else except where the disclosure is made in the normal exercise of an
employment, profession or duties, or, whilst in possession of inside information, to recommend or induce anyone to
acquire or dispose of financial instruments to which the information relates. Furthermore, it is prohibited for any
person to engage in or attempt to engage in market manipulation, for instance by conducting transactions which
give, or are likely to give, false or misleading signals as to the supply of, the demand for or the price of a financial
instrument.
Non-compliance with the above obligations under MAR is an economic offense and could lead to the imposition of
criminal prosecution, administrative fines, imprisonment or other sanctions. Nasdaq Iceland hf. may impose
administrative penalties or a cease-and-desist order under penalty for non-compliance.
Directive 2004/109/EC of the European Parliament and of the Council of 15 December 2004 on the harmonization
of transparency requirements in relation to information about issuers whose securities are admitted to trading on a
regulated market, as amended, as implemented into Icelandic law with Act No. 20/2021 (the “Disclosure Act”)
. The
Disclosure Act imposes requirements including (i) periodic disclosure of financial reports (annual and half-yearly
reports), prepared in accordance with the Icelandic Act, no. 3/2006, on Annual Accounts (the Annual Accounts Act)
or in accordance with the applicable Switzerland legislation if deemed to be equivalent to that of the Annual
Accounts Act, (ii) disclosure by shareholders that acquire or dispose of ordinary shares if it results in the holding
exceeding or falling below the thresholds of 5, 10, 15, 20, 25, 30, 35, 40, 50, 66 2/3 and 90% and (iii) equal
treatment and shareholders rights, including but not limited to ensuring that all information necessary to enable
shareholders to exercise their rights are available. Shareholders are advised to consult with their own legal advisors
to determine whether the notification obligations apply to them.
Icelandic procedural rules that may become applicable to any takeover bid as set out in the Icelandic legal Act no.
108/2007 (the Takeover Act)
which
inter alia
regulates the process relating to the submission of a voluntary takeover
offer.
Corporate Sustainability Reporting Directive (EU) 2022/2464 (“CSRD”)
. In addition, we expect that we may need
to comply with the CSRD, once implemented into Icelandic law, which requires EU and non-EU companies with
activities in the EU to file annual sustainability reports alongside their financial statements.
Failure to comply with these new compliance requirements, when applicable to Oculis, could have a material effect
on our business, results of operations and financial condition, or may delay or discourage a takeover attempt.
We have issued and expect to continue to issue additional ordinary shares, including under our equity incentive
plan. Any such issuances would dilute the interest of our shareholders and likely present other risks.
We have issued and expect to continue to issue a substantial number of ordinary shares, including under our Stock
Option and Incentive Plan Regulation 2023 (the
“2023 Plan”
).
Ordinary shares reserved for future issuance under the 2023 Plan will become eligible for sale in the public market
once those shares are issued, subject to provisions relating to various vesting agreements, lock-up agreements and, in
some cases, limitations on volume and manner of sale applicable to affiliates under Rule 144, as applicable. The
aggregate number of ordinary shares reserved for issuance under the 2023 Plan is 12,480,000 ordinary shares. As of
December 31, 2025, we had awards issued and outstanding covering 6,171,582 ordinary shares.
Any such issuances of additional ordinary shares or securities convertible into ordinary shares:
•
may significantly dilute the equity interests of our investors;
74
•
may subordinate the rights of holders of our ordinary shares if securities are issued with rights senior to
those afforded to our ordinary shares; and
•
may adversely affect prevailing market prices for our ordinary shares.
We do not currently intend to pay dividends on our securities and, consequently, your ability to achieve a return
on your investment will depend on appreciation in the price of the ordinary shares. In addition, Swiss law may
limit the amount of dividends we are able to distribute.
We have never declared or paid any cash dividends on our ordinary shares and do not currently intend to do so for
the foreseeable future. We currently intend to invest our future earnings, if any, to fund our growth. Therefore, you
are not likely to receive any dividends on your shares for the foreseeable future and the success of an investment in
the shares will depend upon any future appreciation in its value. Consequently, investors may need to sell all or part
of their holdings of the shares after price appreciation, which may never occur, as the only way to realize any future
gains on their investment. There is no guarantee that the shares will appreciate in value or even maintain the price at
which our shareholders have purchased them. Investors seeking cash dividends should not purchase the shares.
In addition, exchange rate fluctuations may affect the amount of euro that we are able to distribute, and the amount
in U.S. dollars that our shareholders receive upon the payment of cash dividends or other distributions we declare
and pay in Swiss Francs, if any. These factors could harm the value of the shares, and, in turn, the U.S. dollar
proceeds that holders receive from the sale of the shares.
Our BCA Public Warrants, BCA Private Warrants and Amended BlackRock Warrant are exercisable for our
ordinary shares, the exercise of which would increase the number of shares eligible for future resale in the public
market and result in dilution to our shareholders.
As a result of the Business Combination being consummated, outstanding BCA Public Warrants and BCA Private
Warrants to purchase an aggregate of 4,403,294 ordinary shares became exercisable on April 2, 2023. The exercise
price of these Warrants is $11.50 per ordinary share, or approximately $50.6 million, assuming none of the Warrants
are exercised through “cashless” exercise. As of December 31, 2025, 2,045,596 BCA Public Warrants and BCA
Private Warrants remained outstanding. On July 31, 2025, as additional consideration for our existing loan facility
with Kreos, we entered into an amended warrant with Kreos Capital VII Aggregator SCSp, an affiliate of Kreos (the
“Amended BlackRock Warrant
”). The Amended BlackRock Warrant may be exercised to purchase up to 494,259
ordinary shares, subject to vesting, at a price per ordinary share equal to $12.17 with respect to 361,011 ordinary
shares from the prior warrant agreement, and $18.64 with respect to the remaining 133,248 ordinary shares. As of
December 31, 2025, the Amended BlackRock Warrant is exercisable for 59,310 ordinary shares. To the extent such
warrants are exercised, additional ordinary shares will be issued, which will result in dilution to the holders of our
ordinary shares and increase the number of shares eligible for resale in the public market.
We believe the likelihood that warrant holders will exercise their warrants, and therefore the amount of cash
proceeds that we would receive, is dependent upon the trading price of our ordinary shares. On December 31, 2025,
the last reported closing price of our ordinary shares on Nasdaq Global Market was $19.97 per share and the last
reported closing price of our BCA Public Warrants was $8.56 per warrant. Because the recent trading price for our
ordinary shares is greater than the exercise price of our outstanding warrants, we believe the holders of our warrants
are likely to exercise their warrants to purchase our ordinary shares. Sales of substantial numbers of such shares in
the public market or the fact that such warrants may be exercised could adversely affect the market price of ordinary
shares. However, if the warrants are not exercised prior to their expiration, they may expire worthless.
The BCA Public Warrants and BCA Private Warrants may expire worthless and the terms of the BCA Public
Warrants may be amended in a manner adverse to a holder if holders of at least 50.0% of the then outstanding
BCA Public Warrants approve of such amendment.
The exercise price for our BCA Public Warrants and BCA Private Warrants is $11.50 per ordinary share. We
believe the likelihood that warrant holders will exercise their BCA Public Warrants and BCA Private Warrants, and
therefore the amount of cash proceeds that we would receive, is dependent upon the trading price of our ordinary
shares. If the trading price for our ordinary shares is less than $11.50 per ordinary share, we believe warrant holders
75
will be unlikely to exercise their Warrants. Because the recent trading price for our ordinary shares is greater than
$11.50 per ordinary share, we believe holders of our BCA Public Warrants and BCA Private Warrants are likely to
exercise their warrants. However, if the BCA Public Warrants and BCA Private Warrants remain unexercised prior
to their expiration, they may expire worthless.
The BCA Public Warrants and BCA Private Warrants were issued in registered form under a warrant agreement
between Continental Stock Transfer & Trust Company, as warrant agent, and EBAC, and were assumed by us at the
time of the Closing, pursuant to a warrant assignment, assumption and amendment agreement by and between us,
EBAC, and Continental Stock Transfer & Trust Company. Continental Stock Transfer & Trust Company is
currently the warrant agent. The warrant agreement provides that the terms of the Warrants may be amended without
the consent of any holder to cure any ambiguity, correct any defective provision or correct any mistake, amend the
definition of “Ordinary Cash Dividend” or add or change any provisions with respect to matters or questions arising
under the warrant as the parties may deem necessary or desirable and that the parties deem shall not adversely affect
the rights of the warrant holders, but requires the approval by the holders of at least 50.0% of the then-outstanding
BCA Public Warrants to make any change that adversely affects the interests of the registered holders of BCA
Public Warrants. Accordingly, we may amend the terms of the BCA Public Warrants in a manner adverse to a
holder if holders of at least 50.0% of the then-outstanding BCA Public Warrants approve of such amendment and,
solely with respect to any amendment to the terms of the BCA Private Warrants or any provision of the warrant
agreement with respect to the BCA Private Warrants, 50.0% of the number of the then outstanding BCA Private
Warrants. Although our ability to amend the terms of the BCA Public Warrants with the consent of at least 50.0% of
the then-outstanding BCA Public Warrants is unlimited, examples of such amendments could be amendments to,
among other things, increase the exercise price of the Warrants, convert the Warrants into cash, shorten the exercise
period or decrease the number of ordinary shares purchasable upon exercise of a Warrant.
We may redeem the BCA Public Warrants prior to their exercise at a time that is disadvantageous to the holder,
thereby making such warrants worthless.
We may redeem the BCA Public Warrants prior to their exercise at a time that is disadvantageous to the holder,
thereby making such warrants worthless. We will have the ability to redeem outstanding BCA Public Warrants at
any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the
closing price of the our ordinary shares equals or exceeds $18.00 per ordinary share (as adjusted for share
subdivisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within a
30 trading day period ending on the third trading day prior to the date on which a notice of redemption is sent to the
warrant holders. We will not redeem the Warrants as described above unless a registration statement under the
Securities Act covering our ordinary shares issuable upon exercise of such Warrants is effective and a current
prospectus relating to those ordinary shares is available throughout the 30-day redemption period. If and when the
BCA Public Warrants become redeemable by us, we may exercise the redemption right even if we are unable to
register or qualify the underlying securities for sale under all applicable state securities laws. Redemption of the
outstanding BCA Public Warrants could force holders (i) to exercise the BCA Public Warrants and pay the exercise
price therefor at a time when it may be disadvantageous to do so, (ii) to sell the BCA Public Warrants at the then-
current market price when holders might otherwise wish to hold the BCA Public Warrants, or (iii) to accept the
nominal redemption price which, at the time the outstanding BCA Public Warrants are called for redemption, is
likely to be substantially less than the market value of the BCA Public Warrants.
In addition, we will have the ability to redeem the outstanding BCA Public Warrants at any time after they become
exercisable and prior to their expiration, at a price of $0.10 per warrant if, among other things, the closing price of
our ordinary shares equals or exceeds $10.00 per ordinary share (as adjusted for share sub-divisions, share
dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like) on the trading day prior to
the date on which a notice of redemption is sent to the warrant holders. Recent trading prices for our ordinary shares
have exceeded the $10.00 per ordinary share threshold at which the BCA Public Warrants would become
redeemable. In such a case, the holders will be able to exercise their BCA Public Warrants prior to redemption for a
number of ordinary shares determined based on the redemption date and the fair market value of our ordinary shares.
The value received upon exercise of the BCA Public Warrants (1) may be less than the value the holders would have
received if they had exercised their BCA Public Warrants at a later time when the underlying share price is higher,
and (2) may not compensate the holders for the value of the BCA Public Warrants.
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Risks Related to Taxation
If we are treated as a passive foreign investment company for any taxable year, U.S. investors could be subject to
adverse U.S. federal income tax consequences.
A non-U.S. corporation generally will be treated as a passive foreign investment company (“
PFIC
”) for U.S. federal
income tax purposes if either (i) at least 75.0% of its gross income in a taxable year, including its pro rata share of
the gross income of any corporation in which it is considered to own at least 25.0% of the shares by value, is passive
income, or (ii) at least 50.0% of its assets in a taxable year (ordinarily determined based on fair market value and
averaged quarterly over the year), including its pro rata share of the assets of any corporation in which it is
considered to own at least 25.0% of the shares by value, are held for the production of, or produce, passive income.
Passive income generally includes dividends, interest, rents and royalties (other than rents or royalties derived from
the active conduct of a trade or business), and gains from the disposition of passive assets.
Based on our analysis of our income, assets, activities, and market capitalization, we believe that we were not a
PFIC for our taxable year ended December 31, 2025. The determination of whether a non-U.S. corporation is a PFIC
is a fact-intensive determination made on an annual basis and the applicable law is subject to varying interpretation.
In particular, the characterization of our assets as active or passive may depend in part on our current and intended
future business plans, which are subject to change. The amount of passive income and passive assets we take into
account for PFIC testing purposes depends, in part, on the size of our cash balance (taking into account the timing
and manner in which such cash is used) and the interest rates applicable thereto. In addition, the total value of our
assets for PFIC testing purposes may be determined in part by reference to our market capitalization from time to
time, which may fluctuate considerably. As a result, there can be no assurance with respect to our PFIC status for
any taxable year, and our U.S. counsel expresses no opinion with respect to our PFIC status for any taxable year.
If we are treated as a PFIC, U.S. investors may be subject to certain adverse U.S. federal income tax consequences,
including additional reporting requirements. See “Material U.S. Federal Income Tax Considerations—Passive
Foreign Investment Company Rules” for a more detailed discussion of the PFIC rules. U.S. investors should consult
their tax advisors regarding the application of the PFIC rules in their particular circumstances.
Changes to tax laws in any of the jurisdictions in which we operate, including new proposals on taxing digital
companies and the ongoing work by the Organization for Economic Co-operation and Development, could have
a material adverse effect on our business, operating results, and financial condition.
Tax laws, including tax rates, in the jurisdictions in which we operate may change as a result of macroeconomic or
other factors outside of our control. New income, sales, use or other tax laws, statutes, rules, regulations or
ordinances could be enacted at any time, which could affect the tax treatment of our domestic and foreign earnings.
The OBBBA, the IRA, the Coronavirus Aid, Relief, and Economic Security Act enacted in 2020 (the
“CARES
Act”
), and the Tax Cuts and Jobs Act enacted in 2017 (the
“TCJA”
) made many significant changes to the U.S.
Internal Revenue Code of 1986, as amended. Future guidance from the Internal Revenue Service and other tax
authorities with respect to any legislation may affect us, and certain aspects of such legislation could be repealed or
modified in future legislation or sunset in future years. Changes in or interpretations under the OBBBA, the TCJA,
the IRA, or other tax legislation, or the enactment of new tax legislation, could increase our future tax liability,
which could in turn adversely impact our business and future profitability.
Our tax treatment may also be impacted by tax policy initiatives and reforms such as the Base Erosion and Profit
Shifting (
“BEPS”
) Project (including
“BEPS
2.0”
) of the Organisation for Economic Co-operation and
Development (
“OECD”
), and the European Commission’s state aid investigations and other initiatives. Such
changes may include (but are not limited to) the taxation of operating income, investment income, dividends
received or, in the specific context of withholding tax dividends paid. The OECD has published a package of
measures for reform as a product of BEPS, which includes the reallocation of global profits above a fixed profit
margin of large multinational companies to market jurisdictions based, broadly, on customer location (referred to as
the Pillar One rules) as well as the introduction of a global minimum tax (referred to as the Pillar Two rules). Core
elements of the OECD minimum tax rate rules (referred to as the Pillar Two rules) have been implemented in
Switzerland by means of an ordinance. The people and cantons approved the necessary constitutional amendment in
a popular vote on June 18, 2023. During its meeting on December 22, 2023, the Federal Council decided to
implement the minimum tax rate with the introduction of a supplementary tax, Qualified Domestic Minimum Top-
77
up Tax in Switzerland as from January 1, 2024. On September 4, 2024, the Federal Council decided to bring the
international supplementary tax under the income inclusion rule into force with effect from 1 January 2025. The
introduction of the Under-Taxed Payment Rule has been postponed to a later date. Within six years, the Federal
Council must additionally submit to the Swiss Parliament a federal act that replaces the ordinance. Many countries
have enacted, or are in the process of enacting, core elements of the Pillar Two rules. Based on our current
understanding of the minimum revenue thresholds, we currently expect to be outside the scope of both the Pillar One
and Pillar Two rules, but could fall within their scope in the future, which could increase our tax obligations and
compliance costs.
Changes in tax laws, treaties, or regulations or their interpretation or enforcement are unpredictable. Any of these
occurrences could have a material adverse effect on our business, operating results, and financial condition,
including changing the amount and recognition of our deferred tax assets and liabilities.
If securities or industry analysts do not publish or cease publishing research or reports about us, our business, or
our market, or if they change their recommendations regarding ordinary shares adversely, then the price and
trading volume of our ordinary shares could decline.
The trading market for ordinary shares is influenced by the research and reports that industry or securities analysts
may publish about us, our business, our market, or our competitors. If any of the analysts who may cover our
company change their recommendation regarding ordinary shares adversely, cease to provide coverage or provide
more favorable relative recommendations about our competitors, the price of our ordinary shares would likely
decline.
Item 4. Information on the Company
A. History and Development of the Company
We are a stock corporation (
Aktiengesellschaft
) that was incorporated under the laws of Switzerland on October 31,
2022. We are registered with the commercial register of the Canton of Zug under company registration number
CHE-396.695.611. The mailing address of our principal executive office is Oculis Holding AG, Bahnhofstrasse 20,
CH-6300, Zug, Switzerland. Neither our articles of association nor the operation of law limit our duration.
Certain additional information about the Company is included in Item 4.B “
Business Overview
” and is incorporated
herein by reference. The Company is subject to certain of the informational filing requirements of the Exchange Act.
Since the Company is a “foreign private issuer,” it is exempt from the rules and regulations under the Exchange Act
prescribing the furnishing and content of proxy statements, and the officers, directors and principal shareholders of
the Company are exempt from the reporting and “short-swing” profit recovery provisions contained in Section 16 of
the Exchange Act with respect to their purchase and sale of ordinary shares. In addition, the Company is not
required to file reports and financial statements with the SEC as frequently or as promptly as U.S. public companies
whose securities are registered under the Exchange Act. However, the Company is required to file with the SEC an
Annual Report on Form 20-F containing financial statements audited by an independent accounting firm. The SEC
also maintains a website at http://www.sec.gov that contains reports and other information that the Company files
with or furnishes electronically to the SEC.
Our telephone number is +41-41-711-3960 and our website is www.oculis.com.
B.
Business Overview
Company Overview
We are a global late clinical-stage biopharmaceutical company, headquartered in Switzerland with operations in
Switzerland, the U.S. and Iceland. We have substantial expertise in therapeutics for the treatment of neuro-
ophthalmic and ophthalmic diseases. We are engaged in developing innovative drug candidates that embrace the
potential to address significant unmet medical needs. We intend to become a global leader in neuro-ophthalmic and
ophthalmic therapeutics to realize this mission.
Our pipeline currently includes three clinical-stage therapeutic candidates: OCS-01, Licaminlimab (OCS-02) and
78
Privosegtor (OCS-05). OCS-01, the first candidate we developed using our OPTIREACH technology, is an eye drop
candidate which aims to be the first non-invasive topical treatment for DME. It is presently being evaluated in two
ongoing Phase 3 clinical trials for DME, with topline results expected in the second quarter of 2026. Licaminlimab
is a product candidate we added to our pipeline in 2018 and are developing for the treatment of keratoconjunctivitis
sicca, or dry eye disease (“
DED
”), with a precision medicine approach. After a successful FDA meeting in the first
quarter of 2025, we initiated the PREDICT-1 registrational Phase 2/3 trial with a genotype-based approach to
investigate Licaminlimab in DED in the fourth quarter of 2025 for which topline results are expected in the fourth
quarter of 2026. Privosegtor is a neuroprotective candidate we added to our pipeline in 2022 which has the potential
to become a novel therapy for optic neuritis (“ON”) and non-arteritic anterior ischemic optic neuropathy (“NAION”)
with broad potential for other neuro-ophthalmic and neurological diseases and beyond. Following a successful
meeting with the FDA in the third quarter of 2025, we advanced Privosegtor into a registrational program called
PIONEER for ON and NAION.
Summary of Our Pipeline
OCS-01 is an eye drop based on the OPTIREACH
®
technology developed to reach the retina, Licaminlimab is an
anti-
TNFα
eye drop candidate designed to treat ocular inflammation and Privosegtor is a peptoid small molecule
with a novel mode of action promoting neuroaxonal survival.
Utilizing our internal core competency in formulation discovery and drug development capabilities, together with
extensive licensing, collaboration and acquisition activities, we have assembled a pipeline of innovative and highly
differentiated development candidates that include three late-stage clinical candidates.
OCS-01
Developed from our proprietary technology, OCS-01 is an OPTIREACH
®
formulation of high-concentration
dexamethasone. It is being developed as an eye drop to offer a non-invasive treatment alternative for diabetic
macular edema (”
DME
”). This route of administration may enable access to treatment in the early stages of the
disease and could be used to treat patients inadequately controlled with the current standard of care in later stages. In
contrast, all currently available treatments require invasive delivery methods, such as intravitreal injections or ocular
implants, to reach the retina. The OPTIREACH
®
solubilizing formulation technology addresses the main limitations
of conventional eye drops by improving the solubility of lipophilic drugs, increasing the residence time on the eye
79
surface and thereby, enabling the drug passage from the eye surface to the posterior segment of the eye. OCS-01 is
being developed with the aim to transform the current treatment paradigm in DME as a non-invasive topical
treatment option.
Given the current burden of therapy, FDA-approved therapeutics are not widely used for early disease intervention.
It has been reported that 60% of DME patients are not treated 12 months after the diagnosis (IRIS data base June
2023), despite some patients experiencing a deterioration in vision, if left untreated. In addition, approximately 40%
of patients treated with anti-VEGF intravitreal injections have an inadequate response at 12 weeks.
OCS-01 is designed to deliver therapeutic levels of drug to the retina via an eye drop, a route of administration for
DME treatment that may enable earlier intervention and thereby significantly increase the proportion of patients
being treated, as well as increase the prescribing physician base by providing a treatment option to general
ophthalmologists. An eye drop treatment would also provide a new treatment option for patients with inadequate
response to the current invasive standard of care. We are currently not aware of the existence of any other eye drop
treatment for DME which is in a similar or more advanced stage of active clinical development; however, we cannot
guarantee that OCS-01 will receive regulatory approval.
Following the positive DIAMOND Stage 1 trial outcome, we advanced the OCS-01 development program for DME
into two global pivotal Phase 3 clinical trials, DIAMOND-1 and DIAMOND-2, for the treatment of DME. We
completed enrollment for both trials in April 2025 with over 800 patients in 119 clinical sites. The topline results
from the two DIAMOND trials are expected in the second quarter of 2026. If the results are positive, we plan to
submit an NDA to the FDA for OCS-01 for the treatment of DME in the fourth quarter of 2026.
The total U.S. prevalence of DME in 2024 was estimated at 3.0 million, with the diagnosed U.S. prevalence
estimated at 1.8 million by the Decision Resources Group DME Landscape November 2020 report. The same report
estimates that 1.0 million U.S. DME patients were treated with drugs in 2024, leaving 0.9 million U.S. patients
diagnosed but untreated. These 0.9 million patients are a key addressable market segment for OCS-01, especially for
those with mild visual impairment. Additionally, OCS-01 is also intended to address the market segment of patients
with inadequate response to anti-VEGF therapy. A study published in the American Journal of Ophthalmology in
2016 found that nearly 40% of patients treated with anti-VEGF therapy had inadequate responses at 12 weeks. By
applying this figure to the number of treated U.S. patients, we estimate that inadequate response occurs in
approximately 0.4 million patients. In total, we estimate that 1.3 million DME patients in the United States are
addressable by OCS-01, with the highest unmet needs in the patients currently being observed with mild visual
impairments (approximately 0.6 million DME patients), and the inadequately controlled patients with the current
standard of care (approximately 0.4 million DME patients).
Licaminlimab
We are also advancing the clinical development of Licaminlimab, a next-generation biologic treatment for ocular
inflammation, specifically as a treatment for DED.
Differentiating Licaminlimab is its use of a single chain antibody
fragment specifically designed for topical delivery in ophthalmology, which are directed against the cytokine human
tumor necrosis factor alpha (“
TNF
α”).
Furthermore, the small size of the fragment enables the topical delivery of an
anti-
TNFα
construct with increased concentrations and enhanced ocular tissue penetration. The anti-inflammatory
and anti-necrotic properties of therapeutics inhibiting
TNFα
activity are well established with anti-TNF
pharmaceuticals already approved as systemic treatments for ocular disease.
While Licaminlimab could be developed for all comers with DED, we are advancing the development of
Licaminlimab in conjunction with the development of a novel genetic biomarker intended to identify patients who
are more likely to have a greater response to Licaminlimab therapy, and believe this precision medicine approach
may allow the candidate to deliver superior outcomes in these patients if approved.
Two Phase 2 clinical trials in patients with symptoms of DED were conducted (the first with the predecessor of
Licaminlimab, and the second with Licaminlimab). Topical ocular administration of Licaminlimab demonstrated
improvements in the global ocular discomfort score versus vehicle in patients with DED, as well as being well
tolerated in both studies. In June 2024, we announced positive topline results from the Phase 2b RELIEF study
evaluating Licaminlimab as a treatment for moderate-to-severe DED in which Licaminlimab was well tolerated,
similar to vehicle. Additionally, improvements in multiple sign efficacy endpoints were observed in the full
80
population and with predictive and more pronounced effects in patients with a specific TNFR1 gene variant as
identified in the prior successful Phase 2 symptoms trial. We have consulted with the FDA during the first quarter of
2025, and in the fourth quarter of 2025 initiated PREDICT-1, a registrational Phase 2/3 trial with a genotype-based
approach to investigate Licaminlimab in DED. The intent is to drive a precision medicine approach in DED, for the
very first time, and topline results from the PREDICT-1 trial are anticipated in the fourth quarter of 2026.
DED is a common condition estimated to impact more than 110 million people in the G7 countries (U.S., U.K.,
Germany, France, Spain, Italy, Japan), including 40 million people in the U.S. alone. Of the about 20 million
patients diagnosed with DED in the U.S. alone, about 10 million are considered to have moderate to severe disease
and therefore need a treatment. It is a multifactorial disease in which ocular surface inflammation plays a central role
in sustaining the pathological state. With currently available treatment options, eye care practitioners often need to
adapt their treatment strategies and rely on ‘trial and error’ to find the best approach for each patient. Despite
currently available treatments, the DED patient population remains underserved with only 13% of patients receiving
prescription treatment, primarily anti-inflammatory medications. Unfortunately, the vast majority (87%) do not feel
that their chronic DED is well-managed, which highlights a high level of dissatisfaction among patients.
Furthermore, given the heterogenicity of the DED patient population, there is a need for more personalized
treatment approaches to improve outcomes for patients. Licaminlimab is designed to address this significant unmet
need.
Privosegtor
Privosegtor, a novel small molecule peptoid that penetrates the blood-brain and retinal barriers and was selected by
high-throughput screening for its neuroprotective properties, has the potential to become the first neuroprotective
therapy for ON and other neuro-ophthalmic and neurological diseases. Positive results from the ACUITY Phase 2
trial demonstrated Privosegtor’s neuroprotective potential, as evidenced by improvements in visual function, low
neurofilaments released in the blood and anatomical preservation of the retina after an acute episode of optic
neuritis. Consistent results were observed in animal models of glaucoma, ON and MS, where Privosegtor preserved
retinal ganglion cell damage and was associated with improvements in mobility (clinical function disability).
Privosegtor has received Breakthrough Therapy designation from the FDA and Orphan Drug designation from both
the FDA and the EMA for ON. Privosegtor has now entered registrational trials for ON and a registrational trial in
NAION as part of our PIONEER (Privosegtor Investigation in Optic Neuropathies Efficacy Evaluation Research)
program. In addition to its potential neuroprotective effect in these orphan conditions, Privosegtor could also have
wide applicability in treating other neuro-ophthalmic and neurological indications.
Our planned first wave of development with Privosegtor is focused on acute optic neuropathy indications, ON and
NAION, which are both rare diseases with high unmet medical needs. Currently there are no specific
neuroprotective treatments which are approved by the FDA or EMA for ON and no medical or surgical treatment
has been shown to improve the prognosis for NAION. In October 2025, we announced the initiation of the
PIONEER program, which includes three pivotal trials to support registration plans for Privosegtor in ON and
NAION. The first two trials, PIONEER-1 and PIONEER-2, will evaluate Privosegtor following the acute onset of
optic neuritis in a broad population consisting of patients with multiple sclerosis (“
MS
”) and those without MS. The
primary endpoint will be measured as low-contrast visual acuity (
“LCVA”
) at three months. Dosing and patient
enrollment criteria will mirror those of the positive Phase 2 ACUITY trial. PIONEER-1 was initiated in the fourth
quarter of 2025, with PIONEER-2 planned to follow in the first half of 2026. The third trial in the PIONEER
program, PIONEER-3, will evaluate Privosegtor after the acute onset of NAION. This study shares the core design
and operational elements with PIONEER-1 and PIONEER-2, and is expected to initiate in mid-2026. Running the
three PIONEER registrational trials concurrently is expected to create operational synergies, improve cost efficiency
and accelerate development timelines.
ON is a condition characterized by an acute inflammation of the optic nerve that can lead to permanent visual
impairment. It affects up to 8 in 100,000 people worldwide with a U.S. incidence estimated to be greater than 30,000
cases annually and often represents the first sign of MS. ON mainly occurs in adults between the age of 20 and 40
years and is more frequent in women (2:1). It is a type of neuropathy (nerve disease) that happens when acute
inflammation of the optic nerve affects the signals traveling from the eyes through the brain, causing pain, vision
loss and other symptoms. The cells that make up the optic nerve have a lipid protective coating called a myelin
sheath, which is preferentially damaged in ON. Without myelin, the optic nerve cells cannot send signals properly
and axons can be damaged irreversibly. To date there is no neuro-protective therapy approved for acute optic
81
neuritis and the unmet needs remain for therapies that can prevent vision loss after an acute episode by reducing
nerve cell permanent damage or death.
NAION is an acute optic nerve disorder that causes permanent visual impairment in more than 60% of affected
patients. It is the most common cause of acute optic nerve injury in individuals over 50 years old and affects up to
10.2 per 100,000 people worldwide with a U.S. incidence estimated to be greater than 30,000 cases. In NAION, the
optic nerve head region swells and there is painless sudden vision loss. The swelling eventually resolves, but the
optic nerve axons and neuronal cell bodies in the retina are permanently lost, leading to significant irreversible
visual impairment or even blindness. There are no approved therapies for NAION and the unmet medical need is for
therapies that preserve vision and provide neuroprotection for patients suffering from NAION.
For the second wave of development, given that ON is often the first manifestation of MS and a common relapse
type in MS, we plan to explore the broader potential of Privosegtor to treat MS relapses. To initiate this, we plan to
submit a new IND for this indication with the neurology division of the FDA in 2026 by cross-referencing the
current IND in ON.
MS is a prevalent disease affecting approximately 2.8 million people worldwide with approximately 850,000 cases
in the U.S. alone. It is more prevalent in women and the average age at diagnosis is typically between 20 and 40
years old. It is an unpredictable disease of the central nervous system, which includes the brain, spinal cord and
optic nerves. MS lesions disrupt the flow of information within the brain, and between the brain and body. It affects
function in cognitive, mood, motor, sensory and visual areas. Symptoms of MS can include fatigue, memory
difficulties, mood changes, mobility issues, numbness, pain, tingling and vision impairment. The two main types of
MS are relapsing MS and progressive MS. Relapsing MS is the most common type representing approximately 85%
of patients at initial diagnosis and is characterized by relapses driven by a person’s immune system attacking the
central nervous system, leading to inflammation, demyelination and neurodegeneration. The prevalence of MS
relapses in the U.S. alone is estimated to be around 170,000 cases per year. The symptoms of relapsing MS vary
from person to person and depend on where inflammation and damage are occurring at any specific time. Current
treatment like ON typically focuses on immunotherapies to reduce the number of relapses which can cause
permanent disability, often referred to as “relapse-associated worsening.” At the time of an acute relapse, most
neurologists recommend a short course of high-dose corticosteroids to reduce the inflammation and end the relapse
faster. However, corticosteroids have no influence on the occurrence of new relapses or long-term disability. As
there are no neuroprotective therapies approved for MS relapses, there remains an unmet medical need for
treatments that can prevent central nervous system damage due to relapses and reduce the risk of future disability
and disease progression.
Our Executive Management Team
We are led by an experienced management team, composed of individuals who have extensive backgrounds in drug
discovery and development, clinical trial design and operations, regulatory affairs, business development and
commercialization, in addition to general management at both large pharmaceutical companies and emerging
biopharmaceutical organizations. Collectively, our management team has a track record of advancing new drug
candidates through regulatory approval and successful commercialization. The expertise of our management team is
complemented by our board of directors, which includes many accomplished industry veterans with significant
capabilities in guiding the success of emerging biopharmaceutical companies such as ours. Since our inception
through December 31, 2025, we have raised approximately CHF 493.6 million from leading North American,
European and Asian life science investors.
Our Strategy
We intend to become a leader in developing innovative therapeutics to address neuro-ophthalmic and ophthalmic
diseases characterized by significant medical needs with large market opportunities. To accomplish this objective,
we plan to focus on the successful completion of our key strategic initiatives. In ophthalmology, we are focused on
advancing the clinical and regulatory plans of OCS-01 to bring a first-in-class topical eye drop therapy for the
treatment in DME and developing Licaminlimab for precision medicine in DED. Furthermore, we are advancing the
82
development of Privosegtor for ON and NAION and exploring broader indications in neuro-ophthalmology and
neurology.
•
Executing the Phase 3 development of OCS-01 for DME.
Based on the positive results achieved in the DIAMOND Stage 1 Phase 3 trial, we have progressed to the pivotal
Phase 3 trials of OCS-01 in DME, DIAMOND-1 and DIAMOND-2, which are currently ongoing with anticipated
readout in the second quarter of 2026. We believe the use of OCS-01 formulated as a non-invasive, self-
administered eye drop, could, if approved, promote a shift in the current treatment paradigm to allow earlier
treatment intervention and increase both the treated patient population and the prescribing physician base. In
addition, OCS-01, if approved, could benefit patients who are diagnosed with DME and who have an inadequate
response to anti-VEGF intravitreal injections.
•
Pursuing the late-stage clinical development of Licaminlimab, our next-generation topical anti-TNF
α
biologic eye drop with a precision medicine approach.
Following a successful meeting with the FDA in the first quarter of 2025 and given the positive and consistent
results achieved with Licaminlimab in three Phase 2 clinical trials for the treatment of DED and the observed
enhanced response in patients with a specific TNFR1-genotype, we initiated the PREDICT-1 registrational Phase
2/3 trial with a genotype-based approach in the fourth quarter of 2025. We believe this precision medicine approach
may allow the candidate to deliver superior outcomes in this patient group, if approved.
•
Executing the PIONEER development program for Privosegtor in ON, NAION and other indications
Based on the positive results achieved in the ACUITY trial announced in January 2025, we have initiated the
PIONEER program, which includes three pivotal trials to support registration plans in ON and NAION. Running the
three PIONEER registrational trials concurrently is expected to create synergies, improve cost efficiency and
accelerate development timelines. The differentiated and novel mechanism of action of Privosegtor, coupled with its
potential neuroprotective properties, suggest potential benefits across many of the more pervasive neurological
pathologies of the eye such as glaucoma, but also for serious neurological conditions such as MS. We plan to submit
an IND to the FDA in 2026 for MS by cross-referencing the existing IND in ON.
The differentiated and novel mechanism of action of Privosegtor, coupled with its potential neuroprotective
properties, suggest potential benefits across more pervasive neurological pathologies of the eye such as glaucoma,
but also for serious neurological conditions such as multiple sclerosis. We evaluated Privosegtor in a first-in-patient
trial for ON, called the ACUITY trial, for which we announced positive topline results in January 2025. There is
currently no specific neuroprotective therapy approved for treatment of ON. Privosegtor has been granted
Breakthrough Therapy designation by the FDA and Orphan Drug designation by both the FDA and the European
Commission. We believe that the demonstration of functional, anatomical, and biological neuroprotective benefits in
ON provides compelling support for the exploration of Privosegtor in NAION, another acute optic neuropathy with
high unmet needs, and also, for larger market opportunities in ophthalmology, neuro-ophthalmology and neurology
indications including for the treatment of MS relapses.
•
Evaluating and selectively entering into strategic collaborations to maximize the potential of our
pipeline and the scope of our product portfolio.
We have retained rights globally to all of our indications, including our lead product candidate OCS-01 eye drops
for the potential treatment of DME; Licaminlimab for the potential treatment of DED with a precision medicine
approach; and Privosegtor as a neuroprotective agent for ON, NAION and potentially other neuro-ophthalmology
and neurology indications. Given the potential to treat patients worldwide, we may opportunistically enter into
strategic collaborations around certain product candidates, diseases or geographic regions.
Our clinical development candidates
83
Utilizing our internal formulation discovery and drug development capabilities, together with extensive licensing,
collaboration and acquisition activities, we have assembled a pipeline of attractive development candidates that
include both late-stage clinical candidates as well as earlier stage preclinical initiatives. Our clinical portfolio is
made up of (i) OCS-01, currently in two ongoing Phase 3 clinical trials in DME with topline results expected in the
second quarter of 2026; (ii) Licaminlimab, for which we initiated the PREDICT-1 registrational Phase 2/3 trial with
a genotype-based approach in the fourth quarter of 2025 to drive precision medicine in DED. Topline results from
the PREDICT-1 trial are anticipated in the fourth quarter of 2026; and (iii) Privosegtor, a novel neuroprotective
agent with potential broad applicability in multiple neurodegenerative diseases in ophthalmology, neuro-
ophthalmology and neurology, which we are initially developing as a potential treatment for ON and NAION.
OCS-01
Key program highlights
:
•
Use of proprietary OPTIREACH
®
technology enables enhanced drug penetration and residence time.
•
Topically delivered formulation design allows for non-invasive self-administration to treat DME.
•
May enable earlier disease intervention in DME if approved, potentially expanding both the patient
population and prescribing physician base.
•
Stage 1 Phase 3 DIAMOND trial in DME met its objective of validating the induction and maintenance
dosing regimen designed to optimize OCS-01 efficacy potential, and met the primary efficacy endpoint
of mean change in BCVA versus baseline at Week 6, as well as key secondary endpoints of
≥15-
letter
improvement in BCVA and greater improvement in retinal thickness, each with statistical significance.
•
OCS-01 DIAMOND program advanced into Stage 2, which includes two global pivotal Phase 3 clinical
trials, DIAMOND-1 and DIAMOND-2, for the treatment of DME. We completed enrollment for both
trials in April 2025 with over 800 patients in 119 clinical sites. The topline results from the two
DIAMOND trials are expected in the second quarter of 2026. If the results are positive, we plan to
submit a NDA to the FDA for OCS-01 for the treatment of DME in the fourth quarter of 2026.
•
Estimated 1.3 million total addressable U.S. DME patients.
OCS-01 is a 1.5% suspension of the anti-inflammatory corticosteroid dexamethasone for use as a potential treatment
for DME. In contrast to currently available therapies, which require the use of more invasive treatments such as an
implant or intravitreal injection to deliver the medication to the retina, differentiating OCS-01 is our use of the
proprietary OPTIREACH
®
technology, which enables the topical eye drop delivery of dexamethasone to the back of
the eye for the treatment of diseases affecting the retina. Via this technology, OCS-01 has been observed in clinical
trials to be capable of delivering therapeutic levels of drug to the retina via eye drop, a route of administration for
DME treatment that may enable earlier treatment intervention and thereby significantly increase the proportion of
patients being treated, as well as increase the prescribing physician base by providing a treatment option to general
ophthalmologists. We are currently not aware of the existence of any other eye drop treatment for DME which is in
a similar or more advanced stage of active clinical development; however, we cannot guarantee that OCS-01 will
receive regulatory approval.
Dexamethasone is a widely studied and well characterized pharmaceutical commonly used to treat a range of
inflammatory conditions and is currently included on the World Health Organization’s List of Essential Medicines.
It may be administered orally, by injection, or topically. Specific to ocular disorders, dexamethasone intravitreal
implants have been approved by the FDA to treat DME and macular edema caused by RVO.
We are developing OCS-01 as a
γ
cyclodextrin-based formulation of dexamethasone, using the OPTIREACH
®
delivery technology, in order to enhance its residence time at the anterior segment and its penetration into the
posterior segment of the eye following topical application. The increased drug residence time produced by the
delivery vehicle, combined with enhanced drug penetration allows for increases in drug concentration of more than
15-fold over conventional dexamethasone. We are currently not aware of the existence of any other topically
84
administered formulation of dexamethasone or other active pharmaceutical ingredient in development intended to
deliver sustained therapeutic levels of drug to diseased tissue at the back of the eye.
The
OPTIREACH
®
technology enables the topical delivery of therapeutics to the back of the eye.
OCS-01 for DME
We are advancing OCS-01 as a treatment for DME, which is a complication of diabetes and is caused by the
progressive growth of new blood vessels under the retina that leak fluid and lipids, leading to swelling of the
macula, which can result in significant blurring of vision and contribute to the risk of blindness from DR. DME is
strongly associated with uncontrolled blood sugar levels, high blood pressure and high cholesterol. An estimated 7%
of diabetics worldwide are affected by the disease. It is a leading cause of blindness among the U.S. adult
population. In the G7 countries (the United States, France, Germany, Italy, Spain, UK and Japan), the market for the
treatment of DME is anticipated to reach approximately $5 billion in 2025.
The total U.S. prevalence of DME in 2024 was estimated at 3.0 million patients, with the diagnosed U.S. prevalence
estimated at 1.8 million patients, including 1.0 million patients treated and 0.9 million patients diagnosed but
untreated. These 0.9 million untreated patients are a key addressable market segment for OCS-01, especially for
those with mild visual impairment. Including the market segment of patients with inadequate response to anti-VEGF
therapy, we estimate that a total of 1.3 million DME patients in the United States are addressable by OCS-01.
Limitations of current treatments for DME
In the G7 countries, the DME disease onset may initially go unnoticed and as a result, in 2025, an estimated 41.6%
of patients with DME may go undiagnosed. Furthermore, based on data from the American Academy of
Ophthalmology’s (AAO) IRIS Registry, approximately 40% of newly diagnosed DME patients received treatment
within the first year of diagnosis. This means over 60% of newly diagnosed patients were not treated in the first 12
months.
Pharmacotherapy involves the invasive administration of a monoclonal antibody therapeutic targeting the VEGF
receptor to inhibit blood vessel growth. However, we estimate that approximately 40% of patients have an
inadequate response to therapy after 12 weeks of anti-VEGF treatment, according to the results of a study published
in the American Journal of Ophthalmology in 2016. Moreover, multiple intravitreal injections are required to
maintain a therapeutic effect, which necessitates an increased treatment burden on patients, their caregivers and
healthcare providers. Patients whose disease progresses while on anti-VEGF therapy may then receive a steroid
implant, or laser photocoagulation of the retina.
The 2017 IRIS Registry analysis of 13,410 newly diagnosed, treatment-naïve patients found that observation (no
treatment) within the first year was common. We believe this decision to observe and not intervene is often driven
by the significant burden current treatment options (frequent intravitreal injections, intravitreal implants, or laser
photocoagulation) place on the patient, as well as the expense and significant demands placed on healthcare
85
resources. FDA approved therapeutics are not widely used for early disease intervention, despite some patients
experiencing a deterioration in vision, if left untreated.
OCS-01’s innovation and differentiation
OCS-01 is in development to be a topical treatment for DME, and we are currently not aware of the existence of any
other eye drop treatment for DME which is in a similar or more advanced stage of active clinical development. In
addition to this potential breakthrough advancement, we believe that an eye drop therapy would enable earlier
disease intervention in DME if approved, potentially expanding both the patient population and prescribing
physician base. We expect that OCS-01, if approved, could address patients who are diagnosed with DME, with
mild visual impairment and who are currently observed and untreated, as well as patients who are diagnosed with
DME and who have an inadequate response to anti-VEGF intravitreal injections. We estimate that both segments of
patients combined, observed patients with mild visual impairment and inadequate responders to the current standard
of care, totals 1.0 million patients in the United States alone.
OCS-01 has produced clinical trial results which support its continued development as a potential topical
treatment for DME
In Stage 1 of our DIAMOND Phase 3 clinical trial which evaluated the use of OCS-01 as a treatment for DME,
patients who received OCS-01 demonstrated a statistically significant improvement from baseline in key
measurements of therapeutic efficacy. In this randomized, double masked trial of 148 DME patients with 2:1
randomization (OCS-01 vs. vehicle), 100 of the trial participants self-administered OCS-01 eye drops six times per
day for a six-week induction phase then three times per day for a subsequent 6-week maintenance phase, with 48
participants administered vehicle only. As noted in the graphic presented below, OCS-01 demonstrated
improvement in mean BCVA “Early Treatment Diabetic Retinopathy Study” chart (BCVA ETDRS) score from
baseline to Week 6 versus (vs) vehicle (OCS-01: 7.2 letters vs vehicle: 3.1 letters, p=0.007) demonstrating strong
visual gain in the treatment arm. The effect was sustained to Week 12 with statistical significance (OCS-01: 7.6
letters vs vehicle 3.7 letters, p= 0.016).
OCS-01 generated improvements in both CMT and BCVA measurements
Furthermore, there was a higher percentage of patients in the OCS-01 group who achieved
≥15-
letter improvement
in BCVA from baseline vs vehicle at Week 6 (OCS-01: 25.3% vs vehicle: 9.8%, p=0.015), which was sustained to
Week 12 (OCS-01: 27.4% vs vehicle 7.5%, p=0.009).
86
Improvements in both CMT and BCVA were greater among patients with lower baseline visual acuity.
A rapid reduction in retinal edema was observed in the OCS-01 treatment arm at week 2 of the study. The observed
statistical significant treatment effect versus vehicle was preserved throughout the study.
Treatment emergent adverse events (“
TEAEs
”) were noted in 70 of the 100 trial participants who received OCS-01,
with the most prevalent adverse event (
“AE”
) being an increase in IOP or ocular hypertension, which was observed
in 14 of the 100 patients and 8 of the 100 patients in the active group, respectively. There was a small mean IOP
increase, which was similar across induction and maintenance phase.
87
These findings of increased IOP were consistent with our expectations given glucocorticoids’ well-known ocular
safety profiles, including the profile of an approved dexamethasone ocular implant. The findings were also
consistent with current literature. Overall, the IOP effects observed in our trial were consistent with what is
generally expected given established ophthalmic use of dexamethasone. Other AEs observed during clinical trials
included diabetic and macular edema, which was reported more frequently in vehicle treated patients.
Except for increased IOP, AEs of a similar nature and number were noted among trial participants who received
vehicle. The number of subjects with any ocular or non-ocular AEs leading to trial discontinuation was higher in the
vehicle arm compared to the active arm. While OCS-01 may contribute to an accelerated onset of cataracts, no
evidence of cataract formation was observed in the treatment arm up to 12 weeks.
The Stage 1 DIAMOND Phase 3 clinical trial results followed outcomes achieved in the earlier Phase 2 study and
two earlier small exploratory studies of DexNP (a previous formulation of OCS-01). In one of the studies, which
was conducted in Japan in 2015, a 22-patient evaluation compared the use of a topically delivered
γ
cyclodextrin-
based formulation of dexamethasone to the posterior injection of 20 mg triamcinolone acetonide. Used at the time of
the trial as an off-label treatment for DME, the
γ
cyclodextrin-based formulation generated significant improvements
in visual acuity and decreased macular thickness, comparable to the results achieved using triamcinolone acetonide.
The results of this 2015 study confirmed similar findings achieved in another 19-person exploratory Japanese study
conducted in 2011.
Phase 3 trial design for OCS-01
Our DIAMOND program includes two stages: Stage 1 has been completed, and in Stage 2, we are conducting two,
52-week pivotal Phase 3 trials, DIAMOND-1 and DIAMOND-2. These global Phase 3 trials enrolled over 400
subjects in each trial. The primary endpoint of these studies is the mean change from baseline in BCVA at 52 weeks.
Key secondary endpoints include the mean change in macular thickness, as assessed by spectral domain optical
coherence tomography and the percentage of participants that exhibit ETDRS improvement of 15 letters or more
from baseline. Key inclusion criteria are similar to those used in Stage 1 of the program. The Phase 3 clinical trial
protocol was reviewed by the FDA during an End-of-Phase 2 meeting.
OCS-01 has the potential to expand the number of treated patients and prescribing physicians
OCS-01 was designed to address two sizeable treatment gaps among the DME patient population in early
intervention and in patients inadequately controlled with the current standard of care. Furthermore, the delivery of
the drug to the back of the eye and non-invasive self-administration are unique differentiators to currently available
treatments. Addressing the two existing treatment gaps may allow for increased early disease intervention
potentially expanding both the patient population and prescribing physician base. If approved, OCS-01 may also be
88
used as a non-invasive complement to currently approved therapeutic regimens, including anti-VEGF medications,
potentially extending or enhancing the clinical benefit of those treatments particularly among those patients with
more advanced diseases whose condition has not responded adequately to the current standard of care.
Licaminlimab
Key Program Highlights
:
•
Next-generation biologic in development as a potential treatment for moderate to severe DED using
single chain antibody fragment technology targeting
TNFα.
•
The Phase 2b RELIEF trial evaluating the potential of Licaminlimab, our innovative anti-
TNFα
biologic
eye drop, for the treatment of signs in moderate to severe DED, was completed with positive topline
results announced in June 2024.
•
After a successful FDA meeting in the first quarter of 2025, we initiated the PREDICT-1 registrational
Phase 2/3 trial of Licaminlimab with a genotype-based approach to drive precision medicine in DED.
Topline results from this trial are anticipated in the fourth quarter of 2026.
•
Potential proprietary genetic biomarker may enable precision medicine guided treatment of patients with
DED.
•
The total addressable U.S. patient population of approximately 10 million, consisting of moderate to
severe DED with a potential focus on the specific TNFR1-genotype present in approximately 20% of
the population.
We are developing Licaminlimab as a next-generation biologic treatment for DED. Licaminlimab is differentiated
by its use of a single chain antibody fragment technology directed against the cytokine human
TNFα
to enable the
topical delivery of an anti-
TNFα
construct at increased concentrations. The anti-inflammatory and anti-necrotic/anti-
apoptotic properties of therapeutics inhibiting
TNFα
activity are well established with anti-TNF pharmaceuticals
already approved as systemic treatments for ocular disease. While Licaminlimab could be developed for all comers
with DED, we are advancing the development of Licaminlimab in conjunction with the development of a novel
genetic biomarker intended to identify patients who are more likely to have a greater response to Licaminlimab
therapy and believe this precision medicine approach may allow the candidate to deliver superior outcomes in these
patients if approved.
Two Phase 2 clinical trials in patients with symptoms of DED were conducted (the first with the predecessor of
Licaminlimab, and the second with Licaminlimab). Topical ocular administration of Licaminlimab demonstrated
improvements in the global ocular discomfort score versus vehicle in patients with DED, as well as being well
tolerated in both studies. In June 2024, we announced positive topline results from the Phase 2b RELIEF study
evaluating Licaminlimab as a treatment for moderate-to-severe DED. In the RELIEF study, Licaminlimab was well
tolerated similar to vehicle. Additionally, improvements in multiple sign efficacy endpoints were observed in the full
population and with predictive and more pronounced effects in the TNFR1 genetic biomarker population as
identified in the prior successful Phase 2 symptoms trial. We have
consulted with the FDA during the first quarter of
2025 and initiated PREDICT-1, a registrational Phase 2/3 trial with a genotype-based approach to investigate
Licaminlimab in DED in the fourth quarter of 2025. Topline results from this trial are anticipated in the fourth
quarter of 2026.
TNFα
performs important roles in the initiation and propagation of both normal and aberrant immune responses via
mechanisms ranging from the stimulation of other cytokines to inflammatory cell recruitment to the alteration of
vascular permeability. Inhibition of
TNFα
has demonstrated significant clinical benefit in the treatment of an array
of diseases arising from dysfunctional immune system activity and anti
TNFα
therapeutics have become among the
most widely prescribed biologics. Three anti-
TNFα
therapeutics (etanercept, sold under the brand name Enbrel
®
,
infliximab, sold under the brand name Remicade
®
, and adalimumab, sold under the brand name Humira
®
), have each
been studied for use in ocular disease. While the use of antagonists to
TNFα
have demonstrated favorable efficacy in
the treatment of ocular inflammatory diseases, these drugs require intravenous infusion or subcutaneous injection
and systemic anti-
TNFα
therapies are associated with a range of often serious adverse effects. Ocular diseases, such
as DED, involve a local
TNFα
driven inflammatory process which may not justify general, systemic
TNFα-
89
suppressive therapy. The novel design of Licaminlimab embracing lower molecular weight single chain antibody
fragment technology may enable it to be used in ocular disease as an eye drop for localized administration.
Licaminlimab for the treatment of DED
DED is a multifactorial disease of the tears and ocular surface characterized by ocular surface inflammation and
increased osmolarity of the tear film that results in ocular discomfort, visual disturbance and tear film instability.
The etiology of DED can involve several deficiencies of the tear film, including the aqueous layer, the lipid layer,
mucin layer or a combination of the three layers. The disease often presents as a complication of other diseases,
prominently autoimmune disorders such as rheumatoid arthritis, diabetes and Sjogren’s syndrome, which may
contribute to its manifestation. As such, DED may afflict individuals with differing severity of burning sensation, a
feeling of dryness, and other symptoms of ocular discomfort. In severe cases, vision may be significantly impaired.
Although the pathogenesis of DED includes a variety of causes, common consequences are a breakdown of corneal
tear film with dehydration of the exposed outer corneal surfaces, ocular surface inflammation and subsequent
damage to exposed tissues. Increased concentration of pro-inflammatory cytokines, such as
TNFα,
in patient tears or
conjunctival tissue has been demonstrated to correlate with disease severity.
In 2025, the U.S. DED patient population was approximately 39.8 million people and is expected to rise to 41.3
million patients by 2029. The market for prescription medications to treat DED is forecasted to increase to $7.3
billion in the G7 countries (the United States, France, Germany, Italy, Spain, UK and Japan) by 2029 from $5.4
billion in 2024. We estimate the segment of DED patients in the United States addressable by Licaminlimab to be
approximately 10 million, consisting of moderate to severe DED with a potential focus on the specific TNFR1-
genotype present in approximately 20% of the population.
Limitations of current therapies and potential for Licaminlimab in DED
The DED patient population is significantly underpenetrated with only an estimated 13% of diagnosed U.S. patients
expected to receive prescription treatments. The vast majority of patients who do receive treatment are treated with
anti-inflammatory drugs, yet among treated patients 87% are unsatisfied and feel that their chronic dry eye disease is
not well managed. Approved topical treatments for DED include Restasis
®,
Cequa
®
and Vevye
®
, which are
formulations of cyclosporine. These drugs act only to increase tear production and are not indicated to reduce DED
symptoms. Further limiting cyclosporine’s therapeutic utility is a delayed onset of action necessitating a two- to
three-month steroid bridge, and a stinging sensation on application in some patients. Topical steroids, including
Eysuvis
®
, are also often used to treat DED but are contraindicated for long-term use because of their side effects
including glaucoma and cataracts. Other treatments available for DED include Xiidra
®
, Tyrvaya
®
, Miebo
®
, and
recently launched Tryptyr
®
.
Licaminlimab’s differentiation as a potential treatment for DED
Given the central role of ocular inflammation in sustaining the pathology of DED and the utility of anti-
TNFα
as a
highly effective anti-inflammatory agent, we believe the localized application of Licaminlimab as an anti-
TNFα
therapeutic, if approved, may provide a differentiated DED treatment approach, which may effectively reduce ocular
discomfort, avoid undesirable features of current therapies (such as stinging sensation, delayed onset of action, or
steroid-related side effects), and provide benefit for many patients who do not receive lasting relief from current
therapies. In addition, the potential for a precision medicine approach with Licaminlimab could address the unmet
need to predict treatment response in the highly heterogeneous DED population.
We estimate the segment of DED patients in the United States addressable by Licaminlimab to be approximately 10
million patients with moderate or severe DED with a potential focus on the specific TNFR1-genotype present in
approximately 20% of the population.
Licaminlimab has produced clinical trial results which support its continued development as a potential
treatment for DED
In the first half of 2024, we conducted the Phase 2b RELIEF trial, which was a multi-center, randomized, double-
masked, vehicle-controlled trial evaluating the efficacy and safety of Licaminlimab in subjects with signs of DED
(NCT05896670). The trial also evaluated the efficacy and safety of Licaminlimab in a subpopulation of subjects
with a TNFR1-related genotype as prespecified in the protocol. One hundred and twenty-two (122) patients were
90
randomized 1:1 to either Licaminlimab (n=62) or vehicle (n=60) across 4 sites for a 6-week treatment period and a
2-week follow up. A total of 23 patients carried a specific TNFR1-related genotype. Patients were evaluated for
efficacy endpoints at baseline, Day 15 and Day 43. The prespecified investigational efficacy measures in this trial
included multiple signs of DED that are accepted by the FDA as efficacy endpoints.
Novartis, from whom we have obtained certain exclusive, worldwide rights to develop and commercialize
Licaminlimab through a December 19, 2018 licensing agreement (please see the section entitled “
—Material
Licenses, Partnerships and Collaborations
” below), conducted a randomized, multi-center, double-masked, vehicle
controlled Phase 2 clinical PoC trial designed to assess the safety and tolerability of Licaminlimab and its efficacy in
reducing DED symptoms. In the trial, patients were randomized on a 1:1 ratio into two cohorts. For a six-week
period, the first trial cohort received a 60 mg/ml ophthalmic solution of Licaminlimab, while the second received
vehicle. Participants in both cohorts self-administered one drop to each eye three times per day. The primary
efficacy endpoint of the trial was improvement in the global ocular discomfort score as compared to vehicle. The
global ocular discomfort score is a composite of discomfort frequency and severity as assessed by a visual analog
scale using an electronic patient reported outcome. Improvement results in a reduction of the discomfort frequency
or severity, or both, translating into a reduction of the resulting Global Ocular Discomfort Score as compared to
baseline. A negative change from baseline indicates improvement. The secondary efficacy endpoint was an
assessment of the number of patients that achieved more than 20 points improvement in the global ocular discomfort
score. The data generated in this trial, consisting of 67 participants in the active group and 64 in the control group,
are presented in the charts below.
Licaminlimab generated statistically significant improvement in ocular discomfort as compared to vehicle.
The trial met both primary and secondary endpoints. As is noted in the left chart above, administration of
Licaminlimab resulted in a statistically significant 7.9 mean point reduction in the global ocular discomfort score
from baseline to treatment day 29 as compared to a 3.6 point mean reduction among patients that received vehicle
only. In addition, as is noted in the right chart above, Licaminlimab generated an improvement in the global ocular
discomfort score of greater than 20 points in 12 of the 67 patients, or 18% of total trial participants. A similar level
of response was achieved in only 5%, or three of the 64, patients included in the vehicle control group. The results
of exploratory endpoints, which included physician graded conjunctival hyperemia, corneal staining, Meibomian
gland assessment and tear film osmolarity, were similar across treatment groups. Licaminlimab demonstrated a
statistically significant improvement in the global ocular discomfort score compared to vehicle in patients with
severe DED. It was well tolerated, with no increase in IOP and minimal systemic drug exposure.
Proprietary genetic biomarker may enable a precision medicine approach to DED
We conducted an exploratory pharmacogenetic analysis focused on the genes relevant to the TNF pathway and
Sjogren’s syndrome among those 12 out of 86 patients who had the CC genotype gene variance or SNP. Among the
gene variants analyzed, a correlation between one variant (rs1800693 CC genotype, “CC genotype”) in the TNFR1
gene, and a greater response (p<0.0001) to Licaminlimab was observed at Day 29. The below figure shows
91
individual patient profiles by study days for change from baseline global ocular discomfort score for participants
with the CC genotype.
Patients with this variant displayed a significant reduction in inflammatory factors, including interleukin 1 beta
(IL1B), interleukin 8 (IL8) and
TNFα.
Phase 2b RELIEF trial design and topline results
In light of the results generated by Licaminlimab in its Phase 2 PoC trials, we advanced Licaminlimab into a 122
subject Phase 2b RELIEF clinical trial to evaluate the safety and efficacy of Licaminlimab in treating the signs of
DED. This trial was randomized, multi-center, double masked and vehicle-controlled. Following initial screening,
trial participants are randomized on a 1:1 basis into either the treatment cohort or the vehicle cohort and received
Licaminlimab 60mg/mL or vehicle three times daily for six weeks, followed by a two week follow up period.
Participants were evaluated for efficacy endpoints at baseline, Day 15 and Day 43. The prespecified investigational
efficacy measures in this trial included multiple signs of DED that are accepted by the FDA as efficacy endpoints,
such as total corneal fluorescein staining, the percentage of patients with a 10 mm or greater increase in Schirmer’s
test, compared to vehicle. Biomarker analyses (from impression cytology samples) were additional endpoints of the
trial.
One hundred and twenty-two (122) patients were randomized 1:1 to either Licaminlimab (n=62) or vehicle (n=60)
across 4 sites for a 6-week treatment period and a 2-week follow up. A total of 23 patients carried a specific TNFR1-
related genotype.
Phase 2b RELIEF trial showed positive effects on multiple signs of DED:
•
For the full trial population (n=122): Treatment effect favoring Licaminlimab was observed in multiple
sign endpoints including fluorescein staining in the total cornea, inferior corneal, central corneal and
nasal conjunctival regions, and in the Schirmer’s test.
•
For the subpopulation of patients with the TNFR1 genetic biomarker (n=23): Treatment effect favoring
Licaminlimab was observed in multiple sign endpoints including fluorescein staining in the total cornea,
inferior corneal, central corneal, nasal conjunctival, total conjunctival and total ocular surface regions, in
the Schirmer’s test, and in conjunctival redness. Rapid and favorable treatment effect in favor of
Licaminlimab on corneal inflammation was observed as early as Day 15 that was significant at Day 43,
as measured by the difference in mean change from baseline versus vehicle for inferior corneal
fluorescein staining score: -0.59 (CI: -1.165, -0.017). The treatment effect also increased over time.
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Licaminlimab was well tolerated. The incidence of ocular TEAEs in the study eye was 11.5% in the Licaminlimab
group and 10.2% in the vehicle group. TEAEs in the fellow eye were similar to the study eye. All ocular TEAEs
were mild and transient, and there were no serious ocular adverse events observed with Licaminlimab in the study.
Drop comfort was also evaluated and was similar to artificial tears.
Privosegtor
Key Program Highlights
:
•
Potentially transformative treatment paradigm as a neuroprotective drug, if approved.
•
Received Breakthrough Therapy designation for the treatment of ON.
•
Achieved an average gain in Low Contrast Visual Acuity (LCVA) of 18 letters compared to IV steroid
alone at month 3 in the ACUITY trial.
•
Demonstrated compelling neuroprotective properties in multiple pre-clinical trials and was well
tolerated in a trial involving healthy volunteers.
•
Evidence of clinical benefit in ON support assessment of potential as a therapeutic for NAION, another
neuro-ophthalmic rare diseases with high unmet need and for the treatment of relapses in MS.
We are advancing Privosegtor, a novel peptoid small molecule candidate with the potential to become, if approved,
a first-in-class neuroprotective therapy for ON, NAION and other neuro-ophthalmic and neurological diseases. The
planned first wave of development focuses on acute optic neuropathies with the assessment of Privosegtor as a
potential therapy to treat ON and NAION in the PIONEER program with three registrational trials. Privosegtor has
been granted Breakthrough Therapy designation by the FDA and Orphan Drug designation by both the FDA and the
European Medicinal Agency (“
EMA”
) for this indication. Privosegtor has been studied in preclinical studies
suggesting neuroprotective and remyelinating activity, as well as in a UK Phase 1 clinical trial (with 48 healthy
volunteers) in which Privosegtor was well tolerated and showed pharmacokinetics (“
PK
”) with good correlation to
its pre-clinical animal studies. We completed a Phase 2 trial with Privosegtor in ON in France, for which we
announced positive topline results in January 2025. Based on these results, we intend to evaluate the potential of
Privosegtor to treat other more pervasive neurological pathologies of the eye and other serious neurodegenerative
disorders like MS. On January 29, 2022, we obtained an exclusive worldwide license to develop Privosegtor through
a licensing agreement with Accure Therapeutics SL (Please see the section entitled “
—Material Licenses,
Partnerships and Collaborations
” below).
Privosegtor was selected by high-throughput screening (HTS) for neuroprotective properties, confirmed in vivo in
glaucoma, multiple sclerosis, and optic neuritis models. The data from in vitro studies suggest that it activates the
serum–glucocorticoid kinase and triggers multiple beneficial effects on apoptosis, oxidation, and inflammation.
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Privosegtor for the treatment of ON
ON is a rare condition characterized by an acute inflammation of the optic nerve that can lead to permanent visual
impairment. It affects up to 8 in 100,000 people worldwide and often represents the first sign of MS. It mainly
occurs in adults between the age of 20 and 40 years and is more frequent in women (2:1).
ON is commonly associated with MS and shares similar physiopathology. ON is the presenting symptom of MS in
15.0-20.0% of patients and will impact over 50.0-65.0% of patients with MS at some time during their lifetime.
However, the causes of ON are not always clear, as it can also arise in patients without MS.
The acute inflammation of the optic nerve causes the loss of myelin and oligodendrocytes, optic nerve conduction
block and loss of vision. At the onset of ON, patients often suffer from ocular pain increasing with eye movement,
associated with a variety of visual impairments. Deterioration of visual acuity, color vision or flashes of light are
common. The loss of vision ranges considerably between patients from mild blurring to loss of perception of light.
The condition tends to worsen over the first several days after the appearance of symptoms before starting to
improve over the first two weeks. The recovery continues for as long as a year after onset. Even if high contrast
visual acuity returns to near normal, patients often report that their vision has not completely recovered. There
remains a persistent impairment of low contrast letter acuity and clinically meaningful reduction in vision-related
quality of life.
When the inflammation recedes, remyelination often occurs but it is incomplete, the result of persistent
demyelination and neuronal death. Without the myelin sheath which normally protects the axon, neurons located in
demyelinated segments become fragile and prone to death. Visual symptoms such as reduced visual acuity are
accompanied by measurable structural changes in the optic nerve and retina. Following the acute inflammatory
phase, progressive thinning of the ganglion cell inner plexiform layer (GCIPL) occurs early, often within weeks to a
few months, reflecting retrograde neuroaxonal degeneration. The magnitude of GCIPL loss correlates with persistent
visual deficits, with greater structural loss associated with poor visual function.
No specific neuroprotective therapeutic is currently approved that preserves vision and ganglion/retinal nerve
integrity after an acute episode of optic neuritis. Medication intended to treat the inflammation and related
symptoms can be administered just after ON onset and patients often receive high doses of corticosteroids for a few
days. While corticosteroids are used to shorten the attack and accelerate recovery of acute visual symptoms, there
remains an unmet medical need for therapies that either preserve vision or provide neuroprotection after an acute
episode of optic neuritis. We believe a neuroprotective therapeutic, such as Privosegtor, if approved, could provide
functional vision improvement through neuroprotective anatomical and biological benefits, including preservation of
retinal ganglion cells and prevention of neuronal and axonal death.
Privosegtor consistently demonstrated compelling neuroprotective properties in multiple pre-clinical trials
and was well tolerated in a trial involving healthy volunteers
Privosegtor has been studied in several preclinical studies with consistent results suggesting neuroprotective activity.
In a high-pressure glaucoma model, Privosegtor was associated with a reduction of RGC damage. In an ON rat
model, it showed prevention of optic nerve axonal loss and reduction of optic nerve demyelination. Finally, in a
mice experimental autoimmune encephalomyelitis model (autoimmune model of ON and MS), it was associated
with improvement of function (disability).
In a Phase 1 clinical trial with 48 healthy volunteers, Privosegtor was well tolerated and showed pharmacokinetics
with good correlation to its pre-clinical animal studies.
We investigated Privosegtor as a treatment for ON in a First-in-Patient clinical trial
The results of prior clinical and preclinical trials of Privosegtor showing neuroprotective effects, together with the
safety and PK profile observed in this first-in-human clinical trial enabled us to advance the compound into a Phase
2 clinical trial. The ACUITY trial, a randomized, double-masked, placebo controlled, multiple center trial, was a
first-in-patient trial enrolling patients diagnosed with ON within twelve days of acute disease episode onset. The
study randomized 36 patients with recent onset (visual loss symptoms) of unilateral AON with a demyelinating
origin, of which 33 patients received treatment and were included in the pre-specified modified intent-to-treat
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(mITT) analysis. The objective of this study was to assess the safety and tolerability of Privosegtor along with initial
signs of efficacy. In addition to the trial’s primary safety endpoint, key secondary endpoints evaluated the effect of
Privosegtor on retinal layer thickness and other visual parameters in the affected eye. The study was conducted in
France under French regulatory guidance and positive top line results were announced in January 2025. The
ACUITY trial showed that Privosegtor achieved the primary safety endpoint in addition to efficacy with
improvement in visual function in patients suffering from AON combined with positive neuroprotective surrogate
biomarkers such as preservation of the GCIPL layer and reduction of neurofilament release in the blood.
Primary Endpoint: To evaluate cardiac safety, the percentage of patients with a shift from normal (baseline) to
abnormal in electrocardiogram (“
ECG”
) parameters after study drug administration until Visit 4 (Day 15) was
measured. The results showed no difference in the percentage of patients with abnormal ECG parameters between
the two treatment arms. Two patients in the Privosegtor arms (2 and 3 mg/kg/day) and one patient in the placebo
arm had a shift from normal to abnormal in any ECG measures between baseline and Visit 4 (Day 15), both
equivalent to 12.5%. Events observed in the Privosegtor arms were mild and transient and qualified as not clinically
significant by central review reading center.
Secondary Efficacy Endpoints Assessed Changes in Retinal Structure: Optical Coherence Tomography imaging was
used to objectively measure the thickness of two different retinal segments in the affected eye to evaluate the
potential neuroprotective effects of Privosegtor compared to placebo: 1) Ganglion Cell-Inner Plexiform Layer
(GCIPL) and 2) Retinal Nerve Fiber Layer (RNFL).
Results showed a 43% improvement in GCIPL thickness mean change from baseline in favor of Privosegtor
(3mg/kg/day) + steroid compared to placebo + steroid at month 3 which was maintained through month 6 with at 3
and 6 months, respectively.
Additionally, a 28% improvement in RNFL thickness mean change from baseline in favor of Privosegtor
(3mg/kg/day) + steroid compared to placebo + steroid at month 3 reaching 30% improvement at month 6 was
observed.
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Secondary Efficacy Endpoint Assessed Changes in Visual Function: Changes in 2.5% ETDRS LCVA were
measured to assess visual function improvement. Results showed a favorable difference in LCVA mean change
from baseline of approximately 18 letters at month 3 and approximately 15 letters at month 6 with Privosegtor (3
mg/kg/day) + steroid compared to placebo + steroid, with nominal p-values of 0.004 and 0.012 at 3 and 6 months,
respectively.
96
These results were also corroborated by a biological sign of neuronal and axonal death. Neurofilament is a
biomarker of axonal and neuronal death which has been used in the past for the regulatory approval of a drug for
amyotrophic lateral sclerosis (ALS), a terminal neurodegenerative disease. In the ACUITY trial, Privosegtor (3
mg/kg/day) + steroid was associated with significantly less neurofilaments in the bloodstream when compared to
placebo + steroid.
Evaluation of TEAEs showed no drug-related SAEs and no AEs leading to drug withdrawal or study
discontinuation. The most frequently reported drug related AEs > 10% in the Privosegtor (2 or 3 mg/kg/day) +
steroid treatment group were headache: 2 patients (10.5%), and acne: 2 patients (10.5%).
We believe that positive outcomes in this trial could support Privosegtor’s development as a potential treatment in
multiple other ophthalmic, neuro-ophthalmic and neurological conditions associated with neurodegeneration. The
novel mechanism of action of Privosegtor may enable it to demonstrate benefit in treating additional ocular
conditions and may additionally allow its development in non-ocular neurological disorders involving neuronal
inflammation such as MS.
Material Licenses, Partnerships and Collaborations
License Agreement with Accure for Privosegtor
Pursuant to a license agreement, dated as of January 29, 2022, by and between us and Accure (the “
Accure
Agreement
”), we obtained an exclusive, worldwide, sublicensable (subject to certain conditions) and transferable
(subject to certain conditions) license under certain patents, know-how and inventory of Accure for any and all uses
and purposes, including to perform research, development, manufacturing and commercialization activities in any
manner and for any purpose. The licensed patents are co-owned by Accure with third parties who have reserved the
right to use the licensed patents for education and research purposes pursuant to an inter-institutional agreement.
As of December 31, 2025, we have paid the full contractual non-refundable upfront fee of CHF 3.0 million and
reimbursed costs in the amount of CHF 0.5 million. During the fourth quarter of 2024, we completed the Phase 2
ACUITY trial of Privosegtor in ON and received clearance from the FDA for our IND application. These events
triggered two milestone payments to Accure totaling CHF 1.1 million ($1.2 million) which were paid in January
2025. The next clinical and regulatory milestone under the Accure Agreement will trigger a payment of CHF 2.1
million ($2.6 million) that the Company expects to pay in 2026. As of December 31, 2025, we were obligated to pay
Accure (a) up to CHF 87.9 million ($110.9 million at the December 31, 2025 exchange rate) in the aggregate upon
the achievement of certain development, regulatory and sales milestones; (b) tiered royalties ranging from a mid-
97
single digit to a low mid-teen percentage on net sales of licensed products; and (c) a percentage in the high teens on
sublicensing revenues received any time after 36 months from the agreement effective date, and a higher percentage
on sublicensing revenues received prior to such date, in all cases subject, in the case of this clause (c), to reduction
for any amounts that were previously paid or are concurrently or later paid by us to Accure pursuant to our
milestone payment obligations. Our royalty payment obligations are subject to certain reductions and expire on a
licensed product-by-licensed product and country-by-country basis upon the later of (i) the expiration of the last
valid claim of any licensed patent covering such licensed product in such country; (ii) the expiration of such licensed
product’s Orphan Drug status, if any, in such country; or (iii) ten (10) years following the date of first commercial
sale of such licensed product in such country (the “
Payment Period
”). Under the Accure Agreement, we are
obligated to use commercially reasonable efforts to develop and seek regulatory approval for a licensed product in
major countries of the territory as defined in the Accure Agreement.
The Accure Agreement will expire on a licensed product-by-licensed product and country-by-country basis upon the
expiration of the applicable Payment Period with respect to such licensed product in such country. We may
terminate the Accure Agreement in whole or in part at any time upon advance written notice (a) for documented
reasonable scientific, regulatory, commercial reasons related to the licensed product without incurring any penalty or
liability to Accure and (b) for no reason. Each party may terminate the Accure Agreement with immediate effect
upon written notice to the other party (i) in the event such other party commits a material breach of its obligations
under the Accure Agreement and fails to cure that breach within a specified period of time or (ii) with certain
exceptions, upon such other party’s bankruptcy. Accure may terminate the Accure Agreement with immediate effect
upon written notice to us if we file any action to invalidate any of the licensed patents or fail to maintain the licensed
patents in major countries of the territory as defined in the Accure Agreement, or, subject to certain exceptions, if
we fail to meet certain development obligations and are unable to agree upon modifications to the development plan
with Accure.
License Agreement with Novartis for Licaminlimab
Pursuant to a license agreement, dated as of December 19, 2018, as amended, by and between us and Novartis (the
“
Novartis Agreement
”), we obtained an exclusive, royalty-bearing, sublicensable (subject to certain conditions),
assignable (subject to certain conditions), worldwide license under certain patents, know-how and manufacturing
platform technology to develop, manufacture and commercialize pharmaceutical, therapeutic or diagnostic products
containing a specified single chain antibody fragment formulation as an active ingredient in the licensed field as
defined in the Novartis Agreement. The license granted to us by Novartis includes sublicenses of rights granted to
Novartis by certain third parties, and our license to such rights is expressly subject to the applicable terms and
conditions of the agreements between Novartis and such third parties.
We are deemed the owner of any inventions that are (a) created solely by or on behalf of us pursuant to the Novartis
Agreement and (b) severable from the licensed products, and grant Novartis a first right to negotiate a worldwide,
royalty-bearing license under any patents directed at such inventions for purposes outside of the licensed field. We
also grant Novartis a worldwide, non-exclusive, perpetual, irrevocable, royalty-free, fully paid-up license back under
any patents owned by us that (i) cover inventions arising from the Novartis Agreement, the practice of which would
infringe the patents licensed to us by Novartis, or (ii) otherwise incorporate Novartis’ proprietary information, in
each case, for certain uses outside of the licensed field.
We originally entered into the Novartis Agreement with Alcon Research, Ltd. (“
Alcon
”), which subsequently
assigned its rights and obligations under the Novartis Agreement to Novartis in connection with Alcon’s spin-off
from Novartis. We made an upfront payment to Alcon of CHF 4.7 million ($4.7 million at the exchange rate at the
time of payment) in cash and issued 401,709 ordinary shares (recast using the Exchange Ratio to reflect the impact
of the BCA) for the residual between the fair value and the upfront payment. This was accounted for as a share-
based payment transaction under IFRS 2. As of December 31, 2025, we were obligated to pay Novartis additional up
to CHF 76.9 million ($97.0 million at the December 31, 2025 exchange rate) in the aggregate upon the achievement
of certain development, regulatory, sales and other milestones and tiered royalties ranging from a mid-single digit to
a mid-teen percentage on net sales. In consideration for the exclusive sublicense from Novartis under certain third-
party intellectual property rights, we are obligated to pay a low-single digit royalty on our net sales of the licensed
product, however, such payments will be deducted from royalties payable to Novartis. Our royalty payment
obligations are subject to certain reductions and expire with respect to any licensed product on a country-by-country
basis upon the later of (a) the expiration of the last to expire valid claim of any licensed patent covering any such
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licensed product in such country; (b) the expiration of the period of data exclusivity in any country worldwide; or (c)
twelve (12) years after first commercial sale of such licensed product in such country (“
Royalty Term
”).
Under the Novartis Agreement, we are obligated to use diligent efforts to develop, manufacture or have
manufactured, and commercialize the licensed products in the licensed field worldwide. The Novartis Agreement
will expire upon the last-to-expire Royalty Term. We may terminate the Novartis Agreement without cause at any
time upon advance written notice to Novartis. Upon written notice to Novartis, we may terminate the Novartis
Agreement for cause due to the following events: (a) an insolvency event occurs; (b) Novartis materially breaches its
obligations under the Novartis Agreement and fails to cure such breach within a specified period of time; or (c) upon
advance written notice for material scientific, technical or medical reasons or in case of a material adverse change
that renders further continuation of the Novartis Agreement by us commercially unreasonable or otherwise not
viable. Upon written notice to us, Novartis may terminate the Novartis Agreement for cause due to the following
events: (i) we fail to pay any undisputed amount due under the Novartis Agreement and we fail to remedy such
failure within a specified period of time; (ii) an insolvency event occurs; (iii) we materially breach our obligations
under the Novartis Agreement and fail to cure such breach within a specified period of time; or (iv) following
negative clinical trial results, we terminate development of the licensed product and do not pursue any further
indications in the licensed field.
Manufacturing Strategy
We oversee and manage third-party global CMOs, to support the development and manufacture of product
candidates for our clinical trials, and, if any product candidates receive marketing approval, we expect to rely on
such global manufacturers to meet commercial demand. We expect this strategy will enable us to maintain a more
efficient operating and cost infrastructure, avoiding dependence on our own manufacturing facility and equipment,
while simultaneously enabling us to focus our expertise on the clinical development and future commercialization of
our products, if approved. Currently, we rely on and have agreements with third-party contract manufacturers for
OCS-01, Licaminlimab and Privosegtor, and we expect to enter into commercial supply agreements with such
manufacturers prior to any potential approval. We continue to develop and improve the manufacturing processes for
Privosegtor and Licaminlimab and to address the requirements in these highly regulated markets. Improvement of
manufacturing processes may involve transferring the development and manufacturing to another CMO, taking into
account technical, quality and economic aspects.
Each of OCS-01, Licaminlimab and Privosegtor is manufactured via conventional pharmaceutical processing
procedures, employing commercially available excipients and packaging materials. The procedures and equipment
employed for manufacture and analysis are consistent with standard pharmaceutical production, and are transferable
to a range of manufacturing facilities, if needed.
Competition
We face substantial competition from multiple sources, including large and specialty pharmaceutical and
biotechnology companies, academic research institutions and governmental agencies and public and private research
institutions. Our competitors compete with us on the level of the technologies employed, or on the level of
development of product candidates. In addition, many small biotechnology companies have formed collaborations
with large, established companies to (i) obtain support for their research, development and commercialization of
products or (ii) combine several treatment approaches to develop longer lasting or more efficacious treatments that
may potentially directly compete with our current or future product candidates. We anticipate that we will continue
to face increasing competition as new therapies and combinations thereof, technologies, and data emerge within the
treatment of ocular conditions.
In addition to the current standard of care treatments for patients with ocular diseases and the entry of biosimilars
and generics, numerous commercial and academic preclinical studies and clinical trials are being undertaken by a
large number of parties to assess novel technologies and product candidates.
99
Several large pharmaceutical and biopharmaceutical companies that have commercialized, or are developing
treatments for ocular diseases, compete with us. Companies that have commercialized or are developing product
candidates to treat DME include Abbvie, ANI Pharmaceuticals, Bayer, Novartis, Regeneron and Roche, among
others. Companies that have commercialized or are developing product candidates to treat DED include Abbvie,
Alcon, Bausch + Lomb, Viatris, Harrow, and Sun Pharmaceuticals, among others. Companies that are
commercializing or developing products to treat neuro-ophthalmic conditions include Amgen, Dompé, Argenx, and
Veridian, among others.
Many of our competitors, either alone or in combination with their respective strategic partners, have significantly
greater financial resources and expertise in research and development, manufacturing, regulatory approval process
and marketing than we do. Mergers and acquisition activity in the pharmaceutical, biopharmaceutical and
biotechnology sector is likely to result in greater resource concentration among a smaller number of our competitors.
Smaller or early-stage companies may also prove to be significant competitors, particularly through sizeable
collaborative arrangements with established companies. These competitors also compete with us in recruiting and
retaining qualified scientific and management personnel, establishing clinical trial sites, patient registration for
clinical trials and acquiring technologies complementary to, or necessary for, our programs.
Our commercial opportunities could be reduced or eliminated if one or more of our competitors develop and
commercialize products that are safer, more effective, better tolerated, or of greater convenience or economic benefit
than our proposed product offerings. Our competitors also may be in a position to obtain FDA or other regulatory
approval for their products more rapidly, resulting in a stronger or dominant market position before we are able to
enter the market. The key competitive factors affecting the success of all of our programs are likely to be product
safety, efficacy, convenience and treatment cost.
Intellectual Property
Intellectual property is of vital importance in our field and in biotechnology generally. We seek to protect and
enhance proprietary technology, inventions, and improvements that are commercially important to the development
of our business by obtaining, maintaining, enforcing and defending intellectual property rights, including patent
rights, whether owned or licensed from third parties. We will also seek to rely on regulatory protection afforded
through inclusion in expedited development and review, data exclusivity, market exclusivity and patent term
extensions where available.
We have sought patent protection in the United States and internationally related to our novel drug targets,
composition of matter, formulations and other inventions and improvements that are central to our R&D efforts. For
our product candidates, our strategy is to pursue patent protection covering compositions of matter, formulations and
methods of use. In addition, we seek to identify additional means of obtaining patent protection, including specific
therapeutic indications and dosing regimen-related claims, which may enhance commercial success. We also rely on
trade secrets that may be important to the development of our business. Trade secrets are difficult to protect and
provide us with only limited protection.
As of December 31, 2025, we own and exclusively in-licensed a patent portfolio that included 23 issued U.S.
patents, 6 issued European patents validated in multiple jurisdictions, and 63 issued patents in other foreign
jurisdictions, as well as 12 pending non-provisional U.S. patent applications, and 90 foreign pending patent
applications, including 12 pending European patent applications, and 3 pending Patent Cooperation Treaty (
“PCT”
)
applications related to our different product candidates, namely, OCS-01, Licaminlimab, Privosegtor, OCS-03 and
OCS-04.
OCS-01
Regarding our OCS-01 product candidate
,
as of December 31, 2025, we own a patent family that consisted of three
issued U.S. patents and one granted European patent validated in 12 jurisdictions (Belgium, France, Germany, Great
Britain, Iceland, Ireland, Italy, the Netherlands, Poland, Spain, Switzerland, Turkey) with claims covering the
composition including dexamethasone. These patents will expire in 2026, without giving effect to any potential
patent term extensions and patent term adjustments and assuming payment of all appropriate maintenance, renewal,
annuity or other governmental fees.
100
As of December 31, 2025, we also own a patent family consisting of 1 issued U.S. patent, 1 U.S. non-provisional
patent application, one issued European patent validated in 41 jurisdictions (Albania, Austria, Bosnia, Belgium,
Bulgaria, Swiss, Cyprus, Czech republic, Germany, Denmark, Estonia, Spain, Finland, France, Great Britain,
Greece, Hungary, Croatia, Ireland, Iceland, Italy, Lithuania, Luxembourg, Latvia, Morocco, Monaco, Moldavia,
Montenegro, Macedonia, Malta, Netherlands, Norway, Poland, Portugal, Romania, Serbia, Sweden, Slovenia,
Slovakia, San Marino and Turkey), and one pending divisional application in Europe, 29 issued patents in other
foreign jurisdictions issued patents (Australia, Brazil, Chile, China, Colombia, Eurasia (Armenia, Azerbaijan,
Belarus, Kyrgyzstan, Kazakhstan, Russia – two patents, Tajikistan, Turkmenistan), Hong Kong, India, Israel, Japan
(two patents), Mexico, Philippines, Singapore, South Africa (two patents), South Korea (two patents), Taiwan (two
patents), Ukraine), pending applications in Argentina, Canada, Egypt and pending divisional applications in
Argentina, China, Hong Kong, Israel, Singapore. This patent family is directed to improved compositions (and
process of preparation thereof) of OCS-01 comprising low levels of impurities. Patents, if issued from patent
applications in this family, will expire in 2037, without giving effect to any potential patent term extensions and
patent term adjustments and assuming payment of all appropriate maintenance, renewal, annuity or other
governmental fees.
As of December 31, 2025, we also own a patent family that consisted of 10 issued U.S. patents and 1 U.S. non-
provisional patent application, one European issued patent validated in many jurisdictions (Albania, Austria,
Belgium, Bulgaria, Swiss, Cyprus, Czech republic, Germany, Denmark, Estonia, Spain, Finland, France, Great
Britain, Greece, Hungary, Croatia, Ireland, Iceland, Italy, Lithuania, Luxembourg, Latvia, Monaco, Macedonia,
Malta, Netherlands, Norway, Poland, Portugal, Romania, Serbia, Sweden, Slovenia, Slovakia, San Marino and
Turkey), one pending divisional application in Europe (directed to specific formulations of OCS-01 and methods for
stabilizing the composition for use as an eye drop), one South African issued patent, one Eurasian issued patent, one
Japan issued patent, one Singapore issued patent, one Australian issued patent and 20 additional foreign patent
applications in other jurisdictions, including one divisional European patent application, directed to specific
formulations of OCS-01 and methods for stabilizing the composition for use as an eye drop. Patents, if issued from
patent applications in this family, will expire in 2040, without giving effect to any potential patent term extensions
and patent term adjustments and assuming payment of all appropriate maintenance, renewal, annuity or other
governmental fees.
As of December 31, 2025, we also own one non-provisional U.S. pending application and two PCT pending
applications as well as pending applications in Taiwan, with claims covering a specific treatment regimen for
treating DME using OCS-01. In order for any future patent applications to claim the benefit of such PCT
application, they must be filed not later than 30 or 31 months (depending on the jurisdiction) after the earliest
priority date of such PCT application. Patents, if issued from such patent applications, will expire in 2043 or 2044,
without giving effect to any potential patent term extensions and patent term adjustments and assuming payment of
all appropriate maintenance, renewal, annuity or other governmental fees.
Licaminlimab
Regarding our Licaminlimab product candidate, as of December 31, 2025, we exclusively licensed from Novartis
under the Novartis Agreement, in the licensed field as defined in the Novartis Agreement, one patent family that
consisted of three issued U.S. patents and two granted European patents validated in 36 jurisdictions (Albania,
Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Great
Britain, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Monaco, the Netherlands,
North Macedonia, Norway, Poland, Portugal, Romania, Serbia, Slovakia, Slovenia, Spain, Sweden, Switzerland,
Turkey) and six jurisdictions (France, Germany, Great Britain, Italy, Spain, Switzerland), respectively, 22 issued
patents in other foreign jurisdictions (Argentina, Australia, Brazil, Canada, Chile (two patents), China (two patents),
India, Hong Kong (two patents), GCC, Japan (two patents), Republic of Korea, Mexico (two patents), Philippines,
Russia, South Africa, Taiwan, Ukraine) and two patent applications pending in other foreign jurisdictions, with
claims covering composition of matter of Licaminlimab or methods of use. Patents (including any patents that issue
from such patent applications) will expire in 2031, without giving effect to any potential patent term extensions and
patent term adjustments and assuming payment of all appropriate maintenance, renewal, annuity or other
governmental fees.
In addition, as of December 31, 2025, we exclusively licensed from Novartis under the Novartis Agreement, in the
licensed field as defined in the Novartis Agreement, one patent family directed on a biomarker for patient selection,
101
that consists of one issued U.S. patent and one issued Japanese patent, one pending European and one U.S. patent
applications and other patent applications pending in Canada and Japan. Patents (including any patents that issue
from such patent applications) will expire in 2037, without giving effect to any potential patent term extensions and
patent term adjustments and assuming payment of all appropriate maintenance, renewal, annuity or other
governmental fees.
In addition, as of December 31, 2025, we exclusively licensed from Novartis under the Novartis Agreement, in the
licensed field as defined in the Novartis Agreement, six additional patent families covering composition of matter of
Licaminlimab or methods of use, which (including any patents that issue from patent applications in these families)
will expire between 2023 and 2031, without giving effect to any potential patent term extensions and patent term
adjustments and assuming payment of all appropriate maintenance, renewal, annuity or other governmental fees.
Under the terms of the Novartis Agreement, Novartis is responsible for the prosecution and maintenance of these six
patent families.
Privosegtor
Regarding our Privosegtor product candidate
,
as of December 31, 2025, we exclusively licensed from Accure under
the Accure Agreement a patent family that consisted of three issued U.S. patents and one granted European patent
validated in 24 jurisdictions (Austria, Belgium, Croatia, Czech Republic, Denmark, Finland, France, Germany,
Great Britain, Greece, Hungary, Ireland, Italy, Luxembourg, Malta, the Netherlands, Norway, Poland, Portugal,
Slovenia, Spain, Sweden, Switzerland, Turkey), as well as 10 issued patents (Australia, Brazil, Canada, China, India,
Israel, Japan, Republic of Korea, Mexico, Russia) in other foreign jurisdictions, with claims covering composition of
matter of Privosegtor. These patents (including any patents that issue from such patent applications) will expire in
2031, without giving effect to any potential patent term extensions and patent term adjustments and assuming
payment of all appropriate maintenance, renewal, annuity or other governmental fees.
As of December 31, 2025, we also exclusively licensed from Accure under the Accure Agreement a patent family
that consisted of one pending non-provisional U.S. patent application, two issued patents in Australia and Japan and
7 pending foreign patent applications, including one pending European patent application (pending applications in
Australia, Canada, China, Japan and Hong Kong), directed to the method of use of the composition of Privosegtor in
combination with active compounds. Patents, if issued from such patent applications, will expire in 2040, without
giving effect to any potential patent term extensions and patent term adjustments and assuming payment of all
appropriate maintenance, renewal, annuity or other governmental fees.
As of December 31, 2025, we also exclusively licensed from Accure under the Accure Agreement a patent family
consisting of two pending non-provisional U.S. patent applications, one issued patent in China and six pending
foreign patent applications, including one pending European patent application (and pending applications in
Australia, Canada, China, Japan), with claims directed to specific dosage regimen for administering the active
pharmaceutical ingredient of Privosegtor. Patents, if issued from such patent applications, will expire in 2040,
without giving effect to any potential patent term extensions and patent term adjustments and assuming payment of
all appropriate maintenance, renewal, annuity or other governmental fees.
As of December 31, 2025, we also own a patent family consisting of pending applications in Argentina, Taiwan,
Australia, Brazil, Canada, Chile, China, Colombia, Eurasia, Europe, Egypt, Hong Kong, Israel, India, Japan, South
Korea, Mexico, New Zealand, Philippines, Singapore, Ukraine, United States and South Africa with claims covering
a manufacturing process of Privosegtor and Privosegtor intermediate synthesis compounds. Patents, if issued from
such patent applications, will expire in 2043, without giving effect to any potential patent term extensions and patent
term adjustments and assuming payment of all appropriate maintenance, renewal, annuity or other governmental
fees.
As of December 31, 2025, we also own a PCT pending application as well as pending applications in Europe,
Argentina and Taiwan, with claims covering an alternative manufacturing process of Privosegtor. In order for any
future patent applications to claim the benefit of such PCT application, they must be filed not later than 30 or 31
months (depending on the jurisdiction) after the earliest priority date of such PCT application. Patents, if issued from
such patent applications, will expire in 2045, without giving effect to any potential patent term extensions and patent
term adjustments and assuming payment of all appropriate maintenance, renewal, annuity or other governmental
fees.
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As of December 31, 2025, we also own one provisional U.S. application and two European non-published pending
applications related to OCS-05.
OCS-03
As of December 31, 2025, we own a patent family that consists of one pending U.S. non provisional application and
one pending European application, with claims covering composition of matter of OCS-03 and its use. Patents
(including any patents that issue from patent application) will expire in 2041, without giving effect to any potential
patent term extensions and patent term adjustments and assuming payment of all appropriate maintenance, renewal,
annuity or other governmental fees.
OCS-04
As of December 31, 2025, we own one patent family consisting of a U.S. non-provisional patent application and a
European patent application, with claims covering composition of matter of OCS-04 and manufacturing processes.
In order for any future patent applications to claim the benefit of such PCT application, they must be filed not later
than 30 or 31 months (depending on the jurisdiction) after the earliest priority date of such PCT application. Patents,
if issued from the patent applications claiming the benefit of such priority application, if issued, will expire in 2043,
without giving effect to any potential patent term extensions and patent term adjustments and assuming payment of
all appropriate maintenance, renewal, annuity or other governmental fees.
Our commercial success will depend in part on obtaining, maintaining, protecting and enforcing patent protection
and trade secret protection of our current and future product candidates and the methods used to develop and
manufacture them, as well as successfully defending any such patents against third-party challenges, enforcing such
patents against third-party infringers, and operating without infringing on, misappropriating or otherwise violating
the intellectual property or proprietary rights of others. Our ability to stop third parties from making, using, selling,
offering to sell or importing our product candidates will depend on the extent to which we have rights under valid
and enforceable patents or trade secrets that cover these activities. We cannot be sure that patents will be issued with
respect to any of our owned or in-licensed pending patent applications or with respect to any patent applications
filed by us or our licensors in the future, nor can we be sure that any patents that may be granted to us or our
licensors in the future will be commercially useful in protecting our product candidates, discovery programs and
processes. For this and more comprehensive risks related to our intellectual property, please see the section entitled
“
Risk Factors—Risks Related to Our Intellectual Property
.”
The terms of individual patents depend upon the legal term of the patents in the countries in which they are obtained.
In most countries in which we file, including the United States, the patent term is 20 years from the earliest date of
filing a non-provisional patent application. In the United States, a patent’s term may be lengthened by patent term
adjustment, which compensates a patentee for administrative delays by the USPTO, in examining and granting a
patent, or may be shortened if a patent is terminally disclaimed over an earlier filed patent. In the United States, the
term of a patent that covers an FDA-approved drug may also be eligible for extension, which permits patent term
restoration as compensation for the patent term lost during the FDA regulatory review process. The Hatch-Waxman
Act permits a patent term extension of up to five years beyond the expiration of the patent. The length of the patent
term extension is related to the length of time the subject drug candidate is under regulatory review. U.S. patent term
extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval,
only one patent applicable to an approved drug may be extended and only those claims covering the approved drug,
a method for using it, or a method for manufacturing it may be extended. Similar provisions to extend the term of a
patent that covers an approved drug are available in Europe and other foreign jurisdictions. In the future, if and when
our products receive FDA approval, we expect to apply for patent term extensions on patents covering those
products. We plan to seek patent term extensions to any issued patents we may obtain in any jurisdiction where such
patent term extensions are available, however there is no guarantee that the applicable authorities, including the
FDA in the United States, will agree with our assessment that such extensions should be granted, and if granted, the
length of such extensions. For more information regarding the risks related to our intellectual property, see section
entitled “
Risk Factors—Risks Related to Our Intellectual Property
.”
We file U.S. non-provisional applications and PCT applications that claim the benefit of the priority date of earlier
filed priority applications, when applicable. The PCT system allows a single application to be filed within 12 months
of the original priority date of the patent application, and to designate all of the PCT member states in which
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national patent applications can later be pursued based on the international patent application filed under the PCT.
The PCT searching authority performs a patentability search and issues a non-binding patentability opinion which
can be used to evaluate the chances of success for the national applications in foreign countries prior to having to
incur the filing fees. Although a PCT application is not issued as a patent, it allows the applicant to seek protection
in any of the member states through national-phase applications. At the end of the period of two and a half years
from the first priority date of the patent application, separate patent applications can be pursued in any of the PCT
member states either by direct national filing or, in some cases by filing through a regional patent organization, such
as the European Patent Office. The PCT system delays expenses, allows a limited evaluation of the chances of
success for national/regional patent applications and enables substantial savings where applications are abandoned
within the first two and a half years of filing.
For all patent applications, we determine claiming strategy on a case-by-case basis. Advice of counsel and our
business model and needs are always considered. We seek to file patents containing claims for protection of all
useful applications of our proprietary technologies and any product candidates, as well as all new applications and/or
uses we discover for existing technologies and product candidates, assuming these are strategically valuable. We
continuously reassess the number and type of patent applications in our portfolio, as well as the pending and issued
patent claims to pursue maximum coverage and value for our processes and compositions, given existing patent
office rules and regulations. Further, claims may be narrowed during patent prosecution, to the extent allowed, to
meet our intellectual property and business needs.
We recognize that the ability to obtain patent protection and the degree of such protection depends on a number of
factors, including the extent of the prior art, the novelty and non-obviousness of the invention, and the ability to
satisfy the enablement requirement of the patent laws. In addition, the coverage claimed in a patent application can
be significantly reduced before the patent is issued, and its scope can be reinterpreted or further altered even after
patent issuance. Consequently, we or our licensors may not obtain or maintain adequate patent protection for any of
our future product candidates or for our OPTIREACH
®
technology platform. We cannot predict whether the owned
or in-licensed patent applications we are currently pursuing will issue as patents in any particular jurisdiction or
whether the claims of any issued patents we own or in-license will provide sufficient proprietary protection from
competitors. Any patents that we own or in-license may be challenged, circumvented or invalidated by third parties.
The patent positions of biotechnology companies like ours are generally uncertain and involve complex legal,
scientific and factual questions. Our commercial success will also depend in part on not infringing upon,
misappropriating or otherwise violating the intellectual property or proprietary rights of third parties. Third-party
patents could require us to alter our development or commercial strategies, or our product candidates or processes,
obtain licenses or cease certain activities. Our breach of any license agreements or our failure to obtain a license to
intellectual property or proprietary rights required to develop or commercialize our product candidates or future
products may have a material adverse impact on us. If third parties prepare and file patent applications in the United
States that also claim technology to which we have rights, we may have to participate in interference or derivation
proceedings in the USPTO to determine priority of invention. For more information, please see the section entitled
“
Risk Factors—Risks Related to Intellectual Property
.”
In addition to patent protection, we also rely on trademark registration, trade secrets, know how, other proprietary
information and continuing technological innovation to develop and maintain our competitive position. As of
December 31, 2025, we owned five registered or pending U.S. trademarks (four of which being fractions of
international registrations), five international trademark registrations (either granted or still under examination in
several countries), 18 registered or pending national foreign trademarks (including the U.S. one). We seek to protect
and maintain the confidentiality of proprietary information to protect aspects of our business that are not amenable
to, or that we do not consider appropriate for, patent protection. Although we take steps to protect our proprietary
information and trade secrets, including through contractual means with our employees and consultants, third parties
may independently develop substantially equivalent proprietary information and techniques or otherwise gain access
to our trade secrets or disclose our technology. Thus, we may not be able to meaningfully protect our trade secrets. It
is our policy to require our employees, consultants, outside scientific collaborators, sponsored researchers and other
advisors to execute confidentiality agreements upon the commencement of employment or consulting relationships
with us. These agreements provide that all confidential information concerning our business or financial affairs
developed or made known to the individual during the course of the individual’s relationship with us is to be kept
confidential and not disclosed to third parties except in specific circumstances. Our agreements with employees also
provide that all inventions conceived by the employee in the course of employment with us or from the employee’s
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use of our confidential information are our exclusive property. However, such confidentiality agreements and
invention assignment agreements can be breached and we may not have adequate remedies for any such breach. In
addition, our trade secrets may otherwise become known or be independently discovered by competitors. To the
extent that our consultants, contractors or collaborators use intellectual property owned by others in their work for
us, disputes may arise as to the rights in related or resulting trade secrets, know-how and inventions. For more
information regarding the risks related to our intellectual property, please see the section entitled
“
Risk
Factors—Risks Related to Intellectual Property
.”
When available to expand market exclusivity, our strategy is to obtain, or license additional intellectual property or
proprietary rights related to current or contemplated development platforms, core elements of technology and/or
clinical candidates.
Government Regulation
Government authorities in the United States at the federal state and local level, and other countries extensively
regulate, among other things, the research, development, nonclinical and clinical testing, manufacture, quality
control, approval, labeling, packaging, storage, record-keeping, promotion, advertising, distribution, post-approval
monitoring and reporting, marketing, and export and import of products such as those we are developing. Generally,
before a new drug or biologic can be marketed, considerable data must be generated, which demonstrate the
product’s quality, safety, and efficacy. Such data must then be organized into a format specific for each regulatory
authority, submitted for review and approved by the regulatory authority.
U.S. Drug and Biologic Development Process
In the United States, the FDA regulates drugs and biologics under the federal FDCA, and its implementing
regulations. Biologics are additionally subject to regulations under the Public Health Service Act. The process of
obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local and foreign
statutes and regulations require the expenditure of substantial time and financial resources. Failure to comply with
the applicable U.S. requirements at any time during the product development process, the approval process or after
approval may subject an applicant to administrative or judicial sanctions. These sanctions could include the FDA’s
refusal to approve pending applications, withdrawal of an approval, a clinical hold, warning letters, product recalls,
product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government
contracts, restitution, disgorgement, or civil or criminal penalties. Any agency or judicial enforcement action could
have a material adverse effect on us.
The process required by the FDA before a biopharmaceutical may be marketed in the United States generally
involves the following:
•
completion of nonclinical laboratory tests, animal studies, and formulation studies in accordance with
FDA’s good laboratory requirements and other applicable regulations;
•
submission to the FDA of an IND, which must become effective before human clinical trials may begin;
•
approval by an independent IRB ethics committee, either centralized or with respect to each clinical site,
before each clinical trial may be initiated;
•
performance of adequate and well-controlled human clinical trials in accordance with cGCP
requirements to establish the safety and efficacy of the proposed drug (or the safety, purity and potency
of the proposed biologic) for its intended use;
•
submission to the FDA of an NDA or BLA after completion of all pivotal trials;
•
determination by the FDA within 60 days of its receipt of an NDA or BLA to accept the filing for
substantive review;
•
satisfactory completion of an FDA advisory committee review, if applicable;
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•
satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the
biopharmaceutical is produced to assess compliance with cGMP regulations to ensure that the facilities,
methods and controls are adequate to preserve the biopharmaceutical’s identity, strength, quality, and
purity, and of selected clinical investigation sites to assess compliance with GCPs; and
•
FDA review and approval of the NDA or BLA to permit commercial marketing of the product for
particular indications for use in the United States.
Prior to beginning the first clinical trial with a product candidate in the United States, we must submit an IND to the
FDA. An IND is a request for authorization from the FDA to administer an IND product to humans. The central
focus of an IND submission is on the general investigational plan and the protocol(s) for clinical studies. The IND
also includes results of animal and
in vitro
studies assessing the toxicology, PK, pharmacology, and
pharmacodynamic characteristics of the product; chemistry, manufacturing, and controls information; and any
available human data or literature to support the use of the investigational product. An IND must become effective
before human clinical trials may begin. The IND automatically becomes effective 30 days after receipt by the FDA,
unless the FDA, within the 30-day time period, raises safety concerns or questions about the proposed clinical trial.
In such a case, the IND may be placed on clinical hold and the IND sponsor and the FDA must resolve any
outstanding concerns or questions before the clinical trial can begin. Submission of an IND therefore may or may
not result in FDA authorization to begin a clinical trial.
Clinical trials involve the administration of the investigational product to human subjects under the supervision of
qualified investigators in accordance with GCPs, which include the requirement that all research subjects provide
their informed consent for their participation in any clinical study. Clinical trials are conducted under protocols
detailing, among other things, the objectives of the study, the parameters to be used in monitoring safety and the
effectiveness criteria to be evaluated. A separate submission to the existing IND must be made for each successive
clinical trial conducted during product development and for any subsequent protocol amendments. Furthermore, an
independent IRB for each site proposing to conduct the clinical trial must review and approve the plan for any
clinical trial and its informed consent form before the clinical trial begins at that site and must monitor the study
until completed. Regulatory authorities, the IRB or the sponsor may suspend a clinical trial at any time on various
grounds, including a finding that the subjects are being exposed to an unacceptable health risk or that the clinical
trial is unlikely to meet its stated objectives. Some studies also include oversight by an independent group of
qualified experts organized by the clinical study sponsor, known as a data safety monitoring board, which may
review data and endpoints at designated check points, make recommendations and/or halt the clinical trial if it
determines that there is an unacceptable safety risk for subjects or other grounds, such as no demonstration of
efficacy. There are also requirements governing the reporting of ongoing clinical studies and clinical study results to
public registries.
Human clinical trials are typically conducted in three sequential phases that may overlap or be combined:
Phase One
: Phase 1 clinical trials are designed to test a new therapy in a small group of people for the first time to
evaluate safety (e.g., to determine a safe dosage range and to identify adverse effects). It can include healthy
participants or patients.
Phase Two
: Phase 2 clinical trials are designed to study an investigational therapy in a larger group of people to
determine efficacy and to further evaluate its safety. It is conducted in participants with the condition or disease
under study and will determine common short-term adverse effects and risks.
Phase Three
: Phase 3 clinical trials are designed to study the efficacy of the investigational therapy in large groups
of patients by comparing the therapy to other standard or experimental therapies as well as to monitor adverse
effects, and to collect information that will allow the therapy being studied to be used safely.
Post-approval clinical trials, sometimes referred to as Phase 4 studies, may be conducted after initial marketing
approval. These clinical trials are used to gain additional experience from the treatment of patients in the intended
therapeutic indication. In certain instances, the FDA may mandate the performance of Phase 4 clinical trials as a
condition of approval of an NDA or BLA.
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The FDA or the sponsor may suspend a clinical trial at any time on various grounds, including a finding that the
research subjects or patients are being exposed to an unacceptable health risk. Similarly, an IRB can suspend or
terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the
IRB’s requirements or if the drug has been associated with unexpected serious harm to patients. In addition, some
clinical trials are overseen by an independent group of qualified experts organized by the sponsor, known as a data
safety monitoring board or committee. Depending on its charter, this group may determine whether a clinical trial
may move forward at designated check points based on access to certain data from the clinical trial.
During the development of a new biopharmaceutical, sponsors are given opportunities to meet with the FDA at
certain points. These points may be prior to submission of an IND, at the end of Phase 2, and before an NDA or
BLA is submitted. Meetings at other times may be requested. These meetings can provide an opportunity for the
sponsor to share information about the data gathered to date, for the FDA to provide advice, and for the sponsor and
the FDA to reach agreement on the next phase of development. Sponsors typically use the meetings at the end of the
Phase 2 clinical trial to discuss Phase 2 clinical results and present plans for the pivotal Phase 3 clinical trials that
they believe will support approval of the new drug.
Concurrent with clinical trials, companies usually complete additional animal studies and must also develop
additional information about the chemistry and physical characteristics of the drug and finalize a process for
manufacturing the product in commercial quantities in accordance with cGMP regulations. The manufacturing
process must be capable of consistently producing quality batches of the product candidate and, among other things,
the manufacturer must develop methods for testing the identity, strength, quality, and purity of the final product. In
addition, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate
that the product candidate does not undergo unacceptable deterioration over its shelf life.
While the IND is active and before approval, progress reports summarizing the results of the clinical trials and
nonclinical studies performed since the last progress report must be submitted at least annually to the FDA, and
written IND safety reports must be submitted to the FDA and investigators for serious and unexpected suspected
AEs, findings from other studies suggesting a significant risk to humans exposed to the same or similar drugs,
findings from animal or
in vitro
testing suggesting a significant risk to humans, and any clinically important
increased incidence of a serious suspected adverse reaction compared to that listed in the protocol or investigator
brochure.
NDA or BLA Review and Approval Process
Assuming successful completion of all required testing in accordance with all applicable regulatory requirements,
the results of product development nonclinical and clinical trials, along with descriptions of the manufacturing
process, analytical tests conducted on the chemistry of the drug, proposed labeling and other relevant information
are submitted to the FDA as part of an NDA or BLA requesting approval to market the product. The submission of
an NDA or BLA is subject to the payment of substantial user fees, although a waiver of such fees may be obtained
under certain limited circumstances. Additionally, no user fees are assessed on NDAs or BLAs for products
designated as orphan drugs, unless the product also includes a non-orphan indication.
The FDA reviews an NDA or BLA to determine, among other things, whether a drug is safe and effective (or a
biologic is safe, pure and potent) for its intended use and whether its manufacturing is cGMP-compliant to assure
and preserve the product’s identity, strength, quality, and purity. Under the Prescription Drug User Fee Act
(PDUFA) guidelines, the FDA has a goal of ten months from the date of “filing” of a standard NDA or BLA for a
new molecular entity to review and act on the submission. This review typically takes 12 months from the date the
NDA or BLA is submitted to FDA because the FDA has approximately two months to make a “filing” decision after
the application is submitted. The FDA conducts a preliminary review of all NDAs or BLAs within the first 60 days
after submission, before accepting them for filing, to determine whether they are sufficiently complete to permit
substantive review. The FDA may request additional information rather than accept an NDA or BLA for filing. In
this event, the application must be resubmitted with the additional information. The resubmitted application is also
subject to review before the FDA accepts it for filing.
The FDA may refer an application for a novel drug to an advisory committee. An advisory committee is a panel of
independent experts, including clinicians and other scientific experts, that reviews, evaluates and provides a
recommendation as to whether the application should be approved and under what conditions. The FDA is not
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bound by the recommendations of an advisory committee, but it considers such recommendations carefully when
making decisions.
Before approving an NDA or BLA, the FDA will typically inspect the facility or facilities where the product is
manufactured. The FDA will not approve an application unless it determines that the manufacturing processes and
facilities are in compliance with cGMP regulations and adequate to assure consistent production of the product
within required specifications. Additionally, before approving an NDA or BLA, the FDA will typically inspect one
or more clinical sites to assure compliance with GCPs. If the FDA determines that the application, manufacturing
process, or manufacturing facilities are not acceptable, it will outline the deficiencies in the submission and often
will request additional testing or information. Notwithstanding the submission of any requested additional
information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval.
After the FDA evaluates an NDA or BLA, it will issue an approval letter or a Complete Response Letter. An
approval letter authorizes commercial marketing of the product with prescribing information for specific indications.
A Complete Response Letter indicates that the review cycle of the application is complete, and the application will
not be approved in its present form. A Complete Response Letter usually describes the specific deficiencies in the
application identified by the FDA and may require additional clinical data, such as an additional pivotal Phase 3
clinical trial or other significant and time-consuming requirements related to clinical trials, nonclinical studies, or
manufacturing. If a Complete Response Letter is issued, the sponsor must resubmit the application, addressing all of
the deficiencies identified in the letter, or withdraw the application. Even if such data and information are submitted,
the FDA may decide that the application does not satisfy the criteria for approval.
If regulatory approval of a product is granted, such approval will be granted for particular indications and may entail
limitations on the indicated uses for which such product may be marketed. For example, the FDA may approve the
application with a Risk Evaluation and Mitigation Strategy (
“REMS”)
to ensure the benefits of the product outweigh
its risks. A REMS is a safety strategy to manage a known or potential serious risk associated with a medicine and to
enable patients to have continued access to such medicines by managing their safe use. It could include medication
guides, physician communication plans, or elements to assure safe use, such as restricted distribution methods,
patient registries, and other risk minimization tools. The FDA also may offer conditional approval subject to, among
other things, changes to proposed labeling or the development of adequate controls and specifications. Once
approved, the FDA may withdraw the product approval if compliance with pre- and post-marketing requirements is
not maintained or if problems occur after the product reaches the marketplace. The FDA may also require one or
more Phase 4 post-market studies and surveillance to further assess and monitor the product’s safety and
effectiveness after commercialization, and may limit further marketing of the product based on the results of these
post-marketing studies. In addition, new government requirements, including those resulting from new legislation,
may be established, or the FDA’s policies may change, which could impact the timeline for regulatory approval or
otherwise impact ongoing development programs.
Orphan Drug Designation
Under the Orphan Drug Act, the FDA may grant orphan designation to a drug or biological product intended to treat
a rare disease or condition, which is generally a disease or condition that affects fewer than 200,000 individuals in
the United States, or more than 200,000 individuals in the United States and for which there is no reasonable
expectation that the cost of developing and making a drug or biological product available in the United States for
this type of disease or condition will be recovered from sales of the product. Orphan product designation must be
requested before submitting a BLA. After the FDA grants orphan product designation, the identity of the therapeutic
agent and its potential orphan use are disclosed publicly by the FDA.
Orphan product designation does not convey any advantage in or shorten the duration of the regulatory review and
approval process. Orphan drug designation entitles a party to financial incentives such as opportunities for grant
funding towards clinical trial costs, tax advantages and user-fee waivers. If a product that has orphan designation
subsequently receives the first FDA approval for the disease or condition for which it has such designation, the
product is entitled to orphan product exclusivity, which means that the FDA may not approve any other applications
to market the same drug or biological product for the same indication for seven years, except in limited
circumstances, such as a showing of clinical superiority to the product with orphan exclusivity. Competitors,
however, may receive approval of different products for the indication for which the orphan product has exclusivity
or obtain approval for the same product but for a different indication for which the orphan product has exclusivity. If
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a drug or biological product designated as an orphan product receives marketing approval for an indication broader
than what is designated, it may not be entitled to orphan product exclusivity. Orphan drug designation status in the
EU has similar, but not identical, benefits.
Post-Approval Requirements
Any products manufactured or distributed by us pursuant to FDA approvals are subject to pervasive and continuing
regulation by the FDA, including, among other things, requirements relating to record-keeping, reporting of adverse
experiences, periodic reporting, product sampling and distribution, and advertising and promotion of the product.
After approval, most changes to the approved product, such as adding new indications or other labeling claims, are
subject to prior FDA review and approval. There are continuing, annual program fees for any marketed products.
Drug manufacturers and their subcontractors are required to register their establishments with the FDA and certain
state agencies, and are subject to periodic unannounced inspections by the FDA and certain state agencies for
compliance with cGMP regulations, which impose certain procedural and documentation requirements upon us and
our third-party manufacturers. Changes to the manufacturing process are strictly regulated, and, depending on the
significance of the change, may require prior FDA approval before being implemented. FDA regulations also
require investigation and correction of any deviations from cGMP regulations and impose reporting requirements
upon us and any third-party manufacturers that we may decide to use. Accordingly, manufacturers must continue to
expend time, money, and effort in the area of production and quality control to maintain compliance with cGMP
regulations and other aspects of regulatory compliance.
The FDA may withdraw approval if compliance with regulatory requirements and standards is not maintained or if
problems occur after the product reaches the market. Later discovery of previously unknown problems with a
product, including AEs of unanticipated severity or frequency, or with manufacturing processes, or failure to comply
with regulatory requirements, may result in revisions to the approved labeling to add new safety information;
imposition of post-market studies or clinical studies to assess new safety risks; or imposition of distribution
restrictions or other restrictions under a REMS program. Other potential consequences include, among other things:
•
restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from
the market or product recalls;
•
fines, warning letters, or untitled letters;
•
clinical holds on post-approval or Phase 4 clinical studies, if applicable;
•
refusal of the FDA to approve pending applications or supplements to approved applications, or
suspension or revocation of product license approvals;
•
product seizure or detention, or refusal to permit the import or export of products;
•
consent decrees, corporate integrity agreements, debarment, or exclusion from federal healthcare
programs; or
•
mandated modification of promotional materials and labeling and the issuance of corrective information.
The FDA closely regulates the marketing, labeling, advertising, and promotion of biopharmaceutical products. A
company can make only those claims relating to safety and efficacy that are approved by the FDA and in accordance
with the provisions of the approved label. The FDA and other agencies actively enforce the laws and regulations
prohibiting the promotion of off-label uses. Failure to comply with these requirements can result in, among other
things, adverse publicity, warning letters, corrective advertising, and potential civil and criminal penalties.
Physicians may prescribe, in their independent professional medical judgment, legally available products for uses
that are not described in the product’s labeling and that differ from those tested by us and approved by the FDA.
Physicians may believe that such off-label uses are the best treatment for many patients in varied circumstances. The
FDA does not regulate the behavior of physicians in their choice of treatments. The FDA does, however, restrict
manufacturer’s communications on the subject of off-label use of their products. The federal government has levied
large civil and criminal fines against companies for alleged improper promotion of off-label use and has enjoined
companies from engaging in off-label promotion. The FDA and other regulatory agencies have also required that
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companies enter into consent decrees or permanent injunctions under which specified promotional conduct is
changed or curtailed. However, companies may share truthful and not misleading information that is otherwise
consistent with a product’s FDA-approved labeling.
Marketing Exclusivity
Market exclusivity provisions authorized under the FDCA can delay the submission and approval of certain
marketing applications for products containing the same active ingredient. The FDCA permits patent term
restoration of up to five years as compensation for a patent term lost during product development and FDA
regulatory review process to the first applicant to obtain approval of an NDA for a new chemical entity in the United
States. Patent-term restoration, however, cannot extend the remaining term of a patent beyond a total of 14 years
from the product’s approval date. A drug is a new chemical entity if the FDA has not previously approved any other
new drug containing the same active moiety, which is the molecule or ion responsible for the action of the drug
substance. During the exclusivity period, the FDA may not approve or even accept for review an abbreviated new
drug application (“
ANDA
”) or an NDA submitted under Section 505(b)(2) (“
505(b)(2) NDA
”), submitted by another
company for another drug based on the same active moiety, regardless of whether the drug is intended for the same
indication as the original innovative drug or for another indication, where the applicant does not own or have a legal
right of reference to all the data required for approval. However, an application may be submitted after four years if
it contains a certification of patent invalidity or non-infringement to one of the patents listed with the FDA by the
innovator NDA holder.
The FDCA alternatively provides three years of marketing exclusivity for an NDA, or supplement to an existing
NDA if new clinical investigations, other than bioavailability studies, that were conducted or sponsored by the
applicant are deemed by the FDA to be essential to the approval of the application, for example new indications,
dosages, or strengths of an existing drug. This three-year exclusivity covers only the modification for which the drug
received approval on the basis of the new clinical investigations and does not prohibit the FDA from approving
ANDAs or 505(b)(2) NDAs for drugs containing the active agent for the original indication or condition of use.
Five-year and three-year exclusivity will not delay the submission or approval of a full NDA. However, an applicant
submitting a full NDA would be required to conduct or obtain a right of reference to any nonclinical studies and
adequate and well-controlled clinical trials necessary to demonstrate safety and effectiveness.
Pediatric exclusivity is another type of marketing exclusivity available in the United States. Pediatric exclusivity
provides for an additional six months of marketing exclusivity attached to another period of exclusivity if a sponsor
conducts clinical trials in children in response to a written request from the FDA. The issuance of a written request
does not require the sponsor to undertake the described clinical trials. In addition, orphan drug exclusivity, as
described above, may offer a seven-year period of marketing exclusivity, except in certain circumstances.
Section 505(b)(2) NDAs
A special type of NDA, commonly referred to as a Section 505(b)(2) NDA, enables the applicant in certain
circumstances to rely, in part, on the FDA’s prior findings in approving a similar product or published literature in
support of its application. A Section 505(b)(2) NDA may provide an alternate path to FDA approval for a new or
improved formulation, a new route of administration, or a new use of a previously approved product. Section
505(b)(2) permits the submission of an NDA where at least some of the information required for approval comes
from studies not conducted by, or for, the applicant and for which the applicant has not obtained a right of reference.
If the Section 505(b)(2) applicant can establish that reliance on the FDA’s prior findings of safety and/or
effectiveness is scientifically appropriate, it may eliminate the need to conduct certain preclinical or clinical studies
of the new product. The FDA may also require companies to perform additional studies or measurements to support
the change from the approved product. The FDA may then approve the new product candidate for all, or some, of
the indications for which the referenced product has been approved, as well as for any new indication sought by the
Section 505(b)(2) applicant. If we choose to rely on the 505(b)(2) process to seek approval for OCS-01, there can be
no assurance that the FDA will agree with our use of that pathway.
To the extent that the Section 505(b)(2) applicant is relying on the FDA’s prior findings of safety or effectiveness
for an already approved product, the applicant is required to certify to the FDA concerning any patents listed for the
approved product in the Orange Book to the same extent that an ANDA applicant would. Thus, approval of a
Section 505(b)(2) NDA can be stalled until all the listed patents claiming the referenced product have expired, until
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any non-patent exclusivity, such as exclusivity for obtaining approval of a new chemical entity, listed in the Orange
Book for the referenced product has expired, and, in the case of a Paragraph IV certification and subsequent patent
infringement suit, until the earlier of 30 months, settlement of the lawsuit or a decision in the infringement case that
is favorable to the Section 505(b)(2) applicant.
FDA Approval and Regulation of Companion Diagnostics
A therapeutic product may rely upon an
in vitro
companion diagnostic for use in selecting the patients that will be
more likely to respond to that therapy. If the FDA determines that a companion diagnostic device is essential to the
safe and effective use of a novel therapeutic product or indication, the FDA generally will not approve the
therapeutic product or new therapeutic product indication if the companion diagnostic device is not approved or
cleared for that indication. Approval or clearance of the companion diagnostic device will ensure that the device has
been adequately evaluated and has adequate performance characteristics in the intended population. The review of
in
vitro
companion diagnostics in conjunction with the review of our therapeutic product candidate Licaminlimab
(OCS-02) will, therefore, likely involve coordination of review by the FDA’s Center for Biologics Evaluation and
Research and the FDA’s Center for Devices and Radiological Health.
Under the FDCA,
in vitro
diagnostics, including companion diagnostics, are regulated as medical devices. In the
United States, the FDCA and its implementing regulations, and other federal and state statutes and regulations
govern, among other things, medical device design and development, preclinical and clinical testing, premarket
clearance or approval, registration and listing, manufacturing, labeling, storage, advertising and promotion, sales and
distribution, export and import, and post-market surveillance. Unless an exemption applies, diagnostic tests require
marketing clearance or approval from the FDA prior to commercial distribution. The three primary types of FDA
marketing authorization applicable to a medical device include premarket notification, also called 510(k) clearance,
premarket approval (“
PMA
”), and
de novo
classification requests.
EU/Rest of World Regulation
Conduct of Clinical Trials in the EU
In addition to regulations in the United States, there are a variety of regulations in other jurisdictions governing,
among other things, clinical trials, commercial sales and distribution of medicinal products. Even if FDA approval
of a particular product is obtained, it must still obtain the requisite approvals from regulatory authorities in foreign
countries prior to the commencement of clinical trials or marketing of the product in those countries. Certain
countries outside of the United States have a similar process that requires the submission of a clinical trial
application much like the IND prior to the commencement of human clinical trials.
In the EU, the Clinical Trials Regulation (EU) No 536/2014 entered into application on January 31, 2022. The
Regulation is intended to harmonize and streamline clinical trial authorizations, simplify adverse-event reporting
procedures, improve the supervision of clinical trials and increase their transparency. Specifically, the new
Regulation, which is directly applicable in all EU Member States, introduces a streamlined application procedure via
a single entry point, the “EU portal,” the Clinical Trials Information System (“
CTIS
”); a single set of documents to
be prepared and submitted for the application as well as simplified reporting procedures for clinical trial sponsors. A
harmonized procedure for the assessment of applications for clinical trials has been introduced and is divided into
two parts. Part I is assessed by the competent authorities of a reference member state selected by the trial sponsor
largely of the type of clinical trial, risk-benefit analysis, and compliance with technical requirements. This
assessment is then submitted to the competent authorities of all the concerned member states in which the trial is to
be conducted for their review. Part II is assessed separately by the competent authorities and ECs in each EU
member state concerned. Individual EU Member States shall retain the power to authorize the conduct of clinical
trials on their territory. The CTR foresaw a three-year transition period that ended on January 31, 2025. Since this
date, all new or ongoing trials are subject to the provisions of the CTR.
Pathways to Obtain a Marketing Authorization in the EU
In the European Economic Area, which consists of the 27 Member States of the European Union, as well as
Norway, Iceland and Liechtenstein, medicinal products can only be commercialized after a related marketing
authorization has been granted. A company may submit an MAA on the basis of the centralized, decentralized or
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mutual recognition procedure. Under the centralized procedure, MAAs are submitted to the EMA for scientific
review by the EMA’s Committee for Medicinal Products for Human Use (“
CHMP
”). The CHMP issues an opinion
concerning whether the quality, safety and efficacy of the product has been demonstrated. The opinion is considered
by the European Commission which is responsible for granting a centralized marketing authorization in the form of
a binding European Commission decision. If the application is approved, the European Commission grants a single
marketing authorization that is valid throughout the EEA. The centralized procedure is mandatory for certain types
of products, such as biotechnology medicinal products, orphan medicinal products, advanced-therapy medicines
such as gene-therapy, somatic cell-therapy or tissue-engineered medicines and medicinal products containing a new
active substance indicated for the treatment of HIV, AIDS, cancer, neurodegenerative disorders, diabetes, auto-
immune and other immune dysfunctions and viral diseases. The centralized procedure is optional for products
containing a new active substance not yet authorized in the EEA, or for products that constitute a significant
therapeutic, scientific or technical innovation or which are in the interest of public health in the European Union.
National marketing authorizations, which are issued by the competent authorities of EEA countries and only cover
their respective territory, are available for products not falling within the mandatory scope of the centralized
procedure. Where a product has already been authorized for marketing in an EEA country, this national marketing
authorization can be recognized in another EEA country through the mutual recognition procedure. The mutual
recognition procedure provides for the EEA countries selected by the applicant to mutually recognize a national
marketing authorization that has already been granted by the competent authority of another EEA country, referred
to as the Reference Member State (“
RMS
”). The decentralized procedure is used when the product in question has
yet to be granted a marketing authorization in any EEA country. Under this procedure the applicant can select the
EEA country that will act as the RMS. In both the mutual recognition and decentralized procedures, the RMS
reviews the application and submits its assessment of the application to the EEA countries for which marketing
authorizations are being sought, referred to as Concerned Member States.
Within 90 days of receiving the application and assessment report, each Concerned Member State must decide
whether to recognize the RMS assessment or reject it on the basis of potential serious risk to public health. If the
disputed points cannot be resolved, the matter is first referred to the Heads of Medicines Agencies’ Coordination
Group for Mutual Recognition and Decentralized Procedures for agreement. If the Heads of Medicines Agencies’
Coordination Group for Mutual Recognition and Decentralized Procedures cannot reach an agreement, a referral is
made to the EMA. The CHMP will provide an opinion that will form the basis of a decision to be issued by the
European Commission that is binding on all EEA countries. If the application is successful during the decentralized
or mutual recognition procedure, national marketing authorizations will be granted by the competent authorities in
each of the EEA countries chosen by the applicant.
In principle, a marketing authorization has an initial validity of five years. The marketing authorization may be
renewed after five years on the basis of a re-evaluation of the risk-benefit balance by the EMA or by the competent
authority of the EEA country in which the original marketing authorization was granted. To support the application,
the marketing authorization holder must provide the EMA or the competent authority with a consolidated version of
the eCTD (Common Technical Document) providing up to date data concerning the quality, safety and efficacy of
the product, including all variations introduced since the marketing authorization was granted, at least nine months
before the marketing authorization ceases to be valid. The European Commission or the competent authorities of the
EEA countries may decide, on justified grounds relating to pharmacovigilance, to proceed with one further five year
renewal period for the marketing authorization. Once subsequently definitively renewed, the marketing
authorization shall be valid for an unlimited period. Any authorization which is not followed by the actual placing of
the medicinal product on the EU market (in case of centralized procedure) or on the market of the authorizing EEA
country within three years after authorization ceases to be valid (the so-called sunset clause).
In the EU, conditional marketing authorizations may be granted in the centralized procedure for a limited number of
medicinal products for human use in cases where the related clinical dataset is not yet complete. A conditional
marketing authorization may be granted for a medicinal product, if (i) the risk-benefit balance of the product is
positive, (ii) it is likely that the applicant will be in a position to provide the required comprehensive data after the
authorization, (iii) the medicinal product fulfills unmet medical needs and (iv) the benefit to public health of the
immediate availability on the market of the medicinal product outweighs the risk inherent in the fact that additional
data are still required. The authorization is valid for one year and must be renewed annually until all related
conditions have been fulfilled. Once any pending studies are provided, the conditional marketing authorization can
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be converted into a traditional marketing authorization. However, if the conditions are not fulfilled within the
timeframe set by the EMA, the marketing authorization will cease to be renewed.
A marketing authorization may also be granted “under exceptional circumstances” where the applicant can show
that it is unable to provide comprehensive data on the efficacy and safety under normal conditions of use even after
the product has been authorized and subject to specific procedures being introduced. These circumstances may arise
in particular when the intended indications are very rare and, in the state of scientific knowledge at that time, it is not
possible to provide comprehensive information, or when generating data may be contrary to generally accepted
ethical principles. Like a conditional marketing authorization, a marketing authorization granted in exceptional
circumstances is reserved to medicinal products intended to be authorized for treatment of rare diseases or unmet
medical needs for which the applicant does not hold a complete data set that is required for the grant of a standard
marketing authorization. However, unlike the conditional marketing authorization, an applicant for authorization in
exceptional circumstances is not subsequently required to provide the missing data. Although the marketing
authorization “under exceptional circumstances” is granted definitively, the risk-benefit balance of the medicinal
product is reviewed annually and the marketing authorization is withdrawn in case the risk-benefit ratio is no longer
favorable.
Innovative products that target an unmet medical need and are expected to be of major public health interest may be
eligible for a number of expedited development and review programs, such as the Priority Medicines (“
PRIME
”),
scheme, which provides incentives similar to the Breakthrough Therapy designation in the U.S. PRIME is a
voluntary scheme aimed at enhancing the EMA’s support for the development of medicinal products that target
unmet medical needs. It permits increased interaction and early dialogue with companies developing promising
medicinal products, to optimize their product development plans and speed up their evaluation to help the product
reach patients earlier than normal. Product developers that benefit from PRIME designation are potentially eligible
for accelerated assessment of their MAA although this is not guaranteed. Benefits accrue to sponsors of product
candidates with PRIME designation, including but not limited to, early and proactive regulatory dialogue with the
EMA, frequent discussions on clinical trial designs and other development program elements, and potentially
accelerated MAA assessment once a dossier has been submitted.
In addition to an MAA, various other requirements apply to the manufacturing and placing on the EU market of
medicinal products. Manufacture of medicinal products in the EU requires a manufacturing authorization, and
import of medicinal products into the EU requires a manufacturing authorization allowing for import. The
manufacturing authorization holder must comply with various requirements set out in the applicable EU laws,
regulations and guidance. These requirements include compliance with EU GMP standards when manufacturing
medicinal products and APIs, including the manufacture of APIs outside of the EU with the intention to import the
APIs into the Union. Similarly, the distribution of medicinal products within the EU is subject to compliance with
the applicable EU laws, regulations and guidelines, including the requirement to hold appropriate authorizations for
distribution granted by the competent authorities of the EU member states. Marketing authorization holders and/or
manufacturing and import authorization (MIA) holders and/or distribution authorization holders may be subject to
civil, criminal or administrative sanctions, including suspension of manufacturing authorization, in case of non-
compliance with the EU or EU member states’ requirements applicable to the manufacturing of medicinal products.
Data and Market Exclusivity
In the EU, innovative medicinal products that are subject to marketing authorization on the basis of a full dossier
and do not fall within the scope of the concept of global marketing authorization qualify for eight years of data
exclusivity upon marketing authorization and an additional two years of market exclusivity. The concept of global
marketing authorization prevents the same marketing authorization holder or members of the same group, or
companies that have concluded tacit or explicit agreements concerning the marketing of the same medicinal product,
from obtaining separate data and market exclusivity periods for medicinal products that contain the same active
substance. Data exclusivity, if granted, prevents regulatory authorities in the European Union from referencing the
innovator’s data to assess a generic application or biosimilar application for eight years from the date of
authorization of the innovative product, after which a generic or biosimilar marketing authorization application can
be submitted, and the innovator’s data may be referenced. However, the generic product or biosimilar products
cannot be marketed in the EU for a further two years thereafter. The overall ten-year period may be extended for a
further year to a maximum of 11 years if, during the first eight years of those ten years, the marketing authorization
holder obtains an authorization for one or more new therapeutic indications which, during the scientific evaluation
prior to their authorization, are held to bring a significant clinical benefit in comparison with existing therapies.
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However, there is no guarantee that a product will be considered by the EU’s regulatory authorities to be a new
chemical/biological entity, and products may not qualify for data exclusivity.
Pediatric Development
In the EU, Regulation (EC) No 1901/2006 provides that all MAAs for new medicinal products must include the
results of trials conducted in the pediatric population, in compliance with a pediatric investigation plan (“
PIP
”),
agreed with the EMA’s Pediatric Committee (“
PDCO
”). The PIP sets out the timing and measures proposed to
generate data to support a pediatric indication of the medicinal product for which marketing authorization is being
sought. The PDCO may grant a deferral of the obligation to implement some or all of the measures provided in the
PIP until there are sufficient data to demonstrate the efficacy and safety of the product in adults. Furthermore, the
obligation to provide pediatric clinical trial data can be waived by the PDCO when these data are not needed or
appropriate because the product is likely to be ineffective or unsafe in children, the disease or condition for which
the product is intended occurs only in adult populations, or when the product does not represent a significant
therapeutic benefit over existing treatments for pediatric patients. Once the marketing authorization is obtained in all
EU Member States and study results are included in the product information, even when negative, the product is
eligible for a six-month extension to the Supplementary Protection Certificate or SPC if any is in effect at the time
of authorization or, in the case of orphan medicinal products, a two-year extension of orphan market exclusivity. For
other countries outside of the European Union, such as certain countries in Eastern Europe, Latin America or Asia,
the requirements governing the conduct of clinical trials, product approval, pricing and reimbursement vary from
country to country. In all cases, the clinical trials are to be conducted in accordance with GCP and the applicable
regulatory requirements and the ethical principles that have their origin in the Declaration of Helsinki.
Orphan Medicinal Products
Regulation (EC) No. 141/2000, as implemented by Regulation (EC) No. 847/2000 provides that a medicinal product
can be designated as an orphan medicinal product by the European Commission if its sponsor can establish that: (i)
the product is intended for the diagnosis, prevention or treatment of life-threatening or chronically debilitating
conditions; (ii) either (a) such conditions affect not more than 5 in 10,000 persons in the EU when the application is
made, or (b) the product without the benefits derived from orphan status, would not generate sufficient return in the
EU to justify the necessary investment in developing the medicinal product; and (iii) there exists no satisfactory
authorized method of diagnosis, prevention, or treatment of the condition that has been authorized in the EU, or even
if such method exists, the product will be of significant benefit to those affected by that condition.
Orphan medicinal product designation entitles an applicant to incentives such fee reductions or fee waivers, protocol
assistance, and access to the centralized marketing authorization procedure. Upon grant of a marketing
authorization, orphan medicinal products are entitled to a ten-year period of market exclusivity for the approved
therapeutic indication, which means that the EMA cannot accept another marketing authorization application, or
grant a marketing authorization, or accept an application to extend a marketing authorization for a similar product
for the same indication for a period of ten years. The period of market exclusivity is extended by two years for
orphan medicinal products that have also complied with an agreed PIP. No extension to any supplementary
protection certificate can be granted on the basis of pediatric studies for orphan indications. Orphan medicinal
product designation does not convey any advantage in, or shorten the duration of, the regulatory review and
approval process.
The period of market exclusivity may, however, be reduced to six years if, at the end of the fifth year, it is
established that the product no longer meets the criteria on the basis of which it received orphan medicinal product
destination, including where it can be demonstrated on the basis of available evidence that the original orphan
medicinal product is sufficiently profitable not to justify maintenance of market exclusivity or where the prevalence
of the condition has increased above the threshold. Additionally, a marketing authorization may be granted to a
similar medicinal product with the same orphan indication during the 10 year period if: (i) if the applicant consents
to a second original orphan medicinal product application; (ii) if the manufacturer of the original orphan medicinal
product is unable to supply sufficient quantities; or (iii) if the second applicant can establish that its product,
although similar, is safer, more effective or otherwise clinically superior to the original orphan medicinal product. A
company may voluntarily remove a product from the register of orphan products.
Post-Approval Requirements
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Where a marketing authorization is granted in relation to a medicinal product in the EU, the holder of the marketing
authorization is required to comply with a range of regulatory requirements applicable to the manufacturing,
marketing, promotion and sale of medicinal products.
Similar to the United States, both marketing authorization holders and manufacturers of medicinal products are
subject to comprehensive regulatory oversight by the EMA, the European Commission and/or the competent
regulatory authorities of the individual EEA countries. The holder of a marketing authorization must establish and
maintain a pharmacovigilance system and appoint an individual qualified person for pharmacovigilance who is
responsible for oversight of that system. Key obligations include expedited reporting of suspected serious adverse
reactions and submission of periodic safety update reports (“
PSURs
”).
All new marketing authorization applications must include a risk management plan (“
RMP
”), describing the risk
management system that the company will put in place and documenting measures to prevent or minimize the risks
associated with the product. The regulatory authorities may also impose specific obligations as a condition of the
marketing authorization. Such risk-minimization measures or post-authorization obligations may include additional
safety monitoring, more frequent submission of PSURs, or the conduct of additional clinical trials or post-
authorization safety studies.
In the EU, the advertising and promotion of medicinal products are subject to both EU and EEA countries laws
governing promotion of medicinal products, interactions with physicians and other healthcare professionals,
misleading and comparative advertising and unfair commercial practices. Although general requirements for
advertising and promotion of medicinal products are established under EU directives, the details are governed by
regulations in each member state and can differ from one country to another. For example, applicable laws require
that promotional materials and advertising in relation to medicinal products comply with the product’s SmPC, as
approved by the competent authorities in connection with a marketing authorization. The SmPC is the document that
provides information to physicians concerning the safe and effective use of the product. Promotional activity that
does not comply with the SmPC is considered off-label and is prohibited in the EU. Direct-to-consumer advertising
of prescription medicinal products is also prohibited in the EU.
Regulation of Companion Diagnostics in the EU
In the EU, despite the absence of a legal definition, companion diagnostics are deemed to be
in vitro
diagnostic
medical devices and are governed by Directive 98/79/EC (“
IVDD
”). The IVDD currently regulates the placing on
the market, the CE-marking, the essential requirements, the conformity assessment procedures, the registration
obligations for manufacturers and devices as well as the vigilance procedure related to such products.
In vitro
diagnostic medical devices, including companion diagnostics, must comply with the requirements provided for in
the IVDD, and with further requirements implemented at national level (as the case may be).
In vitro
diagnostic medical devices (including companion diagnostics) are currently required to conform with the
essential requirements of the IVDD. To demonstrate compliance with the essential requirements laid down in Annex
I to the IVDD, the manufacturer must conduct a conformity assessment procedure.
For general
in vitro
diagnostic medical devices (i.e. all IVDs other than those covered by Annex II to the IVDD and
IVDs for self-testing), the conformity assessment is performed through a self-assessment of the manufacturer
without the intervention of a notified body which is an independent organization designated by the competent
authorities of an EU member state to assess the conformity of devices before being placed on the market. The
manufacturer must prepare an EC Declaration of Conformity confirming conformity of its products with the
essential requirements laid down in the IVDD before placing the product on the EU market.
By contrast, the conformity assessment of
in vitro
diagnostic medical devices for self-testing or that are listed in
Annex II (i.e. essentially moderate and high risk reagents and reagent products) to the IVDD requires the
intervention of a notified body. Following successful completion of a conformity assessment procedure the notified
body will issue a CE Certificate of Conformity. The device manufacturer may, after having completed remaining
related procedures and obligations, affix the CE mark to its medical device after having prepared and signed a
related EC Declaration of Conformity.
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The regulation of companion diagnostics has been subject to further requirements since the
in vitro
diagnostic
medical devices Regulation (No 2017/746), (“
IVDR
”), became applicable on May 26, 2022. The IVDR introduced a
new classification system for companion diagnostics which are now specifically defined as diagnostic tests that
support the safe and effective use of a specific medicinal product, by identifying patients that are suitable or
unsuitable for treatment. Companion diagnostics have to undergo a conformity assessment by a notified body. If the
medicinal product has, or is in the process of, been authorized through the centralized procedure for the
authorization of medicinal products, the notified body is, before it can issue a CE Certificate of Conformity, required
to seek a scientific opinion from the EMA on the suitability of the companion diagnostic for use in relation to the
medicinal product concerned. For medicinal products that have or are in the process of authorization through any
other route provided in EU legislation, the notified body must seek the opinion of the national competent authority
of an EU Member State.
Other Healthcare Laws
Pharmaceutical manufacturers are subject to additional healthcare laws, regulation, and enforcement by the U.S.
federal government and by authorities in the states and foreign jurisdictions in which they conduct their business.
Such laws include, without limitation:
•
the federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and
willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in
kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, order,
lease, furnishing, prescribing or recommendation of, any good or service, for which payment may be
made under federal and state healthcare programs, such as Medicare and Medicaid. The term
“remuneration” has been broadly interpreted to include anything of value. The ACA, among other
things, amended the intent requirement of the federal Anti-Kickback Statute such that a person or entity
no longer needs to have actual knowledge of the statute or specific intent to violate, in order to commit a
violation;
•
federal civil and criminal false claims laws, including the federal False Claims Act which can be
enforced by private individuals on behalf of the government through civil whistleblower or qui tam
actions, and civil monetary penalty laws prohibit individuals or entities from knowingly presenting, or
causing to be presented, to the federal government, including the Medicare and Medicaid programs,
claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal
an obligation to pay money to the federal government. Entities can be held liable under these laws if
they are deemed to “cause” the submission of false or fraudulent claims by, for example, providing
inaccurate billing or coding information to customers, promoting a product off-label, or for providing
medically unnecessary services or items. In addition, a claim including items or services resulting from
a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of
the federal False Claims Act;
•
the federal Health Insurance Portability and Accountability Act of 1996 (“
HIPAA
”), which imposes
criminal and civil liability for knowingly and willfully executing, or attempting to execute, a scheme to
defraud any healthcare benefit program, including third-party payors, knowingly and willfully
embezzling or stealing from a healthcare benefit program, willfully obstructing a criminal investigation
of a healthcare offense, and knowingly and willfully falsifying, concealing or covering up a material fact
or making any materially false, fictitious or fraudulent statements in connection with the delivery of or
payment for healthcare benefits, items or services;
•
HIPAA, as amended by the HITECH, and their respective implementing regulations, which impose
obligations on certain healthcare providers, health plans, and healthcare clearinghouses, known as
covered entities, as well as individuals and entities that create, receive, maintain or transmit individually
identifiable health information for or on behalf of a covered entity, known as business associates, as
well as their covered subcontractors, with respect to safeguarding the privacy, security and transmission
of individually identifiable health information. HITECH also created new tiers of civil monetary
penalties, amended HIPAA to make civil and criminal penalties directly applicable to business
associates, and gave state attorneys general new authority to file civil actions for damages or injunctions
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in U.S. federal courts to enforce the federal HIPAA laws and seek attorneys’ fees and costs associated
with pursuing federal civil actions;
•
the federal Physician Payments Sunshine Act, which requires manufacturers of drugs, devices, biologics
and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health
Insurance Program, with specific exceptions, to report annually to the Centers for Medicare & Medicaid
Services (
“CMS”
) information related to “payments or other transfers of value” made to physicians,
which is defined to include doctors, dentists, optometrists, podiatrists and chiropractors, other health
care professionals (such as physician assistants and nurse practitioners), and teaching hospitals and
ownership and investment interests held by some of these healthcare professionals and their immediate
family members;
•
analogous foreign laws and regulations; and
•
similar state and local laws and regulations may also restrict business practices in the pharmaceutical
industry, such as state anti-kickback and false claims laws, which may apply to business practices,
including but not limited to, research, distribution, sales, and marketing arrangements and claims
involving healthcare items or services reimbursed by non-governmental third-party payors, including
private insurers, or by patients themselves; state laws that require pharmaceutical companies to comply
with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance
guidance promulgated by the federal government, or otherwise restrict payments that may be made to
healthcare providers and other potential referral sources; state laws and regulations that require drug
manufacturers to file reports relating to pricing and marketing information; state and local laws which
require the tracking of gifts and other remuneration and any transfer of value provided to physicians,
other healthcare providers and entities; state and local laws that require certain regulatory licenses to
manufacture or distribute pharmaceutical products commercially and/or the registration of
pharmaceutical sales representatives; and state and local laws governing the privacy and security of
health information in some circumstances, many of which differ from each other in significant ways and
often are not preempted by HIPAA, thus complicating compliance efforts.
These laws and regulations are subject to change, which can increase the resources needed for compliance and delay
drug approval or commercialization. Any action brought against us for violations of these laws or regulations, even
successfully defended, could cause us to incur significant legal expenses and divert our management’s attention
from the operation of our business. Also, we may be subject to private “qui tam” actions brought by individual
whistleblowers on behalf of the federal or state governments. Actual or alleged violation of any such laws or
regulations may lead to investigations and other claims and proceedings by regulatory authorities and in certain
cases, private actors, and violation of any of such laws or any other governmental regulations that apply may result
in penalties, including, without limitation, significant administrative, civil and criminal penalties, damages, fines,
disgorgement, additional reporting obligations, and oversight if we become subject to a corporate integrity
agreement or other agreement to resolve allegations of non-compliance with these laws, the curtailment or
restructuring of operations, exclusion from participation in government healthcare programs and imprisonment.
The collection and use of personal health data in the EEA is governed by the GDPR ((EU) 2016/679), which became
effective May 25, 2018. The GDPR applies to any company established in the EEA and to companies established
outside the EEA that process personal data in connection with the offering of goods or services to data subjects in
the EU or the monitoring of the behavior of data subjects in the EU. The GDPR enhances data protection obligations
for controllers and processors of personal data, including stringent requirements relating to the consent of data
subjects, expanded disclosures about how personal data is used, requirements to conduct privacy impact assessments
for high-risk processing, limitations on retention of personal data and mandatory data breach notification and
privacy by design requirements, and creates direct obligations on service providers acting as data processors. The
GDPR also imposes strict rules on the transfer of personal data out of the EEA to countries that do not ensure the
same level of protection, such as the United States. Failure to comply with the requirements of the GDPR and the
related national data protection laws of the EEA countries may result in fines up to 20 million Euros or 4.0% of a
company’s global annual revenues for the preceding financial year, whichever is higher. Moreover, the GDPR
grants data subjects the right to claim compensation for damages resulting from infringement of the GDPR.
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Coverage and Reimbursement
Sales of any pharmaceutical product depend, in part, on the extent to which such product will be covered by third-
party payors, such as federal, state, and foreign government healthcare programs, commercial insurance, and
managed healthcare organizations, and the level of reimbursement for such product by third-party payors.
Significant uncertainty exists as to the coverage and reimbursement status of any newly approved product. Decisions
regarding the extent of coverage and amount of reimbursement to be provided are made on a plan-by-plan basis.
One third-party payor’s decision to cover a particular product does not ensure that other payors will also provide
coverage for the product. As a result, the coverage determination process can require manufacturers to provide
scientific details, information on cost-effectiveness, and clinical support for the use of a product to each payor
separately. This can be a time-consuming process, with no assurance that coverage and adequate reimbursement will
be applied consistently or obtained in the first instance. In addition, third-party payors are increasingly reducing
reimbursements for pharmaceutical products and related services. The U.S. government and state legislatures have
continued implementing cost-containment programs, including price controls, restrictions on coverage and
reimbursement and requirements for substitution of generic products. Third-party payors are increasingly
challenging the prices charged, examining the medical necessity and reviewing the cost-effectiveness of
pharmaceutical products, in addition to questioning their safety and efficacy. Adoption of price controls and cost-
containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures,
could further limit sales of any product. For example, HHS imposes rebates on many Medicare Part B and Medicare
Part D products to penalize price increases that outpace inflation on an annual basis. HHS has also been empowered
to negotiate the price of certain single-source drugs that have been on the market for at least seven (7) years covered
under Medicare as part of the Medicare Drug Price Negotiation Program. Each year up to twenty (20) products will
be selected by HHS for the Medicare Drug Price Negotiation Program. Products subject to the Medicare Drug Price
Negotiation Program are expected to experience a significant reduction in reimbursement from the Medicare
program on a per unit basis.
In international markets, reimbursement and healthcare payment systems vary significantly by country, and many
countries have instituted price ceilings on specific products and therapies. For example, the European Union
provides options for its member states to restrict the range of medicinal products for which their national health
insurance systems provide reimbursement and to control the prices of medicinal products for human use. A member
state may approve a specific price for the medicinal product or it may instead adopt a system of direct or indirect
controls on the profitability of the company placing the medicinal product on the market. Pharmaceutical products
may face competition from lower-priced products in foreign countries that have placed price controls on
pharmaceutical products and may also compete with imported foreign products. Furthermore, there is no assurance
that a product will be considered medically reasonable and necessary for a specific indication, that it will be
considered cost-effective by third-party payors, that an adequate level of reimbursement will be established even if
coverage is available, or that the third-party payors’ reimbursement policies will not adversely affect the ability for
manufacturers to sell products profitably.
Healthcare Reform
In the United States and certain foreign jurisdictions, there have been, and we expect there will continue to be, a
number of legislative and regulatory changes to the healthcare system. In March 2010, the ACA was signed into
law, which substantially changed the way healthcare is financed by both governmental and private insurers in the
United States. For example, the Patient Protection and Affordable Care Act of 2010, as amended by the Health Care
and Education Reconciliation Act of 2010 (or collectively, the “
ACA
”), substantially affects the way healthcare is
financed by both the government and private insurers, and significantly impacts the U.S. pharmaceutical industry.
For example, on July 4, 2025, the One Big Beautiful Bill Act (the “
OBBBA
”) was signed into law, which narrowed
access to ACA marketplace exchange enrollment and declined to extend the ACA enhanced advanced premium tax
credits that expired at the end of 2025, which, among other provisions in the law, are anticipated to reduce the
number of Americans with health insurance. The OBBBA also is expected to reduce Medicaid spending and
enrollment by implementing work requirements for some beneficiaries, capping state-directed payments, reducing
federal funding, and limiting provider taxes used to fund the program. Congress is considering proposed legislation
intended to further reduce healthcare costs with alternatives to replace the expired ACA subsidies.
Since its enactment, there have been amendments to and executive, judicial and Congressional challenges to certain
aspects of the ACA, and we expect there will be additional challenges and amendments to the ACA in the future.
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Other legislative changes have been proposed and adopted since the ACA was enacted. These changes include
aggregate reductions to Medicare payments to providers of up to 2.0% per fiscal year, effective April 1, 2013,
which, due to subsequent legislative amendments, will stay in effect until 2032 unless additional congressional
action is taken.
Additional health reform measures may continue and affect our business in unknown ways, particularly given the
recent change in administration. The current Trump administration is pursuing policies to reduce regulations and
expenditures across government including at HHS, the FDA, CMS and related agencies. These actions, presently
directed by executive orders or memoranda from the Office of Management and Budget, may propose policy
changes that create additional uncertainty for our business. For example, the current administration has announced
agreements with several pharmaceutical companies that require the drug manufacturers to offer, through a direct to
consumer platform (“
TrumpRx
”), U.S. patients and Medicaid programs prescription drug Most-Favored Nation
pricing equal to or lower than those paid in other developed nations, with additional mandates for direct-to-patient
discounts and repatriation of foreign revenues. Other recent actions, for example, include (1) directing agencies to
reduce agency workforce and cut programs; (2) directing HHS and other agencies to lower prescription drug costs
through a variety of initiatives; (3) imposing tariffs on imported pharmaceutical products; and (4) as part of the
Make America Healthy Again (“
MAHA
”) Commission’s Strategy Report released in September 2025, working
across government agencies to increase enforcement on direct-to-consumer pharmaceutical advertising.
Additionally, the current administration recently called on Congress to enact "The Great Healthcare Plan," to codify
and expand Most-Favored Nation pricing, lower government subsidies to private insurance companies, increase
healthcare price transparency, expand pharmaceutical drugs available for over-the-counter purchase, and enact
restrictions on pharmacy benefit manager (“
PBM
”) payment methodologies, among other things. These actions and
policies may significantly reduce U.S. drug prices, potentially impacting manufacturers’ global pricing strategies
and profitability, while increasing their operational costs and compliance risks. In June 2024, the U.S. Supreme
Court’s Loper Bright decision greatly reduced judicial deference to regulatory agencies, which could increase
successful legal challenges to federal regulations affecting our operations. Congress may introduce and ultimately
pass health care related legislation that could impact the drug approval process and make changes to the Medicare
Drug Price Negotiation Program.
Individual states in the United States have also become increasingly active in passing legislation and implementing
regulations designed to control pharmaceutical and biological product pricing, including price or patient
reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and
transparency measures, and, in some cases, designed to encourage importation from other countries and bulk
purchasing. Legally mandated price controls on payment amounts by third-party payors or other restrictions could
materially and adversely affect our business, financial condition, results of operations and prospects. In addition,
regional healthcare authorities and individual hospitals are increasingly using bidding procedures to determine what
pharmaceutical products and which suppliers will be included in their prescription drug and other healthcare
programs. This could reduce the ultimate demand for our product candidates or put pressure on our product pricing.
On January 12, 2025, Regulation No 2021/2282 on Health Technology Assessment (HTA Regulation), entered into
application through a phased implementation. The Regulation initially applies to new active substances for oncology
and ATMPs. It will be expanded to orphan medicinal products in January 2028, and to all centrally authorized
medicinal products as of 2030. Select high-risk medical devices also came into scope in 2026. The HTA Regulation
is intended to boost cooperation among Member States in assessing health technologies, including new medicinal
products. The Regulation establishes a framework for EU
‑
level joint clinical assessments, joint scientific
consultations, and the early identification of emerging health technologies. The Regulation permits EU Member
States to use common tools, methodologies, and procedures and requires them to rely on EU
‑
level joint clinical
assessment reports for the clinical components of their national HTA evaluations. Individual EU Member States will
continue to be responsible for assessing non-clinical (e.g., economic, social, ethical) aspects of health technologies,
and making decisions on pricing and reimbursement.
C.
Organizational Structure
Oculis Holding AG is a stock corporation (
Aktiengesellschaft
) with its registered office at Bahnhofstrasse 20, CH-
6300, Zug, Switzerland. It was incorporated under the laws of Switzerland on October 31, 2022. Our official seat is
planned to remain in Zug, Switzerland.
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As of December 31, 2025, we controlled seven wholly-owned subsidiaries: Oculis Operations Sàrl (“
Oculis
Operations
”) with its registered office in Lausanne, Switzerland, which was incorporated on December 27, 2022,
Oculis ehf. (“
Oculis Iceland
”), which was incorporated in Reykjavik, Iceland on October 28, 2003, Oculis France
Sàrl (“
Oculis France
”) which was incorporated in Paris, France on March 27, 2020, Oculis US, Inc. which was
incorporated in Delaware, USA on May 26, 2020, Oculis HK, Limited (“
Oculis HK
”) which was incorporated in
Hong Kong, China on June 1, 2021, Neurocol IP Sàrl with its registered office in Lausanne, Switzerland, which was
incorporated on December 4, 2025, and Neurocol Operations Sàrl, with its registered office in Lausanne,
Switzerland, which was incorporated on December 4, 2025. The Company and its wholly-owned subsidiaries form
the Oculis Group (the “
Group
”). Prior to the Business Combination on March 2, 2023, Oculis SA (“
Legacy
Oculis
”), which was incorporated on December 11, 2017, and had its registered office in Lausanne, Switzerland, and
its wholly-owned subsidiaries Oculis Iceland, Oculis France, Oculis U.S. and Oculis HK, formed the Oculis group.
On July 6, 2023, Legacy Oculis merged with and into Oculis Operations, and the separate corporate existence of
Legacy Oculis ceased. Oculis Operations is the surviving entity and remains a wholly-owned subsidiary of Oculis.
On April 18, 2024, we completed the dissolution of Oculis Merger Sub II Company (“
Merger Sub 2
”) which was
incorporated in the Cayman Islands on January 3, 2023 and was a wholly-owned subsidiary of Oculis. Merger Sub 2
was created for purposes of consummating the Business Combination and did not contain any of our business
operations.
D.
Property, Plants and Equipment
As of December 31, 2025, we leased approximately 14,500 square feet of facilities for our operations, including
4,300 square feet of laboratory and office space in Iceland, with main activities of research, business and clinical
development, 4,630 square feet of office space in Switzerland, with main activities of business and clinical
development and 5,575 square feet of office space in the United States, with main activities being general and
administrative in nature. We believe that these facilities will be adequate to meet our needs, and we are constantly
evaluating our needs for expanding and or adding to our existing facilities.
Item 4A. Unresolved Staff Comments
Not applicable.
Item 5. Operating and Financial Review and Prospects
You should read the following discussion and analysis of our audited financial condition and results of operations
together with our consolidated financial statements appearing elsewhere in this Annual Report on Form 20-F. This
Annual Report on Form 20-F contains forward-looking statements within the meaning of Section 27A of the
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Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Exchange Act, including, without
limitation, statements regarding our expectations, beliefs, intentions or future strategies that are signified by the
words “expect,” “anticipate,” “intend,” “believe,” or similar language. All forward-looking statements included in
this Annual Report on Form 20-F are based on information available to us on the date hereof, and we assume no
obligation to update any such forward-looking statements. In evaluating our business, you should carefully consider
the information provided under “Item 3.D. Risk Factors.” Actual results could differ materially from those
projected in the forward-looking statements. The terms “Company,” “Oculis,” “we,” “our” or “us” as used herein
refer to Oculis and its consolidated subsidiaries unless otherwise stated or indicated by context.
Certain information called for by this Item 5, including a discussion of the year ended December 31, 2023, as well a
comparison of the year ended December 31, 2024 against the year ended December 31, 2023, has been reported
previously in our Annual Report on Form 20-F for the year ended December 31, 2024 filed on March 11, 2025
under Item 5. “Operating and Financial Review and Prospects.”
All amounts discussed, aside from share data, are in Swiss francs and presented in thousands, unless otherwise
indicated.
Company Overview
We are a global late clinical-stage biopharmaceutical company, headquartered in Switzerland with operations in
Switzerland, the U.S. and Iceland. We have substantial expertise in therapeutics for the treatment of neuro-
ophthalmic and ophthalmic diseases. We intend to become a leader in developing innovative therapeutics to address
neuro-ophthalmic and ophthalmic diseases characterized by significant medical needs with large market
opportunities. To accomplish this objective, we plan to focus on successful completion of our key strategic
initiatives. For the ophthalmic franchise, we are focused on advancing the clinical and regulatory plans of OCS-01 to
bring a first-in-class topical eye drop therapy for the treatment in DME and developing Licaminlimab for precision
medicine for DED. Furthermore, we are advancing the development of Privosegtor in ON and NAION, and
exploring additional broader indications in neuro-ophthalmology.
Our pipeline currently includes three clinical-stage therapeutic candidates: OCS-01, Licaminlimab (OCS-02) and
Privosegtor (OCS-05). OCS-01 is an eye drop candidate which aims to be the first non-invasive topical treatment for
DME. It is presently being evaluated in two ongoing Phase 3 clinical trials for DME, with topline results expected in
the second quarter of 2026. Licaminlimab is a product candidate for the treatment of keratoconjunctivitis sicca, or
dry eye disease (“
DED
”), which we are advancing with a precision medicine approach. After a successful FDA
meeting in the first quarter of 2025, we initiated the PREDICT-1 registrational Phase 2/3 trial with a genotype-based
approach to investigate Licaminlimab in DED in the fourth quarter of 2025 for which topline results are expected in
the fourth quarter of 2026. Privosegtor is a neuroprotective candidate that has the potential to become a novel
therapy for optic neuritis (“
ON
”), non-arteritic anterior ischemic optic neuropathy (“
NAION
”), potentially other
neuro-ophthalmic diseases, neurological diseases and beyond. Following a successful meeting with the FDA in the
third quarter of 2025, we advanced Privosegtor into a registrational program called PIONEER for ON and NAION.
Numerous diseases and disorders, many of which represent significant medical needs, are associated with the human
eye. The National Eye Institute, a part of the U.S. National Institutes of Health, estimates that in the United States,
blindness or significant visual impairment impacts approximately seven million people, including those with vision
loss resulting from retinal diseases such as DME, macular degeneration, DR, and RVO; disorders caused by
swelling and inflammation such as DED; and glaucoma, among other disease states. For glaucoma more
specifically, the American Glaucoma Society highlighted a tremendous unmet need for therapies, independent of
intraocular pressure (IOP) lowering agents, that can offer neuroprotection, neurorecovery and/or neuroregeneration.
Of note, retinal neuroprotection has been considered the next frontier in ophthalmic disease as the discovery of
novel neuroprotection strategies will fill a critical unmet need for multiple neuro-ophthalmic conditions. It is
estimated that the global spending for ophthalmology therapeutics will reach approximately $33 billion in 2027,
according to an industry source.
To date, we have primarily financed our operations through the proceeds from share issuances and grants. We have
no products approved for commercialization and have never generated any revenues from product sales.
Pharmaceutical and biopharmaceutical product development is a highly speculative undertaking and involves a
substantial degree of risk. It may be several years, if ever, before we have a product candidate approved for
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commercialization, and we begin to generate revenue and royalties from product sales. We have also incurred
significant operating losses. We incurred net losses of CHF 99.0 million for the year ended December 31, 2025, and
had accumulated losses of CHF 384.5 million as of December 31, 2025.
Factors Affecting Our Performance
Business Environment
The biopharmaceutical industry is extremely competitive. We are subject to risks and uncertainties common to any
clinical-stage biopharmaceutical company. These risks include, but are not limited to, the introduction of new
products, therapies, standards of care or technological innovations, our ability to obtain, maintain, protect and
enforce our licensed technology, data and other intellectual property and proprietary rights and compliance with
extensive government regulation and oversight. Please see the section entitled “
Risk Factors
” for more information.
We are also dependent upon the services of key personnel, including our Chief Executive Officer, executive team
and other highly skilled employees. Demand for experienced personnel in the pharmaceutical and biotechnology
industries is high and competition for talent is intense.
We face potential competition from many different sources, including pharmaceutical and biotechnology companies,
academic institutions and governmental agencies as well as public and private research institutions. Many of our
competitors are working to develop or have commercialized products similar to those we are developing and have
considerable experience in undertaking clinical trials and in obtaining regulatory approval to market pharmaceutical
products. Our competitors may also have significantly greater financial resources, established presence in the
markets in which we hope to compete, expertise in research and development, manufacturing, preclinical and
clinical testing, obtaining regulatory approvals and reimbursement and marketing approved products. Smaller or
early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements
with large and established companies. These third parties also compete with us in recruiting and retaining qualified
scientific and management personnel, establishing clinical trial sites and registering patients for clinical trials,
entering into agreements with CMOs for the manufacture of our product candidates, as well as in acquiring
technologies complementary to, or necessary for, our programs.
Business combination with European Biotech Acquisition Corp (“
EBAC
”)
On March 2, 2023, we consummated a business combination with EBAC (the “
Business Combination
”) pursuant to
the Business Combination Agreement (
“BCA”
) between Legacy Oculis and EBAC dated as of October 17, 2022.
We received gross proceeds of CHF 97.6 million or $103.7 million comprising CHF 12.0 million or $12.8 million of
cash held in EBAC’s trust account and CHF 85.6 million or $90.9 million from private placement (“
PIPE
”)
investments and conversion of notes issued under Convertible Loan Agreements (“
CLA
”) into our ordinary shares.
As a result of the transaction, each issued and outstanding EBAC public warrant (“
BCA Public Warrants
”) and
EBAC private placement warrant (“
BCA Private Warrants
”) ceased to be a warrant with respect to EBAC ordinary
shares and were assumed by Oculis as warrants with respect to ordinary shares on substantially the same terms (the
BCA Public Warrants and the BCA Private Warrants collectively the “
Warrants
”). In connection with the Business
Combination, Oculis became listed on the United States Nasdaq Global Market with the ticker symbol “OCS” for its
ordinary shares and “OCSAW” for its public warrants.
Earnout consideration
As a result of the BCA, Legacy Oculis preferred, ordinary and option holders (collectively “
equity holders
”)
received consideration in the form of 3,793,995 earnout shares and 369,737 earnout options with an exercise price of
CHF 0.01.
The earnout consideration is subject to forfeiture in the event of a failure to achieve the price targets during the
earnout period defined as follows: (i) 1,500,000, (ii) 1,500,000 and (iii) 1,000,000 earned based on the achievement
of post acquisition-closing share volume weighted average price targets of $15.00, $20.00 and $25.00, respectively,
in each case, for any 20 trading days within any consecutive 30 trading day period commencing after the acquisition
closing date and ending on or prior to March 2, 2028 (the “
Earnout Period
”). A given share price target described
above will also be deemed to be achieved if there is a change of control, as defined in the BCA, during the Earnout
Period.
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The price targets of $15.00, $20.00 and $25.00 were met in November 2024, February 2025 and February 2026,
respectively, resulting in an aggregate of 2,845,446 earnout shares vested and 159,453 earnout options outstanding
and exercisable as of December 31, 2025, and an additional 948,549 earnout shares vested and 55,487 earnout
options becoming exercisable in February 2026.
May 2023 Public Offering
On May 31, 2023, we entered into an underwriting agreement with BofA Securities Inc. and SVB Securities, LLC,
as representatives of several underwriters. On June 5, 2023 and June 13, 2023, we closed a public offering for the
aggregate issuance and sale of 3,654,234 ordinary shares at a price of CHF 10.45 or $11.50 per share, for total gross
proceeds of CHF 38.2 million or $42.0 million before deducting underwriting discounts, commissions and offering
expenses.
Registered Direct Offering and Nasdaq Iceland Main Market listing
On April 22, 2024, we closed a registered direct offering with gross proceeds of CHF 53.5 million or $58.8 million
through the issuance and sale of 5,000,000 of our ordinary shares, at a purchase price of CHF 10.70 or $11.75 per
share, and commenced trading of our ordinary shares on the Nasdaq Iceland Main Market under the ticker symbol
“OCS” on April 23, 2024.
At-the-Market Offering Program
On May 8, 2024, we entered into a sales agreement with Leerink Partners, LLC (“
Leerink Partners
”) with respect to
an at-the-market offering program (the “
ATM Offering Program
”) under which we may offer and sell, from time to
time at our sole discretion, ordinary shares having an aggregate offering price of up to $100.0 million (CHF 79.3
million) through Leerink Partners as our sales agent. On October 29, 2025, in conjunction with the November 2025
Underwritten Offering, discussed below, the Company suspended and terminated the ATM Offering Program. As of
the date hereof, we have not sold any ordinary shares under the ATM Offering Program. We will not make any sales
of our ordinary shares pursuant to the sales agreement unless and until a new prospectus, prospectus supplement or
registration statement is filed. Other than the termination of the ATM Offering Program, the sales agreement
remains in full force and effect.
Loan Facility
On July 31, 2025, the Company entered into an amended and restated agreement for its existing loan facility (the
“Amended Loan Agreement”
) with Kreos Capital VII (UK) Limited (the
“Lender”
), which are funds and accounts
managed by BlackRock, Inc. The Amended Loan Agreement replaces the prior loan agreement between the
Company and the Lender dated May 29, 2024, with an upsized structure to provide the EUR equivalent of up to
CHF 75.0 million in borrowing capacity (which may be increased to up to CHF 100.0 million) (the “
Loan
”),
comprising tranches 1, 2 and 3, in the amounts of the EUR equivalents of CHF 25.0 million each, as well as an
additional loan of the EUR equivalent of up to CHF 25.0 million, which may be made available by the Lender to the
Company if mutually agreed in writing by the Lender and the Company. No amounts were drawn under the
Amended Loan Agreement during the year ended December 31, 2025.
Loan 1 will be available for drawdown from closing until November 15, 2026, which period may be shortened upon
the occurrence of a development milestone. Loans 2 and 3 will be available for drawdown prior to November 15,
2026 and December 31, 2026, respectively, in each case subject to satisfaction of certain pre-specified conditions.
The availability of any funds under a drawdown of Loans 1, Loan 2 or Loan 3 is conditional upon, together with
other conditions, the Company having a debt-to-market cap ratio (where debt includes the amount of all amounts
drawn down to date and the proposed drawdown) equal to or less than 15% at the time of each draw down.
Borrowings under Loan 1, 2 and 3 will bear interest at a fixed rate (cash and PIK) of 9.7%, 9.6% and 9.5% per
annum, respectively. The Loan will have an interest-only period of, in respect of Loans 1, 2 and 3, from the relevant
drawdown date until December 31, 2027, March 31, 2028 and June 30, 2028, respectively. The interest-only periods
for each of Loans 1 and 2 will be shortened to December 31, 2026 if certain conditions are not met. In the event the
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interest-only periods for Loans 1 and 2 are shortened, Loans 1 and 2 will mature on 30 June 2029. In the event the
interest-only periods are not shortened, Loans 1, 2 and 3 will expire on 31 December 2029.
The Company may prepay all, but not part, of the term loan amounts at any time other than, unless the Lender
agrees otherwise, by notifying the Lender in advance. The Loan is subject to mandatory prepayment in the event of a
change of control or specified asset dispositions or licenses, subject to certain exceptions and thresholds. There are
additional fees (including prepayment premia) payable to the Lender in the event the loan is prepaid either
mandatorily or voluntarily. The Lender received a restatement fee of CHF 0.5 million in connection with the
Amended Loan Agreement. The Lender is eligible to receive an aggregate of approximately CHF 0.6 million in
additional transaction fees payable upon the Company’s eligibility to receive and actual receipt of future
drawdowns. The Lender will be eligible to receive certain non-utilisation fees. On the date on which the Loan is
prepaid or falls due for repayment in full, the Lender is eligible to receive an end of loan fee of, in relation to each of
Loans 1, 2 and 3, 4.5% of the amount drawn down under the relevant loan. The Loan contains customary affirmative
and negative covenants.
As additional consideration for the Loan, Kreos Capital VII Aggregator SCSp, an affiliate of the Lender (the
“
Holder
”), and the Company entered into an amended warrant (the “
Amended Warrant
”) to purchase up to 494,259
of the Company’s ordinary shares, subject to vesting, at a price per ordinary share equal to $12.17 with respect to
361,011 shares from the prior warrant agreement, and $18.64 with respect to the remaining 133,248 shares reflecting
the upsized facility, subject to adjustment. The Amended Warrant amends the prior warrant issued to Holder on May
29, 2024. As of the signing date, the Amended Warrant is exercisable for 59,310 ordinary shares, of which 43,321
shares were previously granted. Following the drawdown of each of Loans 1, 2 and 3, the Amended Warrant will
become exercisable for additional amounts of ordinary shares ratably based on the amounts of Loans 1, 2 and 3 that
are drawn. Each tranche of the Amended Warrant will be exercisable for a period of up to seven years from the date
of vesting and the Amended Warrant will terminate at the earliest of (i) December 31, 2033, (ii) such earlier date on
which the Amended Warrant is no longer exercisable for any warrant shares in accordance with its terms and (iii)
the acceptance by the Company’s shareholders of a third-party bona fide offer for all outstanding shares of the
Company (subject to any prior exercise by the Holder, if applicable). The Amended Warrant also includes
customary F-3 resale and piggyback registration rights and anti-dilution provisions.
The Amended Warrant had not been exercised in part or in full as of December 31, 2025.
February 2025 Underwritten Offering
On February 14, 2025, we entered into an underwriting agreement with BofA Securities Inc. and Leerink Partners
LLC, as a representative of the several underwriters in connection with an offering of 5,000,000 of our ordinary
shares, CHF 0.01 nominal value per share, at a price of $20.00 (CHF 18.05) per share, for total gross proceeds of
$100.0 million (CHF 90.2 million), before deducting underwriting discounts, commissions and offering expenses.
The offering closed on February 18, 2025.
November 2025 Underwritten Offering and Registered Direct Offering
On November 3, 2025, we closed offerings of an aggregate of 5,432,098 ordinary shares, CHF 0.01 nominal value
per share, at a price of $20.25 (CHF 16.33) per share for total gross proceeds of $110.0 million (CHF 88.7 million)
before deducting underwriting discounts, commissions and offering expenses. This offering was carried out with
2,635,801 shares out of the Company’s existing capital band and 2,796,297 shares previously held in treasury by the
Company.
Components of Results of Operations
Revenue
We have not generated any revenue from product sales since our inception and do not expect to generate any
revenue from the sale of products in the near future. If our development efforts for our product candidates are
successful and result in regulatory approval or if we enter into collaboration or licensing agreements with third
parties, we may generate revenue in the future from a combination of product sales and payments from such
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collaboration or licensing agreements. However, there can be no assurance as to when we will generate such
revenue, if at all.
Grant Income
Grant income reflects reimbursement of research and development expenses and income from certain research
projects managed by Icelandic governmental institutions. We maintain a subsidiary in Iceland that provides research
and development for our product candidates. Certain expenses qualify for incentives from the Icelandic government
in the form of tax credits or cash reimbursements. We do not anticipate generating significant grant income in the
near future.
Operating Expenses
Research and Development expenses
Research and development expenses consist primarily of costs incurred in connection with the research and
development of our product candidates and programs. We expense research and development costs and the cost of
acquired intangible assets used in research and development activities as incurred. Research and development
expenditures are capitalized only if they meet the recognition criteria of IAS 38 (“
Intangible Assets
”). Capitalization
does not result in amortization until the related product is approved for commercialization, where a finite useful
economic life can be more reliably determined. To date, all capitalized R&D intangible assets remain unamortized.
Research and development expenses include:
•
personnel-related expenses, including salaries, related benefits and equity-based compensation expense,
for employees and third-party consultants engaged in research and development functions;
•
expenses incurred in connection with the preclinical and clinical development of our product candidates
and programs, including under agreements with clinical research organizations (“
CROs
”), as well as
clinical trial investigative sites and consultants that conduct our clinical trials;
•
costs related to contract manufacturing organizations (“
CMOs
”) that are primarily engaged to provide
drug substance and product for our clinical trials, research and development programs, as well as costs
of acquiring and manufacturing non-clinical and clinical trial materials, including manufacturing
registration and validation batches;
•
costs related to non-clinical studies and other scientific development services;
•
costs related to compliance with quality and regulatory requirements; and
•
costs related to formulation research, IP expenses, facilities, overhead, depreciation and amortization of
laboratory equipment and other expenses.
For the years ended December 31, 2025 and 2024, no research and development costs were capitalized by the
Company.
Product candidates in later stages of clinical development generally have higher development costs than those in
earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials.
We expect that our research and development expenses will increase substantially in connection with our ongoing
and planned clinical development activities in the near term and in the future. At this time, we cannot accurately
estimate or know the nature, timing and costs of the efforts that will be necessary to complete the clinical
development of any current or future product candidates.
125
General and Administrative expenses
General and administrative expenses consist primarily of internal and external costs related to executive
management, finance and accounting functions, legal, business development, corporate insurance, corporate and
investor communications, pre-commercial and other administrative functions and operating costs.
Finance Income (Expense)
Finance income (expense) consists primarily of interest income on fixed term deposits.
Fair value adjustment on warrant liabilities
Fair value adjustment on warrant liabilities reflects the changes in fair value of our warrant instruments. The fair
value of our public and private placement warrants (“
BCA Warrants
”) is dependent on the change in the underlying
market price of the public warrants and the number of outstanding warrants at the reporting date. This fair value is,
in general, directly correlated with the market price of our warrants. Assuming the number of outstanding warrants
remains constant, we would expect a fair value loss due to an increase in the market price of the warrants, and a fair
value gain due to a decrease in the market price of the warrants. The fair value of the BlackRock Warrant is
dependent on the change in the Black-Scholes fair value and the number of outstanding warrants at the reporting
date.
Foreign Currency Exchange Gain (Loss)
Foreign currency exchange gains and losses consist of currency exchange differences that arise from transactions
denominated in currencies other than Swiss Francs.
Income Tax Expense
We are subject to corporate Swiss federal, cantonal and communal taxation, respectively, in Switzerland, Canton of
Zug, and Commune of Zug, as well as in the Canton of Vaud, and Commune of Lausanne. We are also subject to
taxation in other jurisdictions in which we operate, in particular the United States, France, Hong Kong and Iceland
where our wholly owned subsidiaries are incorporated.
We are entitled, under Swiss laws, to carry forward any losses incurred for a period of seven years and can offset our
losses carried forward against future taxes owed. As of December 31, 2025, we had tax loss carry-forwards totaling
CHF 106.9 million. There is no certainty that we will make sufficient profits to be able to utilize tax loss carry-
forwards in full and no deferred tax assets have been recognized in the financial statements.
126
A.
Operating Results
The following table summarizes our results of operations for the periods presented:
For the years ended December 31,
2025
2024
Change
% Change
Grant income
1,199
686
513
74.8
%
Operating income
1,199
686
513
74.8
%
Research and development expenses
(57,085
)
(52,083
)
(5,002
)
(9.6
%)
General and administrative expenses
(25,786
)
(21,807
)
(3,979
)
(18.2
%)
Operating expenses
(82,871
)
(73,890
)
(8,981
)
(12.2
%)
Operating loss
(81,672
)
(73,204
)
(8,468
)
(11.6
%)
Finance income
1,770
2,168
(398
)
(18.4
%)
Finance expense
(833
)
(639
)
(194
)
30.4
%
Fair value adjustment on warrant liabilities
(12,294
)
(15,531
)
3,237
(20.8
%)
Foreign currency exchange gain (loss)
(6,114
)
1,269
(7,383
)
(581.8
%)
Finance result
(17,471
)
(12,733
)
(4,738
)
(37.2
%)
Loss before tax for the period
(99,143
)
(85,937
)
(13,206
)
(15.4
%)
Income tax benefit (expense)
186
160
26
(16.3
%)
Loss for the period
(98,957
)
(85,777
)
(13,180
)
(15.4
%)
Comparison of the Years Ended December 31, 2025 and 2024
Grant Income
Grant income for the years ended December 31, 2025 and 2024 were CHF 1.2 million and CHF 0.7 million,
respectively. The grant income is dependent upon the Icelandic government making such reimbursement available
for qualified research and development activities. While certain of our research and development expenses have
historically qualified for reimbursement and we anticipate incurring a similar level of costs in the future, there is no
assurance that the Icelandic government will continue with the tax reimbursement program.
Research and Development Expenses
For the years ended December 31,
2025
2024
Change
% Change
Personnel expenses
18,849
11,114
7,735
69.6
%
Payroll and related expenses
9,851
6,085
3,766
61.9
%
Share-based compensation
8,998
5,029
3,969
78.9
%
Other operating expenses
38,236
40,969
(2,733
)
(6.7
%)
External service providers
36,818
40,127
(3,309
)
(8.2
%)
Other operating expenses
1,077
573
504
88.0
%
Depreciation expense
341
269
72
26.8
%
Total research and development
expenses
57,085
52,083
5,002
9.6
%
Research and development expenses were CHF 57.1 million for the year ended December 31, 2025 compared to
CHF 52.1 million for the year ended December 31, 2024. The net increase of CHF 5.0 million, or 9.6%, was
primarily due to advancements in our late-stage development portfolio, including Privosegtor development activities
and the DIAMOND clinical program. The cost increases were partially offset by a decline in Licaminlimab
development costs due to the completion of RELIEF Phase 2 trial in 2024 and commencement of PREDICT
registrational trial in late 2025.
The table below represents the breakdown of research and development expenses by project:
127
For the years ended December 31,
2025
2024
Change
% Change
OCS-01
35,497
32,400
3,097
9.6
%
Licaminlimab
7,666
11,931
(4,265
)
(35.7
%)
Privosegtor
10,938
4,266
6,672
156.4
%
Other development projects
2,984
3,486
(502
)
(14.4
%)
Total research and development
expenses
57,085
52,083
5,002
9.6
%
For the year ended December 31, 2025, research and development expenses were driven by increased development
costs related to the advancement of Privosegtor, as well as the OCS-01 Phase 3 DIAMOND-1 and DIAMOND-2
clinical trials in DME which completed enrollment in April 2025 and for which we expect topline results in Q2
2026.
General and Administrative Expenses
For the years ended December 31,
2025
2024
Change
% Change
Personnel expenses
14,997
11,476
3,521
30.7
%
Payroll and related expenses
7,951
6,723
1,228
18.3
%
Share-based compensation
7,046
4,753
2,293
48.2
%
Other operating expenses
10,789
10,331
458
4.4
%
External service providers
8,200
7,445
755
10.1
%
Other operating expenses
2,384
2,749
(365
)
(13.3
%)
Depreciation expense
205
137
68
49.6
%
Total general and administrative
expenses
25,786
21,807
3,979
18.2
%
General and administrative expenses were CHF 25.8 million for the year ended December 31, 2025, compared to
CHF 21.8 million for the year ended December 31, 2024. The increase of CHF 4.0 million, or 18.2%, was primarily
driven by an increase in share-based compensation expense due to new equity grants and increased grant value for
equity awards granted in 2025.
Finance Income and Finance Expense
For the years ended December 31,
2025
2024
Change
% Change
Finance income
1,770
2,168
(398
)
(18.4
%)
Finance expense
(833
)
(639
)
(194
)
30.4
%
Total finance income
937
1,529
(592
)
(38.7
%)
We realized net finance income of CHF 0.9 million for the year ended December 31, 2025 compared to CHF 1.5
million for the year ended December 31, 2024. Finance income decreased CHF 0.4 million due to lower interest
income from our short-term bank deposits in 2025 compared to 2024. Finance expense increased CHF 0.2 million
due to the amortization of transaction costs related to the July 2025 Amended Loan Agreement.
Fair Value Adjustment on Warrant Liabilities
For the years ended December 31,
2025
2024
Change
% Change
Fair value adjustment on warrant
liabilities
(12,294
)
(15,531
)
3,237
(20.8
)%
128
We recorded fair value adjustment losses on warrant liabilities of CHF 12.3 million and CHF 15.5 million,
respectively, for the years ended December 31, 2025 and 2024, primarily due to increases in the market price of the
BCA Warrants during the periods.
Foreign Currency Exchange Gain (Loss)
For the years ended December 31,
2025
2024
Change
% Change
Foreign currency exchange gain (loss)
(6,114
)
1,269
(7,383
)
(581.8
%)
We recorded a foreign currency exchange loss of CHF 6.1 million for the year ended December 31, 2025, compared
to a gain of CHF 1.3 million for the year ended December 31, 2024. The foreign currency exchange activity reflects
fluctuations of the U.S. dollar against the Swiss Franc impacting our cash and short-term financial assets balances,
which were net unfavorable in 2025 and favorable in 2024.
Comparison of Years Ended December 31, 2024 and 2023
For a discussion of the financial results and condition for the fiscal year ended December 31, 2023, please refer to
our Annual Report on Form 20-F for the year ended December 31, 2023 filed on March 19, 2024. For a comparison
of years ended December 31, 2024 and 2023 please refer to our Annual Report on Form 20-F for the year ended
December 31, 2024 filed on March 11, 2025.
B.
Liquidity and Capital Resources
Overview
Since our inception, we have incurred significant operating losses. We have not yet commercialized any products
and we do not expect to generate revenue from sales of products in the near future. We incurred a loss of CHF 99.0
million and a cash outflow from operations of CHF 66.3 million for the year ended December 31, 2025. As of
December 31, 2025 and 2024, we had cash, cash equivalents and short-term investments of CHF 213.0 million and
CHF 98.7 million, respectively. We had accumulated losses of CHF 384.5 million and CHF 285.6 million as of
December 31, 2025 and 2024, respectively.
On April 22, 2024, we closed a registered direct offering with gross proceeds of CHF 53.5 million or $58.8 million
through the issuance of 5,000,000 ordinary shares, nominal value CHF 0.01 per share, at a purchase price of CHF
10.70 or $11.75 per share, and commenced trading of our ordinary shares on the Nasdaq Iceland Main Market under
the ticker symbol “OCS” on April 23, 2024.
On May 8, 2024, we entered into a sales agreement with Leerink Partners with respect to an ATM Offering Program
under which we may offer and sell, from time to time at our sole discretion, ordinary shares having an aggregate
offering price of up to $100.0 million (CHF 79.3 million) through Leerink Partners as our sales agent. On October
29, 2025, in conjunction with the November 2025 Underwritten Offering, the Company suspended and terminated
the ATM Offering Program. As of the date hereof, we have not sold any ordinary shares under the ATM Offering
Program. We will not make any sales of our ordinary shares pursuant to the sales agreement unless and until a new
prospectus, prospectus supplement or registration statement is filed. Other than the termination of the ATM Offering
Program, the sales agreement remains in full force and effect.
On February 18, 2025, we closed an underwritten offering for the issuance and sale of 5,000,000 ordinary shares,
CHF 0.01 nominal value per share, at a price of $20.00 or CHF 18.05 per share, for total gross proceeds of CHF
90.2 million or $100.0 million.
On July 31, 2025, we amended our existing loan facility with Kreos Capital VII (UK) Limited (the “
Lender
”), which
are funds and accounts managed by BlackRock, Inc. (the “
Amended Loan Agreement
”). The Amended Loan
Agreement is structured to provide the EUR equivalent of up to CHF 75.0 million in borrowing capacity (which may
be increased to up to CHF 100.0 million), comprising tranches 1, 2 and 3, in the amounts of the EUR equivalents of
129
CHF 25.0 million each, as well as an additional loan of the EUR equivalent of up to CHF 25.0 million, which may
be made available by the Lender to us if mutually agreed in writing between us and the Lender.
On November 3, 2025, we closed concurrent underwritten and registered direct offerings of an aggregate of
5,432,098 ordinary shares, CHF 0.01 nominal value per share, at a price per share of $20.25 (CHF 16.33) for total
gross proceeds of $110.0 million (CHF 88.7 million) before deducting underwriting discounts and commissions and
offering expenses.
We expect to incur additional operating losses in the near future and our operating expenses will increase as we
continue invest in the development of our product candidates through additional research and development
activities, including clinical trials. See “
Risk Factors—Risks related to development and regulatory approval of our
investigational therapies
.” We will continue to incur additional costs associated with operating as a public company,
including expenses related to legal, accounting, financial reporting and regulatory matters, maintaining compliance
with exchange listing and SEC requirements, director and officer insurance premiums and investor relations.
Based on our current operating plan, we believe that our existing cash, cash equivalents and short-term financial
assets will be sufficient to fund our operations and capital expenses through at least the next twelve months from the
date that this Annual Report is filed with the SEC without additional capital or drawdown from our loan facility. We
have based our estimate on assumptions that may prove to be wrong, and we may use our available capital resources
sooner than we currently expect. We may require additional capital resources due to underestimation of the nature,
timing and costs of the efforts that will be necessary to complete the development of our product candidates. We
may also need to raise additional funds more quickly if we choose to expand our development activities, our
portfolio or if we consider acquisitions or other strategic transactions, including licensing transactions. For more
information regarding these risks and factors that could influence our future capital requirements and the timing
thereof, please see the section entitled “
Risk Factors
.”
Future Funding Requirements
Product development is expensive and involves a high degree of risk. Only a small number of research and
development programs result in the commercialization of a product. We will not generate revenue from product
sales unless and until we successfully complete clinical development and are able to obtain regulatory approval for
and successfully commercialize the product candidates we are currently developing or that we may develop.
Our product candidates, currently under development or that we may develop, will require significant additional
research and development efforts, including extensive clinical testing and regulatory approval prior to
commercialization.
If we obtain regulatory approval for one or more of our product candidates, we have the options of seeking strategic
partnerships or commercializing such products ourselves. If we decide to pursue direct commercialization, we
expect to incur significant expenses to develop our commercialization capabilities to support product sales, medical
affairs, market access, and marketing and distribution activities, either alone or in collaboration with others. As a
result, we may need substantial additional funding to support our continuing operations and pursue our growth
strategy.
Until such time, if ever, when we can generate substantial product revenue, we may finance our operations through a
combination of private or public equity offerings, debt financings, collaborations, strategic alliances, marketing,
distribution or licensing arrangements or through other sources of funding. Adequate capital may not be available to
us when needed or on acceptable terms. To the extent that we raise additional capital through the sale of equity or
convertible debt securities, your ownership interest will be diluted, and the terms of these securities may include
liquidation or other preferences that adversely affect your rights as a holder of ordinary shares. Debt financing, such
as the Amended Loan Agreement, may involve agreements that include covenants limiting or restricting our ability
to take specific actions, such as incurring additional debt, making acquisitions or capital expenditures. Debt
financing would also result in fixed payment obligations. If we raise additional funds through collaborations,
strategic alliances or marketing, distribution or licensing arrangements with third parties, we may have to relinquish
valuable rights to our technologies, future revenue streams, research programs 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 research,
130
product development or future commercialization efforts, grant third parties rights to develop and market product
candidates that we would otherwise prefer to develop and market ourselves, obtain funds through arrangements with
collaborators on terms unfavorable to us or pursue merger or acquisition strategies, all of which could adversely
affect the holdings or the rights of our shareholders. Please see the section entitled
“Risk Factors—Risks related to
our business, financial condition, capital requirements, or financial operations”
for additional risks associated with
our substantial capital requirements.
We expect our expenses to increase substantially in connection with our ongoing activities, particularly as we
advance the preclinical activities, manufacturing and clinical development of our product candidates. In addition, we
will continue to incur additional costs associated with operating as a dual-listed public company, including
significant legal, accounting, investor relations and other expenses. Our expenses will also increase as we:
•
progress our Phase 3 clinical trials for OCS-01 for DME;
•
advance our Licaminlimab program into the PREDICT-1 clinical trial for DED and related
manufacturing development activities;
•
advance Privosegtor in ON and NAION into the PIONEER registrational program;
•
advance our preclinical stage product candidates into clinical development;
•
seek to identify, acquire and develop additional product candidates, including through business
development efforts to invest in or in-license other technologies or product candidates;
•
hire additional clinical, regulatory, technical development, quality assurance and control, medical,
scientific and other technical personnel to support our product development operations;
•
expand our operational, financial and management systems and increase personnel to support our
operations;
•
meet the requirements and demands of being a dual-listed public company, including compliance with
regulatory regimes and stock exchange rules in both the U.S. and Iceland;
•
maintain, expand, protect and enforce our intellectual property portfolio;
•
make milestone, royalty or other payments due under the license agreements with Novartis Technology
LLC (“
Novartis
”) and Accure Therapeutics SL (“
Accure
”), described below, and any future in-license
or collaboration agreements;
•
seek regulatory approvals for any product candidates that successfully complete clinical trials; and
•
undertake any pre-commercialization activities to establish sales, medical affairs, market access,
marketing and distribution capabilities for any product candidates for which we may receive regulatory
approval in regions where we choose to commercialize our products on our own or jointly with third
parties.
See the section of this Annual Report titled “
Risk Factors
” for additional risks associated with our substantial capital
requirements.
Material Cash Requirements for Known Contractual Obligations and Commitments
We have certain payment obligations under existing license and collaboration agreements. Under these agreements,
we are required to pay non-refundable, upfront license fees, predefined development and commercial milestone
payments and royalties on net sales of licensed products.
131
License Agreement with Accure for Privosegtor
Pursuant to a license agreement, dated as of January 29, 2022, by and between us and Accure (the “
Accure
Agreement
”), we obtained an exclusive, worldwide, sublicensable (subject to certain conditions) and transferable
(subject to certain conditions) license under certain patents, know-how and inventory of Accure for any and all uses
and purposes, including to perform research, development, manufacturing and commercialization activities in any
manner and for any purpose. The licensed patents are co-owned by Accure with third parties who have reserved the
right to use the licensed patents for education and research purposes pursuant to an inter-institutional agreement.
As of December 31, 2025, we had paid the full contractual non-refundable upfront fee of CHF 3.0 million and
reimbursed costs in the amount of CHF 0.5 million. In December 2024, we achieved two milestones under the
agreement for the IND approval and positive topline data readout from the ACUITY trial and recorded a liability of
CHF 1.1 million ($1.2 million) in connection with those milestones, which was paid in 2025. The next clinical and
regulatory milestone under the Accure Agreement will trigger a payment of CHF 2.1 million ($2.6 million) that the
Company expects to pay in 2026. As of December 31, 2025, we could be further obligated to pay Accure (a) up to
CHF 87.9 million ($110.9 million at the December 31, 2025 exchange rate) in the aggregate upon the achievement
of additional future development, regulatory and sales milestones; (b) tiered royalties ranging from a mid-single
digit to a low mid-teen percentage on net sales of licensed products; and (c) high teens on sublicensing revenues
received any time after 36 months from the agreement effective date, and a higher percentage on sublicensing
revenues received prior to such date, in all cases subject to reduction for any amounts that were previously paid or
are concurrently or later paid by us to Accure pursuant to our milestone payment obligations and such amounts
received from a sublicensee will be deduced from amounts owed to Accure. Our royalty payment obligations are
subject to certain reductions and expire on a licensed product-by-licensed product and country-by-country basis
upon the later of (i) the expiration of the last valid claim of any licensed patent covering such licensed product in
such country; (ii) the expiration of such licensed product’s Orphan Drug status, if any, in such country; or (iii) ten
(10) years following the date of first commercial sale of such licensed product in such country (the “
Payment
Period
”).
Under the Accure Agreement, we are obligated to use commercially reasonable efforts to develop and seek
regulatory approval for a licensed product in major countries of the territory as defined in the Accure Agreement.
The Accure Agreement will expire on a licensed product-by-licensed product and country-by-country basis upon the
expiration of the applicable Payment Period with respect to such licensed product in such country. We may
terminate the Accure Agreement in whole or in part at any time upon advance written notice (a) for documented
reasonable scientific, regulatory, commercial reasons related to the licensed product without incurring any penalty or
liability to Accure and (b) for no reason. Each party may terminate the Accure Agreement with immediate effect
upon written notice to the other party (i) in the event such other party commits a material breach of its obligations
under the Accure Agreement and fails to cure that breach within a specified period of time or (ii) with certain
exceptions, upon such other party’s bankruptcy. Accure may terminate the Accure Agreement with immediate effect
upon written notice to us if we file any action to invalidate any of the licensed patents or fail to maintain the licensed
patents in major countries of the territory as defined in the Accure Agreement, or, subject to certain exceptions, if
we fail to meet certain development obligations and are unable to agree upon modifications to the development plan
with Accure.
License Agreement with Novartis for Licaminlimab
Pursuant to a license agreement, dated as of December 19, 2018, as amended, by and between us and Novartis (the
“
Novartis Agreement
”), we obtained an exclusive, royalty-bearing, sublicensable (subject to certain conditions),
assignable (subject to certain conditions), worldwide license under certain patents, know-how and manufacturing
platform technology to develop, manufacture and commercialize pharmaceutical, therapeutic or diagnostic products
containing a specified single chain antibody fragment formulation as an active ingredient in the licensed field as
defined in the Novartis Agreement. The license granted to us by Novartis includes sublicenses of rights granted to
Novartis by certain third parties, and our license to such rights is expressly subject to the applicable terms and
conditions of the agreements between Novartis and such third parties.
132
We originally entered into the Novartis Agreement with Alcon Research, Ltd. (“
Alcon
”), which subsequently
assigned its rights and obligations under the Novartis Agreement to Novartis in connection with its spin-off from
Novartis.
We are deemed the owner of any inventions that are (a) created solely by or on behalf of us pursuant to the Novartis
Agreement and (b) severable from the licensed products, and grant Novartis a first right to negotiate a worldwide,
royalty-bearing license under any patents directed at such inventions for purposes outside of the licensed field. We
also grant Novartis a worldwide, non-exclusive, perpetual, irrevocable, royalty-free, fully paid-up license back under
any patents owned by us that (i) cover inventions arising from the Novartis Agreement, the practice of which would
infringe the patents licensed to us by Novartis, or (ii) otherwise incorporate Novartis’ proprietary information, in
each case, for certain uses outside of the licensed field.
We paid in full the contractual non-refundable upfront payment to Alcon of CHF 4.7 million ($4.7 million at the
exchange rate at the time of payment) in cash and issued 401,709 ordinary shares (recast subsequent to the BCA) for
the residual between the fair value and the upfront payment. This was accounted for as a share-based payment
transaction under IFRS 2. As of December 31, 2025, we could be obligated to pay Novartis up to an additional CHF
76.9 million ($97.0 million at the December 31, 2025 exchange rate) in the aggregate upon the achievement of
certain development, regulatory, sales and other milestones and tiered royalties ranging from a mid-single digit to a
low mid-teen percentage on net sales. In consideration for the exclusive sublicense from Novartis under certain
third-party intellectual property rights, we are obligated to pay a low-single digit royalty on our net sales of the
licensed product, however, such payments will be deducted from royalties payable to Novartis. Our royalty payment
obligations are subject to certain reductions and expire with respect to any licensed product on a country-by-country
basis upon the later of (a) the expiration of the last to expire valid claim of any licensed patent covering any such
licensed product in such country; (b) the expiration of the period of data exclusivity in any country worldwide; or (c)
twelve (12) years after first commercial sale of such licensed product in such country (“
Royalty Term
”).
Under the Novartis Agreement, we are obligated to use diligent efforts to develop, manufacture or have
manufactured, and commercialize the licensed products in the licensed field worldwide. The Novartis Agreement
will expire upon the last-to-expire Royalty Term. We may terminate the Novartis Agreement without cause at any
time upon advance written notice to Novartis. Upon written notice to Novartis, we may terminate the Novartis
Agreement for cause due to the following events: (a) an insolvency event occurs; (b) Novartis materially breaches its
obligations under the Novartis Agreement and fails to cure such breach within a specified period of time; or (c) upon
advance written notice for material scientific, technical or medical reasons or in case of a material adverse change
that renders further continuation of the Novartis Agreement by us commercially unreasonable or otherwise not
viable. Upon written notice to us, Novartis may terminate the Novartis Agreement for cause due to the following
events: (i) we fail to pay any undisputed amount due under the Novartis Agreement and we fail to remedy such
failure within a specified period of time; (ii) an insolvency event occurs; or (iii) we materially breach our obligations
under the Novartis Agreement and fail to cure such breach within a specified period of time; or (iv) following
negative clinical trial results, we terminate development of the licensed product and do not pursue any further
indications in the licensed field.
Other Commitments
The majority of our near term cash needs relate to our clinical and Chemistry, Manufacturing and Controls projects.
We have conducted research and development programs through collaborative arrangements that include, among
others, arrangements with universities, CROs and clinical research sites. As of December 31, 2025, commitments
for external research and development projects totaled CHF 42.0 million, with CHF 31.4 million due within one
year and CHF 10.5 million due between one and five years.
In addition, we enter into agreements in the normal course of business with CROs for clinical trials and with vendors
for preclinical studies, manufacturing services, and other services and products for operating purposes, which are
generally cancelable upon written notice.
We have entered into three real estate lease agreements for lab and office facilities. At December 31, 2025, these
lease agreements have aggregate lease liabilities of CHF 0.6 million due within one year and CHF 2.4 million due in
more than one year.
133
Refer to Notes 10, 18 and 20 to our audited consolidated financial statements included elsewhere in this Annual
Report for further details on our obligations and timing of expected future payments.
Cash Flows
The following table summarizes our sources and uses of cash and cash equivalents for each of the periods presented:
For the years ended December 31,
2025
2024
Change
% Change
Net cash outflow for operating activities
(66,304)
(48,919)
(17,385)
35.5%
Net cash outflow for investing activities
(60,934)
(16,083)
(44,851)
278.9%
Net cash inflow for financing activities
186,918
53,976
132,942
246.3%
Increase (decrease) in cash and cash
equivalents
59,680
(11,026)
70,706
(641.3%)
Total cash, cash equivalents and short-term investments were CHF 213.0 million as of December 31, 2025, which
represents an increase of CHF 114.3 million from CHF 98.7 million at December 31, 2024. The increase was
primarily due to the February 2025 and November 2025 offerings, partially offset by ongoing operations of the
Company.
Operating Activities
For the year ended December 31, 2025, operating activities used CHF 66.3 million of cash, primarily consisting of a
loss before tax of CHF 99.1 million, partially offset by non-cash adjustments of CHF 33.0 million and working
capital adjustments. Non-cash adjustments primarily consisted of CHF 16.0 million of share-based compensation
expense, CHF 12.3 million fair value adjustment loss on warrant liabilities, and CHF 4.0 million of financial result
comprised primarily of foreign exchange losses on U.S. dollar liquid asset balances during the period and interest
income. Working capital adjustments consisted of a CHF 2.3 million decrease in other current assets, driven by a
decrease in prepaid clinical and technical development expenses due to the advancements of clinical trials, primarily
the OCS-01 DIAMOND-1 and DIAMOND-2 trials in DME which started in December 2023 and February 2024,
respectively, and completed enrollment in April 2025, partially offset by a CHF 1.9 million timing related decrease
in payables and accrued liabilities, and a CHF 0.4 million increase in accrued income related to Icelandic
government research and development cost reimbursements.
For the year ended December 31, 2024, operating activities used CHF 48.9 million of cash, primarily consisting of a
loss before tax of CHF 85.9 million, partially offset by non-cash adjustments of CHF 23.0 million and working
capital adjustments of CHF 14.3 million. The decrease in net working capital was driven by an increase of CHF 9.4
million in accrued expenses and other payables, a decrease in other current assets of CHF 5.0 million due to
advancements of clinical trials in 2024 that commenced during the fourth quarter of 2023 which resulted in
recording of expenses and lowering of prepaid balances and a CHF 0.2 million decrease in accrued income. Non-
cash adjustments primarily consisted of CHF 9.8 million of share-based compensation expense, CHF 15.5 million
fair value adjustment loss on warrant liabilities, partially offset by CHF 2.7 million of financial result composed of
foreign exchange transactions and interest income.
Investing Activities
For the year ended December 31, 2025, investing activities used CHF 60.9 million in cash, primarily driven by CHF
60.8 million for investments in current fixed term bank deposits, net of maturities, as well as a CHF 1.1 million
milestone payment to Accure. These outflows were partially offset by CHF 1.2 million of interest received on short
term financial assets.
For the year ended December 31, 2024, investing activities used CHF 16.1 million in cash, primarily consisting of
CHF 17.3 million for investments in current fixed term bank deposits, net of maturities, partially offset by CHF 1.5
million of interest received on short term financial assets.
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Financing Activities
For the year ended December 31, 2025, net cash provided by financing activities was CHF 186.9 million, which
primarily consisted of CHF 178.9 million of net proceeds received from the issuance and sale of shares in the
February 2025 and November 2025 underwritten offerings, CHF 19.8 million received from the exercise of warrants
and CHF 1.9 million of proceeds from the exercise of stock options, partially offset by CHF 13.2 million of
transaction costs related to financing activities.
For the year ended December 31, 2024,
net cash provided by financing activities was CHF 54.0 million,
which
primarily consisted of proceeds received from the issuance and sale of shares in a registered direct offering.
For a discussion of our cash flows for the year ended December 31, 2023, see “Item 5. Operating and Financial
Review and Prospects—B. Liquidity and Capital Resources” in our Annual Report on Form 20-F filed with the SEC
on March 11, 2025.
C.
Research and Development, Patents and Licenses, etc.
Full details of our research and development activities and expenditures are given in the “Item 4.B. Information on
the Company—Business Overview” and “Item 5 Operating and Financial Review and Prospects” sections of this
Annual Report.
D.
Trend Information
Other than as described elsewhere in this Annual Report, we are not aware of any trends, uncertainties, demands,
commitments or events that are reasonably likely to have a material adverse effect on our revenue, income from
continuing operations, profitability, liquidity or capital resources, or that would cause our reported financial
information not necessarily to be indicative of future operating results or financial condition.
E.
Critical Accounting Estimates
We prepared our consolidated financial statements in accordance with IFRS Accounting Standards as issued by the
IASB. Refer to Note 3 and 4 to our audited consolidated financial statements included elsewhere in this Annual
Report for further details on the most significant accounting policies applied in the preparation of our consolidated
financial statements and our critical accounting estimates and judgments.
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Item 6.
Directors, Senior Management and Employees
A.
Directors and senior management
The following table sets forth the current executive committee members and directors of Oculis as of the filing date.
Unless otherwise noted, the business address of each of our directors and executive committee members is
Bahnhofstrasse 20, 6300 Zug, Switzerland.
Name
Age
Title
Non-Employee Directors
Anthony Rosenberg
73
Chairman of the Board of Directors
Christina Ackermann
61
Director
Lionel Carnot
58
Director
Arshad M. Khanani
47
Director
Martijn Kleijwegt
71
Director
Geraldine O’Keeffe
59
Director
Robert K. Warner
59
Director
Executive Committee
Riad Sherif, M.D.
58
Chief Executive Officer and Director
Sylvia Cheung
51
Chief Financial Officer
Páll Ragnar Jóhannesson
45
Chief Business Officer
Non-Employee Directors
Anthony Rosenberg,
73, has served as Chairman of the board of directors of Oculis since April 2018. Since April
2015, Mr. Rosenberg has served as the Chief Executive Officer of TR Advisory Services GmbH. Additionally, from
April 2015 to April 2020, Mr. Rosenberg served as a Managing Director of MPM Capital. Prior to that, from 2005
to 2012, Mr. Rosenberg held a series of business development and licensing positions of increasing seniority at
Novartis, and most recently, from 2012 to 2015, Mr. Rosenberg served as the Corporate Head of M&A and
Licensing at Novartis International AG. Mr. Rosenberg currently serves on the boards of directors of Argenx BV,
Cullinan Therapeutics Inc. (previously Cullinan Oncology) and Nuclidium AG. Mr. Rosenberg previously served on
the boards of directors of
SiO2 Materials Science,
TriNetX and Radius Health, Inc. Mr. Rosenberg holds a B.Sc.
(Hons) from the University of Leicester and a M.Sc. in Physiology from the University of London.
Christina Ackermann,
61, has served as a member of the board of directors of Oculis since March 2023. Ms.
Ackermann serves as the Chair of the board of directors of Virometix, and sits on the Audit Committee and Chairs
the Remuneration Committee at Virometix. From January 2022 to May 2023, Ms. Ackermann served as Executive
Vice President, General Counsel & President of Ophthalmic Pharmaceuticals at Bausch + Lomb. Ms. Ackermann
joined Bausch Health as Executive Vice President, General Counsel, in August 2016. Prior to Bausch Health, Ms.
Ackermann was part of the Novartis group of companies for 14 years, most recently serving as Senior Vice
President, General Counsel for Alcon, where she was responsible for the legal, intellectual property and compliance
functions, in addition to Trade Compliance Function, Enterprise Risk Management and Diversity & Inclusion.
Previously, she served as Global Head, Legal and General Counsel at Sandoz, the generics division of Novartis,
from 2007 to 2012. She joined Novartis Pharma in 2002 as Head, Legal Technical Operations and Ophthalmics, and
assumed the role of Head Legal General Medicine in July 2005. Before Novartis, Ms. Ackermann served in
Associate General Counsel roles with Bristol Myers Squibb and DuPont Pharmaceuticals, as well as in private
practice, where she focused on securities, and mergers & acquisitions. From August 2021 to March 2023, Ms.
Ackermann served on the board of directors of Graybug Vision, where she was Chair of the Nominating and
Corporate Governance Committee and a member of the Compensation Committee. Between March 2022 and
January 2024, Ms. Ackermann served on the American Glaucoma Society Foundation Advisory Board. From
September 2023 to October 2025, Ms. Ackermann served on the board of directors of Verona Pharma, where she
was a member of the Commercial Committee and the Audit Committee. Ms. Ackermann holds an LL.B in law from
Queen’s University in Ontario, Canada and a post graduate degree in EU competition law from King’s College in
London, England.
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Lionel Carnot,
58, has served as a member of the board of directors of Oculis since December 2017. Since March
2012, Mr. Carnot has served as Partner of Earlybird Venture Capital. Additionally, from 2005, Mr. Carnot served as
a Managing Director of Bay City Capital LLC until 2020. Prior to that, from 2000 to 2005, Mr. Carnot served as an
Associate of The Pritzker Organization, LLC. Before that, from 1999 to 2000, Mr. Carnot served as a Principal of
Oracle Partners. Prior to that, from 1997 to 1998, Mr. Carnot served as a Senior Associate of Booz Allen and
Hamilton. Before that, from 1995 to 1997, Mr. Carnot served as a Product Manager of Eli Lilly & Co. Prior to that,
from 1991 to 1994, Mr. Carnot served as a Senior Consultant of Accenture. Before that, from 1989 to 1991, Mr.
Carnot served as a sales and marketing professional at Rhone-Poulenc. Mr. Carnot currently serves on the board of
directors of Priothera. Mr. Carnot previously served on the board of directors of Atlantic Therapeutics, Merus,
Interleukin
Genetics,
Madrigal
Pharmaceuticals
Inc.,
Nabsys,
Bioseek,
Pathway
Diagnostics,
Reliant
Pharmaceuticals, IQONE Healthcare, and iSTAR Medical. Mr. Carnot holds an MBA with Distinction from
INSEAD and a M.Sc. in Molecular Biology from the University of Geneva.
Arshad M. Khanani, M.D.
, 47, has served as a member of the board of directors of Oculis since May 2024. Dr.
Khanani founded the clinical research section at Sierra Eye Associates, and currently serves as its Managing Partner,
Director of Clinical Research, and Director of Fellowship. He has been a principal investigator for more than 120
clinical trials and a top enroller in the United States for multiple Phase 1-3 trials. He is also a Clinical Professor at
the University of Nevada, Reno School of Medicine and is an elected member of the Retina Society, Macula
Society. Dr. Khanani completed his Fellowship in Vitreo-Retinal Diseases and Surgery at the UT Southwestern
Medical Center, his Chief Resident in Ophthalmology and his Ophthalmology Residency Program at Texas Tech
University Health Sciences Center, where he also received his Doctor of Medicine (M.D.) degree. Dr. Khanani
completed an Internship in Internal Medicine at Baylor College and received a Master and Bachelor of Arts (M.A.
and B.A.) in Chemistry from Washington University in St. Louis.
Martijn Kleijwegt,
71, has served as a member of the board of directors of Oculis since March 2023. Previously, he
served as a member and the Chairman of the EBAC Board from EBAC’s inception in January 2021 to March 2023.
Mr. Kleijwegt founded LSP in 1998 and is currently a partner at EQT Life Sciences (f/k/a Life Science Partners).
Mr. Kleijwegt has over 30 years of hands-on finance and investment experience. Mr. Kleijwegt currently serves on
the boards of Vico Therapeutics International BV, AM-Pharma Holding BV, Avidicure Holding BV, Pantera NV
and LSP Advisory BV. Mr. Kleijwegt previously served on the board of directors of OxThera AB and Vicentra BV.
Mr. Kleijwegt has a master’s degree in Economics from Amsterdam University.
Geraldine O’Keeffe, 59
, has served as a member of the board of directors of Oculis since March 2023. Ms. O’Keeffe
joined LSP in 2008. She became a Partner of the firm in 2010. Ms. O’Keeffe’s prime focus and responsibility within
LSP is to invest in listed securities. Prior to joining LSP, she held the position of Senior Healthcare Analyst at Fortis
Investment Banking. In that position, she researched a wide range of innovative life sciences companies, both in
Europe and the US. Before joining the financial community, she worked within the life sciences industry for a
number of years, gaining first-hand product development experience in a commercial setting. Prior to working in the
industry, she lectured in Biomedical Sciences for several years at the Dublin Institute of Technology. From July
2022 to July 2025, Ms. O’Keeffe served on the board of directors of T-Knife Therapeutics, where she was a member
of the Audit Committee. Ms. O’Keeffe has a Bachelor’s degree in Biochemistry and Microbiology from University
College Cork and a Master’s degree in Biotechnology from University College Galway. She also conducted post-
graduate research, inter alia at the prestigious Max Planck Institute for Biophysical Chemistry in Göttingen,
Germany. In addition, Ms. O’Keeffe is also a graduate of The Dublin School of Business.
Robert K. Warner
, 59, has served as a member of the board of directors of Oculis since May 2024. Mr. Warner
serves on the board of another public company, RXSight, Inc., where he also serves as chair of the nominating and
corporate governance committee. In addition, Mr. Warner serves on the board of three private medical device
companies, i-Lumen Scientific, where he is also a member of the compensation committee, EyeYon Medical, where
he also serves as chairman of the board, and Qlaris Bio. From March 2022 to February 2025, Mr. Warner served on
the board of INARI Medical Inc., where he also served as a member of the audit committee. Mr. Warner served as
President and General Manager of Alcon Vision Care Franchise Alcon Laboratories from August 2015 until
February 2018. Prior to that, Mr. Warner served as President, U.S. and Canada, for Alcon from January 2012 to July
2015 and as President, Canada and Latin America, for Alcon from November 2010 to January 2012. From January
2005 to October 2010, Mr. Warner served in increasing positions of responsibility for Alcon. Mr. Warner was a
137
member of the Alcon Executive Leadership Team for over 10 years and led the Alcon transition from Nestle to
Novartis majority ownership. Mr. Warner holds a B.S. in Chemistry from Pace University and an MBA from
Rutgers University.
Executive Committee Members
Riad Sherif, M.D.,
58, has served as the Chief Executive Officer and member of the board of directors of Oculis
since December 2017. Previously, from June 2016 to September 2017, Dr. Sherif served as Entrepreneur in
Residence at the Novartis Venture Fund. Before that, Dr. Sherif served as the President of Europe, Middle East and
Africa of Alcon, Inc. from March 2014 to May 2016. Prior to that, from January 2002 to April 2014, Dr. Sherif held
roles of increasing responsibility at Novartis AG, including as the Global Sales Head in the Transplant and
Infectious Disease unit, as the Head for Latin America in transplant and infectious disease, as the President of the
Novartis Vaccines and Diagnostics Division for Latin America and where he co-founded Synergium a leading
biotech company, and most recently as the President of Novartis Pharmaceuticals, Canada and Novartis Country
President. Prior to Novartis, Dr. Sherif worked for several pharmaceutical companies, holding positions of
increasing seniority, mainly in marketing and general management with international scope. Dr. Sherif currently
serves as a member of the board of directors of Revenio Group Oyi. Dr. Sherif previously served as the Vice
Chairman for the Innovative Medicine Canada Association, as the Chairman of In-Vivo Montreal, and as the
Chairman of the Board Ophthalmic Surgery and Vision Care of Eucomed. Dr. Sherif is a Medical Doctor by
training, and holds an MBA from IMD Business School and a Specialized Master’s Degree in Medical Management
from ESCP.
Sylvia Cheung, 51
, has served as the Chief Financial Officer of Oculis since September 2020. Prior to that, from
October 2005 to August 2020, Ms. Cheung held executive positions at Anika Therapeutics, Inc., a publicly-traded
joint preservation company. Most recently, from April 2013 to August 2020, Ms. Cheung served as the Chief
Financial Officer of Anika Therapeutics, Inc. Previously, from 2000 to 2005, Ms. Cheung held a series of financial
management positions of increasing responsibility at Transkaryotic Therapies, Inc., which was acquired by Shire
Pharmaceuticals in 2005. Before that, from 1995 to 2000, Ms. Cheung served as a Senior Associate at
PricewaterhouseCoopers. Ms. Cheung holds a Bachelor of Business Administration degree in Accounting from the
University of Massachusetts in Amherst, an MBA from Boston University, and was certified as Certified Public
Accountant in Massachusetts.
Páll Ragnar Jóhannesson,
45, has served as the Chief Business Officer of Oculis since January 2024. Previously,
from September 2020 to January 2024, Mr. Jóhannesson served as the Chief Strategy Officer of Oculis, and from
January 2018 to September 2020, Mr. Jóhannesson served as the Chief Financial Officer of Oculis. Additionally,
Mr. Jóhannesson has served as the Managing Director of Oculis Iceland ehf. since May 2015. Prior to that, from
February 2012 to April 2015, Mr. Jóhannesson held a series of corporate finance positions of increasing
responsibility at Straumur Investment Bank, and most recently, from September 2013 to April 2015, Mr.
Jóhannesson served as the Managing Director, Corporate Finance. Before that, from January 2009 to November
2011, Mr. Jóhannesson served as a Director, Corporate Finance at Íslandsbanki and its predecessor Glitnir Bank. Mr.
Jóhannesson currently serves as a director of Tæknisetur ehf. Mr. Jóhannesson holds a B.Sc. in Industrial
Engineering from the University of Iceland, an M.Phil in Management Science from the University of Cambridge,
and was certified as securities broker in Iceland.
Family Relationships
There are no family relationships among any of our executive committee members or directors.
Corporate Governance
We structured our corporate governance in a manner we believe closely aligns our interests with those of our
shareholders. Notable features of this corporate governance include:
•
We have seven independent directors and our audit, remuneration, and nomination and governance
committees are composed entirely of independent directors. Our independent directors meet regularly
without the presence of our corporate officers or non-independent directors;
138
•
At least one of our independent directors qualifies as an “audit committee financial expert” as defined
by the SEC; and
•
We have implemented a range of other corporate governance practices.
B.
Compensation
Compensation of Members of the Executive Committee
Historically, our executive compensation program has reflected our innovative growth and development-oriented
corporate culture. To date, the compensation of our Chief Executive Officer and our other executive committee
members has consisted of a combination of base salary, bonus and long-term equity incentive compensation in the
form of restricted stock units (“
RSUs
”) and/or stock options. Our executive committee members who are full-time
employees, like all other full-time employees, are participants in applicable retirement plans in the jurisdiction in
which they reside. We evaluate our compensation values and philosophy and compensation plans and arrangements
as circumstances merit. We review executive committee compensation periodically with input from a third-party
compensation consultant. As part of this review process, the board of directors and the remuneration committee
apply our values and philosophy, while considering the compensation levels needed to ensure our executive
compensation program remains competitive with our peers. In connection with our executive compensation
program, we also review whether we are meeting our retention objectives and the potential cost of replacing a key
employee.
We use base salaries to recognize the experience, skills, knowledge and responsibilities required of all our executive
committee members. Base salaries are reviewed annually by the remuneration committee, typically in connection
with our annual performance review process, and adjusted from time to time to align salaries with market levels
after taking into account individual responsibilities, performance and experience, as well as the results of external
benchmarking. In addition, our executive committee members are entitled to annual cash bonuses for their
performance over the fiscal year, based on goals established by our board of directors. Furthermore, we have a
formal process with respect to the grant of equity incentive awards to our employees, including members of our
executive committee. We believe that equity incentive awards provide our employees with a strong link to our long-
term performance, create an ownership culture and help to align the interests of our employees, including our
executive committee members, and our stockholders. In addition, we believe that equity incentive awards with time-
based vesting features promote employee retention because this feature incentivizes our employees, including our
executive committee members, to remain in our employment during the vesting period.
Pursuant to Swiss law, we are required to submit the aggregate amount of compensation of our executive officers to
a binding say-on-pay vote by our shareholders.
Adoption of Clawback Policy
In October 2023, in accordance with Rule 10D-1 promulgated under the Exchange Act and Nasdaq Listing Rule
5608, we adopted an Incentive Compensation Recoupment Policy which is incorporated by reference herewith at
Exhibit 97.1.
Compensation of Directors
Our board of directors adopted a board of directors’ compensation policy that is designed to enable us to attract and
retain, on a long-term basis, highly qualified non-employee directors. As of December 31, 2025, we pay each
eligible director who is not an employee of the Company annual cash retainers, as set forth below. Lionel Carnot,
Martijn Kleijwegt and Geraldine O’Keeffe did not receive any compensation for their services on the Board of
Directors during the year ended December 31, 2025 due to policy requirements of their employers which are
investors in the Company.
139
Annual Cash Retainer
Board of Directors Chair
$
89,000
Board of Directors Member
$
48,000
Audit Committee Chair
$
20,000
Audit Committee Member
$
12,000
Remuneration Committee Chair
$
15,000
Remuneration Committee Member
$
7,500
Nomination and Governance Committee Chair
$
11,000
Nomination and Governance Committee Member
$
5,500
In addition, each eligible director elected or appointed to our board of directors is eligible to participate in the Stock
Option and Incentive Plan Regulation 2023 of the Company (the “
2023 Plan
”), subject to its terms and conditions as
approved and amended by our board of directors from time to time. Upon joining Oculis, we issue to eligible
directors a one-time equity incentive award in the form of RSUs, stock options or similar awards under the 2023
Plan or other equity incentive plans then in effect, at an estimated equity value of $400,000. The exact number of
options to be granted and the vesting schedule shall be determined by the Board in the grant notice in its free
discretion and only such grant notice shall have legal effect. We will also issue to eligible directors an annual equity
incentive award in the form of RSU’s, stock options or similar awards under the 2023 Plan or other equity incentive
plans then in effect, at an estimated equity value of $250,000, generally granted on the date of our annual general
meeting.
The eligible directors are not eligible to any benefits other than those set out in the directors compensation policy,
unless our board of directors decides otherwise. We reimburse all reasonable expenses in accordance with the terms
and conditions of our travel and expense policy then in effect.
Pursuant to Swiss law, we are required to submit the aggregate amount of compensation of our board of directors to
a binding say-on-pay vote by our shareholders.
Compensation of Directors and Executive Committee Members
For the year ended December 31, 2025, the aggregate compensation earned by the members of our board of
directors and our executive committee members for services in all capacities was CHF 14.3 million.
For the year ended December 31, 2025, fees, salaries and other short-term employee benefits earned by the members
of our board of directors and our executive committee members was CHF 2.5 million.
The amount contributed by us to provide post-employment benefits to executive committee members amounted to a
total of CHF 0.2 million for the year ended December 31, 2025.
During the year ended December 31, 2025, 293,210 options to purchase ordinary shares and 470,048 RSUs were
granted to members of our board of directors and members of our executive committee for a total fair value of CHF
11.5 million.
See Note 13 to our audited consolidated financial statements included elsewhere in this Annual Report for further
details regarding the share options, stock appreciation rights and RSUs, including the exercise price and the
expiration date.
Risk Oversight
The board of directors is responsible for overseeing our risk management process. The board of directors focuses on
our general risk management strategy, the most significant risks, and oversees the implementation of risk mitigation
strategies by management, including oversight of cybersecurity risk assessment and risk management. The audit
committee is also responsible for discussing our policies with respect to risk assessment and risk management. The
board of directors believes its administration of its risk oversight function has not negatively affected the board of
directors’ leadership structure.
140
Code of Business Conduct and Ethics
Our board of directors adopted a Code of Business Conduct and Ethics applicable to the directors, executive
committee members and employees that complies with the rules and regulations of the United States Nasdaq Global
Market, the Nasdaq Iceland Main Market and the SEC. The Code of Business Conduct and Ethics is available on our
website. In addition, we posted on the Corporate Governance section of our website all disclosures that are required
by law or United States Nasdaq Global Market listing standards concerning any amendments to, or waivers from,
any provision of the Code of Business Conduct and Ethics. The reference to our website address in this Annual
Report does not include or incorporate by reference the information on our website into this Annual Report.
Stock Option and Incentive Plan Regulation 2023
The 2023 Plan was approved by our board of directors on March 2, 2023 and amended in May 2024, and provides
for the grant of options, restricted stock awards, restricted stock units and stock appreciation rights.
The purpose of the 2023 Plan is to attract and retain highly qualified personnel and to provide key employees,
directors and consultants with additional incentive to increase their efforts on behalf of and in the best interest of us
and our subsidiaries by giving them the opportunity to acquire a proprietary interest in us. The terms of the 2023
Plan are described in more detail below.
The 2023 Plan shall be administered by a plan administrator (one or several persons) elected by our board of
directors from time to time. The plan administrator acts within the guidelines set and approved by our board of
directors or a committee thereof and is authorized to, among others, determine (i) which eligible persons are to
receive awards under the 2023 Plan, (ii) the time or times when such award grants are to be made, (iii) the nature of
the shares and the number of awards covered by each such grant, (iv) the time or times at which each option or stock
appreciation right is to become exercisable, (v) the vesting conditions applicable to the awards, (vi) the maximum
term for which the options or rights are to remain outstanding, and (vii) any terms and conditions of any restricted
stock award, in each case, subject to the guidelines set and approved by our board of directors or a committee
thereof. Persons eligible to participate in our 2023 Plan are employees, members of the board of directors and
consultants of Oculis or a subsidiary.
The 2023 Plan provides for up to 12,480,000 registered shares to be reserved and available for grant or issuance. In
the event registered shares that otherwise would have been issuable under the 2023 Plan are withheld by us in
payment of the exercise price or withholding obligations, such shares shall remain available for issuance under the
2023 Plan. In the event that an outstanding award expires or is cancelled, forfeited or terminated for any reason, the
shares allocable to the unexercised or unsettled portion shall remain available for issuance under the 2023 Plan.
A participant may only exercise an option or stock appreciation right to the extent that the option or stock
appreciation right has vested and has not lapsed under the 2023 Plan. Unless otherwise determined by our board of
directors at the grant date or as set forth in the grant notice, an option or an award in the form of a restricted stock
unit or stock appreciation right granted under the 2023 Plan typically vests as to 25% of the award at the end of the
first year following the vesting start date, with the remaining 75% of the award vesting either monthly or quarterly
over the 3 years after the first year following the vesting start date, depending on award type. Any restricted stock
may not be transferred or pledged. Such restriction expires with vesting or with the expiration of any repurchase
right for the restricted stock. The 2023 Plan provides provisions that govern the exercise of any awards held by the
participant at the time the legal relationship forming the basis of the service is coming to an end. Generally, any
award not vested shall immediately lapse at the time a notice of termination has been received (regardless of which
party gives notice) or at the end of the term in case of a board member. If indicated in the grant notice or otherwise
resolved by the board of directors, upon the occurrence of a “Corporate Transaction” (as defined in the 2023 Plan ),
all options and awards in the form of restricted stock units or stock appreciation rights (i) shall fully vest and (ii) in
the case of options and stock appreciation rights must be immediately exercised, except if such options or stock
appreciation rights are repurchased by Oculis or a third party designated by Oculis for a cash consideration
equivalent to the economic value applicable to such option or stock appreciation right under the 2023 Plan.
Our board of directors has complete and exclusive power and authority to amend or modify the 2023 Plan in any or
all respects. Such amendment or modification shall be communicated in appropriate form as an amendment of the
2023 Plan. Unless such change is required to comply with applicable law, listing requirements, accounting rules or
141
tax requirements, no such amendment or modification shall, without the consent of the concerned participant,
adversely affect materially his/her rights and obligations under the 2023 Plan.
C.
Board Practices
Composition of Our Board of Directors
Our board of directors is currently composed of eight members. In accordance with our articles of association, the
board of directors is not divided into classes of directors. The directors were appointed until the end of the general
meeting of shareholders called to approve our annual accounts for the 2025 financial year.
Seven of eight directors are independent as defined in United States Nasdaq Global Market listing standards and
applicable SEC rules and our board of directors has an independent audit committee, a nomination and governance
committee, and a remuneration committee.
Committees of our Board of Directors
Our board of directors has three standing committees: an audit committee, a remuneration committee, and a
nomination and governance committee. The board has adopted written charters that are available to shareholders on
our website at
https://investors.oculis.com/corporate-governance
. The reference to our website address in this
Annual Report on Form 20-F does not include or incorporate by reference the information on our website into this
Annual Report on Form 20-F.
Audit Committee
The audit committee consists of Lionel Carnot, Geraldine O’Keeffe and Christina Ackermann. The audit committee
assists the board of directors in overseeing our accounting and financial reporting processes and the audits of our
financial statements. Mr. Carnot serves as chairperson of the audit committee. In addition, the audit committee is
responsible for the appointment, compensation, retention and oversight of the work of our independent registered
public accounting firm. Our board of directors has determined that Mr. Carnot, Ms. O’Keeffe and Ms. Ackermann
satisfy the “independence” requirements set forth in Rule 10A-3 under the Exchange Act and Mr. Carnot qualifies as
an “audit committee financial expert,” as such term is defined in the rules of the SEC.
Each of the members of our audit committee qualify as independent directors according to the rules and regulations
of the SEC and United States Nasdaq Global Market with respect to audit committee membership. In addition, all of
the audit committee members meet the requirements for financial literacy under applicable SEC and Nasdaq Global
Market rules and at least one of the audit committee members qualifies as an “audit committee financial expert,” as
such term is defined in Item 407(d) of Regulation S-K. The audit committee is governed by a charter that complies
with applicable Nasdaq rules, which charter is posted on our website. We have adopted an audit committee charter,
which details the principal functions of the audit committee, including:
•
review and discuss with management the annual and quarterly financial statements and reports,
including earnings press releases and financial information and earnings guidance given to analysts and
rating agencies;
•
propose to the board to approve the quarterly and annual reports;
•
inform the board on its assessment of the financial statements and decide whether to recommend the
statutory and consolidated financial statements to the board for approval and presentation to the meeting
of shareholders;
•
review in cooperation with the auditor and the management whether the accounting principles applied
by the company and any of its subsidiaries are appropriate;
•
review and assess the qualifications, independence, performance, and effectiveness of the auditor and
recommend to the board the nomination of the auditor;
142
•
review the scope of the prospective audit by the auditor, the estimated fees and any other matters
pertaining to such audit as the committee may deem appropriate;
•
approve any proposal of audit and non-audit services to be provided by the auditor to the company to
ensure auditor independence;
•
review and assess the auditor’s report, management letters and take notice of all comments of the
auditor on accounting procedures and systems of internal control;
•
review with the auditors and management the auditor’s reports to the committee/board on critical
accounting policies and practices used (and any changes thereto), on alternative treatments of financial
information discussed with management and on other material written communication between the
auditor and management;
•
review with the auditor any audit problems or difficulties and management’s response, including any
restrictions on the scope of the auditor’s activities or on access to requested information, and any
significant disagreements with management;
•
at least annually monitor, review and discuss with the auditor and with management the adequacy and
effectiveness of the company’s policies and procedures regarding internal controls over financial
reporting and risk assessment and the company’s compliance therewith;
•
monitor compliance with respect to our code of business conduct and ethics, as may be amended from
time to time;
•
have oversight responsibility with respect to the Company’s cybersecurity and information security
compliance activities in accordance with internal policies and applicable external regulations;
•
periodically review the company’s policies and procedures for risk management and assess the
effectiveness thereof;
•
periodically review the company’s policies and procedures designed to ensure compliance with laws,
regulations and internal rules and policies;
•
establishing procedures for the receipt, retention and treatment of complaints received by the company
regarding accounting, internal control or auditing matters, as well as the confidential, anonymous
submission by officers, employees or directors of the company of concerns regarding questionable
accounting or auditing matters;
•
monitor compliance with respect to our Related Person Transactions Policy, as may be amended from
time to time, and review, approve and/or ratify proposed transactions that have been identified as related
person transactions thereunder; and
•
discuss with management and, if appropriate, the company’s external advisors any legal matters
(including the status of pending or threatened litigation) that may have a material impact on the
company’s financial statements and any material reports or inquiries from regulatory or governmental
agencies which could materially impact the company’s contingent liabilities and risks.
Remuneration Committee
The remuneration committee consists of Christina Ackermann, Robert K. Warner and Lionel Carnot. The
remuneration committee assists the board of directors in determining compensation for members of our executive
committee and other key leaders of the Company, and our directors. Ms. Ackermann serves as chairperson of the
remuneration committee.
We are subject to the Swiss provisions regarding compensations for listed companies under the Swiss Code of
Obligations, which require Swiss corporations listed on a stock exchange to establish a remuneration committee. In
143
accordance with the Swiss Code of Obligations, the members of our remuneration committee must be elected during
our general meeting of shareholders and the aggregate amount of compensation of each of our directors and our
executive committee members must also be approved during a general meeting of shareholders. On June 4, 2025 a
general meeting was held during which the shareholders approved the compensation packages for the Board and the
executive committee until the next general meeting of shareholders to be held in 2026. At the same meeting,
shareholders reelected Ms. Ackermann as the chair of the remuneration committee until the next annual general
meeting of shareholders.
Each of the members of our remuneration committee qualifies as an independent director according to the rules and
regulations of the SEC and Nasdaq with respect to remuneration committee membership, including the heightened
independence standards for members of a remuneration committee. The remuneration committee is governed by a
charter that is posted on our website. We have adopted a remuneration committee charter, which details the principal
functions of the remuneration committee, including:
•
prepare and recommend to the board for approval (i) a compensation policy for the board, (ii) a
compensation policy for the executive committee, and (iii) a compensation policy for other key leaders
of the Company; and thereafter, annually review such policy or policies and recommend changes, if any,
for approval by the board;
•
periodically review the company’s compensation policies for its employees who are not members of the
executive committee;
•
review and recommend to the board for approval any compensation and other payments to present and
former non-employee directors of the company to the extent not already provided for in the
compensation policy for the board;
•
propose to the board the resolution to be submitted to the general meeting for the maximum total
compensation of the board and executive committee;
•
evaluate annually the performance the CEO (as defined in the organizational rules) and submit such
evaluation for review and discussion by the board, in each case in executive session without the
presence of the CEO;
•
review and recommend for approval by the board the annual base salary, incentive compensation and
equity compensation of the CEO and, in consultation with the CEO, of the other members of the
executive committee, and the overall compensation of the CEO and executive committee;
•
review and approve any employment contracts, severance contracts, or other agreements that the
company proposes to enter into with any present, future or former members of the executive committee
or other key leaders of the Company;
•
establish an incentive compensation plan providing for variable compensation of the members of the
executive committee and other key leaders of the Company based on the achievement of the company’s
corporate goals and the individuals’ performance, and approve any changes to such plan as may be
proposed by the CEO from time to time;
•
approve any incentive compensation plans providing for variable compensation of employees of the
company (excluding any member of the executive committee) and any changes thereto, as may be
proposed by the CEO from time to time;
•
develop and periodically review equity compensation plans, and submit such plans and any changes to
such plans to the board for approval;
•
approve grants of equity compensation pursuant to the Company’s equity compensation plans
(excluding grants to members of the executive committee);
144
•
review and approve any perquisite benefits plans proposed by the CEO for the members of the executive
committee or other key leaders of the Company;
•
review the annual corporate goals proposed by the CEO, and recommend such goals as approved by the
committee for approval by the board;
•
determine the level of achievement of the corporate goals as approved by the board upon completion of
each calendar year, and apply such achievement level to the determination of the variable compensation
of the members of the executive committee and other key leaders of the Company in accordance with
the applicable incentive compensation plan;
•
evaluate its own performance on a periodic basis as part of the board performance assessment process;
•
supervise the preparation of the annual compensation report and submit it to the board for approval; and
•
review the remuneration committee charter annually and submit any recommended changes to the board
for approval.
Nomination and Governance Committee
The nomination and governance committee consists of Robert K. Warner, Geraldine O’Keeffe and Martijn
Kleijwegt. The nomination and governance committee assists our board of directors in identifying individuals
qualified to become our directors consistent with criteria established by us and in developing our code of business
conduct and ethics. Mr. Warner serves as chairperson of the nomination and governance committee. The nomination
and governance committee is governed by a charter that is posted on our website. We have adopted a nomination
and governance committee charter, which details the principal functions of the nomination and governance
committee, including:
•
establish and periodically review the qualification criteria for board candidates;
•
conduct the search for board candidates based on the qualification criteria established by the committee
and any other criteria that the committee may consider appropriate, and recommend suitable candidates
to the board to be nominated for election by the shareholders;
•
periodically review the policies and principles for corporate governance of the company, including the
organizational rules, and recommend changes, if any, to the board for approval;
•
make recommendations to the board on board and committee compositions, including the board and
committee chairperson and the size of the board and the committees, taking into account the
independence standards established by applicable laws, the company’s articles of association, the
organizational rules, the committee policies and corporate governance principles;
•
conduct the search for candidates for the position of CEO of the company, and recommend suitable
candidates for evaluation and appointment by the board;
•
conduct the search for candidates for executive committee positions and recommend suitable candidates
for evaluation and appointment by the board;
•
periodically review the Company’s policies and practices related to management of human capital
resources and corporate culture;
•
identify candidates for the election to the board on its own as well as by considering recommendations
from shareholders, other members of the board, officers and employees of the company, and other
sources that the committee deems appropriate;
•
establish a process for and conduct an annual review of the performance of the board, its committees,
and individual board members in their role as members of the board or a committee of the board; and
145
consider the results of the annual performance review when determining whether or not to recommend
the nomination of a director for an additional term on the board or a committee, and for developing
proposals for improving corporate governance policies and effectiveness of the board and its
committees;
•
prepare and review, at least annually, a succession plan for the directors of the board, the CEO, and the
members of the executive committee; and
•
review the corporate governance report of the company for inclusion in the annual report for the
approval of the board and approve any other written public disclosures on corporate governance matters
including, but not limited to, environmental, social and governance-related matters.
D.
Employ
ees
As of December 31, 2025, we had 60 employees. Our headcount for R&D was 32, and our headcount for G&A was
28. Our employees include 30 executive leadership, administrative, and development personnel based in
Switzerland; 10 executive leadership, administrative, and research personnel based in Iceland; 17 executive
leadership, administrative, and development personnel based in the United States; and 3 research and development
personnel based in France and UK. Pursuant to local laws, our employees in Iceland and France are represented by a
labor union or covered under a collective bargaining agreement. We consider our relationship with our employees to
be good.
Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and
integrating our existing and new employees, advisors and consultants. The principal purposes of our equity and cash
incentive plans are to attract, retain and reward personnel through the granting of stock-based and cash-based
compensation awards, in order to increase stockholder value and the success of our company by motivating such
individuals to perform to the best of their abilities and achieve our objectives.
E.
Share Ownership
For information regarding the share ownership of our directors and executive committee members, see “
Item 7.A
Major Shareholders
” and “
Item 6.B Compensation
” for a discussion of the 2023 Plan.
F.
Disclosure of a registrant’s action to recover erroneously awarded compensation
Not applicable.
Item 7. Major Shareholders and Related Party Transactions
A.
Major Shareholders
The following table sets forth information regarding the beneficial ownership of our ordinary shares as of
December 31, 2025:
•
each person known by us to be the beneficial owner of more than 5% of the ordinary shares;
•
each of our directors and members of our executive committee; and
•
all our directors and members of our executive committee as a group.
Except as otherwise noted herein, the number and percentage of ordinary shares beneficially owned is determined in
accordance with Rule 13d-3 of the Exchange Act, and the information is not necessarily indicative of beneficial
ownership for any other purpose. Under such rule, beneficial ownership includes any ordinary shares as to which the
holder has sole or shared voting power or investment power and also any ordinary shares which the holder has the
right to acquire within 60 days of December 31, 2025 through the exercise or vesting of any option, RSU, warrant or
any other right.
We have based percentage ownership on 57,984,438 ordinary shares outstanding as of December 31, 2025.
146
Name and Address of Beneficial Owners
Number of Shares
% Ownership
Directors and Executive Committee Members
(1)
Anthony Rosenberg
(2)
168,940
*
Christina Ackermann
(3)
62,817
*
Lionel Carnot
90,753
*
Arshad M. Khanani
(4)
48,528
*
Martijn Kleijwegt
470,969
*
Geraldine O'Keeffe
20,593
*
Robert K. Warner
(5)
23,470
*
Riad Sherif
(6)
1,699,553
2.9
%
Sylvia Cheung
(7)
515,022
*
Páll Ragnar Jóhannesson
(8)
772,581
1.3
%
All directors and executive committee members
as a group (10 individuals)
3,873,226
6.7
%
Five Percent Holders of the Company
LSP 7 Coöperatief U.A.
(9)
5,900,294
10.2
%
Funds managed by Pivotal Partners
(10)
2,909,995
5.0
%
* Indicates beneficial ownership of less than 1.0% of the total ordinary shares outstanding.
(1)
Unless otherwise noted, the business address of each of the directors and executive committee members of
Oculis is Bahnhofstrasse 20, 6300 Zug, Switzerland.
(2)
Consists of (i) 129,720 ordinary shares and (ii) 39,220 ordinary shares issuable upon conversion of share
options, RSUs and earnout shares, vested and/or fully exercisable within 60 days of December 31, 2025.
(3)
Consists of (i) 6,528 ordinary shares and (ii) 56,289 ordinary shares issuable upon conversion of share options
and RSUs, vested and/or fully exercisable within 60 days of December 31, 2025.
(4)
Consists of (i) 20,344 ordinary shares and (ii) 28,184 ordinary shares issuable upon conversion of share
options and RSUs, vested and/or fully exercisable within 60 days of December 31, 2025.
(5)
Consists of (i) 6,528 ordinary shares and (ii) 16,942 ordinary shares issuable upon conversion of share options
and RSUs, vested and/or fully exercisable within 60 days of December 31, 2025.
(6)
Consists of (i) 1,066,287 ordinary shares and (ii) 633,266 ordinary shares issuable upon conversion of share
options, RSUs and earnout shares, vested and/or and fully exercisable within 60 days of December 31, 2025.
(7)
Consists of (i) 77,316 ordinary shares and (ii) 437,706 ordinary shares issuable upon conversion of share
options and earnout shares vested and/or fully exercisable within 60 days of December 31, 2025.
(8)
Consists of (i) 288,430 ordinary shares and (ii) 484,151 ordinary shares issuable upon conversion of share
options and earnout shares, vested and/or fully exercisable within 60 days of December 31, 2025.
(9)
Based solely on Schedule 13G filed by LSP 7 Management B.V. on February 12, 2025. 5,900,294 represents
ordinary shares directly held by LSP 7 Coöperatief UA, of which LSP 7 Management B.V. is the sole director.
The managing directors of LSP 7 Management B.V. are Martijn Kleijwegt, Rene Kuijten and Joachim Rothe.
As such, LSP 7 Management B.V., Martijn Kleijwegt, Rene Kuijten and Joachim Rothe may be deemed to be
individuals identified in this footnote. The business address of LSP 7 Coöperatief UA is Johannes
Vermeerplein 9 1071 DV Amsterdam, Netherlands.
(10)
Based on Schedule 13G filed by Nan Fung Group Holdings Limited on November 14, 2025 and earnout
shares vested within 60 days of December 31, 2025. The general partner of Pivotal is Pivotal bioVenture
Partners Fund I G.P., L.P. (“
Pivotal GP
”). The general partner of Pivotal GP is Pivotal bioVenture Partners
Fund I U.G.P., Ltd (the “
Ultimate General Partner
”). Richard Coles, Peter Bisgaard and Vincent Sai Sing
Cheung are directors of the Ultimate General Partner, and may, along with the Ultimate General Partner be
deemed to have shared voting and investment control and power over the shares owned by Pivotal. Such
147
persons disclaim beneficial ownership of such securities except to the extent of any pecuniary interest therein.
The Ultimate General Partner is wholly owned by Pivotal Partners Ltd (“
Pivotal Partners
”). Pivotal Partners
is wholly owned by Pivotal Life Sciences Holdings Limited (“
Pivotal Life Sciences
”). Pivotal Life Sciences is
wholly owned by Nan Fung Life Sciences Holdings Limited (“
Nan Fung Life Sciences
”), and Nan Fung Life
Sciences is wholly owned by NF Investment Holdings Limited (“
NFIHL
”). NFLS Beta is wholly owned by
NFLS Platform Holdings Limited, which is wholly owned by Nan Fung Life Sciences. Nan Fung Life
Sciences is wholly owned by Nan Fung Group Holdings Limited (“
NFGHL
” and together with Pivotal,
Pivotal GP, Ultimate General Partner, Pivotal Partners, Pivotal Life Sciences, Nan Fung Life Sciences and
NFIHL, the “
Pivotal Parties
”). The members of the Executive Committee of NFGHL make voting and
investment decisions with respect to shares of our common stock held by NFLS Beta. Kam Chung Leung,
Frank Kai Shui Seto, Vincent Sai Sing Cheung, Pui Kuen Cheung, Vanessa Tih Lin Cheung, Meng Gao and
Chun Wai Nelson Tang are the members of the Executive Committee of NFGHL. Such persons disclaim
beneficial ownership of such securities except to the extent of any pecuniary interest therein. The Pivotal
Parties share voting and dispositive power over the shares held by Pivotal. The business address of Pivotal,
Pivotal GP, Ultimate General Partner, Pivotal Partners and Pivotal Life Sciences is 501 Second Street, Suite
200, San Francisco, CA 94107. The address of NFGHL is 23rd Floor, Nan Fung Tower, 88 Connaught Road
Central and 173 Des Voeux Road Central, Central, Hong Kong. The address of NFIHL is Vistra Corporate
Services Centre, Wickhams Cay II, Road Town, Tortola, VG1110, British Virgin Islands.
Significant Changes in Percentage Ownership
In March 2023, we experienced significant changes in the percentage ownership held by major shareholders as a
result of the Business Combination.
Voting Rights
The voting rights of the principal shareholders do not differ from the voting rights of other shareholders.
Shareholders in the United States
As of January 22, 2026, to the best of our knowledge 50,982,447 of our outstanding ordinary shares, including
earnout shares, were held by 15 shareholders of record in the United States. The actual number of holders is greater
than these numbers of record holders, and includes beneficial owners whose ordinary shares are held in street name
by brokers and other nominees. This number of holders of record also does not include holders whose shares may be
held in trust by other entities.
B.
Related Party Transactions
Policies and Procedures for Related Person Transactions
Our board of directors has adopted a written related person transaction policy that sets forth certain policies and
procedures for the review and approval or ratification of transactions involving us in which a related person has or
will have a direct or indirect material interest, as determined by the audit committee of the Board. A “related person”
for purposes of the policy means: (i) enterprises that directly or indirectly through one or more intermediaries,
control or are controlled by, or are under common control with, us; (ii) associates (defined as, unconsolidated
enterprises in which we have a Significant Influence or which has Significant Influence over us); (iii) individuals
owning, directly or indirectly, an interest in the voting power of us that gives them Significant Influence over us, and
close members of any such individual’s family; (iv) key management personnel (i.e., having authority and
responsibility for planning, directing and controlling our activities), including directors and close members of such
individuals’ families; and (v) enterprises in which a substantial interest in the voting power is owned, directly or
indirectly, by any person described in (iii) or (iv) above or over which such a person is able to exercise Significant
Influence, including enterprises owned by our directors or major shareholders and enterprises that have a member of
key management in common with us. “Significant Influence” for purposes of the policy means the power to
participate in the financial and operating policy decisions of an enterprise but is less than control over those policies,
provided that shareholders beneficially owning a 10.0% or more interest in the voting power of the enterprise
concerned are presumed to have a significant influence on such enterprise.
148
Pursuant to the policy, each director, nominee for director, and executive committee member shall promptly notify
the designated contact of any transaction involving us and a related person. The designated contact will present any
new related person transactions, and proposed transactions involving related persons, to the audit committee of the
board of directors at its next occurring regular meeting. If the audit committee determines that the related person
involved has a direct or indirect material interest in the transaction, and therefore that the transaction is a related
party transaction, the audit committee shall consider all relevant facts and circumstances, including the commercial
reasonableness of the terms, the benefit and perceived benefit, or lack thereof, to Oculis, opportunity costs of
alternate transactions, the materiality and character of the related person’s direct or indirect interest, and the actual or
apparent conflict of interest of the related person. The audit committee will not approve or ratify a related person
transaction unless it shall have determined that, upon consideration of all relevant information, the transaction is in,
or not inconsistent with, our best interests. On an annual basis, the audit committee shall review previously approved
related person transactions, under the standard described above, to determine whether such transactions should
continue. If after the review described above, the audit committee determines not to approve or ratify a related
person transaction (whether such transaction is being reviewed for the first time or has previously been approved
and is being reviewed), the transaction will not be entered into or continued.
Agreements with members of our Executive Committee and Directors
Aside from standard employment agreements and a consulting agreement with one director, there are no transactions
between the Company and its directors and executive committee members. The remuneration of the directors and
executive committee members, who are the key management personnel, is described in the section entitled
“
Compensation
.”
Indemnification Agreements
The articles of association provide that we will indemnify our directors and officers to the fullest extent permitted by
Swiss law, subject to certain exceptions contained in our articles of association.
In connection with the Business Combination, we also entered into indemnification agreements with each of our
directors and executive committee members. The indemnification agreements provide the indemnities with
contractual rights to indemnification, and expense advancement and reimbursement, to the fullest extent permitted
under Swiss law, subject to certain exceptions contained in those agreements.
C.
Interests of Experts and Counsel
Not applicable.
Item 8. Financial Information
A.
Consolidated Statements and Other Financial Information
Our consolidated financial statements are appended at the end of this Annual Report, starting at page F-1.
Legal Proceedings
From time to time, we may be subject to legal proceedings. We are not currently a party to or aware of any
proceedings that we believe will have, individually or in the aggregate, a material adverse effect on our business,
financial condition or results of operations. Regardless of outcome, litigation can have an adverse impact on us
because of defense and settlement costs, diversion of management resources, and other factors.
B.
Significant Changes
Not applicable.
149
Item 9. The Offer and Listing.
A.
Offer and Listing Details
Our ordinary shares and warrants are listed on the United States Nasdaq Global Market under the symbols “OCS”
and “OCSAW”, respectively. Since April 23, 2024, our ordinary shares have been listed on the Nasdaq Iceland Main
Market under the symbol “OCS.” Prior to March 6, 2023, there was no public trading market for our ordinary shares
or warrants. Holders of our ordinary shares and warrants should obtain current market quotations for their securities.
B.
Plan of Distribution
Not applicable.
C.
Markets
Our ordinary shares and warrants have been listed on the United States Nasdaq Global Market under the symbols
“OCS” and “OCSAW,” respectively, since March 6, 2023. Since April 23, 2024, our ordinary shares have been
listed on the Nasdaq Iceland Main Market under the symbol “OCS.” Prior to March 6, 2023, there was no public
trading market for our ordinary shares or warrants.
D.
Selling Shareholders
Not applicable.
E.
Dilution
Not applicable.
F.
Expenses of the Issue
Not applicable.
Item 10. Additional Information.
A.
Share Capital
Not applicable.
B.
Memorandum and Articles of Association
Please see the information set forth in Exhibit 2.5 “Description of Securities” and the copy of our Amended and
Restated articles of association filed as Exhibit 1.1, which are each incorporated herein by reference.
C.
Material Contracts
In addition to the contracts described elsewhere in this Annual Report, the following are summaries of each material
contract to which we are a party for the two years preceding the date of this Annual Report. For additional
information on our material contracts, please see “
Item 4. Information on the Company
,” “
Item 6. Directors, Senior
Management and Employees
,” and “
Item 7.B Related Party Transactions
” of this Annual Report.
Loan Facility
On July 31, 2025, the Company entered into an amended and restated agreement for its existing loan facility (the
“Amended Loan Agreement”
) with Kreos Capital VII (UK) Limited (the
“Lender”
), which are funds and accounts
managed by BlackRock, Inc. The Amended Loan Agreement replaces the prior loan agreement between the
Company and the Lender dated May 29, 2024, with an upsized structure to provide the EUR equivalent of up to
CHF 75.0 million in borrowing capacity (which may be increased to up to CHF 100.0 million) (the “
Loan
”),
comprising tranches 1, 2 and 3, in the amounts of the EUR equivalents of CHF 25.0 million each, as well as an
additional loan of the EUR equivalent of up to CHF 25.0 million, which may be made available by the Lender to the
150
Company if mutually agreed in writing by the Lender and the Company. No amounts were drawn under the
Amended Loan Agreement during the year ended December 31, 2025.
Loan 1 will be available for drawdown from closing until November 15, 2026, which period may be shortened upon
the occurrence of a development milestone. Loans 2 and 3 will be available for drawdown prior to November 15,
2026 and December 31, 2026, respectively, in each case subject to satisfaction of certain pre-specified conditions.
The availability of any funds under a drawdown of Loans 1, Loan 2 or Loan 3 is conditional upon, together with
other conditions, the Company having a debt-to-market cap ratio (where debt includes the amount of all amounts
drawn down to date and the proposed drawdown) equal to or less than 15% at the time of each draw down.
Borrowings under Loan 1, 2 and 3 will bear interest at a fixed rate (cash and PIK) of 9.7%, 9.6% and 9.5% per
annum, respectively. The Loan will have an interest-only period of, in respect of Loans 1, 2 and 3, from the relevant
drawdown date until December 31, 2027, March 31, 2028 and June 30, 2028, respectively. The interest-only periods
for each of Loans 1 and 2 will be shortened to December 31, 2026 if certain conditions are not met. In the event the
interest-only periods for Loans 1 and 2 are shortened, Loans 1 and 2 will mature on 30 June 2029. In the event the
interest-only periods are not shortened, Loans 1, 2 and 3 will expire on 31 December 2029.
The Company may prepay all, but not part, of the term loan amounts at any time other than, unless the Lender
agrees otherwise, by notifying the Lender in advance. The Loan is subject to mandatory prepayment in the event of a
change of control or specified asset dispositions or licenses, subject to certain exceptions and thresholds. There are
additional fees (including prepayment premia) payable to the Lender in the event the loan is prepaid either
mandatorily or voluntarily. The Lender received a restatement fee of approximately CHF 0.5 million in connection
with the Amended Loan Agreement. The Lender is eligible to receive an aggregate of approximately CHF 0.6
million in additional transaction fees payable upon the Company’s eligibility to receive and actual receipt of future
drawdowns. The Lender will be eligible to receive certain non-utilisation fees. On the date on which the Loan is
prepaid or falls due for repayment in full, the Lender is eligible to receive an end of loan fee of, in relation to each of
Loans 1, 2 and 3, 4.5% of the amount drawn down under the relevant loan. The Loan contains customary affirmative
and negative covenants.
As additional consideration for the Loan, Kreos Capital VII Aggregator SCSp, an affiliate of the Lender (the
“
Holder
”), and the Company entered into an amended warrant (the “
Amended Warrant
”) to purchase up to 494,259
of the Company’s ordinary shares, subject to vesting, at a price per ordinary share equal to $12.17 with respect to
361,011 shares from the prior warrant agreement, and $18.64 with respect to the remaining 133,248 shares reflecting
the upsized facility, subject to adjustment. The Amended Warrant amends the prior warrant issued to Holder on May
29, 2024. As of the signing date, the Amended Warrant is exercisable for 59,310 ordinary shares, of which 43,321
shares were previously granted. Following the drawdown of each of Loans 1, 2 and 3, the Amended Warrant will
become exercisable for additional amounts of ordinary shares ratably based on the amounts of Loans 1, 2 and 3 that
are drawn. Each tranche of the Amended Warrant will be exercisable for a period of up to seven years from the date
of vesting and the Amended Warrant will terminate at the earliest of (i) December 31, 2033, (ii) such earlier date on
which the Amended Warrant is no longer exercisable for any warrant shares in accordance with its terms and (iii)
the acceptance by the Company’s shareholders of a third-party bona fide offer for all outstanding shares of the
Company (subject to any prior exercise by the Holder, if applicable). The Amended Warrant also includes
customary F-3 resale and piggyback registration rights and anti-dilution provisions.
The Amended Warrant had not been exercised in part or in full as of December 31, 2025.
D.
Exchange Controls
There are no foreign exchange controls or foreign exchange regulations under the currently applicable laws of
Switzerland.
E.
Taxation
Material Swiss Tax Considerations
In the opinion of VISCHER AG, the following are the material Swiss tax consequences of receiving, owning and
disposing of ordinary shares and warrants.
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This summary is based upon Swiss tax laws, and the practices of the Swiss tax authorities, in effect on the date of
this Annual Report. Such laws and administrative practice are subject to change at any time, possibly with
retroactive effect. The summary does not constitute legal or tax advice and is intended only as a general guide. It is
not exhaustive and shareholders should consult their own tax advisors about the Swiss tax consequences (and tax
consequences under the laws of other relevant jurisdictions) of the acquisition, ownership and disposal of ordinary
shares and warrants and as to their tax position.
Please be aware that the residence concept used under the respective headings applies for Swiss tax assessment
purposes only. Any reference in this section to a tax, duty, levy impost or other charge or withholding of a similar
nature refers to Swiss tax law and/or concepts only.
Swiss Withholding Tax
Under present Swiss tax law, dividends and similar cash or in-kind distributions made by the Oculis to a holder of
ordinary shares (including liquidation proceeds and bonus shares) are subject to Swiss federal withholding tax (the
“
Withholding Tax
”), currently at a rate of 35.0% (applicable to the gross amount of taxable distribution), unless
these payments are repayments of the par value of ordinary shares or, within the limitations accepted by the
legislation in force and the respective administrative practice of the reserve from capital contribution (
Reserve aus
Kapitaleinlage
). Oculis is obliged to deduct the Withholding Tax from the gross amount of any taxable distribution
and to pay the tax to the Swiss Federal Tax Administration within 30 days of the due date of such distribution,
unless a notification procedure applies (the notification procedure does not apply to portfolio holdings).
Swiss resident individuals who hold their ordinary shares as private assets (“
Resident Private Shareholders
”) are in
principle eligible for a full refund or credit against income tax of the Withholding Tax if they duly report the
underlying income in their income tax return. In addition (i) corporate and individual shareholders who are resident
in Switzerland for tax purposes, (ii) corporate and individual shareholders who are not resident in Switzerland, and
who, in each case, hold their shares as part of a trade or business carried on in Switzerland through a permanent
establishment or fixed place of business situated, for tax purposes, in Switzerland, and (iii) Swiss-resident private
individuals who, for income tax purposes, are classified as “professional securities dealers” for reasons of, inter alia,
frequent dealing, or leveraged investments, in shares and other securities (“
Domestic Commercial Shareholders
”)
who, among other things, are also the beneficial owners of the ordinary shares and the dividends or the other
distributions made or paid by Oculis on the ordinary shares are in principle eligible for a full refund or credit against
income tax of the Withholding Tax if they, inter alia, duly report the underlying income in their income statements
or income tax return, as the case may be.
Shareholders who are not resident in Switzerland for tax purposes, and who, during the respective taxation year,
have not engaged in a trade or business carried on through a permanent establishment with fixed place of business
situated in Switzerland for tax purposes, and who are not subject to corporate or individual income taxation in
Switzerland for any other reason (collectively, “
Non-Resident Shareholders
”) may be entitled to a total or partial
refund of the Withholding Tax if the country in which such recipient resides for tax purposes maintains a bi- or
multilateral treaty for the avoidance of double taxation with Switzerland and further conditions of such treaty are
met. Non-Resident Shareholders should be aware that the procedures for claiming treaty benefits (and the time
required for obtaining a refund) may differ from country to country. Non-Resident Shareholders should consult their
own legal, financial or tax advisors regarding receipt, ownership, purchases, sale or other dispositions of ordinary
shares and the procedures for claiming a refund of the Withholding Tax.
Swiss Federal Stamp Taxes
To the extent Oculis issues new shares, Oculis will bear the Swiss federal issue stamp tax (
Emissionsabgabe
) on the
issuance of such ordinary shares of 1.0% of the offering price, net of certain deductions. The delivery of newly
issued shares against payment of the offering price is generally not subject to Swiss federal securities turnover tax
(
Umsatzabgabe
).
To the extent Oculis offers existing shares currently held by Oculis or certain existing shareholders of Oculis, the
sale and delivery of any such existing shares will, subject to statutory exemptions, be subject to Swiss federal
securities turnover tax (
Umsatzabgabe
) at an aggregate tax rate of up to 0.15% of the consideration paid on such sale
and will be borne (or compensated) by the current holders of such existing ordinary shares.
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Any subsequent transactions in ordinary shares in the secondary markets are subject to Swiss securities turnover tax
at an aggregate rate of 0.15% of the consideration paid for such ordinary shares, however, only if a bank or other
securities dealer in Switzerland or Liechtenstein, as defined in the Swiss Federal Stamp Tax Act
(
Stempelabgabengesetz
), is a party or an intermediary to the transaction and no exemption applies.
Swiss Federal, Cantonal and Communal Individual Income Tax and Corporate Income Tax
a.
Non-Resident Shareholders
Non-Resident Shareholders are not subject to any Swiss federal, cantonal or communal income tax on dividend
payments and similar distributions because of the mere holding of ordinary shares. The same generally applies for
capital gains on the sale of ordinary shares. For Withholding Tax consequences, please see the section entitled
“
—Material Swiss Tax Considerations—Swiss Withholding Tax.
”
b.
Resident Private Shareholders and Domestic Commercial Shareholders
Resident Private Shareholders who receive dividends and similar cash or in-kind distributions (including liquidation
proceeds as well as bonus shares or taxable repurchases of ordinary shares as described above), which are not
repayments of the par value of ordinary shares or, within the limitations accepted by the legislation in force and the
respective administrative practice, reserve from capital contribution (
Kapitaleinlagereserven
), are required to report
such distributions in their individual income tax returns. A gain or a loss by Resident Private Shareholders realized
upon the sale or other disposition of ordinary shares to a third party will generally be a tax-free private capital gain
or a not tax-deductible capital loss, as the case may be. Furthermore, the Swiss federal income tax on dividends is
currently reduced to 70.0% of regular taxation (
Teilbesteuerung
), if the investment amounts to at least 10.0% of the
total share capital of the issuer. On cantonal and communal level, similar provisions regarding partial taxation apply,
with income reduced to between 50.0% and 80.0% depending on the canton of residency.
Domestic Commercial Shareholders who receive dividends and similar cash or in-kind distributions (including
liquidation proceeds as well as bonus shares) are required to recognize such payments in their income statements for
the relevant tax period and are subject to Swiss federal, cantonal and communal individual or corporate income tax,
as the case may be, on any net taxable earnings accumulated (including the dividends and the gain or loss realized
on the sale or other dispositions of ordinary shares) for such period. Domestic Commercial Shareholders who are
corporate taxpayers may qualify for participation relief on dividend distributions (
Beteiligungsabzug
), if, inter alia,
ordinary shares held have a market value of at least CHF 1 million. For cantonal and communal income tax
purposes, the regulations on participation relief are broadly similar, depending on the canton of residency. For
Domestic Commercial Shareholders who are individual taxpayers, the Swiss federal individual income tax on
Dividends is reduced to 70.0% of regular taxation (
Teilbesteuerung
), if the investment is held in connection with the
conduct of a trade or business or qualifies as an opted business asset (
gewillkürtes Geschäftsvermögen
) according to
Swiss tax law and amounts to at least 10.0% of the total share capital of the Company. On cantonal and communal
level, similar provisions regarding partial taxation apply, with income reduced to between 50.0% and 80.0%
depending on the canton of residency.
Domestic Commercial Shareholders are required to recognize a gain or loss realized upon the disposal of ordinary
shares in their income statement for the respective taxation period and are subject to Swiss federal, cantonal and
communal individual or corporate income tax, as the case may be, on any net taxable earnings (including the gain or
loss realized on the sale or other disposition of ordinary shares) for such taxation period.
Swiss Wealth Tax and Capital Tax
a.
Non-Resident Shareholders
Non-Resident Shareholders holding ordinary shares are not subject to cantonal and communal wealth or annual
capital tax because of the mere holding of ordinary shares.
b.
Resident Private Shareholders
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Resident Private Shareholders are required to report the market value of their ordinary shares at the end of each tax
period as part of their private wealth, which is subject to cantonal and communal wealth tax.
c.
Domestic Commercial Shareholders
Domestic Commercial Shareholders are required to report their ordinary shares as part of their business wealth or
taxable capital, as defined in the applicable cantonal and communal tax laws, which is subject to cantonal and
communal wealth or annual capital tax.
Gift and Inheritance Taxes
The transfer of ordinary shares may be subject to cantonal and/or communal gift, estate or inheritance taxes if the
donor is, or the deceased was, resident for tax purposes in a Swiss canton levying such taxes.
Automatic Exchange of Information in Tax Matters
On November 19, 2014, Switzerland signed the Multilateral Competent Authority Agreement. The Multilateral
Competent Authority Agreement is intended to ensure the uniform implementation of Automatic Exchange of
Information (the “
AEOI
”). The Swiss Federal Act on the International Automatic Exchange of Information in Tax
Matters (the “
AEOI Act
”) entered into force on January 1, 2017. The AEOI Act is the legal basis for the
implementation of the AEOI standard in Switzerland.
The AEOI is being introduced in Switzerland through bilateral agreements or multilateral agreements. The
agreements have been, and will be, concluded on the basis of guaranteed reciprocity, compliance with the principle
of specialty (i.e., the information exchanged may only be used to assess and levy taxes (and for criminal tax
proceedings)) and adequate data protection.
Based on such multilateral and bilateral agreements and the implementing laws of Switzerland, Switzerland collects
data in respect of financial assets, which may include ordinary shares, held in, and income derived thereon and
credited to, accounts or deposits with a paying agent in Switzerland for the benefit of individuals resident in an EU
member state or in a treaty state since 2017, and exchanges it since 2018. Switzerland has signed and is expected to
sign AEOI agreements with other countries. A list of such agreements of Switzerland in effect or signed and
becoming effective can be found on the website of the State Secretariat for International Finance.
Swiss Facilitation of the Implementation of the U.S. Foreign Account Tax Compliance Act
Switzerland has concluded an intergovernmental agreement with the United States to facilitate the implementation
of U.S. Foreign Account Tax Compliance Act. The agreement ensures that the accounts held by U.S. persons with
Swiss financial institutions are disclosed to the U.S. tax authorities either with the consent of the account holder or
by means of group requests within the scope of administrative assistance. Information will not be transferred
automatically in the absence of consent, but instead will be exchanged only within the scope of administrative
assistance on the basis of the double taxation agreement between the United States and Switzerland. On September
20, 2019, the protocol of amendment to the double taxation treaty between Switzerland and the U.S. entered into
force allowing the U.S. competent authority in accordance with the information reported in aggregated form to
request all the information on U.S. accounts without a declaration of consent and on non-consenting non-
participating financial institutions.
On October 8, 2014, the Swiss Federal Council approved a mandate for negotiations with the United States on
changing the current direct-notification-based regime to a regime where the relevant information is sent to the Swiss
Federal Tax Administration, which in turn provides the information to the U.S. tax authorities.
As a consequence on June 27, 2024, Switzerland and the United States have signed a new FATCA Agreement
(Model 1). This FATCA Agreement foresees a reciprocal exchange of information. Based on the actual planning the
new FATCA Agreement shall be implemented as of January 1, 2027.
THE MATERIAL SWISS TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A SWISS HOLDER’S
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PARTICULAR SITUATION. SWISS HOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS WITH
RESPECT TO, THE OWNERSHIP AND DISPOSITION OF ORDINARY SHARES AND WARRANTS,
INCLUDING THE TAX CONSEQUENCES UNDER NON-SWISS, AND OTHER TAX LAWS AND TAX
TREATIES AND THE POSSIBLE EFFECTS OF CHANGES IN SWISS OR OTHER TAX LAWS.
Material U.S. Federal Income Tax Considerations for U.S. Holders
The following is a discussion of certain material U.S. federal income tax considerations generally applicable to the
acquisition, ownership, and disposition of ordinary shares by a “U.S. Holder.” This discussion applies only to
ordinary shares that are held by a U.S. Holder as “capital assets” within the meaning of Section 1221 of the Code
(generally, property held for investment). This discussion does not describe all U.S. federal income tax
considerations that may be relevant to a U.S. Holder in light of such U.S. Holder’s particular circumstances, nor
does it address any state, local, or non-U.S. tax considerations, any non-income tax (such as gift or estate tax)
considerations, any minimum tax provisions of the Code, the special tax accounting rules under Section 451(b) of
the Code, the Medicare contribution tax on net investment income, or any tax consequences that may be relevant to
U.S. Holders that are subject to special tax rules, including, without limitation:
•
banks or other financial institutions;
•
insurance companies;
•
mutual funds;
•
pension or retirement plans;
•
S corporations;
•
broker or dealers in securities or currencies;
•
traders in securities that elect mark-to-market treatment;
•
regulated investment companies;
•
real estate investment trusts;
•
trusts or estates;
•
tax-exempt organizations (including private foundations);
•
persons that hold ordinary shares as part of a “straddle,” “hedge,” “conversion,” “synthetic security,”
“constructive sale,” or other integrated transaction for U.S. federal income tax purposes;
•
persons that have a functional currency other than the U.S. dollar;
•
certain U.S. expatriates or former long-term residents of the United States;
•
persons owning (directly, indirectly, or constructively) 5.0% (by vote or value) or more of our stock;
•
persons that acquired ordinary shares pursuant to an exercise of employee stock options or otherwise as
compensation;
•
partnerships or other entities or arrangements treated as pass-through entities for U.S. federal income tax
purposes and investors in such entities;
•
“controlled foreign corporations” within the meaning of Section 957(a) of the Code;
•
“passive foreign investment companies” within the meaning of Section 1297(a) of the Code; and
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•
corporations that accumulate earnings to avoid U.S. federal income tax.
If a partnership (including an entity or arrangement treated as a partnership for U.S. federal income tax purposes)
holds ordinary shares, the tax treatment of a partner in such partnership generally will depend on the status of the
partner and the activities of the partnership and the partner. Partnerships holding ordinary shares should consult their
tax advisors regarding the tax consequences in their particular circumstances.
This discussion is based on the Code, the U.S. Treasury regulations promulgated thereunder, administrative rulings,
and judicial decisions, all as currently in effect and all of which are subject to change or differing interpretation,
possibly with retroactive effect. Any such change or differing interpretation could alter the tax consequences
described herein. Furthermore, there can be no assurance that the Internal Revenue Service (the “
IRS
”) will not
challenge the tax considerations described herein and that a court will not sustain such challenge.
For purposes of this discussion, a “U.S. Holder” is a beneficial owner of ordinary shares, that is, for U.S. federal
income tax purposes:
•
an individual who is a U.S. citizen or resident of the United States;
•
a corporation (including an entity treated as a corporation for U.S. federal income tax purposes) created
or organized in or under the laws of the United States, any state thereof, or the District of Columbia;
•
an estate the income of which is subject to U.S. federal income taxation regardless of its source; or
•
a trust (i) if a court within the United States is able to exercise primary supervision over the
administration of the trust and one or more “United States persons” within the meaning of Section
7701(a)(30) of the Code have the authority to control all substantial decisions of the trust or (ii) that has
in effect a valid election under applicable U.S. Treasury regulations to be treated as a United States
person.
THIS DISCUSSION IS FOR GENERAL INFORMATIONAL PURPOSES ONLY AND IS NOT TAX ADVICE.
U.S. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS REGARDING THE TAX CONSEQUENCES
OF THE ACQUISTION, OWNERSHIP, AND DISPOSITION OF ORDINARY SHARES IN THEIR
PARTICULAR CIRCUMSTANCES.
Distributions on ordinary shares
Subject to the PFIC rules discussed below under “—
Passive Foreign Investment Company Rules
,” distributions on
ordinary shares generally will be taxable as dividends for U.S. federal income tax purposes to the extent paid from
our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Such
distributions in excess of our current and accumulated earnings and profits will constitute a return of capital that will
be applied against and reduce (but not below zero) the applicable U.S. Holder’s adjusted tax basis in its ordinary
shares. Any remaining excess will be treated as gain realized on the sale or other taxable disposition of ordinary
shares and will be treated as described below under “—
Sale or Other Taxable Disposition of Ordinary Shares.
” The
amount of any such distributions will include any amounts required to be withheld by us (or another applicable
withholding agent) in respect of any non-U.S. taxes. Any such amount treated as a dividend will be treated as
foreign-source dividend income. Any such dividends received by a corporate U.S. Holder generally will not qualify
for the dividends-received deduction generally allowed to U.S. corporations in respect of dividends received from
other U.S. corporations. With respect to non-corporate U.S. Holders, any such dividends generally will be taxed at
currently preferential long-term capital gains rates only if (i) ordinary shares are readily tradable on an established
securities market in the United States or we are eligible for benefits under an applicable tax treaty with the United
States, (ii) we are not treated as a PFIC with respect to the applicable U.S. Holder at the time the dividend was paid
or in the preceding year, and (iii) certain holding period and other requirements are met. The amount of any such
dividends paid in a currency other than the U.S. dollar generally will be the U.S. dollar amount calculated by
reference to the exchange rate in effect on the date of actual or constructive receipt, regardless of whether the
payment is in fact converted into U.S. dollars at that time. A U.S. Holder may have foreign currency gain or loss if
the dividend is converted into U.S. dollars after the date of actual or constructive receipt.
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As noted above and subject to applicable limitations, taxing jurisdictions other than the United States may withhold
taxes from distributions on ordinary shares, and a U.S. Holder may be eligible for a reduced rate of withholding to
the extent there is an applicable tax treaty between the applicable taxing jurisdiction and the United States and/or
may be eligible for a foreign tax credit against the U.S. Holder’s U.S. federal income tax liability. Recently issued
U.S. Treasury regulations may in some circumstances prohibit a U.S. Holder from claiming a foreign tax credit with
respect to certain foreign taxes that are not creditable under applicable tax treaties. However, the IRS has released
notices that provide relief from certain of the provisions of the Treasury Regulations described above for taxable
years ending before the date that a notice or other guidance withdrawing or modifying the temporary relief is issued
(or any later date specified in such notice or other guidance). In lieu of claiming a foreign tax credit, a U.S. Holder
may, at such U.S. Holder’s election, deduct foreign taxes in computing such U.S. Holder’s taxable income, subject
to generally applicable limitations under U.S. tax law. An election to deduct foreign taxes in lieu of claiming a
foreign tax credit applies to all foreign taxes paid or accrued in the taxable year in which such election is made. The
foreign tax credit rules are complex and U.S. Holders should consult their tax advisers regarding the application of
such rules, including the creditability of foreign taxes, in their particular circumstances.
Sale or Other Taxable Disposition of Ordinary Shares
Subject to the PFIC rules discussed below under “—
Passive Foreign Investment Company Rules
,” upon any sale or
other taxable disposition of ordinary shares, a U.S. Holder generally will recognize gain or loss in an amount equal
to the difference, if any, between (i) the sum of (A) the amount of cash and (B) the fair market value of any other
property received in such sale or disposition and (ii) the U.S. Holder’s adjusted tax basis in the ordinary shares. Any
such gain or loss generally will be capital gain or loss and will be long-term capital gain or loss if the U.S. Holder’s
holding period for such ordinary shares exceeds one year. Long-term capital gain recognized by non-corporate U.S.
Holders generally will be taxed at currently preferential long-term capital gains rates. The deductibility of capital
losses is subject to limitations. For foreign tax credit purposes, any such gain or loss generally will be treated as U.S.
source gain or loss.
If the consideration received by a U.S. Holder upon a sale or other taxable disposition of ordinary shares is not paid
in U.S. dollars, the amount realized will be the U.S. dollar value of such payment calculated by reference to the
exchange rate in effect on the date of such sale or disposition. A U.S. Holder may have foreign currency gain or loss
to the extent of the difference, if any, between (i) the U.S. dollar value of such payment on the date of such sale or
disposition and (ii) the U.S. dollar value of such payment calculated by reference to the exchange rate in effect on
the date of settlement.
U.S. Holders should consult their tax advisors regarding the tax consequences of a sale or other taxable disposition
of ordinary shares, including the creditability of foreign taxes imposed on such sale or disposition by a taxing
jurisdiction other than the United States, in their particular circumstances.
Passive Foreign Investment Company Rules
The U.S. federal income tax treatment of U.S. Holders could be materially different from that described above if we
are treated as a PFIC for U.S. federal income tax purposes. A non-U.S. corporation generally will be treated as a
PFIC for U.S. federal income tax purposes if either (i) at least 75% of its gross income in a taxable year, including
its pro rata share of the gross income of any corporation in which it is considered to own at least 25% of the shares
by value, is passive income, or (ii) at least 50% of its assets in a taxable year (ordinarily determined based on fair
market value and averaged quarterly over the year), including its pro rata share of the assets of any corporation in
which it is considered to own at least 25% of the shares by value, are held for the production of, or produce, passive
income. Passive income generally includes dividends, interest, rents and royalties (other than rents or royalties
derived from the active conduct of a trade or business), and gains from the disposition of passive assets.
Based on our analysis of our income, assets, activities, and market capitalization, we believe that we were not a
PFIC for our taxable year ended December 31, 2025. The determination of whether a non-U.S. corporation is a PFIC
is a fact-intensive determination made on an annual basis and the applicable law is subject to varying interpretation.
In particular, the characterization of our assets as active or passive may depend in part on our current and intended
future business plans, which are subject to change. The amount of passive income and passive assets we take into
account for PFIC testing purposes depends, in part, on the size of our cash balance (taking into account the timing
and manner in which such cash is used) and the interest rates applicable thereto. In addition, the total value of our
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assets for PFIC testing purposes may be determined in part by reference to our market capitalization from time to
time, which may fluctuate considerably. As a result, there can be no assurance with respect to our status as a PFIC
for any taxable year, and our U.S. counsel expresses no opinion with respect to our PFIC status for the taxable year
ended December 31, 2025, the taxable year ending December 31, 2026, or for future taxable years. Even if we
determine that we are not a PFIC for a taxable year, there can be no assurance that the IRS will agree with that
conclusion and that the IRS would not successfully challenge our position. U.S. Holders of ordinary shares should
be aware of the risk that we may become a PFIC and should consult their tax advisors concerning the application of
the PFIC rules to the ordinary shares in their particular circumstances.
Although PFIC status is generally determined annually, if we are determined to be a PFIC for any taxable year (or
portion thereof) that is included in the holding period of a U.S. Holder in its ordinary shares and the U.S. Holder did
not make either a mark-to-market election or a qualified electing fund (“
QEF
”) election, which are referred to
collectively as the “PFIC Elections” for purposes of this discussion, for the first taxable year in which we are treated
as a PFIC, and in which the U.S. Holder held (or was deemed to hold) ordinary shares, or the U.S.
Holder does not otherwise make a purging election, as described below, the U.S. Holder generally will be subject to
special and adverse rules with respect to (i) any gain recognized by the U.S. Holder on the sale or other taxable
disposition of its ordinary shares and (ii) any “excess distribution” made to the U.S. Holder (generally, any
distributions to the U.S. Holder during a taxable year of the U.S. Holder that are greater than 125% of the average
annual distributions received by the U.S. Holder in respect of its ordinary shares during the three preceding taxable
years of the U.S. Holder or, if shorter, the U.S. Holder’s holding period in its ordinary shares).
Under these rules:
•
the U.S. Holder’s gain or excess distribution will be allocated ratably over the U.S. Holder’s holding
period in its ordinary shares;
•
the amount allocated to the U.S. Holder’s taxable year in which the U.S. Holder recognized the gain or
received the excess distribution, and to any period in the U.S. Holder’s holding period before the first
day of the first taxable year in which we are treated as a PFIC, will be taxed as ordinary income;
•
the amount allocated to other taxable years (or portions thereof) of the U.S. Holder and included in the
U.S. Holder’s holding period will be taxed at the highest tax rate in effect for that year and applicable to
the U.S. Holder; and
•
an additional tax equal to the interest charge generally applicable to underpayments of tax will be
imposed on the U.S. Holder with respect to the tax attributable to each such other taxable year of the
U.S. Holder.
PFIC Elections
If we are treated as a PFIC and ordinary shares constitute “marketable stock,” a U.S. Holder may avoid the adverse
PFIC tax consequences discussed above if such U.S. Holder makes a mark-to-market election with respect to its
ordinary shares for the first taxable year in which the U.S. Holder holds (or is deemed to hold) ordinary shares and
each subsequent taxable year. Such U.S. Holder generally will include for each of its taxable years as ordinary
income the excess, if any, of the fair market value of its ordinary shares at the end of such year over its adjusted tax
basis in its ordinary shares. The U.S. Holder also will recognize an ordinary loss in respect of the excess, if any, of
its adjusted tax basis in its ordinary shares over the fair market value of its ordinary shares at the end of its taxable
year (but only to the extent of the net amount of previously included income as a result of the mark-to-market
election). The U.S. Holder’s adjusted tax basis in its ordinary shares will be adjusted to reflect any such income or
loss amounts, and any further gain recognized on a sale or other taxable disposition of its ordinary shares will be
treated as ordinary income.
The mark-to-market election is available only for “marketable stock,” generally, stock that is regularly traded on a
national securities exchange that is registered with the SEC, including the Nasdaq (on which ordinary shares are
currently listed), or on a foreign exchange or market that the IRS determines has rules sufficient to ensure that the
market price represents a legitimate and sound fair market value. As such, such election generally will not apply to
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any of our non-U.S. subsidiaries, unless the shares in such subsidiaries are themselves “marketable stock.” As such,
U.S. Holders may continue to be subject to the adverse PFIC tax consequences discussed above with respect to any
lower-tier PFICs, as discussed below, notwithstanding their mark-to-market election with respect to ordinary shares.
If made, a mark-to-market election would be effective for the taxable year for which the election was made and for
all subsequent taxable years unless ordinary shares cease to qualify as “marketable stock” for purposes of the PFIC
rules or the IRS consents to the revocation of the election. U.S. Holders should consult their tax advisors regarding
the availability and tax consequences of a mark-to-market election with respect to ordinary shares in their particular
circumstances.
If we are treated as a PFIC, a U.S. Holder may also avoid the adverse PFIC tax consequences discussed above with
respect to ordinary shares if the U.S. Holder makes a valid QEF election for the first taxable year in which the U.S.
Holder owns (or is treated as owning) ordinary shares.
If a U.S. Holder has made a QEF election with respect to ordinary shares, and the special tax and interest charge
rules do not apply to such shares (because the QEF election was made in the U.S. Holder’s first taxable year in
which the U.S. Holder owns (or is treated as owning) ordinary shares or a purging election was made, as described
below), any gain recognized on the sale of ordinary shares will generally be taxable as capital gain and no interest
charge will be imposed under the PFIC rules. A U.S. Holder that makes a QEF election with respect to ordinary
shares is currently taxed on its pro rata share of our earnings and profits, whether or not distributed. In such case, a
subsequent distribution of such earnings and profits that were previously included in income generally should not be
taxable as a dividend to the U.S. Holder. The U.S. Holder’s tax basis in ordinary shares with respect to which a QEF
election has been made will be increased by amounts that are included in income, and decreased by amounts
distributed but not taxed as dividends, under the above rules. Similar basis adjustments apply to property if by
reason of holding such property the U.S. Holder is treated under the applicable attribution rules as owning ordinary
shares with respect to which a QEF election has been made. A U.S. Holder generally can make a separate election to
defer the payment of taxes on undistributed income inclusions under the QEF election rules, but if deferred, any
such taxes will be subject to an interest charge.
In order to comply with the requirements of a QEF election with respect to ordinary shares, a U.S. Holder generally
must receive a PFIC Annual Information Statement (as defined in Treasury Regulations Section 1.1295-1(g)) from
us. If we are determined to be a PFIC for any taxable year, we will endeavor to make available to U.S. Holders a
PFIC Annual Information Statement with respect to such taxable year. However, there is no assurance that we will
have timely knowledge of our status as a PFIC in the future or that we will make available a PFIC Annual
Information Statement. U.S. Holders are urged to consult their tax advisors regarding the availability and tax
consequences of a QEF election with respect to ordinary shares in their particular circumstances.
If we are treated as a PFIC and a U.S. Holder failed or was unable to timely make a PFIC Election for prior periods,
the U.S. Holder might seek to make a purging election to rid its ordinary shares of the PFIC taint. Under the purging
election, the U.S. Holder will be deemed to have sold its ordinary shares at their fair market value and any gain
recognized on such deemed sale will be treated as an excess distribution, as described above. As a result of the
purging election, the U.S. Holder will have a new adjusted tax basis and holding period in ordinary shares solely for
purposes of the PFIC rules.
Related PFIC Rules
If we are treated as a PFIC and, at any time, have a non-U.S. subsidiary that is treated as a PFIC, a U.S. Holder
generally would be deemed to own a proportionate amount of the shares of such lower-tier PFIC, and generally
could incur liability for the deferred tax and interest charge described above if we receive a distribution from, or sell
or otherwise dispose of all or part of our interest in, such lower-tier PFIC, or the U.S. Holder otherwise was deemed
to have sold or otherwise disposed of an interest in such lower-tier PFIC. U.S. Holders should consult their tax
advisors regarding the application of the lower-tier PFIC rules in their particular circumstances.
A U.S. Holder that owns (or is deemed to own) shares in a PFIC during any taxable year may have to file an IRS
Form 8621 (whether or not a QEF election or a mark-to-market election is made) and to provide such other
information as may be required by the U.S. Treasury Department. Failure to do so, if required, will extend the
statute of limitations applicable to such U.S. Holder until such required information is furnished to the IRS and
could result in penalties.
159
THE PFIC RULES ARE VERY COMPLEX. U.S. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS
REGARDING THE APPLICATION OF SUCH RULES IN THEIR PARTICULAR CIRCUMSTANCES.
Information Reporting and Backup Withholding
Payments of dividends and sales proceeds that are made within the United States or through certain U.S.-related
financial intermediaries are subject to information reporting, and may be subject to backup withholding, unless (i)
the U.S. Holder is a corporation or other exempt recipient or (ii) in the case of backup withholding, the U.S. Holder
provides a correct taxpayer identification number and certifies that it is not subject to backup withholding.
Backup withholding is not an additional tax. The amount of any backup withholding from a payment to a U.S.
Holder will be allowed as a credit against the U.S. Holder’s U.S. federal income tax liability and may entitle the
U.S. Holder to a refund, provided that the required information is timely furnished to the IRS.
U.S. Holders should consult their tax advisors regarding the information reporting requirements and the application
of the backup withholding rules in their particular circumstances.
THIS DISCUSSION IS FOR GENERAL INFORMATIONAL PURPOSES ONLY AND IS NOT TAX ADVICE.
U.S. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS REGARDING THE U.S. FEDERAL, STATE,
AND
LOCAL
AND
NON-U.S.
INCOME
AND
NON-INCOME
TAX
CONSEQUENCES
OF
THE
ACQUISITION, OWNERSHIP, AND DISPOSITION OF ORDINARY SHARES, INCLUDING THE IMPACT
OF ANY POTENTIAL CHANGE IN LAW, IN THEIR PARTICULAR CIRCUMSTANCES.
F.
Dividends and Paying Agents
Not applicable.
G.
Statement by Experts
Not applicable.
H.
Documents on Display
We are subject to the information reporting requirements of the Exchange Act applicable to foreign private issuers
and under those requirements will file reports with the SEC. Those reports may be inspected without charge at the
locations described below. As a foreign private issuer, we are exempt from the rules under the Exchange Act related
to the furnishing and content of proxy statements, and our officers, directors and principal shareholders are exempt
from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act.
In addition, we are not required under the Exchange Act to file periodic reports and financial statements with the
SEC as frequently or as promptly as United States companies whose securities are registered under the Exchange
Act. Nevertheless, we will file with the SEC an Annual Report on Form 20-F containing financial statements that
have been examined and reported on, with and opinion expressed by an independent registered public accounting
firm.
We maintain a corporate website at www.oculis.com. We intend to post our Annual Report on our website promptly
following it being filed with the SEC. Information contained on, or that can be accessed through, our website does
not constitute a part of this Annual Report. We have included our website address in this Annual Report solely as an
inactive textual reference.
The SEC maintains a website (www.sec.gov) that contains reports, proxy and information statements and other
information regarding registrants, such as us, that file electronically with the SEC.
With respect to references made in this Annual Report to any contract or other document of our company, such
references are not necessarily complete, and you should refer to the exhibits attached or incorporated by reference to
this Annual Report for copies of the actual contract or document.
160
I.
Subsidiary Information
Not applicable.
J.
Annual Report to Security Holders
We intend to submit an annual report provided to security holders in electronic format as an exhibit to a current
report on Form 6-K.
Item 11. Quantitative and Qualitative Disclosures About Market Risk.
We are exposed to market risks that may result in changes of foreign currency exchange rates and interest rates, as
well as the overall change in economic conditions in the countries where we conduct business.
The company takes a conservative approach to manage currency exchange risk by prioritizing long term stability
and natural hedging of currencies with the underlying currency flow of operations. Other conservative measures
include diversification of banks utilized by the Company and cash preservation in low risk short term investments.
For more information about financial risks we are exposed to, refer to Note 20 of our audited consolidated financial
statements, included elsewhere in this Annual Report.
Item 12. Description of Securities Other than Equity Securities.
A.
Debt Securities
Not applicable.
B.
Warrants and Rights
Not applicable.
C.
Other Securities
Not applicable.
D.
American Depositary Shares
Not applicable.
PART II
Item 13. Defaults, Dividend Arrearages and Delinquencies.
Not applicable.
Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds.
Not applicable.
Item 15. Controls and Procedures.
A. Disclosure Controls and Procedures
Our management evaluated, with the participation of the Chief Executive Officer and Chief Financial Officer, the
effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this report.
The term “Disclosure Controls and Procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under 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
161
procedures include, without limitation, controls and procedures designed to provide reasonable assurance that the
information is accumulated and communicated to management, including our principal executive and principal
financial officers, as appropriate to allow timely decisions regarding our required disclosures. Based on the
evaluation of our disclosure controls and procedures as of December 31, 2025, our Chief Executive Officer and
Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at a
reasonable assurance level.
B. Management’s Annual Report on Internal Control Over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting, as
such term is defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act.
Our management conducted an assessment of the effectiveness of our internal control over financial reporting based
on the criteria set forth in “Internal Control-Integrated Framework (2013)” issued by the Committee of Sponsoring
Organizations of the Treadway Commission (
“COSO”
). Based on this assessment, management concluded that, as
of December 31, 2025, our internal control over financial reporting was effective based on criteria established in the
COSO 2013 framework.
C. Attestation Report of the Registered Public Accounting Firm
The effectiveness of our internal control over financial reporting as of December 31, 2025 has been audited by
PricewaterhouseCoopers SA, an independent registered public accounting firm. Their report, included on page F-1,
includes their attestation report on management’s assessment of our internal control over financial reporting.
D. Changes in Internal Control Over Financial Reporting
There were no changes to internal control over financial reporting during the year ended December 31, 2025 that
have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Item 16. [Reserved]
Item 16A. Audit Committee Financial Expert
Our Board has determined that Mr. Carnot (Chair) qualifies as an “audit committee financial expert” as defined by
SEC rules and has the requisite financial sophistication under the applicable rules and regulations of the Nasdaq
Stock Market. Mr. Carnot (Chair), Ms. Ackermann and Ms. O’Keeffe are independent as such term is defined in
Rule 10A-3 under the Exchange Act and under the listing standards of the Nasdaq Stock Market.
Item 16B. Code of Ethics
Our board of directors adopted a code of business conduct and ethics applicable to the directors, executive
committee members and other employees, that complies with the rules and regulations of the United States Nasdaq
Global Market, the Nasdaq Iceland Main Market and the SEC. The Code of Business Conduct and Ethics is
available on our website. In addition, we posted on the Corporate Governance section of our website all disclosures
that are required by law or Nasdaq listing standards concerning any amendments to, or waivers from, any provision
of the Code of Business Conduct and Ethics. The reference to our website address in this Annual Report on Form
20-F does not include or incorporate by reference the information on our website into this Annual Report on Form
20-F.
Item 16C. Principal Accountant Fees and Services
For the years ended December 31, 2025 and 2024, PricewaterhouseCoopers SA was our independent registered
public accounting firm.
The following table shows the aggregate fees for services rendered by PwC to us and our subsidiaries, in the fiscal
years ended December 31, 2025 and 2024.
162
For the years ended December 31,
(in CHF thousands)
2025
2024
Audit fees
1,176
798
Audit-related fees
9
7
Tax fees
197
145
Total
1,382
950
Auditor Name
Auditor Location
PricewaterhouseCoopers SA
Lausanne, Switzerland
Audit fees
include fees billed for professional services rendered for audits of our annual consolidated financial
statements, reviews of consolidated quarterly information, statutory audit of the Company and our subsidiaries,
review of our securities offering documents in relation to our underwritten offerings and ATM Program.
Audit-related fees
include fees billed for assurance and related services in connection with capital increases and
services that generally only the independent accountant can reasonably provide.
Tax fees include
fees billed for professional services for tax compliance, tax advice and tax planning.
Audit Committee Pre-Approval Policies and Procedures
Our audit committee reviews and pre-approves the scope and the cost of audit services related to us and permissible
non-audit services performed by the independent auditors. All of the services related to us provided by
PricewaterhouseCoopers SA during the last fiscal year have been pre-approved by the audit committee.
Item 16D. Exemptions from the Listing Standards for Audit Committees.
Not applicable.
Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers.
Not applicable.
Item 16F. Change in Registrant’s Certifying Accountant.
Not applicable.
Item 16G. Corporate Governance.
We are a “foreign private issuer,” as defined by the SEC. As a result, in accordance with Nasdaq rules, we will
comply with home country governance requirements and certain exemptions thereunder rather than complying with
Nasdaq corporate governance standards. While we expect to voluntarily follow most Nasdaq corporate governance
rules, we may choose to take advantage of the following limited exemptions:
•
Exemption from filing quarterly reports on Form 10-Q containing unaudited financial and other
specified information or current reports on Form 8-K upon the occurrence of specified significant
events;
•
Exemption from Section 16 rules providing for liability for insiders who profit from trades in a short
period of time;
•
Exemption from quorum requirements for shareholder meetings. Swiss practice with respect to quorum
requirements for shareholder meetings in lieu of the requirement under Nasdaq Listing Rules that the
quorum be not less than 33 1/3% of the outstanding voting shares;
163
•
Exemption from the Nasdaq rules applicable to domestic issuers requiring disclosure within four
business days of any determination to grant a waiver of the code of business conduct and ethics to
directors and officers;
•
Exemption from the requirement to obtain shareholder approval for certain issuances of securities,
including shareholder approval of share option plans and other securities issuances;
•
Exemption from the requirement that our audit committee have review and oversight responsibilities
over all “related party transactions,” as defined in Item 7.B of Form 20-F;
•
Exemption from the requirement that our board have a compensation committee that is composed
entirely of independent directors with a written charter addressing the committee’s purpose and
responsibilities. We currently have three directors who serve on the compensation committee who meet
the heightened independence standards for members of a compensation committee; and
•
Exemption from the requirements that director nominees are selected, or recommended for selection by
our board, either by (1) independent directors constituting a majority of our board’s independent
directors in a vote in which only independent directors participate, or (2) a committee comprised solely
of independent directors, and that a formal written charter or board resolution, as applicable, addressing
the nominations process is adopted.
Furthermore, Nasdaq Rule 5615(a)(3) provides that a foreign private issuer, such as we, may rely on home country
corporate governance practices in lieu of certain of the rules in the Nasdaq Rule 5600 Series and Rule 5250(d),
provided that we nevertheless comply with Nasdaq’s Notification of Noncompliance requirement (Rule 5625), the
Voting Rights requirement (Rule 5640) and that we have an audit committee that satisfies Rule 5605(c)(3),
consisting of committee members that meet the independence requirements of Rule 5605(c)(2)(A)(ii). Although we
are permitted to follow certain corporate governance rules that conform to Swiss requirements in lieu of many of the
Nasdaq corporate governance rules, we intend to comply with the Nasdaq corporate governance rules applicable to
foreign private issuers.
Accordingly, our shareholders will not have the same protections afforded to shareholders of companies that are
subject to all of the corporate governance requirements of Nasdaq. We may utilize these exemptions for as long as
we continue to qualify as a foreign private issuer. See the exhibit titled “
Description of Securities
” for additional
information.
Item 16H. Mine Safety Disclosure.
Not applicable.
Item 16I. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
Not applicable.
Item 16J. Insider Trading Policies.
Our board of directors adopted an Insider Trading Policy applicable to the directors, officers, employees and
consultant of the Company that is reasonably designed to promote compliance with applicable insider trading laws,
rules and regulations, and listing standards applicable to us. The Insider Trading Policy is attached to this Annual
Report on Form 20-F as Exhibit 19.1.
Item 16K. Cybersecurity.
Risk management and strategy
Cybersecurity and data privacy risks are evaluated through our annual risk management assessment. The Chief
Business Officer oversees our cybersecurity risk management program, in partnership with a Cybersecurity Incident
Management Team (
“CSI Management Team”
). The program has been developed to respond to the threat of
164
security breaches and cyberattacks, and to protect and preserve the confidentiality, integrity, and continued
availability of information owned by Oculis.
To address cybersecurity threats and prevent IT system interruptions, we have implemented a company-wide
Cybersecurity Incident Response Policy that details the procedures to be followed in the event of a known or
suspected incident. Depending on the environment, we implement and maintain various technical, physical, and
organizational measures, processes, standards and policies designed to manage and mitigate material risks from
cybersecurity threats to our information systems and data, including, for example access controls through
multifactor authentication, regular back-ups of data and information, and cybersecurity awareness training of
employees. We also have installed and regularly update antivirus software on all company-managed systems and
computers to detect and prevent malicious code from impacting our systems. Where appropriate, any incidents
would be escalated by the CSI Management Team to the audit committee of our board of directors, pursuant to our
Cybersecurity Incident Response Policy. Oculis has not experienced any known material cybersecurity incidents
during the years ended December 31, 2025, 2024 or 2023.
Our assessment and management of material risks from cybersecurity threats are integrated into the Company’s
overall risk management processes. For example, all systems are evaluated by management to prioritize our risk
management processes and mitigate cybersecurity threats that are more likely to lead to a material impact to our
business. Furthermore, the Company is leveraging industry frameworks such as ISO 27001 and the SEC
Cybersecurity Rules adopted in July 2023 to benchmark and work towards continuous improvements of the
Company’s cybersecurity practices.
We use third-party service providers to assist us from time to time to identify, assess, and manage material risks
from cybersecurity threats, including, for example, by monitoring current information on system threats and
vulnerabilities. We use third-party service providers to perform a variety of functions throughout our business, such
as management of clinical studies, manufacturing and intellectual property management. Depending on the nature of
the services provided, the sensitivity of the information systems and data at issue, and the identity of the provider,
our vendor management process may involve different levels of assessment designed to help identify cybersecurity
and data privacy risks associated with a provider and impose contractual obligations related to cybersecurity on the
provider.
For a description of the risks from cybersecurity threats that may materially affect the Company and how they may
do so, see our risk factors under Part 1. Item 3D.
Risk Factors
in this Annual Report on Form 20-F, including “Our
business, financial condition and results of operations would suffer in the event of computer system failures, security
breaches or other disruptions to our information technology systems.”
Governance
Our board of directors addresses our cybersecurity risk management as part of its general oversight function. The
board of directors’ audit committee is responsible for overseeing our cybersecurity risk management processes,
including oversight and mitigation of risks from cybersecurity threats.
Our cybersecurity risk assessment and management processes are implemented and maintained by certain Company
management, including the Chief Business Officer and the Chief Financial Officer.
The Chief Business Officer, together with other company management, is responsible for hiring appropriate
personnel, helping to integrate cybersecurity risk considerations into the Company’s overall risk management
strategy, and communicating key priorities to relevant personnel. The Company’s board of directors and its audit
committee is responsible for approving budgets, helping prepare for cybersecurity incidents, approving
cybersecurity processes, and reviewing security assessments and other security-related reports.
Our Cybersecurity Incident Response Policy is designed to escalate certain cybersecurity incidents to members of
management depending on the circumstances. The CSI Management Teams works on mitigating and remediating
165
cybersecurity incidents of which they are notified. In addition, our Cybersecurity Incident Response Policy includes
reporting to the audit committee of the board of directors for certain cybersecurity incidents.
The audit committee receives quarterly reports concerning any significant cybersecurity threats and risk and the
processes we have implemented to address them. The audit committee also receives various reports, summaries or
presentations related to cybersecurity threats, risk and mitigation.
166
PART III
Item 17. Financial Statements.
See pages F-1 through F-38 of this Annual Report.
Item 18. Financial Statements.
Not applicable.
Item 19. Exhibits
EXHIBIT INDEX
Incorporation By Reference
Exhibit
Description
Schedule/
Form
File
Number
Exhibit
File Date
1.1*
Amended and Restated Articles of
Association of the Company.
2.1
Specimen Warrant Certificate
S-1
333-253220
4.3
03.04.2021
2.2
Warrant Agreement, dated March 15, 2021,
between EBAC and Continental Stock
Transfer & Trust Company, as warrant agent
8-K
001-40211
4.1
03.18.2021
2.3
Warrant Agreement, by and between the
Registrant and Kreos Capital VII Aggregator
SCSp, dated May 29, 2024
6-K
001-41636
99.5
08.27.2024
2.4
Amendment to Warrant Agreement by and
between Oculis Holding AG and Kreos
Capital VII Aggregator SCSp, dated as of
July 31, 2025
F-3
333-291426
4.3
11.10.2025
2.5*
Description of Securities
4.1††
License Agreement by and among Alcon
Research, LTD., and Oculis, dated
December 19, 2018
F-4
333-268201
10.8
12.12.2022
4.2††
Amendment to License Agreement by and
among Alcon Research, LTD. and Oculis,
dated September 11, 2020
F-4
333-268201
10.9
12.12.2022
4.3††
Letter Agreement by and among Novartis
Technology LLC and Oculis, dated October
12, 2021
F-4
333-268201
10.11
12.12.2022
4.4††
License Agreement by and among Accure
Therapeutics SL and Oculis, dated January
29, 2022
F-4
333-268201
10.12
12.12.2022
4.5#
Stock Option and Incentive Plan Regulation
2023 of Oculis Holding AG
F-4
333-268201
10.13
01.06.2023
167
4.6#
Form of Indemnification Agreement with the
officers and directors
F-4
333-268201
10.10
01.06.2023
4.7
††+
Loan Agreement, by and among the
Company, Oculis Operations Sàrl and Kreos
Capital VII (UK) Limited, dated as of May
29, 2024
6-K
001-41636
99.4
08.27.2024
4.8*
††+
Amended and Restated Loan Agreement, by
and among the Company, Oculis Operations
Sàrl and Kreos Capital VII (UK) Limited,
dated as of July 31, 2025
4.9
Sales Agreement, dated as of May 8, 2024,
by and between Oculis Holding AG and
Leerink Partners, LLC
6-K
001-41636
1.1
05.08.2024
8.1*
Subsidiaries of the Registrant
12.1*
Certification by the Principal Executive
Officer pursuant to Securities Exchange Act
Rules 13a-14(a) and 15d-14(a) as adopted
pursuant to Section 302 of the Sarbanes-
Oxley Act of 2002
12.2*
Certification by the Principal Financial
Officer pursuant to Securities Exchange Act
Rules 13a-14(a) and 15d-14(a) as adopted
pursuant to Section 302 of the Sarbanes-
Oxley Act of 2002
13.1**
Certification by the Principal Executive
Officer and the Principal Financial Officer
pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
15.1*
Consent of the Independent Registered
Public Accounting Firm
19.1*
Insider Trading Policy
97.1
Incentive Compensation Recoupment Policy
20-F
001-41636
97.1
03.19.2024
101.INS
*
Inline XBRL Instance Document (the
instance document does not appear in the
Interactive Data File because its XBRL tags
are embedded within the Inline XBRL
document)
101.SCH
*
Inline XBRL Taxonomy Extension Schema
Document
104
Cover Page Interactive Data File (formatted
as inline XBRL and contained in Exhibit
101)
168
*
Filed herewith.
**
Furnished herewith.
††
Certain confidential portions (indicated by brackets and asterisks) have been omitted from this exhibit.
+
Certain schedules and exhibits to this Exhibit have been omitted pursuant to Regulation S-K Item 601(a)(5). The Company agrees to furnish
supplementally a copy of any omitted schedule or exhibit to the SEC upon request.
#
Indicates a management contract or any compensatory plan, contract or arrangement
SIGNATURES
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly
caused and authorized the undersigned to sign this report on its behalf.
March 4, 2026
OCULIS HOLDING AG
By:
/s/ Riad Sherif
Name:
Riad Sherif
Title:
Chief Executive Officer
Oculis Holding AG
Consolidated Financial Statements
Table of Contents
Report of Independent Registered Public Accounting Firm
(PCAOB ID 1358)
F-1
Consolidated Statements of Financial Position as of December 31, 2025 and 2024
F-3
Consolidated Statements of Loss for the years ended December 31, 2025, 2024 and 2023
F-4
Consolidated Statements of Comprehensive Loss for the years ended December 31, 2025, 2024 and 2023
F-5
Consolidated Statements of Changes in Equity for the years ended December 31, 2025, 2024 and 2023
F-6
Consolidated Statements of Cash Flows for the years ended December 31, 2025, 2024 and 2023
F-8
Notes to the Consolidated Statements
F-9
F-1
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of Oculis Holding AG
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated statements of financial position of Oculis Holding AG and its
subsidiaries (the “Company”) as of December 31, 2025 and December 31, 2024, and the related consolidated
statements of loss, comprehensive loss, changes in equity and cash flows for each of the three years in the period
ended December 31, 2025, including the related notes (collectively referred to as the “consolidated financial
statements”).
We also have audited the Company’s internal control over financial reporting as of December 31,
2025, based on criteria established in
Internal Control - Integrated Framework
(2013) issued by the Committee
of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the
financial position of the Company as of December 31, 2025 and December 31, 2024, and the results of its
operations and its cash flows for each of the three years in the period ended December 31, 2025 in conformity
with IFRS Accounting Standards as issued by the International Accounting Standards Board. Also in our
opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of
December 31, 2025, based on criteria established in
Internal Control - Integrated Framework
(2013) issued by
the COSO.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective
internal control over financial reporting, and for its assessment of the effectiveness of internal control over
financial reporting, included in Management's Annual Report on Internal Control over Financial Reporting
appearing under Item 15(b). Our responsibility is to express opinions on the Company’s consolidated financial
statements and on the Company's internal control over financial reporting based on our audits.
We are a public
accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and
are required to be independent with respect to the Company in accordance with the U.S. federal securities laws
and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are
free of material misstatement, whether due to error or fraud, and whether effective internal control over financial
reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material
misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures
that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the
amounts and disclosures in the consolidated financial statements.
Our audits also included evaluating the
accounting principles used and significant estimates made by management, as well as evaluating the overall
presentation of the consolidated financial statements. Our audit of internal control over financial reporting
included obtaining an understanding of internal control over financial reporting, assessing the risk that a
material weakness exists, and testing and evaluating the design and operating effectiveness of internal control
based on the assessed risk. Our audits also included performing such other procedures as we considered
necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles.
A company’s internal control over financial reporting
includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the
company’s assets that could have a material effect on the financial statements.
F-2
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated
financial statements that was communicated or required to be communicated to the audit committee and that (i)
relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our
especially challenging, subjective, or complex judgments. The communication of critical audit matters does not
alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by
communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the
accounts or disclosures to which it relates.
Research and Development Expenses and Accruals Related to Product Development Related Expenses
As described in Notes 3(M), 7.(B) and 16 to the consolidated financial statements, research expenditures are
recognized in expense in the year in which they are incurred. Research and development expenses consist mainly
of personnel expenses (payroll and related expenses and share-based compensation expense), external service
providers and other operating expenses. Research and development expenses for the year ended December 31,
2025 were CHF 57.1 million, the majority of which related to external service providers. As disclosed by
management, the Company conducts product research and development programs through third party vendors
that include contract research organizations “CROs” and clinical research sites. The Company records accruals for
estimated costs incurred or prepayments depending on the stage of completion of the product development and
clinical research. Within accrued expenses, total accrued product development related expenses as of December
31, 2025 amounted to CHF 13.2 million.
The principal considerations for our determination that performing procedures relating to research and
development expenses and accruals related to product development related expenses is a critical audit matter are
a high degree of auditor effort in performing procedures and evaluating audit evidence related to the Company’s
research and development expenses and accruals.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming
our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness
of controls relating to the research and development expenses process. These procedures also included, among
others, (i) testing accuracy and completeness of the report prepared by management to calculate the clinical
accruals by obtaining and inspecting source documents, such as contracts, purchase orders and invoices, (ii)
testing, on a sample basis, the completeness and accuracy of costs incurred for services that have been performed
and for which the Company has been invoiced by comparing amounts to CRO contracts and invoices, and (iii)
testing, on a sample basis, classification of research and development expenses.
/s/ PricewaterhouseCoopers SA
Lausanne, Switzerland
March 4, 2026
We have served as the Company’s auditor since 2019.
F-3
Oculis Holding AG
Consolidated Statements of Financial Position
(in CHF thousands)
As of December 31,
As of December 31,
Note
2025
2024
ASSETS
Non-current assets
Property and equipment
8
Intangible assets
9
Right-of-use assets
10
Other non-current assets
Total non-current assets
Current assets
Other current assets
11
Accrued income
11
Short-term financial assets
14
Cash and cash equivalents
14
Total current assets
TOTAL ASSETS
EQUITY AND LIABILITIES
Shareholders’ equity
Share capital
15
Share premium
15
Reserve for share-based payment
13
Actuarial loss on post-employment benefit obligations
12
(1,634
)
(2,233
)
Treasury shares
15
(7
)
(10
)
Cumulative translation adjustments
(480
)
(271
)
Accumulated losses
(384,514
)
(285,557
)
Total equity
Non-current liabilities
Long-term lease liabilities
10
Defined benefit pension liabilities
12
Total non-current liabilities
Current liabilities
Trade payables
16
Accrued expenses and other payables
16
Short-term lease liabilities
10
Warrant liabilities
17
Total current liabilities
Total liabilities
TOTAL EQUITY AND LIABILITIES
The accompanying notes form an integral part of the consolidated financial statements.
F-4
Oculis Holding AG
Consolidated Statements of Loss
(in CHF thousands, except loss per share data)
For the years ended December 31,
Note
2025
2024
2023
Grant income
7. (A) / 11
Operating income
Research and development expenses
7. (B)
(57,085
)
(52,083
)
(29,247
)
General and administrative expenses
7. (B)
(25,786
)
(21,807
)
(17,487
)
Merger and listing expense
7. (B)
(34,863
)
Operating expenses
(82,871
)
(73,890
)
(81,597
)
Operating loss
(81,672
)
(73,204
)
(80,714
)
Finance income
7. (C)
Finance expense
7. (C)
(833
)
(639
)
(1,315
)
Fair value adjustment on warrant liabilities
7. (C) / 17
(12,294
)
(15,531
)
(3,431
)
Foreign currency exchange gain (loss)
7. (C)
(6,114
)
(4,664
)
Finance result
(17,471
)
(12,733
)
(7,981
)
Loss before tax for the period
(99,143
)
(85,937
)
(88,695
)
Income tax benefit (expense)
7. (D)
(107
)
Loss for the period
(98,957
)
(85,777
)
(88,802
)
Loss per share:
Basic and diluted loss attributable to equity holders
21
(1.89
)
(2.12
)
(2.97
)
The accompanying notes form an integral part of the consolidated financial statements.
F-5
Oculis Holding AG
Consolidated Statements of Comprehensive Loss
(in CHF thousands)
For the years ended December 31,
Note
2025
2024
2023
Loss for the period
(98,957
)
(85,777
)
(88,802
)
Other comprehensive income (loss)
Items that will not be reclassified to Statements of Loss:
Actuarial gain (loss) of defined benefit plans
12
(1,161
)
(808
)
Items that may be reclassified subsequently to loss:
Foreign currency translation differences
2. (D)
(209
)
(5,005
)
Foreign currency translation differences recycling
5
Other comprehensive income (loss) for the period
(1,105
)
(835
)
Total comprehensive loss for the period
(98,567
)
(86,882
)
(89,637
)
The accompanying notes form an integral part of the consolidated financial statements.
F-6
Oculis Holding AG
Consolidated Statements of Changes in Equity
(in CHF thousands, except share numbers)
Legacy share capital
Legacy treasury shares
Share capital
Treasury shares
Note
Shares
Share
capital
Shares
Treasury
shares
Shares
Share capital
Shares
Treasury
shares
Share
premium
Reserve for
share-based
payment
Cumulative
translation
adjustment
Actuarial gain
(loss) on post-
employment
benefit obligations
Accumulated
losses
Total
Balance as of January 1, 2023
(114,323
)
(1
)
(300
)
(264
)
(110,978
)
(97,991
)
Loss for the period
-
-
-
-
(88,802
)
(88,802
)
Other comprehensive loss:
Actuarial loss on post-employment benefit
obligations
12
-
-
-
-
(808
)
(808
)
Foreign currency translation differences
-
-
-
-
(5,005
)
(5,005
)
Foreign currency translation differences recycling
5
-
-
-
-
Total comprehensive loss for the period
-
-
-
-
(27
)
(808
)
(88,802
)
(89,637
)
Share-based compensation expense
13
-
-
-
-
Conversion of Legacy Oculis ordinary shares and
treasury shares into Oculis ordinary shares
5
(3,894,722
)
(39
)
-
Conversion of Legacy Oculis long-term financial
debt into Oculis ordinary shares
5
Issuance of ordinary shares to PIPE investors
5
Issuance of ordinary shares under CLA
5
Issuance of ordinary shares to EBAC shareholders
5
Transaction costs related to the business
combination
5
(4,821
)
(4,821
)
Proceeds from sale of shares in public offering
5
Transaction costs related to the public offering
5
-
-
-
-
(3,361
)
(3,361
)
Stock option exercised
13
Issuance of shares in connection with warrant
exercises
17
-
-
-
Balance as of December 31, 2023
(327
)
(1,072
)
(199,780
)
Balance as of January 1, 2024
(327
)
(1,072
)
(199,780
)
Loss for the period
-
-
-
-
(85,777
)
(85,777
)
Other comprehensive income (loss):
Actuarial loss on post-employment benefit
obligations
12
-
-
-
-
(1,161
)
(1,161
)
Foreign currency translation differences
-
-
-
-
Total comprehensive loss for the period
-
-
-
-
(1,161
)
(85,777
)
(86,882
)
Share-based compensation expense
13
-
-
-
-
Issuance of ordinary shares related to registered
direct offering
5
Transaction costs related to registered direct
offering
5
-
-
-
-
(1,868
)
(1,868
)
Issuance of shares to be held as treasury shares
15
(1,000,000
)
(10
)
Vesting of earnout shares
5
-
-
-
(14
)
Warrants exercised
17
-
-
-
Stock options exercised and RSUs vested/released
13
(99
)
Balance as of December 31, 2024
(1,000,000
)
(10
)
(271
)
(2,233
)
(285,557
)
Balance as of January 1, 2025
(1,000,000
)
(10
)
(271
)
(2,233
)
(285,557
)
Loss for the period
-
-
-
-
(98,957
)
(98,957
)
Other comprehensive income (loss):
Actuarial gain on post-employment benefit
obligations
12
-
-
-
-
Foreign currency translation differences
-
-
-
-
(209
)
(209
)
Total comprehensive loss for the period
-
-
-
-
(209
)
(98,957
)
(98,567
)
Share-based compensation expense
13
-
-
-
-
Issuance of ordinary shares related to underwritten
offerings
5
-
-
Transaction costs related to the issuance of ordinary
shares
5
-
-
-
-
(13,335
)
(13,335
)
Vesting of earnout shares
5
-
-
-
(14
)
Issuance of shares to be held as treasury shares
15
-
-
(2,500,000
)
(25
)
Warrants exercised
17
-
-
-
Stock options exercised and RSUs vested/released
13
(1,719
)
Balance as of December 31, 2025
(703,703
)
(7
)
(480
)
(1,634
)
(384,514
)
F-7
The accompanying notes form an integral part of the consolidated financial statements.
F-8
Oculis Holding AG
Consolidated Statements of Cash Flows
(in CHF thousands)
For the years ended December 31,
Note
2025
2024
(as recast)
2023
(as recast)
Operating activities
Loss before tax for the period
(99,143
)
(85,937
)
(88,695
)
Non-cash adjustments:
- Financial result
(2,674
)
- Depreciation of property and equipment and right-of-use assets
- Share-based compensation expense
13
- Interest expense on Series B and C preferred shares
15 / 7.(C)
- Post-employment (benefits)/ loss
12
(36
)
(171
)
- Fair value adjustment on warrant liabilities
17
- Merger and listing expense
5
Working capital adjustments:
- De/(Increase) in other current assets
11
(5,556
)
- De/(Increase) in accrued income
11
(364
)
- De/(Increase) in other operating assets
(112
)
(95
)
(29
)
- (De)/Increase in payables and accrued liabilities
16
(1,947
)
(7,820
)
- (De)/Increase in long-term payables
(378
)
Taxes (paid)/ received
(55
)
(152
)
(101
)
Net cash outflow for operating activities
(66,304
)
(48,919
)
(55,037
)
Investing activities
Payment for purchase of property and equipment
8
(301
)
(230
)
(48
)
Interest received
Payment for short-term financial assets, net
14
(60,787
)
(17,327
)
(54,163
)
Payment for intangible assets
9
(1,087
)
Net cash outflow for investing activities
(60,934
)
(16,083
)
(52,973
)
Financing activities
Proceeds from sale of shares in public offerings
5
Transaction costs related to financing activities
5
(13,222
)
(2,894
)
(2,983
)
Proceeds from exercises of warrants, net
17
Proceeds from stock options exercised
13
Principal payment of lease obligations
10
(373
)
(274
)
(158
)
Interest paid
(87
)
(54
)
(46
)
Proceeds from the shares issued to PIPE investors
5
Proceeds from the shares issued to CLA investors
5
Proceeds from EBAC non-redeemed shareholders
5
Transaction costs related to the business combination
5
(4,607
)
Net cash inflow for financing activities
Increase (decrease) in cash and cash equivalents
(11,026
)
Cash and cash equivalents, beginning of period
14
Effect of foreign exchange rate changes
(6,059
)
(3,075
)
Cash and cash equivalents, end of period
14
Net cash and cash equivalents variation
(11,026
)
Supplemental non-cash investing information
Intangible assets acquisition recorded in accrued expenses
Interest receivable recorded in other current assets
Supplemental non-cash financing information
Transaction costs recorded in accrued expenses and other payables
The accompanying notes form an integral part of the consolidated financial statements.
Oculis Holding AG
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts presented in CHF thousands, except share numbers, unless otherwise noted)
F-9
CORPORATE INFORMATION
“Oculis”
or the
“Company”
) is a stock corporation (
“Aktiengesellschaft”
) with its registered
October 31, 2022.
The Company controls seven wholly-owned subsidiaries: Oculis Operations Sàrl (
“Oculis Operations”
) with its
registered office in Lausanne, Switzerland, which was incorporated in Zug, Switzerland on December 27, 2022,
Oculis ehf (
“Oculis Iceland”)
, which was incorporated in Reykjavik, Iceland on October 28, 2003, Oculis France
Sàrl (
“Oculis France”
) which was incorporated in Paris, France on March 27, 2020, Oculis US, Inc. with its
registered office in Newton MA, USA, which was incorporated in Delaware, USA, on May 26, 2020, Oculis HK,
Limited (
“Oculis HK”
) which was incorporated in Hong Kong, China on June 1, 2021, Neurocol IP Sàrl
(
“Neurocol IP”
), which was incorporated in Lausanne, Switzerland on December 4, 2025, and Neurocol Operations
Sàrl (
“Neurocol Operations”
), which was incorporated in Lausanne, Switzerland on December 4, 2025. The
Company and its wholly-owned subsidiaries form the Oculis Group (the
“Group”
).
treatment of ophthalmic and neuro-ophthalmic diseases. Oculis is engaged in developing innovative drug candidates
with the potential to address significant unmet medical needs for many eye-related and neuro-ophthalmic
conditions. The Company’s mission is to save sight and improve eye care for patients worldwide and it intends to
BASIS OF PREPARATION
Going concern
The Group’s accounts are prepared on a going concern basis. To date, the Group has financed its cash requirements
primarily from share issuances, as well as government research and development grants. The November and
February 2025 offerings, as well as prior financing transactions raised funding to secure business continuity as
explained under Note 5. The Board of Directors believes that the Group has the ability to meet its financial
obligations for at least the next 12 months.
The Company is a late clinical stage company and is exposed to all the risks inherent to establishing a business,
including the substantial uncertainty as to whether current projects will succeed. The Company’s success may
depend in part upon its ability to (i) establish and maintain a strong patent position and protection; (ii) enter into
collaborations with partners in the biotech and pharmaceutical industry; (iii) successfully move its product
candidates through preclinical and clinical development; (iv) successfully obtain regulatory approval and
commercialize its products; and (v) attract and retain key personnel. The Company’s success is subject to its ability
to raise capital to support its current and future operations. To date, the Company has financed its cash requirements
primarily through the sale of its preferred and ordinary shares and issuance of shares from warrants exercises. The
Company will continue to evaluate additional funding through public or private financings, debt financing or
collaboration agreements. The Company cannot be certain that additional funding will be available on acceptable
terms, or at all. If the Company is unable to raise additional capital when required or on acceptable terms, it may
have to (i) significantly delay, scale back or discontinue the development of one or more of its product candidates;
(ii) seek collaborators for product candidates at an earlier stage than otherwise would be desirable and on terms that
are less favorable than might otherwise be available; or (iii) relinquish or otherwise dispose of rights to product
Statement of compliance
The consolidated financial statements of Oculis are prepared in accordance with IFRS Accounting Standards
(
“IFRS”
) as issued by the International Accounting Standards Board (“
IASB
F-10
(C)
Basis of measurement
The policies set out below are consistently applied to all the years presented. The consolidated financial statements
have been prepared under the historical cost convention, unless stated otherwise in the accounting policies in Note
3.
The totals are calculated with the original unit amounts, which could lead to rounding differences. These differences
in thousands of units are not changed in order to keep the accuracy of the original data.
Functional currency
The consolidated financial statements of the Group are expressed in Swiss Francs (
“CHF”
), which is the
Company’s functional and the Group’s presentation currency. The functional currency of the Company’s
subsidiaries is the local currency except for Oculis Iceland whose functional currency is CHF.
Assets and liabilities of foreign operations are translated into CHF at the rate of exchange prevailing at the reporting
date and their statements of profit or loss are translated at average monthly exchange rates. The exchange
SUMMARY OF MATERIAL ACCOUNTING POLICIES
The principal accounting policies adopted in the preparation of these financial statements are set out below. The
policies set out below are consistently applied to all the years presented, unless otherwise stated.
Current vs. non-current classification
The Company presents assets and liabilities on the balance sheet based on current/non-current classification. The
Company classifies all amounts to be realized or settled within 12 months after the reporting period to be current
and all other amounts to be non-current. Liabilities are classified as non-current if the Company has the
Foreign currency transactions
Foreign currency transactions are translated into the functional currency, CHF, using prevailing exchange rates at
the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated into
CHF at rates of exchange prevailing at reporting date. Any gains or losses from these translations are included in
Group accounting
The Company has seven wholly owned subsidiaries, including Oculis Operations, Oculis Iceland, Oculis France,
Oculis U.S., Oculis HK, Neurocol IP and Neurocol Operations. The Company’s consolidated financial statements
present the aggregate of the eight Group entities, after elimination of intra-group transactions, balances, investments
Segment reporting
The Company is managed and operated as one business. A single management team that reports to the Chief
Executive Officer comprehensively manages the entire business and accordingly, has one reporting segment.
The Company has locations in five countries: Switzerland, Iceland, France, U.S. and Hong Kong. An analysis of
All leases are accounted for by recognizing a right-of-use asset and a lease liability except for leases of low value
assets and leases with a duration of 12 months or less.
Lease liabilities are measured at the present value of the expected contractual payments due to the lessor over the
lease term, with the discount rate determined by reference to the rate inherent in the lease unless this is not readily
determinable, in which case the Group’s incremental borrowing rate on commencement date of the lease is used.
Variable lease payments are only included in the measurement of the lease liability if they depend on an index or
rate and remain unchanged throughout the lease term. Other variable lease payments are expensed.
F-11
On initial recognition, the carrying value of the lease liability also includes amounts expected to be payable under
any residual value guarantee, and the exercise price of any purchase option granted in favor of the group if it is
reasonably certain to assess that option. Right-of-use assets are initially measured at the amount of the lease
liability, reduced for any lease incentives received, and increased for lease payments made at or before
commencement of the lease and initial direct costs incurred.
Subsequent to the initial measurement, lease liabilities increase as a result of interest charged at a constant rate on
the balance outstanding and are reduced for lease payments made. Right-of-use assets are depreciated on a straight-
line basis over the remaining expected term of the lease or over the remaining economic life of the asset if this is
judged to be shorter than the lease term.
When the Company revises its estimate of the term of any lease, it adjusts the carrying amount of the lease liability
to reflect the expected payments over the revised term, which are discounted using a revised discount rate. The
carrying value of lease liabilities is similarly revised if the variable future lease payments dependent on a rate or
index is revised. In both cases, an equivalent adjustment is made to the carrying value of the right-of-use asset, with
the revised carrying amount being amortized over the remaining lease term. If the carrying amount of the right-of-
Grant income recognition
Grant income is recognized where there is reasonable assurance that the grant will be received and all attaching
Taxes reported in the consolidated statements of loss include current and deferred taxes on profit. Taxes on income
are accrued in the same periods as the revenues and expenses to which they relate.
measure assets and liabilities with rules that differ from those of the consolidated accounts. Deferred income tax is
calculated using the liability method and determined using tax rates and laws that have been enacted or
substantively enacted by the balance sheet date and are expected to apply when the related deferred income tax
asset is realized, or the deferred income tax liability is settled. Any changes to the tax rates are recognized in the
consolidated statements of loss unless related to items directly recognized in equity or other comprehensive loss.
Deferred income tax is recognized on temporary differences arising between the tax bases of assets and liabilities
and their carrying amounts in the consolidated financial statements. Deferred income tax assets are recognized only
to the extent that it is probable that future taxable profit will be available against which the temporary differences or
the unused tax losses can be utilized. Deferred income tax assets from tax credit carry forwards are recognized to
the extent that the national tax authority confirms the eligibility of such a claim and that the realization of the
related tax benefit through future taxable profits is probable. Deferred income tax assets and liabilities are offset
when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the
deferred income tax assets and liabilities relate to income taxes levied by the same taxation authority on either the
Loss per share
The Company presents basic loss per share for each period in the financial statements. The loss per share is
calculated by dividing the loss of the period by the weighted average number of shares outstanding during the
period. Diluted earnings per share, applicable in case of positive result, reflect the potential dilution that could occur
months. Short-term financial assets are held in order to collect contractual cash flows made of payments of principal
and interests.
F-12
Short-term financial assets are measured at amortized cost, which approximates fair value, and are subsequently
measured using the effective interest method. This method allocates interest income over the relevant period by
applying the effective interest rate to the carrying amount of the asset. Gains and losses are recognized in the
Fair value measurements
The Company measures certain financial assets and liabilities at fair value on a recurring basis, including warrants.
Fair value is the price the Company would receive to sell an asset or pay to transfer a liability in an orderly
transaction with a market participant at the measurement date. The Company uses a three-level hierarchy that
prioritizes fair value measurements based on the types of inputs used, as follows:
•
Level 1: unadjusted quoted prices in active markets for identical assets or liabilities.
•
Level 2: either directly or indirectly, quoted prices for similar assets or liabilities in active markets.
•
Level 3: unobservable inputs for the asset or liability to the extent that observable inputs are not
available in situations in which there is little, if any, market activity for the asset or liability at the
measurement date.
There was no change in the valuation techniques applied to financial instruments during all periods presented. There
were no transfers between levels 1, 2 or 3 for recurring fair value measurements during the year. The Group
recognizes transfers into and out of fair value hierarchy levels at the end of the reporting period
Property and equipment
All property and equipment are shown at cost, less subsequent depreciation and impairment. Cost includes
expenditures that are directly attributable to the acquisition of the items. Subsequent costs are included in the asset’s
carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic
benefits associated with the item will flow to the Group and the cost of the item can be measured reliably.
Category |
Useful life in years |
Laboratory equipment |
5 - 7 |
Laboratory fixtures and fittings |
10 |
Office equipment and hardware |
2 - 3 |
Leasehold improvements |
5 |
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. An
asset’s carrying amount is impaired immediately to its recoverable amount if the asset’s carrying amount is greater
than its estimated recoverable amount. Gains and losses on disposal or retirement of tangible fixed assets are
determined by comparing the net proceeds received with the carrying amounts and are included in the consolidated
Warrant liabilities
The Company recognizes the warrant instruments as liabilities at fair value and adjusts the instruments to fair value
at each reporting period (refer to Note 17). Any change in fair value is recognized in the Company’s consolidated
statements of loss. Warrants are classified as short-term liabilities as the Company cannot defer the settlement
beyond 12 months.
The Amended BlackRock Warrant, as defined in Note 5, issued in conjunction with the Amended Loan Agreement
is classified as a liability since its exercise price is fixed in USD, which is not the functional currency of the
Company and therefore it does not meet the requirements to be classified as equity under IFRS. An instrument that
will be settled in the Company’s own equity shares is an equity instrument only if the issuer has to deliver a fixed
number of its own shares for a fixed amount (fixed for fixed requirement, IAS 32.16). The fair value of the
BlackRock Warrant is determined using the Black-Scholes option-pricing model. This valuation model as well as
parameters used such as expected volatility and expected term are partially based on management’s estimates. The
expected volatility is estimated using historical stock volatilities of comparable peer public companies within the
Company’s industry. The expected term represents the period that the warrant is expected to be outstanding. The
BlackRock Warrant is included in Level 3 of the fair value hierarchy. Refer to Note 17
- Warrant Liabilities.
F-13
The fair value of the BCA Public Warrants, as defined in Note 5, traded in active markets is based on the quoted
market prices at the end of the reporting period for such warrants. For the BCA Private Warrants, which have
identical terms to the BCA Public Warrants, the Company determined that the fair value of each BCA Private
Warrant is equivalent to that of each BCA Public Warrant. BCA Public Warrants are included in Level 1 and BCA
Private Warrants in Level 2 of the fair value hierarchy. Refer to Note 17 -
.
Research and development costs
Research expenditures are recognized in expense in the year in which they are incurred. Internal development
expenditures are capitalized only if they meet the recognition criteria of IAS 38 “Intangible Assets.” Given the
inherent regulatory and other uncertainties, these criteria are generally not met before obtaining approval from the
relevant regulatory authority. As a result, development expenditures are typically recognized as expenses in the
consolidated statements of loss. However, when capitalization criteria are satisfied, development costs are recorded
as intangible assets and amortized on a straight-line basis over their estimated useful lives. Amortization of
capitalized licenses begins upon receipt of market approval. The Company records accruals for estimated costs
Acquired licenses and related development milestones are capitalized as intangible assets at historical cost and
amortized over their estimated useful lives. The amortization period is determined based on the expected pattern of
consumption of future economic benefits and begins only after the necessary regulatory and marketing approvals
have been obtained. Capitalized licenses are assessed for impairment annually in the last quarter of each financial
period or earlier if indicators of impairment arise. Amortization expense related to capitalized licenses is recognized
Impairment of licenses
Impairment of non-financial assets
Assets that are subject to amortization are reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount of the asset may not be recoverable. An impairment loss is recognized for the
amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher
of the asset’s fair value less costs of disposal and value-in-use.
For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generate
cash inflows from continuing use that are largely independent of the cash flows of other assets (“
cash-generating
units
”). Impairment losses are recognized in the consolidated statements of loss. Prior impairments of non-financial
Financial instruments
The principal financial instruments used by the Company are as follows
:
•
Cash and cash equivalents
•
Short-term financial assets
•
Other current assets, excluding prepaid expenses
•
Accrued income
•
Trade payables
•
Accrued expenses and other payables
•
Lease liabilities
•
Warrant liabilities
F-14
These financial instruments are carried at amortized cost, except warrant liabilities which are adjusted to fair value
at period end.
Due to their short-term nature, the carrying value of cash and cash equivalents, short-term financial assets, other
current assets, excluding prepaid expenses, accrued income, lease liabilities, trade payables, accrued expenses and
other payables approximates their fair value. For details of the fair value hierarchy and valuation techniques, refer to
Note 20.
(a)
Cash and cash equivalents
Cash and cash equivalents include cash on hand and highly liquid investments with original maturities of three
months or less. These investments are readily convertible to known amounts of cash.
(b)
Short-term financial assets
Short-term financial assets consist of fixed term bank deposits with original maturities between three and six
months. Short-term financial assets are held in order to collect contractual cash flows made of payments of principal
and interests.
(c)
Other current assets, excluding prepaid expenses
The carrying amount of other receivables/current assets is reduced through the use of an allowance account, and the
amount of the loss is recognized in the consolidated statements of loss. Subsequent recoveries of amounts
previously written off are credited to the consolidated statements of loss.
(d)
Accrued income
Grant income reflects reimbursement of research and development expenses and income from certain research
projects managed by Icelandic governmental institutions. Certain expenses qualify for incentives from the Icelandic
government in the form of tax credits or cash reimbursements.
(e)
Trade payables
Trade payables are amounts due to third parties in the ordinary course of business. Trade payables are non-interest
bearing and are normally settled on 45-day terms.
(f)
Accrued expenses and other payables
Accrued expenses and other payables are amounts provided for / due to third parties in the ordinary course of
business. Accrued expenses and other payables are non-interest bearing.
(g)
Lease liabilities
Lease liabilities are measured at the present value of the expected contractual payments due to the lessor over the
lease term, with the discount rate determined by reference to the rate inherent in the lease unless this is not readily
Employee benefits
(a)
Pension obligations
The Company operates a defined benefit pension plan for its Swiss-based employees, which is held in a multi-
employer fund. The pension plan is funded by payments from employees and from the Company. The Company’s
contributions to the defined benefit pension plan are charged to the consolidated statements of loss in the year to
which they relate.
The liability recognized in the balance sheet in respect of defined benefit pension plan is the present value of the
defined benefit obligation at the balance sheet date less the fair value of plan assets and the possible effect of the
asset ceiling, together with adjustments for unrecognized past-service costs. The defined benefit obligation is
calculated annually by independent actuaries using the projected unit credit method.
When the Company has a surplus in the defined benefit pension plan, it measures the net defined benefit asset at the
lower of the surplus in the defined benefit pension plan, or the asset ceiling (being the present value of any
F-15
economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan),
determined using the discount rate.
The Company does not expect any refunds or contribution reductions in case of a surplus in the defined benefit
pension plan calculated per IAS 19, therefore no assets would be recognized in the Consolidated Statements of
Financial Position.
The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows
using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will
be paid, and that have terms to maturity approximating to the terms of the related pension liability.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or
credited to equity in other comprehensive income in the period in which they arise.
Past-service costs are recognized immediately in income, unless the changes to the pension plan are conditional on
the employees remaining in service for a specified period of time (the vesting period). In this case, the past-service
costs are amortized on a straight-line basis over the vesting period.
(b)
Employee participation
The Company operates an equity-settled, share-based compensation plan, under which the entity receives services
from employees as consideration for equity instruments (e.g. options) of the Company. The fair value of the awards
granted in exchange of the employee services received is recognized as an expense.
Non-market vesting conditions are included in assumptions about the number of options that are expected to vest.
The total expense is recognized over the vesting period, which is the period over which all of the specified vesting
conditions are to be satisfied. At the end of each reporting period, the entity revises its estimates of the number of
options that are expected to vest based on the non-market vesting conditions. It recognizes the impact of the
revision to original estimates, if any, in the consolidated statements of loss, with a corresponding adjustment to
equity. When options are exercised, the Company issues new shares. The proceeds received net of any directly
attributable transaction costs are credited to share capital (nominal value) and share premium when the options are
Earnout consideration
The Company recognized the earnout consideration under the BCA as a share-based contingent consideration
within the scope of IFRS 2, and therefore equity classified as the earnout consideration ultimately settles in ordinary
shares. The Company determined that the fair value of the earnout shares is accounted for as a component of the
deemed cost of the listing services upon consummation of the Business Combination. The fair value of total
consideration transferred was included in the calculation of the IFRS 2 share listing service expense and will not be
subsequently adjusted regardless of whether the price target is achieved or not. The earnout options granted to
employees were determined to be compensation for the dilution to their previously held Legacy Oculis equity
instruments. No subsequent compensation charge has been recognized under IFRS 2 because no additional fair
Capitalization of transaction costs
The Company capitalizes transaction costs incurred in connection with its ATM program within other current assets
in the Company’s consolidated balance sheet because those costs are directly attributable to new equity issuances
and management estimates that a future financing is probably of occurring. If and when the Company completes a
transaction, capitalized transaction costs will be offset against the proceeds and will be recorded as a reduction of
share premium within the Company’s consolidated balance sheet. If the Company determines that it is not highly
probable that a transaction will be completed, the Company will write-off capitalized transaction costs incurred
during that respective quarter in the consolidated statement of loss.
Transaction costs incurred in connection with underwritten offerings are recorded as a reduction of share premium
(S)
Presentation of interest in the statement of cash flows
Effective January 1, 2025, the Company revised its accounting policy regarding the classification of interest paid
and interest received in the statement of cash flows. Interest paid was reclassified from “net cash flows used in
operating activities” to “net cash flows used in financing activities,” and interest received was reclassified from “net
F-16
cash flows used in operating activities” to “net cash flows used in investing activities.” The Company assessed the
change in accounting policy under IAS 8, in accordance with the guidance regarding a voluntary change in
accounting policy.
The reclassification of interest paid was elected to provide a more cohesive presentation of payments related to the
Company’s office leases. Prior to the change in accounting policy, interest paid on lease liabilities was classified as
operating cash flows, while payments of the principal portion of lease liabilities were classified as financing cash
flows. The change aligns the interest paid with the associated financial liability giving rise to the interest.
In addition, the Company reclassified interest received to investing activities, as the majority of interest received
relates to interest earned on cash and cash equivalents and short-term investments. The Company believes the
updated classification better reflects the nature and source of the cash inflows.
The Company applied the change in accounting policy retrospectively and has recast prior periods’ comparative
information within the statement of cash flows to ensure consistency and comparability with the current period
presentation. As part of the retrospective application, net cash outflow from operating activities for the year ended
December 31, 2024 increased by CHF 1.4 million, net cash outflow from investing activities decreased by CHF 1.5
million, and net cash flow inflow from financing activities decreased by CHF 54 thousand. As part of the
retrospective application, net cash used in operating activities for the year ended December 31, 2023 increased by
CHF 1.2 million, net cash flow used in investing activities decreased by CHF 1.2 million, and net cash flow inflow
from financing activities decreased by CHF 46 thousand.
New accounting standards, interpretations and amendments adopted by the Company
There are no new IFRS Accounting Standards, amendments to standards or interpretations that are mandatory for
the financial year beginning on January 1, 2025 that have a material impact to the Company. In April 2024, the
IASB issued IFRS 18,
Presentation and Disclosure in Financial Statements
, which provides requirements for the
presentation and disclosure of information in general purpose financial statements. The standard is effective for
periods beginning on or after January 1, 2027. The Company is in the process of evaluating whether IFRS 18 will
have a material effect on the consolidated financial statements. New standards, amendments to standards and
interpretations that are not yet effective, which have been deemed by the Company as currently not relevant, are not
CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS
The Group’s principal accounting policies are set out in Note 3 of the Group’s consolidated financial statements and
conform to IFRS Accounting Standards. Significant judgments and estimates are used in the preparation of the
consolidated financial statements which, to the extent that actual outcomes and results may differ from these
assumptions and estimates, could affect the accounting in the areas described in this section.
Impairment of licenses
The Group assesses whether there are any indicators of impairment for all licenses at each reporting date, which
refers exclusively to the licenses of two specific product candidates: Licaminlimab (OCS-02) and Privosegtor
(OCS-05). Given the stage and advancement of Oculis’ development activities and the importance of both products
in Oculis’ portfolio, the impairment test is performed first on the basis of a fair value model for the entire Company
using a market approach, and second on the basis of the continued development feasibility of the relevant product
Deferred income taxes
Deferred income tax assets are recognized for all unused tax losses and deductible temporary differences, including
those related to intangible assets, only to the extent that it is probable that taxable profits will be available against
which the losses and temporary differences can be utilized. Judgment is required from management to determine the
Pension benefits
The present value of the pension obligations depends on several factors that are determined on an actuarial basis
using a number of assumptions. The assumptions used in determining the net cost or income for pensions include
the discount rate. Any changes in these assumptions will impact the carrying amount of pension obligations. The
F-17
independent actuary of the Group uses statistic-based assumptions covering future withdrawals of participants from
the plan and estimates on life expectancy. The actuarial assumptions used may differ materially from actual results
due to changes in market and economic conditions, higher or lower withdrawal rates or longer or shorter life spans
of participants. These differences could have a significant impact on the amount of pension income or expenses
recognized in future periods.
The Group determines the appropriate discount rate at the end of each year. This is the interest rate used to
determine the present value of estimated future cash outflows expected to be required to settle the pension
obligations. In determining the appropriate discount rate, the Group considers the interest rates of high-quality
corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to
maturity approximating the terms of the related pension liability. Other key assumptions for pension obligations are
Share-based compensation
Stock options granted are valued using the Black-Scholes option-pricing model (see Note 13). This valuation model
as well as inputs such as expected volatility and expected term of the stock options are partially based on
management’s estimates. The expected volatility is estimated using historical stock volatilities of comparable peer
public companies within the Company’s industry. The expected term represents the period that share-based awards
are expected to be outstanding. The Company classifies its share-based payments as equity-classified awards as
they are settled in ordinary shares. The Company measures equity-classified awards at their grant date fair value
using a Black-Scholes option pricing model and does not subsequently remeasure them. Compensation costs related
to equity-classified awards are equal to the fair value of the award at the date of grant amortized over the vesting
period of the award using the graded method. If awards are granted with performance conditions, the Company
evaluates the probability of achievement. Expense is only recorded for awards with vesting criteria linked to
performance conditions that are deemed probable of achievement. The Company reclassifies a portion of vested
awards to reserve for share-based payment as the awards vest. The proceeds received net of any directly attributable
Accounting for the Business Combination
In relation to the 2023 Business Combination, the following critical estimates and judgments were made:
•
Determining the accounting acquirer in the Business Combination
Despite EBAC being the legal acquirer, Legacy Oculis was determined to be the accounting acquirer for financial
reporting purposes. This determination is primarily based on the fact that subsequent to the Business Combination,
i) the shareholders of Legacy Oculis have a majority of the voting interest in the combined company; ii) Legacy
Oculis’ operations comprise all of the ongoing operations of the combined company; and iii) Legacy Oculis’
management comprise all of the senior management of the combined company.
•
Business Combination accounted for within the scope of IFRS 2
EBAC was a Special Purpose Acquisition Company and therefore does not meet the definition of a business under
IFRS 3 as it has no operations and the related BCA cannot be treated as a business combination. The Business
Combination was accounted for as a continuation of Legacy Oculis financial statements with a deemed issuance of
shares by the Company accompanied by a recapitalization of the Company’s equity. The excess of fair value of the
shares deemed issued by the Company over EBAC’s identifiable net assets has been recorded as share-based
payment expense in accordance with IFRS 2 and represents a public listing service received by the Company.
•
Capitalized transaction costs
Legacy Oculis and EBAC incurred costs such as legal, accounting, auditing, printer fees and other professional fees
directly related to the Business Combination (“
Transaction Costs
”). Transaction costs directly associated with
equity issuance qualify for capitalization and are accounted for as a deduction of share premium. To capture costs
associated with the new equity, the Company allocated capitalizable transaction costs to the various transaction
components (equity issuance and listing) at the percentages of 38.0% and 62.0% for new shares and old shares,
F-18
FINANCING ACTIVITIES
Business combination with European Biotech Acquisition Corp. (“
EBAC
”)
On March 2, 2023, the Company consummated the Business Combination pursuant to the Business Combination
Agreement (“
BCA
”) between Legacy Oculis and EBAC dated as of October 17, 2022. The Company received gross
proceeds of CHF 97.6 million or $103.7 million, comprising CHF 12.0 million or $12.8 million of cash held in
EBAC’s trust account and CHF 85.6 million or $90.9 million from private placement (the “
PIPE Financing
”)
investments and conversion of notes issued by Legacy Oculis under convertible loan agreements (“
CLA
”) into
Oculis’ ordinary shares. As a result of the transaction, each issued and outstanding EBAC public warrant (“
BCA
Public Warrants
”) and EBAC private placement warrant (“
BCA Private Warrants
”) ceased to be a warrant with
respect to EBAC ordinary shares and were assumed by Oculis as warrants with respect to ordinary shares on
substantially the same terms (“
BCA Warrants
”). In connection with the Business Combination, Oculis was listed on
the United States Nasdaq Global Market with the ticker symbol “OCS” for its ordinary shares and “OCSAW” for its
public warrants.
During the third quarter of 2023, the Company gave effect in its financial statements to the dissolution of Merger
Sub 2, a legal entity formed under the terms of the BCA. As a result, the cumulative translation adjustments related
to Merger Sub 2 previously reported as equity and recognized in other comprehensive income, were reclassified
from equity to the Consolidated Statement of Loss for the year ended December 31, 2023. The resulting foreign
exchange impact of such reclassification amounted to CHF 5.0 million for the year ended December 31, 2023.
Merger and listing expense
The Business Combination was accounted for as a capital re-organization in the first quarter of 2023 within the
scope of IFRS 2
Share-based Payment,
as EBAC did not meet the definition of a business in accordance with IFRS
3
Business Combinations
. Any excess of the fair value of the Company’s shares issued over the fair value of
EBAC’s identifiable net assets acquired represented compensation for the service of a stock exchange listing. This
expense was incurred in the first quarter of 2023 and amounted to CHF 34.9 million, which was expensed to the
statement of loss as operating expenses, “Merger and listing expense.”
Earnout consideration
As a result of the BCA, Legacy Oculis preferred, ordinary and option holders (collectively “
equity holders
”)
received consideration in the form of 3,793,995 earnout shares and 369,737 earnout options with an exercise price
of CHF 0.01.
The earnout consideration is subject to forfeiture in the event of a failure to achieve the price targets during the
earnout period defined as follows: (i) 1,500,000, (ii) 1,500,000 and (iii) 1,000,000 earned based on the achievement
of post acquisition-closing volume weighted average share price targets of Oculis of $15.00, $20.00 and $25.00,
respectively, in each case, for any 20 trading days within any consecutive 30 trading day period commencing after
the acquisition closing date and ending on or prior to March 2, 2028 (the “E
arnout Period
”). A given share price
target described above will also be deemed to be achieved if the Company enters into a change of control
transaction, as defined in the BCA, during the Earnout Period. The price targets of $15.00, $20.00 and $25.00 were
met in November 2024, February 2025 and February 2026, respectively resulting in an aggregate of 2,845,446
earnout shares vested and 159,453 earnout options outstanding and exercisable as of December 31, 2025, and an
additional 948,549 earnout shares vested and 55,487 earnout options becoming exercisable in February 2026.
Registered Direct Offering and Nasdaq Iceland Main Market listing
On April 22, 2024, the Company closed its registered direct offering with gross proceeds of CHF 53.5 million or
$58.8 million through the issuance and sale of 5,000,000 of our ordinary shares, at a purchase price of CHF 10.70 or
$11.75 per share to investors (the “
Registered Direct Offering
”), and commenced trading of its ordinary shares on
the Nasdaq Iceland Main Market under the ticker symbol “OCS” on April 23, 2024. In connection with the
Registered Direct Offering and Nasdaq Iceland Main Market listing, the Company incurred CHF 2.5 million of
transaction related costs during the year ended December 31, 2024, of which CHF 1.9 million were recorded as a
reduction of share premium in equity.
Loan facility
In May 2024, the Company and Kreos Capital VII (UK) Limited, which are funds and accounts managed by
BlackRock, Inc. (the
“Lender”
), entered into a loan facility of up to CHF 50.0 million in borrowing capacity (which
may be increased to up to CHF 65.0 million) and a related warrant agreement for up to 361,011 of the Company’s
F-19
ordinary shares at a price per ordinary share equal to $12.17. On July 31, 2025, the Company entered into an
amended and restated agreement for its existing loan facility (the
“Amended Loan Agreement”
) with the Lender.
The Amended Loan Agreement replaces the prior loan agreement between the Company and the Lender dated May
29, 2024, with an upsized structure to provide the EUR equivalent of up to CHF 75.0 million in borrowing capacity
(which may be increased to up to CHF 100.0 million) (the
“Loan”
), comprising tranches 1, 2 and 3, in the amounts
of the EUR equivalents of CHF 25.0 million each, as well as an additional loan of the EUR equivalent of up to CHF
25.0 million, which may be made available by the Lender to the Company if mutually agreed in writing by the
Lender and the Company. No amounts were drawn under the Amended Loan Agreement during the year ended
December 31, 2025.
Loan 1 will be available for drawdown from closing until November 15, 2026, which period may be shortened upon
the occurrence of a development milestone. Loans 2 and 3 will be available for drawdown prior to November 15,
2026 and December 31, 2026, respectively, in each case subject to satisfaction of certain pre-specified conditions.
The availability of any funds under a drawdown of Loans 1, Loan 2 or Loan 3 is conditional upon, together with
other conditions, the Company having a debt-to-market cap ratio (where debt includes the amount of all amounts
drawn down to date and the proposed drawdown) equal to or less than 15% at the time of each draw down. Pursuant
to the Amended Loan Agreement, the Company is subject to a non-utilization fee of 0.75% per annum of any
undrawn amount under tranches 1 and 2. Additionally, to the extent Loan 1 has not been drawn prior to its expiry
date, an additional one-time fee of the EUR equivalent of CHF 2.6 million shall be payable, subject to certain
conditions.
As additional consideration for the Loan, Kreos Capital VII Aggregator SCSp, an affiliate of the Lender (the
“Holder”
) and the Company entered into an amended warrant (the
“Amended BlackRock Warrant”
) to purchase up
to 494,259 of the Company’s ordinary shares, subject to vesting, at a price per ordinary share equal to $12.17 (CHF
9.65) with respect to 361,011 shares from the prior warrant agreement, and $18.64 (CHF 14.78) with respect to the
remaining 133,248 shares reflecting the upsized facility, subject to adjustment. The Amended BlackRock Warrant
amends the prior warrant issued to Holder on May 29, 2024. As of the signing date, the Amended BlackRock
Warrant is exercisable for 59,310 ordinary shares, of which 43,321 shares were previously granted. Following the
drawdown of each of Loans 1, 2 and 3, the Amended BlackRock Warrant will become exercisable for additional
amounts of ordinary shares ratably based on the amounts of Loans 1, 2 and 3 that are drawn. Each tranche of the
Amended BlackRock Warrant in connection with Loans 1, 2 and 3, will be exercisable for a period of up to seven
years from the date of vesting and the Amended BlackRock Warrant will terminate at the earliest of (i) December
31, 2033, (ii) such earlier date on which the Amended BlackRock Warrant is no longer exercisable for any warrant
shares in accordance with its terms and (iii) the acceptance by the shareholders of the Company of a third-party
bona fide offer for all outstanding shares of the Company (subject to any prior exercise by the Holder, if
applicable). The Amended BlackRock Warrant had not been exercised in part or in full as of December 31, 2025.
In connection with this transaction, the Company incurred CHF 0.7 million and CHF 0.8 million of transaction
related costs during the years ended December 31, 2025 and 2024, respectively, which were capitalized as a
prepayment for liquidity services and recorded within other current assets.
At-the-Market Offering Program
On May 8, 2024, the Company entered into a sales agreement with Leerink Partners, LLC (“
Leerink Partners
”)
with respect to an at-the-market offering program (the “
ATM Offering Program
”) under which the Company may
offer and sell, from time to time at its sole discretion, ordinary shares of the Company having an aggregate offering
price of up to $100.0 million (CHF 79.3 million) through Leerink Partners as its sales agent. Any such sales, made
through the sales agent, can be made by any method that is deemed an “at-the-market offering” as defined in Rule
415 promulgated under the Securities Act of 1933, as amended, or in other transactions pursuant to an effective
shelf registration statement on Form F-3. The Company agreed to pay Leerink Partners a commission of up to 3.0%
of the gross proceeds of any sales of ordinary shares sold pursuant to the sales agreement. Following the execution
of the agreement, the Company issued 1,000,000 ordinary shares during the year ended December 31, 2024 and
2,500,000 ordinary shares during the year ended December 31, 2025 out of its existing capital band, each with a
nominal value of CHF 0.01 to be held as treasury shares. In connection with this transaction the Company incurred
approximately CHF 0.3 million of transaction related costs during the year ended December 31, 2024, which were
capitalized within other current assets.
On October 29, 2025, in conjunction with the November 2025 Offerings, the Company suspended the ATM
Offering Program. The sales agreement with Leerink Partners remains in full force and effect. As of the date hereof,
we have not sold any ordinary shares under the ATM Offering Program. Of the ordinary shares held as treasury
shares, 2,796,297 were issued in connection with the November 2025 Offerings discussed below.
F-20
Public Offerings
May 2023 Offering
On May 31, 2023, the Company entered into an underwriting agreement with BofA Securities Inc. and SVB
Securities, LLC, as representatives of several underwriters, and on June 5 and June 13, 2023, the Company closed
the issuance and sale in a public offering of an aggregate of 3,654,234 ordinary shares at a public offering price of
CHF 10.45 or $11.50 per share, for total gross proceeds of CHF 38.2 million or $42.0 million before deducting
underwriting discounts, commissions and offering expenses.
February 2025 Offering
In February 2025, the Company closed an underwritten follow-on offering of 5,000,000 ordinary shares, CHF 0.01
nominal value per share, at a price of $20.00 (CHF 18.05) per share, for total gross proceeds of $100.0 million
(CHF 90.2 million). New shares were issued out of the Company’s existing capital band.
November 2025 Offerings
On November 3, 2025, the Company closed offerings of an aggregate of 5,432,098 ordinary shares, CHF 0.01
nominal value per share, at a price of $20.25 (CHF 16.33) per share for total gross proceeds of $110.0 million (CHF
88.7 million) before deducting underwriting discounts and commissions and offering expenses. The Company
issued 2,635,801 shares out of the Company’s existing capital band and 2,796,297 shares previously held in
SEGMENT INFORMATION
The Company is managed and operated as one business. A single management team that reports to the Chief
Executive Officer comprehensively manages the entire business and accordingly, the Company has one reportable
segment.
The table below provides the carrying amount of certain non-current assets, by geographic area:
Switzerland |
Others |
Total |
||||
As of |
As of |
As of |
As of |
As of |
||
As of |
December 31, |
December 31, |
December 31, |
December 31, |
December 31, |
|
December 31, 2025 |
2024 |
2025 |
2024 |
2025 |
2024 |
|
Intangible assets |
13,292 |
13,292 |
- |
- |
13,292 |
13,292 |
Property and equipment |
156 |
200 |
378 |
185 |
534 |
385 |
Right-of-use assets |
541 |
699 |
1,922 |
604 |
2,463 |
1,303 |
Total |
13,989 |
14,191 |
2,300 |
789 |
16,289 |
14,980 |
INCOME AND EXPENSES
GRANT INCOME
Grant income reflects reimbursement of research and development expenses, and income from certain research
projects managed by Icelandic governmental institutions. Certain expenses qualify for incentives from the Icelandic
government in the form of tax credits or cash reimbursements. Icelandic government grant income for the year
ended December 31, 2025, 2024 and 2023 was CHF 1.2 million, CHF 0.7 million and CHF 0.9 million,
OPERATING EXPENSES
The tables below show the breakdown of the operating expenses by category:
F-21
| For the years ended December 31, |
|||||||||
Research and development |
General and administrative |
||||||||
| expenses |
expenses |
Total operating expenses |
|||||||
2025 |
2024 |
2023 |
2025 |
2024 |
2023 |
2025 |
2024 |
2023 |
|
Personnel expenses |
18,849 |
11,114 |
6,509 |
14,997 |
11,476 |
7,029 |
33,846 |
22,590 |
13,537 |
Payroll and related expenses |
9,851 |
6,085 |
4,796 |
7,951 |
6,723 |
5,134 |
17,802 |
12,808 |
9,930 |
Share-based compensation |
|||||||||
expense |
8,998 |
5,029 |
1,713 |
7,046 |
4,753 |
1,895 |
16,044 |
9,782 |
3,607 |
Other operating expenses |
38,236 |
40,969 |
22,738 |
10,789 |
10,331 |
10,458 |
49,025 |
51,300 |
68,059 |
External service providers |
36,818 |
40,127 |
22,256 |
8,200 |
7,445 |
7,695 |
45,018 |
47,572 |
29,951 |
Other operating expenses |
1,077 |
573 |
258 |
2,384 |
2,749 |
2,700 |
3,461 |
3,322 |
2,958 |
Depreciation expense |
341 |
269 |
224 |
205 |
137 |
63 |
546 |
406 |
287 |
Merger and listing expense (1) |
- |
- |
- |
- |
- |
- |
- |
- |
34,863 |
Total |
57,085 |
52,083 |
29,247 |
25,786 |
21,807 |
17,487 |
82,871 |
73,890 |
81,597 |
(1)
Merger and listing expense is presented separately from research and development or general and administrative expenses on the consolidated
statements of loss. The item relates to the BCA and is non-recurring in nature, representing a share-based payment made in exchange for a listing
was driven by a CHF 5.0 million increase in research and development expense and a CHF 4.0 million increase in
general and administrative expense year over year.
The increase in research and development expenses was primarily due to advancements in our late-stage
development portfolio, including Privosegtor development activities and the DIAMOND clinical program. The cost
increases were partially offset by a decline in Licaminlimab development costs due to the completion of RELIEF
Phase 2 trial in 2024 and commencement of PREDICT registrational trial in late 2025.
The increase in general and administrative costs was primarily driven by personnel costs, specifically
share-based
compensation expense due to increased headcount and increased grant value for awards granted during the year
FINANCE RESULT
| For the years ended December 31, |
|||
2025 |
2024 |
2023 |
|
Finance income |
1,770 |
2,168 |
1,429 |
Finance expense |
(833 ) |
(639 ) |
(1,315 ) |
Fair value adjustment on warrant liabilities |
(12,294 ) |
(15,531 ) |
(3,431 ) |
Foreign currency exchange gain (loss) |
(6,114 ) |
1,269 |
(4,664 ) |
Finance result |
(17,471 ) |
(12,733 ) |
(7,981 ) |
Finance income in all periods presented consists primarily of interest income earned from the Company’s short-
term financial assets.
The primary finance expense in 2025 and 2024 is the amortization of transaction costs related to the Loan
Agreement, entered into during the second quarter of 2024 and amended in the third quarter of 2025. Refer to Note
5.
The Company had 2,045,596 shares of BCA Warrants and 59,310 ordinary shares of Blackrock Warrants
outstanding at December 31, 2025. Warrants are adjusted to fair market value at each reporting date. Refer to Note
17 for further discussions of the fair value gain/(loss) on warrant liabilities.
For the year ended December 31, 2025, the foreign currency exchange loss is primarily related to overall weakening
of the U.S. dollar against the Swiss Franc. During the year ended December 31, 2024, the foreign currency
exchange gain is primarily related to overall strengthening of the U.S. dollar against the Swiss Franc.
Financial result as presented in the statements of cash flows is comprised of interest and the foreign exchange effect
INCOME TAX AND DEFERRED TAX
F-22
For the years ended December 31, | |||
2025 | 2024 | 2023 | |
Current income tax expense | (13 ) | (130 ) | (127 ) |
Deferred tax income (expense) | 199 | 290 | 20 |
Total tax benefit (expense) | 186 | 160 | (107 ) |
The Group’s expected tax expense for each year is based on the applicable tax rate in each individual jurisdiction,
which ranged between 8.3% and 25.0% for 2025, 2024 and 2023 in the tax jurisdictions in which the Group
operates. The weighted average tax rates applicable to the profits of the consolidated entities were 12.8%, 13.7%
and 12.7% for the years 2025, 2024 and 2023, respectively. The decrease in 2025 primarily reflects changes in the
composition of taxable results.
The tax on the Group’s profit / (loss) before tax differs from the statutory amount that would arise using the
weighted average applicable tax rate as follows:
For the years ended December 31, | |||
2025 | 2024 | 2023 | |
Groups average expected tax rate | 12.8 % | 13.7 % | 12.7 % |
Accounting loss before income tax | (99,143 ) | (85,937 ) | (88,695 ) |
Taxes at weighted average income tax | 12,727 | 11,792 | 11,294 |
Effect of unrecognized tax losses | (33,450 ) | (8,764 ) | (10,520 ) |
Effect of use of unrecognized tax losses | 22,491 | - | - |
Effect of non-deductible expenses | (3,434 ) | (3,098 ) | (6,041 ) |
Effect of non-taxable income | 1,457 | 280 | 5,103 |
Effect of other items | 395 | (50 ) | 57 |
Total tax benefit (expense) | 186 | 160 | (107 ) |
During the year ended December 31, 2025, the Group changed its corporate structure and completed an intra-group
sale of an intangible asset between two wholly-owned Swiss legal entities, generating an intra-group taxable profit
of CHF 210.4 million. The intra-group sale of intangible asset combined with regular operational losses resulted in
the use of CHF 160.6 million unrecognized tax losses to offset the taxable income in the transferring Swiss entity,
resulting in a reconciling effect of use of unrecognized tax losses of CHF 22.5 million.
The transaction created future temporary difference of CHF 210.4 million in the receiving Swiss entity due to the
differences between the statutory and the IFRS carrying values of the transferred intangible asset. The amortization
of the transferred intangible asset will commence when the market approval for the underlying asset is obtained.
Given the uncertainty in the realization of future taxable profits, no deferred tax asset on these future temporary
differences has been recognized as of December 31, 2025.
As of December 31, 2025, 2024 and 2023, the Group has accumulated tax losses, primarily in Switzerland. These
losses may be carried forward to offset future taxable profits of the Company until expiration. However, no deferred
tax assets have been recognized related to these losses as of December 31, 2025 as the realization of sufficient
future taxable profits is not considered probable. Additionally, as certain tax losses have not yet been validated by
the tax authorities, they remain subject to potential adjustments. The combined effect of unrecognized tax losses
and intangible asset temporary differences amounted to CHF 33.5 million. This does not affect management’s
assumption on the going concern hypothesis of the Group. Below is the maturity of the Group reportable losses:
| As of December 31, | |||
2025 | 2024 | 2023 | |
2025 | - | 16,733 | 16,733 |
2026 | - | 13,113 | 13,113 |
2027 | - | 12,437 | 12,437 |
2028 | - | 14,865 | 14,865 |
2029 | - | 31,786 | 31,786 |
2030 | 41,396 | 81,509 | 81,509 |
2031 | 31,795 | 63,397 | - |
2032 | 33,670 | - | - |
Total | 106,861 | 233,840 | 170,443 |
The Group did not recognize the following temporary differences:
F-23
| As of December 31, |
|||
2025 |
2024 |
2023 |
|
Pension |
1,335 |
1,870 |
728 |
Tax losses in Switzerland |
106,861 |
233,840 |
170,443 |
Leases |
(150 ) |
(123 ) |
(150 ) |
Intangible asset |
206,403 |
(4,025 ) |
(4,025 ) |
Total |
314,449 |
231,562 |
166,996 |
The abovementioned intra-group sale transaction generated future temporary differences of CHF 210.4 million in
the receiving Swiss entity and reduced accumulated tax losses by an amount of CHF 160.6 million as of December
The following table presents the movements in the book values of property and equipment:
Office |
|||||
Lab - |
Lab - fixtures |
equipment & |
Leasehold |
||
| equipment |
and fittings |
hardware |
improvement |
Total |
|
Acquisition cost: |
|||||
Balance as of December 31, |
|||||
2023 |
618 |
195 |
151 |
- |
964 |
Additions |
10 |
- |
122 |
98 |
230 |
Balance as of December 31, |
|||||
2024 |
628 |
195 |
273 |
98 |
1,194 |
Additions |
126 |
- |
95 |
80 |
301 |
Disposals |
(53 ) |
- |
(9 ) |
- |
(62 ) |
Balance as of December 31, |
|||||
2025 |
701 |
195 |
359 |
178 |
1,433 |
Accumulated depreciation: |
|||||
Balance as of December 31, |
|||||
2023 |
(464 ) |
(106 ) |
(106 ) |
- |
(676 ) |
Depreciation expense |
(84 ) |
(19 ) |
(20 ) |
(10 ) |
(133 ) |
Balance as of December 31, |
|||||
2024 |
(548 ) |
(125 ) |
(126 ) |
(10 ) |
(809 ) |
Depreciation expense |
(66 ) |
(20 ) |
(37 ) |
(29 ) |
(152 ) |
Disposals |
53 |
- |
9 |
- |
62 |
Balance as of December 31, |
|||||
2025 |
(561 ) |
(145 ) |
(154 ) |
(39 ) |
(899 ) |
Carrying amount: |
|||||
Balance as of December 31, |
|||||
2024 |
80 |
70 |
147 |
89 |
385 |
Balance as of December 31, |
|||||
2025 |
140 |
50 |
205 |
139 |
534 |
INTANGIBLE ASSETS
The following tables summarize the movement of intangibles assets, all of which represent licenses:
Total |
|
Acquisition cost: |
|
Balance as of December 31, 2023 |
12,206 |
Additions |
1,086 |
Balance as of December 31, 2024 |
13,292 |
Balance as of December 31, 2025 |
13,292 |
Intangible assets as of both December 31, 2025 and 2024 were CHF 13.3 million, and represented licenses
purchased under license agreements with Novartis and Accure. The Novartis license agreement was dated as of
F-24
December 19, 2018 between Legacy Oculis and Novartis and relates to a novel topical anti-
TNFα
antibody,
renamed Licaminlimab, for ophthalmic indications. The license agreement between Legacy Oculis and Accure,
dated as of January 29, 2022, relates to the exclusive global licensing of its Privosegtor (formerly ACT-01)
technology. This license agreement contained an upfront payment of CHF 3.0 million and reimbursement of
development related costs of CHF 0.5 million. During the fourth quarter of 2024, the Company completed the Phase
2 ACUITY trial of Privosegtor in ON and received clearance from the U.S. Food and Drug Administration (“
FDA
”)
for its investigational new drug (“
IND
”). These events triggered milestone payments to Accure totaling CHF 1.1
million which were capitalized, increasing the value of the intangible asset. The next clinical and regulatory
milestone under the Accure Agreement will trigger a payment of CHF 2.1 million ($2.6 million) that the Company
expects to pay in 2026.
(A)
Intangible assets amortization
The products candidates related to the capitalized intangible assets are not yet available for use. The amortization of
the licenses will start when the market approval is obtained.
Annual impairment testing
Oculis performs an assessment of its licenses in the context of its annual impairment test. Given the stage of Oculis’
development activities and the importance of the relevant product candidates, Licaminlimab and Privosegtor, in
Oculis’ portfolio, the impairment test is performed first on the basis of a fair value model for the entire Company
using a market approach and second on the basis of the continued development feasibility of both candidates.
Oculis performs its annual impairment tests on its entire portfolio of research and development assets, by deriving
the fair value from an observable valuation for the entire Company determined via its stock market price quoted in
Nasdaq as per the reporting date. The fair value of the asset portfolio is derived by deducting the carrying value of
tangible assets and the remaining assets, which consist primarily of short-term financial assets and cash and cash
equivalents, from the Company valuation.
Licaminlimab and Privosegtor, are additionally tested for impairment by assessing their probability of success.
Assessments include reviews of the following indicators, and if the candidate fails any of these indicators the entire
balance is written off:
•
Importance allocated to the candidate within
Oculis’
development portfolio, including future
contractual commitments and internal budgets approved by the Board of Directors for ongoing and
future development;
•
Consideration of the progress of technical development and clinical trials, including obtaining technical
development reports, efficacy and safety readout data, and discussions with regulatory authorities for
new trials; and
•
Consideration of market potentials supported where available by external market studies, and
assessments of competitor products and product candidates.
In 2025, 2024 and 2023, reviews of all these indicators for Licaminlimab and Privosegtor were positive. No
RIGHT-OF-USE ASSETS AND LEASE LIABILITIES
The following table presents the right-of-use assets, which are related to the Company’s Switzerland, Iceland and
U.S. facilities:
Right-of-use assets |
||
2025 |
2024 |
|
Balance as of January 1, |
1,303 |
755 |
Indexation for the period |
20 |
25 |
New leases |
1,530 |
792 |
FX revaluation |
4 |
4 |
Depreciation charge for the period |
(394 ) |
(273 ) |
Balance as of December 31, |
2,463 |
1,303 |
F-25
During the year ended December 31, 2025, the Company signed a new lease in the U.S. commencing July 1, 2025
and a new lease in Iceland commencing September 1, 2025.
There are no variable lease payments which are not included in the measurement of lease obligations. Expected
extension options have been included in the measurement of lease liabilities.
The following table presents the lease obligations:
Lease liabilities |
||
2025 |
2024 |
|
Balance as of January 1, |
(1,180 ) |
(605 ) |
New leases |
(1,530 ) |
(792 ) |
FX revaluation |
44 |
(32 ) |
Indexation for the period |
(20 ) |
(25 ) |
Interest expense for the period |
(87 ) |
(47 ) |
Lease payments for the period |
460 |
321 |
Balance as of December 31, |
(2,313 ) |
(1,180 ) |
As of December 31, |
As of December 31, |
|
2025 |
2024 |
|
Current |
(502 ) |
(315 ) |
Non-current |
(1,811 ) |
(865 ) |
Total |
(2,313 ) |
(1,180 ) |
OTHER CURRENT ASSETS, OTHER RECEIVABLE AND ACCRUED INCOME
The table below shows the breakdown of the other current assets by category:
As of December 31, 2025 |
As of December 31, 2024 |
|
Prepaid clinical and technical development expenses |
1,590 |
2,615 |
Prepaid general and administrative expenses |
2,492 |
2,105 |
VAT, withholding tax and interest receivables |
801 |
885 |
Total |
4,883 |
5,605 |
The decrease in prepaid clinical and technical development expenses as of December 31, 2025 compared to prior
year relates primarily to advancements of clinical trials. Specifically, the OCS-01 DIAMOND-1 and DIAMOND-2
trials in DME which started in December 2023 and February 2024, respectively, with enrollments completed in
April 2025. The increase in prepaid general and administrative expenses is primarily due to capitalized transaction
costs associated with the Company’s ATM Offering Program and Amended Loan Agreement.
The table below shows the movement of the accrued income for the years ended December 31, 2025 and 2024:
2025 |
2024 |
|
Balance as of January 1, |
629 |
876 |
Accrued income recognized during the period |
1,199 |
686 |
Payments received during the period |
(617 ) |
(952 ) |
Foreign exchange revaluation |
(218 ) |
19 |
Balance as of December 31, |
993 |
629 |
Accrued income is generated by incentives for research and development offered by the Icelandic government in
the form of tax credits for innovation companies. These tax credits are either used to reduce the company’s income
tax liability or, if the credits exceed the tax due, they are paid out in cash. The tax credit is subject to companies
PENSIONS AND OTHER POST-EMPLOYMENT BENEFIT PLANS
financial position or results.
F-26
The Company’s Swiss entity is affiliated to a collective foundation administrating the pension plans of various
unrelated employers that qualifies as defined benefit plan under IAS 19. For employees in Switzerland, the pension
fund provides post-employment, death-in-service and disability benefits in accordance with the Swiss Federal Law
on Occupational Retirement, Survivor’s and Disability Pension Plans which specifies the minimum benefits that are
to be provided.
The pension plan of the Company’s Swiss entity is fully segregated from the ones of other participating employers.
The collective foundation has reinsured all risks with an insurance company. The most senior governing body of the
collective foundation is the Board of Trustees. All governing and administration bodies have an obligation to act in
the interests of the plan beneficiaries.
The retirement benefits are based on the accumulated retirement capital, which is made of the yearly contributions
towards the old age risk by both employer and employee and the interest thereon until retirement. The employee
contributions are determined based on the insured salary, depending on the age, staff level and saving amount of the
beneficiary. The interest rate is determined annually by the governing body of the collective plan in accordance
with the legal framework, which defines the minimum interest rates.
If an employee leaves the pension plan before reaching retirement age, the law provides for the transfer of the
vested benefits to a new pension plan. These vested benefits comprise the employee and the employer contributions
plus interest, the money originally brought into the pension plan by the beneficiary and an additional legally
stipulated amount. On reaching retirement age, the plan beneficiary may decide whether to withdraw the benefits in
the form of an annuity or (entirely or partly) as a lump-sum payment. The annuity is calculated by multiplying the
balance of the retirement capital with the applicable conversion rate.
All actuarial risks of the plan, e.g. old age, invalidity and death-in-service or investment, are fully covered by
insurance. However, the collective foundation is able to withdraw from the contract with the Company at any time,
in which case the Company would be required to join another pension plan. In addition, the risk premiums may be
adjusted by the insurance company periodically.
The Company’s Swiss pension plan is fully reinsured with Swiss Life, therefore the plan assets are 100% covered
by an insurance contract. The insurance company bearing the investment risk is also making these investments on
behalf of the collective foundation. As a result, the assets of the plan consist of a receivable from the insurance
police.
The assets are invested by the pension plan, to which many companies contribute, in a diversified portfolio that
respects the requirements of the Swiss Law. The insurance policy has been treated as a qualifying insurance policy
and therefore the pension assets are presented as one asset and are not desegregated and presented in classes that
distinguish the nature and risks of those assets.
The following tables summarize the components of net benefit expense recognized in the consolidated statements of
loss, amounts recognized in the balance sheet and gains/(losses) recognized in other comprehensive loss.
For the years ended December 31, |
||
Actuarial gains / (losses) recognized in other comprehensive loss: |
2025 |
2024 |
On plan assets |
(1 ) |
(71 ) |
On obligation |
600 |
(1,090 ) |
Total |
599 |
(1,161 ) |
For the years ended December 31, |
||
Net benefit expense: |
2025 |
2024 |
Service cost |
(975 ) |
(663 ) |
Interest cost on benefit obligation |
(134 ) |
(143 ) |
Interest income |
119 |
133 |
Administration cost |
(18 ) |
(15 ) |
Net benefit expense |
(1,008 ) |
(688 ) |
F-27
For the years ended December 31, | ||
Benefit liability | 2025 | 2024 |
Defined benefit obligation | (15,998 ) | (13,715 ) |
Fair value of plan assets | 14,663 | 11,845 |
Net benefit liability | (1,335 ) | (1,870 ) |
Changes in the present value of the defined benefit obligation are as follows:
For the years ended December 31, | ||
2025 | 2024 | |
Defined benefit obligation at January 1, | (13,715 ) | (9,930 ) |
Interest cost | (134 ) | (143 ) |
Service cost | (975 ) | (663 ) |
Administrative expenses | (18 ) | (15 ) |
Contributions paid by participants | (2,711 ) | (3,179 ) |
Employees’ contributions | (408 ) | (312 ) |
Benefits paid from plan assets | 1,363 | 1,617 |
Actuarial gains / (losses) | 600 | (1,090 ) |
Defined benefit obligation at December 31, | (15,998 ) | (13,715 ) |
Changes in the fair value of plan assets are as follows:
For the years ended December 31, | ||
2025 | 2024 | |
Fair value of plan assets at January 1, | 11,845 | 9,202 |
Expected return | 119 | 133 |
Contributions by employer | 944 | 707 |
Employees’ contributions | 408 | 312 |
Benefits paid from plan assets | (1,363 ) | (1,617 ) |
Contributions paid by participants | 2,711 | 3,179 |
Actuarial losses | (1 ) | (71 ) |
Fair value of plan assets at December 31, | 14,663 | 11,845 |
The Group expects to contribute CHF 0.7 million to its defined benefit pension plan in 2026. The average duration
of the plan was 14.3 years and 14.6 years as of December 31, 2025 and 2024, respectively.
The principal assumptions used in determining pension benefit obligations for the Group’s plan are shown below:
For the years ended December 31, | ||
2025 | 2024 | |
Discount rate | 1.30 % | 1.00 % |
Future salary increases | 0.75 % | 1.00 % |
Future pensions increases | 0.00 % | 0.00 % |
Retirement age | 65 | 65 |
Demographic assumptions | BVG 2020 | BVG 2020 |
In regard to the underlying estimates for the calculation of the defined benefit pension liabilities the Company
updated, among other minor updates, the discount rate assumption to 1.30% and 1.00% and the future salary
increase assumption from 1.00% to 0.75% as of December 31, 2025 and 2024, respectively. All the actuarial
assumption changes resulted in an actuarial gain of defined benefit pension liabilities of CHF 0.6 million. The net
result is a decrease of defined benefit pension liabilities from CHF 1.9 million as of December 31, 2024 to CHF 1.3
million as of December 31, 2025. Other assumptions for defined benefit pension liabilities remain unchanged.
In 2025, the guaranteed interest to be credited to employees’ savings remains consistent with 2024 at 1.10%. The
rate for converting mandatory savings to an annuity remains stable at 5.40% for males and 5.57% for females in
2026 and increases to 5.71% for females in 2027. The rate for converting supplementary savings to an annuity
remains stable at 4.49% for males and 4.67% for females in 2026 and increases to 4.82% in 2027.
Sensitivity analysis
F-28
A quantitative sensitivity analysis for significant assumptions as of December 31, 2025 and 2024 is shown below:
Future salary |
Mortality |
|||||
Discount rate |
increase |
assumptions |
||||
Assumptions as of December 31, 2025 |
+0.25% |
-0.25% |
+0.50% |
-0.50% |
+1 year |
-1 year |
Potential defined benefit obligation |
(15,466 ) |
(16,597 ) |
(16,129 ) |
(15,872 ) |
(16,153 ) |
(15,844 ) |
Decrease/(increase) from actual defined benefit |
||||||
obligation |
532 |
(599 ) |
(131 ) |
126 |
(155 ) |
154 |
Assumptions as of December 31, 2024 |
+0.25% |
-0.25% |
+0.50% |
-0.50% |
+1 year |
-1 year |
Potential defined benefit obligation |
(13,226 ) |
(14,236 ) |
(13,828 ) |
(13,607 ) |
(13,844 ) |
(13,589 ) |
Decrease/(increase) from actual defined benefit |
||||||
obligation |
490 |
(521 ) |
(112 ) |
108 |
(129 ) |
126 |
The sensitivity analysis above is subject to limitations and has been determined based on a method that extrapolates
the impact on net defined benefit obligation as a result of reasonable changes in key assumptions occurring at the
F-29
SHARE BASED PAYMENT
On March 2, 2023, the Company adopted the Stock Option and Incentive Plan Regulation 2023 (the
“2023 Plan”
)
which allows for the grant of equity incentives, including share-based options, stock appreciation rights (
“SARs”
),
restricted stock units (
“RSUs”
) and other awards. The 2023 Plan lays out the details for the equity incentives for
talent acquisition and retention purposes.
Each grant of share-based options made under the 2023 Plan entitles the grantee to acquire ordinary shares from the
Company with payment of the exercise price in cash. In the case of SARs, the intention of the Company is settling
in equity. For each grant of share-based options or SARs, the Company issues a grant notice, which details the
terms of the options or SARs, including number of shares, exercise price, vesting conditions and expiration date.
Options granted under the 2023 Plan vest over periods ranging from one to four years and expire one day before the
tenth anniversary of the grant date. The specific terms of each grant are set by the Board of Directors.
The 2023 Plan reflects the revised capital structure of the Company following completion of the Business
Combination in March 2023. As a result, all option holders holding options under the prior Stock Option and
Incentive Plan Regulation 2018 (the
“2018 Plan”
) prior to the close of the Business Combination exchanged their
options held in Legacy Oculis for newly issued options to purchase ordinary shares of Oculis (
“Converted
Options
”) and additional earnout options. The Converted Options continue to be subject to substantially the same
terms and conditions except that the number of ordinary shares of Oculis issuable and related exercise prices were
adjusted by the Exchange Ratio with all other terms remaining unchanged. The comparative fair value calculation
of options using the Black-Scholes model before and after the merger concluded that there was no significant
change in value. The exchange of equity awards under the prior 2018 Plan for equity awards under the 2023 Plan
was determined to be a modification in accordance with IFRS 2 – Share-based payment. The Group has and will
continue to record the related expense per the original valuation and vesting period without incremental charges.
Option awards and SARs
Each share-based option or SAR granted under the 2023 Plan entitles the grantee to acquire common shares from
the Company with cash payment of the exercise price. For each grant of share-based options or SARs, the Company
provides a grant notice which details the terms of the option, including exercise price, vesting conditions and
expiration date. The terms of each grant are set by the Board of Directors.
The fair value of option awards and SARs is determined using the Black-Scholes option-pricing model. The
weighted average grant date fair value of options granted during the year ended December 31, 2025 was CHF 11.77
or $14.17 per share. The weighted average grant date fair value of options and SARs granted during the year ended
December 31, 2024 was CHF 7.80 or $8.85 per share. The weighted average grant date fair value of options granted
during the year ended December 31, 2023 was CHF 5.24 or $5.83 per share.
The Black-Scholes fair value of SARs was determined using assumptions that were not materially different from
those used to value options. The following assumptions were used in the Black-Scholes option-pricing model for
determining the fair value of options and SARs granted during the years indicated:
| For the years ended December 31, |
|||
2025 |
2024 |
2023 |
|
Weighted average share price at the date |
|||
of grant (1) |
USD 18.39 (CHF 15.28) |
USD 11.63 (CHF 10.24) |
USD 8.30 (CHF 7.46) |
Range of expected volatilities (%) (2) |
81.84-91.39 |
85.54-93.00 |
68.70-83.80 |
Range of expected terms (years) (3) |
6.25 |
5.50-6.25 |
6.25 |
Range of risk-free interest rates (%) (1)(4) |
3.7-4.3 |
3.6-4.6 |
3.5-4.8 |
Dividend yield (%) |
0.0 |
0.0 |
0.0 |
(1)
Following the NASDAQ U.S. listing in 2023, the equity award exercise price is denominated in USD and the applicable risk-free interest rate has been adjusted
accordingly.
(2)
The expected volatility was derived from the historical stock volatilities of comparable peer public companies within the Company
’
s industry.
(3)
The expected term represents the period that share-based awards are expected to be outstanding.
(4)
The risk-free interest rates are based on the U.S. Treasury yield curve in effect at the measurement date with maturities approximately equal to the expected term.
The following table summarizes the Company’s stock option and SARs activity under the 2023 Plan for 2023 to
2025:
F-30
Weighted average | Range of expiration | ||
Number of options (1) | exercise price (1) (CHF) | dates | |
Outstanding as of January 1, 2023 | 1,762,949 | 2.39 | 2027-2031 |
Options granted (2) | 1,614,000 | 7.49 | 2033 |
SARs granted | 134,765 | 7.27 | 2033 |
Earnout options granted | 369,737 | 0.01 | 2028 |
Forfeited (2)(3) | (302,299 ) | 2.62 | 2033 |
Exercised (3) | (112,942 ) | 2.43 | 2028-2032 |
Outstanding as of December 31, 2023 | 3,466,210 | 4.50 | 2027-2033 |
Exercisable at December 31, 2023 | 1,164,513 | 2.21 | 2028-2033 |
Outstanding as of January 1, 2024 | 3,466,210 | 4.50 | 2027-2033 |
Options granted | 1,811,122 | 10.24 | 2034 |
Forfeited (3) | (288,767 ) | 4.38 | 2028-2034 |
Exercised (3) | (301,511 ) | 3.17 | 2027-2033 |
Outstanding as of December 31, 2024 | 4,687,054 | 6.82 | 2028-2034 |
Exercisable at December 31, 2024 | 1,935,101 | 4.34 | 2028-2034 |
Outstanding as of January 1, 2025 | 4,687,054 | 6.82 | 2028-2034 |
Options granted | 1,227,131 | 15.28 | 2035 |
Forfeited (3) | (387,146 ) | 10.53 | 2028-2035 |
Exercised (3) | (363,093 ) | 5.19 | 2028-2034 |
Outstanding as of December 31, 2025 | 5,163,946 | 8.32 | 2028-2035 |
Exercisable at December 31, 2025 | 2,661,095 | 5.27 | 2028-2035 |
(1)
Retroactive application of the recapitalization effect due to the BCA for activity prior to March 2, 2023, an Exchange Ratio of 1.1432 was applied to the number of options and the
weighted average exercise price was divided by the same exchange ratio.
(2)
Pursuant to the BCA, all outstanding and unexercised options to purchase Legacy Oculis ordinary shares were assumed by Oculis and each option was replaced by an option to
purchase ordinary shares of Oculis (the “Converted Options”). The exchange of Legacy Oculis 2018 Plan options for converted 2023 Plan options is not reflected in the table above.
Refer to Note 5 -
Financing Activities
for further details.
(3)
Forfeited amount includes earnout options forfeited during the years ended December 31, 2025, 2024, and 2023. No SARs have been exercised or forfeited during the years ended
December 31, 2025, 2024, and 2023.
Excluding earnout options, which have an exercise price of CHF 0.01, options outstanding as of December 31, 2025
have exercise prices ranging from CHF 1.63 to CHF 17.10. The weighted average remaining contractual life of
options and SARs outstanding as of December 31, 2025 and 2024 was seven and eight years, respectively.
Restricted stock units
Each RSU granted under the 2023 Plan entitles the grantee to one ordinary share upon vesting of the RSU. The
Company intends to settle all outstanding RSUs in equity. The fair value of RSUs is determined by the closing
stock price on the date of grant and the related compensation cost is amortized over the vesting period of the award
using the graded method. RSU’s have time-based vesting conditions ranging from one to four years. Certain RSU’s
also include a performance condition, for which the Company has evaluated the probability of achievement.
Expense is only recorded for awards with vesting criteria linked to performance conditions that are deemed
probable of achievement. The following table summarizes the Company’s RSU activity under the 2023 Plan for the
years ended December 31, 2025 and 2024:
| 2025 | 2024 | |||||
Weighted | Weighted | |||||
average grant | Range of | average grant | Range of | |||
Number of | date fair | expiration | Number of | date fair | expiration | |
awards | value (CHF) | dates | awards | value (CHF) | dates | |
Outstanding as of | ||||||
January 1, | 467,478 | 9.81 | 2034 | — | — | — |
RSUs granted | 714,813 | 15.36 | 2035 | 476,908 | 9.83 | 2034 |
RSUs vested/released | (174,655 ) | 10.24 | 2034-2035 | (9,430 ) | 10.51 | 2034 |
Outstanding as of | ||||||
December 31, | 1,007,636 | 13.93 | 2034-2035 | 467,478 | 9.81 | 2034 |
Restricted share awards
Each restricted share award (“
RSA
”) granted under the 2018 Plan was immediately exercised and the expense was
recorded at fair value on the grant date in full. The Company held call options to repurchase shares diminishing
F-31
ratably on a monthly basis over three years from grant date, the last of which expired during 2024. As of December
31, 2023, 98,094 RSA’s were subject to repurchase. No RSA’s were subject to repurchase at December 31, 2024 or
2025. For each grant of restricted shares, the Company issued a grant notice, which detailed the terms of the grant,
including the number of awards, repurchase right start date and expiration date. The terms of each grant were set by
the Board of Directors. No RSAs were granted under the 2023 Plan since plan adoption. No expense was
recognized during the years ended December 31, 2025, 2024 or 2023 related to restricted stock awards.
Share-based compensation expense
The following table details share-based compensation expense by award type for the years indicated:
For the years ended December 31, |
|||
2025 |
2024 |
2023 |
|
Stock options |
9,662 |
8,218 |
3,608 |
RSUs |
6,382 |
1,564 |
- |
Total share-based compensation |
|||
expense |
16,044 |
9,782 |
3,608 |
The reserve for share-based payment increased from CHF 6.4 million as of December 31, 2023 to CHF 16.1 million
as of December 31, 2024, and to CHF 30.4 million as of December 31, 2025. During the year ended December 31,
2025, certain RSUs that included a performance condition were modified such that the condition had been met,
resulting in CHF 0.3 million of additional share-based compensation expense during the year ended December 31,
2025. During the year ended December 31, 2024, certain options were modified to accelerate vesting upon the death
CASH AND CASH EQUIVALENTS AND SHORT-TERM FINANCIAL ASSETS
The table below shows the breakdown of the cash and cash equivalents and short-term financial assets by
currencies:
Cash and cash equivalents |
Short-term financial assets |
|||
As of |
As of |
As of |
As of |
|
December 31, |
December 31, |
December 31, |
December 31, |
|
by currency |
2025 |
2024 |
2025 |
2024 |
Swiss Franc |
45,716 |
2,810 |
126,000 |
61,000 |
US Dollar |
33,766 |
15,234 |
1,031 |
9,955 |
Euro |
539 |
8,960 |
4,653 |
- |
Iceland Krona |
440 |
648 |
- |
- |
Other |
868 |
56 |
- |
- |
Total |
81,329 |
27,708 |
131,684 |
70,955 |
Cash and cash equivalents consist primarily of cash balances held at banks. Short-term financial assets consist of
(A)
Conditional Capital
The conditional capital at December 31, 2025 amounted to a maximum of CHF 235,752.08 split into 23,575,208
ordinary shares, in connection with the potential future issuances of:
•
Conditional share capital for new bonds and similar debt instruments
:
CHF 67,500.00 through the issuance of a maximum of 6,750,000 fully paid-up registered shares, each with a
par value of CHF 0.01 (ordinary shares), in connection with the exercise of convertible rights and/or option
rights or warrants, new bonds and similar debt instruments.
F-32
•
Conditional share capital in connection with employee benefit plans
:
CHF 124,800.00 through the issuance of a maximum of 12,480,000 fully paid-up registered shares, each with a
par value of CHF 0.01 (ordinary shares), in connection with the exercise of option rights or other equity-linked
instruments granted to any employee, consultant or member of the Board of Directors of Oculis.
During the year ended December 31, 2025, 363,093 stock options have been exercised and 174,655 RSUs
vested resulting in the associated ordinary shares issued using the conditional share capital for employee
benefit plans (refer to Note 13). These shares were not registered yet in the commercial register as of
December 31, 2025.
•
Conditional share capital for BCA public and private warrants
:
CHF 39,751.05 through the issuance of a maximum of 3,975,105 fully paid up registered shares, each with a
par value of CHF 0.01 (ordinary shares), in connection with the exercise of warrants.
During the year ended December 31, 2025, 1,929,467 warrants have been exercised and associated ordinary
shares have been issued using the conditional share capital for BCA public and private warrants (refer to Note
17). These shares were not registered yet in the commercial register as of December 31, 2025.
•
Conditional share capital for earnout options:
CHF 3,701.03 through the issuance of a maximum of 370,103 fully paid up registered shares, each with a par
value of CHF 0.01 (ordinary shares), in connection with the exercise of option rights or other equity-linked
instruments granted to any employee, consultant or member of the Board of Directors of Oculis. As of
December 31, 2025, 159,453 earnout options were exercisable.
Treasury shares
The Company cancelled 100,000 treasury shares effective March 2, 2023 as a result of the Business Combination.
In connection with the ATM Offering Program, the Company issued 1,000,000 ordinary shares during the year
ended December 31, 2024 and 2,500,000 ordinary shares during the year ended December 31, 2025 out of its
existing capital band, each with a nominal value of CHF 0.01 to be held as treasury shares. There were no sales
under the ATM Offering Program during the year ended December 31, 2025. In connection with the November
(D) Capital band
As of December 31, 2025, the Company’s capital band has a lower limit of CHF 545,336.74 and upper limit of
CHF 818,005.11. The Company may effect an increase of the Company’s share capital in a maximum amount of
CHF 272,668.37 by issuing up to 27,266,837 ordinary shares with a par value of CHF 0.01 each out of the
Company’s capital band. The Board of Directors is authorized to increase the share capital to the upper limit or
2025. The decrease in trade payables compared to prior year relates to the commencement of several clinical trials
As of |
As of |
|
December 31, |
December 31, |
|
2025 |
2024 |
|
Product development related expenses |
13,156 |
13,702 |
Personnel related expenses |
4,491 |
3,696 |
General and administration related expenses |
1,385 |
749 |
Other payables |
935 |
51 |
Total |
19,967 |
18,198 |
Accrued general and administrative related expenses and other payables primarily increased due to professional
F-33
The following table summarizes the Company’s outstanding warrant liabilities by warrant type as of December 31,
2025 and 2024:
2025 |
2024 |
|||||
Amended |
Total |
Total |
||||
BCA |
BlackRock |
Warrant |
BCA |
BlackRock |
Warrant |
|
Warrants |
Warrant |
Liabilities |
Warrants |
Warrant |
Liabilities |
|
Balance as of January 1, |
19,390 |
461 |
19,851 |
5,370 |
- |
5,370 |
Issuance of warrants |
- |
122 |
122 |
- |
294 |
294 |
Fair value loss on warrant liability |
12,280 |
14 |
12,294 |
15,364 |
167 |
15,531 |
Exercise of public and private |
||||||
warrants |
(17,789 ) |
- |
(17,789 ) |
(1,344 ) |
- |
(1,344 ) |
Balance as of December 31, |
13,881 |
597 |
14,478 |
19,390 |
461 |
19,851 |
The fair value of the public BCA Warrants, which are traded on Nasdaq, is based on the quoted Nasdaq market
prices at the end of the reporting period for such warrants. Since the private placement BCA Warrants have
identical terms to the public BCA Warrants, the Company determined that the fair value of each private placement
BCA Warrant is equivalent to that of each public BCA Warrant. The public BCA Warrants are included in Level 1
and the private placement BCA Warrants in Level 2 of the fair value hierarchy. The BCA Warrants are classified as
short-term liabilities given that the Company cannot defer the settlement for at least 12 months.
The BlackRock Warrant, described in Note 5, is classified as a liability because its exercise price is fixed in USD,
which is not the functional currency of the Company and therefore it does not meet the requirements to be classified
as equity under IFRS. The fair value of the BlackRock Warrant is determined using the Black-Scholes option-
pricing model and is included in Level 3 of the fair value hierarchy.
The following assumptions were used in the Black-Scholes option-pricing model for determining the fair value of
the BlackRock Warrant as of initial issuance date, December 31, 2024, Amended BlackRock Warrant issuance date
and December 31, 2025 as indicated:
December 31, |
||||
December 31, 2025 |
July 31, 2025 |
2024 |
May 29, 2024 |
|
USD 19.97 (CHF |
USD 17.64 (CHF |
USD 17.00 (CHF |
USD 11.93 (CHF |
|
Share price on valuation date |
15.83) |
14.34) |
15.38) |
10.88) |
Expected volatility (%) (1) |
82.52-85.13 |
88.53 |
94.32 |
85.56 |
Expected term (years) (2) |
2.71-3.29 |
3.50 |
3.21 |
3.50 |
Risk-free interest rate (%) (3) |
3.53-3.58 |
3.91 |
4.28 |
4.75 |
Dividend yield (%) |
0.00 |
0.00 |
0.00 |
0.00 |
(1)
The expected volatility was derived from the historical stock volatilities of comparable peer public companies within the Company’s industry.
(2)
The expected term represents the period that the BlackRock Warrant is expected to be outstanding.
(4)
The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the measurement date with maturities approximately equal to
the expected terms.
For the year ended December 31, 2025, the Company recognized a fair value loss of CHF 12.3 million, primarily
due to increase of the warrant share price. There were exercises of 1,929,467 warrant shares during the year ended
December 31, 2025 at a price of CHF 9.55 or $11.50 per share, which resulted in a reduction of CHF 17.8 million to
the warrant liability, an additional CHF 19.8 million of cash and an increase of CHF 37.8 million in shareholders’
equity. The warrant exercises, partially offset by the fair value loss resulted in a decrease of the warrant liability to
CHF 14.5 million as of December 31, 2025. For the year ended December 31, 2024, the Company recognized a fair
value loss of CHF 15.5 million, leading to an increase of the warrant liability to CHF 19.9 million as of
December 31, 2024. The exercise of 279,033 public warrants at a price of CHF 10.13 or $11.50 per share during the
year ended December 31, 2024 resulted in a reduction of CHF 1.3 million to the warrant liability, an additional
CHF 2.7 million of cash and an increase of CHF 4.1 million in shareholders’ equity.
In the event of an exercise, warrant liabilities are reduced by the fair value on the date of exercise. The resulting fair
value adjustment and cash received are recorded to share premium within the statements of changes in equity. The
movement of the warrant liabilities during the years ended December 31, 2025 and 2024 is illustrated below:
F-34
2025 |
2024 |
|||
Number of |
Number of |
|||
Warrant |
outstanding |
Warrant |
outstanding |
|
liabilities |
warrants |
liabilities |
warrants |
|
Balance as of January 1, |
19,851 |
4,018,384 |
5,370 |
4,254,096 |
Issuance of warrants |
122 |
15,989 |
294 |
43,321 |
Fair value loss on warrant liability |
12,294 |
- |
15,531 |
- |
Exercise of public and private warrants |
(17,789 ) |
(1,929,467 ) |
(1,344 ) |
(279,033 ) |
Balance as of December 31, |
14,478 |
2,104,906 |
19,851 |
4,018,384 |
Commitments related to Novartis license agreement
In December 2018, Oculis entered into an agreement with Novartis, under which Oculis licensed a novel topical
anti-
TNFα
antibody, now named as Licaminlimab, for ophthalmic indications. As consideration for the licenses,
Oculis is obligated to pay non-refundable, upfront license fees, predefined development and commercial milestone
payments and royalties on net sales of licensed products. Royalties range from high one digit to low teens, based on
sales thresholds. As of December 31, 2019, Oculis had paid in full the contractual non-refundable upfront fee of
CHF 4.7 million. Oculis has not reached any milestones or royalties thresholds according to the agreement. If all
predefined milestones will be reached, Oculis will be obligated to pay additional CHF 76.9 million or $97.0 million.
Royalties are based on net sales of licensed products, depending on the sales volumes reached.
Commitments related to Accure license agreement
On January 29, 2022, the Company entered into a License Agreement with Accure for the exclusive global
licensing of its Privosegtor technology. Under this agreement, Oculis licensed a novel neuroprotective drug
candidate, now renamed as Privosegtor, for ophthalmic and other indications (refer to Note 9). As consideration for
the licenses, Oculis is obligated to pay non-refundable, upfront license fees, predefined development and
commercial milestone payments and royalties on net sales of licensed products. Royalties range from one digit to
low teens, based on sales thresholds. As of December 31, 2025, Oculis has paid the full contractual non-refundable
upfront fee of CHF 3.0 million and reimbursed costs in the amount of CHF 0.5 million. During the fourth quarter of
2024, the Company met the first two milestones pursuant to the agreement, which were FDA IND clearance for the
intravenous formulation of Privosegtor, and completion and positive readout of the first PoC clinical trial for AON,
resulting in an accrual of CHF 1.1 million, for which payment was made in 2025. If all remaining predefined
milestones are reached, Oculis will be obligated to pay a total of CHF 87.9 million or $110.9 million. The next
clinical and regulatory milestone under the Accure Agreement will trigger a payment of CHF 2.1 million ($2.6
million) that the Company expects to pay in 2026. In case of a commercialization, sublicense revenues will be
subject to further royalty payments.
Commitments related to Rennes University Collaboration Research agreement
On January 31, 2022, the Company entered into a collaboration research agreement with the Rennes University and
CNRS in France. This agreement is for the research of Antisense Oligonucleotide (ASO) to modulate gene
expressions. As consideration for the research performed by Rennes University and CNRS, Oculis is obligated to
pay a non-refundable cost contribution of CHF 0.2 million or EUR 0.2 million. As of December 31, 2025, Oculis
paid a contractual non-refundable cost contribution of CHF 0.1 million or EUR 0.1 million. Following completion
of the research services, the parties shall sign a commercial agreement based on predefined development and
commercial milestone payments and royalties on net sales of licensed products as defined in the collaboration
research agreement. Oculis has not reached any milestones or royalties thresholds. If the commercial agreement was
signed by the parties and development and commercial milestones were reached, Oculis would be obligated to pay
an additional CHF 6.5 million or EUR 7.0 million and royalties ranging from low to mid-single digit percentage on
net sales. In case of sublicense revenues, Oculis shall be subject to further royalty payments.
Research and development commitments
The Group conducts product research and development programs through third party vendors that include, among
others, arrangements with universities, contract research organizations and clinical research sites. Oculis has
contractual arrangements with these organizations. As of December 31, 2025, commitments for external research
and development projects amounted to CHF 42.0 million, compared to CHF 32.2 million as of December 31, 2024,
F-35
as detailed in the schedule below. The increase in commitments year over year is primarily due to the progression of
ongoing clinical trials during 2025, including the DIAMOND trials, as well as the initiation of the PIONEER
program and PREDICT-1 trial in Q4 2025.
As of |
As of |
|
December 31, |
December 31, |
|
2025 |
2024 |
|
Within one year |
31,449 |
21,933 |
Between one and five years |
10,537 |
10,232 |
Total |
41,986 |
32,165 |
Key management, including the Board of Directors and the executive management team, compensation expenses
were:
For the years ended December 31, |
|||
2025 |
2024 |
2023 |
|
Salaries, cash compensation and other short-term benefits |
6,030 |
4,902 |
3,067 |
Pension expense |
498 |
398 |
320 |
Share-based compensation expense |
11,502 |
7,480 |
2,543 |
Total |
18,030 |
12,780 |
5,930 |
Salaries, cash compensation and other short-term benefits include social security, board member fees and insurance
benefits.
The number of key management individuals reported as receiving compensation in the table above decreased from
12 to 11 for the year ended December 31, 2025 as compared to the year ended December 31, 2024. The number of
individuals receiving compensation for service on the Board of Directors as reported in the table above was 4 for
Categories of financial instruments:
As indicated in Note 3, all financial assets and liabilities are shown at amortized cost, except for warrant liabilities
that are held at fair value. The following table shows the carrying amounts of financial assets and liabilities:
| As of December 31, | As of December 31, | |
| Financial assets | 2025 | 2024 |
Financial assets - non-current | 249 | 141 |
Other current assets, excluding prepaids | 801 | 148 |
Accrued income | 993 | 629 |
Short-term financial assets | 131,684 | 70,955 |
Cash and cash equivalents | 81,329 | 27,708 |
Total | 215,056 | 99,581 |
As of December 31, | As of December 31, | |
Financial liabilities | 2025 | 2024 |
Trade payables | 1,800 | 5,871 |
Accrued expenses and other payables | 19,967 | 18,198 |
Lease liabilities | 2,313 | 1,180 |
Warrant liabilities | 14,478 | 19,851 |
Total | 38,558 | 45,100 |
F-36
Below is the net debt table of liabilities from financing activities:
Leasing |
Warrant |
Total |
|
liabilities |
|||
Net debt as of December 31, 2023 |
(605 ) |
(5,370 ) |
(5,975 ) |
Payments for the period |
321 |
- |
321 |
Issuance of warrants |
- |
(294 ) |
(294 ) |
Fair value loss on warrant liability |
- |
(15,531 ) |
(15,531 ) |
Exercise of public and private warrants |
- |
1,344 |
1,344 |
Addition of Swiss lease |
(792 ) |
- |
(792 ) |
Interest calculated on leases |
(47 ) |
- |
(47 ) |
Indexation for the period |
(25 ) |
- |
(25 ) |
FX revaluation |
(32 ) |
- |
(32 ) |
Net debt as of December 31, 2024 |
(1,180 ) |
(19,851 ) |
(21,031 ) |
Payments for the period |
460 |
- |
460 |
Issuance of warrants |
- |
(122 ) |
(122 ) |
Fair value loss on warrant liability |
- |
(12,294 ) |
(12,294 ) |
Exercise of public and private warrants |
- |
17,789 |
17,789 |
Addition of US and Iceland amended leases |
(1,530 ) |
- |
(1,530 ) |
Interest calculated on leases |
(87 ) |
- |
(87 ) |
Indexation for the period |
(20 ) |
- |
(20 ) |
FX revaluation |
44 |
- |
44 |
Net debt as of December 31, 2025 |
(2,313 ) |
(14,478 ) |
(16,791 ) |
Fair values
Due to their short-term nature, the carrying value of cash and cash equivalents, short-term financial assets, other
current assets, excluding prepaid expenses, accrued income, trade payables and accrued expenses and other
payables approximates their fair value.
The warrant liabilities are measured at fair value on a recurring basis, refer to Note 3.
Risk assessment
The Company maintains an internal control system that includes an annual financial reporting risk assessment. The
ultimate responsibility of the risk management is of the Board of Directors and a yearly review takes place during
one of the Board of Directors meetings.
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices
will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk
management is to manage and control market risk exposures within acceptable parameters, while optimizing the
return.
As of December 31, 2025, if the listed price of the warrants had moved by 5.0% with all other variables held
constant, the net loss for the period would have been lower/higher by CHF 0.7 million. As of December 31, 2024,
the change would have been CHF 1.0 million.
Foreign currency risks
Since 2020, Oculis has established a presence in the U.S., France and Hong Kong with local currencies in U.S.
Dollar (USD), Euro (EUR) and Hong Kong Dollar (HKD), respectively. In 2025, foreign currency risks primarily
relate to cash and cash equivalents, short term financial assets, prepaid expenses, trade payables and accrued
expenses denominated in U.S. Dollar and Euro, with immaterial amounts recorded in ISK and HKD.
F-37
The following table demonstrates the impact of a possible change in USD and EUR against CHF in regard to
monetary assets and liabilities denominated in local functional currencies, as well as the impact of foreign currency
risk on the Company’s consolidated net loss:
As of December 31, |
For the year ended |
As of December 31, |
For the year ended |
|
2025 |
December 31, 2025 |
2024 |
December 31, 2024 |
|
Change in rate |
Net exposure |
Impact on loss |
Net exposure |
Impact on loss |
+5.0% USD |
5,586 |
279 |
10,272 |
(514 ) |
-5.0% USD |
5,586 |
(279 ) |
10,272 |
514 |
+5.0% EUR |
3,951 |
198 |
5,409 |
270 |
-5.0% EUR |
3,951 |
(198 ) |
5,409 |
(270 ) |
Interest rate risk
Hedging activities
There are no hedging activities within the Group.
As of December 31, 2025, the maximum exposure is the carrying amount of the Company’s cash, cash equivalents
and short-term financial assets are mainly held with two financial institutions, each with a high credit rating of A+
assigned by international credit-rating agencies. Management focuses on diversification strategies and monitors
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its
financial liabilities that are settled by delivering cash or another financial asset. Liquidity management is performed
by Group finance based on cash flow forecasts which are prepared on a rolling basis and focuses mainly on
ensuring that the Group has sufficient cash to meet its operational needs. The Group’s liquidity needs have been
historically satisfied through the issuance of preferred shares, the Business Combination, PIPE and CLA financings,
All of the Company’s financial instruments, except for the long-term portion of lease liabilities, are due within one
year. The following table shows the total future obligations related to these financial instruments:
| As of | As of | |||||
December 31, | Less than | Over | December 31, | Less than | Over | |
2025 | one year | one year | 2024 | one year | one year | |
Trade payables | 1,800 | 1,800 | - | 5,871 | 5,871 | - |
Accrued expenses and other | ||||||
payables | 19,967 | 19,967 | - | 18,198 | 18,198 | - |
Lease payments | 2,931 | 551 | 2,380 | 1,270 | 353 | 917 |
Total | 24,698 | 22,318 | 2,380 | 25,339 | 24,422 | 917 |
Since its incorporation, the Group has primarily funded its operations through capital increases, and at the current
As of December 31, 2025, the Company had 57,984,438 ordinary shares issued and outstanding with a share price
of $19.97 or CHF 15.83. The following table sets forth the loss per share calculations for the years ended
December 31, 2025, 2024 and 2023.
F-38
For the years ended December 31, |
|||
2025 |
2024 |
2023 |
|
Net loss for the period attributable to Oculis shareholders |
(98,957 ) |
(85,777 ) |
(88,802 ) |
Loss per share |
|||
Weighted-average number of shares used to compute basic and diluted |
52,243,100 |
40,406,551 |
29,899,651 |
loss per share |
|||
Basic and diluted net loss per share for the period, in CHF |
(1.89 ) |
(2.12 ) |
(2.97 ) |
Since the Company has a loss for all periods presented, basic net loss per share is the same as diluted net loss per
share. Potentially dilutive securities that were not included in the diluted loss per share calculations because they
would be anti-dilutive were as follows:
| As of December 31, |
|||
2025 |
2024 |
2023 |
|
Share options issued and outstanding |
4,946,948 |
4,444,388 |
3,096,473 |
Earnout options |
216,998 |
242,666 |
369,737 |
Share and earnout options issued and outstanding |
5,163,946 |
4,687,054 |
3,466,210 |
Restricted stock units subject to future vesting |
1,007,636 |
467,478 |
- |
Restricted shares subject to repurchase |
- |
- |
98,094 |
Unvested earnout shares |
948,549 |
2,371,272 |
3,793,995 |
Public warrants |
1,893,897 |
3,823,364 |
4,102,397 |
Private warrants |
151,699 |
151,699 |
151,699 |
BlackRock Warrant |
59,310 |
43,321 |
- |
Total |
9,225,037 |
11,544,188 |
11,612,395 |
As a result of the BCA, Legacy Oculis equity holders received consideration in the form of 3,793,995 earnout
shares and 369,737 earnout options with an exercise price of CHF 0.01. The earnout consideration is subject to
forfeiture in the event of a failure to achieve the price targets during the earnout period defined as follows: (i)
1,500,000, (ii) 1,500,000 and (iii) 1,000,000 earned based on the achievement of post acquisition-closing VWAP
targets of Oculis of $15.00, $20.00 and $25.00, respectively, in each case, for any 20 trading days within any
consecutive 30 trading day period during the earnout period. In February 2026, the third price target of $25.00 was