Item 1A. Risk Factors 14
Item 1B. Unresolved Staff Comments 44
Item 1C. Cybersecurity 44
Item 2. Properties 45
Item 3. Legal Proceedings 45
Item 4. Mine Safety Disclosures 45
Part II
Item 6. [Reserved] 46
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 49
Item 8. Financial Statements and Supplementary Data 49
Item 9A. Controls and Procedures 49
Item 9B. Other Information 50
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 50
Part III
Item 10. Directors, Executive Officers and Corporate Governance 51
Item 11. Executive Compensation 54
Item 14. Principal Accountant Fees and Services 60
Part IV
Item 15. Exhibits and Financial Statement Schedules 61
Signatures 64
Power of Attorney 65
Index to Consolidated Financial Statements F-1
Cautionary
Note on Forward-Looking Statements
This
annual report on form 10-K (“Annual Report”) contains forward-looking statements. Such forward-looking statements include
those that express plans, anticipation, intent, contingency, goals, targets or future development and/or otherwise are not statements
of historical fact. These forward-looking statements are based on our current expectations and projections about future events and they
are subject to risks and uncertainties known and unknown that could cause actual results and developments to differ materially from those
expressed or implied in such statements.
All
statements other than historical facts contained in this Annual Report, including statements regarding our future financial
position, capital expenditures, cash flows, business strategy and plans and objectives of management for future operations are
forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,”
“estimate,” “expect,” “intend,” “may,” “might,” “plan,”
“potential,” “project,” “seek,” “should,” “will,” “would,”
and similar expressions are intended to identify forward-looking statements. These statements include, among others, information
regarding future operations, future capital expenditures, and future net cash flow. Such statements reflect our management’s
current views with respect to future events and financial performance and involve risks and uncertainties, including, without
limitation, our ability to raise additional capital to fund our operations, obtaining U.S. Food and Drug Administration and other
regulatory authorization to market our drug and biological products, successful completion of our clinical trials, our ability to
achieve regulatory authorization to market our lead product NELL-1/DBM, our reliance on third-party manufacturers for our drug
products, market acceptance of our products, our dependence on licenses for certain of our products, our reliance on the expected
growth in demand for our products, exposure to product liability and defect claims, development of a public trading market for our
securities, and various other matters, many of which are beyond our control.
Should
one or more of these risks or uncertainties occur, or should underlying assumptions prove to be incorrect, actual results may vary materially
and adversely from those anticipated, believed, estimated or otherwise indicated. Consequently, all of the forward-looking statements
made in this Annual Report are qualified by these cautionary statements and accordingly there can be no assurances made with respect
to the actual results or developments. We undertake no obligation to revise or publicly release the results of any revision to these
forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue
reliance on such forward-looking statements.
Unless
expressly indicated or the context requires otherwise, the terms “Company,” “Bone Biologics,” “we,”
“us,” and “our” in this document refer to Bone Biologics Corporation, a Delaware corporation, and, our wholly
owned subsidiary, as defined under Part I, Item 1-”Business” in this Annual Report.
Glossary
of Abbreviations and Defined Terms
Abbreviations
ACA Affordable Care Act
BMP Bone Morphogenic Protein
CDMO Contract Development and Manufacturing Organization
cGMP current Good Manufacturing Practice
CRO Contract Research Organization
DDD Degenerative disc disease
FDA U.S. Food and Drug Administration
HIPAA Health Insurance Portability and Accountability Act of 1996
IDE Investigational Device Exemption
IRB Institutional Review Board
MTF Musculoskeletal Transplant Foundation
NDA New Drug Application
NELL-1 Neural epidermal growth factor-like 1 protein (NELL-1)
NOL Net Operating Loss
PMA Pre-market approval
rhBMP-2 Recombinant Bone Morphogenic Protein
rhNELL-1 Recombinant NELL-1
UCLA TDG UCLA Technology Development Group on behalf of UC Regents
USPTO The United States Patent and Trademark Office
Defined Terms
Demineralized Bone Bone that has had the calcium removed.
Osteopromotive A material that promotes the de novo formation of bone.
Osteostimulative Stimulates bone growth.
PART
I
Item
1. Business
Company
Overview
We
are a medical device company that is currently focused on bone regeneration in spinal fusion using the recombinant human protein
known as NELL-1. NELL-1 in combination with DBM, demineralized bone matrix, is an osteopromotive recombinant protein that provides
target specific control over bone regeneration. The NELL-1 technology platform has been licensed exclusively for worldwide
applications to us through a technology transfer from the UCLA Technology Development Group on behalf of UC Regents (“UCLA
TDG”). UCLA TDG and the Company received guidance from the U.S. Food and Drug Administration (“FDA”) that
NELL-1/DBM will be classified as a device/drug combination product that will require an FDA-approved pre-market approval
(“PMA”) application before it can be commercialized in the United States.
We
were founded by University of California professors in collaboration with an Osaka University professor and a University of Southern
California surgeon in 2004 as a privately held company with proprietary, patented platform technology. Our platform technology has been validated in sheep and non-human primate models to facilitate bone growth. We believe our platform technology has
application in delivering improved outcomes in the surgical specialties of spinal, orthopedic, general orthopedic, plastic
reconstruction, neurosurgery, interventional radiology, and sports medicine. Lead product development and clinical studies are
targeted on spinal fusion surgery, one of the larger segments in the orthopedic market.
We
are a clinical-stage entity. The production and marketing of our products and ongoing research and development activities are
subject to extensive regulation by numerous governmental authorities in the United States. Prior to marketing in the United States,
any combination product developed by us must undergo rigorous preclinical (animal) and clinical (human) testing and an extensive
regulatory approval process implemented by the FDA under the Federal Food, Drug, and Cosmetic Act. There can be no assurance that we
will not encounter problems in clinical trials that will cause us or the FDA to delay or suspend clinical trials.
Our
success will depend in part on our ability to obtain and retain patents and product license rights, maintain trade secrets, and
operate without infringing on the proprietary rights of others, both in the United States and other countries. There can be no
assurance that patents issued to or licensed by us will not be challenged, invalidated, rendered unenforceable, or circumvented, or
that the rights granted thereunder will provide proprietary protection or competitive advantages to us.
During
2024, we announced the treatment of the first patients in the multicenter, prospective, randomized pilot clinical study of our NB1
bone graft device. NB1 is NELL-1 protein combined with demineralized bone matrix (DBM) to provide rapid, specific and guided
control over bone regeneration.
The pilot clinical study will evaluate the safety and effectiveness, fusion success, pain, function improvement and
adverse events of NB1 in up to 30 adult subjects who undergo transforaminal lumbar interbody fusion (TLIF) to treat degenerative disc
disease (DDD). To be enrolled in the study, subjects must have DDD at one level from L2-S1 and may also have up to Grade 1 spondylolisthesis
or Grade 1 retrolisthesis at the involved level. The study is being conducted in Australia. The study design was previously reviewed and
agreed upon by the FDA’s Division of Orthopedic Devices in a Pre-submission to support progression to a pivotal clinical trial in
the United States.
Product
Candidates
We
have developed a stand-alone platform technology through significant laboratory and small and large animal research over more than
10 years to generate the current applications across broad fields of use. The platform technology is our recombinant human protein,
known as NELL-1, a proprietary skeletal-specific growth factor that is a bone void filler. NELL-1 provides regulation over skeletal
tissue formation and stem cell differentiation during bone regeneration. We obtained the platform technology pursuant to an
exclusive license agreement with UCLA TDG which grants us exclusive rights to develop and commercialize NELL-1 for spinal fusion by
local administration, osteoporosis and trauma applications. A major challenge associated with orthopedic surgery is effective bone
regeneration, including challenges related to rapid, uncontrolled bone growth that can cause unsound structure; less dense bone
formation; unwanted bone formation, and cysts, swelling; and intense inflammatory response to current bone regeneration compounds.
We believe NELL-1 will address these unmet clinical challenges for effective bone regeneration, especially in hard
healers.
We
are currently focused on bone regeneration in lumbar spinal fusion using NELL-1 in combination with DBM, a demineralized bone matrix
from MTF Biologics (“MTF”). The combination NELL-1/DBM medical device is an
osteopromotive recombinant protein that provides target specific control over bone regeneration. We have successfully surpassed four
critical milestones:
● Completed pivotal animal study; and
● Initiated a first-in-man pilot clinical study in Australia.
Our
lead product candidate is expected to be purified NELL-1 mixed with 510(k)-cleared DBM Demineralized Bone Putty recommended for use
in conjunction with applicable hardware consistent with the indication. The NELL-1/DBM Fusion Device, NB1, will be comprised of a
single dose vial of NELL-1 recombinant protein freeze dried onto DBM. A vial of NELL-1/DBM will be sold in a convenience kit with a
diluent and a syringe of 510(k)-cleared demineralized bone (“DBM Putty”) produced by MTF. A delivery device
will allow the surgeon to mix the reconstituted NELL-1 with the appropriate quantity of DBM Putty just prior to implantation. Use of NB1 will not require changes to the orthobiologic preparation or implantation protocol.
The
NELL-1/DBM Fusion Device, NB1, is intended for use in lumbar spinal fusion and may have a variety of other spine and orthopedic applications.
While the product is initially targeted at the lumbar spine fusion market, in keeping with our exclusive license agreement, we believe
NELL-1’s novel set of characteristics, target-specific mechanism of action, efficacy, safety and affordability position the product for application in a variety of procedures including:
UCLA’s
initial research was funded with approximately $18 million in resources from UCLA TDG and government grants. Since licensing the exclusive
worldwide intellectual property rights from UCLA TDG, we have continued development with funding through capital raises. Our research
and development expenses for the years ended December 31, 2024 and 2023 were $2,130,385 and $6,907,824, respectively.
NELL-1’s
powerful specific bone forming properties are derived from the ability of NELL-1 to only target cells that exhibit an activated “master
switch” to develop into bone. NELL-1 is a function-specific recombinant human protein that has been proven in laboratory
bench models to recapitulate normal human growth and development to provide control over bone regeneration.
We
have completed two preclinical sheep studies that demonstrated our recombinant NELL-1 (“rhNELL-1”) growth factor effectively
promotes bone formation in a phylogenetically advanced spine model. In addition, rhNELL-1 was shown to be well tolerated and there were
no findings of inflammation. Our pivotal sheep study evaluated the effect of rhNELL-1 combined with DBM on lumbar interbody arthrodesis
in an adult ovine model and demonstrated a 37.5% increased frequency of fusion at 26 weeks compared with the control.
We
began subject enrollment in 2024 in our first-in-man pilot clinical study to evaluate the safety and effectiveness of NB1 in adult
subjects with spinal degenerative disc disease at one level from L2-S1, who may also have up to Grade 1 spondylolisthesis or Grade 1
retrolisthesis at the involved level, and are undergoing transforaminal lumbar interbody fusion. The multi-center, prospective,
randomized study is being conducted in Australia and will enroll up to 30 patients. The primary end-point is fusion success at 12
months and change from baseline in the Oswestry Disability Index pain score. We anticipate completing the trial 12 months after
enrolling the 30th patient. We intend to use the pilot clinical trial data from the Australia study to enable a future,
larger U.S. pivotal clinical study, prior to submission of a PMA to the FDA.
Research
& Publications
We
believe our scientific evidence validates the many benefits of NELL-1. Currently there is a comprehensive database of more than 80 research
publications and abstracts of preclinical studies with NELL-1 of which more than 45 are peer-reviewed publications.
We
completed a preclinical study that shows our rhNELL-1 growth factor effectively promotes
bone formation in a phylogenetically advanced spine model. In addition, rhNELL-1 was shown
to be well tolerated and there were no findings of inflammation.
Proposed
Initial Clinical Application
The
NELL-1/DBM Fusion Device, NB1, will be indicated for spinal fusion procedures in skeletally mature patients with spinal degenerative
disk disease (“DDD”) at one level from L2-S1. These DDD patients may also have up to Grade I spondylolisthesis at the
involved level. The NELL-1/DBM Fusion Device is to be implanted via an anterior open or an anterior laparoscopic approach in
conjunction with a cleared intervertebral body fusion device. Patients receiving the device should have had at least six months of
non-operative treatment prior to treatment with the device. A cervical indication is currently under consideration. This indication
for use would fill a current clinical gap, created by potentially dangerous inflammatory responses caused by commercially available
catalytic bone growth agents that are the subject of a Public Health Notification from the FDA on July 1, 2008 about
life-threatening complications associated with a recombinant human protein in cervical spine fusion. We do not expect our product to
see the same adverse events with NELL-1/DBM as have been observed with other commercially available protein. We have performed a rat
femoral onlay model to compare proinflammatory response of rhBMP-2 and NELL-1 within Helistate collagen sponges. NELL-1 induced
normal healing, while rhBMP-2 induced significant amounts of swelling and histological evidence of intense inflammatory
response.
Description
of the DBM Putty to Be Used with Nell-1
The
DBM Demineralized Bone Putty provided as part of the convenience kit with NELL-1/DBM is a Class II medical device. The common name
is “Bone Void Filler Containing Human Demineralized Bone Matrix.” The product is regulated under 21 C.F.R.
§888.3045 Resorbable calcium salt bone void filler device, Product Codes MQV, GXP, and MBP. DBM Putty is manufactured by MTF
and was cleared by the FDA for use in spine indications in December 2006.
DBM
Putty is a matrix composed of processed human cortical bone. Demineralized bone granules are mixed with sodium hyaluronate to form the
DBM Putty. Every lot of final DBM Putty product is tested in an athymic mouse model or in an alkaline phosphatase assay, which has been
shown to have a positive correlation with the athymic mouse model, to ensure osteostimulation.
Based
upon extensive discussions with regulatory experts and a specific communication from the FDA in response to a submission of our plan
under the Amended License Agreement between UCLA TDG and the Company, we believe the NELL-1/DBM Fusion Device, NB1, will be regulated
as a Class III medical device and will therefore require submission and approval of a PMA.
Our
Business Strategy
Our
business plan is to develop our target-specific growth factor for bone regeneration, based on preclinical and clinical data demonstrating increases in the quantity and quality of bone, and a strong safety profile. Our initial focus on lumbar spinal fusion entails
advancing our target-specific growth factor through clinical studies to achieve FDA approval with comparable efficacy and safety to the
gold standard for spine fusion (autografts). Continued capital funding is critical to facilitate the development of our Nell-1 technology
through the clinical regulatory path.
Development
of the Company
We
were incorporated under the laws of the State of Delaware on October 18, 2007 as AFH Acquisition X, Inc. Pursuant to a Merger
Agreement, dated September 19, 2014, by and among the Company, its wholly owned subsidiary, Bone Biologics Acquisition Corp., a
Delaware corporation (“Merger Sub”), and Bone Biologics, Inc. Merger Sub merged with and into Bone Biologics Inc., with
Bone Biologics Inc. remaining as the surviving corporation in the merger. On September 22, 2014, the Company officially changed its
name to “Bone Biologics Corporation” to more accurately reflect the nature of its business and Bone Biologics, Inc.
became a wholly owned subsidiary of the Company. Bone Biologics, Inc. was incorporated in California on September 9,
2004.
Effective
June 5, 2023, we implemented a reverse split of the outstanding common stock of the Company at a ratio of 1-for-30.
Effective
December 20, 2023, we implemented a reverse split of the outstanding common stock of the Company at a ratio of 1-for-8.
All
share and per share amounts have been retro-actively restated as if the reverse split occurred at the beginning of the earliest period
presented.
UCLA
TDG Exclusive License Agreement
Effective
April 9, 2019, we entered into an Amended and Restated Exclusive License Agreement dated as of March 21, 2019, and amended through three
sets of amendments (as so amended the “Amended License Agreement”) with the UCLA TDG. The Amended License Agreement amends
and restates the Amended and Restated Exclusive License Agreement, dated as of June 19, 2017 (the “2017 Agreement”). The
2017 Agreement amended and restated the Exclusive License Agreement, effective March 15, 2006, between the Company and UCLA TDG, as amended
by ten amendments. Under the terms of the Amended License Agreement, the Regents have continued to grant us exclusive rights to develop
and commercialize NELL-1 (the “Licensed Product”) for spinal fusion by local administration, osteoporosis and trauma applications.
The Licensed Product is a recombinant human protein growth factor that is essential for normal bone development.
We
have agreed to pay an annual maintenance fee to UCLA TDG of $10,000 as well as pay certain royalties to UCLA TDG under the Amended License
Agreement at the rate of 3.0% of net sales of licensed products or licensed methods. We must pay the royalties to UCLA TDG on a quarterly
basis. Upon a first commercial sale, we also must pay a minimum annual royalty between $50,000 and $250,000, depending on the calendar
year which is after the first commercial sale. If we are required to pay a third party any royalties as a result of us making use of
UCLA TDG patents, then we may reduce the royalty owed to UCLA TDG by 0.333% for every percentage point paid to a third party. If we grant
sublicense rights to a third party to use the UCLA TDG patent, then we will pay UCLA TDG 10% to 20% of the sublicensing income we receive
from such sublicense.
We
are obligated to make the following milestone payments to UCLA TDG for each Licensed Product or Licensed Method:
● $100,000 upon enrollment of the first subject in a Feasibility Study;
● $250,000 upon enrollment of the first subject in a Pivotal Study:
We
are also obligated pay to UCLA TDG a fee (the “Diligence Fee”) of $8,000,000 upon the sale of any Licensed Product (the “Triggering
Sale Date”) in accordance with the payment schedule below:
Our
obligation to pay the Diligence Fee will survive termination or expiration of the Amended License Agreement and we are prohibited from
assigning, selling, or otherwise transferring any of its assets related to any Licensed Product unless our Diligence Fee obligation is
assigned, sold, or transferred along with such assets, or unless we pay UCLA TDG the Diligence Fee within ten (10) days of such assignment,
sale or other transfer of such rights to any Licensed Product.
We
are also obligated to pay UCLA TDG a cash milestone payment within thirty (30) days of a Liquidity Event (including a Change of
Control Transaction and a payment election by UCLA TDG exercisable after December 22, 2016) such payment to equal the greater of
(i) $500,000; or (ii) 2% of all proceeds
in connection with a Change of Control Transaction.
During
the year ended December 31, 2024, the first patients were treated in the multicenter, prospective, randomized pilot clinical study of
the Company’s NB1 bone graft device, triggering the payment of the initial $100,000 Feasibility Study milestone.
We
are obligated to diligently proceed with developing and commercializing licensed products under UCLA TDG patents set forth in the Amended
License Agreement. UCLA TDG has the right to either terminate the license or reduce the license to a non-exclusive license if we do not
meet certain diligence milestone deadlines set forth in the Amended License Agreement.
We
must reimburse or pre-pay UCLA TDG for patent prosecution and maintenance costs incurred during the term of the Amended License Agreement.
We have the right to bring infringement actions against third-party infringers of the Amended License Agreement, UCLA TDG may join voluntarily,
at its own expense, or, at our expense, be joined involuntarily to the action. We are required to indemnify UCLA TDG against any third-party claims arising out of our exercise of the rights under the Amended License Agreement or any sublicense.
Payments
to UCLA TDG under the Amended License Agreement for the years ended December 31, 2024 and 2023 were $129,867 and $30,845, respectively.
Competition
The
orthobiologic and orthopedic industries are characterized by rapidly advancing technologies, intense competition and a strong emphasis
on intellectual property. We face substantial competition from many different sources, including large and specialty orthopedic companies,
biotechnology companies, academic research institutions and governmental agencies along with public and private research institutions.
Our
business is in a very competitive and evolving field, that faces competition from large established orthopedic companies such as (but
not limited to) Medtronic, Stryker, Globus Medical, and DePuy-Synthes that possess considerably more resources than Bone Biologics.
Our
commercial opportunity could be reduced if our competitors develop and commercialize products that are safer, more effective, have fewer
or less severe side effects, are more convenient or are less expensive than any products that we may develop. Our competitors also may
obtain FDA or other regulatory approval for their products more rapidly than we may obtain approval for ours, which could result in our
competitors establishing a strong market position before we are able to enter the market.
Customers
The
populations of interest include spine surgeons, and patients with a skeletal bone defect or bone-related condition in their spine, for
which intervention is undertaken to correct such a defect. Spine surgeons and patients can choose to eliminate the need to perform a
second painful surgery to obtain autograft harvest of hip bone for fusion procedures by utilizing various other types of biologics.
Most
cases of lower back pain can be linked to a general cause such as muscle strain, injury, overuse, or can be attributed to a specific
condition like herniated disc, degenerative disc disease, spondylolisthesis, spinal stenosis, or osteoarthritis.
Intellectual
Property
We
have an intellectual property portfolio that includes exclusive, worldwide licenses from UCLA TDG, which we believe constitute
a formidable barrier to entry.
Additional
patent applications are currently in preparation. The intellectual property portfolio comprehensively covers NELL-1 manufacture, NELL-1
compositions and NELL-1 use in wide ranging clinical and diagnostic applications. We protect our proprietary technology through mechanisms
including U.S. and foreign patent filings, trade secret protections, and collaboration agreements with domestic and international corporations,
universities and research institutions. We are the exclusive licensee for the following six (6) UCLA TDG issued patents:
U.S. Patent No. Summary Date Issued Expiration Date
These
patents will expire between 2026 through 2033. We may be entitled to obtain a patent term extension
or extend the patent expiration date provided we meet the applicable requirements for obtaining such patent term extensions. Although
such extensions may be available, the life of a patent and the protection it affords is by definition limited.
Government
Regulation
The
manufacturing and marketing of any product which we may formulate with our technologies as well as our related research and development
activities are subject to regulation for safety, efficacy and quality by governmental authorities in the U.S. and other countries. We
anticipate these regulations will apply separately to each product. We believe that complying with these regulations will involve
a considerable level of time, expense and uncertainty.
In
the U.S., devices are subject to rigorous federal regulation and, to a lesser extent, state regulation. The Federal Food, Drug and Cosmetic
Act, as amended, and the regulations promulgated thereunder, and other federal and state statutes and regulations govern, among other
things, the testing, manufacture, safety, efficacy, labeling, storage, record keeping, approval, advertising and promotion of our products.
Device development and approval within this regulatory framework is difficult to predict, requires a number of years and involves the
expenditure of substantial resources. Moreover, ongoing legislation by U.S. Congress and rule making by the FDA presents an ever-changing
landscape where we could be required to undertake additional activities before any governmental approval is granted allowing us to market
our products. The steps required before a biological device may be marketed in the U.S. include:
● The submission of a PMA to the FDA; and
In
addition to obtaining FDA approval for each product, each manufacturing establishment must be registered with, and approved by, the FDA.
Moreover, manufacturing establishments are subject to biennial inspections by the FDA and must comply with the FDA’s current Good
Manufacturing Practice “cGMP” for products, drugs and devices.
Non-clinical
Trials
Non-clinical
testing includes laboratory evaluation of chemistry and formulation as well as tissue culture and animal studies to assess the safety
and potential efficacy of the product. Non-clinical safety tests must be conducted by laboratories that comply with FDA regulations regarding
good laboratory practices. Non-clinical testing is inherently risky and the results can be unpredictable or difficult to interpret. The
results of non-clinical testing are submitted to the FDA as part of an investigational device exemption (“IDE”) and are reviewed by the FDA prior to the commencement of clinical
trials. Unless the FDA objects to an IDE, clinical studies may begin 30 days after the IDE is submitted. We have relied and intend to
continue to rely on third-party contractors to perform non-clinical trials.
Clinical
Trials
Our
first-in-man pilot clinical study, with the first patient enrolled in 2024, will evaluate the safety and effectiveness of NB1 in
adult subjects with DDD at one level from L2-S1, who may also have up to Grade 1 spondylolisthesis or Grade 1 retrolisthesis at the
involved level who undergo transforaminal lumbar interbody fusion. The multi-center, prospective, randomized trial will consist of
up to 30 patients in Australia, with the primary end-point of fusion success at 12 months and change from baseline in the Oswestry
Disability Index pain score. We anticipate completing the trial 12 months after enrolling the 30th patient.
Our
clinical, and regulatory strategy involves a well-established pathway to success. We intend to use the pilot clinical study data from
Australia to enable our larger U.S. pivotal clinical study, prior to submission of a PMA to the FDA.
Clinical
trials involve the administration of the investigational product to healthy volunteers or to patients under the supervision of a
qualified investigator. Clinical trials must be conducted in accordance with good clinical practices under protocols that detail the
objectives of the study, the parameters to be used to monitor safety and the efficacy criteria to be evaluated. In Australia, the
efficacy, quality, safety and timely availability of medical devices in Australia is governed by the Therapeutic Goods
Administration (the “TGA”), through the Therapeutic Goods Act 1989. The approval process for commencing pilot studies
resides with the TGA and the Human Research Ethics Committee. In the United States, each protocol must be submitted to the FDA prior
to its conduct. Further, each clinical study must be conducted under the auspices of an independent institutional data monitoring
committee. The institutional data monitoring committee will consider, among other things, ethical factors, the safety of human
subjects and the possible liability of the institution. The drug product used in clinical trials must be manufactured according to
the FDA’s current Good Manufacturing Practices.
Clinical
trials under IDE regulations are typically conducted in two sequential trials. In the Pilot trial, the initial introduction of the product
into healthy human subjects, the drug is tested for safety (adverse side effects), absorption, metabolism, bio-distribution, excretion,
food and drug interactions, abuse as well as limited measures of pharmacologic effect and proof of principle that involves studies in
a limited patient population in order to:
● demonstrate efficacy in a limited patient population;
● identify the range of doses likely to be effective for the indication; and
● identify possible adverse events and safety risks.
When
there is evidence that the product may be effective and has an acceptable safety profile in pilot evaluations, pivotal trials are undertaken
to establish and confirm the clinical efficacy and establish the safety profile of the product within a larger population at geographically
dispersed clinical study sites. Pivotal trials frequently involve randomized controlled trials and, whenever possible, studies are conducted
in a manner so that neither the patient nor the investigator knows what treatment is being administered. The Company, the institutional
review board (“IRB”) or the FDA, may suspend clinical trials at any time if it is believed that the individuals participating
in such trials are being exposed to unacceptable health risks. We intend to rely upon third-party contractors to advise and assist us
in the preparation of our IDEs and the conduct of clinical trials that will be conducted under the IDEs.
Premarket
Approval and FDA Approval Process
The
results of the manufacturing process, development work, non-clinical studies and clinical studies are submitted to the FDA in the form
of a PMA prior to marketing and selling the product. The testing and approval process is likely to require substantial time and effort.
In addition to the results of non-clinical and clinical testing, the PMA applicant must submit detailed information about chemistry,
manufacturing and controls that will describe how the product is made and tested through the manufacturing process.
The
PMA review process involves FDA investigation into the details of the manufacturing process, as well as the design and analysis of each
of the non-clinical and clinical studies. This review includes inspection of the manufacturing facility, the data recording process for
the clinical studies, the record keeping at a sample of clinical trial sites and a thorough review of the data collected and analyzed
for each non-clinical and clinical study. Through this investigation, the FDA reaches a decision about the risk-benefit profile of a
product candidate. If the benefit is worth the risk, the FDA begins negotiating with the company about the content of an acceptable package
insert and associated Risk Evaluation and Mitigation Strategies, if required.
The
approval process is affected by a number of factors, including the severity of the disease, the availability of alternative treatments
and the risks and benefits demonstrated in clinical trials. Consequently, there is a risk that approval may not be granted on a timely
basis, if at all. The FDA may deny a PMA if applicable regulatory criteria are not satisfied, require additional testing or information
or require post-marketing testing (Phase 4) and surveillance to monitor the safety of a company’s product if it does not believe
the PMA contains adequate evidence of the safety and efficacy of the product. Moreover, if regulatory approval of a product is granted,
such approval may entail limitations on the indicated uses for which it may be marketed. Finally, product approvals may be withdrawn
if compliance with regulatory standards is not maintained or health problems are identified that would alter the risk-benefit analysis
for the product. Post-approval studies may be conducted to explore the use of the product for new indications or populations such as
pediatrics.
Among
the conditions for PMA approval is the requirement that any prospective manufacturer’s quality control and manufacturing procedures
conform to the FDA’s Good Manufacturing Practices and the specifications approved in the PMA. In complying with standards set forth
in these regulations, manufacturers must continue to expend time, money and effort in the area of product and quality control to ensure
full technical compliance. Manufacturing establishments, both foreign and domestic, also are subject to inspections by or under the authority
of the FDA and by other federal, state or local agencies. Additionally, in the event of non-compliance, FDA may issue warning letters
and/or seek criminal and civil penalties, enjoin manufacture, seize product or revoke approval.
Post-Approval
Regulation
Medical
device products manufactured or distributed pursuant to FDA clearance are subject to pervasive and continuing regulation by the FDA,
including, among other things, requirements relating to recordkeeping, periodic reporting, product sampling and distribution, advertising
and promotion and reporting of adverse experiences with 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 also continuing, annual user fee requirements
for any marketed products and the establishments at which such products are manufactured, as well as new application fees for supplemental
applications with clinical data.
The
FDA may impose a number of post-approval requirements as a condition of approval of marketing authorization. For example, the FDA may
require post-marketing testing and surveillance to further assess and monitor the product’s safety and effectiveness after commercialization.
In
addition, medical device manufacturers and other entities involved in the design, manufacture and distribution of approved products are
required to register their establishments with the FDA and state agencies and are subject to periodic unannounced inspections by the
FDA and these state agencies for compliance with cGMPs requirements. Changes to the manufacturing process are strictly regulated and
often require prior FDA approval before being implemented. FDA regulations also require investigation and correction of any deviations
from cGMPs requirements and impose reporting and documentation requirements upon the sponsor and any third-party manufacturers that the
sponsor may decide to use. Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality
control to maintain cGMPs compliance.
Once
approval is granted, the FDA may withdraw the 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 adverse
events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may
result in mandatory revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical trials
to assess new safety risks; or imposition of distribution or other restrictions. Other potential consequences include, but are not limited
to:
● fines, warning letters or holds on post-approval clinical trials;
● injunctions or the imposition of civil or criminal penalties.
The
FDA strictly regulates marketing, labeling, advertising and promotion of products that are placed on the market. Devices may be promoted
only for the approved indications 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, and a company that is found to have improperly promoted off-label
uses may be subject to significant liability. In addition, products, if deemed adulterated, can lead to serious consequences as set forth
above as well as civil and criminal penalties.
Manufacturing,
sales, promotion and other activities of medical devices following product approval, where applicable, or commercialization are also
subject to regulation by numerous regulatory authorities in the United States in addition to the FDA, which may include the Centers for
Medicare & Medicaid Services, other divisions of the Department of Health and Human Services, the Department of Justice, the Drug
Enforcement Administration, the Consumer Product Safety Commission, the Federal Trade Commission, the Occupational Safety & Health
Administration, the Environmental Protection Agency, and state and local governments and governmental agencies.
Healthcare
Law and Regulation
Healthcare
providers and third-party payors play a primary role in the recommendation and prescription of devices that are granted FDA marketing
approval. If we obtain FDA approval for our product candidates, arrangements with providers, consultants, third-party payors, and customers
will be subject to broadly applicable fraud and abuse, anti-kickback, false claims laws, reporting of payments to physicians and teaching
physicians and patient privacy laws and regulations and other healthcare laws and regulations. Restrictions under applicable federal
and state healthcare laws include and are not limited to the U.S. federal Anti-Kickback Statute; the federal civil and criminal false
claims laws, including the civil U.S. False Claims Act, and civil monetary penalties laws; the federal false statements statute; the
anti-inducement law; the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, as amended by the Health Information
Technology for Economic and Clinical Health Act of 2009, or HITECH, and their respective implementing regulations; the federal transparency
requirements known as the federal Physician Payments Sunshine Act, under the U.S. Patient Protection and Affordable Care Act, as amended
by the U.S. Health Care and Education Reconciliation Act, collectively, the Affordable Care Act; federal government price reporting laws;
and analogous laws and regulations in other national jurisdictions and states, such as state anti-kickback and false claims laws, which
may apply to healthcare items or services that are reimbursed by non-governmental third-party payors, including private insurers.
International
Approval
Whether
or not FDA approval has been obtained, approval of a product by regulatory authorities in foreign countries must be obtained prior to
the commencement of commercial sales of the medical product in such countries. The requirements governing the conduct of clinical trials
and product approvals vary widely from country to country, and the time required for approval may be longer or shorter than that required
for FDA approval. Although there are some procedures for unified filings for certain European countries, in general, each country at
this time has its own procedures and requirements.
Other
Regulation
In
addition to regulations enforced by the FDA, we are also subject to U.S. regulation under the Controlled Substances Act, the Occupational
Safety and Health Act, the Environmental Protection Act, the Toxic Substances Control Act, the Resource Conservation and Recovery Act
and other present and potential future federal, state, local or similar foreign regulations. Our research and development may involve
the controlled use of hazardous materials, chemicals and radioactive compounds. Although we believe that its safety procedures for handling
and disposing of such materials comply with the standards prescribed by state and federal regulations, the risk of accidental contamination
or injury from these materials cannot be completely eliminated. In the event of any accident, we could be held liable for any damages
that result and any such liability could exceed our resources.
Employees
and Human Capital
As
of the date hereof, we have two full-time employees, Jeffery Frelick and Deina Walsh. See “Management” below for biographies
of Mr. Frelick and Ms. Walsh. We have relied and plan on continuing to rely on independent organizations, advisors and consultants to
perform certain services for us, including handling substantially all aspects of regulatory approval, clinical management, manufacturing,
marketing, and sales. Such services may not always be available to us on a timely basis or at costs that we can afford. Our future performance
will depend in part on our ability to successfully integrate newly hired officers and to engage and retain consultants, as well as our
ability to develop an effective working relationship with our management and consultants.
We
also have engaged and plan to continue to engage regulatory consultants to advise us on our dealings with the FDA and other foreign regulatory
authorities and have been and will be required to retain additional consultants and employees. Our future performance will depend in
part on our ability to successfully integrate newly hired officers into our management team and our ability to develop an effective working
relationship among senior management. Losing key personnel or failing to recruit necessary additional personnel would impede our ability
to attain our development objectives.
Corporate
Information
Our
principal executive offices are located at 2 Burlington Woods Drive, Suite 100, Burlington, MA 01803 and our telephone number is (781)
552-4452. Our website address is www.bonebiologics.com. Our website and the information contained on, or that can be accessed through,
the website will not be deemed to be incorporated by reference in, and are not considered part of, this Annual Report.
Item
1A. Risk Factors
The
following factors, as well as factors described elsewhere in this Form 10-K, or in other filings by us with the Securities and
Exchange Commission (the “SEC”), could adversely affect our consolidated financial position, results of operations or cash flows. Other factors
not presently known to us or that we presently believe are not material could also affect our business operations and financial
results.
Risk
Factor Summary
The
following is a summary of the principal risks that could materially adversely affect our business operations, industry and financial
results.
● Risks Related to Our Financial Position and Capital Needs
○ We have a limited operating history.
○ Our long-term capital requirements are subject to numerous risks.
○ We have limited resources to pursue product candidates and indications.
○ We may find it difficult to enroll patients in our clinical trials.
○ We may be unable to obtain regulatory approval in non-U.S. jurisdictions.
● Risks Related to Our Dependence on Third Parties
● Risks Related to our Intellectual Property
● Risks Related to Our Business Operations
○ We operate in a highly competitive environment.
● Risks Related to Healthcare Compliance Regulations
○ The application of privacy provisions of HIPAA is uncertain.
● Risks Related to Owning our Common Stock
○ The price of our common stock may fluctuate substantially.
○ We do not intend to pay cash dividends on our shares of common stock.
● General Risk Factors
○ We may be at risk of securities class action litigation.
Risks
Relating to Our Financial Position and Capital Needs
Our
limited operating history makes it difficult to evaluate our current business and future prospects.
We
have a limited operating history, and there is a risk that we will be unable to continue as a going concern. We have minimal assets and
no significant financial resources. Our limited operating history makes it difficult to evaluate our current business model and future
prospects. Accordingly, you should consider our prospects in light of the costs, uncertainties, delays and difficulties frequently encountered
by companies in the early stages of development. Potential investors should carefully consider the risks and uncertainties that a company
with a limited operating history will face. In particular, potential investors should consider that there is a significant risk that
we will not be able to, among other things:
● implement or execute our current business plan, which may or may not be sound;
● maintain our anticipated management and advisory team;
If
we cannot execute any one of the foregoing or similar matters relating to our business, the business may fail, in which case you would
lose the entire amount of your investment in us.
Our
long-term capital requirements are subject to numerous risks.
We
anticipate that we will need to raise substantial additional funds to achieve FDA approval, if possible, for a spine interbody fusion indication, including costs related to a pivotal clinical trial prior to marketing our first product. Our long-term capital requirements will depend on many factors, including, among others:
● continued progress and cost of our research and development programs;
● progress with pre-clinical studies and clinical trials;
● time and costs involved in obtaining regulatory (including FDA) clearance;
● competing technological and market developments;
● market acceptance of our device formulations or products;
● costs for recruiting and retaining employees and consultants;
● costs for training physicians;
● legal, accounting and other professional costs; and
In
addition, due to the numerous risks and uncertainties associated with product development, including that our product candidates may
not advance through development or achieve the endpoints of applicable clinical trials, we are unable to predict the timing or
amount of expenses, or when or if we will generate revenue and ultimately be able to achieve or maintain profitability. We may
consume available resources more rapidly than currently anticipated, resulting in the need for additional funding. We may seek to
raise any necessary additional funds through equity or debt financings, collaborative arrangements with corporate partners or other
sources, which may be dilutive to existing stockholders or otherwise have a material effect on our current or future business
prospects. If adequate funds are not available, we may be required to significantly reduce or refocus our development and
commercialization efforts with regard to our delivery technologies and our proposed formulations and products.
Our
recurring operating losses have raised substantial doubt regarding our ability to continue as a going concern.
Our
recurring operating losses raise substantial doubt about our ability to continue as a going concern. During the year ended December
31, 2024, we incurred a net loss of $4.1 million and used net cash in operating activities of $4.1 million. Our available cash is
expected to fund our operations up to the fourth quarter of 2025. In addition, our independent registered public accounting firm, in
its audit report to the financial statements as of and for the year ended December 31, 2024, expressed substantial doubt about our
ability to continue as a going concern. Our financial statements do not include any adjustments that might result if we are unable
to continue as a going concern and, therefore, be required to realize our assets and discharge our liabilities other than in the
normal course of business which could cause investors to suffer the loss of all or a substantial portion of their investment. In
order to have sufficient cash and cash equivalents to fund our operations in the future, we will need to raise additional equity or
debt capital and cannot provide any assurance that we will be successful in doing so. The perception of our ability to continue as a
going concern may make it more difficult for us to obtain financing for the continuation of our operations and could result in the
loss of confidence by investors, suppliers and employees.
We
have incurred losses since inception and we expect our operating expenses to increase in the foreseeable future, which may make it more
difficult for us to achieve and maintain profitability.
We
have no significant operating history and since inception to December 31, 2024 have incurred accumulated losses of approximately $85.0
million. We will continue to incur significant expenses for development activities for our lead product candidate NELL-1/DBM.