ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of financial condition and results of operations should be read in conjunction with our audited Consolidated Financial Statements and related Notes beginning on page F-1 of this Annual Report on Form 10-K. This discussion contains forward-looking statements, based on current expectations and related to future events and our future financial performance, that involve risks and uncertainties. Our actual results may differ significantly from those anticipated or implied in these forward-looking statements as a result of many important factors, including, but not limited to, those set forth under Item 1A, “Risk Factors,” and elsewhere in this report.
The following Management’s Discussion and Analysis (MD&A) provides a narrative of our results of operations for the year ended December 31, 2025, and the comparable period ended December 31, 2024, respectively, and our financial position as of December 31, 2025 and 2024, respectively. The MD&A should be read together with our consolidated financial statements and related notes included in this Annual Report on Form 10-K.
Overview
We are a clinical-stage biopharmaceutical company committed to developing and commercializing innovative therapeutics to improve the lives of patients with serious retinal diseases. Our pipeline leverages its proprietary bioerodible Durasert ETM technology (Durasert ETM) for sustained intraocular drug delivery. Our lead product candidate, DURAVYUTM1, is an investigational sustained delivery treatment for vascular endothelial growth factor (VEGF) mediated retinal diseases combining vorolanib, a selective and patent-protected tyrosine kinase inhibitor (TKI) with our bioerodible Durasert ETM drug delivery technology. DURAVYU is currently being evaluated in Phase 3 pivotal trials (LUGANO and LUCIA) for wet age-related macular degeneration (wet AMD) and in Phase 3 clinical trials (COMO and CAPRI) for diabetic macular edema (DME). Additional pipeline programs include EYP-2301, razuprotafib, a TIE-2 agonist, formulated in Durasert ETM to potentially improve outcomes in serious retinal diseases. EyePoint is headquartered in Watertown, Massachusetts with a commercial manufacturing facility in Northbridge, Massachusetts.
DURAVYU brings a potential new multi-mechanism of action paradigm for the treatment of retinal diseases as vorolanib, the active drug in DURAVYU, acts through intracellular inhibition of all VEGF receptors, platelet- derived growth factor (PDGF) and pro-inflammatory interleukin 6 (IL-6)/JAK1 signaling for at least six months. Vorolanib has also demonstrated neuroprotection in an in-vivo model of retinal detachment.
DURAVYU is currently in Phase 3 clinical trials for the potential treatment of wet AMD and DME, the two largest retinal disease markets. Enrollment in the pivotal Phase 3 clinical trials for wet AMD is complete with data expected beginning in mid-2026. The first patient was dosed in the Phase 3 DME program in February 2026.
We announced enrollment was completed in the pivotal Phase 3 LUGANO and LUCIA clinical trials evaluating DURAVYU on May 27, 2025 and July 29, 2025, respectively.
Fiscal 2025 Overview
The fiscal year ended December 31, 2025, was highlighted by the following events:
•
On January 8, 2025, we announced the appointment of renowned retina specialist and industry pioneer Reginald J. Sanders, M.D., FASRS to the Company’s Board of Directors.
•
On March 18, 2025, ANI announced that it completed the buyout of its 3.125% perpetual royalty obligation to SWK on worldwide net revenues of ILUVIEN® and YUTIQ® for a one-time payment of $17.25 million. Under the terms of the agreement, upon making the buyout payment, no further royalty is due to SWK on net revenues beginning January 1, 2025, forward. As a result, the Company terminated the RPA effective March 18, 2025.
•
On October 14, 2025, we entered into an underwriting agreement (Underwriting Agreement) with J.P. Morgan Securities LLC, Jefferies LLC, Citigroup Global Markets Inc. and Guggenheim Securities, LLC, as representatives of the underwriters named therein (Underwriters), in connection with an underwritten public offering (Offering) of 11,000,000 shares (Shares) of common stock, par value $0.001 per share (Common Stock) and, to certain investors, in lieu of Common Stock, pre-funded warrants (PFWs) to purchase 1,500,000 shares of Common Stock. The price to the public for the Shares in the Offering was $12.00 per Share and the price to the public for the PFWs was $11.999 per PFW, which represents the price to the public for the Shares less the $0.001 per share exercise price for each such PFW. The Offering closed on October 16, 2025. In addition, under the terms of the Underwriting Agreement, we also granted the Underwriters an option to purchase up to an additional 1,875,000 shares of Common Stock at the same price, which was
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exercised and closed on October 30, 2025. The net proceeds from the Offering were approximately $162.1 million, after deducting underwriting discounts and commissions and before other estimated offering expenses payable by us.
R&D Highlights
•
In February 2025, we announced positive six-month results for the ongoing Phase 2 VERONA clinical trial evaluating DURAVYU. The clinical trial met its primary endpoint with extended time to first supplemental injection compared to aflibercept control for both DURAVYU doses. The trial also demonstrated clinically meaningful outcomes including continued safety with no DURAVYU related ocular or systemic serious adverse events (SAEs) and an early and sustained improvement in vision and anatomical control. DURAVYU 2.7mg demonstrated a +7.1 letter BCVA gain and 76-micron CST reduction at week 24, with a supplement-free rate of 73% versus 50% for eyes treated with aflibercept. These positive Phase 2 VERONA results add to a robust dataset across another key indication demonstrating the potential best-in-class potential for DURAVYU in serious retinal diseases.
•
The Phase 2 VERONA clinical trial of DURAVYU in DME met both primary and secondary endpoints. The 24-week data demonstrated a meaningful and sustained improvement in vision and anatomical control with a continued favorable safety profile.
•
A subgroup analyses of supplement-free patients from the VERONA trial in DME demonstrated that DURAVYU 2.7mg significantly and rapidly (by week 4) improved vision and reduced fluid levels, demonstrating a BCVA improvement of +10.3 letters versus +3.0 letters for aflibercept control and a CST improvement of 117.4 microns versus 43.7 microns for aflibercept control at week 24. These results further underscore the differentiated profile of DURAVYU with compelling efficacy date, a favorable safety profile, and strong durability data.
•
Presented multiple datasets at the Association for Research in Vision and Ophthalmology (ARVO) Annual Meeting in early May 2025, demonstrating DURAVYU’s potential real-world application in multiple retinal disease indications and de-risked trial designs that we believe position DURAVYU for clinical and commercial success. Presentations included:
o
An assessment of the treatment burden in wet AMD treated with DURAVYU versus aflibercept from the Phase 2 DAVIO 2 clinical trial
o
Trial design of the global LUGANO and LUCIA pivotal Phase 3 trials in wet AMD
o
A 24-month Good Laboratory Practice (GLP) repeat-dose toxicology study of vorolanib intravitreal insert
•
The 24-week topline results from the Phase 2 VERONA study in DME were accepted for presentation at the Retina World Congress in May 2025, which highlighted DURAVYU’s potential to transform the treatment landscape in the second largest retinal disease market with its potential best-in-class safety and efficacy profile.
•
On July 29, 2025, we announced enrollment was now completed in both of our pivotal Phase 3 trials for DURAVYU in wet AMD.
•
On October 14, 2025 we announced details for our pivotal Phase 3 program evaluating DURAVYU for the treatment of DME with first patient dosing anticipated in first quarter of 2026. In this announcement we shared new preclinical data that demonstrates vorolanib, the active drug in DURAVYU, inhibits interleukin-6 (IL-6) mediated inflammation through inhibition of all Janus Kinase (JAK) receptors, in particular JAK-1, in addition to known blockage of vascular endothelial growth factor (VEGF) mediated vascular permeability. This finding reinforces the early and sustained improvements observed through six months in the Phase 2 VERONA clinical trial and positions DURAVYU as a potential multi-mechanism of action (MOA) treatment.
Recent Developments
•
On February 18, 2026, we announced the appointment of Michael Campbell as Chief Commercial Officer.
•
On March 2, 2026, we announced the first patients dosed in both Phase 3 COMO and CAPRI global clinical trials of DURAVYU for the treatment of DME.
•
In the first quarter of 2026, we reached an agreement in principle with the DOJ to settle matters related to the DOJ investigation into certain of our sales, marketing and promotional practices as pertain to DEXYCU during the period for which we commercialized this product. The agreement in principle is for a payment of approximately $4.7 million plus interest (exclusive of attorneys’ fees payable by us to counsel for relators in the qui tam action which are expected to be at or about $0.2 million), with such agreement in principle subject to our reaching an agreement in principle with the Office of Inspector General of the Department of Health and Human Services (HHS). On February 26, 2026, we reached an
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agreement in principle with HHS to resolve matters related to the DOJ investigation on terms to include us entering into a corporate integrity agreement and HHS agreeing not to seek our exclusion from participation in Medicare, Medicaid, or other federal health care programs. The agreements in principle are subject to negotiation, completion and execution of appropriate documents resolving these matters, including a settlement agreement and a corporate integrity agreement, which are expected to be finalized in the first half of 2026, and the final approval of the respective parties.
Summary of Critical Accounting Policies and Estimates
The discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles, (U.S. GAAP). The preparation of these financial statements requires that we make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. We base our estimates on historical experience, anticipated results and trends and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily available from other sources. By their nature, these estimates, judgments and assumptions are subject to an inherent degree of uncertainty, and management evaluates them on an ongoing basis for changes in facts and circumstances. Changes in estimates are recorded in the period in which they become known. Actual results may differ from our estimates under different assumptions or conditions.
While our significant accounting policies are more fully described in Note 2 in the accompanying Notes to the Consolidated Financial Statements contained in this Annual Report on Form 10-K, we believe that the following accounting policies are critical to understanding the judgments and estimates used in the preparation of our financial statements. It is important that the discussion of our operating results that follows be read in conjunction with the critical accounting policies discussed below.
Revenue Recognition
Revenue is recognized when a customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, Revenue from Contracts with Customers (ASC 606), we perform the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. We only apply the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, we assess the goods or services promised within each contract, determines those that are performance obligations and assesses whether each promised good or service is distinct. We then recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. Sales, value add, and other taxes collected on behalf of third parties are excluded from revenue.
License and collaboration agreement revenue — We analyze each element of our license and collaboration arrangements to determine the appropriate revenue recognition. The terms of the license agreement may include payment to us of non-refundable upfront license fees, milestone payments if specified objectives are achieved, and/or royalties on product sales. We recognize revenue from upfront payments at a point in time, typically upon fulfilling the delivery of the associated intellectual property to the customer. For licenses that are combined with other promises, we determine whether the combined performance obligation is satisfied over time or at a point in time, when (or as) the associated performance obligation in the contract is satisfied.
If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price based on the estimated relative standalone selling prices of the promised products or services underlying each performance obligation. We determine standalone selling prices based on the price at which the performance obligation is sold separately. If the standalone selling price is not observable through past transactions, we estimate the standalone selling price taking into account available information such as market conditions and internally approved pricing guidelines related to the performance obligations.
We recognize sales-based milestone payments as revenue upon the achievement of the cumulative sales amount specified in the contract in accordance with ASC 606-10-55-65. For those milestone payments which are contingent on the occurrence of particular future events, we determine that these need to be considered for inclusion in the calculation of total consideration from the contract as a component of variable consideration using the most-likely amount method. As such, we assess each milestone to determine the probability and substance behind achieving each milestone. Given the inherent uncertainty associated with these future events, we will
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not recognize revenue from such milestones until there is a high probability of occurrence, which typically occurs near or upon achievement of the event.
When determining the transaction price of a contract, an adjustment is made if payment from a customer occurs either significantly before or significantly after performance, resulting in a significant financing component. Applying the practical expedient in paragraph 606-10-32-18, we do not assess whether a significant financing component exists if the period between when we perform our obligations under the contract and when the customer pays is one year or less. None of our contracts contained a significant financing component as of December 31, 2025.
Reimbursement of costs — We may provide research and development services and incur maintenance costs of licensed patents under collaboration arrangements to assist in advancing the development of licensed products. We act primarily as a principal in these transactions and, accordingly, reimbursement amounts received are classified as a component of revenue to be recognized consistent with the revenue recognition policy summarized above. We record the expenses incurred and reimbursed on a gross basis.
Royalties — We recognize revenue from license arrangements with our commercial partners’ net sales of products. Such revenues are included as royalty income. In accordance with ASC 606-10-55-65, royalties are recognized when the subsequent sale of the commercial partner’s products occurs. Our commercial partners are obligated to report their net product sales and the resulting royalty due to us typically within 60 days from the end of each quarter. Based on historical product sales, royalty receipts and other relevant information, we recognize royalty income each quarter and subsequently determine a true-up when we receive royalty reports and payment from our commercial partners. Historically, these true-up adjustments have been immaterial.
Please refer to Note 3 for further details on the license and collaboration agreements into which we have entered and corresponding amounts of revenue recognized during the current and prior year periods.
Recognition of Expense in Outsourced Clinical Trial Agreements
We record accruals for estimated ongoing research and development costs, including costs with respect to outsourced agreements for clinical trials with contract research organizations (CROs). When recording these prepaid and accrued expenses, we analyze progress of the studies, including the phase or completion of events, invoices received, payments made, contracted costs, communications with third-party vendors, and internal tracking of the work performed to date. Judgments and estimates are made in determining the prepaid and accrued balances at the end of any reporting period. Payments made in advance of services provided are recorded as prepaid research and development costs and recognized as expense in the period the expense is incurred. In determining the prepaid and accrued balances, we make assessments of the services performed based on various factors, including reporting from third-party CROs and internal tracking of work performed during the period, which are subject to management’s judgment. Actual results could differ from our estimates.
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Results of Operations
Years Ended December 31, 2025 and 2024 (in thousands except percentages)
Year ended December 31, Change
Revenues:
Operating expenses:
Other income (expense):
Provision for income taxes $ (279 ) $ (90 ) $ (189 ) 210 %
Net loss per share - basic and diluted $ (3.17 ) $ (2.32 ) $ (0.85 ) 37 %
Product Sales, net
Product sales, net decreased by $1.6 million, or 50%, to $1.6 million for 2025 compared to $3.2 million for 2024. This decrease was primarily attributable to the termination of the ANI commercial supply agreement (CSA) in the second quarter of 2025.
License and collaboration agreement
License and collaboration agreement revenues decreased by $21.8 million, to $16.7 million in 2025 compared to $38.5 million for 2024. This decrease was primarily attributable to recognition of remaining deferred revenue related to the Company’s 2023 agreement for the license of YUTIQ® product rights in the second quarter of 2025.
Royalty Income
Royalty income increased by $11.4 million, or 708%, to $13.0 million in 2025 compared to $1.6 million for 2024. The increase in royalty income recognized was due mainly to the recognition of the remaining $12.7 million of deferred SWK royalty income. On March 18, 2025, ANI announced that it completed the buyout of its 3.125% perpetual royalty obligation to SWK on worldwide net revenues of ILUVIEN® and YUTIQ® for a one-time payment of $17.25 million. Under the terms of the agreement, upon making the buyout payment, no further royalty is due to SWK on net revenues beginning January 1, 2025, forward. As a result, the Company terminated the RPA effective March 18, 2025.
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Cost of Sales
Cost of sales decreased by $1.6 million, to $2.1 million for 2025 compared to $3.7 million for 2024. This decrease was primarily attributable to lower commercial product sales year over year.
Research and Development
The following table summarizes our research and development expenses for the years ended December 31, 2025 and 2024:
December 31,
Direct research and development expenses by program:
Other direct research and development 3,036 2,656
Unallocated expenses:
Personnel (including stock based compensation) 52,861 49,676
Research and development expenses increased by $88.1 million, or 66%, to $221.0 million for 2025 from $132.9 million in the prior year. This increase was primarily attributable to ongoing DURAVYU Phase 3 clinical trials (LUGANO and LUCIA) for wet AMD and scale-up of the Northbridge commercial manufacturing facility.
Sales and Marketing
Sales and marketing expenses remained consistent and were immaterial for 2025 compared to prior year.
General and Administrative
General and administrative expenses decreased by $0.7 million, or 1%, to $51.6 million for 2025 from $52.4 million for 2024.
Interest (Expense) Income
Interest income from investments in marketable securities and institutional money market funds decreased by $3.3 million, to $11.8 million for 2025 compared to $15.1 million for 2024. This decrease was primarily attributable to general decrease in market interest rates and lower cash available for investment in marketable securities.
Recently Adopted and Recently Issued Accounting Pronouncements
For a full discussion of recently adopted and recently issued accounting pronouncements, see Note 2, "Significant Accounting Policies" to the Consolidated Financial Statements included under Item 15, "Exhibits and Financial Statement Schedules."
Liquidity and Capital Resources
We have had a history of operating losses and an absence of significant recurring cash inflows from revenue, and at December 31, 2025, we had a total accumulated deficit of $1,105.0 million. Our operations have been financed primarily from public and private offerings of our common stock, issuance of debt and a combination of license fees, milestone payments, royalty income and other fees received from collaboration partners.
Financing Activities
During the year ended December 31, 2025, we completed an underwritten public offering with gross proceeds of $172.5 million. The Company sold 12,875,000 shares of its common stock, which included the exercise in full by the underwriters of their option to purchase an additional 1,875,000 shares of common stock and, to certain investors, in lieu of common stock, PFWs to purchase 1,500,000 shares of common stock. The shares of common stock were sold at a public offering price of $12.00 per share and the
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PFWs were sold at $11.999, which represents the price to the public for the shares less the $0.001 per share exercise price for each such PFW.
Also during the year ended December 31, 2025, we sold 825,844 shares of our common stock under the ATM facility at a weighted average price of $14.10 per share for gross proceeds of approximately $11.6 million. Share issue costs, including sales agent commissions, totaled approximately $0.5 million.
During the year ended December 31, 2024, we completed an underwritten public offering with gross proceeds of $161.0 million. The Company sold 14,636,363 shares of its common stock, which included the exercise in full by the underwriters of their option to purchase an additional 1,909,090 shares of common stock. The shares of common stock were sold at a public offering price of $11.00 per share.
During the year ended December 31, 2024, we sold 1,299,506 shares of our common stock under the ATM facility at a weighted average price of $9.36 per share for gross proceeds of approximately $12.2 million. Share issue costs, including sales agent commissions, totaled approximately $0.4 million.
Future Funding Requirements
At December 31, 2025, we had cash, cash equivalents, and investments in marketable securities of $306.1 million. We expect that our cash and investments in marketable securities will enable us to fund our operations into the fourth quarter of 2027. Due to the difficulty and uncertainty associated with the design and implementation of clinical trials, we will continue to assess our cash and cash equivalents, investments in marketable securities, and future funding requirements. However, there is no assurance that additional funding will be achieved and that we will succeed in our future operations.
Actual cash requirements could differ from management’s projections due to many factors including additional investments in research and development programs, clinical trial expenses for DURAVYU and potentially EYP-2301, competing technological and market developments and the costs of any strategic acquisitions and/or development of complementary business opportunities.
The amount of additional capital we will require will be influenced by many factors, including, but not limited to:
1.
the scope, progress, results, and costs of clinical trials of DURAVYU, as a sustained delivery intravitreal treatment for wet AMD and DME;
2.
our expectations regarding the timing and clinical development of our product candidates, including DURAVYU and EYP-2301;
3.
the duration and outcome of a potential negotiated settlement with the U.S. government related to the DOJ investigation, including any additional undertakings that the DOJ or HHS requires us to pursue in connection with such negotiated resolution, such as a corporate integrity agreement;
4.
whether and to what extent we internally fund, whether and when we initiate, and how we conduct additional pipeline product development programs;
5.
payments we receive under any new collaboration agreements or payments expected from existing agreements;
6.
whether and when we are able to enter into strategic arrangements for our products or product candidates and the nature of those arrangements;
7.
the costs involved in preparing, filing, prosecuting, maintaining, defending, and enforcing any patent claims;
8.
the costs and timing to implement corrective and preventive actions required by the Warning Letter to the satisfaction of the FDA;
9.
changes in our operating plan, resulting in increases or decreases in our need for capital; and
10.
our views on the availability, timing, and desirability of raising capital.
We do not know if additional capital will be available when needed or on terms favorable to us or our stockholders. Collaboration, licensing, or other agreements may not be available on favorable terms, or at all. If we seek to sell our equity securities, we do not know whether and to what extent we will be able to do so, or on what terms. If available, additional equity financing may be dilutive to stockholders, debt financing may involve restrictive covenants or other unfavorable terms and dilute our existing stockholders’ equity, and funding through collaboration, licensing, or other commercial agreements may be on unfavorable terms, including requiring us to relinquish rights to certain of our technologies or products. If adequate financing is not available if and when needed, we may delay, reduce the scope of, or eliminate research or development programs, or other new products, if any, postpone or cancel the pursuit of product candidates, or otherwise significantly curtail our operations to reduce our capital requirements and extend our cash runway.
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Our consolidated statements of historical cash flows are summarized as follows (in thousands):
Year ended December 31,
Cash flows from operating activities:
Changes in operating assets and liabilities (33,781 ) (27,773 ) (6,008 )
Operating cash outflows for the year ended December 31, 2025, totaled $240.1 million, primarily due to our net loss of $232.0 million offset by $25.6 million of non-cash expenses and a change in working capital of 33.8 million. Non-cash expense primarily included $27.9 million of stock-based compensation, partially offset by $4.8 million for amortization of discount on available for sale of marketable securities. The change in working capital included $28.6 million of deferred revenue related to the agreement to license YUTIQ® product rights to ANI and $5.2 million in other working capital adjustments.
Operating cash outflows for the year ended December 31, 2024, totaled $126.2 million, primarily due to our net loss of $130.9 million offset by $32.4 million of non-cash expenses, which primarily included $36.7 million of stock-based compensation, partially offset by $5.9 million for amortization of discount on available for sale of marketable securities. The change in working capital were $27.8 million, including $30.6 million of deferred revenue related to the agreement to license YUTIQ® product rights to ANI offset by $2.8 million in other working capital adjustments.
Net cash provided by investing activities for the year ended December 31, 2025, consisted of $71.7 million of net sales and maturities of marketable securities offset by $3.1 million for the purchase of property and equipment, net of proceeds from sales.
Net cash used in investing activities for the year ended December 31, 2024, consisted of $215.3 million of net cash purchases of marketable securities and $4.1 million for the purchase of property and equipment.
Net cash provided by financing activities for the year ended December 31, 2025 totaled $173.7 million and consisted primarily of the following:
(i)
$173.4 million of net proceeds from the issuance of 12,875,000 shares of our common stock and PFWs to purchase 1,500,000 shares of our common stock in a follow on offering and the issuance of 825,844 shares of our common stock sold utilizing our ATM;
(ii)
$2.2 million from the exercise of stock options and stock issued under our employee stock option plan; and
(iii)
$1.9 million used for the settlement of stock units and payment of equity issue costs
Net cash provided by financing activities for the year ended December 31, 2024 totaled $164.0 million and consisted primarily of the following:
(i)
$163.3 million of net proceeds from the issuance of 14,636,363 shares of our common stock in a follow on offering and the issuance of 1,299,506 shares of our common stock sold utilizing our ATM; and
(i)
$6.0 million from the exercise of stock options and stock issued under our employee stock option plan; and
(ii)
$5.2 million used for the settlement of stock units and payment of equity issue costs
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that would be material to investors.
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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this Item.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this item may be found in this Annual Report on Form 10-K.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2025. 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 an issuer that are designed to ensure that information required to be disclosed by the issuer 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 Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Management recognizes that any control or procedure, no matter how well designed and operated, can provide only reasonable assurance of achieving its desired objectives, and our management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of December 31, 2025, our principal executive officer and principal financial officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.
(a)
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. The term "internal control over financial reporting," as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, means a process designed by, or under the supervision of, the issuer's principal executive and principal financial officers, or persons performing similar functions, and effected by the issuer's board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP and includes those policies and procedures that:
(1)
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the issuer;
(2)
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that receipts and expenditures of the issuer are being made only in accordance with authorizations of management and directors of the issuer; and
(3)
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the issuer's assets that could have a material effect on the financial statements.
Management recognizes that all internal control systems, no matter how well designed, have inherent limitations and may not prevent or detect misstatements. Projections of any evaluations 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.
Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2025. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission
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in Internal Control — Integrated Framework (2013). Based on this assessment, our management concluded that, as of such date, our internal control over financial reporting was effective based on those criteria.
(b)
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during the last quarter of the period covered by this Annual Report on Form 10-K that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
Executive Employment Matters
On March 5, 2026, the Company and Jay S. Duker, M.D., the Company’s President and Chief Executive Officer, entered into a third amendment (Duker Amendment) to that certain Amended and Restated Employment Agreement, initially effective as of November 1, 2021 and previously amended on January 3, 2023 and July 10, 2023 (as amended, Duker Employment Agreement).
The Duker Amendment adjusted the severance benefits Dr. Duker is entitled to receive in connection with certain qualifying terminations of employment occurring within sixty (60) days prior to, or within eighteen (18) months following, the occurrence of a Change of Control (as defined in the Duker Employment Agreement), as follows: (i) from eighteen (18) months base salary from the date of termination to twenty-four (24) months base salary from the date of termination, (ii) from one and one-half (1.5) times Dr. Duker’s target bonus to two (2) times such target bonus and (iii) from up to eighteen (18) months to up to twenty-four (24) months of monthly payments equal to the portion of monthly health premiums paid by the Company on Dr. Duker’s behalf and that of Dr. Duker’s eligible dependents for Dr. Duker and Dr. Duker’s eligible dependents immediately preceding the date that Dr. Duker’s employment terminates, provided, that Dr. Duker timely elects continuation coverage under the federal law known as “COBRA” or similar state law. In addition, in the event that the severance benefits and other benefits provided for in the Duker Amendment or otherwise payable to Dr. Duker constitute “parachute payments” pursuant to Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”) and would be subject to excise taxes, then such benefits will either be delivered in full or delivered as to such lesser extent which would result in no portion of such severance benefits and other benefits being subject to excise taxes, whichever results in the receipt by the employee of the greatest amount of benefits on an after-tax basis (280G Provision).
On March 5, 2026, the Company and George O. Elston, the Company’s Executive Vice President and Chief Financial Officer, entered into an amendment (Elston Amendment) to that certain Amended and Restated Employment Agreement, initially effective as of January 3, 2023, by and between the Company and Mr. Elston (as amended, Elston Employment Agreement). The Elston Amendment adds the 280G Provision to the Elston Employment Agreement.
On March 5, 2026, the Company and Ramiro Ribeiro, M.D., Ph.D., the Company’s Chief Medical Officer, entered into an amendment (Ribeiro Amendment) to that certain Amended and Restated Employment Agreement, initially effective as of March 1, 2024, by and between the Company and Dr. Ribeiro (as amended, Ribeiro Employment Agreement). The Ribeiro Amendment adds the 280G Provision to the Ribeiro Employment Agreement.
The descriptions of the Duker Amendment, the Elston Amendment and the Ribeiro Amendment contained herein do not purport to be complete and are qualified in their entirety by reference to the complete text of the Duker Amendment, the Elston Amendment and the Ribeiro Amendment, copies of which are filed as Exhibits 10.22, 10.23, and Exhibit 10.24, respectively, to this Annual Report and are incorporated by reference herein.
Rule 10b5-1 Trading Arrangements
The Company permits officers and directors to adopt written trading plans, known as “Rule 10b5-1 trading arrangements”, as such term defined in Item 408(a) of Regulation S-K for the purchase or sale of the Company's securities, which are intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act.
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During the three months ended December 31, 2025, our executive officers and directors adopted, modified or terminated Rule 10b5-1 trading arrangements for the purchase or sale of our common stock as noted below:
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
None.
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PART III
Certain information required by Part III is omitted from this Annual Report on Form 10-K and is incorporated herein by reference from our definitive proxy statement relating to our 2026 annual meeting of stockholders, pursuant to Regulation 14A of the Exchange Act of 1934, also referred to in this Annual Report on Form 10-K as our 2026 Proxy Statement, which we expect to file with the SEC no later than April 30, 2026.
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
Corporate Governance
We have adopted a written Code of Business Conduct that applies to all of our employees, officers and directors. This Code of Business Conduct is designed to ensure that our business is conducted with integrity and in compliance with SEC regulations and Nasdaq listing standards. The Code of Business Conduct covers adherence to laws and regulations as well as professional conduct, including employment policies, conflicts of interest, and the protection of confidential information. The Code of Business Conduct is available under “Governance Overview” within the “Investors – Corporate Governance” section of our website at www.eyepoint.bio.
We intend to disclose any future amendments to, or waivers from, the Code of Business Conduct that affect our directors or senior financial and executive officers within four business days of the amendment or waiver by posting such information on the website address and location specified above.
Other Information
The other information required to be disclosed in Item 10 is hereby incorporated by reference to our 2026 Proxy Statement.
ITEM 11. EXECUTIVE COMPENSATION
The information required to be disclosed in Item 11 is hereby incorporated by reference to our 2026 Proxy Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The information required to be disclosed in Item 12 is hereby incorporated by reference to our 2026 Proxy Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The information required to be disclosed in Item 13 is hereby incorporated by reference to our 2026 Proxy Statement.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
The information required to be disclosed in Item 14 is hereby incorporated by reference to our 2026 Proxy Statement.
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PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENTS
(a)(1) Financial Statements
The financial statements filed as part of this report are listed on the Index to Consolidated Financial Statements on page F-1.
(a)(2) Financial Statement Schedules
Schedules have been omitted because of the absence of conditions under which they are required or because the required information is included in our Consolidated Financial Statements or Notes thereto.
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(a)(3) Exhibits
Incorporated by Reference to SEC Filing
Exhibit No. Exhibit Description Form SEC Filing Date Exhibit No.
Articles of Incorporation and By-Laws
3.5 By-Laws of EyePoint Pharmaceuticals, Inc. 10-K 09/18/18 3.5
3.10 Amendment No. 2 to the By-Laws of EyePoint, Inc. 8-K 12/08/25 3.2
Instruments Defining the Rights of Security Holders
4.1 Form of Specimen Stock Certificate for Common Stock 8-K12G3 06/19/08 4.1
4.2(a) Description of Securities of EyePoint, Inc.
4.3 Form of Pre-Funded Warrant to Purchase Common Stock, 2021 8-K 11/19/21 4.1
4.4 Form of Pre-Funded Warrant to Purchase Common Stock, 2025 8-K 10/17/25 4.1
Material Contracts - Management Contracts and Compensatory Plans
10.6(a)† EyePoint, Inc. 2019 Employee Stock Purchase Plan, as amended
10.7(a)† EyePoint, Inc. 2023 Long-Term Incentive Plan
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Incorporated by Reference to SEC Filing
Exhibit No. Exhibit Description Form SEC Filing Date Exhibit No.
10.16(a)† EyePoint, Inc. Amendment No.1 to 2023 Long-Term Incentive Plan
10.17(a)† EyePoint, Inc. Amendment No. 2 to 2019 Employee Stock Purchase Plan
10.18(a)† EyePoint, Inc. Amendment No 2. to 2023 Long-Term Incentive Plan
Material Contracts - Leases
81
Incorporated by Reference to SEC Filing
Exhibit No. Exhibit Description Form SEC Filing Date Exhibit No.
Material Contracts - License and Collaboration Agreements
Material Contracts - Other Agreements
19.1(a) Insider Trading Policy
21.1(a) Subsidiaries of EyePoint, Inc.
101.SCH Inline XBRL Taxonomy Extension Schema With Embedded Linkbases Document
82
Incorporated by Reference to SEC Filing
Exhibit No. Exhibit Description Form SEC Filing Date Exhibit No.
# Portions of this exhibit have been omitted in compliance with Item 601 of Regulation S-K.
† Indicates management contract or compensatory arrangement.
(a) Filed herewith
(b) Furnished herewith
ITEM 16. FORM 10-K SUMMARY
Not applicable.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
EYEPOINT, INC.
By: /s/ Jay S. Duker
Jay S. Duker, M.D.
President and Chief Executive Officer
(Principal Executive Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant in the capacities and on the dates indicated.
Name Title Date
/S/ GÖRAN ANDO Chair of the Board of Directors March 5, 2026
Göran Ando, M.D.
/S/ NANCY LURKER Vice Chair of the Board of Directors March 5, 2026
Nancy Lurker
/S/ JAY S. DUKER President, Chief Executive Officer and Director March 5, 2026
Jay S. Duker, M.D. (Principal Executive Officer)
George O. Elston (Principal Financial Officer and Principal Accounting Officer)
/S/ WENDY DICICCO Director March 5, 2026
Wendy DiCicco
/S/ JOHN LANDIS Director March 5, 2026
John Landis
/S/ KAREN ZADEREJ Director March 5, 2026
Karen Zaderej
/S/ STUART DUTY Director March 5, 2026
Stuart Duty
/S/ FRED HASSAN Director March 5, 2026
Fred Hassan
/S/ REGINALD J. SANDERS Director March 5, 2026
Reginald J. Sanders, M.D.
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EYEPOINT, INC. AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Financial Statements:
Consolidated Balance Sheets F-4
Consolidated Statements of Comprehensive Loss F-5
Consolidated Statements of Stockholders’ Equity F-6
Consolidated Statements of Cash Flows F-7
Notes to Consolidated Financial Statements F-8
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the stockholders and the Board of Directors of EyePoint, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of EyePoint, Inc. (formerly EyePoint Pharmaceuticals, Inc.) and subsidiaries (the "Company") as of December 31, 2025 and 2024, the related consolidated statements of comprehensive loss, stockholders' equity and cash flows, for the years then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements 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 audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the 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 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 financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the 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.
Prepaid and Accrued Clinical Trial Expenses — Refer to Notes 2, 4, and 7 to the financial statements
Critical Audit Matter Description
As disclosed in Note 2 to the financial statements, the Company records accruals for estimated ongoing research and development costs, including costs with respect to outsourced agreements for clinical trials with contract research organizations (CROs). When recording these prepaid and accrued expenses, the Company analyzes the progress of each of its studies, including the phase or completion of events, invoices received, payments made, contracted costs, communications with third-party vendors, and internal tracking of the work performed to date. Judgments and estimates are made in determining the prepaid and accrued balances at the end of any reporting period. Payments made in advance of services provided are recorded as prepaid research and development costs and recognized as expense in the period the expense is incurred. In determining the prepaid and accrued clinical trial balances, management makes its assessment of the services performed based on various factors, including reporting from third-party CROs and internal tracking of work performed during the period, which are subject to management’s judgment.
F-2
We identified auditing the estimates of the progress to completion of events performed by a CRO related to the Company’s two wet AMD Phase III clinical trials (LUGANO and LUCIA) as a critical audit matter due to (i) size of the trials in terms of activity and dollar amount, (ii) the level of judgment required by management and (iii) the increased audit effort in performing procedures to evaluate the reasonableness of management’s estimates of progress to completion.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to accrued and prepaid clinical trial costs for the contracts with the third-party CRO performing research and development for the wet AMD Phase III clinical trials (LUGANO and LUCIA) included the following, among others:
•
Evaluated the appropriateness of the method used by management to develop its estimates of progress to completion of specific events.
•
Tested the completeness and accuracy of the underlying data used in the estimates of progress to completion through the following:
o
Inspecting the terms of the contracts and statements of work between the Company and the third-party CRO and testing of actual billed expenses under the contracts.
o
Sending written confirmations directly to the CRO to confirm completeness of contracts executed as well as direct and pass through costs incurred to date and inspecting correspondence received directly from them, including status reports, and comparing such information to the amounts used in the Company's estimates.
•
Performed corroborating inquiries with Company personnel responsible for overseeing the activities performed by the CRO, and inspected information from the CRO, which includes the CRO’s estimate of completed tasks or progress of completion of certain tasks within the study.
•
Tested the current and non-current balance sheet classification of the prepaid clinical trial expenses by examining supporting documentation.
/s/ Deloitte & Touche LLP
Boston, Massachusetts
March 5, 2026
We have served as the Company's auditor since 2008.
F-3
EYEPOINT, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands except share data)
December 31, December 31,
Assets
Current assets:
Accounts and other receivables, net 651 607
Prepaid expenses and other current assets 20,105 9,481
Liabilities and stockholders' equity
Current liabilities:
Deferred revenue – noncurrent — 10,853
Operating lease liabilities – noncurrent 20,772 21,858
Other noncurrent liabilities 87 205
Contingencies (Note 15)
Stockholders' equity:
Accumulated other comprehensive income (loss) 961 1,028
Total liabilities and stockholders' equity $ 363,996 $ 418,465
See notes to consolidated financial statements.
F-4
EYEPOINT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(In thousands except per share data)
Year ended
December 31,
Revenues:
Operating expenses:
Sales and marketing 90 131
Other (expense) income:
Interest expense (33 ) (14 )
Loss on extinguishment of debt — —
Provision for income taxes $ (279 ) $ (90 )
Net loss per share:
Basic and diluted $ (3.17 ) $ (2.32 )
Weighted average common shares outstanding:
Other comprehensive gain (loss):
Unrealized gain (loss) on available-for-sale securities (67 ) 164
See notes to consolidated financial statements.
F-5
EYEPOINT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands except share data)
Common Stock Additional AccumulatedOther Total
Unrealized gain (loss) on available-for-sale securities — — — — 164 164
Cashless exercise of warrants 2,206,442 2 (2 ) — — —
Unrealized gain (loss) on available-for-sale securities — — — — (67 ) (67 )
See notes to consolidated financial statements.
F-6
EYEPOINT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Year Ended
December 31,
Cash flows from operating activities:
Adjustments to reconcile net loss to cash flows used in operating activities:
Depreciation of property and equipment 2,309 1,540
Deferred income tax 279 90
Changes in operating assets and liabilities:
Accounts receivable and other current assets (10,667 ) (244 )
Accounts payable and accrued expenses 4,677 5,731
Right-of-use assets and operating lease liabilities 500 1,618
Other noncurrent liabilities (33 ) —
Net cash (used in) provided by operating activities (240,110 ) (126,226 )
Cash flows from investing activities:
Sales and maturities of marketable securities 323,725 183,000
Purchases of property and equipment (3,280 ) (4,052 )
Proceeds from sale of property and equipment 155 —
Net cash (used in) provided by investing activities 68,580 (219,355 )
Cash flows from financing activities:
Payment of equity issue costs (543 ) (672 )
Principal payments on finance lease obligations (105 ) (105 )
Net cash (used in) provided by financing activities 173,647 164,022
Cash, cash equivalents and restricted cash at beginning of period 99,854 281,413
Cash, cash equivalents and restricted cash at end of period $ 101,971 $ 99,854
Supplemental disclosure of non-cash investing and financing activities:
Lease liability arising from obtaining right-of-use assets $ 903 $ 17,544
Stock issuance costs $ 316 $ 311
See notes to consolidated financial statements.
F-7
EYEPOINT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1.
Operations
EyePoint, Inc., a Delaware corporation (together with its subsidiaries, the Company), is a clinical-stage biopharmaceutical company committed to developing and commercializing innovative therapeutics to help improve the lives of patients with serious retinal diseases. The Company's pipeline leverages its proprietary bioerodible Durasert ETM technology (Durasert ETM) for sustained intraocular drug delivery. The Company’s lead product candidate, DURAVYUTM, is an investigational sustained delivery treatment for vascular endothelial growth factor (VEGF) mediated retinal diseases combining vorolanib, a selective and patent-protected tyrosine kinase inhibitor (TKI) with Durasert ETM. DURAVYU is currently being evaluated in Phase 3 pivotal trials (LUGANO and LUCIA) for wet age-related macular degeneration (wet AMD) with data readout beginning in mid-2026. Pivotal Phase 3 clinical trials (COMO and CAPRI) in diabetic macular edema (DME) are expected to dose patients in the first quarter of 2026. Additional pipeline programs include EYP-2301, razuprotafib, a TIE-2 agonist, formulated in Durasert ETM to potentially improve outcomes in serious retinal diseases. EyePoint is headquartered in Watertown, Massachusetts with a commercial manufacturing facility in Northbridge, Massachusetts.
The Company plans to identify and advance additional product candidates through clinical and regulatory development for its pipeline. This may be accomplished through internal discovery efforts, research collaborations and/or in-licensing arrangements and potential acquisitions of additional products, product candidates or technologies.
Liquidity
The Company had cash, cash equivalents and investments in marketable securities of $306.1 million at December 31, 2025. The Company has a history of operating losses and has not had significant recurring cash inflows from revenue. The Company’s operations have been financed primarily from sales of its equity securities, issuance of debt, and a combination of license fees, milestone payments, royalty income and other fees received from its collaboration partners. The Company anticipates that it will continue to incur losses as it continues the research and development of its product candidates, and the Company does not expect revenues from its product sales to generate sufficient funding to sustain its operations in the near-term. The Company expects to continue fulfilling its funding needs through cash inflows from revenues, licensing and research collaboration transactions, additional equity capital raises and other arrangements. The Company believes that its cash, cash equivalents and investments in marketable securities of $306.1 million at December 31, 2025, will enable the Company to fund its current and planned operations for at least the next twelve months from the date these consolidated financial statements were issued. Actual cash requirements could differ from management’s projections due to many factors, the timing and results of the Company’s clinical trials for DURAVYU, additional investments in research and development programs, competing technological and market developments, the costs of any ongoing obligations in connection with a final negotiated settlement with the DOJ and HHS and the costs of any strategic acquisitions, and/or development of complementary business opportunities.
2.
Significant Accounting Policies
Basis of Presentation
The consolidated financial statements are presented in U.S. dollars in accordance with U.S. generally accepted accounting principles (U.S. GAAP) and include the accounts of EyePoint, Inc. and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated.
Use of Estimates
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts and disclosure of assets and liabilities at the date of the consolidated financial statements and the reported amounts and disclosure of revenues and expenses during the reporting periods. Significant management estimates and assumptions include, among others, those related to revenue recognition for multiple-deliverable arrangements, recognition of expense in outsourced clinical trial agreements, realization of deferred tax assets, and determining grant date fair value of stock options and other equity awards. Actual results could differ from these and other estimates and there may be changes to the Company’s estimates in future periods.
Foreign Currency
The functional currency of the Company and each of its subsidiaries is the currency of the primary economic environment in which each such entity operates—the U.S. dollar or the Pound Sterling.
F-8
Assets and liabilities of the Company’s foreign subsidiary are translated at period-end exchange rates. Amounts included in the consolidated statements of comprehensive loss and cash flows are translated at the weighted average exchange rates for the period. Gains and losses from currency translation are included in accumulated other comprehensive income as a separate component of stockholders’ equity on the consolidated balance sheets. Foreign currency gains or losses arising from transactions denominated in foreign currencies, whether realized or unrealized, are recorded in interest and other income, net in the consolidated statements of comprehensive loss and were not material for all periods presented.
Cash Equivalents
Cash equivalents represent highly liquid investments with maturities of three months or less at the date of purchase, principally consisting of institutional money market funds and investment-grade commercial paper and U.S. Treasury securities.
Marketable Securities
Marketable securities consist of investments with an original or remaining maturity of greater than three months but less than one year at the date of purchase. The Company has historically classified its marketable securities as available-for-sale. Accordingly, the Company records these investments at fair value, with unrealized gains and losses excluded from earnings and reported, net of tax, in accumulated other comprehensive income, which is a component of stockholders’ equity. If the Company determines that a decline of any investment is other-than-temporary, the investment is written down to fair value. Marketable securities consisted of investment-grade commercial paper, U.S. Treasury securities, and U.S. Agency securities at December 31, 2025 and 2024. The Company’s investment policy, approved by the Board of Directors, includes guidelines relative to diversification and maturities designed to preserve principal and liquidity.
The fair value of marketable securities is determined based on quoted market prices at the balance sheet date of the same or similar instruments. The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts through to the earlier of sale or maturity. Such amortization and accretion amounts are included in interest and other income, net in the consolidated statements of comprehensive loss. The cost of marketable securities sold is determined by the specific identification method.
Concentrations of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash, cash equivalents, investments in marketable securities, and accounts receivable. The Company deposits its cash in financial institutions. At times, such deposits may be in excess of insured limits.
As of December 31, 2025, there were no accounts receivable balances. For the year ended December 31, 2025 revenues from ANI Pharmaceuticals, Inc. (ANI), formerly Alimera Sciences, Inc. and SWK Funding LLC (SWK), accounted for 54.8% and 40.4% of total revenues, respectively.
As of December 31, 2024, accounts receivable from ANI accounted for 72.3% and accounts receivable from OncoSil Medical Ltd. accounted for 16.5% of total accounts receivable, respectively. For the year ended December 31, 2024, revenues from ANI accounted for 93.6% of total revenues.
Fair Value Measurements
The Company accounts for certain assets and liabilities at fair value. The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market. The Company categorizes each of its fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety. These levels are:
•
Level 1 – Inputs are quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets and liabilities.
•
Level 2 – Inputs are directly or indirectly observable in the marketplace, such as quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities with insufficient volume or infrequent transaction (less active markets).
•
Level 3 – Inputs are unobservable estimates that are supported by little or no market activity and require the Company to develop its own assumptions about how market participants would price the assets or liabilities.
The Company’s cash equivalents and marketable securities are classified within Level 1 or Level 2 on the basis of valuations using quoted market prices or alternative pricing sources and models utilizing market observable inputs, respectively. The marketable
F-9
securities have been valued on the basis of valuations provided by third-party pricing services, as derived from such services’ pricing models. Inputs to the models may include, but are not limited to, reported trades, executable bid and ask prices, broker/dealer quotations, prices or yields of securities with similar characteristics, benchmark curves or information pertaining to the issuer, as well as industry and economic events. The pricing services may use a matrix approach, which considers information regarding securities with similar characteristics to determine the valuation for a security, and have been classified as Level 2.
The carrying amounts of accounts payable and accrued expenses approximate fair value because of their short-term maturity.
Inventory
Inventory is stated at the lower of cost or net realizable value, net on a first-in, first-out (FIFO) basis.
Capitalization of inventory costs begins after FDA approval of a product. Prior thereto, inventory costs of products and product candidates are recorded as research and development expense, even if this inventory may later be sold as commercial product.
The Company assesses the recoverability of inventory and writes down any excess and obsolete inventories to their estimated realizable value in the period in which the impairment is first identified. Write-downs are based on the age of the inventory, lower of cost or market, along with significant management judgments concerning future demands for the inventory. Such impairment charges, should they occur, are recorded within cost of sales. The determination of whether inventory costs will be realizable requires estimates by management. If actual market conditions are less favorable than management's projections, additional write-downs of inventory might be recorded in future periods.
Cost of sales consists of costs associated with the manufacture of YUTIQ®. The inventory costs for YUTIQ® include purchases of various components, the active pharmaceutical ingredient (API) and direct labor and overhead for the product manufactured in the Company’s Watertown, Massachusetts facility.
Debt and Equity Instruments
Debt and equity instruments are classified as either liabilities or equity in accordance with the substance of the contractual arrangement.
Property and Equipment
Property and equipment are recorded at cost and depreciated over their estimated useful lives (generally three to five years) using the straight-line method. Leasehold improvements are amortized on a straight-line basis over the shorter of the remaining non-cancellable lease term or their estimated useful lives. Repair and maintenance costs are expensed as incurred. When assets are retired or sold, the assets and accumulated depreciation are derecognized from the respective accounts and any gain or loss is recognized.
Leases
The Company is a party to two operating leases, the Company's headquarters in Watertown, Massachusetts, in which it leases office, laboratory, and manufacturing operations facilities and the Company's new standalone manufacturing facility, including office and lab space located at 600 Commerce Drive, Northbridge, Massachusetts (see Note 8).
The Company determines whether an arrangement is or contains a lease at inception. Leases are recognized on the consolidated balance sheets as ROU assets, current lease liabilities and noncurrent lease liabilities. ROU assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Lease liabilities and their corresponding ROU assets are recorded based on the present value of lease payments over the expected remaining lease term. For this purpose, the Company considers only payments that are fixed and in-substance fixed at lease commencement. ROU assets may also be adjusted for items such as prepayments and lease incentives. The interest rate implicit in a lease contract is typically not readily determinable. As a result, the Company utilizes its incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. For operating leases, lease expense is recognized on a straight-line basis over the lease term. For finance leases, amortization expense and interest expense are recognized over the lease term.
Revenue Recognition
Revenue is recognized when a customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, Revenue from Contracts with Customers (ASC 606), the
F-10
Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within the contract, determines those that are performance obligations and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. Sales, value-add and other taxes collected on behalf of third parties are excluded from revenue.
License and collaboration agreement revenue — The Company analyzes each element of its license and collaboration arrangements to determine the appropriate revenue recognition. The terms of the license agreement may include payment to the Company of non-refundable upfront license fees, milestone payments if specified objectives are achieved, and/or royalties on product sales. The Company recognizes revenue from upfront payments at a point in time, typically upon fulfilling the delivery of the associated intellectual property to the customer. For licenses that are combined with other promises, the Company determines whether the combined performance obligation is satisfied over time or at a point in time, when (or as) the associated performance obligation in the contract is satisfied.
If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price based on the estimated relative standalone selling prices of the promised products or services underlying each performance obligation. The Company determines standalone selling prices based on the price at which the performance obligation is sold separately. If the standalone selling price is not observable through past transactions, the Company estimates the standalone selling price taking into account available information such as market conditions and internally approved pricing guidelines related to the performance obligations.
The Company recognizes sales-based milestone payments as revenue upon the achievement of the cumulative sales amount specified in the contract in accordance with ASC 606-10-55-65. For those milestone payments which are contingent on the occurrence of particular future events, the Company determines that these need to be considered for inclusion in the calculation of total consideration from the contract as a component of variable consideration using the most-likely amount method. As such, the Company assesses each milestone to determine the probability and substance behind achieving each milestone. Given the inherent uncertainty associated with these future events, the Company will not recognize revenue from such milestones until there is a high probability of occurrence, which typically occurs near or upon achievement of the event.
When determining the transaction price of a contract, an adjustment is made if payment from a customer occurs either significantly before or significantly after performance, resulting in a significant financing component. Applying the practical expedient in paragraph 606-10-32-18, the Company does not assess whether a significant financing component exists if the period between when the Company performs its obligations under the contract and when the customer pays is one year or less. None of the Company’s contracts contained a significant financing component as of December 31, 2025 and 2024, respectively, nor during the respective years then ended.
Royalties — The Company recognizes revenue from license arrangements with its commercial partners’ net sales of products. Such revenues are included as royalty income. In accordance with ASC 606-10-55-65, royalties are recognized when the subsequent sale of the commercial partner’s products occurs. The Company’s commercial partners are obligated to report their net product sales and the resulting royalty due to the Company typically within 60-days from the end of each quarter. Based on historical product sales, royalty receipts, and other relevant information, the Company recognizes royalty income each quarter and subsequently determines a true-up when it receives royalty reports and payment from its commercial partners. Historically, these true-up adjustments have been immaterial.
Sale of Future Royalties — The Company has sold its rights to receive certain royalties on product sales. In the circumstance where the Company has sold its rights to future royalties under a royalty purchase agreement (RPA) and also maintains limited continuing involvement in the arrangement (but not significant continuing involvement in the generation of the cash flows that are due to the purchaser), the Company defers recognition of the proceeds it receives for the sale of royalty streams and recognizes such unearned revenue as revenue under the units-of-revenue method over the life of the underlying license agreement. Under the units-of-revenue method, amortization for a reporting period is calculated by computing a ratio of the proceeds received from the purchaser to the total payments expected to be made to the purchaser over the term of the agreement, and then applying that ratio to the period’s cash payment.
Estimating the total payments expected to be received by the purchaser over the term of such arrangements requires management to use subjective estimates and assumptions. Changes to the Company’s estimate of the payments expected to be made to
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the purchaser over the term of such arrangements could have a material effect on the amount of revenues recognized in any particular period.
Research Collaborations — The Company recognizes revenue over the term of the statements of work under any funded research collaborations. Revenue recognition for consideration, if any, related to a license option right is assessed based on the terms of any such future license agreement or is otherwise recognized at the completion of the research collaborations.
Please refer to Note 3 for further details on the license and collaboration agreements into which the Company has entered and corresponding amounts of revenue recognized during the current and prior year periods.
Cost of sales — Cost of sales consist of costs associated with the manufacture of YUTIQ®.
Research and Development
Research and development costs are charged to operations as incurred. These costs include all direct costs, including cash and stock-based compensation and benefits for research, clinical development, quality assurance, quality control, operations and medical affairs personnel, third-party costs and services for clinical trials, clinical materials, pre-clinical programs, regulatory and medical affairs, external consultants, and other operational costs related to the Company’s research and development of its product candidates.
The Company records accruals for estimated ongoing research and development costs, including costs with respect to outsourced agreements for clinical trials with contract research organizations (CROs). When recording these prepaid and accrued expenses, the Company analyzes progress of the studies, including the phase or completion of events, invoices received, payments made, contracted costs, communications with third-party vendors, and internal tracking of the work performed to date. Judgments and estimates are made in determining the prepaid and accrued balances at the end of any reporting period. Payments made in advance of services provided are recorded as prepaid research and development costs and recognized as expense in the period the expense is incurred. In determining the prepaid and accrued balances, management makes its assessments of the services performed based on various factors, including reporting from third-party CROs and internal tracking of work performed during the period, which are subject to management’s judgment. Actual results could differ from the Company’s estimates.
Stock-Based Compensation
Compensation cost related to share-based payment awards is based on the fair value of the instrument on the grant date and is recognized on a graded vesting basis over the requisite service period for each separately vesting tranche of the awards. The Company classifies stock-based compensation expense in its consolidated statements of operations and comprehensive loss in the same manner in which the grantee’s payroll costs are classified or in which the grantee’s service payments are classified.
The Company may also grant share-based payment awards that are subject to objectively measurable performance and service criteria. Compensation expense for performance-based awards begins at such time as it becomes probable that the respective performance conditions will be achieved. The Company continues to recognize the grant date fair value of performance-based awards through the vesting date of the respective awards so long as it remains probable that the related performance conditions will be satisfied.
The Company estimates the fair value of stock option awards using the Black-Scholes option valuation model and the fair value of performance stock units, restricted stock units, and deferred stock units based on the observed grant date fair value of the underlying common stock.
Net Loss per Share
Basic net loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. For periods in which the Company reports net income, diluted net income per share is determined by adding to the basic weighted average number of common shares outstanding the total number of dilutive common equivalent shares using the treasury stock method, unless the effect is anti-dilutive.
Comprehensive Loss
Comprehensive loss is comprised of net loss, foreign currency translation adjustments and unrealized gains and losses on available-for-sale marketable securities.
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Income Tax
The Company accounts for income taxes under the asset and liability method. Deferred income tax assets and liabilities are computed for the expected future impact of differences between the financial reporting and income tax bases of assets and liabilities and for the expected future benefit to be derived from tax credits and loss carry forwards. Such deferred income tax computations are measured based on enacted tax laws and rates applicable to the years in which these temporary differences are expected to be recovered or settled. A valuation allowance is provided against net deferred tax assets if, based on the available evidence, it is more likely than not that some or all of the net deferred tax assets will not be realized.
The Company determines whether it is more likely than not that a tax position will be sustained upon examination. If it is not more likely than not that a position will be sustained, none of the benefit attributable to the position is recognized. The tax benefit to be recognized for any tax position that meets the more likely than not recognition threshold is calculated as the largest amount that is more than 50% likely of being realized upon resolution of the uncertainty. The Company accounts for interest and penalties related to uncertain tax positions as part of its income tax provision.
Recently Adopted and Recently Issued Accounting Pronouncements
New accounting pronouncements are issued periodically by the Financial Accounting Standards Board (FASB) and are adopted by the Company as of the specified effective dates. Unless otherwise disclosed below, the Company believes that recently issued and adopted pronouncements will not have a material impact on the Company’s financial position, results of operations and cash flows or do not apply to the Company’s operations.
Recently Adopted Accounting Pronouncements
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted. The legislation restored immediate deductibility of domestic research and development expenditures and reinstated 100% bonus depreciation. Although these provisions may increase our net operating loss carryforwards and reduce the deferred tax asset associated with capitalized R&D, we continue to maintain a full valuation allowance. Accordingly, OBBBA did not have a material impact on our results of operations or liquidity for the year ended December 31, 2025. We elected to continue to defer R&D costs and will continue to monitor any future guidance related to OBBBA.
In December 2023, the FASB issued ASU 2023-09—Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This ASU was issued to address investor requests for more transparency about income tax information through improvements to income tax disclosure primarily related to the rate reconciliation and income taxes paid information, and to improve the effectiveness of income tax disclosures. The prospective adoption of this ASU resulted in additional annual disclosure, but did not impact our consolidated financial position, results of operations, or cash flows.
Recently Issued Accounting Pronouncements
In November 2024, the FASB issued ASU 2024-03—Income Statement —Reporting Comprehensive Income —Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The amendments in ASU 2024-03 address investor requests for more detailed expense information and require additional disaggregated disclosures in the notes to financial statements for certain categories of expenses that are included on the face of the income statement. This guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact the adoption of this ASU will have on its consolidated financial statement disclosures.
3.
Revenue
For the years ended December 31, 2025 and 2024, the Company’s product revenues were primarily from the Company’s existing supply agreements with commercial partners. For the years ended December 31, 2025 and 2024, the Company’s product revenues were made up of $1.6 million and $3.1 million, respectively, primarily from sales of YUTIQ®.
License and Collaboration Agreements and Royalty Income
ANI Product Rights Agreement and Commercial Supply Agreement
On May 17, 2023, the Company entered into a PRA with ANI. Under the PRA, the Company granted to ANI an exclusive and sublicensable right and license (the License) under the Company’s and its affiliates’ interest in certain of the Company’s and its affiliates’ intellectual property to develop, manufacture, sell, commercialize, and otherwise exploit certain products, including YUTIQ®, for the treatment and prevention of uveitis in the entire world except Europe, the Middle East and Africa (EMEA).
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Additionally, pursuant to the PRA, the Company transferred and assigned to ANI certain assets and certain contracts with third parties related to YUTIQ®, including the new drug application for YUTIQ® (collectively, the Asset Transfer). Pursuant to the PRA, ANI paid the Company a $75.0 million upfront payment (the Upfront Payment). ANI also made four quarterly payments of $1.875 million to the Company totaling $7.5 million during 2024. ANI will also pay royalties to the Company from 2025 to 2028 at a percentage of low-to-mid double digits of ANI’s related U.S. annual net sales of certain products (including YUTIQ®) in excess of certain thresholds, beginning at $70 million in 2025, and increasing annually thereafter. Upon ANI’s payment of the Upfront Payment and the 2024 quarterly payments, the licenses and rights granted to ANI automatically became perpetual and irrevocable. Payments received from ANI are non-refundable.
The Company and ANI also entered into a commercial supply agreement (CSA), pursuant to which, during the term of the PRA, the Company agreed to manufacture and exclusively supply to ANI agreed-upon quantities of YUTIQ® necessary for ANI to commercialize YUTIQ® in the United States at certain cost plus amounts, subject to adjustments and potential extensions and terminations set forth in the CSA. The CSA with ANI automatically terminated on May 31, 2025.
Revenue from sales of product supply to ANI under the CSA was $0.7 million and $2.6 million during the years ended December 31, 2025 and 2024, respectively. License and Collaboration revenue related to the PRA was $15.9 million and $37.1 million during the years ended December 31, 2025 and 2024, respectively. License and collaboration revenue, related to additional transitional services was $0.6 million and $0.7 million during the years ended December 31, 2025 and 2024, respectively.
SWK Royalty Purchase Agreement
On December 17, 2020 the Company entered into a royalty purchase agreement (RPA) with SWK. Pursuant to the RPA, the Company sold its right to receive royalty payments on future sales of products subject to a licensing and development agreement, as amended, with ANI (the Amended ANI Agreement) for an upfront cash payment of $16.5 million. The Company classified the proceeds received from SWK as deferred revenue at inception of the RPA and is recognizing revenue as royalty payments are made from ANI to SWK. The Company recognized $12.7 million and $1.1 million of royalty income related to the RPA for the years ended December 31, 2025 and 2024, respectively. As of December 31, 2024, the Company classified $1.8 million and $10.9 million as current and non-current deferred revenue recognized under the RPA, respectively.
On March 18, 2025, ANI announced that it completed the buyout of its 3.125% perpetual royalty obligation to SWK on worldwide net revenues of ILUVIEN® and YUTIQ® for a one-time payment of $17.25 million. Under the terms of the agreement, upon making the buyout payment, no further royalty is due to SWK on net revenues beginning January 1, 2025, forward. As a result, the Company terminated the RPA effective March 18, 2025.
Ocumension Therapeutics
The Company entered into an Exclusive License Agreement on November 2, 2018, as amended by a Memorandum of Understanding dated March 1, 2019, a Memorandum of Understanding dated August 18, 2020, a Supply and Quality Agreement on February 19, 2019 and a Memorandum of Understanding on August 26, 2024. Pursuant to the license agreement and Memorandum of Understanding signed with the Company, Ocumension has:
•
An exclusive license for the development and commercialization of its three-year micro insert using the Durasert® technology for the treatment of posterior segment uveitis of the eye (YUTIQ® in the U.S.) in Mainland China, Hong Kong, Macau, and Taiwan at its own cost and expense in return for royalties based on sales with the Company supplying products for clinical trials and commercial sale;
•
An exclusive license for the development and commercialization in Mainland China, Hong Kong, Macau, and Taiwan of DEXYCU® for the treatment of post-operative inflammation following ocular surgery at its own cost and expense in return for royalties based on sales with the Company supplying product for clinical trials and commercial sale; and
•
Exclusive rights to develop and commercialize YUTIQ® and DEXYCU® products under its own brand names in South Korea and other jurisdictions across Southeast Asia in Brunei, Burma (Myanmar), Cambodia, Timor-Leste, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand, and Vietnam (the Territory), at its own cost and expense in return for royalties based on sales with the Company supplying product for clinical trials and commercial sale.
•
The right and obligation to manufacture YUTIQ®, either by itself or through affiliates or sub-contractors, for sale and use in the Territory following completion of a technology and know-how transfer from the Company to Ocumension.
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During both years ended December 31, 2025 and 2024, the Company recognized $0.9 million and $0.5 million of revenue from sales of product supply to Ocumension under the supply agreement and recorded this amount in product sales, net on the condensed consolidated statements of operations and comprehensive loss, respectively. The Company recognized approximately $0.1 million, of license and collaboration revenue related to additional technical assistance during the years ended December 31, 2025 and 2024. The Company also recorded royalty income of $0.4 million and $0.5 million during the years ended December 31, 2025 and 2024, respectively.
4.
Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consisted of the following (in thousands):
Total prepaid expenses and other current assets $ 20,105 $ 9,481
As of December 31, 2025 and 2024, the Company had $5.4 million of prepaid clinical expense included in other assets on its consolidated balance sheets.
5.
Inventory
Inventory consisted of the following (in thousands):
6.
Property and Equipment, Net
Property and equipment, net consisted of the following (in thousands):
December 31, December 31,
Accumulated depreciation and amortization (6,017 ) (4,057 )
Property and equipment, net $ 9,023 $ 8,177
Depreciation expense totaled $2.1 million and $1.5 million in the years ended December 31, 2025 and 2024, respectively.
7.
Accrued Expenses
Accrued expenses consisted of the following (in thousands):
December 31, December 31,
Professional fees, contingencies and legal fees 5,160 840
Sales chargebacks, rebates and other revenue reserves 62 147
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8.
Leases
On January 23, 2023, the Company entered into a lease agreement (Northbridge Lease) for its new standalone commercial manufacturing facility, including office and lab space located at 600 Commerce Drive, Northbridge, Massachusetts. The new 41,141 square-foot manufacturing facility is Current Good Manufacturing Practice (cGMP) compliant to meet U.S. FDA and European Medicines Agency (EMA) standards to support DURAVYU clinical supply and commercial readiness upon regulatory approval. In addition, the building has the capacity and capabilities for pipeline expansion. The lease includes a non-cancellable lease term of fifteen years and four months, with two options to extend the lease term for two additional terms of either five years or ten years at 95% of the then-prevailing fair market rent.The lease term, under ASC 842, commenced during the second quarter of 2024. The Company entered into an amendment to the Northbridge Lease, effective September 30, 2024. Pursuant to the amendment, the Company's obligation to pay base rent began on March 1, 2025. The Company is responsible for real estate taxes, maintenance, and other operating expenses applicable to the leased premises. The Company recognized an initial increase of $17.7 million to its lease liabilities and $17.9 million to its right-of-use (ROU) assets resulting from the Northbridge Lease during the second quarter of 2024.
Since the Company elected to account for each lease component and its associated non-lease components as a single combined component, all contract consideration was allocated to the respective lease components. The expected lease terms include non-cancellable lease periods. Renewal option periods have not been included in the determination of the lease terms as they are not deemed reasonably certain of exercise. Variable lease payments, such as common area maintenance, real estate taxes, and property insurance are not included in the determination of the lease’s ROU asset or lease liability.
As of December 31, 2025, the weighted average remaining term of the Company’s operating leases was 11.8 years and the weighted average discount rate was 11.75%. As of December 31, 2024, the weighted average remaining term of the Company’s operating leases was 12.6 years and the weighted average discount rate was 11.63%.
Supplemental balance sheet information related to operating leases as of December 31, 2025 and 2024, respectively, is as follows (in thousands):
December 31, December 31,
Other current liabilities – operating lease current portion $ 2,022 $ 1,247
Operating lease liabilities – noncurrent portion 20,772 21,858
Total operating lease liabilities $ 22,794 $ 23,105
The elements of lease expense were as follows (in thousands):
Year EndedDecember 31,
Lease expense included in:
General and administrative 259 260
Cash paid for amounts included in the measurement of operating lease liabilities was $3.8 million and $1.2 million for the years ended December 31, 2025 and 2024, respectively.
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The Company’s total future minimum lease payments under non-cancellable leases at December 31, 2025, were as follows (in thousands):
Operating Leases
Total lease payments $ 44,390
Less imputed interest (21,596 )
9.
Stockholders’ Equity
Equity Financings
Common Stock Offerings
In October 2025, the Company sold 12,875,000 shares of its common stock and, to certain investors, in lieu of common stock, pre-funded warrants (PFWs) to purchase 1,500,000 shares of common stock, in an underwritten public offering at a price of $12.00 per share, including the exercise in full by the underwriters of their option to purchase an additional 1,875,000 shares of common stock. The gross proceeds of the offering to the Company were approximately $172.5 million. Underwriter discounts and commissions and other share issue costs totaled approximately $10.8 million.
In October 2024, the Company sold 14,636,363 shares of its common stock in an underwritten public offering at a price of $11.00 per share, including the exercise in full by the underwriters of their option to purchase an additional 1,909,090 shares of common stock. The gross proceeds of the offering to the Company were approximately $161.0 million. Underwriter discounts and commissions and other share issue costs totaled approximately $10.2 million.
ATM Facility
In August 2020, the Company entered into an at-the-market facility (the ATM Facility) with Cantor Fitzgerald & Co (Cantor). Pursuant to the ATM Facility, the Company may, at its option, offer and sell shares of its common stock from time to time, through or to Cantor, acting as sales agent. The Company will pay Cantor a commission of 3.0% of the gross proceeds from any future sales of such shares.
During the year ended December 31, 2025, the Company sold 825,844 shares of common stock under the ATM facility at a weighted average price of $14.10 per share for gross proceeds of approximately $11.6 million. Share issue costs, including sales agent commissions, totaled approximately $0.5 million.
During the year ended December 31, 2024, the Company sold 1,299,506 shares of its common stock under the ATM facility at a weighted average price of $9.36 per share for gross proceeds of approximately $12.2 million. Share issue costs, including sales agent commissions, totaled approximately $0.4 million.
Warrants to Purchase Common Shares
Pursuant to a credit agreement, the Company issued a warrant to SWK to purchase (i) 40,910 shares of the Company’s common stock on March 28, 2018, at an exercise price of $11.00 per share with a seven-year term and (ii) 7,773 shares of the Company’s common stock on June 26, 2018, at an exercise price of $19.30 per share with a seven-year term.
In January 2024, SWK exercised their warrants in full via cashless exercise resulting in the net share issuance of 25,666 shares.
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The Company issued 3,272,727 shares of PFWs to purchase common stock, in connection with the November 2021 underwritten public offering. On April 18, 2024, 2,181,818 PFWs were exercised in full as a cashless exercise, resulting in a net issuance of 2,180,776 shares of common stock.
The Company issued 1,500,000 shares of PFWs to purchase common stock, in connection with the October 2025 underwritten public offering.
As of December 31, 2025 and 2024, 2,590,909 and 1,090,909 PFWs were outstanding, respectively. The PFWs were included in the basic and diluted net loss per share calculation during the year ended December 31, 2025.
10.
Share-Based Payment Awards
Equity Incentive Plans
The 2023 Long-Term Incentive Plan (the “2023 Plan”), approved by the Company’s stockholders on June 20, 2023 (the “Adoption Date”), originally provided for the issuance of up to 3,500,000 shares of the Company’s common stock reserved for issuance under the 2023 Plan plus any additional shares of the Company’s common stock that were available for grant under the 2008 and the 2016 Incentive Plan (the “2008 & 2016 Plan”) at the Adoption Date or would otherwise become available for grant under the 2008 Plan as a result of subsequent termination or forfeiture of awards under the 2008 or 2016 Plan. Prior to June 18, 2025, the maximum aggregate number of shares available for issuance under the 2023 Plan was equal to (i) 7,500,000 shares, plus (ii) 184,904 shares that were previously available for grant under the Company’s 2016 Equity Incentive Plan (the 2016 Plan) that were transferred to the 2023 Plan on June 20, 2023, plus (iii) any shares granted under the Company’s 2008 Equity Incentive Plan or 2016 Plan (collectively, the Prior Plans) that, on or after the effective date of the 2023 Plan, become available as a result of the termination or forfeiture of awards under the Prior Plans. At the Company’s Annual Meeting of Stockholders held on June 18, 2025, the Company’s stockholders approved an amendment to the 2023 Plan to increase the number of shares authorized for issuance by 2,900,000 shares to 10,400,000 shares under the 2023 Plan. At December 31, 2025, a total of approximately 4,727,914 shares were available for new awards under the 2023 Plan.
Starting March 2022, the Company granted non-statutory stock options to new employees as inducement awards to enter into employment with the Company. The grants were approved by the Compensation Committee of the Board of Directors and awarded in accordance with Nasdaq Listing Rule 5635(c)(4). Although not awarded under any equity incentive plans, the grants are subject to and governed by the terms and conditions of the applicable plan in effect at the time of the grant.
Stock Options
The following table provides a reconciliation of stock option activity under the Company’s equity incentive plan and for inducement awards for the year ended December 31, 2025:
(in years) (in thousands)
The Company's stock options generally vest over four years with 25% vesting after one year of service followed by ratable monthly vesting over the remaining three years. Nonemployee awards are granted similar to the Company’s employee awards. All option grants have a 10-year term.
The Company recognizes stock-based compensation expense over the requisite service period based on the grant date fair value of the award. The Company has elected to use the Black-Scholes option pricing model to determine the fair value of awards granted.
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The determination of the fair value of stock-based awards utilizing the Black-Scholes model is affected by the share price and a number of assumptions, including expected volatility, expected life, risk-free interest rate and expected dividends. The Company determined the expected volatility by using available historical price information. The expected life of the awards is estimated based on the simplified method. The risk-free interest rate assumption is based on observed interest rates appropriate for the terms of the awards. The dividend yield assumption is based on history and expectation of paying no dividends. Forfeitures have not been material in the periods presented.
The fair value of the share-based awards was measured with the following range of assumptions for the years ended December 31, 2025 and 2024:
Year ended December 31,
Expected dividends 0.0% 0.0%
The following table summarizes information about employee, non-executive director and external consultant stock options for the years ended December 31, 2025 and 2024 (in thousands except per share amounts):