10-K
1
tm211090d1_10k.htm
FORM 10-K
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 10-K
For
the fiscal year ended December 31, 2020
or
For
the transition period from to
Commission
File Number 001-36672
EYEGATE
PHARMACEUTICALS, INC.
(Exact
Name of Registrant as Specified in Its Charter)
271
Waverley Oaks Road
Suite
108
Waltham,
MA 02452
(Address
of Principal Executive Offices, including zip code)
(781)
788-8869
(Registrant’s
telephone number, including area code)
Securities
registered pursuant to Section 12(b) of the Act:
Title of each class Trading symbol(s) Name of each exchange on which registered
Common Stock, $0.01 par value EYEG The Nasdaq Capital Market
Securities
registered pursuant to Section 12(g) of the Act: None.
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES
☐ NO ☒
Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
Act. YES ☐ NO ☒
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES
☒ NO ☐
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant
to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit
such files). YES ☒ NO ☐
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated filer ☐ Accelerated filer ☐
Non-accelerated filer ☒ Smaller reporting company ☒
Emerging growth company ☐
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐
Indicate
by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES
☐ NO ☒
The
aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant, computed by reference
to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of June 30,
2020 was approximately $16,289,960. Shares of the registrant’s common stock held by each officer and director and each person
known to the registrant to own 10% or more of the outstanding voting power of the registrant have been excluded in that such persons
may be deemed affiliates. This determination of affiliate status is not a determination for other purposes.
At
March 23, 2021, there were 7,097,912 shares of the registrant’s common stock
issued and outstanding.
EYEGATE
PHARMACEUTICALS, INC.
Table
of Contents
ANNUAL
REPORT ON FORM 10-K
For
the Year Ended December 31, 2020
INDEX
Page
PART I
Item 1. Business 2
Item 1A. Risk Factors 24
Item 1B. Unresolved Staff Comments 52
Item 2. Properties 52
Item 3. Legal Proceedings 52
Item 4. Mine Safety Disclosures 52
PART II
Item 6. Selected Financial Data 53
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 65
Item 8. Financial Statements and Supplementary Data 65
Item 9A. Controls and Procedures 66
Item 9B. Other Information 67
PART III
Item 10. Directors, Executive Officers and Corporate Governance 67
Item 11. Executive Compensation 67
Item 14. Principal Accounting Fees and Services 67
PART IV
Item 15. Exhibits, Financial Statement Schedules 68
Index to Consolidated Financial Statements F-1
Signatures 70
FORWARD-LOOKING
STATEMENTS
This
Annual Report on Form 10-K contains statements that are not statements of historical fact and are forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”), each as amended. The forward-looking statements are principally, but not
exclusively, contained in “Item 1: Business” and “Item 7: Management’s Discussion and Analysis of Financial
Condition and Results of Operations.” These statements involve known and unknown risks, uncertainties and other factors
that may cause our actual results, performance or achievements to be materially different from any future results, performance
or achievements expressed or implied by the forward-looking statements. Forward-looking statements include, but are not limited
to, statements about management’s confidence or expectations, and our plans, objectives, expectations and intentions that
are not historical facts. In some cases, you can identify forward-looking statements by terms such as “may,” “will,”
“should,” “could,” “would,” “expects,” “plans,” “anticipates,”
“believes,” “goals,” “sees,” “estimates,” “projects,” “predicts,”
“intends,” “think,” “potential,” “objectives,” “optimistic,” “strategy,”
and similar expressions intended to identify forward-looking statements. Forward looking statements include, but are not limited
to, statements about:
• the rate and degree of market acceptance of any of our product candidates;
• our expectations regarding competition;
• our anticipated growth strategies;
• our ability to attract or retain key personnel;
• our ability to establish and maintain development partnerships;
• our expectations regarding federal, state and foreign regulatory requirements;
• regulatory developments in the U.S. and foreign countries;
• the impact of the evolving COVID-19 pandemic and the global response thereto.
These
statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties.
Given these uncertainties, you should not place undue reliance on these forward-looking statements. We discuss many of these risks
in detail under the heading “Item 1A. Risk Factors” beginning on page 24 of this Annual Report on Form 10-K. You should
carefully review all of these factors, as well as other risks described in our public filings, and you should be aware that there
may be other factors, including factors of which we are not currently aware, that could cause these differences. Also, these forward-looking
statements represent our estimates and assumptions only as of the date of this report. We may not update these forward-looking
statements, even though our situation may change in the future, unless we have obligations under the federal securities laws to
update and disclose material developments related to previously disclosed information.
EyeGate
Pharmaceuticals, Inc. is referred to herein as “we,” “our,” “us,” and “the Company.”
1
PART I
Item 1. Business.
Overview
We
are a clinical-stage pharmaceutical company developing and commercializing products for treating inflammatory and immune diseases
with a focus on the eye and nervous system.
In
the fourth quarter of 2020, we acquired Panoptes Ges.m.b.H. (“Panoptes”), transforming our pipeline with the addition
of PP-001, a clinical stage Dihydroorotate Dehydrogenase (“DHODH”) inhibitor. PP-001, is a next-generation, non-steroidal,
immuno-modulatory and small-molecule inhibitor of DHODH with what we believe to be best-in-class picomolar potency and a validated
immune modulating mechanism designed to overcome the off-target side effects and safety issues typically associated with DHODH
inhibitors. PP-001 has been developed in two clinical-stage ophthalmic formulations: PaniJect, an intravitreal injection for inflammatory
diseases of the eye including posterior uveitis, and PaniDrop, a novel nano carrier technology eye drop for ocular surface diseases
such as conjunctivitis, dry eye disease and others. Other administration routes are also in development and Investigational New
Drug (“IND”) enabling studies are underway for conditions outside the ocular space.
In
addition, we are developing Ocular Bandage Gel (“OBG”), a modified form of the natural polymer hyaluronic acid, designed
to protect the ocular surface to permit re-epithelialization of the cornea and improve ocular surface integrity. OBG, with unique
properties that help hydrate and protect the ocular surface, is in clinical evaluation for patients undergoing photorefractive
keratectomy (“PRK”) surgery for corneal wound repair after refractive surgery and patients with punctate epitheliopathies
(“PE”) as a result of dry eye. We are currently developing OBG as a device, but are evaluating the potential to reclassify
OBG as a drug. We attended a type-B meeting with the U.S. Food and Drug Administration’s (“FDA”) Center for
Drug Evaluation and Research (“CDER”) division during the first quarter of 2021 to discuss OBG’s path forward
as a drug and will continue to evaluate the feedback received as we move towards reaching a decision on the reclassification.
2
Our
Strategy
Our
goal is to continue developing products for treating disorders of the eye and to expand development to indications outside of
ophthalmology. The key elements of this strategy are to:
Market
Opportunity
PP-001
Overview
PP-001
is a third-generation small molecule DHODH inhibitor. DHODH is extensively exploited as potential drug targets for immunological
disorders, oncology, and infectious diseases. DHODH is a key enzyme in the de novo pyrimidine synthesis pathway. This enzyme is
located in the mitochondria and catalyzes the conversion of dihydroorotate (“DHO”) to orotate as the fourth step in
the de novo synthesis of pyrimidines that are ultimately used in the production of nucleotides.
Nucleotides
are required for cell growth and replication. Nucleotides are the activated precursors of nucleic acids and are necessary for
the replication of the genome and the transcription of the genetic information into RNA. Nucleotides also serve as an energy source
for a more select group of biological processes (ATP and GTP). They also play a role in the formation of glycogen, signal-transduction
pathways, and as components of co-enzymes (NAD and FAD). An ample supply of nucleotides in the cell is essential for all cellular
processes.
There
are two pathways for the biosynthesis of nucleotides: salvage and de novo. The main difference is where the nucleotide bases come
from. In the salvage pathway, the bases are recovered (salvaged) from RNA and DNA degradation. In the de novo pathway, the bases
are assembled from simple precursor molecules (made from scratch).
One
critical requirement of fast-growing or proliferating cells, such as the expansion of activated B and T-cells, cancer cells, and
pathogen infected host cells, is the requirement of an abundance of nucleotide bases. These metabolic activities will predominately
utilize the de novo pathway for nucleotide biosynthesis. A key advantage of DHODH inhibition is the selectivity towards metabolically
activated cells (with a high need for RNA and DNA production), which should mitigate any negative impact on normal cells. Depletion
of cellular pyrimidine pools through the selective inhibition of DHODH has been shown to be a successful approach for therapeutic
development.
Currently,
two first generation DHODH inhibitors have been approved in the U.S. and abroad and are marketed by Sanofi as leflunomide (Arava®)
and the active metabolite teriflunomide (Aubagio®). These oral tablets are approved for the treatment of rheumatoid and psoriatic
arthritis and multiple sclerosis (“MS”), respectively. Both diseases are autoimmune disorders. One potential explanation
for the therapeutic effects of Arava® in arthritis is the reduction in the numbers or reactivity of activated T-cells, which
are involved in the pathogenesis of arthritis. The generally accepted view of human MS pathogenesis implicates peripheral activation
of myelin-specific autoreactive T-cells that lead to inflammatory disease in the central nervous system (“CNS”). By
blocking the de novo pyrimidine synthesis pathway via DHODH inhibition, it is suggested that Aubagio® reduces T-cell proliferation
in the periphery. Arava® and Aubagio® are formulated as oral drugs and it is established that leflunomide will be metabolized
in the liver to the active metabolite teriflunomide. Hepatotoxicity was reported as a major side effect after oral administration,
possibly as a result of extensive liver metabolization. Moreover, it was shown that apart from DHOHD, a series of protein kinases
are inhibited by Arava® and Aubagio®.
3
PP-001
was identified as a promising novel third generation DHODH inhibitor, with a half-maximal inhibitory concentration IC50-value
of 0.3 nM. Based on internal work completed, we believe that this is more than 1,000-fold more potent than teriflunomide (IC50
DHODH 415 nM). Furthermore, PP-001 represses the expression of key pro-inflammatory cytokines such as IL-17, IFN-g,VEGF
and others, potentially as a consequence of inhibiting DHODH. IL-17 and IFN-g are the hallmark cytokines expressed by Th1 and
Th17 T-cells, respectively, and play a crucial role in initiating the inflammatory processes in several ocular diseases, including
non-noninfectious uveitis and dry eye disease. PP-001 is structurally and mechanistically different from Arava®. The IC50
of PP-001 on selected tyrosine kinases, such as PI3K, AKT and JAK, is more than 10,000-fold above the IC50 of
PP-001 for DHODH. In general, side effects are not expected and have not been observed to date in animal and human studies after
PP-001 administration.
Despite
the fact that the DHODH protein is ubiquitously expressed in most cells, malignant cells seem to be more metabolically dependent
on de novo pyrimidine production, forming the potential basis of a therapeutic window. Inhibiting DHODH alone or in combination
with standard-of-care has been shown to be very active in a series of different in vivo cancer models for AML, breast,
lung, and others.
Additionally,
viral replication and viral cell metabolism is dependent on a large nucleotide pool. Therefore, PP-001 demonstrates antiviral
efficacy, which is likely due to pyrimidine depletion caused by DHODH inhibition. The postulated DHODH directed mode of action
of PP-001 is underlined by reversibility of the antiviral activity by co-application of uridine or other pyrimidine precursors.
The
postulated mode of action of PP-001 is depicted below.
4
OBG
Overview
OBG
is a synthetic modified hyaluronic acid (“HA”) capable of coating the ocular surface and designed to resist degradation
under conditions present in the eye. This prolongs residence time of the bandage on the ocular surface, thereby addressing the
limitations of current non-cross-linked hyaluronic acid formulations. Additionally, cross-linking allows the product’s viscosity
to be modified to meet optimum ocular needs. The increased viscosity and non-covalent muco-adhesive interfacial forces improve
residence time in the tear film, thus providing a coating that aids and promotes re-epithelization of the ocular surface via physical
protection. If OBG is approved by the FDA, we expect that it will be the only prescription eye drop available in the U.S. based
on HA.
OBG
exhibits significant shear thinning properties. This feature allows the modified HA to act as a more concentrated, viscous barrier
at low shear rates in a resting tear film, but also as a lower resistance fluid (therefore thinned) during high shear events such
as blinking. This property enables better residence time and a more favorable ocular surface coating with less optical blur. We
have demonstrated in animal studies that OBG remains on the ocular surface for up to two hours and further demonstrated in a human
clinical study that OBG does not cause blurriness while on the ocular surface. This enhances ocular surface protection and patient
comfort.
OBG
has been shown to provide a mechanical barrier that aids in the management of corneal epithelial defects and re-epithelization
in both preclinical studies and in clinical ophthalmic veterinary use. As such, PRK surgery was chosen as the subject population
which is best suited to demonstrate this effect. PRK is an efficacious alternative to patients seeking surgical correction of
refractive errors who are not suitable candidates for laser in situ keratomileusis (“LASIK”) due to inadequate corneal
thickness, larger pupil size, history of keratoconjunctivitis sicca (“KCS”), or anterior basement membrane disease.
OBG has demonstrated statistical significance in a pivotal clinical study for its ability to accelerate wound healing against
the current standard-of-care, a bandage contact lens.
We
believe that OBG can be used for the management of a variety of large and small corneal epithelial defects including PE, which
also includes dry eye. PE is an early sign of epithelial compromise and is associated with a variety of pathologic ocular inflammatory
conditions including ocular causes, as well as systemic diseases. This ocular surface condition is common and may represent areas
of epithelial cell damage and loss and therefore stain positively with fluorescein. Causes can include dry eye, acute and chronic
bacterial and viral conjunctivitis, trauma, contact lens wear (tight lens syndrome), chemical irritation and burns, diabetic and
infectious neuropathies, chemotherapy, and corneal abrasion. OBG demonstrated its ability to reduce corneal staining, which occurs
when the compromised corneal epithelial defects heal, in a pilot study in dry eye patients when compared against Refresh®
lubricating eye drops.
5
Potential
Targeted Indications
We
are undergoing an assessment of routes of administration for PP-001 and which diseases to focus our resources on. This will include
a review of existing routes of delivery, specifically PaniJect and PaniDrop, and may determine that it is not in our best interest
to continue with both ophthalmic routes of administration.
PaniJect
PaniJect
is being considered for multiple diseases that affect the posterior region of the eye (the retina), including Non-Infectious Posterior
Uveitis (“NIPU”) and Diabetic Macular Edema (“DME”).
PaniDrop
PaniDrop
is being considered for multiple diseases that affect the ocular surface and anterior region of the eye, including Allergic Conjunctivitis,
Viral Conjunctivitis and Dry Eye Disease (“DED”).
OBG
Punctate
Epitheliopathies due to Dry Eye
PE
is an early sign of epithelial compromise and is associated with a variety of pathologic ocular inflammatory conditions including
ocular causes, as well as systemic diseases. This ocular surface condition is common and may represent areas of epithelial cell
damage and loss and therefore stain positively with fluorescein. PE is characterized by a breakdown or damage of the epithelium
of the cornea in a pinpoint pattern, which can be seen by examination with a slit lamp. Patients may present with non-specific
symptoms such as red eye, tearing, foreign body sensation, photophobia, and burning. Causes can include dry eye, acute and chronic
bacterial and viral conjunctivitis, trauma, contact lens wear (tight lens syndrome), chemical irritation and burns, diabetic and
infectious neuropathies, chemotherapy, and corneal abrasion.
Standard-of-care
treatments are aimed at attempting to heal these punctate micro defects and/or epitheliopathies and can include increasing humidity,
artificial tears, lubricants, and ointments and in severe cases can even utilize bandage contact lens, antibiotics and amniotic
membrane graphs, as well as treating the underlying cause with topical anti-inflammatory and T-cell modulators. Often these current
treatments fall short, as they are ineffective in protecting and enabling corneal re-epithelization. The artificial tears have
limited residence time and often do nothing to mechanically protect the cornea and create an environment that can manage corneal
re-epithelization. Furthermore, many of the ointments and gels, although offering better residence time, are thicker and blur
vision, thus making them less attractive for daytime use.
OBG,
once applied to the eye, forms a thin layer that protects and lubricates the eye to promote re-epithelization in the management
of a variety of large and small corneal epithelial defects including PE.
Corneal
Wound Repair
OBG
has been shown to provide a mechanical barrier that aids in the management of corneal epithelial defects and re-epithelization
in both preclinical studies and in clinical ophthalmic veterinary use. PRK surgery was chosen as the subject population that is
best suited to demonstrate this effect. PRK is an efficacious alternative to patients seeking surgical correction of refractive
errors who are not suitable candidates for LASIK due to inadequate corneal thickness, larger pupil size, history of KCS, or anterior
basement membrane disease. PRK involves controlled mechanical removal of corneal epithelium with subsequent excimer laser photoablation
of the underlying Bowman’s layer and anterior stroma, including the subepithelial nerve plexus.
The
military prefers PRK as a refractive surgery due to the stability of the PRK incision and the absence of risk for flap dislocation
during military active duty. Although this procedure yields desirable visual acuity results, common complications of the procedure
include post-operative pain secondary to the epithelial defects, risk of corneal infection prior to re-epithelization of the large
epithelial defect, corneal haze formation, decreased contrast sensitivity, and slower visual recovery.
OBG
provides a thin coating to the surface of the eye, serving as a protectant and lubricant to facilitate and manage corneal re-epithelization.
6
Clinical
Trial Results
PaniJect:
Non-Infectious Posterior Uveitis
Phase
1a/2b Safety Study
A
first in human clinical study to evaluate the safety of intravitreally applied PP-001 in patients with chronic, non-infectious
uveitis has been completed. PP-001 was applied as a single, intravitreal injection of 300, 600 and 1,200 ng per eye. The primary
objective of the study was to assess the safety and tolerability of ascending doses of PP-001 in patients. The secondary objectives
were to assess improvement of intraocular inflammation and to evaluate the pharmacokinetics of PP-001 in patients. For this study,
PP-001 was formulated as a sterile, aqueous solution for intravitreal injection.
The
purpose of this study was to assess safety, pharmacokinetic (“PK”), and efficacy data of 12 treated patients.
PP-001 showed an excellent safety profile and promising efficacy signals in improvement of inflammatory parameters and visual
acuity in uveitis patients.
Assessment
of the evaluated efficacy parameters shows a clear dose dependent treatment effect in improvement of visual acuity at day 14 post
dosing. Figure 1 shows the mean change in letters read from baseline for patients treated in cohorts 1, 2, and 3 (300, 600, and
1,200 ng per eye).
Figure
1: Improvement of visual acuity in cohorts 1, 2, and 3 at day 14 post dose
7
Analyzing
only the highest dose group (1200 ng per eye, cohort 3), a fundamental mean improvement of visual acuity is seen in the patients,
which started within the first week post injection (day 7) and lasted beyond the last study visit (day 28). Figure 2 shows the
mean letters read change from baseline to study days 7, 14, and 28 for patients treated in cohort 3.
Figure
2: Improvement of visual acuity in cohort 3 on study days 7, 14, and 28
Apart
from improved visual acuity, improvements in vitreous haze and reduction in macular edema were observed in the patients treated
with PP-001.
PaniDrop:
Healthy Volunteers
Phase
1 Safety Study:
A
Phase I safety and tolerability study of PP-001 eye drops in healthy adult volunteers was completed. In this study, healthy volunteers
were repeatedly treated with ascending doses of PP-001 and placebo eyedrops. 0.05 and 0.15% eyedrops showed excellent tolerability.
Both doses can be used for future studies in patients having an infection or inflammation on the ocular surface.
8
OBG:
Corneal Wound Repair
Pivotal
Study:
In
the fourth quarter of 2019, we reported positive topline results from our corneal wound repair pivotal clinical trial of OBG for
the corneal re-epithelialization in patients having undergone PRK surgery. The prospective, controlled study randomized 234 patients
undergoing bilateral PRK surgery and was designed to assess safety and efficacy by comparing EyeGate’s OBG to the current
standard- of-care, a bandage contact lens (“BCL”). The primary endpoint was the proportion of study eyes achieving
complete wound closure on Day 3 (and remaining closed). This assessment was evaluated by an independent masked reading center,
using digital slit-lamp photographs of fluorescein staining in all treated eyes, and a protocol-driven method to quantify the
outcomes.
The
enrolled patients were randomized into one of two study groups, with patients receiving the same treatment in both eyes:
• Arm 1 (n=117) was comprised of OBG QID for two weeks after surgery.
• Arm 2 (n=117) was comprised of BCL administered four times daily.
OBG
demonstrated superiority for the primary endpoint with a p-value of 0.0203. The statistical significance measurement was based
on the number of patients in each arm that achieved complete corneal defect closure three days post refractive surgery. At Day
3, 80.2% of eyes receiving the OBG treatment regimen were completely healed, compared with 67.0% for BCL. Additionally, at Day
2, the average wound size for all eyes treated with OBG was 3.61 mm2, compared to 6.66 mm2 for eyes treated
with BCL, which is 46% smaller than the standard-of-care.
9
OBG:
Punctate Epitheliopathies with a Focus on Dry Eye
Follow-On
Pilot Study:
In
the first quarter of 2020, we reported positive topline results from the follow-on clinical trial of OBG evaluating the potential
to help clinicians better manage patients with dry eye. This positive controlled, investigator masked study enrolled 20 patients,
or 40 eyes, with dry eye. This study confirmed the ability of OBG eye drops to demonstrate improvement of the ocular surface for
several important ophthalmic endpoints. OBG eye drops showed an improvement in central corneal region staining, high order ocular
aberrations (“HOA”) and best corrected visual acuity (“BCVA”), outperforming the positive control, Allergan’s
Refresh Plus Preservative-Free (“Refresh Plus”) lubricant eye drop.
Prior
to randomization there was a one-week run in period where all patients took Refresh eye drops only in both eyes. Patients with
a corneal staining score of ≥4, using the NEI scale, and a tear film break-up time (“TFBUT”) of ≤7 seconds at
Day 0, or at the end of the 7-day run-in period, then entered the 14-day treatment phase. To be randomized at Day 0, both eyes
had to qualify and have similar scores for staining and TFBUT. The patient acted as their own control and one eye was treated
with Refresh Plus eye drops and the other eye was treated with OBG eye drops.
The
twenty enrolled patients had one eye randomized to the OBG treatment group and the other eye randomized to the Refresh Plus treatment
group, for a total of 40 eyes randomized:
• Arm 1 (n=20 eyes) received OBG eye drops four times daily for four weeks.
The
primary endpoint was based on corneal epithelial healing as measured by fluorescein staining. Punctates are a sign of epithelial
compromise (corneal barrier disruption) which is characterized by a breakdown of the epithelium of the cornea and an increased
permeability to fluorescein dye. Thus, fluorescein dye is used to clinically evaluate the severity of corneal barrier disruption.
The National Eye Institutes (“NEI”) scale was used, which divides the cornea into five different regions. Each region
was scored on a scale from 0 to 3 for a total maximum score of 15 (a higher score represented a more severe disruption of the
corneal barrier). To be randomized into the study, each eye had to have a minimum total score of 4.
At
all visits, all corneal regions were assessed, but of particular interest due to vision quality involvement and corneal sensitivity,
is the central region of the cornea. All 20 patients randomized had a minimum scoring for the whole cornea (i.e., all 5 regions)
of at least 4 (maximum score = 15) in both eyes, and 16 of these patients also had a minimum score of at least 1 (maximum score
= 3) in the central region of the cornea in both eyes. OBG demonstrated a positive treatment effect as compared to Refresh Plus
at both Day 7 and Day 14. The overall improvement (i.e., reduction in staining) at Day 14 was approximately 27% from baseline
versus only approximately 9% for the positive control, Refresh Plus eye drops. OBG also showed improvement more quickly than Refresh
Plus eye drops with an approximately 10% reduction in staining versus an increase in staining of approximately 7% for the Refresh
Plus treatment group.
10
The
uniqueness of OBG is the combination of the high viscosity profile with a high shear rate. This means that with blinking or other
sources of shearing or energy that the viscosity of OBG temporarily drops. Thus, this clinical study was also used to confirm
that OBG does not result in blurriness of vision while on the eye. After all endpoint assessments were completed, one drop of
OBG and one drop of Refresh Plus was instilled onto each eye. This was completed in a masked fashion based on randomization of
each eye per drop. BCVA measurements were taken at 30 and 60 minutes to determine if instillation of either OBG or Refresh Plus
caused blurriness or a change in vision. At all assessment time points there was essentially no change in BCVA for OBG or Refresh
Plus, but OBG did perform better than Refresh Plus. At 30 minutes post instillation, OBG saw a negative change of 0.4% versus
a negative change of 1.0% for Refresh Plus. At 60 minutes, OBG had a positive effect of 0.2% versus a negative effect of 0.3%
for Refresh Plus.
11
Clinical
Development Plan
PP-001
The
clinical development plan for all PP-001 routes of delivery is under assessment.
OBG
We
are currently developing OBG as a device but are evaluating the potential to reclassify OBG as a drug. We attended a type-B meeting
with the FDA’s CDER division during the first quarter of 2021 to discuss OBG’s path forward as a drug and will continue
to evaluate the feedback received as we move towards reaching a decision on the reclassification.
12
Intellectual
Property and Proprietary Rights
Overview
We
are building an intellectual property portfolio for our PP-001 and modified HA platforms and any other product candidates that
we may develop, as well as other devices and product candidates for treatment of ocular indications in the U.S. and abroad. We
currently seek, and intend to continue to seek, patent protection in the U.S. and internationally for our product candidates,
methods of use, and processes for manufacture, and for other technologies, where appropriate. Our current policy is to actively
seek to protect our proprietary position by, among other things, filing patent applications in the U.S. and abroad relating to
proprietary technologies that are important to the development of our business. We also rely on, and will continue to rely on,
trade secrets, know-how, continuing technological innovation and in-licensing opportunities to develop and maintain our proprietary
position. We cannot be sure that patents will be granted with respect to any of our pending patent applications or with respect
to any patent applications filed by us in the future, nor can we be sure that any of our existing patents or any patents that
may be granted to us in the future will be commercially useful in protecting our technology.
Our
success will depend significantly on our ability to obtain and maintain patent and other proprietary protection for the technologies
that we consider important to our business, our ability to defend our patents, and our ability to preserve the confidentiality
of our trade secrets and operate our business without infringing the patents and proprietary rights of third parties.
Patent
Portfolio
Our
patent portfolio includes drug delivery device patents directed to PP-001 as composition-of-matter, formulations thereof and its
therapeutic uses in the treatment of viral and ocular disorders and diseases. In addition, further patent applications are directed
to the modified HA platform in combination with active therapeutics to treat ocular diseases. These issued patents will expire
between 2021 and 2036. Given the amount of time required for the development, testing and regulatory review of new product candidates,
patents protecting such candidates might expire before or shortly after such candidates are commercialized. As a result, our owned
and licensed patent portfolio may not provide us with sufficient rights to exclude others from commercializing products similar
or identical to ours. In the future, we intend to apply for restorations of patent term for some of our currently owned or licensed
patents to add patent life beyond their current expiration date, depending on the expected length of clinical trials and other
factors involved in the submission of the relevant new drug application or NDA. See “Government Regulation—Patent
Term Restoration and Marketing Exclusivity” below.
We
and our subsidiaries have been developing drug compositions and drug delivery systems for non-invasive treatment on the eye for
several years. These delivery systems include various patented and patent pending drug delivery devices, active therapeutics and
combination device/therapeutic to treat components of the eye, such as the cornea, sclera, and combinations thereof. These devices
and therapeutics have been further improved to provide better patient comfort levels, patient compliance and recovery times. We
hold 11 U.S. patents and 43 international patents.
13
License
Agreements
We
are a party to four license agreements as described below. These license agreements require us to pay or receive royalties or
fees to or from the licensor based on revenue or milestones related to the licensed technology.
On
July 2, 2013, we (through our Panoptes subsidiary) entered into a patent and know-how assignment agreement with 4SC Discovery
GmbH (“4SC”) transferring to us all patent rights and know-how to the compound PP-001. We are responsible for paying
royalties based on a specified percentage of net sales of PP-001.
On
July 2, 2013, we (through our Panoptes subsidiary) entered into an out-license agreement with 4SC Discovery GmbH (“4SC”)
granting 4SC the exclusive worldwide right to commercialize the compound PP-001 for rheumatoid arthritis and inflammatory bowel
disease, including Crohn’s Disease and Ulcerative Colitis. We are eligible to receive milestone payments totaling up to
155 million euros, upon and subject to the achievement of certain specified developmental and commercial milestones. In addition,
we are eligible to receive royalties based on a specified percentage of net sales of PP-001.
On
September 12, 2013, we (through our subsidiary, Jade Therapeutics, Inc.) entered into an agreement with BioTime, Inc. granting
to it the exclusive worldwide right to commercialize modified HA for ophthalmic treatments in humans. The agreement calls for
a license issue fee paid to BioTime of $50,000 and requires us to pay an annual fee of $30,000 and royalties to BioTime based
on revenue relating to any product incorporating the modified HA technology. The agreement expires when patent protection for
the modified HA technology lapses.
On
September 26, 2018, we entered into an intellectual property licensing agreement (the “SentrX Agreement”) with SentrX,
a veterinary medical device company that develops and manufactures veterinary wound care products. Under the SentrX Agreement,
we will in-license the rights to trade secrets and know-how related to the manufacturing of OBG. The SentrX Agreement will enable
us to pursue a different vendor with a larger capacity for manufacturing and an FDA-inspected facility for commercialization of
a product for human use. Under the SentrX Agreement, we paid SentrX an upfront payment of $250,000. SentrX is eligible to
receive milestone payments totaling up to $4.75 million, upon and subject to the achievement of certain specified developmental
and commercial milestones.
We
were previously a party to an exclusive worldwide license agreement with the University of Miami School of Medicine to license
technology relating to our former EyeGate® II Delivery System. This agreement, which was amended in December 2005, required
us to pay to the University of Miami an annual license fee of $12,500. This license also required payments to the University of
Miami upon our achievement of certain milestones. On July 9, 2020, we provided written notice to terminate this agreement effective
90 days from the written notice. Effective October 7, 2020, the Company’s agreement with the University of Miami School
of Medicine terminated.
We
were previously a party to an exclusive worldwide license agreement with the University of Utah Research Foundation to further
the commercial development of the NASH technology, together with alkylated HA. The agreement called for payments due to the University
of Utah, consisting of a license grant fee of $15,000 due within 30 days of signing, and minimum royalty payments, initially $5,000,
and escalating ratably up to $20,000 in 2021. On October 8, 2019, we provided written notice to terminate this agreement effective
120 days from the written notice. Effective February 5, 2020, the Company’s agreement with the University of Utah Research
Foundation terminated.
On
July 9, 2015, we entered into an exclusive worldwide licensing agreement with a subsidiary of Bausch Health Companies, Inc. (“BHC”),
through which we granted BHC exclusive, worldwide commercial and manufacturing rights to our EGP-437 Combination Product in the
field of anterior uveitis, as well as a right of last negotiation to license the EGP-437 Combination Product for other indications.
Under the agreement, BHC paid us an upfront payment of $1.0 million. We were eligible to receive milestone payments totaling up
to $32.5 million, upon and subject to the achievement of certain specified developmental and commercial milestones. In addition,
we were eligible to receive royalties based on a specified percentage of net sales of the EGP-437 Combination Product throughout
the world, subject to adjustment in certain circumstances. BHC voluntarily terminated this license agreement effective March 14,
2019.
On
February 21, 2017, we entered into an exclusive, worldwide licensing agreement with a subsidiary of BHC (the “New BHC Agreement”),
through which we granted BHC exclusive, worldwide commercial and manufacturing rights to our EGP-437 Combination Product in the
field of ocular iontophoretic treatment for post-operative ocular inflammation and pain in ocular surgery patients (the “New
Field”). Under the New BHC Agreement, BHC paid us an initial upfront payment of $4.0 million, and we were eligible to receive
milestone payments totaling up to approximately $99.0 million, upon and subject to the achievement of certain specified developmental
and commercial progress of the EGP-437 Combination Product for the New Field. In addition, we were eligible under the New BHC
Agreement to receive royalties based on a specified percentage of net sales of the EGP-437 Combination Product for the New Field
throughout the world, subject to adjustment in certain circumstances. BHC voluntarily terminated this license agreement effective
March 14, 2019.
14
Confidential
Information and Inventions Assignment Agreements
We
currently require and will continue to require each of our employees and consultants to execute confidentiality agreements upon
the commencement of such individual’s employment, consulting, or collaborative relationships with us. These agreements provide
that all confidential information developed or made known during the course of the relationship with us be kept confidential and
not disclosed to third parties except in specific circumstances.
In
the case of employees, the agreements provide that all inventions resulting from such individual’s work performed for us,
utilizing our property, or relating to our business and conceived or completed by the individual during employment shall be our
exclusive property to the extent permitted by applicable law. Our consulting agreements also provide for assignment to us of any
intellectual property resulting from services performed by a consultant for us.
Sales
and Marketing
If
PP-001 or OBG is approved by the FDA for commercial sale, we may enter into agreements with third parties to sell PP-001 or OBG,
or we may choose to market these directly to physicians in the United States or globally through our own sales and marketing force
and related internal commercialization infrastructure. If we market PP-001 or OBG directly, we will need to incur significant
additional expenses and commit significant additional management resources to establish and train an internal sales and marketing
force to market and sell PP-001 or OBG.
Manufacturing
We
currently do not have an in-house manufacturing capability for our products and as a result, we will depend heavily on third-party
contract manufacturers to produce and package our products. We currently do not have any contractual relationships with third-party
manufacturers. We intend to rely on third-party suppliers that we have used in the past for the manufacturing of various components
that comprise our PP-001, OBG and other contemplated clinical trials.
Competition
The
biotechnology and pharmaceutical industries are characterized by rapidly advancing technologies, intense competition, and a strong
emphasis on proprietary products. While we believe that our technologies, knowledge, experience, and scientific resources provide
us with competitive advantages, we face potential competition from many different sources, including major pharmaceutical, specialty
pharmaceutical and biotechnology companies, academic institutions and governmental agencies and public and private research institutions.
Any product candidates that we successfully develop and commercialize will compete with existing therapies and new therapies that
may become available in the future.
Our
potential competitors include large pharmaceutical and biotechnology companies, and specialty pharmaceutical and generic drug
companies. Many of our competitors have significantly greater financial resources and expertise in research and development, manufacturing,
preclinical testing, conducting clinical trials, obtaining regulatory approvals, and marketing approved products than we do. These
competitors also compete with us in recruiting and retaining qualified scientific and management personnel and establishing clinical
trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary
for, our programs. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative
arrangements with large and established companies.
The
key competitive factors affecting the success of each of our product candidates, if approved for marketing, are likely to be its
efficacy, safety, method of administration, convenience, price, the level of generic competition and the availability of coverage
and adequate reimbursement from government and other third-party payors.