Item 1A. Risk Factors

Our business involves a high degree of risk. You should consider and read carefully all of the risks and uncertainties described below, as well as other information included in this Annual Report on Form 10-K, including our audited consolidated financial statements and related notes appearing in Item 8 of this Annual Report on Form 10-K. The risks described below are not the only ones facing us. The occurrence of any of the following risks or additional risks and uncertainties not presently known to us or that we currently believe to be immaterial could materially and adversely affect our business, financial condition or results of operations. In such case, the trading price of our common stock could decline, and you may lose all or part of your investment. This Annual Report on Form 10-K also contains forward-looking statements and estimates that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of specific factors, including the risks and uncertainties described below.

Risks Related to Our Business and Products

We have a history of net losses, and we expect to continue to incur losses for the foreseeable future. If we ever achieve profitability, we may not be able to sustain it

We have incurred losses since our inception and expect to continue to incur losses for the foreseeable future. We have reported a net loss of approximately $49.1 million for the year ended December 31, 2023 and a net loss of approximately $33.6 million for the year ended December 31, 2022. As a result of these losses, as of December 31, 2023, we had an accumulated deficit of approximately $248.9 million. We expect to continue to incur net losses for the foreseeable future.

We will continue to incur substantial expenses without corresponding revenues unless and until we are able to obtain regulatory approval or certification and successfully commercialize some of our product candidates. To date, we have generated only limited revenue from our products, and we expect to incur significant expenses to complete our clinical program for our product candidates in the United States and elsewhere. We may never be able to obtain regulatory approval or certification for the marketing of our product candidates in the United States or internationally. Even if we are able to commercialize some of our products or product candidates, there can be no assurance that we will generate significant revenues or ever achieve profitability. We expect to continue to incur significant sales and marketing, research and development, regulatory and other expenses as we expand our marketing efforts to increase adoption of our products, expand existing relationships with our customers, obtain regulatory approvals or certifications for our product candidates, conduct clinical studies on our existing and planned product candidates and develop new product candidates or add new features to our existing products. In addition, we expect our selling, general and administrative expenses to increase due to the additional costs associated with being a public company. The net losses that we incur may fluctuate significantly from

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period to period. As a result of these increased expenditures, we will need to generate significant additional revenue in order to offsetour operating expenses and achieve and sustain profitability. Accordingly, we may not achieve or maintain profitability, and we may continue to incur significant losses in the future. Even if we achieve profitability, we cannot be sure that we will remain profitable for any substantial period of time. If we do not achieve or sustain profitability, it will be more difficult for us to finance our business and accomplish our strategic objectives, either of which would have a material adverse effect on our business, financial condition, results of operations and prospects and may cause the market price of our common stock todecline.

We currently have a limited operating history and limited sources of revenue and may never become profitable

We commenced substantive operations in 2018. Our wholly-owned subsidiary Caliber Therapeutics, LLC (“Caliber”) commenced operations in 2008, our wholly-owned subsidiary BackBeat Medical, LLC (“BackBeat”) commenced operations in 2010 and our wholly-owned subsidiary FreeHold Surgical, LLC (“FreeHold”) commenced operations in 2010. Our limited operating history makes it difficult to evaluate our current business and predict our future results, prospects or viability. To date, we have not generated significant revenue. Our ability to generate substantial revenue and ultimately become profitable depends primarily upon our ability, alone or with our partners, to successfully obtain regulatory approval and certificationforandsuccessfullycommercializeourproductcandidates.Ourabilitytogeneratefuturerevenue from our products or any existing or future product candidates also depends on a number of additional factors, including our or our partners’ abilityto:

• successfully develop the manufacturing processes for our product candidates;

• achieve market acceptance for our products;

• establish, maintain and protect our intellectual property rights; and

• attract, hire and retain qualified personnel.

In addition, because of the numerous risks and uncertainties associated with drug/device and software/ device combination product development, including that our product candidates may not advance through development or achieve the endpoints of applicable clinical studies, we are unable to predict the timing or amount of our expenses, or if or when we will achieve or maintain revenues or profitability. In addition, our expenses could increase beyond expectations if we decide to or are required by the FDA or foreign regulatory authorities or notified bodies to perform non-clinical tests or clinical studies or trials for our product candidates in addition to those that we currently anticipate. If we complete the development and regulatory processes of our product candidates, we or our partners anticipate incurring significant costs associated with launching and commercializing our product candidates. Even if we generate revenuesfrom the sale of our

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products (or through the sale of products by our partners), we may not be profitable and may need to obtain additional funding to continue operations. If we fail to achieve profitability or do not sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and be forced to reduce our operations.

If we do not achieve our projected development and commercialization goals, our business may be harmed

For planning purposes, we estimate the timing of the accomplishment of various scientific, clinical, regulatory and other product development and commercialization goals, which we sometimes refer to as milestones. These milestones include the commencement or completion of scientific studies and clinical studies and the submission of regulatory applications. We base these milestones on a variety of assumptions, which are subject to numerous risks and uncertainties. Further, our collaboration agreement with Terumo, as further described herein, includes payments tied to the achievement of certain milestones, which in some cases, must be achieved by a specified calendar date. Other future collaboration agreements may have similar provisions. There is a risk we will not achieve these milestones on a timely basis or at all. Even if we achieve these milestones, the actual timing of the achievement of these milestones can vary dramatically comparedtoourestimates,oftenforreasonsbeyondourcontrol,dependingonnumerousfactors,including:

• adverse reactions reported during clinical studies or commercialization;

• other actions by regulators, including actions related to a class of products.

If we do not meet these milestones for our products or if we are delayed in achieving these milestones, the development and commercialization of new product candidates, modifications of existing products or salesofexistingproductsfornewindicationsmaybepreventedordelayed,whichcoulddamageourreputation or materially adversely affect our business. Further, we may not receive milestone-based payments from partners on a timely basis or at all, which may have an adverse impact on our anticipated financial resources. In addition, Terumo has the right to terminate, and other partners may have the right to terminate or renegotiate, agreements if certain milestones are not achieved at all or on a timely basis. Even if we achieve a milestone for a product or product candidate, market acceptance for the product or product candidate isnot assured. See “— Risks Related to Our Reliance on Third Parties — We did not meet the target achievement dates relating to certain milestone payments, and we do not expect to meet certain other target achievement dates relating to additional milestone payments, under the Terumo Agreement, and we may not be able to restructure the Terumo Agreement in a manner that provides us with a satisfactory amount of additional capital.”

The clinical study process required to obtain regulatory approvals or certifications carries substantial risks and is lengthy and expensive with uncertain outcomes. If our clinical studies are unsuccessful or significantly delayed, or if we do not complete our clinical studies, our business may be harmed

In order to obtain approval of a PMA from the FDA for a device-led combination product candidate, such as our Virtue SAB, or for device candidates like BackBeat CNT or CNT-HF which are designed to be integrated with the collaboration of device manufacturers into their existingmedical devices such as pacemakers, as well as other future product candidates, or marketing approval for an NDA, such as our extended release formulation of sirolimus called “SirolimusEFR,” we must conduct well-controlled clinical studies designed to assess the safety and efficacy of the product candidate, in addition to nonclinical and other product development studies. Clinical development is a long, expensive and uncertain process and is

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subject to delays and to the risk that products may not ultimately adequately demonstrate safety or effectiveness in treating the indicationsfor whichtheyaredesigned.Completionoftheclinicalstudiesrequiredtosupportamarketingauthorization usuallytakes several years or more. We cannot assure you that we will successfully complete clinical testing of our productswithintheperiodswehaveplanned,oratall.Evenifweachievepositiveinterimorpreliminary resultsinclinicalstudies,theseresultsdonotnecessarilypredictfinalresults,andpositiveresultsinearlytrials donotnecessarilyindicatesuccessinlatertrials.Moreover,preclinicalandclinicaldataareoftensusceptible tovaryinginterpretationsandanalyses,andmanycompanieshavesufferedsignificantsetbacksinadvanced clinicalstudies,evenafterreceivingpositiveresultsinearliertrials.Anyofourproductsmaymalfunctionor mayproduceundesirableadverseeffectsthatcouldcauseusorregulatoryauthoritiestointerrupt,delay orhaltclinicalstudies.We,theFDA,oranotherregulatoryauthoritymaysuspendorterminateclinical studiesatanytimetoavoidexposingtrialparticipantstounacceptablehealthrisks.

Additionally, the FDA or other regulatory authorities or notified bodies may disagree with our interpretation of the data from our preclinical studies and clinical studies, or may find the clinical study design,conductorresultsinadequatetodemonstratesafetyorefficacy,andmayrequireustopursueadditional preclinicalstudiesorclinicalstudies,whichcouldfurtherdelayorpreventtheapprovalorcertificationofour products. The data we collect from our preclinical studies and clinical studies may not be sufficient to supportpotentialFDAorforeignapprovalorcertification,andifweareunabletodemonstratethesafety and efficacy of our product candidates in our clinical studies, we will be unable to obtain regulatory approval or certification to market our products.

We have in the past and may in the future experience unforeseen events during, or because of, the clinical study process that could delay or prevent us from receiving regulatory approval or certification for new products, modification of existing products, or approval or certification of new indications for existing products including:

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• the cost of clinical studies may be greater than we anticipate;

• we may have trouble in managing multiple clinical sites;

Patient enrollment in clinical studies and completion of patient follow-up depend on many factors, including the size of the patient population, the nature of the trial protocol, the proximity of patients to clinical sites, the eligibility criteria for the clinical study, patient compliance, competing clinical studies and clinicians’ and patients’ perceptions as to the potential advantages of the product candidate being studied in relation to other available therapies, including any new treatments that may be approved for the indications weareinvestigating.Inaddition,patientsparticipatinginourclinicalstudiesmaydropoutbeforecompletion of the trial or experience adverse medical events unrelated to our product candidates. Delays in patient enrollment or failure of patients to continue to participate in a clinical study may delay commencement or completionoftheclinicalstudy,causeanincreaseinthecostsoftheclinicalstudyanddelays,orresultinthe failure of the clinical study. In addition, we may in the future experience disruptions caused by pandemics, whichmay increase the likelihood that we encounter such difficulties or delays in initiating, enrolling, conducting or completing our planned and ongoing clinicalstudies.

We could also encounter delays if a clinical study is suspended or terminated by us, by the IRBs of the institutions at which such studies are being conducted, by the Data Safety Monitoring Board for such trial or by the FDA or other regulatory authorities. Such authorities may impose such a suspension or termination due to a number of factors, including failure to conduct the clinical study in accordance with regulatory requirements or our clinical protocols, results of regulatory inspection of the clinical study operations or trial site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issuesor adverse side effects, failure to demonstrate a benefit from using

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the investigational product, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical study. If we experience delays in the completion of, or termination of, any clinical study, the approval, certification and commercial prospects of our device will be harmed, and our ability to generate product revenues from any of these product candidates will be delayed. In addition, any delays in completing our clinical studies will increase our costs, slow down the approval or certification process and jeopardize our ability to commence product sales and generate revenues. Any of these occurrences may harm our business, financial condition and prospects significantly. In addition, many of the factors that cause, or lead to, a delay in the commencement or completion of clinical studies may also ultimately lead to the denial of regulatory approval of our product candidates.

Failuresorperceivedfailuresinourclinicalstudieswilldelayandmaypreventourproductcandidatedevelopment and regulatory approval or certification process, damage our business prospects and negatively affect our reputation and competitiveposition

Failure can occur at any stage of clinical testing. Our clinical studies may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical and non-clinical testing in addition to those we have planned. Our failure to adequately demonstrate the safety and efficacy of our system or any product we may develop in the future would prevent receipt of regulatory approval or certification and, ultimately, the commercialization of that product or indication for use. Further, regulators may determine that our financial relationships with certain principal investigators who provideuswithconsultingservicesfromtimetotimeforwhichweseparatelycompensatethemresultedina perceived or actual conflict of interest that may have affected the interpretation of a study, the integrity of thedatageneratedattheapplicableclinicalstudysiteortheutilityoftheclinicalstudyitself.Evenifourfuture products are approved in the United States, commercialization of our product candidates in foreign countries would require approval by regulatory authorities or certification by notified bodies in those countries. Approval and certification procedures vary among jurisdictions and can involve requirements andadministrativereviewperiodsdifferentfrom,andgreaterthan,thoseintheUnitedStates,and may necessitate additional preclinical studies or clinical studies. Any of these occurrences could have an adverse effect on our business, financial condition and results of operations.

Clinical studies must be conducted in accordance with the laws and regulations of the FDA and other applicable regulatory authorities’ legal requirements, regulations or guidelines, and are subject to oversight bythesegovernmentalagenciesandIRBsatthemedicalinstitutionswheretheclinicalstudiesareconducted. In addition, clinical studies must be conducted under GCPs with supplies of our product candidates produced under cGMP and/or FDA’s QSR and other requirements. Furthermore, we rely on CROs, consultants and clinical study sites to ensure the proper and timely conduct of our clinical studies and while we have agreements governing their committed activities, we have limited influence over their actual performance. We depend on our collaborators and on medical institutions and CROs to conduct our clinical studies in compliance with GCP requirements. To the extent our collaborators or the CROs fail to enroll participants for our clinical studies, fail to conduct the study to GCP standards or are delayed for a significanttimeintheexecutionoftrials,includingachievingfullenrollment,wemaybeaffectedbyincreased costs, program delays or both. In addition, clinical studies that are conducted in countries outside the UnitedStatesmaysubjectustofurtherdelaysandexpensesasaresultofincreasedshipmentcosts,additional regulatory requirements and the engagement of non-U.S. CROs, as well as expose us to risks associated with clinical investigators who are unknown to the FDA, and different standards of diagnosis, screening and medicalcare, and sufficient heterogeneity in clinical patient populations to support approval.

Even if we obtain all necessary FDA approvals, our product candidates may not achieve or maintain market acceptance and may be subject to additional regulatory requirements post-approval

Even if we obtain FDA approval of our product candidates, or new indications for our products, market acceptance of our products in the healthcare community, including physicians, patients and third-party payors, will depend on many factors, including:

• the availability of alternative treatments;

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• customer demand;

• liability risks generally associated with the use of new product candidates;

• the training required to use a new product candidate;

• the marketing and distribution support for our products.

Even if we obtain all necessary FDA approvals, our products may fail to achieve market acceptance. If our products achieve market acceptance, they may not maintain that market acceptance over time if competingproductsortechnologiesareintroducedthatarereceivedmorefavorablyoraremorecost-effective. Failure to achieve or maintain market acceptance would limit our ability to generate revenue and would haveamaterialadverseeffectonourbusiness,financialcondition,resultsofoperationsandprospects. Further,ourproductsaresubjecttoongoingregulatoryoversightandmayrequireadditionalclinicaldatato support maintenance of regulatoryapprovals.

We may be unable to compete successfully with larger companies in our highly competitive industry

The medical technology and pharmaceutical industries are highly competitive and the medical device industry is characterized by rapid and significant change. Many of our current and potential competitors have substantially greater financial, manufacturing, marketing, and technical resources than we do. Larger competitors may have substantially larger sales and marketing operations than we or our partners have or plan to have and may have greater name recognition. This may allow those competitors to spend more timewithpotentialcustomersandtofocusonalargernumberofpotentialcustomers,whichwouldgive them a significant advantage over the sales and marketing team we would use and our international distributors in makingsales.

Larger competitors may also have broader product lines, which enable them to offer customers bundled purchase contracts and quantity discounts. These competitors may have more experience than we have in research and development, marketing, manufacturing, preclinical testing, conducting clinical studies, obtaining FDA and foreign regulatory approvals or certifications and marketing approved or certified products. Our competitors may discover technologies and techniques, or enter into partnerships and collaborations, to develop competing products that are more effective or less costly than our products or the products we may develop. There can be no assurance that other companies will not succeed in developing or marketing devices and products that are more effective than our technology or products or that would render our technology or products obsolete or noncompetitive. Academic institutions, government agencies, and other public and private research organizations may seek patent protection regarding potentially competitive products or technologies and may establish exclusive collaborative or licensing relationships with our competitors. Our competitors may be better equipped than we are to respond to competitive pressures. Competition will likelyintensify.

Additionally, many companies in the healthcare industry, including healthcare provider systems, are consolidating to create new companies with greater market power, and we expect that to continue. As the healthcare industry consolidates, competition to provide goods and services to industry participants will become more intense. These industry participants may try to use their market power to negotiate price concessions or reductions for medical devices including those produced by us. If we reduce our prices because of consolidation in the healthcare industry, our revenue would decrease and our consolidated earnings, financial condition, or cash flows would suffer.

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Ouroperatingresultsmayfluctuatesignificantly,whichmakesourfutureoperatingresultsdifficulttopredict andcouldcauseouroperatingresultstofallbelowexpectationsoranyguidance we mayprovide

Our quarterly and annual operating results may fluctuate significantly, which makes it difficult for us to predict our future operating results. These fluctuations may occur due to a variety of factors, many of which are outside of our control, including, but not limited to:

• future accounting pronouncements or changes in our accounting policies.

The cumulative effects of these factors could result in large fluctuations and unpredictability in our quarterly and annual operating results. As a result, comparing our operating results on a period-to-period basis may not be meaningful. Investors should not rely on our past results as an indication of our future performance.

This variability and unpredictability could also result in our failing to meet the expectations of industry or financial analysts or investors for any period. If our revenue or operating results fall below the expectations of analysts or investors or below any forecasts we may provide to the market, it could have a material adverse effect on our business, financial condition, results of operations orprospects.

The sizes of the markets for product candidates have not been established with precision, and may be smaller than we estimate

Our estimates of the annual total addressable markets for our product candidates are based on a number of internal and third-party estimates, including, without limitation, the number of patients with specifieddiseasesandtheassumedpricesatwhichwewillbeabletosellanyproductswedevelopinvarious markets. While we believe our assumptions and the data underlying our estimates are reasonable, these assumptions and estimates may not be correct and the conditions supporting our assumptions or estimates maychangeatanytime,therebyreducingthepredictiveaccuracyoftheseunderlyingfactors.Inaddition,our estimates of the sizes of the PAD and CAD patient population may include patients who are asymptomatic

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or in the early stages of disease; these patients might never progress to more advanced disease stages and, accordingly, might never be likely candidates for treatment with our products. As a result, our estimates of the annual total addressable market for our currentorfutureproductsmayprovetobeincorrect.Iftheactualnumberofpatientswhowouldbenefitfrom our products, the price at which we will be able to sell future products, or the annual total addressable market for our products is smaller than we have estimated, it may impair future sales of any product we develop and have an adverse impact on ourbusiness.

Thelong-termmacroeconomiceffectsoftheCOVID-19pandemicandanyfuturepandemicorepidemiccould adverselyimpactourbusiness,includingourclinicalstudiesandfinancialcondition

Outbreaks of contagious disease, including COVID-19, or other adverse public health developments in the U.S. or worldwide could have a material adverse effect on our business, including our clinical trials and financial condition. While many of the direct impacts of the COVID-19 pandemic have eased, the longer-term macroeconomic effects on global supply chains, inflation, labor shortages and wage increases continue to impact many industries, including ours. Moreover, with the potential for new strains of existing viruses to emerge, or other pandemics or epidemics, governments and businesses may re-impose aggressive measures to help slow the spread of disease in the future.

Long-term macroeconomic effects from a pandemic or epidemic, including from supply and labor shortages and workforce reductions in response to challenging economic conditions, may have an adverse impact on our business. In addition, COVID-19 caused, and any future pandemic or epidemic may cause, delayswithrespecttoregulatoryapprovalsorcertificationsforclinicalstudies,theinitiationofclinicalstudies andthecoordinationoffollow-upwithrespecttoclinicalstudies,aswellasdelaysinreceivingsupplies and third-party testing results from vendors. The emergence of a new pandemic or epidemic may also cause us to experience additional disruptions that could severely impact our business and clinical studies, including:

• delays or difficulties in enrolling patients in our clinical studies;

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The full extent of the impact and effects of COVID-19, and any future pandemics or epidemics, will depend on future developments, including, among other factors, how rapidly variants develop, availability, acceptanceandeffectivenessofvaccinesalongwithrelatedtraveladvisories,quarantinesandrestrictions,the recovery time of the disrupted supply chains and industries, the impact of labor market interruptions, the impact of government interventions, and uncertainty with respect to the duration of the global economic slowdown.COVID-19,oranyfuturepandemicsorepidemics,andresultingimpactsonthefinancial,economic and capital markets environment, and future developments in these and other areas presentuncertainty and risk with respect to our business and financial results.

Interim, “top-line” and preliminary data from our clinical studies that we announce or publish from time to timemaychangeasmorepatientdatabecomeavailableandaresubjecttoauditandverificationproceduresthat could result in material changes in the finaldata

From time to time, we may publicly disclose preliminary or top-line data from our preclinical studies and clinical studies, which is based on a preliminary analysis of then-available data, and the results and related findings and conclusions are subject to change following a more comprehensive review of the data related to the particular study or trial. We also make assumptions, estimations, calculations and conclusions as part of our analyses of data, and we may not have received or had the opportunity to fully and carefully evaluate all data. As a result, the top-line or preliminary results that we report may differ from future results of the same studies, or different conclusions or considerations may qualify such results, once additional data have been received and fully evaluated. Top-line data also remain subject to audit and verification proceduresthatmayresultinthefinaldatabeingmateriallydifferentfromthepreliminarydatawepreviously published. As a result, top-line data should be viewed with caution until the final data areavailable.

From time to time, we may also disclose interim data from our preclinical studies and clinical studies. Interim data from clinical studies that we may complete are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available or as patients from our clinical studies continue other treatments for their disease. Adverse differences between preliminary or interim data and final data could significantly harm our business prospects. Further, disclosure of interim data by us or by our competitors could result in volatility in the price of our common stock.

Further, others, including regulatory agencies, may not accept or agree with our assumptions, estimates, calculations,conclusionsoranalysesormayinterpretorweightheimportanceofdatadifferently,whichcould impact the value of the particular program, the approvability or commercialization of the particular productcandidateorproductandourcompanyingeneral.Inaddition,theinformationwechoosetopublicly disclose regarding a particular study or clinical study is based on what is typically extensive information, and you or others may not agree with what we determine is material or otherwise appropriate information to include in our disclosure. If the interim, top-line, or preliminary data that we report differ from actual results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain approval or certification for, and commercialize, our product candidates may be harmed, which could harm our business, operating results, prospects or financialcondition.

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Our product candidates have in the past and may in the future be associated with serious adverse events, undesirable side effects or have other properties that could halt their clinical development, prevent their regulatoryapprovalorcertification,limittheircommercialpotentialorresultinsignificantnegativeconsequences

Adverse events or other undesirable side effects caused by our product candidates could cause us or regulatory authorities to interrupt, delay or halt clinical studies and could result in a more restrictive label or the delay or denial of regulatory approval or certification by the FDA or other comparable foreign regulatory authorities or notified bodies.

During the conduct of clinical studies, patients report changes in their health, including illnesses, injuries, and discomforts, to their study doctor. Often, it is not possible to determine whether the product candidate being studied caused these conditions. It is possible that as we test our product candidates in larger, longer and more extensive clinical studies, or as use of these product candidates becomes more widespread if they receive regulatory approval or certification, illnesses, injuries, discomforts and other adverseeventsthatwereobservedinprevioustrials,aswellasconditionsthatdidnotoccurorwentundetected in previous trials, will be reported by patients. Many times, side effects are only detectable after investigational products are tested in large-scale clinical studies or, in some cases, after they are made available to patients on a commercial scale following approval orcertification.

For example, during the initial study period for MODERATO I, there were eleven SAEs in seven of the 27 study patients. One event was adjudicated as “probably related” to the implant procedure for the Moderato device. Four events in four patients were adjudicated as “possibly related” to the Moderato device (atrial fibrillation, myocardial infarction with symptoms of heart failure, cardiac asthma, and arrhythmia due to ventricular oversensing).

During the extended 21-month follow-up period, that included 24 patients who continued with BackBeat CNT, there were 25 SAEs in twelve patients. Five events in three patients were adjudicated as “possibly” device related. These included two events of atrial fibrillation in the same patient, pneumonia with cardiac decompensation and dyspnea with cardiac decompensation in one patient, and cardiac decompensation in one patient.

For the MODERATO II study, there were no major adverse cardiac events (“MACE”) in the BackBeat CNT group and three MACE in two patients in the control group (one death from cancer and two cardiac events)atsixmonths.Duringtherandomizedphaseofthestudy,therewereeightSAEsinfourpatientsinthe control group (n=21) and none in the treatment group (n=26). During the extended 18-month follow-up period that included treatment patients (n=26) and crossover-to-treatment patients (n=14), therewere 26 SAEs in 16 patients. Over the entire three-year period of the SABRE study, a total of 66 SAEs occurred in 32 of the 50 study patients.

Ifanyseriousadverseeventsoccur,clinicalstudiesorcommercialdistributionofanyproductcandidates orproductswedevelopcouldbesuspendedorterminated,andourbusinesscouldbeseriouslyharmed. Treatment-related side effects could also affect patient recruitment and the ability of enrolled patients to complete the trial or result in potential liability claims. Regulatory authorities could order us to cease clinical studies, deny approval of, or require us to cease selling any product candidates or products for any or all targeted indications. If we are required to delay, suspend or terminate any clinical study or commercialization efforts, the commercial prospects of such product candidates or products may be harmed, and our ability to generate product revenues from them or other product candidates that we developmay be delayed or eliminated. Additionally, if one or more of our product candidates receives marketing approval or certification and we or others later identify undesirable side effects or adverse events caused by such products, a number of potentially significant negative consequences could result, including but not limited to:

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approval studies;

• we could be sued and held liable for harm caused to patients; and

• our reputation may suffer.

Any of these events could prevent us from achieving or maintaining market acceptance of the particular product candidate, if approved or certified, and could seriously harm our business.

We depend on attracting, retaining and developing key management, clinical, scientific, regulatory, quality, marketingandotherexpertpersonnel,andlosingthesepersonnelcouldimpairthedevelopmentandsalesofour products or productcandidates

We are highly dependent on our senior management and other key personnel. Our success depends on our continued ability to attract, retain, develop and motivate highly qualified management, clinical, scientific and sales and marketing personnel. Although we have entered into employment agreements with certain of our executive officers, our employees, including our executive officers, are employed “at will,” and each employee can terminate his or her employment with us at any time. We also do not maintain “key person” insurance policies on any of our officers or our other employees. The competition for qualified personnel in the medical innovation industry is intense, and we may incur significant costs to attract and retain them. Wewillneedtohireadditionalpersonnelaswecontinuetoexpandourdevelopmentactivitiesanddrivesales of our products or product candidates. We may not attract, retain and develop quality personnel on acceptable terms due to the competition for such personnel. If we are not able to attract and retain necessary personnel to accomplish our business objectives, we may experience constraints that will significantly impede the achievement of our development objectives, our ability to raise additional capital and our ability to implement our businessstrategy.

If we make acquisitions, we could incur significant costs and encounter difficulties that harm our business

In the ordinary course of our business, we expect to from time to time evaluate the acquisition of, investment in or in-license of complementary products, technologies or businesses, although we do not currently have any agreements, arrangements or commitments with respect to any potential acquisition, investmentorlicense.Ifweengageinsuchacquisitions,investmentsorin-licenses,wemayincursignificant transaction and integration costs and have difficulty integrating the acquired personnel, operations, productsortechnologiesorotherwiserealizingsynergiesorotherbenefitsfromtheacquisitions,investments or in-licenses. The integration process could result in the loss of key employees, loss of key customers, loss ofkeyvendors,decreasesinrevenueandincreasesinoperatingcosts,aswellasthedisruptionofourbusiness.

Acquisitions may disrupt our ongoing business, divert the time of our management and employees, increase our expenses, subject us to liabilities and increase our risk of litigation, all of which could harm our business. If we use cash to acquire companies, products or technologies, it may divert resources otherwise available for other purposes or increase our debt. If we use our capital stock to acquire companies, products or technologies, we may experience a change of control or our stockholders may experience substantial dilution or both. In addition, anticipated benefits of any future acquisitions may not materialize. Any of these risks, if realized, could materially and adversely affect our business, financial condition, results of operation andprospects.

If we do not manage our growth or control costs related to growth, our results of operations will suffer

Weintendtogrowourbusinessbycommercializingourproductcandidateswithpartnerswhenapproved and, expanding our product development pipeline, possibly through acquisitions or other business combinations. Growth could place significant strain on our management, employees, operations, operating andfinancialsystems,andotherresources.Toaccommodatesignificantgrowth,wecouldberequiredtoopen additional facilities, expand and improve our information

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systems and procedures and hire, train, motivate and manage a growing workforce, all of which would increase our costs. Our systems, facilities, procedures and personnel may not be adequate to support our future operations. Further, we may not maintain or accelerate our current growth, manage our expanding operations or achieve planned growth on a timely and profitablebasis.

Litigation and other legal proceedings may adversely affect our business

From time to time we may be involved in various litigation matters, which could have an adverse impact on our reputation, business and financial condition and divert the attention of our management from the operation of our business. Claims arising out of actual or alleged violations of the law could be assertedagainstusbyindividuals,eitherindividuallyorthroughclassactions,bygovernmentalentitiesincivil or criminal investigations and proceedings by other entities. These claims could be asserted under a variety of laws, including but not limited to patent, trade secret and other intellectual property matters, product liabilityclaims,employeeclaims,tortorcontractclaims,andfederalregulatoryinvestigations.These actions could expose us to adverse publicity and to substantial monetary damages and legal defense costs, injunctive relief and criminal and civil fines and penalties.

Productliabilityandotherclaimsagainstusmayreducedemandforourproductsorresultinsubstantial damages

Ourbusinessexposesustopotentialliabilityforrisksthatmayarisefromtheclinicaltestingofour productcandidates,theuseofourproductsbyphysicians,andthemanufactureandsaleof anyapproved products.Individualsmaybringaproductliabilityclaimsagainstus,includingfrivolouslawsuits,ifoneofour productscauses,ormerelyappearstohavecaused,aninjury.

We currently have product liability insurance for $6.0 million per occurrence with an annual aggregate maximum of $6.0 million.

We cannot assure, however, that product liability claims will not exceed our insurance coverage limits orthatsuchinsurance coverage limitswillcontinuetobeavailableonacceptableterms,or at all. Ourinsurers may also claim that certain claims are not within the scope of our product liability insurance. A product liability claim, recall, or other claim regarding uninsured liabilities or for amounts over insured liabilities could have a material adverse effect on our business, financial condition, results of operations andprospects. Any product liability claim or series of claims or class actions brought against us, with or without merit, could resultin:

• withdrawal of clinical study volunteers or subjects;

• damage to our reputation and the reputation of our product candidates;

• litigation costs; and

• diversion of our management’s attention from managing our business.

Themisuseor promotion ofoff-labelusesofourproductsmayharmourreputationinthemarketplace,resultininjuriesthat lead to product liability suits or result in costly investigations, fines or sanctions by regulatory bodies,anyofwhichcouldbecostlytoourbusiness

Any products that we market will be approved for specific indicated uses and subject to limitations on those uses as specified in their respective approved for certified labeling. Uses outside of the approved or certified indications for use are known as “off-label uses.” We cannot prevent a physician from using our products off-label in the physician’sindependent

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professionalmedicaljudgment. However, theremaybeincreased risk of injury to patients if physicians attempt to use our products off-label. Furthermore, the use of our products for indications, other than those approved or certified by the FDA or by any foreign regulatory authority or notified body, may not effectively treat such conditions, which could harm our reputation in the marketplace among physicians andpatients.

The FDA and other regulatory agencies strictly regulate the promotional claims that may be made about prescription products, such as our product candidates, if approved or certified. With only limited exceptions, a product generally may not be promoted for off-label uses. If the FDA or any foreign regulatory body determines that our promotional materials or training constitute promotion of an off-label use, it could request that we modify our training or promotional materials or subject us to regulatory or enforcement actions, including the issuance or imposition of an untitled letter, which is used for violators that do not necessitate a warning letter, injunction, seizure, civil fine or criminal penalties. It is also possible that other federal, state or foreign enforcement authorities might take action under other regulatory authority, such as false claims laws, if they consider our business activities to constitute promotion of an off-label use, which could result in significant penalties, including, but not limited to, criminal, civil and administrative penalties, damages, fines, disgorgement, exclusion from participation in government healthcare programs and the curtailment of ouroperations.

In addition, physicians may misuse our products, or use improper techniques if they are not adequately trained, potentially leading to injury and an increased risk of product liability. If so, we may become subject to costly litigation by our customers or their patients. Product liability claims could divert management’s attention from our core business, be expensive to defend and result in sizable damage awards against us that may not be covered by insurance.

Our information technology systems, or those of any of our CROs, manufacturers, other contractors, consultants, collaborators or potential future collaborators, may fail or suffer security or data privacy breaches or other unauthorized or improper access to, use of, or destruction of our proprietary or confidential data, employee data, or personal data, which could result in additional costs, loss of revenue, significant liabilities, harm to our brand and material disruption of our operations

Despitetheimplementationofsecuritymeasures,ourinformationtechnologysystemsandthoseof ourcurrentandanyfutureCROsandothercontractors,consultants,collaboratorsandthird-partyservice providers, are vulnerable to attack and damage from computer viruses and malware (e.g., ransomware), malicious code, hacking, cyberattacks, phishing attacks and other social engineering schemes, cybersecurity threats, unauthorized access, natural disasters, terrorism, war, telecommunication and electrical failure, employeetheftormisuse,humanerror,fraud,denialordegradationofserviceattacks,sophisticatednation-stateandnation-state-supportedactorsorunauthorizedaccessorusebypersonsinsideourorganization, orpersonswithaccesstosystemsinsideourorganization.Attacksuponinformationtechnologysystemsare increasingintheirfrequency,levelsofpersistence,sophisticationandintensity,andarebeingconductedby sophisticatedandorganizedgroupsandindividualswithawiderangeofmotivesandexpertise.Asaresultof more people working remotely since the COVID-19 pandemic, we may also face increased cybersecurity risks due to our reliance on internet technologyandthenumberofouremployeeswhoareworkingremotely,whichmaycreateadditional opportunities for cybercriminals to exploit vulnerabilities. Furthermore, because the techniques used to obtain unauthorized access to, or to sabotage, systems change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques or implement adequate preventativemeasures.Wemayalsoexperiencesecuritybreachesthatmayremainundetectedforanextended period. Even if identified, we may be unable to adequately investigate or remediate incidents or breaches due to attackers increasingly using tools and techniques that are designed to circumvent controls, to avoid detection, and to remove or obfuscate forensicevidence.

We and certain of our service providers are, from time to time, subject to cyberattacks and security incidents. While we do not believe that we have experienced any significant system failure, accident or security breach to date, if such an event were to occur and cause interruptions in our operations or result in the unauthorized acquisition of, or access to, personally identifiable information or individually identifiable health information, it could result in a material disruption of our development programs and our business operations, whether due to a loss of our trade secrets or other similar disruptions. Some of the federal, stateandforeigngovernmentrequirementsincludeobligationsofcompaniestonotifyindividualsofsecurity breaches involving particular personally identifiable information, which could result from breaches experienced by us or by our vendors, contractors or organizations with which we have formed strategic relationships.

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Notifications and follow-up actions related to a security breach could impact our reputation, cause us to incur significant costs, including legal expenses and remediation costs. For example, the loss of clinical study data from completed or future clinical studies could result in delays in our regulatory approval or certification efforts and significantly increase our costs to recover or reproduce the lost data. We also rely on third parties to manufacture our product candidates, and similar events relating to their computer systemscouldalsohaveamaterialadverseeffectonourbusiness.Totheextentthatanydisruptionorsecurity breach were to result in a loss of, or damage to, our data, or inappropriate disclosure of confidential or proprietary information, we could be exposed to litigation and governmental investigations, the further development and commercialization of our product candidates could be delayed, and we could be subject to significant fines or penalties for any noncompliance with certain state, federal and/or international privacy and securitylaws.

Our insurance policies may not be adequate to compensate us for the potential losses arising from any such disruption, failure or security breach. In addition, such insurance may not be available to us in the future on economically reasonable terms, or at all. Further, our insurance may not cover all claims made against us and could have high deductibles in any event, and defending a suit, regardless of its merit, could be costly and divert management attention.

Wemustsuccessfullymaintainandupgradeourinformationtechnologysystems,andourfailuretodosocould haveamaterialadverseeffectonourbusiness,financialconditionandresultsofoperations

As we expand, in order to remain competitive, we will need to significantly expand and improve our information technology systems and personnel to support historical and expected future growth. As such, we will continue to invest in and implement, significant modifications and upgrades to our information technology systems and procedures, including replacing legacy systems with successor systems, making changestolegacysystemsoracquiringnewsystemswithnewfunctionality,hiringemployeeswithinformation technology expertise and building new policies, procedures, training programs and monitoring tools. These typesofactivitiessubjectustoinherentcostsandrisksassociatedwithreplacingandchangingthesesystems, fulfill customer orders, potential disruption of our internal control structure, substantial capital expenditures, additional administration and operating expenses, acquisition and retention of sufficiently skilled personnel to implement and operate the new systems, demands on management time and other risks and costs of delays or difficulties in transitioning to or integrating new systems into our current systems. These implementations, modifications and upgrades may not result in productivity improvements at a level that outweighs the costs of implementation, or at all. In addition, difficulties with implementing new technology systems, delays in our timeline for planned improvements, significant system failures, or our inability to successfully modify our information systems to respond to changes in our business needs may cause disruptions in our business operations and have a material adverse effect on our business, financialcondition and results ofoperations.

Economic conditions may adversely affect our business, financial condition and share price

Adverse worldwide economic conditions may negatively impact our business. A significant change in the liquidity or financial condition of our customers could cause unfavorable trends in their purchases and/orinourreceivablecollections,andadditionalallowancesmayberequired,whichcouldadverselyaffect our business, financial condition and results of operations. Adverse worldwide economic conditions may also adversely impact our suppliers’ ability to provide us with materials and components, which could have a material adverse effect on our business, financial condition and results ofoperations.

The global credit and financial markets have recently experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability, declines in consumer confidence, inflation, declines in economic growth, wage inflation because of labor shortages and uncertainty about economic stability. The financial markets and the global economy may also be adversely affected by the current or anticipated impact of military conflict, including the conflict between Russia and Ukraine and the Israeli-Palestinian conflict, terrorism or other geopolitical events. Sanctions imposed by the United States and other countries in response to such conflicts, including the one in Ukraine, may also adversely impact the financial markets and the global economy, and any economic countermeasures by affected countries and others could exacerbate market and economic instability. In addition, the attacks by Hamas on Israel in October 2023, Israel’s response and a potential broader armed conflict in the Middle East are likely to continue impacting the global economy, including that of the United States and have added to concerns of a widening conflict in the Middle

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East. In particular, oil prices have become increasingly volatile in the aftermath of the attacks on Israel. Each of the developments described above, or any combination of them, could adversely affect our businesses, financial condition and results of operations. There can be no assurance that further deterioration in credit and financial markets andconfidenceineconomicconditionswillnotoccur.Ourgeneralbusinessstrategymaybeadverselyaffected by any such economic downturn, volatile business environment or continued unpredictable and unstable market conditions. If the current equity and credit markets deteriorate, it may make any necessary debt or equityfinancingmoredifficult,morecostlyandmoredilutive.Thesedevelopments,ortheperceptionthatany of them could occur, may restrict the ability of key market participants to operate in certain financial markets or restrict our access to capital. For example, there is a risk that one or more of our current service providers, manufacturers and other partners may not survive an economic downturn, which could directly affect our ability to attain our operating goals on schedule and on budget. Any of these factors could have a material adverse effect on our business, financial condition and results of operations and reduce theprice of our common stock.

Businessdisruptionscouldseriouslyharmourfuturerevenueandfinancialconditionandincreaseourcostsand expenses

Our operations could be subject to power shortages, telecommunications failures, water shortages, floods, hurricanes, typhoons, fires, extreme weather conditions, health epidemics or pandemics or other contagious outbreaks, such as the recent COVID-19 pandemic, and other natural or man-made disasters or business interruptions, for which we are predominantly self-insured. We rely on third-party manufacturers to produce our products and product candidates and/or components thereof. Our ability to obtain clinical supplies of our products and/or components thereof could be disrupted if the operations of these suppliers were affected by a man-made or natural disaster or other business interruption. The occurrence of any of these business disruptions could seriously harm our operations and financial condition and increase our costs andexpenses.

Disruptions at the FDA, other government agencies and notified bodies caused by funding shortages or global healthconcernscouldhindertheirabilitytohire,retainordeploykeyleadershipandotherpersonnel,orotherwise prevent new or modified products from being developed, approved, certified or commercialized in a timely manneroratall,orotherwisepreventthoseagenciesandbodiesfromperformingnormalbusinessfunctionson which the operation of our business may rely, which could negatively impact ourbusiness

The ability of the FDA, other government agencies and notified bodies to review and approve or certify new products can be affected by a variety of factors, including government budget and funding levels, statutory, regulatory and policy changes, the FDA’s or other government agencies’ ability to hire and retain key personnel and accept the payment of user fees, and other events that may otherwise affect the FDA’s, other government agencies’ and notified bodies’ ability to perform routine functions.Average review times at the FDA, other government agencies and notified bodies have fluctuated in recent years as a result. In addition, government funding of other government agencies that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable. Disruptions at the FDA, other agencies and notified bodies may also slow the time necessary for new drugs and medical devices or modifications to approved drugs or approved or certified medical devices to be reviewed and/or approved or certified by necessary government agencies or notified bodies, which would adversely affect our business. For example, over the last several years, the U.S. government has shut down several times and certain regulatory agencies, such as the FDA, have had to furlough critical FDA employees and stop critical activities.

Separately,inresponsetotheCOVID-19pandemic,theFDAhadsignificantlycurtailedandlimitedits inspectionofbothforeignanddomesticfacilities.Furthermore,regulatoryauthoritiesoutsidetheUnited StatesadoptedsimilarrestrictionsorotherpolicymeasuresinresponsetotheCOVID-19pandemic.Ifa prolongedgovernmentshutdownoccurs,orifneworexistingglobalhealthconcernscontinuetohinderor preventtheFDAorotherregulatoryauthoritiesfromconductingtheirregularinspections,reviews,or other regulatory activities, it could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

In addition, in the EU, notified bodies must be officially designated to certify products and services in accordance with the EU MedicalDevicesRegulation.Whileseveralnotifiedbodieshavebeendesignated,currentdesignatednotified bodies are facing a large amount of requests with the new regulation as a consequence of which review times have

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lengthened. This situation may impact the ability of our notified body(ies) to timely review and process our regulatory submissions, and our ability to grow our business in the EEA.

We, in conjunction with our partners, intend to expand sales of our products internationally in the future, but weandourpartnersmayexperiencedifficultiesinobtainingregulatoryapprovalorcertificationorinsuccessfully marketing and distributing our products internationally even if approved or certified. A variety of risks associated with marketing and distributing our products internationally could materially adversely affect our business

Our future growth may depend, in part, on our and our partners’ ability to develop and commercialize our planned and future products in foreign markets. Sales of our products outside of the United States are and will be subject to foreign regulatory requirements governing clinical studies and marketing approval or certification, as well as FDA regulation of the export of drugs and medical devices from the United States. To obtain separate regulatory approval or certification in many other countries we must comply with numerous and varying regulatory requirements regarding safety and efficacy and governing, among other things, clinical studies, commercial sales, pricing and distribution of our planned or future products. We and/or our partners will incur substantial expenses in connection with our expected international expansion. Additional risks related to operating in foreign countries include:

• foreign taxes, including withholding of payroll taxes;

• unexpected changes in tariffs, trade barriers and regulatory requirements;

• difficulties staffing and managing foreign operations;

Theseandotherrisksassociatedwithourinternationaloperationsmaymateriallyadverselyaffectour abilitytoattainormaintainprofitableoperations,whichwouldhaveamaterialadverseeffectonourbusiness, financial condition and results ofoperations.

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Inaddition,therecanbenoguaranteethatwewillreceiveapprovalorcertificationtosellourproduct candidatesinanyinternationalmarketwetarget,norcantherebeanyguaranteethatanysaleswouldresult, evenifsuchapprovalorcertificationisreceived.EveniftheFDAgrantsmarketingapprovalforaproduct candidate,comparableregulatoryauthoritiesornotifiedbodiesofforeigncountriesmustalsoapproveor certifythemanufacturingormarketingoftheproductcandidateinthosecountries.Approvalinthe United States, or in any other jurisdiction, does not ensure approval or certification in other jurisdictions. Obtainingforeignapprovalsorcertificationscouldresultinsignificantdelays,difficultiesandcostsforusand require additional trials and additional expenses. Regulatory requirements can vary widely from country to country and could delay the introduction of our products or product candidates in those countries. Marketing authorization by the FDA does not ensure registration, certification, clearance or approval by regulatory authorities or notified bodies in other countries, and registration, certification, clearance or approval by one or more foreign regulatory authorities or notified bodies does not ensure registration, clearance, certification or approval by regulatory authorities or notified bodies in other foreign countries or by the FDA. However, a failure or delay in obtaining registration or regulatory clearance, certification or approval in one country may haveanegativeeffectontheregulatoryprocessinothers.Clinicalstudiesconductedinonecountrymay not be accepted by other countries. If we fail to comply with these regulatory requirements or toobtain and maintain required approvals or certifications, our target market will be reduced and our ability to generaterevenuewillbediminished.Ourinabilitytosuccessfullyenter allourdesiredinternationalmarkets and manage business on a global scale could negatively affect our business, financial results and results of operation.

We may in the future bring certain cGMP product release testing, stability testing and cGMP pharmaceutical manufacturing capabilities in-house, and we may not be able to do so successfully or in compliance with FDA regulations

We have brought certain activities that we previously outsourced to third parties, in-house, and we may bringcertainadditionalactivitiesin-houseinthefuture.Forexample,wehavebroughtcertaincGMPproduct release testing related to SirolimusEFR in-house. In addition, we may eventually bring the manufacture of pharmaceutical drug products, such as SirolimusEFR, in-house. To the extent we do bring these functions in-house, we will be directly subject to FDA and other regulations with respect to these activities, such as the FDA’s good laboratory practice requirements, cGMP regulations and similar foreign requirements. We cannotprovideassurancethatwewillbeabletoperformthesefunctionseffectivelyorcomplywithapplicable regulations if we bring these functionsin-house.

We may expend our limited resources to pursue a particular product or indication and fail to capitalize on products or indications that may be more profitable or for which there is a greater likelihood of success

Because we have limited financial and managerial resources, we focus on specific products and product candidates, indications and discovery programs. As a result, we may forgo or delay pursuit of other opportunitieswithothersthatcould have hadgreatercommercialpotential.Ourresourceallocationdecisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities. Our spending on current and future research and development programs for specific indications may not yield any commercially viable products. If we do not accurately anticipate physician and patient needs, as well as evaluate the commercial potential or target market for a particular potential product, we may miss valuable product development opportunities or we may relinquish valuable rights to that potential product through future collaborations, licenses and other similar arrangements in cases in which it would have been more advantageous for us to further advance development or to retain sole development and commercialization rights to such potentialproduct.

Our ability to utilize our net operating loss carryforwards and certain other tax attributes may be limited

As of December 31, 2023, we had gross net operating loss (“NOL”) carryforwards of approximately $135.1 million for federal income tax purposes, and $113.5 million for state income tax purposes, and approximately $6.1 million of federal research and development tax credits, after applying limitations under Section 382 and Section 383 of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”). Utilization of these NOLs depends on many factors, including our future income, which cannot be assured. Some of these NOLs could expire unused and be unavailable to offset our future income tax liabilities. In addition, under Section 382 of the Internal Revenue Code, and corresponding provisions of statelaw,ifacorporationundergoesan“ownershipchange,”whichisgenerallydefinedasagreaterthan50%

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change, by value, in its equity ownership by 5% stockholders over a three-year period, the corporation’s ability to use its pre-change NOLs and other pre-change tax attributes to offset its post-change income may be limited. We have experienced Section 382 ownership changes in the past, and the federal NOL disclosed above reflects the impact of the calculated Section 382 limitation. In addition, we may experience additional ownership changes in the future as a result of subsequent changes in our stock ownership, some of which may be outside of our control. If we determine that an ownership change has occurred and our ability to use ourhistoricalNOLsismateriallylimited,itcouldharmourfutureoperatingresultsbyeffectivelyincreasing our future tax obligations. In addition, under the Tax Cuts and Jobs Act of 2017 (the “Tax Act”),future tax losses may be utilized to offset no more than 80% of the taxable income annually. There is also a risk that due to statutory or regulatory changes or other unforeseenreasons,ourfutureNOLscouldexpireorotherwisebeunavailabletooffsetfutureincometax liabilities.Forthesereasons,wemaynotbeabletorealizeataxbenefitfromtheuseofanyfutureNOLswe generate,whetherornotweattainprofitability.AsofDecember31,2023and2022,werecorded a full valuation allowance on our deferred tax assets.

Changes in tax laws could adversely affect the taxes we pay and, as a result, adversely affect our financial condition and results of operations

Tax laws, regulations, and administrative practices may be subject to significant change, with or without notice, due to economic, political and/or other conditions, and significant judgment is required in applying the relevant provisions of tax law. If such changes were to be adopted or if the tax authorities were to challenge our application of relevant provisions of applicable tax laws, our financial condition and results of operations could be adverselyaffected.

In particular, the U.S. government may enact significant changes to the taxation of business entities including, among others, an increase in the corporate income tax rate, the imposition of minimum taxes or surtaxesoncertaintypesofincome,significantchangestothetaxationofincomederivedfrominternational operations,andanadditionoffurtherlimitationsonthedeductibilityofbusinessinterest.Forexample, the Inflation Reduction Act of 2022 enacted on August 16, 2022, among other provisions, imposes a 15% minimumtaxontheadjustedfinancialstatementincomeofcertainlargecorporations,aswellasa1%excise tax on corporate stock repurchases by publicly traded companies. This act, as well as any other changes to taxlawsthatareenacted,couldadverselyaffectourtaxliability.Whilecertainotherdraftlegislationhasbeen publicly released and is under development in Congress at this time, the likelihood of these changes being enactedorimplementedisunclear.Wearecurrentlyunabletopredictwhethersuchchangeswilloccur.Ifsuch changes are enacted or implemented, we are currently unable to predict the ultimate impact on our business andthereforetherecanbenoassuranceourbusinesswillnotbeadverselyaffected.

Risks Related to Our Reliance on Third Parties

We are, and expect to continue to be, highly dependent on partners to drive the successful marketing and sale of our initial product candidates. There is no assurance that we will be able to form and properly manage partnerships. There is no assurance that partnerships will be successful

We intend to primarily pursue licensing and distribution arrangements with strategic partners to commercialize and sell our product candidates. As such, licensing and collaboration payments, including upfrontandmilestonepayments,aswellasroyaltiesandrevenuesharingarrangementsrelatedtoourproducts and product candidates, will account for substantially all of our revenue for the foreseeable future. Any of these relationships may require us to incur non-recurring and other charges, increase our near and long-term expenditures, issue securities that dilute our existing stockholders or disrupt our management and business. In addition, we face significant competition in seeking appropriate strategic partners and the negotiation processistime-consumingandcomplex.Wehavelimitedexperienceinnegotiating,establishingandmanaging such collaborations and we may be unable to successfully form and maintain such arrangements. Without commercialization partners, we may not have adequate financial or other resources to successfully commercialize our product candidates. In addition, any potential future collaborations may be terminable by our strategic partners, and we may not be able to adequately protect our rights under these agreements. Furthermore, strategic partners may negotiate for exclusive rights to commercialize our products or certain rights to control decisions regarding the development and commercialization of our products, if approved, andmaynotconductthoseactivitiesinthesamemanneraswedo.Anyterminationofcollaborationswehave entered into or may enter into in the future, or any delay in entering into collaborations

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related to our products or product candidates, could delay the development and commercialization of our products or product candidates and reduce their competitiveness if they reach the market, which could have a material adverse effect on our business, financial condition and results ofoperations.

Successfully commercializing medical device combinations such as ours is a complex and uncertain process, dependent on the efforts of management, distributors, outside consultants, physicians and general economic conditions, among other factors. Any factors that adversely impact the commercialization of our product candidates will have a negative impact on our business, results of operations and financial condition. We cannot assure you that we or our partners will be successful in developing orcommercializing any of our product candidates or any other new product candidates. Our inability to successfully commercialize our product candidates through partnerships and/or successfully develop and commercialize additional products or any enhancements to our products which we may develop would have a material adverse effect on our business, results of operations and financialcondition.

We did not meet the target achievement dates relating to certain milestone payments, and we do not expect to meet certain other target achievement dates relating to additional milestone payments, under the Terumo Agreement, and we may not be able to restructure the Terumo Agreement in a manner that provides us with a satisfactory amount of additional capital

In June 2019, we entered into a strategic partnership with Terumo (the “Terumo Partnership”) for the manufacture and distribution of our product Virtue SAB. Under the Terumo Agreement, we were initially eligible for certain milestone payments in the amount of $65 million from Terumo upon completion of certain minimum enrollments in clinical studies, making certain filings and submissions, and obtaining certain regulatory approvals and certifications. Of these milestone payments, $35 million relate to achieving certain milestones by specified target achievement dates, and, as of the date of this Annual Report on Form 10-K, we have already passed the target achievement dates for two $5 million milestone payments, in each case, without achieving the related milestones. In addition, due to delays in our Virtue SAB program resulting from the COVID-19 pandemic, supply chain issues and unexpected regulatory delays and requirements, we are unlikely to be able to complete the remaining time-based milestones by the specified target achievement dates to earn the remaining $25 million in time-based milestone payments pursuant to our agreement with Terumo. Our failure to earn milestone payments under our agreement with Terumo will have an adverse effect on our results of operations.

Further, Terumo has the right to terminate the agreement, or certain of its obligations thereunder, if certain milestones are not achieved. If Terumo elects to terminate the agreement, our development and commercialization plans for Virtue SAB could be adversely impacted, and this could have a material adverse effect on our business, financial condition, results of operations and prospects.

As previously disclosed, we have been negotiating with Terumo for mutually agreeable adjustments to the Terumo Agreement with the purposes of restructuring milestone payments as well as making other potential material modifications to that agreement including additional financial commitments by Terumo to us and the Virtue SAB program. We have delayed initiation of our Virtue ISR-US pivotal study, for which we secured conditional IDE approval from the FDA on August 8, 2023, until such time as we and Terumo restructure the Terumo Agreement in a manner that provides us with a satisfactory amount of additional capital, whether from milestone payments or other financial arrangements. In addition, in light of the recent FDA approval of Boston Scientific Corporation’s AGENTTM paclitaxel-coated balloon for the treatment of coronary ISR, we and Terumo are reviewing the design for the Virtue ISR-US pivotal study and considering alternative clinical study designs with input from our clinical steering committee for Virtue SAB. If negotiations are not completed to our satisfaction or to the satisfaction of Terumo, clinical study, product development, and commercialization plans for Virtue SAB may continue to be adversely impacted.

We expect to be highly dependent on partners and third-party vendors to manufacture and provide important materialsandcomponentsforourproductsandproductcandidates.Thereisnoassurancethatwewillbeable properlymanageoursupplychain.Further,wecurrentlydonothaveredundancybuiltintooursupplychain

Weutilizeandintendtocontinuetoutilizepartnersandthird-partyvendorstoassistinthemanufacture and assembly of our products and product candidates, as well as to provide materials and components essentialtothemanufactureofour

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productsandproductcandidates,inparticularVirtueSAB.Forexample, forourVirtueSABproductcandidate,wecurrentlysourcesirolimusfromasinglemanufacturerinChina, andwesourceangioplastyballoonsfromasinglemanufacturerinSingapore.Disruptionsinthosecountries or with respect to those suppliers for any reason, including, without limitation, further outbreaks of COVID-19,includinganystrainsorvariantsofthevirus,oranyfuturepandemic,couldcauseustoseek neworadditionalsuppliersfortheseproductsandcouldhaveamaterialadverseeffectonourbusiness.

We expect to continue to rely on third-party manufacturers for the commercial supply of any of our product candidates for which we obtain marketing approval, if any. We may be unable to maintain or establish required agreements with third-party manufacturers or to do so on acceptable terms. Even if we are able to establish agreements with third-party manufacturers, reliance on third-party manufacturersentails additional risks,including:

• the breach by the third-party contractors of our agreements with them;

In addition, successfully manufacturing a medical device combination product or product candidate such as our Virtue SAB is a complex and uncertain process, dependent on the efforts of management, suppliers, manufacturing companies, packaging vendors, testing companies, outside consultants and general economic conditions, among other factors. Our ability to supply our products commercially and to develop any future products depends, in part, on our ability to obtain these materials, components and products in accordance with regulatory requirements and in sufficient quantities for commercialization and clinical testing. Any factors that adversely impact the manufacturing of our products or product candidates will have a negative impact on our business, results of operations and financial condition. We cannot assure you that we or our partners will be successful in manufacturing our current products or product candidates or any potential enhancements to our products or any other new products. Our inability to successfully manufacture our products through partnerships and/or successfully develop and manufacture additional products or any enhancements to our products which we may develop would have a material adverse effect on our business, results of operations and financial condition.

We and our partners may be unable to sustain revenue growth

We expect our ability to increase our revenue in future periods to primarily depend on the ability of commercial partners to successfully penetrate our target markets and increase sales of our products or product candidates, which will, in turn, depend in part on our partners’ success in growing their customer baseandobtainingreordersfromthosecustomers.Newproductswillalsoneedtobedevelopedandapproved, or certified or otherwise authorized by the FDA and foreign regulatory agencies or notified bodies to sustain revenue growth in our markets. Additional clinical data and new products may be necessary to grow revenue.

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The failure of our manufacturing partners and component suppliers to meet regulatory quality standards applicabletotheirmanufacturingprocessescouldhaveanadverseeffectonourbusiness,financialcondition and results ofoperations

Our medical device and component manufacturers must register with the FDA and are subject to periodic inspection by the FDA for compliance with the QSR and cGMP, requirements,whichrequiremanufacturersofmedicaldevices and drugs, respectively, to adhere tocertainmanufacturingpractices, including design controls, product validation and verification, in process testing, quality control and documentationprocedures.Similarrequirementsapplyinforeignjurisdictions.Compliancewithapplicable regulatory requirements is subject to continual review and is rigorously monitored through periodic inspectionsorauditsbytheFDAandotherregulatoryagenciesornotifiedbodies.Ourcomponent,polymer anddrugsuppliersarealsorequiredtomeetcertainstandardsapplicabletotheirmanufacturingprocesses.

We cannot assure you that we, our manufacturing partners, or component suppliers comply or can continue to comply with all regulatory requirements. The inability of one of these parties to achieve or maintain compliance with these requirements or quality standards may disrupt our ability to supply products sufficient to meet demand until compliance is achieved, or until a new supplier or manufacturer has been identified and evaluated. Our or these parties’ failure to comply with applicable regulations could cause sanctionstobeimposedonus,includingwarningletters,fines,injunctions,civilpenalties,failureofregulatory authorities to grant marketing approval of our product candidates, delays, suspension or withdrawal of approvals, certifications, license revocation, seizures or recalls of products or product candidates, operating restrictions and criminal prosecutions, which could harm our business. We cannot assure you that if we need toengagenewsuppliers,manufacturersortestingresourcestosatisfyourbusinessrequirementsthatwe can locate new ones in compliance with regulatory requirements. Our failure to do so could have a material adverse effect on our business, financial condition, results of operations and prospects.

From time to time, we engage outside parties to perform services related to certain of our clinical studies and trials, and any failure of those parties to fulfill their obligations could cause costs and delays

From time to time, we engage consultants and CROs to help design, monitor and analyze the results of certain of our clinical studies and trials. The consultants and CROs we engage interact with clinical investigators to enroll patients in our clinical studies. We depend on these consultants, CROs and clinical investigators to perform the clinical studies and trials and monitor and analyze data from these studies and trialsundertheinvestigationalplanandprotocol for thestudyortrialandincompliancewithregulationsand requirements for conducting, recording and reporting results of clinical studies or trials to assure that the data and results are credible and accurate and the trial participants are adequately protected, as required by the FDA and foreign regulatory authorities. The consultants and CROs also are responsible for protecting confidentialpatientdataandcomplyingwithU.S. andforeignlawsandregulationsrelatedtodataprivacy.We may face delays in our regulatory approval process if these parties do not perform their obligations in a timelyorcompetentfashionorifwemustchangeserviceproviders.Thisriskisgreaterforourclinicalstudies and trials conducted outside of the United States, where it may be more difficult to ensure our studies and trialsareconductedincompliancewithFDArequirements.Anythirdpartieswehiretodesignormonitorand analyze results of our clinical studies and trials may also provide services to our competitors, which could compromise the performance of their obligations to us. If these third parties do not successfully carry out their duties or meet expected deadlines, or if the quality, completeness or accuracy of the data they obtain is compromised due to the failure to adhere to our clinical study protocols or for other reasons, our clinical studies or trials may be extended, delayed or terminated or may otherwise prove to be unsuccessful, and our development costs will increase. We may not establish or maintain relationships with these third parties on favorable terms, or at all. If we need to enter into replacement arrangements because a third-party is not performing in accordance with our expectations, we may not be able to do so without undue delays or considerable expenditures, or atall.

The FDA and similar regulatory bodies may hold us responsible for any failure of our third-party consultantsorCROs.Ourmonitoringofourthird-partyconsultantsorCROsmayfailtodetect,remedyor report theirfailures.

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Thecontinuingdevelopmentofmanyof ourproductsandproductcandidatesdependsuponourmaintaining strong working relationships withphysicians

The research, development, marketing and sale of many of our new and improved products or product candidatesdependuponourmaintainingworkingrelationshipswithphysicians.Werelyontheseprofessionals toprovideuswithconsiderableknowledgeandexperienceregardingthedevelopment,marketingandsale of our products or product candidates. Physicians assist us as researchers, marketing and product consultants, inventors and public speakers. If we cannot maintain our strong working relationships with these professionals and continue to receive their advice and input, the development and marketing of our products or product candidates could suffer, which could have a material adverse effect on our business, financial condition, results of operations and prospects. At the same time, the medical device industry’s relationship with physicians is under increasing scrutiny by the Office of Inspector General (the “OIG”), and the U.S. Department of Justice (the “DOJ”). Our failure to comply with requirements governing the industry’s relationships with physicians, including the reporting of certain payments to physicians under the National Physician Payment Transparency Program or an investigation into our compliance by the OIG or the DOJ, could have a material adverse effect on our business, financial condition, results of operations and prospects.

We have limited pharmaceutical manufacturing experience and our CMOs may experience development or manufacturing problems or delays in producing our products and planned or future products that could limitor prevent the potential growth of our revenue or increase our losses

We are responsible for the manufacture of the proprietary SirolimusEFR used in our Virtue SAB product candidate. We have already experienced substantial delays and other challenges in the manufacture ofSirolimusEFRasaresultofsupplychainandpersonnelissuesexperiencedbythesinglesourceCMOthat produces SirolimusEFR for us. Many of the processes, ingredients and components required for manufacture of SirolimusEFR are also required for manufacture of COVID-19 vaccines and tests and, as such, supply chains continue to be adversely impacted. Further, the manufacture of SirolimusEFRinvolves certain novel processes that we continue to develop to achieve consistent reproducibility as well as increase scaletosupportlargeclinicalstudiesandfuturecommercialization.Intheeventthatwedonothavesufficient SirolimusEFR, our planned clinical studies could be prevented or delayed. Further delays in our trial timelines will result in additional expenses to us and potentially risk or damage our partnership withTerumo and the future competitiveness of our Virtue SABsolution.

If approved for use in connection with our medical device product candidates or as a stand-alone product, we currently expect to remain responsible for the manufacture and supplying of SirolimusEFR at clinical and/or commercial scale for our partner, Terumo. We have limited experience in manufacturing pharmaceutical products and no experience manufacturing SirolimusEFR in the volume that we anticipate will be required if we achieve planned levels needed for clinical studies and/or commercial sales. We do not currently have, nor do we currently have plans to acquire, the infrastructure or capability internally to manufacture or test SirolimusEFR on a clinical and/or commercial scale. Instead, we rely on contract manufacturers for current production of SirolimusEFR for clinical study supplies and currently plan to continue to use contract manufacturers for supply and testing. Our reliance on third-party suppliers and manufacturers, including certain single-source suppliers, could harm our ability to fulfill our supply obligations to Terumo. If our third-party suppliers fail to deliver the required quantities of materials on a timely basis and at reasonable prices, and we are unable to find one or more replacement suppliers capable of production at a substantially equivalent cost in substantially equivalent volumes and quality on a timely basis, the supply of our products or product candidates to customers and the development of any future products will be delayed, limited or prevented, which could have material adverse effect on our business, financial condition and results of operations.

The facilities used by our CMOs to manufacture our product candidates must be authorized by the applicable regulatory authorities, including the FDA, pursuant to inspections that will be conducted after a PMA, NDA or comparable foreign regulatory marketing application is submitted. We depend on our contract manufacturing partners for compliance with the FDA’s cGMP or similar foreign requirements for manufacture of both the active drug substances and finished drug product. If our contract manufacturers cannot successfully manufacture material that conforms to our specifications and the FDA’s or foreign regulatory authorities’ strict regulatory requirements, they will not be able to secure or maintain FDA or foreign approval for use of their manufacturing facilities with respect to our product candidates. In addition, if the FDA

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or any other applicable regulatory authority does not approve these facilities for the manufacture of our product candidates or if it withdraws any such approval in the future, or if our suppliers or contract manufacturers decide theyno longerwanttosupplyormanufactureforus,wemayneedtofindalternativemanufacturingfacilities,inwhich case we might not be able to identify manufacturers for clinical or commercial supply on acceptable terms, without delay, or at all, which would significantly impact our ability to fulfill our supply obligations for SirolimusEFR for Virtue SAB, as well as sales of SirolimusEFR for other potential clinicalapplications.

In addition, the manufacture of pharmaceutical products is complex and requires significant expertise and capital investment, including the development of advanced manufacturing techniques and process controls. Manufacturers of pharmaceutical products often encounter difficulties in production, particularly in scaling up and validating initial production and absence of contamination. They may also encounter equipment breakdowns requiring lengthy repairs or the need to replace equipment. These problems include difficulties with production costs and yields, quality control, including stability of the product, quality assurancetesting,operatorerror,shortagesofqualifiedpersonnel,aswellascompliancewithstrictlyenforced federal, state and foreign regulations. Furthermore, if contaminants are discovered in our supply or in the manufacturing facilities, such manufacturing facilities may need to be closed for an extended period of time to investigate and remedy the contamination and could require that affected supplies be withdrawn or withheld from the market. Any stability or other issues relating to the manufacture of our productcandidates may occur in the future. Additionally, our manufacturers may experience manufacturing difficulties due to resource constraints or as a result of labor disputes or unstable political environments. If our manufacturers were to encounter any of these difficulties, or otherwise fail to comply with their contractual obligations, our ability to provide SirolimusEFR to Terumo would be jeopardized, which would result in a material adverse effect on our business, financial condition, results of operations andprospects.

Reductionorinterruptioninsupplyandaninabilitytodevelopalternativesourcesforsupplymayadversely affect our partners’ manufacturing operations and related productsales

We purchase many of the components and raw materials used in manufacturing our products from numerous suppliers in various countries. Generally, we have been able to obtain adequate supplies of such rawmaterialsandcomponents.However,forreasonsofqualityassurance, unique processes, or specialty item availability, we may procure certain components and raw materials from a sole supplier. For example, for our Virtue SAB product candidate, we source sirolimus from a single manufacturer in China, we source porous angioplasty balloons from a single manufacturer in Germany with unique processes and expertise,and we source custom specialty polymers from a single manufacturer in the United States.We workcloselywithoursupplierstotrytoensurecontinuityofsupplywhilemaintaininghighquality and reliability. However, we cannot guarantee that these efforts will be successful. In addition, due to the stringent regulations and requirements of the FDA, comparable regulatory bodies in countries in the EU and similar regulatory bodies elsewhere around the world regarding the manufacture of our productsor productcandidates,wemaynotbeabletoquicklyestablishadditionalorreplacementsourcesforcertain componentsormaterials.Areductioninoraninterruptiontosupply,andaninabilitytodevelopalternative sourcesforsuchsupply,couldadverselyaffectourabilitytomanufactureourproductsinatimelyor cost-effective manner and to make our related product sales. Manufacturing facilities used to make our balloonsorothercomponentsmaybeshutdown,soldorotherwisebecomeunavailableanditwilltaketime andmoneyforustoidentifyandrequalifynewfacilities.

In addition, assuming our BackBeat CNT product candidate is approved, we will be reliant on Medtronic, Inc. (an affiliate of Medtronic plc) (“Medtronic”) and its ability to obtain supplies for and to produce its BackBeat CNT-enabled pacemaker systems. If Medtronic is unable or unwilling to obtain such supplies or is otherwise unable or unwilling to produce its BackBeat CNT-enabled pacemaker systems, it could adversely affect our results of operations.

Wesourcecertainproductsfromforeignsuppliers,makingusvulnerabletosupplyproblemsorpricefluctuations caused by trade conflicts and other geopoliticalevents

Geopolitical risks and other global events could negatively affect our ability to rely on foreign suppliers. Ongoing uncertainty in the trade relationship between China and the United States could cause delays in the manufacturing supply chain for sirolimus, which we currently source from China. Likewise, export restrictions enacted in foreign countries,

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including those imposed in China, could limit our ability to obtain products from foreign suppliers or make foreign-made products more costly than anticipated. Any disruptions or delays in our supply chain could negatively impact our ability to operate our business or increase our costs. Further, any import restrictions or tariffs imposed on products we or our partners import from China, Singapore or any other foreign supplier, as a result of global trade conflict, could cause us to increase prices for our future products or reduce ourmargins.

In February 2022, following Russia’s invasion of Ukraine, the United States, the EU, and the UK imposed various economic sanctions against Russia. Additional impacts, including restrictions on the sale of oil or other energy resources from Russia to other countries in the region, that could result in an increase in our global shipping expenses, reduce our sales or otherwise have an adverse effect on particularly our European operations. Furthermore, escalation by Russia beyond Ukraine and into other countries within the region could also reduce our sales and have a negative effect on our European operations.

Risks Related to Government Regulation and Our Industry

Healthcare reform initiatives and other administrative and legislative proposals may adversely affect our business

There have been, and continue to be, proposals by the federal government, state governments, regulators and third-party payors to control or manage the increased costs of healthcare and, more generally, to reform the U.S. healthcare system. Certain of these proposals could limit the prices we are able to charge for our products or the coverage and reimbursement available for our products and could limit the acceptance and availability of our products. The adoption of proposals to control prices could have a material adverse effect on our business, financial condition, results of operations and prospects.

In the United States, there have been, and continue to be a, number of legislative initiatives to contain healthcare costs. For example, in March 2010, ACA was enacted in the United States, which made a number of substantial changes in the way healthcare is financed by both governmentalandprivateinsurers.Amongotherwaysinwhichitmayaffectourbusiness,theACAestablished a new Patient-Centered Outcomes Research Institute to oversee and identify priorities in comparative clinical effectiveness research in an effort to coordinate and develop such research, implemented payment system reforms including a national pilot program on payment bundling to encourage hospitals, physicians and other healthcare providers to improve the coordination, quality and efficiency of certain healthcare services through bundled payment models, and expanded the eligibility criteria for Medicaidprograms.

Since its enactment, there have been judicial, U.S. Congressional and executive branch challenges to certain aspects of the ACA. On June 17, 2021, the U.S. Supreme Court dismissed the most recent judicial challengetotheACAbroughtbyseveralstateswithoutspecificallyrulingontheconstitutionalityoftheACA. Prior to the Supreme Court’s decision, President Biden issued an executive order to initiate a special enrollment period from February 15, 2021 through August 15, 2021 for purposes of obtaining health insurance coverage through the ACA marketplace. The executive order also instructed certain governmental agencies to review and reconsider their existing policies and rules that limit access to healthcare, including among others, reexamining Medicaid demonstration projects and waiver programs that include work requirements, and policies that create unnecessary barriers to obtaining access to health insurance coverage through Medicaid or the ACA. It is unclear how other healthcare reform measures of the Biden administration or other efforts, if any, will impact ourbusiness.

Inaddition,otherlegislativechangeshavebeenproposedandadoptedsincetheACAwasenacted.On August2,2011,theBudgetControlActof2011wassignedintolaw,which,amongotherthings,reduced Medicarepaymentstoproviders,effectiveonApril1,2013and,duetosubsequentlegislativeamendmentsto thestatute,willremainineffectthrough2031,withtheexceptionofatemporarysuspensionfromMay1, 2020 through March 31, 2022, unless additional Congressional action is taken. On January 2, 2013, the AmericanTaxpayerReliefActof2012wassignedintolaw,which,amongotherthings,reducedMedicare payments to several providers, including hospitals, and increased the statute of limitations period for the governmenttorecoveroverpaymentstoprovidersfromthreetofiveyears.TheMedicareAccessandCHIP ReauthorizationActof2015(the“MACRA”),enactedonApril16,2015,repealedtheformulabywhich Medicaremadeannualpaymentadjustmentstophysiciansandimplementedfixedannualupdatesandanew system of incentive payments that began in 2019

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that are based on various performance measures and physicians’participationinalternativepaymentmodelssuchasaccountablecareorganizations.Itisunclear what effect new quality and payment programs, such as MACRA, may have on our business, financial condition, results of operations or cashflows.

In addition to continuing pressure on prices and cost-containment measures in the United States, legislative developments at the EU or member state level may result in significant additional requirements or obstacles. The delivery of healthcare in the EU, including the establishment and operation of health services and the pricing and reimbursement of medicines, is almost exclusively a matter for national, rather than EU, law and policy. National governments and health service providers have different priorities and approaches to the delivery of healthcare and the pricing and reimbursement of products in that context. In general, however, thehealthcarebudgetaryconstraintsinmostEUmemberstateshave resultedinrestrictions on the pricing and reimbursement of medicines by relevant health service providers. Coupled with ever-increasing EU and national regulatory burdens on those wishing to develop and market products, this could restrict or regulate post-approval activities and affect the ability of pharmaceutical companies to commercialize their products. In international markets, reimbursement and healthcare payment systems vary significantly by country, and many countries have instituted price ceilings on specific products and therapies.

We expect additional state, federal and foreign healthcare policies and reform measures to be adopted in the future, any of which could limit reimbursement for healthcare products and services or otherwise resultinreduceddemandforourproductsorotherproductswemaycommercializeinthefutureoradditional pricing pressure and have a material adverse effect on our industry generally and on our customers. Any changes in, or uncertainty with respect to, future coverage or reimbursement rates could affect demandfor our products or other products we may commercialize in the future, which, in turn, could impact our ability to successfully commercialize our products or other products we may commercialize in the future and could have a material adverse effect on our business, financial condition and results of operations.

For instance, in December 2021, the EU Regulation No 2021/2282 on HTA, amending Directive 2011/24/EU, was adopted. This regulation, which entered into force in January 2022, intends to boost cooperation among EU member states in assessing health technologies, including some medical devices, and providing the basis for cooperation at the EU level for joint clinical assessmentsintheseareas.Theregulationforeseesathree-yeartransitionalperiodandwillpermitEUmember states to use common HTA tools, methodologies, and procedures across the EU, working together in four main areas, including joint clinical assessment of the innovative health technologies with the most potential impact for patients, joint scientific consultations whereby developers can seek advice from HTA authorities, identification of emerging health technologies to identify promising technologies early, and continuing voluntary cooperation in other areas. Individual EU member states will continue to be responsible for assessing non-clinical (e.g., economic, social, ethical) aspects of health technologies, and making decisions on pricing andreimbursement.

Regulatorycomplianceisexpensive,complexanduncertain,andapprovalsorcertificationscanoftenbedenied or significantly delayed. We may not obtain the necessary approvals or certifications and failure to obtain timely regulatory approval or certification, if at all, would adversely affect ourbusiness

We are not permitted to commercialize, market, promote or sell any of our product candidates in the United States without obtaining approval from the FDA. Foreign regulatory authorities impose similar requirements. The time required to obtain approval or certification by the FDA, comparable foreign regulatory authorities and notified bodies is unpredictable, typically takes many years following the commencement of clinical studies and depends upon numerous factors, including the type, complexity and novelty of the product candidates involved. In addition, approval policies, regulations or the type and amount of clinical data necessary to gain approval may change during the course of a product candidate’s development and may vary among jurisdictions, which may cause delays in the approval, certification or the decision nottoapproveanapplication.Regulatoryauthoritiesandnotifiedbodieshavesubstantialdiscretioninthe approvalorcertificationprocessandmayrefusetoacceptanyapplicationormaydecidethatourdataare insufficientforapprovalorcertificationandrequireadditionalpreclinical,clinicalorotherstudies.We have not submitted for or obtained marketing approval for any product candidate, except for European Conformity (“CE”) mark certification of our first-generation BackBeat CNT on the Moderato IPG device.

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In the United States, before we can market a new medical device, or a new use of, new claim for or significant modification to an existing device, we must first receive either clearance under Section 510(k) of the FDCA, or approval of a PMA application from the FDA, unless an exemption applies. Under the FDCA, medical devices are classified into one of three classes, Class I, Class II or Class III, depending on the degree of risk associated with each medical device and the extent of manufacturer and regulatory control needed to ensure its safety and effectiveness. Certain Class I and Class II devices are exempt from premarket notification (510(k)) requirements as well as the Medical Device cGMPs, also referred to as the QSR. A Class I or Class II device that is exempt from 510(k) requirements must still comply with other requirements unless the device is explicitly exempt from those requirements as indicated in the regulation for that device type. We do not believe Virtue SAB or BackBeat CNT or other of our current product candidates will be exempt from, or eligible for, clearance under Section 510(k) of the FDCA. We expect our product candidates will require submission and FDA approval of a PMA to be marketed in the United States. In the process of obtaining PMA approval, the FDA must determinethataproposeddeviceissafeandeffectiveforitsintendeduse(s)based,inpart,onextensivedata, including, but not limited to, technical, preclinical, clinical study, manufacturing and labeling data. The PMA process is typically required for devices that are deemed to pose the greatest risk, such as life-sustaining, life-supporting or implantable devices. Modifications to products that are approved through a PMAapplicationgenerallyrequireFDAapproval.ThePMAprocesscanbeexpensive,lengthyanduncertain. The process of obtaining a PMA is much more costly and uncertain than the 510(k) clearance process and generallytakesfromonetothreeyears,orevenlonger,fromthetimetheapplicationissubmittedtotheFDA.

In the United States, before we can market a new drug product, or market an approved drug for a new indication, we must receive approval of an NDA. In the process of obtaining NDA approval, the FDA must determine that the drug product candidate is safe and effective for its intended uses. The NDA is a comprehensive, multivolume application that includes, among other things, the results of preclinical and clinical studies, information about the drug’s composition, and plans for manufacturing, packaging and labeling the drug. The time required to obtain NDA approval by the FDA is unpredictable and typically takes many years following the commencement of clinical studies.

We expect that obtaining regulatory approvals for our product candidates will require us to conduct human clinical studies. For our medical device product candidates and combination drug/device product candidatesregulatedasmedicaldevices,wewillneedtoobtainapprovalofanIDE, prior to beginning a clinical study in the United States. For our drug product candidates, we will need to submit an IND application that the FDA authorizes prior to beginning clinicalstudiesintheUnitedStates.Preclinicalstudies,submissionsrelatedtoCMC of our product candidates, and safety data such as biocompatibility will be required in connection with any IDE or IND applications. It is possible that unforeseen failure of one or more of these tests could cause delays in the application process.

Despitethetime,effortandcostinvolvedinconductingclinicalstudiesandseekingregulatory approvals or certifications, a product candidate may not be approved or certified by the FDA or comparable regulatory authorities or notified bodies. Any delay or failure to obtain necessary regulatory approvals or certifications could harm our business. Furthermore, even if we are granted regulatory approvals or certifications, they may include significant limitations on the indicated uses for the device, which may limit the market for the product.

The FDA, comparable regulatory authorities (or notified bodies) can delay, limit or deny approval of a drug or approval or certification of a medical device for many reasons, including:

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Regulatory changes could result in restrictions on our ability to carry on or expand our operations, higher than anticipated costs or lower than anticipated sales. The FDA and foreign regulatory authorities enforce these regulatory requirements through various mechanisms, including periodic unannounced inspections. Failure to comply with applicable regulations could jeopardize our ability to sell our products and result in enforcement actions such as: warning letters; fines; injunctions; civil penalties; termination of distribution; recalls or seizures of products; delays in the introduction of products into the market; total or partial suspension of production; refusal to grant future approvals or certifications; withdrawals or suspensions of current approvals or certifications, resulting in prohibitions on sales of our products; and, in the most serious cases, criminal penalties.

Subject to the transitional provisions provided in the EU Medical Devices Regulation, and in order to sell our products in EU member states, our products must comply with the general safety and performance requirementsof theEUMedicalDevicesRegulation,whichrepealsandreplacestheMedicalDevicesDirective andtheActiveImplantableMedicalDevicesDirective.Compliancewiththeserequirementsisaprerequisite to be able to affix the CE mark to our products, without which they cannot be sold or marketed inthe EU.Allmedicaldevices(includingactiveimplantablemedicaldevices)placedonthemarketintheEUmust meet the general safety and performance requirements laid down in Annex I to the EU Medical Devices Regulation, including the requirement that a medical device must be designed and manufactured in such a waythat,duringnormalconditionsofuse,itissuitableforitsintendedpurpose.Medicaldevicesmustbesafe and effective and must not compromise the clinical condition or safety of patients, or the safety and health ofusersand—whereapplicable—otherpersons,providedthatanyriskswhichmaybeassociatedwiththeir use constitute acceptable risks when weighed against the benefits to the patient and are compatible with a high level of protection of health and safety, taking into account the generally acknowledged state of the art. To demonstrate compliance with the general safety and performance requirements, we must undergo a conformity assessment procedure, which varies according to the type of medical device and its (risk) classification. A conformity assessment procedure generally requires the intervention of a notified body.The notified body would typically audit and examine the technical file and the quality system for the manufacture, design and final inspection of our devices. If satisfied that the relevant product conforms to therelevantgeneralsafetyandperformancerequirements,thenotifiedbodyissuesacertificateofconformity, which the manufacturer uses as a basis for its own declaration of conformity. The manufacturer may then apply the CE mark to the device, which allows the device to be placed on the market throughout the EU. Failing to comply with applicable laws and regulations, would preclude us from being able to affix the CE mark to our products, which would prevent us from selling them within theEU.

The aforementioned EU rules are generally applicable in the EEA (which consists of the 27 EU member states plus Norway, Liechtenstein and Iceland). Non-compliance with the above requirements would also prevent us from selling our products in these countries.

International regulatory approval or certification processes may take longer than the FDA approval process.We may be unable to obtain future regulatory approval or certification in a timely manner, or at all, especially if existing regulations are changed or new regulations are adopted. A failure or delay in obtaining necessary regulatory approvals or certifications would materially adversely affect ourbusiness.

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performance requirements and quality system requirements laid down in the Annexes to the EU Medical Devices Regulation. The notified body may disagree with our proposed changes and product introductions or modificationscouldbedelayedorcanceled,whichcouldadverselyaffectourabilitytogrowourbusiness.

Ourmedicaldeviceproductsmustbemanufacturedinaccordancewithfederal,stateandforeignregulations,and we or any of our suppliers or third-party manufacturers could be forced to recall our installed systems or terminate production if we fail to comply with theseregulations

Themethodsusedin,andthefacilitiesusedfor,themanufactureofourmedicaldeviceproductsmust comply with the FDA’s QSR which is a complex regulatory scheme that covers the procedures and documentationofthedesign,testing,production,processcontrols,qualityassurance,labeling,packaging, handling,storage,distribution,installation,servicingandshippingofmedicaldevices.Furthermore,weare required to verify that our suppliers maintain facilities, procedures and operations that comply with our quality standards and applicable regulatory requirements. The FDA enforces the QSR through periodic announced or unannounced inspections of medical device manufacturing facilities, which may include the facilities of subcontractors. Our products are also subject to similar state regulations and various laws and regulations of foreign countries governing manufacturing. Our third-party manufacturers may not take the necessary steps to comply with applicable regulations, which could cause delays in the delivery of our products.

If any of these events occurs, our reputation could be harmed, we could be exposed to product liability claims and we could lose customers and experience reduced sales and increased costs.

Even if we obtain regulatory approval or certification for a product candidate, our products will remain subject to regulatory scrutiny and post-marketing requirements. Failure to comply with post-marketing regulatory requirements could subject us to enforcement actions, including substantial penalties, and might require us to recall or withdraw a product from the market

Anyregulatoryapprovalsorcertificationsthatwemayreceiveforourproductcandidateswillrequire thesubmissionofreportstoregulatoryauthoritiesandsurveillancetomonitorthesafetyandefficacyof theproductcandidate,maycontainsignificantlimitationsrelatedtouserestrictionsforspecifiedagegroups, warnings, precautions or contraindications, and may include burdensome post-approval study or risk managementrequirements.Forexample,theFDAmayrequireaREMSinordertoapproveourdrugproduct candidates,whichcouldentailrequirementsforamedicationguide,physiciantrainingandcommunication plansoradditionalelementstoensuresafeuse,suchasrestricteddistributionmethods,patientregistriesand otherriskminimizationtools.Inaddition,ifoneofourproductcandidatesisapprovedorcertified,itwill besubjecttoongoingandpervasiveregulatoryrequirementsgoverning,amongotherthings,themanufacture, marketing,labeling,advertising,adverseeventreporting,recordkeeping,sale,promotion,sampling, testing, conduct of post-marketing studies, registration, and listing of drugs and medical devices. For example, we must submit periodic reports to the FDA as a condition of approval. These reports include safetyandeffectivenessinformationaboutthedrugordeviceafteritsapproval.Failuretosubmitsuchreports, or failure to submit the reports in a timely manner, could result in enforcement action by the FDA. Following its review of the periodic reports, the FDA might ask for additional information or initiate furtherinvestigation.

Regulatory changes could result in restrictions on our ability to continue or expand our operations, higher than anticipated costs or lower than anticipated sales. Even after we have obtained the proper regulatory approval or certification to market a device, we have ongoing responsibilities under FDA regulations and applicable foreign laws and regulations. The FDA, state and foreign regulatory authorities have broad enforcement powers. Our failure to comply with applicable regulatory requirements could result in enforcement action by the FDA, state or foreign regulatory authorities, which may include any of the following sanctions:

• untitled letters or warning letters;

• fines, injunctions, consent decrees and civil penalties;

• customer notifications or repair, replacement or refunds;

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• operating restrictions or partial suspension or total shutdown of production;

• criminal prosecution.

Any government investigation of alleged violations of law could require us to expend significant time and resources in response and could generate negative publicity. Any failure to comply with ongoing regulatory requirements may adversely affect our ability to commercialize and generate revenue from our products. If regulatory sanctions are applied or if regulatory approval or certification is withdrawn, our business will be seriously harmed.

Moreover, the policies of the FDA and of other regulatory authorities may change, and additional government regulations may be enacted that could prevent, limit or delay regulatory approval or certification of our product candidates. We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative or executive action, either in the United States or abroad. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval or certification that we may have obtained and we may not achieve or sustain profitability.

Modifications to any approved or certified device products may require us to obtain new PMA approvals or approvals of a PMA supplement or foreign certification, and if we market modified products without obtaining necessary approvals or certifications, we may be required to cease marketing or recall the modified products until required approvals or certifications are obtained

Certain modifications to any device product for which we receive PMA approval may require approval of a new PMA or a PMA supplement, or alternatively a notification or other submission to the FDA. The FDA requires device manufacturers to make and document a determination of whether a modification requires an approval, supplement or clearance; however, the FDA can review a manufacturer’s decision. The FDA may not agree with our decisions regarding whether approval of a modification is necessary. We may make modifications to approved devices in the future that we believe do not require approval of a new PMA or PMA supplement. If the FDA disagrees with our determination and requires us to submit a new PMA or PMA supplement for modifications to our previously approved device products, we may be required to ceasemarketingortorecallthemodifiedproductuntilweobtainapproval,andwemaybesubjecttosignificant regulatory fines or penalties. In addition, the FDA may not approve our products for the indications that are necessary or desirable for successful commercialization or could require clinical trials to support any modifications.

In the EU, we must inform the notified body that carried out the conformity assessment of the medical devices that we market or sell in the EU and the EEA of any planned substantial changes to our quality system or substantial changes to our medical devices that could affect compliance with the general safety and performance requirements laid down in Annex I to the EU Medical Devices Regulation or cause a substantial change to the intended use for which the device has been CE marked. The notified bodywill thenassesstheplannedchangesandverifywhethertheyaffecttheproducts’ongoingconformitywiththeEU Medical Devices Regulation. If the assessment is favorable, the notified body will issue a new certificate of conformity or an addendum to the existing certificate attesting compliance with the general safety and performance requirements and quality system requirements laid down in the Annexes to the EU Medical Devices Regulation. The notified body may disagree with our proposed changes and product introductions ormodificationscouldbedelayedorcanceled,whichcouldadverselyaffectourabilitytogrowourbusiness.

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Our medical device products, if approved or certified, may cause or contribute to adverse medical events or be subject to failures or malfunctions that we are required to report to the FDA or similar foreign regulatory authorities, and if we fail to do so, we would be subject to sanctions that could harm our reputation, business, financialconditionandresultsofoperations.Thediscoveryofserioussafetyissueswithourproducts,orarecall ofourproductseithervoluntarilyoratthedirectionofthe FDAoranothergovernmentalauthority,could have a negative impact on us

We are subject to the FDA’s medical device reporting regulations and similar foreign regulations, which require us to report to the FDA when we receive or become aware of information that reasonably suggests thatoneormoreofourproductsmayhavecausedorcontributedtoadeathorseriousinjuryormalfunctioned in a way that, if the malfunction were to recur, it could cause or contribute to a death or seriousinjury. The timing of our obligation to report is triggered by the date we become aware of the adverse event, as well as the nature of the event. We may fail to report adverse events of which we become aware within the prescribedtimeframe. We mayalsofailtorecognizethatwehavebecomeawareofareportableadverseevent, especially if it is not reported to us as an adverse event or if it is an adverse event that is unexpected or removed in time from the use of the product. If we fail to comply with our reporting obligations, the FDA or foreign regulatory authorities could take action, including warning letters, untitled letters, administrative actions, criminal prosecution, imposition of civil monetary penalties, revocation of our device approval, seizure of our products or delay in approval or certification of futureproducts.

The FDA and foreign regulatory bodies have the authority to require the recall of commercialized products in the event of material deficiencies or defects in design or manufacture of a product or in the event that a product poses an unacceptable risk to health. The FDA’s authority to require a recall must be basedonafindingthatthereisreasonableprobabilitythatthedevicecouldcauseseriousinjuryordeath.We may also choose to voluntarily recall a product if any material deficiency is found. A government-mandated or voluntary recall by us could occur as a result of an unacceptable risk to health, component failures, malfunctions, manufacturing defects, labeling or design deficiencies, packaging defects or other deficienciesorfailurestocomplywithapplicableregulations.Productdefectsorothererrorsmayoccurinthe future.

Depending on the corrective action we take to redress a product’s deficiencies or defects, the FDA, foreign regulatory authorities or notified bodies may require, or we may decide, that we will need to obtain newapprovalsorcertificationsforthedevicebeforewemaymarketordistributethecorrecteddevice.Seeking such approvalsorcertifications may delay ourabilitytoreplacetherecalleddevicesinatimelymanner. Moreover, if we do not adequately address problems associated with our devices, we may face additional regulatory enforcement action, including FDA and similar foreign regulatory authorities warning letters, product seizure, injunctions, administrative penalties or civil or criminal fines.

Companies are required to maintain certain records of recalls and corrections, even if they are not reportable to the FDA. We may initiate voluntary withdrawals or corrections for our products in the future that we determine do not require notification of the FDA or foreign regulatory authorities. If the FDA or foreign regulatory authorities disagree with our determinations, it could require us to report those actions as recalls and we may be subject to enforcement action. A future recall announcement could harm our reputation with customers, potentially lead to product liability claims against us and negatively affect our sales. Any corrective action, whether voluntary or involuntary, as well as defending ourselves in a lawsuit, willrequirethededicationofourtimeandcapital,distractmanagementfromoperatingourbusinessandmay harm our reputation and financialresults.

Virtue SAB is a drug/device combination, which may result in additional regulatory and other risks

Our Virtue SAB product candidate is subject to regulation in the United States as a drug/device combination product. If marketed individually, each constituent part of Virtue SAB would be subject to different regulatory pathways and would require approval of an independent marketing applications by the FDA.Acombinationproduct,however,isassignedtoanFDAcenterthatwillhaveprimaryjurisdictionover itsregulationbasedonadeterminationofthecombinationproduct’sprimarymodeofaction,whichisthe singlemodeofactionthatprovidesthemostimportanttherapeuticeffect.InthecaseofVirtueSAB,we believe that the primary mode of action is attributable to the device component of the product. In this regard,in2019,theFDAconfirmedthatVirtueSABwillberegulatedasacombinationproductcandidate, with the FDA’s Center for Devices and Radiological Health as the lead review center of a marketing application.Although we believe a single marketing application for the approval of a combination product wouldbe appropriate and successful,therecanbeno

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assurancethattheFDAwillnotdeterminethatseparatemarketingapplications arenecessary.IftheFDAweretomakethatdetermination,itcouldsignificantlyincreasetheresourcesand timerequiredtobringaparticularcombinationproducttomarket.

The EU regulates medical devices and medicinal products separately, through different legislative instruments, and the applicable requirements will vary depending on the type of drug-device combination product. For instance, drug-delivery products intended to administer a medicinal product where the medicinal product and the device form a single integral product are regulated as medicinal products in the EU. In such a case, the marketing authorization application must include — where available — the results of the assessment of the conformity of the device part with the EU Medical Devices Regulation contained in the manufacturer’s EU declaration of conformity of the device or the relevant certificate issued by a notified body. If the marketing authorization application does not include the results of the conformity assessment and where for the conformity assessment of the device, if used separately, the involvement of a notifiedbody is required, the EMA or the EU member state competent authority must require the applicant to provide a notifiedbodyopinionontheconformityofthedevice.Bycontrast,incaseofdrug-deliveryproductsintended to administer a medicinal product where the device and the medicinal product do not form a single integral product (but are, e.g., co-packaged), the medicinal product is regulated in accordance with the rules for medicinal products described above while the device part is regulated as a medical device and will have to comply with all the requirements set forth by the EU Medical DevicesRegulation.

Although the FDA and similar foreign regulatory agencies have or may have systems in place for the review and approval or certification of combination products such as ours, we have and may continue to experience delays in the development and commercialization of our product candidates due to regulatory timing constraints and uncertainties in the product development and approval process, as well as coordination between two different centers within FDA responsible for review of the different components of the combination product.

If the FDA does not conclude that SirolimusEFR as a standalone product candidate satisfies the requirements for the Section 505(b)(2) regulatory approval pathway, or if the requirements for SirolimusEFR under Section 505(b)(2) are not as we expect, the approval pathway for SirolimusEFR may take significantly longer, cost significantly more and entail significantly greater complications and risks than anticipated, and in either case may not besuccessful

We may seek FDA approvals for our SirolimusEFR as both a standalone drug product candidate and as part of our Virtue SAB product candidate as well as, potentially, other device/drug combination product candidates for other clinical applications. For the standalone drug product candidate development program, we may seek approval for SirolimusEFR to treat conditions such as acute or chronic joint inflammation (osteoarthritis), through the Section 505(b)(2) regulatory pathway. The Drug Price Competition and Patent Term Restoration Act of 1984, also known as theHatch-WaxmanAmendments,addedSection505(b)(2)totheFDCA.Section505(b)(2)permitsthefiling of an NDA where at least some of the information required for approval comes from trials that were not conducted by or for the applicant and for which the applicant has not obtained a right ofreference. Section505(b)(2),wouldallowanNDAwesubmit totheFDAtorelyinpartondatainthepublicdomainortheFDA’spriorconclusionsregardingthe safety and effectiveness of approved drugs, which could expedite the development program for our product candidates by potentially decreasing the amount of clinical data that we would need to generate in order to obtain FDA approval. If the FDA does not allow us to pursue the Section 505(b)(2) regulatory pathway as we anticipate, we may need to conduct additional clinical studies, provide additional data andinformation and meet additional standards to obtain regulatory approval, if ever. If this were to occur, the time and financial resources required to obtain FDA approval for SirolimusEFR, and complications and risks associated with the development of certain of our product candidates, would likely substantiallyincrease. Moreover, inability to pursue the Section 505(b)(2) regulatory pathway could result in competitive products reaching the market before our product candidates, which could impact our competitive position and prospects. Even if we are allowed to pursue the Section 505(b)(2) regulatory pathway, we cannot assure you that our product candidates will receive the requisite approvals for commercialization, or that a competitor would not obtain approval first along with subsequent market exclusivity, thereby delaying potential approval of our product.

In addition, the pharmaceutical industry is highly competitive, and Section 505(b)(2) NDAs are subject to special requirements designed to protect the patent rights of sponsors of previously approved drugs that are referenced in a Section 505(b)(2) NDA. These requirements may give rise to patent litigation and mandatory delays in approval of our NDAs for

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up to 30 months or longer depending on the outcome of anylitigation. It is not uncommon for a manufacturer of an approved product to file a citizen petition with the FDA seeking to delay approval of, or impose additional approval requirements for, pending competing products.Ifsuccessful,suchpetitionscansignificantlydelay,orevenprevent,theapprovalofthenewproduct. However, even if the FDA ultimately denies such a petition, the FDA may substantially delay approval whileitconsidersandrespondstothepetition.Inaddition,evenifweareabletoutilizetheSection505(b)(2) regulatory pathway, there is no guarantee this would ultimately lead to expedited product development or earlier approval.

Moreover, even if our product candidates are approved under Section 505(b)(2), the approval may be subject to limitations on the indicated uses for which the products may be marketed or to other conditions of approval or may contain requirements for costly post-marketing testing and surveillance to monitor the safety or efficacy of theproducts.

The EU regulates medical devices and medicinal products separately, through different legislative instruments, and the applicable requirements will vary depending on the type of drug-device combination product. For instance, drug-delivery products intended to administer a medicinal product where the medicinal product and the device form a single integral product are regulated as medicinal products in the EU. In such a case, the marketing authorization application must include — where available — the results of the assessment of the conformity of the device part with the EU Medical Devices Regulation contained in the manufacturer’s EU declaration of conformity of the device or the relevant certificate issued by a notified body. If the marketing authorization application does not include the results of the conformity assessment and where for the conformity assessment of the device, if used separately, the involvement of a notified body is required, the EMA or the EU member state competent authority must require the applicant to provide a notified body opinion on the conformity of the device. By contrast, in case of drug-delivery products intended to administer a medicinal product where the device and the medicinal product do not form a single integral product (but are, e.g., co-packaged), the medicinal product is regulated in accordance with the rules for medicinal products described above while the device part is regulated as a medical device and will have to comply with all the requirements set forth by the EU Medical Devices Regulation. Should SirolimusEFR be considered a drug product, it would be subject to various other EMA regulatory requirements and timelines.

Changes in methods of product candidate manufacturing or formulation may result in additional costs or delay

As product candidates proceed through preclinical studies to late-stage clinical studies towards potential approval and commercialization, it is common that various aspects of the development program, such as manufacturing methods and formulation, are altered along the way in an effort to optimize processes and results. Such changes carry the risk that they will not achieve these intended objectives. Any of these changes could cause our product candidates to perform differently and affect the timing, continuation or results of planned clinical studies or other future clinical studies conducted with the altered materials. Such changes may also require additional testing and/or FDA or foreign regulatory authority approval or notified body certification. This could delay completion of clinical studies, require the conduct of bridging clinical studies or the repetition of one or more clinical studies, increase clinical study costs, delay approval of our product candidates and jeopardize our ability to commence sales and generaterevenue.

Our relationships with physicians, patients and payors in the United States and elsewhere may be subject, directly or indirectly, to applicable anti-kickback, fraud and abuse, false claims, transparency, and other healthcare laws and regulations

Our current and future operations with respect to the commercialization of our products are subject to various U.S. federal, state and foreign healthcare laws and regulations. These laws will affect our operations, sales and marketing activities, support and education programs and our relationships with physicians and other customers and third-party payors. The laws that may affect our ability to operate include:

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violate it to have committed a violation;

Ensuring that our internal operations and business arrangements with third parties comply with applicable healthcare laws and regulations could involve substantial costs. Certain physicians who may be in a position to influence the ordering or use of our products in procedures they perform have ownership interests in us and/or receive compensation for consulting and advisory services provided to us. It is possible that governmental authorities will conclude that our business practices do not comply with applicable fraud and abuse or other healthcare laws and regulations or guidance. If our operations are found to be in violationofsuchlawsoranyothergovernmentallawsandregulationsthatmayapplytous,wemaybesubject tosignificantpenalties,includingcivil,criminalandadministrativepenalties,damages,fines,exclusion fromU.S.governmentfundedhealthcareprograms,suchasMedicareandMedicaid,disgorgement,individual imprisonment, contractual damages, reputational harm, diminished profits and the curtailment or restructuring of ouroperations.

Healthcare cost-containment pressures and legislative or administrative reforms resulting in restrictive coverage and reimbursement practices of third-party payors could decrease the demand for our products, the pricesthatcustomersarewillingtopayforthoseproductsandthenumberofproceduresperformedusingour devices, which could have an adverse effect on ourbusiness

Our products are, and our future products are expected to be, purchased principally by hospitals and ambulatory medical facilities, which typically bill various third-party payors, including governmental programs,suchasMedicareandMedicaid,privateinsuranceplansandmanagedcareplans,forthehealthcare services provided to their patients. Because there is often no separate reimbursement for products used in surgical procedures, the additional cost associated with the use of some of our products can impact theprofit margin of the hospital or surgery center where the procedure is performed.

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Some of our target customers may be unwilling to adopt our products in light of the additional associated cost. Further, any decline in the amount payors are willing to reimburse our customers for the procedures using our products may make it difficult for customers to adopt our products and could create additional pricing pressure for us. We may be unable to sell our products on a profitable basis if third-party payors deny coverage or reduce their current levels of reimbursement. The ability of our customers to obtain appropriate coverage and reimbursement for our products or procedures using our products from government and private third-party payors iscritical to our success.

Reimbursement varies from country to country, state to state and plan to plan, and can significantly influence the acceptance of new products and services. Certain private third-party payors may view some procedures using our products as experimental and may not provide coverage. Third-party payors may not coverandreimbursetheproceduresusingourproductsinwholeorinpartinthefuture,orpaymentratesmay not be adequate, or both. For products administered under the supervision of a physician, obtaining coverage and adequate reimbursement may be particularly difficult because of the higher prices often associated with such drugs. Additionally, separate reimbursement for the product itself or the treatment or procedureinwhichtheproductisused maynotbeavailable,which may impactphysicianutilization.Further, the adequacy of coverage and reimbursement by third-party payors is also related to billing codes to describe procedures performed using our products. Hospitals and physicians use several billing codes to bill for such procedures. Third-party payors may not continue to recognize the billing codes available foruse by our customers.

Reimbursement rates are unpredictable, and we cannot project how our business may be affected by future legislative and regulatory developments. Future legislation or regulation, or changing payment methodologies, may have a material adverse effect on our business, and reimbursement may not be adequate for all customers. From time to time, typically on an annual basis, payment amounts are updated and revised by third-party payors. Because the cost of our products generally is recovered by the healthcare provider as part of the payment for performing a procedure and not separately reimbursed, these updates could directly impact the demand for our products. We cannot predict how pending and future healthcare legislation will impact our business and any changes in coverage and reimbursement that further restricts coverage of our products or lowers reimbursement for procedures using our devices could materially affect ourbusiness.

After we develop new products or seek to market our products for new indications, once approved (or certified), we may find limited demand for the product unless government and private third-party payors provide adequate coverage and reimbursement. Even with reimbursement approval and coverage by government and private payors, providers submitting reimbursement claims may face delays in payment if there is confusion by providers regarding the appropriate codes to use in seeking reimbursement. Such delays may create an unfavorable impression within the marketplace regarding the level of reimbursement or coverage available for our products.

Demand for our products or new approved (or certified) indications for our existing products may fluctuateovertimeiffederal,stateandforeignlegislativeoradministrativepolicychangesaffectcoverageor reimbursement levels for our products, or the services related to our products. In the United States, there havebeen,andweexpecttherewillcontinuetobe,legislativeandregulatoryproposalstochangethehealthcare system,someofwhichcouldhave a material adverse effect on our business.

Actual or perceived failures to comply with U.S. and foreign privacy and data protection laws, regulations and standards may adversely affect our business, operations and financial performance

We are subject to or affected by numerous federal, state and foreign laws and regulations, as well as regulatory guidance, governing the collection, use, disclosure, retention and security of personal data, such as information that we collect about patients and healthcare providers in connection with clinical studies in the United States and abroad. The global data protection landscape is rapidly evolving, and implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future. This evolution may create uncertainty in our business, affect our or our collaborators’, service providers’ and contractors’ ability to operate in certain jurisdictions or to collect, store, transfer use and share personal information, necessitate the acceptance of more onerous obligations in our contracts, result in liability or impose additional costs on us. The cost of compliance with these laws, regulations and standards is high and is likely to increase in the future. Any failure or perceived failure by us or our collaborators, service providers andcontractorstocomplywithfederal,stateorforeignlawsorregulation,ourinternalpoliciesandprocedures or our contracts governing

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processing of personal information could result in negative publicity, diversion of management time and effort and proceedings against us by governmental entities or others. In many jurisdictions, enforcement actions and consequences for noncompliance arerising.

In the United States, HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act and its implementing regulations, imposes privacy, security and breach notification obligations on certain healthcare providers, health plans, and healthcare clearinghouses, known as covered entities, as well as their business associates that perform certain services that involve creating, receiving, maintaining or transmitting individually identifiable health information for or on behalf of such covered entities, and their covered subcontractors. HIPAA establishes privacy and security standards that limit the use and disclosure of individually identifiable health information and protected health information (“PHI”) and requires the implementation of administrative, physical and technological safeguards to protect the privacy of PHI and ensure the confidentiality, integrity and availability of electronic PHI. Most healthcare providers, including research institutions from which we obtain patient health information, are subject to privacy and security regulations promulgated under HIPAA. Covered entities are those that electronically transmit health information in connection with transactions susceptible to standards set by the U.S. Department of Health and Human Services and may concern billing and payment for services or insurance coverage. Business associates may perform or assist in performance of a function or activity involving the use or disclosure of individually identifiable health information, or other activities that may involve disclosure of individually identifiable health information by the covered entity. While we do not believe that we are currently acting as a covered entity or business associate under HIPAA and, thus, are not directly regulated under HIPAA, federal and state regulators may disagree and bring an enforcement action under HIPAA against us.

In addition, certain state laws govern the privacy and security of health-related and other personal information, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts. By way of example, the California Consumer Privacy Act (the“CCPA”),whichwentintoeffectonJanuary1,2020,givesCaliforniaresidentsexpandedrightstoaccess and delete their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is used. The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches that is expected to increase data breach litigation. The CCPA may increase our compliance costs and potential liability. Further, the California Privacy Rights Act (the “CPRA”) passed in California in 2020, significantly amending the CCPA and imposing additional data protection obligations on covered businesses, including additional consumer rights processes, limitations on data uses, new audit requirements for higher risk data and opt outs for certain uses of sensitive data. The CPRA also creates a new California data protection agency authorized to issue substantive regulations and could result in increased privacy and information security enforcement. ThemajorityoftheprovisionswentintoeffectonJanuary1,2023,andadditionalcomplianceinvestmentand potential business process changes may be required. Similar laws have taken effect in Virginia, Colorado, Connecticut and Utah, and been enacted or proposed in other states, reflecting atrend toward more stringent privacy legislation in the United States. Numerous data privacy related legislative proposals remain pending at the federal level as well. The enactment of such laws could have potentiallyconflictingrequirementsthatwouldmakecompliancechallenging.Intheeventthatwearesubject to or affected by HIPAA, the CCPA, the CPRA or other domestic privacy and data protection laws, any liability from failure to comply with the requirements of these laws could adversely affect our financial condition.

Our operations abroad may also be subject to increased scrutiny or attention from data protection authorities.Forexample,theEUandtheUKGeneralDataProtectionRegulations(respectively,the“EU GDPR”andthe“UKGDPR,”together,the“GDPR”)eachimposestrictrequirementsforprocessingthe personaldataofindividualswithintheEEA,and/ortheUKandtoprocessingthatoccursinthecontextofan establishmentin,respectively,theEEAand/orUK.TheEUGDPR,whichwentintoeffectinMay2018 andintroducesstrictrequirementsforprocessingthepersonalinformationofEUsubjects,includingclinical studydata.TheGDPRhasandwillcontinuetoincreasecomplianceburdensonus,includingbymandating potentiallyburdensomedocumentationrequirementsandgrantingcertainrightstoindividualstocontrol how we collect, use, disclose, retain and process information about them. The processing of sensitive personal data, such as physical health condition, may impose heightened compliance burdens under the GDPR and is a topic of active interest among foreign regulators. Companies that must comply with the GDPRfaceincreasedcomplianceobligationsandrisk,includingmorerobustregulatoryenforcementofdata protectionrequirementsandpotentialfinesfornoncomplianceofupto€20millionundertheEUGDPR and£17.5millionundertheUKGDPRor4%oftheannualglobalrevenuesofthenoncompliantcompany, whicheverisgreater.Inadditiontothesefines,supervisoryauthoritieshaveextensiveauditandinspection rights,andpowers

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OBIO US Equity

OBIO · 10-K · period ended 2023-12-31

Item 1A. Risk Factors

OBIO US Equity☆

OBIO · 10-K · period ended 2023-12-31

Item 1A. Risk Factors

OBIO US Equity