UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
(Mark One)
For the Fiscal Year Ended December 31, 2022
OR
For the transition period from ________
to ________
Commission File Number 001-36747
Vivani
Medical, Inc.
(Exact name of registrant as specified
in its charter)
(Address of principal executive offices, including zip code)
Registrant’s telephone number, including
area code: (818) 833-5000
Securities registered pursuant to Section
12(b) of the Act:
Title of Each Class Trading Symbol Name of Each Exchange on Which Registered
Common Stock VANI NASDAQ
Warrants VANIW NASDAQ
Securities registered pursuant to Section
12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned
issuer, as defined in Rule 405 of the Securities Act. Yes ☐No☒
Indicate by check mark if the registrant is not required to
file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☐No☒
Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes☒
No ☐
Indicate by check mark whether the registrant
has submitted electronically on its corporate website, if any, every Interactive Data File required to be submitted and pursuant
to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit). Yes☒ No ☐
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of
“large accelerated filer,” “accelerated filer,” “smaller reporting company”, and “emerging
growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐ Accelerated filer ☐
Non-accelerated filer ☒ Smaller reporting company ☒
Emerging growth company ☐
If an emerging growth company, indicate
by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant
has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared
or issued its audit report. ☐
If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the
registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate
by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐No☒
The aggregate market value of the shares
of the registrant’s Common Stock held by non-affiliates of the registrant as of June 30, 2022, computed by reference to the
closing sales price on the Nasdaq Capital Market on June 30, 2022, was approximately $57.1 million.
As of March 27, 2023, the registrant had
50,735,770 shares of common stock, no par value per share and 7,680,938 warrants outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions
of the registrant’s Definitive Proxy Statement for the 2023 Annual Meeting of Stockholders (the “Proxy Statement”) are
incorporated herein by reference in Part III of this Annual Report on Form 10-K to the extent stated herein. Registrant
intends to file a definitive proxy statement pursuant to Regulation 14A with the Securities and Exchange Commission (the “SEC”) within
120 days after the end of registrant’s fiscal year end of December 31, 2022.
VIVANI MEDICAL, INC.
FORM 10-K
TABLE OF CONTENTS
Page
PART I
Item 1. Business 5
Item 1A. Risk Factors 28
Item 1B. Unresolved Staff Comments 58
Item 2. Properties 58
Item 3. Legal Proceedings 58
Item 4. Mine Safety Disclosures 58
PART II
Item 6. Reserved 60
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 68
Item 8. Financial Statements and Supplementary Data 68
Item 9A. Controls and Procedures 68
Item 9B. Other Information 69
Item 9C. Disclosure regarding foreign jurisdictions that prevent inspections 69
PART III
Item 10. Directors, Executive Officers and Corporate Governance 70
Item 11. Executive Compensation 70
Item 14. Principal Accounting Fees and Services 70
PART IV
Item 15. Exhibits, Financial Statement Schedules 70
SIGNATURES 74
2
Below is a summary of
the principal risk factors related to the Annual Report on Form 10-K (“10-K”) for the fiscal year ended December 31,
2022.
Summary of Risk Factors
Our business is subject to a number of risks of which you should
be aware before making an investment decision. These risks are discussed more fully in the “Risk Factors” section of
this Form 10-K. These risks include, but are not limited to, the following:
● We may not be able to protect our proprietary or licensed technology.
3
VIVANI MEDICAL, INC.
FORM 10-K
CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS
AND FACTORS THAT MAY AFFECT FUTURE RESULTS
This Annual Report
on Form 10-K, or Annual Report, includes forward-looking statements within the meaning of Section 27A of the Securities Act of
1933, as amended, or the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act.
All statements other than statements of historical fact contained in this Annual Report are forward-looking statements. In some
cases, you can identify forward-looking statements by terminology such as “may,” “could,” “will,”
“would,” “should,” “expect,” “plan,”, “anticipate,” “believe,”
“estimate,” “intend,” “predict,” “seek,” “contemplate,” “project,”
“continue,” “potential,” “ongoing” or the negative of these terms or other comparable terminology,
although not all forward-looking statements contain these identifying words. These forward-looking statements include, but are
not limited to, statements about:
Any forward-looking
statements in this Annual Report reflect our current views with respect to future events or to our future financial performance
and involve known and unknown risks, uncertainties, assumptions and other factors described under the “Risk Factors”
section and elsewhere in this Annual Report, that may cause our actual results, performance or achievements to be materially different
from any future results, performance or achievements expressed or implied by these forward-looking statements. Given these uncertainties,
you should not place undue reliance on these forward-looking statements.
In addition, statements
that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements
are based upon information available to us as of the date of this report, and while we believe such information forms a reasonable
basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that
we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are
inherently uncertain and investors are cautioned not to unduly rely upon these statements as predictions of future events. Except
as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information
becomes available in the future.
This Annual Report
also contains estimates, projections and other information concerning our industry, our business, and the markets for certain diseases,
including data regarding the estimated size of those markets, and the incidence and prevalence of certain medical conditions. Information
that is based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties
and actual events or circumstances may differ materially from events and circumstances reflected in this information. Unless otherwise
expressly stated, we obtained this industry, business, market and other data from reports, research surveys, studies and similar
data prepared by market research firms and other third parties, industry, medical and general publications, government data and
similar sources.
4
PART I
Item 1. Business
Our Company
Company Overview
Vivani
Medical, Inc. (“Vivani,” the “Company,” “we,” “us,” “our” or similar
terms) is a preclinical stage biopharmaceutical company which develops miniaturized, subdermal implants utilizing
its proprietary NanoPortalTM technology to enable long-term, near constant-rate delivery of a broad range of medicines to
treat chronic diseases. Vivani uses this platform technology to develop and potentially commercialize drug implant candidates,
alone or in collaboration with pharmaceutical company partners to address a leading cause of poor clinical outcomes in the treatment
of chronic disease, medication non-adherence. According to the US Centers for Disease Control and Prevention (CDC), adherence
is defined as the extent to which an individual’s behavior, including taking medications, corresponds to recommendations
from a health care provider. For example, approximately 50% of patients treated for type 2 diabetes are medication non-adherent,
which can lead to poor clinical outcomes. We are developing a portfolio of miniature, sub-dermal drug implant candidates that,
unlike most oral and injectable medicines, are designed with the goal of guaranteeing medication adherence by delivering therapeutic
drug levels for up to 6 months or the life of the implant. In addition, our aim is to minimize fluctuations in patients’
drug levels through the use of our NanoPortal technology, which may improve the tolerability profiles for medicines that produce
side effects associated with fluctuating drug levels in the blood.
Vivani resulted from the August
2022 business combination of Second Sight Medical Products, Inc. (Second Sight) and Nano Precision Medical, Inc. (NPM). Since
inception, Vivani’s main priority has been the further development of the Company’s lead program, NPM-119, a
miniature, 6-month, GLP-1 implant candidate for the treatment of patients with type 2 diabetes under the Company’s
Biopharm Division (formerly NPM). In parallel, Vivani’s new management team remained committed to identifying and
exploring strategic options for the Neuromodulation Division (formerly Second Sight) that will enable further development of
its pioneering neurostimulation systems to help patients recover critical body functions.
In
March 2023, Vivani announced the filing of a Registration Statement on Form S-1 with the U.S. Securities and Exchange Commission
(“SEC”) for the proposed initial public offering of Cortigent, Inc. (“Cortigent”). Cortigent, currently
a wholly-owned subsidiary of Vivani, was formed for the purpose of advancing the business of Vivani’s neuromodulation
division and is expected to continue to be majority-owned by Vivani immediately following the initial public offering.
Moving
forward, Vivani’s focus will be on the further development of NPM-119 and its emerging pipeline of innovative miniature,
long-term drug implants to treat patients with chronic diseases and high unmet medical need. The origins of this business started
while its current Vivani CEO and NPM co-founder Adam Mendelsohn and two of his graduate school colleagues at the University of
California, San Francisco (UCSF) and the University of California, Berkeley (UCB), entered business school competitions leveraging
their growing knowledge of chemistry, drug delivery, and nanoscale technology to propose the development of new miniature, biocompatible,
drug implant prototypes capable of releasing therapeutic drug levels over an extended period of time. Based on their success and
encouragement from professors and others, including medical device/pharmaceutical icon Al Mann, Dr. Mendelsohn and colleagues
started Nano Precision Medical in 2009 and operations began in 2011 in an incubator on the UCB campus. Today, the company has
grown to nearly 40 full-time employees and its current headquarters and operations are located at 5858 Horton Street, Emeryville,
California.
Our
Proprietary NanoPortalTM Implant Technology
Vivani’s
implant technology, which we refer to as NanoPortal, utilizes a space-efficient design that allows a miniaturized implant to provide
many months of therapeutic delivery of potent molecules. The technology has no moving parts, which is intended to minimize fluctuating
drug delivery over the duration of the implant and is also tunable. Vivani has primarily been developing implant candidates around
peptide therapeutics, but the technology has potential application across a wide range of molecular types. The key innovative
component of the technology is a biocompatible titanium-oxide nano-porous membrane which consists of millions of precisely
sized nanotubes whose inner diameters represent the only path for drug molecules to exit the reservoir once the implant is fully
assembled.
5
We
believe the key to the technology’s ability to achieve near constant release without moving parts is the ability to precisely
tune the inner diameter of the nanotubes to the same size range as individual drug molecules. If the inner diameter of the nanotubes
is smaller than the size of a given drug molecule, there would be no release at all. If the inner diameter of the nanotubes is
much larger than the size of a given drug molecule, the rate at which the drug leaves the reservoir would follow traditional physics
and would decrease over time as the drug concentration decreases. However, when the opening is close enough in size to the drug
molecules, the drug release is constrained and can result in a variety of desirable delivery profiles, including near constant
release. Vivani’s NanoPortal technology has demonstrated near constant release in an animal model for six months.
For
drug molecules with adequate potency and stability, NanoPortal can allow minimization of the implant size while extending implant
duration. A custom delivery profile can also be achieved by adjusting the number of accessible nanotubes, engineering changes
to the implant, and/or changes in formulation parameters. With the design flexibility afforded by the NanoPortal technology, Vivani
plans to develop a portfolio of drug implant candidates aimed at addressing chronic diseases with high unmet medical needs.
6
Vivani’s
NanoPortal technology has demonstrated near constant in vitro release for two dose configurations (see left
portion of the chart below). In vitro testing was performed at 37°C on implant devices stored in a buffer solution
adjusted to a physiological pH of 7.4. For a high-dose configuration, the observed near-constant release was demonstrated over
the 12-week measurement period, after which the drug began to be depleted. For a low-dose configuration, the observed near-constant
release lasted for 24 weeks. In addition, the near-constant in vitro release observed has been shown to translate into
sustained exposure levels in vivo over a 6-month duration in an animal model (depicted in a separate chart below). Finally, NanoPortal has demonstrated minimal in vitro fluctuations during 2.5-hour interval sampling periods which demonstrates
a very smooth release profile (see right portion of the chart below for individual device release rates).
7
Our
Emerging Portfolio
Although
Vivani’s proprietary NanoPortal implant technology may potentially be broadly applied across a wide range of therapeutic
molecules and disease areas, our initial focus is on peptide therapeutics for the treatment of patients with metabolic disease.
The pipeline table below-depicts our current portfolio of
four distinct pre-clinical stage programs targeting type 2 diabetes (in humans and companion cats), obesity, and NASH (non-alcoholic
steatohepatitis).
Below
is a summary description of each pipeline program:
NPM-119:
This exenatide implant candidate is in preclinical stage development for the treatment of patients with type 2 diabetes with an
anticipated duration of six months. Exenatide is a GLP-1 receptor agonist (GLP-1 RA or GLP-1) and was originally approved as the
twice-daily subdermal injection, Byetta® (exenatide) injection, approved in 2005 by the U.S. Food and Drug Administration
(FDA) as adjunctive therapy to improve glycemic control in patients with type 2 diabetes mellitus who are taking metformin, a
sulfonylurea, or a combination of metformin and a sulfonylurea but have not achieved adequate glycemic control. Byetta was the
first GLP-1 to reach the U.S. marketplace.
According
to the CDC, more than 37 million Americans have diabetes and 90-95% have type 2 diabetes. The total number of people living worldwide
with diabetes is projected to rise to 643 million by 2030 and 783 million by 2045. According to the American Diabetes Association
(ADA), the total cost of diagnosed diabetes in the U.S. was $327 billion in 2017, including $237 billion for direct medical costs
and $90 billion for reduced productivity. In 2022, the global sales of GLP-1 receptor agonists products was nearly $20 billion.
Because the current drug adherence rate for type 2 diabetes is only 40-60% for oral and injectable GLP-1 products, Vivani
believes there is significant unmet need for a GLP-1 implant that could address non-adherence. Vivani holds all commercial rights
to NPM-119.
We
believe NPM-119, our lead drug implant candidate, has the potential to address two important limitations of the GLP-1category,
namely, poor real-world medication adherence, and a potentially undesirable gastrointestinal tolerability profile.
To
address real-world medication adherence, NPM-119 is designed to provide 6 months of steady dosing from a single miniature, subdermal
implant. Current GLP-1 products are associated with only 50-60% real-world medication adherence. Non-adherent patients do not
receive the full potential benefits of existing treatments. In addition, medication non-adherence for patients with type 2 diabetes
is associated with approximately $5,500 per non-adherent patient in avoidable healthcare costs associated with unnecessary acute
care and hospitalization visits. NPM-119 has the potential to offer a highly differentiated 6-month dosage form to
address the medication adherence challenge. Results from a small, third-party market research study funded by Vivani indicate
that the majority of physicians will be highly likely to recommend a product with the NPM-119 target product profile to their
type 2 diabetes patients. In the market research study, primary care physicians (n=10) provided an average rating of 8.3 out of
10 in terms of likelihood of recommending a product with NPM-119’s target product profile. These preliminary results are
encouraging since 90% of type 2 diabetes patients are treated in a primary care setting.
8
A
well-documented side effect of the GLP-1 class is poor gastrointestinal (GI) tolerability. GI intolerance can present as nausea
and vomiting which can lead to volume loss (hypovolemia), acute kidney injury (AKI) and potentially major cardiovascular adverse
events. GI-related issues are the most commonly reported side effect for all drugs in the GLP-1class. In responding to a marketing
application filed for Intarcia Therapeutics’ ITCA 650 exenatide implant candidate, with a proposed indication
for use as an adjunct to diet and exercise to improve glycemic control in adults with type 2 diabetes mellitus (T2DM), the FDA
stated in a July 29, 2022 letter that they believe that marked increases in the dose of a GLP-1 are responsible for increased
risk of GI intolerance. The establishment of marked GLP-1 dose increases being responsible for GI intolerance combined with the
daily in vitro variability exhibited by ITCA 650 resulted in the FDA summarizing their findings as “The clinical
data in the three pivotal clinical trials for ITCA 650–including the high rates of nausea, vomiting, and diarrhea, the high
rates of discontinuations due to these adverse gastrointestinal reactions, and most notably, the increased risk of acute kidney
injury (AKI) comprise safety signals whose root cause can reasonably be concluded to be irregular and uncontrolled exenatide release”
and “The data provided to validate the limits of the in vitro dose delivery specifications did not support the safe and
effective use of the device constituent of ITCA 650.” We believe Vivani’s NanoPortal technology, which is specifically
designed and tested to deliver regular and controlled exenatide release, may overcome these challenges. Our NanoPortal implant
technology has no moving parts that could otherwise contribute to variations in drug release rates. NanoPortal has demonstrated
the ability to release exenatide with minimal fluctuations in vitro on time scales that are even shorter than a day as
exhibited by the 2.5-hour in vitro release rates that are shown in the Technology section above. Since the half-life of
exenatide in humans is 2.4-4 hours, steady release from one 2.5-hour interval to the next is expected to be associated with minimal
device-related exposure fluctuations, potentially minimizing the opportunity for gastrointestinal events.
An
investigational new drug application (IND) to support the initiation of clinical studies with NPM-119 is planned for submission
in 2023. Vivani’s initial clinical study, called LIBERATE-1, is designed as a 12-week, randomized, Phase 2 clinical study
to investigate the safety, tolerability and full pharmacokinetic profile of NPM-119 in patients with type 2 diabetes. The study
will include a Bydureon BCise® (exenatide extended-release injectable suspension) comparator, will investigate glycemic control
as a secondary endpoint, and will also evaluate changes in weight. The study will recruit patients on a non-exenatide GLP-1
therapy which will be discontinued prior to randomization. Conditional institutional review board (IRB) approval has
been obtained pending IND clearance. The LIBERATE-1 study design was discussed in multiple FDA interactions and is planned
to initiate in mid-2023, subject to IND clearance. The pharmacokinetic profile obtained in a preclinical study with the NPM-119
configuration (n=8) intended for use in LIBERATE-1 is provided in the graphic below. The left axis shows experimentally measured
exenatide plasma concentrations from rats implanted with NPM-119. The right axis shows expected exenatide plasma concentrations
in humans, assuming there are no NPM-119 specific translation effects, based on previously established clearance rate differences
between rats and humans when exposed to steady state delivery of exenatide. Since the EC50 (concentration of exenatide
which provides half maximal response) is 0.0835 ng/mL, this pharmacokinetic profile is expected to provide therapeutic exposure
levels of exenatide in humans unless, for example, there are any device-specific pharmacokinetic translation effects from rats
to humans which the results of LIBERATE-1 will determine.
9
Vivani
has also made progress towards preparing for future clinical development of NPM-119. In the second half of 2023, Vivani is planning
to relocate into a new facility designed to provide suitable capacity for manufacturing of clinical materials for registration
studies as well as commercial-scale supply. Based on preliminary discussions with the FDA, Vivani intends to pursue the 505(b)(2)
pathway and believes that a single pivotal trial evaluating a 6-month NPM-119 configuration that is representative of the proposed
commercial configuration may be sufficient to support registration in the U.S. That said, throughout the NPM-119 development process,
we also intend to further engage with regulatory authorities on the timing, duration, endpoints, number of enrolled patients and
other aspects of trial design for future clinical trials of NPM-119.
We
have conducted a pre-clinical study to evaluate proof-of-concept activity of NPM-119. In that study, a six-month implantation of
NPM-119 into rats was associated with steady exenatide concentration over the duration of the implant, as depicted in the figure
below.
In
addition to the NPM-119 program targeting the treatment of patients with type 2 diabetes, Vivani believes that the results of
LIBERATE-1, if favorable, could support the further exploration of NPM-119 for obesity with a higher dose configuration.
This would be similar to the strategy Novo Nordisk has taken with its semaglutide injection franchise, Ozempic® and Wegovy®
for type 2 diabetes and obesity, respectively.
OKV-119:
This exenatide implant is under development for the treatment of obese and diabetic companion cats. In 2017, there were over 90
million cats in the U.S. 20-30 million cats have obesity, and 2-4 million cats have diabetes. Over $100 billion is spent on pets
in the U.S. each year, this spending is expected to triple over the next 10 years, and pet health is the fastest-growing sub-segment
of this market. Since cats are difficult to medicate, we believe that a small subdermal implant administered by a veterinarian
can be a welcome option for many pet owners, if approved.
The
program is partnered with Okava Pharmaceuticals, Inc. (“Okava”) who is responsible for management and funding of the
development and regulatory activities of OKV-119 and, if approved, ultimate commercialization of this product. In 2022,
OKV-119 advanced out of the feasibility stage after having produced in vivo data demonstrating a configuration that provided adequate
exenatide exposure to companion felines over a 12-week duration. Vivani does not anticipate any significant Vivani
focus beyond the support of product development and manufacturing activities.
10
NPM-139 :
This implant candidate is in feasibility testing for the treatment of patients with obesity. The undisclosed compound, is the
proprietary molecule of a large pharmaceutical company with whom we have entered into a material transfer agreement to conduct
feasibility studies. The undisclosed compound is the drug substance in an approved product which is marketed in the U.S. for the
treatment of obesity. Although the initial target product profile is under development as a six-month implant, we believe this
product candidate has the potential for once-yearly administration based on preliminary results of feasibility testing to date.
The
market for GLP-1 therapy in the treatment of patients with obesity is also attractive and growing rapidly. As an example, Novo
Nordisk’s Wegovy® (semaglutide injection) sold $336M in the fourth quarter of 2022, which represents a 111% increase
quarter-over-quarter from the third quarter of 2022.
NPM-159 :
This potential six-month implant candidate is in feasibility testing for the treatment of patients with non-alcoholic steatohepatitis
(NASH). The undisclosed compound is the proprietary molecule of a large pharmaceutical company with whom we have entered
into a material transfer agreement to conduct feasibility studies. The undisclosed compound is in a drug class that has already
demonstrated, in clinical trials by a third party, signals of clinical activity for the treatment of NASH, and multiple product
candidates based on that drug class are currently under development in the U.S.
Beyond
our current pipeline, Vivani intends to apply its extensive experience and proprietary implant technology to develop a pipeline
of drug implant candidates that have the potential to address chronic diseases with high unmet medical needs across multiple therapeutic
categories and disease areas. For example, Vivani is also following the evaluation of the GLP-1 agonist semaglutide in the treatment
of NASH and Alzheimer’s disease . If one or more of these trials shows encouraging results, Vivani believes that a
miniature long-term drug implant could have the potential to be an attractive alternative treatment option in these underserved
patient populations.
Our
Strategy
Vivani’s
mission is to provide people with the freedom to live healthier. Vivani develops miniaturized drug implants using its proprietary
NanoPortal implant technology to enable delivery of a broad range of medicines to treat chronic diseases. These products, designed
to address poor medication adherence, are anticipated to significantly improve the health of otherwise non-adherent patients and
to provide assurance to their family members and to the health care professionals who treat them.
Vivani
plans to initially test its technology and business model through the clinical and regulatory development of its lead program,
NPM-119 (exenatide implant). The active drug, exenatide, is a member of the GLP-1 receptor agonist class of drugs. Drug products,
including drug substances within this relatively new drug class, have already been successfully developed and marketed for the
treatment of both type 2 diabetes and obesity and GLP-1 products are the category leader in revenue for both the type 2 diabetes
and obesity drug treatment categories. In addition, GLP-1 receptor agonists have shown promising early clinical results in NASH
and they are being evaluated in other therapeutic areas including Alzheimer’s disease. Vivani intends to complete IND-enabling
studies and submit an IND to permit a first-in-human (FIH) study of NPM-119 in type 2 diabetes in 2023. In addition, Vivani intends
to advance its early-stage programs in obesity and NASH with two undisclosed collaborations with global pharmaceutical companies.
Its business strategy includes:
● Announcing top-line results from LIBERATE-1 in the first half of 2024;
● Advancing the feasibility assessments for NPM-139 and NPM-159 in 2023;
● Maintaining, expanding, and protecting its intellectual property portfolio;
11
Competition
Our
industry is characterized by rapidly advancing technologies, intense competition and a strong emphasis on proprietary products.
We face competition and potential competition from a number of sources, including pharmaceutical and biotechnology companies,
generic drug companies, drug delivery companies and academic and research institutions. Some of these companies are developing
therapies that are directly competitive to our approach. We believe the key competitive factors that will affect the development
and commercial success of our product candidates include ease of administration and convenience of dosing, therapeutic efficacy,
safety and tolerability profiles and cost. Many of our potential competitors have substantially greater financial, technical and
human resources than we do, as well as more experience in the development of product candidates, obtaining FDA and other foreign
regulatory approvals of products, and the commercialization of those products. Consequently, our competitors may develop similar
products to address the indications targeted by our current product candidates or for other indications we may pursue in the future,
and such competitors’ products may be more effective, better tolerated and less costly than our product candidates. Our
competitors may also be more successful in manufacturing and marketing their products than we are. We will also face competition
in recruiting and retaining qualified personnel and establishing clinical trial sites and patient enrollment in clinical trials.
The
competition for Vivani will be dependent upon the individual product candidate in development. For Vivani’s lead asset,
NPM-119, the competition could be defined as any drug product/manufacturer approved for use in the treatment of patients with
type 2 diabetes. However, we believe that our more direct competitors comprise other GLP-1 receptor agonist and combination products
with a GLP-1 receptor agonist component approved or in development for type 2 diabetes only. In May 2022, Lilly’s MounjaroTM
(tirzepatide) was approved as the first and only combination GIP and GLP-1 receptor agonist for the treatment of adults with type
2 diabetes. Manufacturers with approved GLP-1 receptor agonists include Lilly, Novo Nordisk, AstraZeneca, and Sanofi.
In
addition to the marketed GLP-1 products, Intarcia Therapeutics has continued to seek approval of ITCA 650 (six-month exenatide
implant) for the treatment of patients with type 2 diabetes since 2016. In public correspondence, FDA asserted that the ITCA 650
NDA did not meet criteria for approval because (i) data submitted in the application do not show that the product would be safe
under the proposed conditions of use and (ii) the methods used in, and the facilities and controls used for, the manufacture,
processing, or packing of the product are not shown to be adequate to preserve its identity, strength, quality, and purity. Further
correspondence disclosed additional deficiencies which included, but were not limited to, data that did not demonstrate adequate
device reliability in regard to dose delivery. While the ultimate fate of ITCA 650 remains unclear from a regulatory approval
perspective, the information provided by FDA and Intarcia, informs our development path and regulatory strategy. In addition,
the support for a six-month exenatide implant provided by patients, physicians, key opinion leaders and the American Diabetes
Association provides confidence for the NPM-119 opportunity.
We
believe the challenges experienced by ITCA 650 may have been related to Intarcia’s proprietary implant technology. The potential
differentiation between Intarcia’s DUROS (osmotic pump) implant technology and Vivani’s NanoPortal (no moving parts)
implant technology could be a key differentiator based on recent FDA correspondence. In addition, Vivani’s NanoPortal technology
should also allow for a much smaller size implant and corresponding needle gauge, which may facilitate easier insertion and removal
of NPM-119 compared to ITCA 650. Although no head-to-head clinical studies of NPM-119 and ITCA 650 have been conducted, there
are differences in the underlying delivery technology between these two drug/device combination candidates, which may result in
different release profiles, as depicted below:
12
NPM-119
NPM-119
(exenatide implant) candidate is a GLP-1 receptor agonist in development for the treatment of type 2 diabetes. Competition in
the GLP-1 class for this indication includes the following:
● AstraZeneca (Bydureon BCise®/exenatide); and (Byetta®/exenatide)
● Sanofi (Adlyxin®/lixisenatide)
We
believe NPM-119, our lead drug implant candidate, has the potential to address two important aspects of the GLP-1category which
are associated with the above-mentioned products, namely, poor real-world medication adherence and potential undesirable gastrointestinal
tolerability.
NPM-139
NPM-139
(undisclosed active pharmaceutical ingredient) is in feasibility testing for the treatment of patients with obesity. According
to the World Obesity Atlas 2022, one billion adults globally will have obesity (BMI ≥30 kg/m2), or about 18% of the adult population,
by 2030. In addition, it is expected that there will be 103 million children and 150 million adolescents living with obesity by
2030 as well.
Competition
in the treatment of obesity includes the following:
● Teva’s Adipex® (phentermine) and generics
● Roche’s Xenical® (orlistat) generics
● Vivus’s Qsymia® (phentermine/topiramate extended release)
● Orexigen’s Contrave® (bupropion/naltrexone)
● Novo Nordisk’s Saxenda® (liraglutide) and Wegovy® (semaglutide)
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NPM-159
NPM-159
(undisclosed active pharmaceutical ingredient) is in feasibility testing for the treatment of non-alcoholic steatohepatitis
(NASH). According to the American Liver Foundation, approximately 5% of the U.S. adult population have NASH. About 20% of the
U.S. adult population have non-alcoholic fatty liver disease (NAFLD). NASH is the more severe form of NAFLD in which patients
have hepatitis or swelling or inflammation of the liver and liver cell damage.
There
are no currently approved drugs for the treatment of NASH. Although the active drug in NPM-159 is undisclosed, there is encouraging
preliminary clinical data from another member in this class of drugs.
Sales
and Marketing
Vivani
currently does not have a commercial infrastructure in any geography. As we progress our programs through development, we may
build a commercial infrastructure in the United States and selected other territories to support the commercialization of each
of our product candidates when we believe a regulatory approval in a particular territory is likely. We intend to conduct market
research in connection with designing our commercialization strategy for each of our product candidates. We may seek licensing
or other strategic collaborations with, for example, global pharmaceutical company partners, to support our commercialization
efforts. We will consider a range of options including building a commercial capability internally, leveraging third-party biopharmaceutical
commercialization organizations, other strategic partners, distributors and/or contract sales forces to expand the commercial
availability of our product candidates when appropriate.
Our
Corporate Information
Vivani
was incorporated under the laws of California on December 17, 2009. Its operations began in 2010. Vivani’s corporate office
is located at 5858 Horton St. #280, Emeryville, California, 94608; its telephone number is (415) 506-8462; and its website is
located at www.vivani.com. In November 2022, Vivani signed a long-term lease for a new facility at 1350 South Loop Road, Alameda,
CA 94502 to accommodate office space, R&D, analytical labs and a GMP manufacturing suite to support our research and development
activities. We plan to initiate our move into the new facility in September 2023 and have it completed by the end of 2023.
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Chemistry,
Manufacturing, and Controls
Vivani
has developed production processes and quality systems to support the manufacture of NPM-119 clinical materials for use in the
currently planned first-in-human (LIBERATE-1) clinical study. A small number of processes are continuing to be refined prior to
the production of the materials to be used in the study. In addition, efforts have also been initiated to support potential subsequent
clinical investigations .
Vivani
has established in-house research, development, and manufacturing capabilities in its corporate headquarters in Emeryville, California,
U.S. Vivani has also engaged with contract manufacturers and/or analytical laboratories for selected processes when appropriate.
In general, Vivani purchases the drug substance from a third-party manufacturer and all assembly processes in which the drug substance
is present, including the associated in-process testing, are intended to be performed by contract manufacturers . Several
device components and all raw materials are purchased from outside vendors according to established specifications. The device
assembly processes, including the associated in-process testing, and final product testing are anticipated to be performed by
Vivani in Emeryville. The custom applicator , which is intended to facilitate subdermal placement of the implant in patients,
has been designed and will be manufactured by a contract manufacturer. Several device components and the drug substance are purchased
from outside vendors according to established specifications.
As
the NPM-119 program advances, Vivani may also engage with additional contract analytical and manufacturing organizations as needed.
Currently, Vivani is not a party to any long-term, commercial manufacturing agreements.
Intellectual
Property
As of March 27, 2023, Vivani held or controlled
14 issued U.S. patents, 8 pending U.S. patent applications, and 12 patents in various jurisdictions outside the United States.
Additionally, Vivani is pursuing 22 corresponding patent applications that are pending in various foreign jurisdictions. Further
advancement of Vivani’s intellectual property portfolio will require the filing of patent applications related to its proprietary
manufacturing process and product candidates. Vivani has patents extending into Australia, China, Germany, India, Japan, Netherlands,
New Zealand, Republic of Korea, Russia and the United States of America, as well as trade secrets protecting Vivani’s intellectual
property. Vivani’s patent prosecution strategy includes exploration of opportunities to expand its patent life and use cases
in order to broaden its existing patent portfolio.
Below is a further description of certain
of Vivani’s key issued patents, including the category of protection, expiration date, number of related patents issued in
foreign jurisdictions and the product candidates to which each patent relates. Vivani currently holds or controls:
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Wherever
possible, Vivani seeks to protect its inventions by filing U.S. patents as well as foreign counterpart applications in select
other countries. Because patent applications in the U.S. are maintained in secrecy for at least eighteen months after the applications
are filed, and since publication of discoveries in the scientific or patent literature often lags behind actual discoveries, Vivani
cannot be certain that it was the first to make the inventions covered by each of its issued or pending patent applications, or
that Vivani was the first to file for protection of inventions set forth in such patent applications. Vivani’s planned,
or potential products may be covered by third-party patents or other intellectual property rights, in which case continued development
and marketing of its products would require a license. Required licenses may not be available to Vivani on commercially acceptable
terms, if at all. If Vivani does not obtain these licenses, it could encounter delays in product introductions while it attempts
to design around the patents, or Vivani could find that the development, manufacture, or sale of products requiring such licenses
are not possible.
In
addition to patent protection, Vivani also relies on know-how, trade secrets, and the careful monitoring of proprietary information,
all of which can be difficult to protect. Vivani seeks to protect some of its proprietary technology and processes by entering
into confidentiality agreements with its employees, consultants, and contractors. These agreements may be breached, Vivani may
not have adequate remedies for any breach and its trade secrets may otherwise become known or be independently discovered by competitors.
To the extent that Vivani’s employees or its consultants or contractors use intellectual property owned by others in their
work for Vivani, disputes may also arise as to the rights in related or resulting know-how and inventions.
Government
Regulation
Regulatory
authorities in the U.S. at the federal, state, and local level and in other countries extensively regulate, among other things,
the research and clinical development, testing, manufacture, quality control, approval, labeling, packaging, storage, record-keeping,
promotion, advertising, distribution, post-approval monitoring and reporting, marketing, pricing, and export and import of drugs,
medical devices and combinations of drugs and devices (combination products) such as those we are developing. Generally, before
a new drug or drug-device combination product can be marketed, considerable data demonstrating its quality, safety, and efficacy
must be obtained, organized into a format specific to each regulatory authority, submitted for review, and approved by the relevant
regulatory authority.
In
the U.S., the FDA regulates drugs, devices and combination products under the Federal Food, Drug, and Cosmetic Act (FDCA), and
its implementing regulations. These products are also subject to other federal, state and local statutes and regulations. The
process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local and foreign statutes
and regulations require the expenditure of substantial time and financial resources. Failure to comply with the applicable U.S.
requirements at any time during the product development process, approval process or after approval, may subject an applicant
to administrative or judicial sanctions. These sanctions could include, among other actions, the FDA’s, or another regulatory
authority’s, refusal to approve pending applications, withdrawal of an approval, a clinical hold, untitled or warning letters,
product recalls or withdrawals from the market, product seizures, total or partial suspension of production or distribution, injunctions,
fines, debarment, refusals of government contracts, restitution, disgorgement, or civil or criminal penalties. Any agency or judicial
enforcement action could have a material adverse effect on us.
U.S.
Drug Development
Our
product candidates are subject to regulation as combination products, which means that they are composed of both a drug product
and device product. If marketed individually, each component would be subject to different regulatory pathways and reviewed by
different centers within the FDA. A combination product, however, is assigned to a center that will have primary jurisdiction
over its regulation based on a determination of the combination product’s primary mode of action, which is the single mode
of action that provides the most important therapeutic action. In the case of our product candidates, the primary mode of action
is attributable to the drug component of the product, which means that the FDA’s Center for Drug Evaluation and Research
has primary jurisdiction over the premarket development, review and approval of our product candidates. Accordingly, we plan to
investigate our products through the IND framework and seek approval through the NDA pathway. The process required by the FDA
before a drug may be marketed in the U.S. generally involves the following:
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● payment of associated user fees;
● review by an FDA advisory committee, where appropriate or if applicable;
Once
a pharmaceutical product candidate is identified for development, it enters the preclinical testing stage. Preclinical tests include
laboratory evaluations of product chemistry, toxicity, formulation and stability, as well as animal studies. A sponsor must submit
the results of the preclinical tests, together with manufacturing information, analytical data and any available clinical data
or literature, to the FDA as part of the IND. An IND is an exemption from the FDCA that allows an unapproved product to be shipped
in interstate commerce for use in an investigational clinical trial and a request for FDA authorization to administer such investigational
product to humans. The sponsor must also include a protocol detailing, among other things, the objectives of the initial clinical
trial, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated if the initial clinical trial
lends itself to an efficacy evaluation. Some preclinical testing may continue even after the IND is submitted. The IND automatically
becomes effective 30 days after receipt by the FDA, unless the FDA raises concerns or questions related to a proposed clinical
trial and places the trial on a clinical hold within that 30-day period. In such a case, the IND sponsor and the FDA must resolve
any outstanding concerns before the clinical trial can begin. Clinical holds also may be imposed by the FDA at any time before
or during clinical trials due to safety concerns or non-compliance, and may be imposed on all drug products within a certain class
of drugs. The FDA also can impose partial clinical holds, for example, prohibiting the initiation of clinical trials of a certain
duration or for a certain dose.
All
clinical trials must be conducted under the supervision of one or more qualified investigators in accordance with GCP regulations.
These regulations include the requirement that all research subjects provide informed consent in writing before their participation
in any clinical trial. Further, an IRB must review and approve the plan for any clinical trial before it commences at any institution,
and the IRB must conduct continuing review and reapprove the study at least annually. An IRB considers, among other things, whether
the risks to individuals participating in the clinical trial are minimized and are reasonable in relation to anticipated benefits.
The IRB also approves the information regarding the clinical trial and the consent form that must be provided to each clinical
trial subject or his or her legal representative and must monitor the clinical trial until completed.
Each
new clinical protocol and any amendments to the protocol must be submitted for FDA review, and to the IRBs for approval. Protocols
detail, among other things, the objectives of the clinical trial, dosing procedures, subject selection and exclusion criteria,
and the parameters to be used to monitor subject safety.
Human
clinical trials are typically conducted in three sequential phases that may overlap or be combined:
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Post-approval
trials, sometimes referred to as Phase 4 clinical trials, may be conducted after initial marketing approval. These studies are
used to gain additional experience from the treatment of patients in the intended therapeutic indication. In certain instances,
the FDA may mandate the performance of Phase 4 trials. Companies that conduct certain clinical trials also are required to register
them and post the results of completed clinical trials on a government-sponsored database, such as ClinicalTrials.gov in the United
States, within certain timeframes. Failure to do so can result in fines, adverse publicity and civil and criminal sanctions.
Progress
reports detailing the results of the clinical trials, among other information, must be submitted at least annually to the FDA,
and written IND safety reports must be submitted to the FDA and the investigators for serious and unexpected adverse events, findings
from other studies that suggest a significant risk to humans exposed to the product, findings from animal or in vitro testing
that suggest a significant risk to human subjects, and any clinically important increase in the rate of a serious suspected adverse
reaction over that listed in the protocol or investigator brochure. Phase 1, Phase 2 and Phase 3 clinical trials may not be completed
successfully within any specified period, if at all. The FDA or the clinical trial sponsor may suspend or terminate a clinical
trial at any time on various grounds, including a finding that the research subjects or patients are being exposed to an unacceptable