Item 1A. Risk Factors 31
Item 1B. Unresolved Staff Comments 69
Item 1C. Cybersecurity 69
Item 2. Properties 69
Item 3. Legal Proceedings 69
Item 4. Mine Safety Disclosures 70
PART II
Item 6. Reserved 71
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 76
Item 8. Financial Statements and Supplementary Data 76
Item 9A. Controls and Procedures 77
Item 9B. Other Information 78
Item 9C. Disclosure regarding foreign jurisdictions that prevent inspections 78
PART III
Item 10. Directors, Executive Officers and Corporate Governance 79
Item 11. Executive Compensation 79
Item 14. Principal Accounting Fees and Services 79
PART IV
Item 15. Exhibits, Financial Statement Schedules 80
SIGNATURES 83
2
SUMMARY
OF RISK FACTORS
Below
is a summary of the principal risk factors related to the Annual Report on Form 10-K (“Form 10-K”) for the fiscal
year ended December 31, 2023.
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:
3
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
AND
FACTORS THAT MAY AFFECT FUTURE RESULTS
This
Annual Report on Form 10-K, or Form 10-K, 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 Form 10-K 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:
● our ability to create and maintain a pipeline of product candidates;
Any
forward-looking statements in this Form 10-K 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 Form 10-K, 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.
4
This
Form 10-K 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.
5
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. For example, approximately 50% of patients treated for type 2 diabetes are non-adherent to their medicines,
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 adherence by delivering therapeutic drug
levels for up to 6 months or longer. 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 business combination of Second Sight Medical Products, Inc. (“Second Sight”) and Nano Precision
Medical, Inc. (“NPM”). Vivani’s main priority is the further development of the company’s
lead programs NPM-115 and NPM-119, which are miniature, 6-month, GLP-1 implant candidates for the treatment of chronic weight management and patients with type 2 diabetes, respectively. In parallel, Vivani’s 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 from legacy company Second Sight aimed at helping patients recover critical body functions.
Moving
forward, Vivani’s focus will be on the further development of NPM-115, 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, Kathleen Fischer
and Lily Peng, 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 Alfred E. Mann, Dr. Mendelsohn and colleagues started NPM in 2009
and operations began in 2011 in an incubator on the UCB campus. Today, the Company has grown to 37 full-time employees and its
current headquarters and operations are located at 1350 South Loop Road, Alameda, California.
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.
In
February 2022, we announced the signing of a definitive merger agreement between NPM and Second Sight, pursuant to which NPM became
a wholly-owned subsidiary of Second Sight. On August 30, 2022, the two companies completed the merger, concurrent with which Second
Sight changed its name to Vivani Medical, Inc. and now conducts the present business of the Company. In September 2022, we announced
the formation of the Company’s Biopharm Division to advance the assets of the former NPM which includes the further development
of the Company’s lead programs, NPM-115 and NPM-119, a miniature, 6-month, GLP-1 implant candidates for the treatment of
chronic weight management and patients with type 2 diabetes, respectively. Vivani’s management team remains committed to
identifying and exploring strategic options for the Neuromodulation Division (formerly Second Sight) that will enable further
development of its pioneering neurostimulation systems from Second Sight to help patients recover critical body functions. On
December 28, 2022, the assets and liabilities of this segment were contributed to Cortigent, Inc. a newly formed wholly owned
subsidiary of Vivani, in exchange for 20,000,000 shares of common stock of Cortigent. As of December 31, 2023, after giving effect
to a 1-for-4 reverse stock split that we implemented, Cortigent had 5,000,000 shares of common stock outstanding, all owned by
Vivani.
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. Cortigent, currently a wholly-owned subsidiary of Vivani, was formed for the purpose of advancing
the Company’s pioneering neurostimulation technology. The Registration Statement on Form S-1 was recently amended and filed
with the SEC in February 2024 to refresh the financial information and provide minor updates to the business.
On
July 6, 2023, Vivani changed its state of incorporation from the State of California to the State of Delaware by means of a plan
of conversion, effective July 5, 2023. The reincorporation, including the principal terms of the plan of conversion, was submitted
to a vote of, and approved by, Vivani’s stockholders at its 2023 Annual Meeting of Stockholders held on June 15, 2023. As
part of this change of incorporation the Company established a par value of $0.0001 per share and all periods have been retroactively
adjusted to reflect this change.
An
Investigational New Drug Application (“IND”) for NPM-119 (GLP-1 implant) was filed with the U.S. Food and Drug Administration
(“FDA”) on July 14, 2023, to support the initiation of the first-in-human study of NPM-119 in patients with type 2
diabetes, also named LIBERATE-1TM. On August 18, 2023, FDA provided written notification that the LIBERATE-1 study was on
full clinical hold, primarily due to insufficient Chemistry, Manufacturing, and Controls (“CMC”) information to assess
the risk to human subjects. Vivani remains actively engaged in discussions with FDA as part of its efforts to lift the clinical
hold and plans to submit a Complete Response to the FDA during the first half of 2024.
On
August 25, 2023, Vivani and Cortigent entered into an Amendment No. 1 (the “Amendment”) to the Transition Funding, Support
and Services Agreement dated March 19, 2023 (the “TFSSA”). Pursuant to the TFSSA, Vivani has agreed to advance funds
and provide or cause to be provided to Cortigent the services and funding intended to cover salaries and related costs, rent and
other overhead in order to permit Cortigent to operate in substantially the same manner in which business operations of Cortigent
were previously operated by Second Sight, prior to the formation of Cortigent, which obligations will continue, in the case of
the funding obligations, until the earlier of December 31, 2024 or the closing of an initial public offering of Cortigent (the
“Funding Support Term”). Under the Amendment, Cortigent has agreed to repay $1,500,000 to Vivani at the conclusion
of the Funding Support Term. In addition, at the conclusion of the Funding Support Term, Cortigent will enter into a five-year
promissory note at 5% interest for $2,000,000 in favor of Vivani. Consequently, Vivani will forgive any remaining amounts due
by Cortigent to it under the TFSSA. In October 2023, Vivani implemented a reduction-in-force to conserve cash that decreased Cortigent’s
employees from 14 to 7 while continuing the ongoing Orion® clinical study and basic operations.
In
the fourth quarter of 2023, Vivani Medical Australia Pty Ltd., a wholly-owned subsidiary in Australia was established to support
studies of our products and product candidates.
In February 2024, Vivani announced positive
NPM-115 preclinical weight loss data comparable to semaglutide, the active ingredient in Ozempic®/Wegovy®,
and disclosed NPM-139 as a semaglutide implant as our strategy shifted to prioritize our obesity portfolio. In a study in high-fat
diet-induced obese mice, NPM-115 generated weight loss of approximately 20% compared to a sham implant control after a 28-day
treatment duration, comparable to weight loss observed in mice treated with semaglutide injections (Ozempic®/Wegovy®)
in the same study. The Company also disclosed that semaglutide is the active pharmaceutical ingredient in NPM-139, a miniature,
subdermal GLP-1 implant in development for chronic weight management, with the added potential benefit of once-yearly administration.
On March 1, 2024, the Company announced
that it had entered into a securities purchase agreement with an institutional investor to purchase 3,947,368 shares of common
stock and warrants to purchase up to an aggregate of 3,947,368 shares of common stock at a purchase price of $3.80 per share and
accompanying warrant in a registered direct offering. The warrants have an exercise price of $3.80 per share, are exercisable immediately
upon issuance, and will expire three years following the date of issuance.
On March 6, 2024, the Company announced
the appointment of Daniel Bradbury to its Board of Directors. Under Bradbury’s leadership as CEO, Amylin Pharmaceuticals,
with partner Alkermes, secured the 2012 approval of Bydureon® (exenatide injection), the world’s first GLP-1
receptor agonist, a class of drugs that now includes blockbusters Ozempic®, Trulicity® and Wegovy®.
6
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.
We
believe the key to the technology’s ability to achieve near constant release of drug 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 need.
7
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).
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), and obesity/chronic weight management.
Below
is a summary description of each pipeline program:
NPM-115:
This high-dose exenatide implant candidate is in preclinical stage development for the treatment of chronic weight management
in patients with obesity or overweight. Vivani believes that higher doses of exenatide can achieve similar weight loss effects
as other GLP-1 products similar to the strategy Novo Nordisk has taken with its semaglutide injection franchise, Ozempic®
and Wegovy® for type 2 diabetes and obesity, respectively. Vivani holds all commercial rights to NPM-115.
8
Obesity
is a global epidemic. There are over 764 million people with obesity today and only approximately 2% of these people are medically
treated. Obesity affects both the individual and society at large. Obesity is associated with over 200 health complications and
is associated with over 8% of the healthcare budget per country.
Similar
to type 2 diabetes, the treatment of chronic weight management with GLP-1 products has challenges associated with medication adherence
and persistence which can lead to sub-optimal patient outcomes. As shown in the graph below, results from a large, retrospective
cohort study recently published in the research journal Obesity, shows improved medication persistence with the newer GLP-1 weight
loss products compared to previous products. That said, the one-year persistence of patients taking semaglutide was still only
40%. This highlights the potential for further improvement for the 60% of individuals who were no longer taking semaglutide after
one year. The potential benefits for a long-term implant like NPM-115 are clearly apparent when considering that body weight begins
to increase shortly after GLP-1 therapy is discontinued.
9
Preliminary
weight loss data of NPM-115 in preclinical models is encouraging. In a study in high fat diet-induced obese mice, NPM-115 generated
weight loss of approximately 20% compared to a sham implant control after a 28-day treatment duration, comparable to weight loss
observed in mice treated with semaglutide (Ozempic®/Wegovy®) in the same study. The supratherapeutic
doses provided for both NPM-115 (single administration delivering exenatide at ~530 nmol/kg/day), and semaglutide (weekly injections
of ~2,700 nmol/kg/week), were selected to maximize the weight-loss potential of both exenatide and semaglutide.
Emerging
data on the durability of effect on weight with NPM-119 provides confidence that a higher-dose exenatide implant (e.g. NPM-115)
has the potential as a treatment for chronic weight management. As depicted in the graph below, in a study in healthy rats, a
single administration of the Company’s exenatide implant NPM-119, in development for the treatment of type 2 diabetes, resulted
in body weights that were approximately 25% lower than a vehicle implant control after 15 weeks of treatment with an expected
duration of effect of six months. NPM-119 delivered exenatide at a rate of approximately 320 nmol/kg/day and has demonstrated
smooth, non-fluctuating release of exenatide in both in vitro and in vivo studies. NPM-119 has previously demonstrated
pharmacokinetic data exhibiting continuous and therapeutic exenatide exposure levels over a 6-month duration in healthy rats.
Since NPM-115 is a higher-dose version of an otherwise similar product as NPM-119, the durability of the effect on weight demonstrated
in this study is expected to translate to future studies utilizing NPM-115.
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. Bydureon BCise® (exenatide extended-release) injection
is a once-weekly administration and was approved for use in the US in 2017.
10
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 today is 537 million and is projected to rise to 643 million by 2030 and 783 million by 2045. Of the 537 million
people with diabetes today, only 15% have good glycemic control. 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, global sales of GLP-1 receptor agonists products were 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-1 category,
namely, poor real-world medication adherence, and a potentially undesirable gastrointestinal tolerability profile.
A
well-documented side effect of the GLP-1 class is poor gastrointestinal (“GI”) tolerability. GI intolerance can present
as nausea, vomiting, and/or diarrhea 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-1 class. 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 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 NanoPortal Implant 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.
11
On
July 14, 2023, an investigational new drug application (“IND”) to support the initiation of clinical studies
with NPM-119 was submitted. Vivani’s First-in-Human (“FIH”) study, called LIBERATE-1, is designed as a
12-week, randomized, 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 and will also measure changes in glycemic control and changes in body 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. On August 18, 2023, FDA
provided written notification that the LIBERATE-1 study was on full clinical hold due primarily to insufficient Chemistry,
Manufacturing and Controls (“CMC”) information. Vivani remains actively engaged in discussions with the FDA as
part of its efforts to lift the clinical hold and enable the expeditious initiations of LIBERATE-1. In parallel, Vivani
submitted an application to a Human Research Ethics Committee in Australia to support the initiation of the Company’s
FIH study in that country. This initial application was not approved and the only cited reason was the existing FDA
clinical hold. Vivani remains in discussions with the Human Research Ethics Committee towards obtaining approval in Australia
once the FDA clinical hold is lifted. If available, Vivani intends
to utilize research and development incentives and rebates from the Australian government in order to defray a portion of the
costs from the trial. Since clinical studies conducted in Australia comply with the International Conference on Harmonization
guidelines and data generated in Australia are acceptable to the FDA and other regulatory authorities. Vivani plans to use
relevant clinical data generated in Australia to support regulatory submissions in other geographies including the US.
Additional guidance will be provided as new information becomes available.
The
LIBERATE-1 study design was discussed in multiple FDA interactions and our Complete Response to the clinical hold is planned for
submission to FDA during the first half of 2024. 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.
12
Vivani
has also made progress towards preparing for future clinical development of NPM-119. In September 2023, Vivani relocated 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 explore the potential use of 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 preclinical 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.
NPM-139:
The Company recently identified semaglutide as the active pharmaceutical ingredient in NPM-139, a miniature, subdermal GLP-1 implant
in development for chronic weight management, with the added potential benefit of once-yearly administration.
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 approximately nearly $4.5 billion in 2023 and continues to
grow rapidly.
OKV-119:
This exenatide implant is under development for metabolic diseases in cats including for the treatment of obesity and diabetes.
In 2017, there were over 90 million cats in the U.S. It is estimated that up to 40% of cats are clinically obese, and 1-4 million
cats have diabetes. Americans spent $136.8 billion on their pets in 2022, an increase of 10.68% from 2021. Spending on pets is
expected to triple over the next 10 years, with pet health representing 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 at a routine clinic visit
can be a welcome option for many pet owners.
The
program is partnered with Okava Pharmaceuticals, Inc. (“Okava”) who is responsible for all clinical 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 data demonstrating adequate exenatide exposure and sustained weight loss in cats over
a 12-week study. Vivani does not anticipate any significant Vivani focus beyond the support of implant development and manufacturing
activities.
13
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 MASH (metabolic associated steatohepatitis) 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 programs,
NPM-115 (high-dose exenatide) and 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 MASH and they are being evaluated in other therapeutic areas including Alzheimer’s disease. Vivani
completed IND-enabling studies and submitted an IND to permit a FIH study of NPM-119 in type 2 diabetes in 2023. In addition,
Vivani intends to advance its early-stage programs in chronic weight management in obese and overweight individuals. Its business
strategy includes:
● Advancing the feasibility assessments for NPM-139 in 2024;
● Maintaining, expanding, and protecting our intellectual property portfolio;
14
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 assets,
NPM-115 and NPM-119, the competition could be defined as any drug product/manufacturer approved for use in the treatment of patients
with obesity or type 2 diabetes, respectively. 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 those respective indications.
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 and in November 2023, Lilly secured approval of a higher dose formulation
of tirzepatide injection with the brand name Zepbound® for chronic weight management in adults with obesity or
overweight with at least one weight-related condition. Manufacturers with approved GLP-1 receptor agonists or dual 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
New Drug Application 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. At the conclusion of the September 28, 2023, FDA Public Forum to debate
the approvability of the ITCA 650, Advisory Committee members voted 19-0 that “based on the available data, the Applicant
has not demonstrated that the benefits of the ITCA 650 drug-device combination outweigh its risks for the treatment of T2DM”.
As a result, the ultimate fate of ITCA 650 (exenatide implant) remains unclear.
NPM-115
NPM-115
(high-dose exenatide implant) candidate is a GLP-1 receptor agonist in development for the treatment of chronic weight management
in obese and/or overweight patients. Competition in the GLP-1 class for this indication 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)
● Lilly (Zepbound®/tirzepatide)
● Novo Nordisk (Saxenda®/liraglutide); and (Wegovy®/semaglutide)
In
addition to the approved products noted above, there are multiple GLP-1 monotherapy agonists, dual agonists and triple agonists
in various stages of clinical development.
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We
believe NPM-115, our lead drug implant candidate for chronic weight management, has the potential to address two important aspects
of the GLP-1 category which are associated with the above-mentioned products, namely, poor real-world medication adherence and
potential undesirable gastrointestinal tolerability.
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:
● Lilly (Trulicity®/dulaglutide) and (Mounjaro®/ tirzepatide)
● AstraZeneca (Bydureon BCise®/exenatide); and (Byetta®/exenatide)
● Sanofi (Adlyxin®/lixisenatide)
In
addition to the approved products noted above, there are multiple GLP-1 monotherapy agonists, dual agonists and triple agonists
in various stages of clinical development which include but are not limited to Lilly (retatrutide) and (orforglipron), Altimmune
(pevidutide), Novo Nordisk (CagriSema); Structure Therapeutics (GSBR-1290), and Amgen AMG 133.
We
believe NPM-119, our lead drug implant candidate for type 2 diabetes, 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
(semaglutide implant) candidate is in feasibility testing for the treatment of chronic weight management in obese and/or overweight
patients. 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)
● Lilly (Zepbound®/tirzepatide)
● Novo Nordisk’s Saxenda® (liraglutide) and Wegovy® (semaglutide)
● Roche CT-388 (Phase 2); CT-868 (Phase 2) and CT-996 (Phase 1)
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.
16
On
July 6, 2023, Vivani changed its state of incorporation from the State of California to the State of Delaware by means of a plan
of conversion, effective July 5, 2023.
Vivani’s
corporate office is located at 1350 South Loop Road, Alameda, CA 94502; its telephone number is (415) 506-8462; and its website
is located at www.vivani.com.
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 FIH (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 Alameda, 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. Vivani intends to conduct all assembly processes in
which the drug substance is present, including the associated in-process testing, when producing materials for Phase 1 and
Phase 2 clinical trials. Vivani anticipates that all assembly processes in which the drug substance is present, including the
associated in-process testing, will be performed by contract manufacturers when producing materials for any registration
trial or commercial use. 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 Alameda, California. 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 December 31, 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:
17
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.
18
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:
● payment of associated user fees;
● review by an FDA advisory committee, where appropriate or if applicable;
19
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