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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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DELAWARE
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26-2025616
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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215 First Street, Suite 400
Cambridge, MA
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02142
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(Address of principal executive offices)
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(Zip code)
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Title of each class
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Name of each exchange on which registered
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Common Stock, par value $0.001 per share
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NASDAQ Global Market
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Large Accelerated filer
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Accelerated filer
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Non-accelerated filer
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x
(Do not check if a smaller reporting company)
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Smaller reporting company
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Page
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Item 15.
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our plans to research and develop our product candidates;
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the initiation and conduct of clinical trials, including the timing, cost, conduct and outcome of our clinical trials of EBI-031 for the treatment of diabetic macular edema and uveitis, including statements regarding the timing of the availability of, and the costs to obtain, top-line data from such trials, the timing of completion of and outcomes of such trials, and the timing of regulatory filings, including our planned investigational new drug application for EBI-031;
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our ability to successfully develop our product candidates and complete our planned clinical programs;
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results of early clinical studies or preclinical trials and whether they will be indicative of the results of future studies;
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expectations regarding regulatory approvals, including the requirements for marketing approval of EBI-031, the nature and timing of our future interactions with regulatory authorities and our ability to design, implement and complete registration trials acceptable to such regulatory authorities and sufficient to support applications for regulatory approvals;
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the timing of and our ability to obtain marketing approval of EBI-031 and our other product candidates, and the ability of EBI-031 and our other product candidates to meet existing or future regulatory standards;
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the potential advantages of EBI-031;
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our estimates regarding the potential market opportunity for EBI-031 and our other product candidates;
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our sales, marketing and distribution capabilities and strategy;
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our ability to establish and maintain arrangements for the manufacture of EBI-031 and our other product candidates;
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our ability to enter into and successfully complete collaborations or in-license or acquire rights to other products, product candidates or technologies;
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our ability to obtain, maintain and protect our intellectual property for our technology and products;
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the rate and degree of market acceptance and clinical utility of our products;
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our estimates regarding expenses, future revenues, capital requirements and need for additional financing;
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the impact of governmental laws and regulations; and
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our competitive position.
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Item 1.
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Business.
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Broad applicability
. We can apply the AMP-Rx platform to select among most forms of protein therapeutics, including antibodies, enzymes, soluble receptors and signaling proteins, for the optimal approach to treatment.
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Efficiency
. We use the AMP-Rx platform to optimize multiple properties of drug candidates simultaneously. We generally avoid the time-consuming approach of traditional protein drug discovery that involves sequential screening and selection of product characteristics.
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Customized drug design
. We use the AMP-Rx platform to design and engineer therapeutics that incorporate a range of key pharmaceutical properties, such as rapid onset of effect, increased half-life and improved ocular surface retention.
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Manufacturability of drug candidates
. We use the AMP-Rx platform to generate drug candidates that have favorable manufacturing characteristics, such as high production yield, improved solubility and thermal stability. We believe these characteristics will allow us to minimize costly or difficult production and purification processes.
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Advance EBI-031 for the treatment of diabetic macular edema.
Our most advanced product candidate, which is still in preclinical development, is EBI-031, an optimized version of an anti-IL-6 antibody, for the treatment of DME. We are undertaking the necessary CMC development work and nonclinical safety studies to support the submission of an IND to the FDA. If the results of these efforts and our additional preclinical studies of EBI-031 are favorable, we intend to submit an IND in the first half of 2016 for the purpose of conducting clinical trials of EBI-031 for the treatment of DME.
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Apply AMP-Rx platform to build a pipeline of product candidates for the treatment of eye diseases.
We use our AMP-Rx platform to rationally design, engineer and generate a pipeline of innovative protein therapeutic candidates that target cytokines that we believe are central to diseases of the eye. We have designed, engineered and generated EBI-031 and our other preclinical product candidate using our AMP-Rx platform. We plan to continue to apply our platform to expand our product pipeline.
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Pursue collaborative and other strategic opportunities.
We have established a collaboration with ThromboGenics N.V., or ThromboGenics, a European based, publicly held biopharmaceutical company focused on developing and commercializing innovative ophthalmic medicines. In this collaboration, we applied our proprietary AMP-Rx platform to design, engineer and generate protein therapeutics that can modulate a specific novel pathway in retinal disease and that may have key pharmaceutical attributes. This collaboration provided us with funding for the specific program that was the subject of the collaboration and allowed us to apply our AMP-Rx platform to a product discovery effort we might not otherwise have pursued. We plan to evaluate opportunities to enter into other collaborations that may contribute to our ability to advance our product candidates and to progress concurrently a range of discovery and development programs. We also plan to evaluate opportunities to in-license or acquire the rights to other products, product candidates or technologies for the treatment of eye diseases.
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engage in one or more potential transactions, such as the sale of our company, a strategic partnership with one or more parties or the licensing, sale or divestiture of some of our assets or proprietary technologies; or
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continue to operate our business in accordance with our existing business strategy.
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Agent
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T
1/2
(days)
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EBI-031
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10
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aflibercept
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6
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tocilizumab
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5
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a Patent Cooperation Treaty, or PCT, patent application covering the IL-6 antibody EBI-031, which, if granted, is expected to expire in 2035;
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a United States provisional application covering the IL-6 antibody EBI-031 formulation, which, if converted to a nonprovisional application and if granted, is expected to expire in 2036;
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a United States, a New Zealand, and a South Africa composition-of-matter patent covering isunakinra which expires in 2031;
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composition-of-matter patent applications covering isunakinra in Australia, Brazil, Canada, China, Europe, Hong Kong, India, Israel, Japan, Korea, Mexico, Russia, Singapore, and Taiwan, which, if granted, are expected to expire in 2031;
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patent applications covering the formulation of isunakinra filed in the United States, Australia, Brazil, Canada, China, Europe, India, Japan, Mexico, New Zealand, Russia, Singapore, and South Africa, which, if granted, are expected to expire in 2034;
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patent applications covering methods of manufacturing isunakinra filed in the United States, Australia, Brazil, Canada, China, Europe, Hong Kong, India, Japan, Russia and Singapore, which, if granted are expected to expire in 2032;
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a European patent and pending applications licensed from The Schepens Eye Research Institute, Inc., or Schepens, pursuant to a license that terminates effective April 12, 2016; the Schepens applications are pending in the United States, Australia, Canada and Japan, and, if granted, are expected to expire in 2030; the Schepens applications cover the use of IL-1 inhibitors to treat certain ocular diseases;
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patent applications covering IL-6 antibody EBI-029, a precursor of EBI-031, filed in the United States, Australia, Brazil, Canada, China, Europe, Hong Kong, India, Israel, Japan, Korean, Mexico, New Zealand, Russia, Singapore, and South Africa, which, if granted, are expected to expire in 2033; and
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a PCT patent application covering methods and compositions for increasing the retention of therapeutic agents in the eye which, if granted, is expected to expire in 2035.
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completion of preclinical laboratory tests, animal studies and formulation studies in compliance with the FDA’s good laboratory practice, or GLP, regulations;
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submission to the FDA of an investigational new drug application, or IND, which must take effect before human clinical trials may begin;
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approval by an independent institutional review board, or IRB, representing each clinical site before each clinical trial may be initiated;
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performance of adequate and well-controlled human clinical trials in accordance with good clinical practices, or GCP, to establish the safety and efficacy of the proposed product for each indication;
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preparation and submission of a BLA to the FDA;
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review of the product by an FDA advisory committee, where appropriate or if applicable; satisfactory completion of one or more FDA inspections of the manufacturing facility or facilities at which the product, or components thereof, are produced to assess compliance with current Good Manufacturing Practices, or cGMP, requirements and to assure that the facilities, methods and controls are adequate to preserve the product’s identity, strength, quality and purity;
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satisfactory completion of FDA audits of clinical trial sites to assure compliance with GCPs and the integrity of the clinical data;
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payment of user fees and securing FDA approval of the BLA and licensure of the new biologic product; and
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compliance with any post-approval requirements, including the potential requirement to implement a risk evaluation and mitigation strategy, or REMS, and any post-approval studies required by the FDA.
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Phase 1:
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The biologic product is initially introduced into healthy human subjects or patients with the target disease or condition and tested for safety, dosage tolerance, absorption, metabolism, distribution, excretion and, if possible, to gain an early indication of its effectiveness and to determine optimal dosage.
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Phase 2:
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The biologic product is administered to a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and optimal dosage.
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Phase 3:
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The biologic product is administered to an expanded patient population, generally at geographically dispersed clinical trial sites, in well-controlled clinical trials to generate enough data to statistically evaluate the efficacy and safety of the product for approval, to establish the overall risk-benefit profile of the product, and to provide adequate information for the labeling of the product.
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restrictions on the marketing or manufacturing of the product, suspension of the approval, or complete withdrawal of the product from the market or product recalls;
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fines, warning letters or holds on post-approval clinical trials;
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refusal of the FDA to approve pending BLAs or supplements to approved BLAs, or suspension or revocation of product license approvals;
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product seizure or detention, or refusal to permit the import or export of products; or
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injunctions or the imposition of civil or criminal penalties.
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an annual, nondeductible fee on any entity that manufactures or imports specified branded prescription drugs and biologic agents, apportioned among these entities according to their market share in certain government healthcare programs, although this fee would not apply to sales of certain products approved exclusively for orphan indications;
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expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to certain individuals with income at or below 133% of the federal poverty level, thereby potentially increasing a manufacturer’s Medicaid rebate liability;
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expanded manufacturers’ rebate liability under the Medicaid Drug Rebate Program by increasing the minimum rebate for both branded and generic drugs and revising the definition of “average manufacturer price,” or AMP, for calculating and reporting Medicaid drug rebates on outpatient prescription drug prices and extending rebate liability to prescriptions for individuals enrolled in Medicare Advantage plans;
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addressed a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected;
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expanded the types of entities eligible for the 340B drug discount program;
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established the Medicare Part D coverage gap discount program by requiring manufacturers to provide a 50% point-of-sale-discount off the negotiated price of applicable brand drugs to eligible beneficiaries during their coverage gap period as a condition for the manufacturers’ outpatient drugs to be covered under Medicare Part D;
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a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research;
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the Independent Payment Advisory Board, or IPAB, which has authority to recommend certain changes to the Medicare program to reduce expenditures by the program that could result in reduced payments for prescription drugs. However, the IPAB implementation has been not been clearly defined. PPACA provided that under certain circumstances, IPAB recommendations will become law unless Congress enacts legislation that will achieve the same or greater Medicare cost savings; and
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established the Center for Medicare and Medicaid Innovation within CMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drug spending. Funding has been allocated to support the mission of the Center for Medicare and Medicaid Innovation from 2011 to 2019.
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the federal Anti-Kickback Statute, which prohibits, among other things, persons and entities from knowingly and willfully soliciting, offering, paying, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made, in whole or in part, under a federal healthcare program such as Medicare and Medicaid;
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the federal civil and criminal false claims laws, including the civil False Claims Act, and civil monetary penalties laws, which prohibit individuals or entities from among other things, knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false, ficticious or fraudulent or knowingly making, using or causing to made or used a false record or statement to avoid, decrease or conceal an obligation to pay money to the federal government;
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the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created additional federal criminal laws that prohibit, among other things, knowingly and willfully for executing, or attempting to execute, a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters;
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HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act and their respective implementing regulations, including the Final Omnibus Rule published in January 2013, which impose obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information;
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the federal false statements statute, which prohibits knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of or payment for healthcare benefits, items or services;
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the federal transparency requirements known as the federal Physician Payments Sunshine Act, under the Patient Protection and Affordable Care Act, as amended by the Health Care Education Reconciliation Act, or the Affordable Care Act, which requires certain manufacturers of drugs, devices, biologics and medical supplies to report annually to the Centers for Medicare & Medicaid Services, or CMS, within the United States Department of Health and Human Services, information related to payments and other transfers of value made by that entity to physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; and
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analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to healthcare items or services that are reimbursed by non-governmental third-party payors, including private insurers.
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Item 1A.
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Risk Factors
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pursue the development of EBI-031 for additional indications, such as uveitis, or for use in other patient populations or, if it is approved, seek to broaden the label for EBI-031;
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continue the research and development of our other preclinical product candidates;
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seek to discover and develop additional product candidates;
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in-license or acquire the rights to other products, product candidates or technologies for the treatment of ophthalmic diseases;
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seek marketing approvals for any product candidates that successfully complete clinical trials;
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establish sales, marketing and distribution capabilities and scale up and validate external manufacturing capabilities to commercialize any products for which we may obtain marketing approval;
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maintain, expand and protect our intellectual property portfolio;
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hire additional clinical, quality control, scientific and management personnel;
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expand our operational, financial and management systems and personnel, including personnel to support our clinical development, manufacturing and planned future commercialization efforts and our operations as a public company; and
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increase our insurance coverage as we commence clinical trials and potentially commercialize EBI-031.
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we are required by the United States Food and Drug Administration, or FDA, or the European Medicine Agency, or EMA, to perform studies in addition to those currently expected; or
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if there are any delays in enrollment of patients in, or completing our clinical trials or the development of EBI-031 or any other product candidates that we may develop.
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submitting an IND and commencing clinical development for EBI-031;
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completing clinical development of EBI-031 in patients with DME, uveitis, or other indications;
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subject to obtaining favorable results from clinical trials, applying for and obtaining marketing approvals for EBI-031;
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establishing sales, marketing and distribution capabilities, either ourselves or through collaboration or other arrangements with third parties, to effectively market and sell EBI-031;
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achieving an adequate level of market acceptance of EBI-031;
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protecting our rights to our intellectual property portfolio related to EBI-031; and
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ensuring the manufacture of commercial quantities of EBI-031.
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the progress, costs and outcome of clinical development of EBI-031 for the treatment of DME and uveitis;
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the costs and timing of process development and manufacturing scale up and validation activities associated with EBI-031;
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the costs, timing and outcome of regulatory review of EBI-031 in the United States, the European Union and in other jurisdictions;
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the costs and timing of commercialization activities for EBI-031 if we receive, or expect to receive, marketing approval, including the costs and timing of establishing product sales, marketing, distribution and outsourced manufacturing capabilities;
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subject to receipt of marketing approval, the amount of revenue received from commercial sales of EBI-031;
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the progress, costs and outcome of developing EBI-031 for the treatment of additional indications or for use in other patient populations;
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our ability to establish collaborations on favorable terms, if at all, particularly manufacturing, marketing and distribution arrangements for our product candidates;
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the scope, progress, results and costs of preclinical development, laboratory testing and, if we determine to proceed into clinical development, clinical trials of our other product candidates;
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the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims; and
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the extent to which we in-license or acquire rights to other products, product candidates or technologies for the treatment of ophthalmic diseases.
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submitting an IND and commencing clinical development for EBI-031;
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completing clinical development of EBI-031 in patients with DME, uveitis or other indications;
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subject to obtaining favorable results from clinical trials, applying for and obtaining marketing approvals for EBI-031;
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establishing sales, marketing and distribution capabilities, either ourselves or through collaboration or other arrangements with third parties, to effectively market and sell EBI-031;
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making arrangements with third-party manufacturers for commercial quantities of EBI-031 and receiving regulatory approval of our manufacturing processes and our third-party manufacturers’ facilities from applicable regulatory authorities;
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acceptance of EBI-031, if and when approved, by patients, the medical community and third-party payors;
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effectively competing with other therapies, including the existing standard of care;
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maintaining a continued acceptable safety profile of EBI-031 following approval;
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obtaining and maintaining coverage and adequate reimbursement from third-party payors;
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obtaining and maintaining patent and trade secret protection and regulatory exclusivity; and
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protecting our rights in our intellectual property portfolio related to EBI-031.
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clinical trials of our product candidates may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical trials or abandon product development programs;
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the number of patients required for clinical trials of our product candidates may be larger than we anticipate, enrollment in these clinical trials may be slower than we anticipate or participants may drop out of these clinical trials at a higher rate than we anticipate;
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our third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all;
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regulators or institutional review boards may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site;
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we may experience delays in reaching, or fail to reach, agreement on acceptable clinical trial contracts or clinical trial protocols with prospective trial sites;
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we may decide, or regulators or institutional review boards may require us, to suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements or a finding that the participants are being exposed to unacceptable health risks;
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the cost of clinical trials of our product candidates may be greater than we anticipate;
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the supply or quality of our product candidates or other materials necessary to conduct clinical trials of our product candidates may be insufficient or inadequate; and
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our product candidates may have undesirable side effects or other unexpected characteristics, causing us or our investigators, regulators or institutional review boards to suspend or terminate the trials.
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be delayed in obtaining marketing approval for our product candidates;
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not obtain marketing approval at all;
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obtain approval for indications or patient populations that are not as broad as intended or desired;
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obtain approval with labeling that includes significant use or distribution restrictions or safety warnings;
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be subject to additional post-marketing testing requirements; or
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have the product removed from the market after obtaining marketing approval.
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the severity of the disease under investigation;
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the eligibility criteria for the study in question;
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the perceived risks and benefits of the product candidate under study;
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the efforts to facilitate timely enrollment in clinical trials;
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the patient referral practices of physicians;
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the ability to monitor patients adequately during and after treatment; and
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the proximity and availability of clinical trial sites for prospective patients.
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the efficacy and potential advantages compared to alternative treatments, including the existing standard of care;
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our ability to offer our products for sale at competitive prices, particularly in light of the lower cost of alternative treatments;
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the convenience and ease of administration compared to alternative treatments;
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the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies;
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the strength of our marketing and distribution support;
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timing of market introduction of competitive products;
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the availability of third-party coverage and adequate reimbursement;
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the prevalence and severity of any side effects; and
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any restrictions on the use of our products together with other medications.
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our inability to recruit, train and retain adequate numbers of effective sales and marketing personnel;
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the inability of sales personnel to obtain access to physicians or persuade adequate numbers of physicians to prescribe our products;
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the lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines; and
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unforeseen costs and expenses associated with creating an independent sales and marketing organization.
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decreased demand for any product candidates or products that we develop;
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injury to our reputation and significant negative media attention;
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withdrawal of clinical trial participants;
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significant costs to defend the related litigation;
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substantial monetary awards to trial participants or patients;
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loss of revenue;
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reduced time and attention of our management to pursue our business strategy; and
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the inability to commercialize any products that we develop.
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collaborators have significant discretion in determining the amount and timing of efforts and resources that they will apply to these collaborations;
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collaborators may not perform their obligations as expected;
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collaborators may not pursue development and commercialization of our product candidates that receive marketing approval or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in the collaborators’ strategic focus or available funding, or external factors, such as an acquisition, that divert resources or create competing priorities;
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collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing;
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collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our products or product candidates if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours;
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product candidates discovered in collaboration with us may be viewed by our collaborators as competitive with their own product candidates or products, which may cause collaborators to cease to devote resources to the commercialization of our product candidates;
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a collaborator with marketing and distribution rights to one or more of our product candidates that achieve regulatory approval may not commit sufficient resources to the marketing and distribution of such product or products;
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disagreements with collaborators, including disagreements over proprietary rights, contract interpretation or the preferred course of development, might cause delays or termination of the research, development or commercialization of product candidates, might lead to additional responsibilities for us with respect to product candidates, or might result in litigation or arbitration, any of which would divert management attention and resources, be time-consuming and expensive;
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collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation;
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collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability; and
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collaborations may be terminated for the convenience of the collaborator and, if terminated, we could be required to raise additional capital to pursue further development or commercialization of the applicable product candidates.
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EBI-031 and any other product candidates that we may develop may compete with other product candidates and products for access to a limited number of suitable manufacturing facilities that operate under current good manufacturing practices, or cGMP, regulations;
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reliance on the third party for regulatory compliance and quality assurance;
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the possible breach of the manufacturing agreement by the third party;
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the possible misappropriation of our proprietary information, including our trade secrets and know-how; and
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the possible termination or nonrenewal of the agreement by the third party at a time that is costly or inconvenient for us.
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the United States Congress could amend the BPCIA to significantly shorten this exclusivity period as has been previously proposed; and
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a potential competitor could seek and obtain approval of its own BLA during our exclusivity period instead of seeking approval of a biosimilar version.
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litigation involving patients taking our products;
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restrictions on such products, manufacturers or manufacturing processes;
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restrictions on the labeling or marketing of a product;
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restrictions on product distribution or use;
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requirements to conduct post-marketing studies or clinical trials;
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warning letters or untitled letters;
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withdrawal of the products from the market;
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refusal to approve pending applications or supplements to approved applications that we submit;
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recall of products;
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fines, restitution or disgorgement of profits or revenues;
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suspension or withdrawal of marketing approvals;
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damage to relationships with any potential collaborators;
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unfavorable press coverage and damage to our reputation;
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•
|
refusal to permit the import or export of our products;
|
•
|
product seizure or detention; or
|
•
|
injunctions or the imposition of civil or criminal penalties.
|
•
|
the federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, order or recommendation or arranging of, any good or service, for which payment may be made under a federal healthcare program such as Medicare and Medicaid;
|
•
|
the federal False Claims Act imposes criminal and civil penalties, including through civil whistleblower or qui tam actions, against individuals or entities for, among other things, knowingly presenting, or causing to be presented, false or fraudulent claims for payment by a federal healthcare program or making a false statement or record material to payment of a false claim or avoiding, decreasing or concealing an obligation to pay money to the federal government, with potential liability including mandatory treble damages and significant per-claim penalties, currently set at $5,500 to $11,000 per false claim;
|
•
|
the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters;
|
•
|
the federal Physician Payments Sunshine Act requires applicable manufacturers of covered products to report payments and other transfers of value to physicians and teaching hospitals, with data collection beginning in August 2013;
|
•
|
HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, and their respective implementing regulations, which imposes obligations, including mandatory contractual terms, on covered healthcare providers, health plans and healthcare clearinghouses, as well as their business associates, with respect to safeguarding the privacy, security and transmission of individually identifiable health information; and
|
•
|
analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws and transparency statutes, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers; state and foreign laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers; state and foreign laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.
|
•
|
an annual, non-deductible fee on any entity that manufactures or imports specified branded prescription products and biologic agents;
|
•
|
an increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program;
|
•
|
a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for products that are inhaled, infused, instilled, implanted or injected;
|
•
|
expansion of healthcare fraud and abuse laws, including the civil False Claims Act and the federal Anti-Kickback Statute, new government investigative powers and enhanced penalties for noncompliance;
|
•
|
a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 50% point-of-sale discounts off negotiated prices of applicable brand products to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient products to be covered under Medicare Part D;
|
•
|
extension of manufacturers’ Medicaid rebate liability to individuals enrolled in Medicaid managed care organizations;
|
•
|
expansion of eligibility criteria for Medicaid programs;
|
•
|
expansion of the entities eligible for discounts under the Public Health Service pharmaceutical pricing program;
|
•
|
new requirements to report certain financial arrangements with physicians and teaching hospitals;
|
•
|
a new requirement to annually report product samples that manufacturers and distributors provide to physicians;
|
•
|
a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research;
|
•
|
a new Independent Payment Advisory Board, or IPAB, which has authority to recommend certain changes to the Medicare program to reduce expenditures by the program that could result in reduced payments for prescription products; and
|
•
|
established the Center for Medicare and Medicaid Innovation within CMS to test innovative payment and service delivery models.
|
•
|
delay, defer or prevent a change in control;
|
•
|
entrench our management and the board of directors; or
|
•
|
delay or prevent a merger, consolidation, takeover or other business combination involving us on terms that other stockholders may desire.
|
•
|
establish a classified board of directors such that only one of three classes of directors is elected each year;
|
•
|
allow the authorized number of our directors to be changed only by resolution of our board of directors;
|
•
|
limit the manner in which stockholders can remove directors from our board of directors;
|
•
|
establish advance notice requirements for stockholder proposals that can be acted on at stockholder meetings and nominations to our board of directors;
|
•
|
require that stockholder actions must be effected at a duly called stockholder meeting and prohibit actions by our stockholders by written consent;
|
•
|
limit who may call stockholder meetings;
|
•
|
authorize our board of directors to issue preferred stock without stockholder approval, which could be used to institute a “poison pill” that would work to dilute the stock ownership of a potential hostile acquirer, effectively preventing acquisitions that have not been approved by our board of directors; and
|
•
|
require the approval of the holders of at least 75% of the votes that all our stockholders would be entitled to cast to amend or repeal specified provisions of our certificate of incorporation or bylaws.
|
•
|
the success of competitive products or technologies;
|
•
|
results of clinical trials of EBI-031 or any other product candidate that we may develop;
|
•
|
results of clinical trials of product candidates of our competitors;
|
•
|
regulatory or legal developments in the United States and other countries;
|
•
|
developments or disputes concerning patent applications, issued patents or other proprietary rights;
|
•
|
the recruitment or departure of key scientific or management personnel;
|
•
|
the level of expenses related to any of our product candidates or clinical development programs;
|
•
|
the results of our efforts to discover, develop, acquire or in-license additional products, product candidates or technologies for the treatment of ophthalmic diseases, the costs of commercializing any such products and the costs of development of any such product candidates or technologies;
|
•
|
actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts;
|
•
|
variations in our financial results or those of companies that are perceived to be similar to us;
|
•
|
changes in the structure of healthcare payment systems;
|
•
|
market conditions in the pharmaceutical and biotechnology sectors;
|
•
|
general economic, industry and market conditions; and
|
•
|
the other factors described in this “Risk Factors” section.
|
•
|
For the prior 30 consecutive business days, the bid price of our common stock on The NASDAQ Global Market closed below the minimum $1.00 per share required for continued inclusion under NASDAQ Marketplace Rule 5810(c)(3)(A), or the Minimum Bid Price Rule.
|
•
|
For the prior 30 consecutive business days, our stockholders’ equity did not comply with the minimum stockholders’ equity requirement of $5,000,000 for continued listing on The NASDAQ Global Market pursuant to NASDAQ Marketplace Rule 5810(c)(3)(D), or the Minimum Market Value Rule.
|
•
|
not being required to comply with the auditor attestation requirements in the assessment of our internal control over financial reporting;
|
•
|
not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements;
|
•
|
reduced disclosure obligations regarding executive compensation; and
|
•
|
exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
|
Item 1B.
|
Unresolved Staff Comments.
|
Item 2.
|
Properties.
|
Item 3.
|
Legal Proceedings.
|
Item 4.
|
Mine Safety Disclosures.
|
Item 5.
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
|
|
Market Price
|
||||||
|
High
|
|
Low
|
||||
First quarter 2014 (February 6, 2014 through March 31, 2014)
|
$
|
19.33
|
|
|
$
|
10.11
|
|
Second quarter 2014
|
$
|
17.48
|
|
|
$
|
10.01
|
|
Third quarter 2014
|
$
|
14.07
|
|
|
$
|
9.50
|
|
Fourth quarter 2014
|
$
|
12.10
|
|
|
$
|
10.00
|
|
First quarter 2015
|
$
|
13.50
|
|
|
$
|
8.92
|
|
Second quarter 2015
|
$
|
13.78
|
|
|
$
|
2.61
|
|
Third quarter 2015
|
$
|
8.00
|
|
|
$
|
2.25
|
|
Fourth quarter 2015
|
$
|
3.30
|
|
|
$
|
2.24
|
|
Item 6.
|
Selected Financial Data.
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
|
(in thousands, except per share data)
|
||||||||||||||||||
Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Collaboration revenue
|
$
|
490
|
|
|
$
|
2,243
|
|
|
$
|
1,334
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other revenue
|
500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total revenue
|
990
|
|
|
2,243
|
|
|
1,334
|
|
|
—
|
|
|
—
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Research and development
|
26,336
|
|
|
26,703
|
|
|
13,788
|
|
|
15,263
|
|
|
9,411
|
|
|||||
General and administrative
|
9,850
|
|
|
8,471
|
|
|
4,024
|
|
|
4,213
|
|
|
3,267
|
|
|||||
Total operating expenses
|
36,186
|
|
|
35,174
|
|
|
17,812
|
|
|
19,476
|
|
|
12,678
|
|
|||||
Loss from operations
|
(35,196
|
)
|
|
(32,931
|
)
|
|
(16,478
|
)
|
|
(19,476
|
)
|
|
(12,678
|
)
|
|||||
Other expense:
|
|
|
|
|
|
|
|
|
|
||||||||||
Other income (expense), net
|
3,139
|
|
|
(849
|
)
|
|
(147
|
)
|
|
(13
|
)
|
|
3
|
|
|||||
Interest expense
|
(1,395
|
)
|
|
(376
|
)
|
|
(1,400
|
)
|
|
(168
|
)
|
|
(151
|
)
|
|||||
Total other income (expense), net
|
1,744
|
|
|
(1,225
|
)
|
|
(1,547
|
)
|
|
(181
|
)
|
|
(148
|
)
|
|||||
Net loss and comprehensive loss
|
$
|
(33,452
|
)
|
|
$
|
(34,156
|
)
|
|
$
|
(18,025
|
)
|
|
$
|
(19,657
|
)
|
|
$
|
(12,826
|
)
|
Cumulative preferred stock dividends and accretion of preferred stock discount
|
—
|
|
|
(519
|
)
|
|
(3,857
|
)
|
|
(3,111
|
)
|
|
(1,452
|
)
|
|||||
Net loss applicable to common stockholders
|
$
|
(33,452
|
)
|
|
$
|
(34,675
|
)
|
|
$
|
(21,882
|
)
|
|
$
|
(22,768
|
)
|
|
$
|
(14,278
|
)
|
Net loss per share applicable to common stockholders—basic and diluted
|
$
|
(1.76
|
)
|
|
$
|
(2.37
|
)
|
|
$
|
(16.18
|
)
|
|
$
|
(22.93
|
)
|
|
$
|
(17.80
|
)
|
Weighted-average number of common shares used in net loss per share applicable to common stockholders—basic and diluted
|
18,993
|
|
|
14,644
|
|
|
1,352
|
|
|
993
|
|
|
802
|
|
|
As of December 31,
|
||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
36,079
|
|
|
$
|
54,059
|
|
|
$
|
7,942
|
|
|
$
|
7,882
|
|
|
$
|
700
|
|
Working capital
|
28,731
|
|
|
49,199
|
|
|
2,677
|
|
|
6,446
|
|
|
(1,229
|
)
|
|||||
Total assets
|
36,825
|
|
|
55,000
|
|
|
11,237
|
|
|
9,503
|
|
|
2,665
|
|
|||||
Notes payable, net of current portion
|
9,763
|
|
|
9,749
|
|
|
2,876
|
|
|
1,769
|
|
|
325
|
|
|||||
Warrant liability
|
115
|
|
|
3,219
|
|
|
297
|
|
|
147
|
|
|
26
|
|
|||||
Convertible preferred stock
|
—
|
|
|
—
|
|
|
56,678
|
|
|
45,035
|
|
|
19,644
|
|
|||||
Accumulated deficit
|
(125,202
|
)
|
|
(91,750
|
)
|
|
(57,594
|
)
|
|
(39,569
|
)
|
|
(19,912
|
)
|
|||||
Total stockholders’ equity (deficit)
|
18,944
|
|
|
36,826
|
|
|
(54,332
|
)
|
|
(39,296
|
)
|
|
(19,791
|
)
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
•
|
We engaged an investment bank to conduct a review of strategic alternatives with the goal of maximizing shareholder value. Potential strategic alternatives to be explored and evaluated during the review process may include the sale of our company, a strategic partnership with one or more parties or the licensing, sale or divestiture of some of our assets or proprietary technologies. We cannot provide any commitment regarding when or if this strategic review process will result in any type of transaction and no assurance can be given that we will determine to pursue a potential sale, strategic partnership or licensing arrangement.
|
•
|
We do not see an immediate path forward for isunakinra and have implemented a plan to wind down the development activities associated with isunakinra.
|
•
|
We have conducted a review of our operations and implemented a plan to reduce future operating expenses to align with current operating conditions.
|
•
|
On March 1, 2016, we prepaid all outstanding amounts owed to Silicon Valley Bank, or SVB, under our Loan and Security Agreement with SVB. We continue to evaluate other financing alternatives to provide additional operating funds on terms that are consistent with our business plans.
|
•
|
For the prior 30 consecutive business days, the bid price of our common stock on The NASDAQ Global Market closed below the minimum $1.00 per share required for continued inclusion under NASDAQ Marketplace Rule 5810(c)(3)(A) (the “Minimum Bid Price Rule”).
|
•
|
For the prior 30 consecutive business days, our stockholders’ equity did not comply with the minimum stockholders’ equity requirement of $5,000,000 for continued listing on The NASDAQ Global Market pursuant to NASDAQ Marketplace Rule 5810(c)(3)(D) (the “Minimum Market Value Rule”).
|
•
|
employee-related expenses, including salaries, benefits, travel and stock-based compensation expense;
|
•
|
expenses incurred under agreements with clinical research organizations, or CROs, and investigative sites that conduct our clinical trials;
|
•
|
expenses associated with developing manufacturing capabilities and manufacturing clinical study materials;
|
•
|
facilities, depreciation, and other expenses, which include direct and allocated expenses for rent and maintenance of facilities, insurance, and other supplies; and
|
•
|
expenses associated with preclinical and regulatory activities.
|
•
|
the scope, progress, outcome and costs of our clinical trials and other research and development activities;
|
•
|
the efficacy and potential advantages of our product candidates compared to alternative treatments, including any standard of care;
|
•
|
the market acceptance of our product candidates;
|
•
|
obtaining, maintaining, defending and enforcing patent claims and other intellectual property rights;
|
•
|
significant and changing government regulation; and
|
•
|
the timing, receipt and terms of any marketing approvals.
|
|
Year ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(in thousands)
|
||||||||||
Programs:
|
|
|
|
|
|
||||||
Isunakinra (EBI-005)
|
$
|
14,455
|
|
|
$
|
19,820
|
|
|
$
|
7,366
|
|
EBI-031
|
5,384
|
|
|
—
|
|
|
—
|
|
|||
Total program expenses
|
19,839
|
|
|
$
|
19,820
|
|
|
$
|
7,366
|
|
|
Personnel and other expenses:
|
|
||||||||||
Employee and contractor-related expenses
|
4,762
|
|
|
4,620
|
|
|
4,409
|
|
|||
Platform-related lab expenses
|
620
|
|
|
855
|
|
|
997
|
|
|||
Facility expenses
|
536
|
|
|
473
|
|
|
773
|
|
|||
Other expenses
|
579
|
|
|
935
|
|
|
243
|
|
|||
Total personnel and other expenses
|
6,497
|
|
|
6,883
|
|
|
6,422
|
|
|||
Total research and development expenses
|
$
|
26,336
|
|
|
$
|
26,703
|
|
|
$
|
13,788
|
|
•
|
persuasive evidence of an arrangement exists;
|
•
|
delivery has occurred or services have been rendered;
|
•
|
the seller’s price to the buyer is fixed or determinable; and
|
•
|
collectability is reasonably assured.
|
|
Year Ended December 31,
|
||||
|
2015
|
|
2014
|
|
2013
|
Risk-free interest rate
|
1.42-1.92%
|
|
1.67-2.02%
|
|
1.09-2.07%
|
Expected dividend yield
|
—%
|
|
—%
|
|
—%
|
Expected term (in years)
|
5.75-6
|
|
5.75-6
|
|
6
|
Expected volatility
|
69.06-74.11%
|
|
60.00-69.58%
|
|
72.13-77.80%
|
|
Year ended
December 31,
|
|
|
||||||||
|
2015
|
|
2014
|
|
Change
|
||||||
|
(in thousands)
|
||||||||||
Collaboration revenue
|
$
|
490
|
|
|
$
|
2,243
|
|
|
$
|
(1,753
|
)
|
Other revenue
|
500
|
|
|
—
|
|
|
500
|
|
|||
Total revenue
|
990
|
|
|
2,243
|
|
|
(1,253
|
)
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Research and development
|
26,336
|
|
|
26,703
|
|
|
(367
|
)
|
|||
General and administrative
|
9,850
|
|
|
8,471
|
|
|
1,379
|
|
|||
Total operating expenses
|
36,186
|
|
|
35,174
|
|
|
1,012
|
|
|||
Loss from operations
|
(35,196
|
)
|
|
(32,931
|
)
|
|
(2,265
|
)
|
|||
Other expense, net
|
1,744
|
|
|
(1,225
|
)
|
|
2,969
|
|
|||
Net loss
|
$
|
(33,452
|
)
|
|
$
|
(34,156
|
)
|
|
$
|
704
|
|
|
Year ended
December 31,
|
|
|
||||||||
|
2014
|
|
2013
|
|
Change
|
||||||
|
(in thousands)
|
||||||||||
Collaboration revenue
|
$
|
2,243
|
|
|
$
|
1,334
|
|
|
$
|
909
|
|
Operating expenses:
|
|
|
|
|
|
||||||
Research and development
|
26,703
|
|
|
13,788
|
|
|
12,915
|
|
|||
General and administrative
|
8,471
|
|
|
4,024
|
|
|
4,447
|
|
|||
Total operating expenses
|
35,174
|
|
|
17,812
|
|
|
17,362
|
|
|||
Loss from operations
|
(32,931
|
)
|
|
(16,478
|
)
|
|
(16,453
|
)
|
|||
Other expense, net
|
(1,225
|
)
|
|
(1,547
|
)
|
|
322
|
|
|||
Net loss
|
$
|
(34,156
|
)
|
|
$
|
(18,025
|
)
|
|
$
|
(16,131
|
)
|
|
Year ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(in thousands)
|
||||||||||
Net cash provided by (used in):
|
|
|
|
|
|
||||||
Operating activities
|
$
|
(34,529
|
)
|
|
$
|
(29,307
|
)
|
|
$
|
(13,494
|
)
|
Investing activities
|
(287
|
)
|
|
(137
|
)
|
|
—
|
|
|||
Financing activities
|
16,836
|
|
|
75,561
|
|
|
13,554
|
|
|||
Net increase in cash and cash equivalents
|
$
|
(17,980
|
)
|
|
$
|
46,117
|
|
|
$
|
60
|
|
•
|
pursue the development of EBI-031 for additional indications, such as uveitis, or for use in other patient populations or, if it is approved, seek to broaden the label for EBI-031;
|
•
|
continue the research and development of our other preclinical product candidates;
|
•
|
seek to discover and develop additional product candidates;
|
•
|
in-license or acquire the rights to other products, product candidates or technologies for the treatment of ophthalmic diseases;
|
•
|
seek marketing approvals for any product candidates that successfully complete clinical trials;
|
•
|
establish sales, marketing and distribution capabilities and scale up and validate external manufacturing capabilities to commercialize any products for which we may obtain marketing approval;
|
•
|
maintain, expand and protect our intellectual property portfolio;
|
•
|
hire additional clinical, quality control, scientific and management personnel;
|
•
|
expand our operational, financial and management systems and personnel, including personnel to support our clinical development, manufacturing and planned future commercialization efforts and our operations as a public company; and
|
•
|
increase our insurance coverage as we commence clinical trials and potentially commercialize EBI-031.
|
•
|
the progress, costs and outcome of clinical development of EBI-031 for the treatment of DME and uveitis;
|
•
|
the costs and timing of process development and manufacturing scale up and validation activities associated with EBI-031;
|
•
|
the costs and timing of commercialization activities for EBI-031 if we receive, or expect to receive, marketing approval, including the costs and timing of establishing product sales, marketing, distribution and outsourced manufacturing capabilities;
|
•
|
subject to receipt of marketing approval, the amount of revenue received from commercial sales of EBI-031;
|
•
|
the progress, costs and outcome of developing EBI-031 for the treatment of additional indications or for use in other patient populations;
|
•
|
our ability to establish collaborations on favorable terms, if at all, particularly manufacturing, marketing and distribution arrangements for our product candidates;
|
•
|
the scope, progress, results and costs of preclinical development, laboratory testing and, if we determine to proceed into clinical development, clinical trials of our other product candidates;
|
•
|
the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims; and
|
•
|
the extent to which we in-license or acquire rights to other products, product candidates or technologies for the treatment of ophthalmic diseases.
|
|
Total
|
|
Less than
1 year
|
|
1 to 3
years
|
|
3 to 5
years
|
|
More than
5 years
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Operating lease obligations(1)
|
$
|
1,540
|
|
|
$
|
642
|
|
|
$
|
898
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Debt obligations(2)
|
16,621
|
|
|
5,146
|
|
|
11,475
|
|
|
—
|
|
|
—
|
|
|||||
Total fixed contractual obligations
|
$
|
18,161
|
|
|
$
|
5,788
|
|
|
$
|
12,373
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(1)
|
We lease office space at 215 First Street in Cambridge, Massachusetts under a non-cancelable operating lease that expires on April 30, 2018.
|
(2)
|
Amounts include payments for interest on our debt obligations.
|
Item 7A.
|
Quantitative and Qualitative Disclosures About Market Risk.
|
Item 8.
|
Financial Statements and Supplementary Data.
|
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
|
Item 9A.
|
Controls and Procedures.
|
Item 9B.
|
Other Information.
|
Item 10.
|
Directors, Executive Officers and Corporate Governance.
|
Item 11.
|
Executive Compensation.
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence.
|
Item 14.
|
Principal Accountant Fees and Services.
|
Item 15.
|
Exhibits and Financial Statement Schedules.
|
ELEVEN BIOTHERAPEUTICS, INC.
|
||
|
||
By:
|
|
/s/ Abbie C. Celniker
|
|
|
Abbie C. Celniker, Ph.D.
|
|
|
President and Chief Executive Officer
|
/s/ Abbie C. Celniker
|
|
Director, President and Chief Executive Officer (Principal Executive Officer)
|
March 24, 2016
|
Abbie C. Celniker, Ph.D.
|
|
|
|
|
|
|
|
/s/ John J. McCabe
|
|
Chief Financial Officer (Principal Financial and Accounting Officer)
|
March 24, 2016
|
John J. McCabe
|
|
|
|
|
|
|
|
/s/ Daniel S. Lynch
|
|
Chairman of the Board of Directors
|
March 24, 2016
|
Daniel S. Lynch
|
|
|
|
|
|
|
|
/s/ David A. Berry
|
|
Director
|
March 24, 2016
|
David A. Berry, M.D., Ph.D.
|
|
|
|
|
|
|
|
/s/ Paul G. Chaney
|
|
Director
|
March 24, 2016
|
Paul G. Chaney
|
|
|
|
|
|
|
|
/s/ Jay S. Duker, M.D.
|
|
Director
|
March 24, 2016
|
Jay S. Duker, M.D.
|
|
|
|
|
|
|
|
/s/ Wendy L. Dixon, Ph.D.
|
|
Director
|
March 24, 2016
|
Wendy L. Dixon, Ph.D.
|
|
|
|
|
|
|
|
/s/ Barry J. Gertz, M.D., Ph.D.
|
|
Director
|
March 24, 2016
|
Barry J. Gertz, M.D., Ph.D.
|
|
|
|
|
|
|
|
/s/ Jane V. Henderson
|
|
Director
|
March 24, 2016
|
Jane V. Henderson
|
|
|
|
|
|
|
|
/s/ Cary G. Pfeffer
|
|
Director
|
March 24, 2016
|
Cary G. Pfeffer, M.D.
|
|
|
|
Exhibit
No.
|
|
Description
|
|
|
|
3.1
|
|
Restated Certificate of Incorporation of the Registrant (Incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed with the SEC on February 18, 2014)
|
|
|
|
3.2
|
|
Amended and Restated By-laws of the Registrant (Incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed with the SEC on April 16, 2015)
|
|
|
|
4.1
|
|
Specimen Stock Certificate evidencing the shares of common stock (Incorporated by reference to Exhibit 4.1 to our Registration Statement on Form S-1/A filed with the SEC on January 23, 2014)
|
|
|
|
4.2
|
|
Amended and Restated Investors’ Rights Agreement of the Registrant (Incorporated by reference to Exhibit 4.2 to our Registration Statement on Form S-1/A filed with the SEC on January 23, 2014)
|
|
|
|
10.1+
|
|
Amended and Restated 2009 Stock Incentive Plan (Incorporated by reference to Exhibit 10.1 to our Registration Statement on Form S-1 filed with the SEC on December 30, 2013)
|
|
|
|
10.2+
|
|
Form of Incentive Stock Option Agreement under the Amended and Restated 2009 Stock Incentive Plan (Incorporated by reference to Exhibit 10.2 to our Registration Statement on Form S-1 filed with the SEC on December 30, 2013)
|
|
|
|
10.3+
|
|
Form of Non-statutory Stock Option Agreement under the Amended and Restated 2009 Stock Incentive Plan (Incorporated by reference to Exhibit 10.3 to our Registration Statement on Form S-1 filed with the SEC on December 30, 2013)
|
|
|
|
10.4+
|
|
Form of Restricted Stock Agreement under the Amended and Restated 2009 Stock Incentive Plan (Incorporated by reference to Exhibit 10.4 to our Registration Statement on Form S-1 filed with the SEC on December 30, 2013)
|
|
|
|
10.5+
|
|
2014 Stock Incentive Plan (Incorporated by reference to Exhibit 10.5 to our Registration Statement on Form S-1/A filed with the SEC on January 23, 2014)
|
|
|
|
10.6+
|
|
Form of Incentive Stock Option Agreement under 2014 Stock Incentive Plan (Incorporated by reference to Exhibit 10.6 to our Registration Statement on Form S-1/A filed with the SEC on January 23, 2014)
|
|
|
|
10.7+
|
|
Form of Non-statutory Stock Option Agreement under 2014 Stock Incentive Plan (Incorporated by reference to Exhibit 10.7 to our Registration Statement on Form S-1/A filed with the SEC on January 23, 2014)
|
|
|
|
10.8+
|
|
Form of Restricted Stock Unit Agreement under 2014 Stock Incentive Plan (Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the SEC on June 29, 2015)
|
|
|
|
10.9†
|
|
License Agreement dated July 13, 2010 by and between the Registrant and The Schepens Eye Research Institute, Inc. (Incorporated by reference to Exhibit 10.8 to our Registration Statement on Form S-1 filed with the SEC on December 30, 2013)
|
|
|
|
10.10†
|
|
Collaboration and License Agreement dated May 28, 2013 by and between the Registrant and ThromboGenics N.V. (Incorporated by reference to Exhibit 10.9 to our Registration Statement on Form S-1 filed with the SEC on December 30, 2013)
|
|
|
|
10.11
|
|
Loan and Security Agreement dated May 27, 2010 by and between the Registrant and Silicon Valley Bank, as modified (Incorporated by reference to Exhibit 10.10 to our Registration Statement on Form S-1 filed with the SEC on December 30, 2013)
|
|
|
|
10.12
|
|
Lease Agreement dated January 14, 2010 by and between the Registrant and ARE-MA Region No. 38, LLC, as amended (Incorporated by reference to Exhibit 10.11 to our Registration Statement on Form S-1 filed with the SEC on December 30, 2013)
|
|
|
|
10.13
|
|
Form of Indemnification Agreement by and between the Registrant and each of its directors and executive officers (Incorporated by reference to Exhibit 10.12 to our Registration Statement on Form S-1/A filed with the SEC on January 23, 2014)
|
|
|
|
10.14+
|
|
2014 Employee Stock Purchase Plan (Incorporated by reference to Exhibit 10.13 to our Registration Statement on Form S-1/A filed with the SEC on January 23, 2014)
|
|
|
|
10.15+
|
|
Employment Agreement, dated December 23, 2013, by and between the Registrant and Abbie C. Celniker, Ph.D. (Incorporated by reference to Exhibit 10.14 to our Registration Statement on Form S-1 filed with the SEC on December 30, 2013)
|
|
|
|
Exhibit
No.
|
|
Description
|
|
|
|
10.16+
|
|
Employment Agreement, dated December 26, 2013, by and between the Registrant and Karen L. Tubridy, Pharm.D (Incorporated by reference to Exhibit 10.16 to our Registration Statement on Form S-1 filed with the SEC on December 30, 2013)
|
|
|
|
10.17*+
|
|
Employment Agreement, dated August 28, 2015, by and between the Registrant and John J. McCabe
|
|
|
|
10.18+
|
|
Form of Director Restricted Stock Agreement under 2014 Stock Incentive Plan (Incorporated by reference to Exhibit 10.18 to our Registration Statement on Form S-1/A filed with the SEC on January 23, 2014)
|
|
|
|
10.19
|
|
Securities Purchase Agreement, dated November 24, 2014, by and among the Registrant and the persons party thereto (Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the SEC on December 1, 2014)
|
|
|
|
10.20
|
|
Form of Warrant to Purchase Common Stock, by and between the Registrant and the persons party thereto (Incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed with the SEC on December 1, 2014)
|
|
|
|
10.21
|
|
Registration Rights Agreement, dated November 24, 2014, by and among the Registrant and the persons party thereto (Incorporated by reference to Exhibit 10.3 to our Current Report on Form 8-K filed with the SEC on December 1, 2014)
|
|
|
|
10.22
|
|
Second Loan Modification, dated November 25, 2014, by and among the Registrant and Silicon Valley Bank (Incorporated by reference to Exhibit 10.22 to our Registration Statement on Form S-1 filed with the SEC on December 19, 2014)
|
|
|
|
10.23
|
|
Form of Warrant issued to Silicon Valley Bank and Life Science Loans, LLC dated November 25, 2014 (Incorporated by reference to Exhibit 10.23 to our Registration Statement on Form S-1 filed with the SEC on December 19, 2014)
|
|
|
|
10.24
|
|
Second Amendment to Lease, dated August 18, 2015, by and between the Registrant and ARE-MA Region No. 38, LLC (Incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q/A filed with the SEC on November 14, 2015)
|
|
|
|
10.25*
|
|
Consent and Third Amendment to Loan and Security Agreement, dated November 25, 2014, by and among the Registrant and Silicon Valley Bank
|
|
|
|
10.26*†
|
|
Amendment #1 to License Agreement dated December 22, 2015 by and between the Registrant and The Schepens Eye Research Institute, Inc.
|
|
|
|
23.1*
|
|
Consent of Ernst & Young LLP
|
|
|
|
31.1*
|
|
Rule 13a-14(a) Certification of Principal Executive Officer
|
|
|
|
31.2*
|
|
Rule 13a-14(a) Certification of Principal Financial Officer
|
|
|
|
32.1*
|
|
Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. §1350
|
|
|
|
101.INS*
|
|
XBRL Instance Document
|
|
|
|
101.SCH*
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL*
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.DEF*
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
101.LAB*
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
101.PRE*
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
*
|
Filed herewith.
|
+
|
This exhibit is a compensatory plan or arrangement in which executive officers or directors of the Company participate.
|
†
|
Confidential treatment requested as to portions of the exhibit. Confidential materials omitted and filed separately with the Securities and Exchange Commission.
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
36,079
|
|
|
$
|
54,059
|
|
Prepaid expenses and other current assets
|
232
|
|
|
342
|
|
||
Total current assets
|
36,311
|
|
|
54,401
|
|
||
Property and equipment, net
|
407
|
|
|
486
|
|
||
Restricted cash
|
94
|
|
|
94
|
|
||
Other assets
|
13
|
|
|
19
|
|
||
Total assets
|
$
|
36,825
|
|
|
$
|
55,000
|
|
Liabilities and stockholders’ equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
1,246
|
|
|
$
|
2,458
|
|
Accrued expenses
|
1,794
|
|
|
1,987
|
|
||
Notes payable, current portion (Note 14)
|
4,134
|
|
|
251
|
|
||
Deferred revenue, current portion
|
406
|
|
|
506
|
|
||
Total current liabilities
|
7,580
|
|
|
5,202
|
|
||
Other liabilities
|
423
|
|
|
4
|
|
||
Notes payable, net of current portion (Note 14)
|
9,763
|
|
|
9,749
|
|
||
Warrant liability
|
115
|
|
|
3,219
|
|
||
Commitments and contingencies (Note 7)
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock, $0.001 par value per share; 5,000,000 shares authorized at December 31, 2015 and 2014 and no shares issued and outstanding at December 31, 2015 and 2014
|
—
|
|
|
—
|
|
||
Common stock, $0.001 par value per share; 200,000,000 shares authorized at December 31, 2015 and 2014 and 19,619,124 and 17,933,260 shares issued and outstanding at December 31, 2015 and 2014, respectively
|
20
|
|
|
18
|
|
||
Additional paid-in capital
|
144,126
|
|
|
128,558
|
|
||
Accumulated deficit
|
(125,202
|
)
|
|
(91,750
|
)
|
||
Total stockholders’ equity
|
18,944
|
|
|
36,826
|
|
||
Total liabilities and stockholders’ equity
|
$
|
36,825
|
|
|
$
|
55,000
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Revenue:
|
|
|
|
|
|
||||||
Collaboration revenue
|
$
|
490
|
|
|
$
|
2,243
|
|
|
$
|
1,334
|
|
Other revenue
|
500
|
|
|
—
|
|
|
—
|
|
|||
Total revenue
|
990
|
|
|
2,243
|
|
|
1,334
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Research and development
|
26,336
|
|
|
26,703
|
|
|
13,788
|
|
|||
General and administrative
|
9,850
|
|
|
8,471
|
|
|
4,024
|
|
|||
Total operating expenses
|
36,186
|
|
|
35,174
|
|
|
17,812
|
|
|||
Loss from operations
|
(35,196
|
)
|
|
(32,931
|
)
|
|
(16,478
|
)
|
|||
Other income (expense):
|
|
|
|
|
|
||||||
Other income (expense), net
|
3,139
|
|
|
(849
|
)
|
|
(147
|
)
|
|||
Interest expense
|
(1,395
|
)
|
|
(376
|
)
|
|
(1,400
|
)
|
|||
Total other income (expense), net
|
1,744
|
|
|
(1,225
|
)
|
|
(1,547
|
)
|
|||
Net loss and comprehensive loss
|
$
|
(33,452
|
)
|
|
$
|
(34,156
|
)
|
|
$
|
(18,025
|
)
|
Cumulative preferred stock dividends and accretion of preferred stock discount
|
—
|
|
|
(519
|
)
|
|
(3,857
|
)
|
|||
Net loss applicable to common stockholders
|
$
|
(33,452
|
)
|
|
$
|
(34,675
|
)
|
|
$
|
(21,882
|
)
|
Net loss per share applicable to common stockholders—basic and diluted
|
$
|
(1.76
|
)
|
|
$
|
(2.37
|
)
|
|
$
|
(16.18
|
)
|
Weighted-average number of common shares used in net loss per share applicable to common stockholders—basic and diluted
|
18,993
|
|
|
14,644
|
|
|
1,352
|
|
|
Series A
Convertible
Preferred Stock
|
|
Series B
Convertible
Preferred Stock
|
|
Common Stock
|
|
Additional
Paid-in
Capital
|
|
Accumulated
Deficit
|
|
Stockholders’
Equity
(Deficit)
|
|||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
||||||||||||||||||||
|
(in thousands, except share data)
|
|||||||||||||||||||||||||||||||
Balance at December 31, 2012
|
45,250,000
|
|
|
$
|
45,035
|
|
|
—
|
|
|
$
|
—
|
|
|
1,205,038
|
|
|
$
|
1
|
|
|
$
|
272
|
|
|
$
|
(39,569
|
)
|
|
$
|
(39,296
|
)
|
Exercise of stock options and vesting of restricted stock awards
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
286,837
|
|
|
1
|
|
|
34
|
|
|
—
|
|
|
35
|
|
||||||
Issuance of series B convertible preferred stock, net of issuance costs of $163,000
|
—
|
|
|
—
|
|
|
5,142,859
|
|
|
7,439
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Issuance of series B convertible preferred stock upon the conversion of notes payable
|
—
|
|
|
—
|
|
|
2,060,986
|
|
|
4,204
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Beneficial conversion feature of Series B preferred stock discount
|
—
|
|
|
—
|
|
|
—
|
|
|
(163
|
)
|
|
—
|
|
|
—
|
|
|
163
|
|
|
—
|
|
|
163
|
|
||||||
Accretion of Series B preferred stock discount
|
—
|
|
|
—
|
|
|
—
|
|
|
163
|
|
|
—
|
|
|
—
|
|
|
(163
|
)
|
|
—
|
|
|
(163
|
)
|
||||||
Issuance of warrants for the purchase of common stock
|
|
|
|
|
|
|
|
|
|
|
|
|
1,685
|
|
|
|
|
1,685
|
|
|||||||||||||
Exercise of warrants
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
144,262
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
9
|
|
||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,260
|
|
|
—
|
|
|
1,260
|
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18,025
|
)
|
|
(18,025
|
)
|
||||||
Balance at December 31, 2013
|
45,250,000
|
|
|
45,035
|
|
|
7,203,845
|
|
|
11,643
|
|
|
1,636,137
|
|
|
2
|
|
|
3,260
|
|
|
(57,594
|
)
|
|
(54,332
|
)
|
||||||
Initial public offering, net of issuance costs of $7.3 million
|
(45,250,000
|
)
|
|
(45,035
|
)
|
|
(7,203,845
|
)
|
|
(11,643
|
)
|
|
14,010,424
|
|
|
14
|
|
|
106,868
|
|
|
—
|
|
|
106,882
|
|
||||||
Issuance of common stock, net of issuance costs of $1.5 million
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,743,680
|
|
|
2
|
|
|
15,417
|
|
|
—
|
|
|
15,419
|
|
||||||
Exercise of stock options and vesting of restricted stock awards
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
190,701
|
|
|
—
|
|
|
65
|
|
|
—
|
|
|
65
|
|
||||||
Exercise of warrants
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
352,318
|
|
|
—
|
|
|
15
|
|
|
—
|
|
|
15
|
|
||||||
Conversion of preferred stock warrant to common stock warrant
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
247
|
|
|
—
|
|
|
247
|
|
||||||
Issuance of common stock warrants in connection with notes payable
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
254
|
|
|
—
|
|
|
254
|
|
||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,432
|
|
|
—
|
|
|
2,432
|
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(34,156
|
)
|
|
(34,156
|
)
|
||||||
Balance at December 31, 2014
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17,933,260
|
|
|
18
|
|
|
128,558
|
|
|
(91,750
|
)
|
|
36,826
|
|
||||||
Issuance of common stock, net of issuance costs of $819,000
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,446,781
|
|
|
2
|
|
|
12,648
|
|
|
—
|
|
|
12,650
|
|
||||||
Exercise of stock options and vesting of restricted stock awards
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
239,083
|
|
|
—
|
|
|
63
|
|
|
—
|
|
|
63
|
|
||||||
Issuance of common stock warrants in connection with notes payable
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
328
|
|
|
—
|
|
|
328
|
|
||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,529
|
|
|
—
|
|
|
2,529
|
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(33,452
|
)
|
|
(33,452
|
)
|
||||||
Balance at December 31, 2015
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
19,619,124
|
|
|
$
|
20
|
|
|
$
|
144,126
|
|
|
$
|
(125,202
|
)
|
|
$
|
18,944
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Operating activities
|
|
|
|
|
|
||||||
Net loss
|
$
|
(33,452
|
)
|
|
$
|
(34,156
|
)
|
|
$
|
(18,025
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
366
|
|
|
410
|
|
|
438
|
|
|||
Non-cash interest expense
|
108
|
|
|
36
|
|
|
36
|
|
|||
Stock-based compensation expense
|
2,529
|
|
|
2,432
|
|
|
1,260
|
|
|||
Change in fair value of warrant liability
|
(3,104
|
)
|
|
123
|
|
|
150
|
|
|||
Change in fair value of convertible notes payable, included in interest expense
|
—
|
|
|
—
|
|
|
991
|
|
|||
Loss on extinguishment of debt
|
—
|
|
|
459
|
|
|
—
|
|
|||
Expense related to issuance costs allocated to warrants measured at fair value
|
—
|
|
|
276
|
|
|
—
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Prepaid expenses and other assets
|
110
|
|
|
(259
|
)
|
|
167
|
|
|||
Restricted cash
|
—
|
|
|
—
|
|
|
40
|
|
|||
Accounts payable
|
(1,212
|
)
|
|
1,021
|
|
|
(211
|
)
|
|||
Accrued expenses
|
226
|
|
|
1,315
|
|
|
190
|
|
|||
Deferred revenue
|
(100
|
)
|
|
(964
|
)
|
|
1,470
|
|
|||
Net cash used in operating activities
|
(34,529
|
)
|
|
(29,307
|
)
|
|
(13,494
|
)
|
|||
Investing activities
|
|
|
|
|
|
||||||
Purchases of property and equipment
|
(287
|
)
|
|
(137
|
)
|
|
—
|
|
|||
Net cash used in investing activities
|
(287
|
)
|
|
(137
|
)
|
|
—
|
|
|||
Financing activities
|
|
|
|
|
|
||||||
Proceeds from issuance of convertible notes payable
|
—
|
|
|
—
|
|
|
3,500
|
|
|||
Proceeds from issuance of notes payable, net of debt issuance costs
|
5,000
|
|
|
9,883
|
|
|
3,000
|
|
|||
Payments on equipment financing and notes payable
|
(877
|
)
|
|
(4,633
|
)
|
|
(511
|
)
|
|||
Proceeds from issuance of series B convertible preferred stock, net of issuance costs
|
—
|
|
|
—
|
|
|
8,837
|
|
|||
Proceeds from issuance of common stock and common stock warrants, net of issuance costs
|
12,650
|
|
|
70,237
|
|
|
—
|
|
|||
Proceeds from exercise of common stock options and common stock warrants
|
63
|
|
|
74
|
|
|
31
|
|
|||
Deferred initial public offering costs
|
—
|
|
|
—
|
|
|
(1,303
|
)
|
|||
Net cash provided by financing activities
|
16,836
|
|
|
75,561
|
|
|
13,554
|
|
|||
Net (decrease) increase in cash and cash equivalents
|
(17,980
|
)
|
|
46,117
|
|
|
60
|
|
|||
Cash and cash equivalents at beginning of period
|
54,059
|
|
|
7,942
|
|
|
7,882
|
|
|||
Cash and cash equivalents at end of period
|
$
|
36,079
|
|
|
$
|
54,059
|
|
|
$
|
7,942
|
|
Supplemental non-cash financing activities
|
|
|
|
|
|
||||||
Conversion of Series A and Series B preferred stock into 8,260,444 shares of common stock
|
$
|
—
|
|
|
$
|
56,678
|
|
|
$
|
—
|
|
Conversion of preferred stock warrants into common stock warrants
|
$
|
—
|
|
|
$
|
247
|
|
|
$
|
—
|
|
Conversion of notes payable and accrued interest thereon into Series B convertible preferred stock
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,204
|
|
Issuance of warrants to purchase common stock
|
$
|
328
|
|
|
$
|
3,300
|
|
|
$
|
1,685
|
|
Supplemental cash flow information
|
|
|
|
|
|
||||||
Cash paid for interest
|
$
|
930
|
|
|
$
|
335
|
|
|
$
|
264
|
|
•
|
The Company engaged an investment bank to conduct a review of strategic alternatives to maximize shareholder value. Potential strategic alternatives to be explored and evaluated during the review process may include the sale of the Company, a strategic partnership with one or more parties or the licensing, sale or divestiture of some of the Company’s proprietary technologies. The Company cannot provide any commitment regarding when or if this strategic review process will result in any type of transaction and no assurance can be given that the Company will determine to pursue a potential sale, strategic partnership or licensing arrangement.
|
•
|
The Company does not see an immediate path forward for isunakinra (EBI-005) and has implemented a plan to wind down the development activities associated with isunakinra.
|
•
|
The Company has conducted a review of its operations and implemented a plan to reduce operating expenses to align with current operating conditions.
|
•
|
As described in Note 14, on March 1, 2016, the Company prepaid all outstanding amounts owed to SVB under the Loan Agreement. The Company continues to evaluate other financing alternatives to provide additional working capital on terms that are consistent with the Company’s business plans.
|
•
|
Persuasive evidence of an arrangement exists;
|
•
|
Delivery has occurred or services have been rendered;
|
•
|
The seller’s price to the buyer is fixed or determinable; and
|
•
|
Collectability is reasonably assured.
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Research and development expense
|
$
|
1,032
|
|
|
$
|
1,069
|
|
|
$
|
1,150
|
|
General and administrative expense
|
1,497
|
|
|
1,363
|
|
|
110
|
|
|||
|
$
|
2,529
|
|
|
$
|
2,432
|
|
|
$
|
1,260
|
|
Description
|
December 31, 2015
|
|
Active
Markets
(Level 1)
|
|
Observable
Inputs
(Level 2)
|
|
Unobservable
Inputs
(Level 3)
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
36,079
|
|
|
$
|
36,079
|
|
|
|
|
|
||||
Restricted cash
|
94
|
|
|
94
|
|
|
|
|
|
|
|
||||
Total assets
|
$
|
36,173
|
|
|
$
|
36,173
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Warrant liability
|
$
|
115
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
115
|
|
Total liabilities
|
$
|
115
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
115
|
|
Description
|
December 31, 2014
|
|
Active
Markets
(Level 1)
|
|
Observable
Inputs
(Level 2)
|
|
Unobservable
Inputs
(Level 3)
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
54,059
|
|
|
$
|
54,059
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Restricted cash
|
94
|
|
|
94
|
|
|
—
|
|
|
—
|
|
||||
Total assets
|
$
|
54,153
|
|
|
$
|
54,153
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Warrant liability
|
$
|
3,219
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,219
|
|
Total liabilities
|
$
|
3,219
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,219
|
|
Beginning balance, January 1, 2015
|
$
|
3,219
|
|
Change in fair value of common stock warrants
|
(3,104
|
)
|
|
Ending balance, December 31, 2015
|
$
|
115
|
|
|
As of December 31,
|
|||||||
|
2015
|
|
2014
|
|
2013
|
|||
Convertible preferred stock
|
—
|
|
|
—
|
|
|
8,260,444
|
|
Stock options
|
1,803,574
|
|
|
1,438,528
|
|
|
1,346,238
|
|
Unvested restricted stock
|
41,657
|
|
|
125,027
|
|
|
163,353
|
|
Restricted stock units
|
150,932
|
|
|
—
|
|
|
—
|
|
Common stock warrants
|
926,840
|
|
|
899,340
|
|
|
333,799
|
|
Preferred stock warrants
|
—
|
|
|
—
|
|
|
30,708
|
|
|
2,923,003
|
|
|
2,462,895
|
|
|
10,134,542
|
|
•
|
an exclusive license to the Company’s intellectual property that is necessary for ThromboGenics to perform its obligations during the research term. (“Research License Deliverable”);
|
•
|
the Company’s obligation to provide research services (“Research Services Deliverable”); and
|
•
|
the Company’s participation on the JRC (“JRC Deliverable”).
|
|
Estimated Useful
Life (Years)
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||||
Lab equipment
|
5
|
|
$
|
1,961
|
|
|
$
|
1,795
|
|
Furniture and fixtures
|
4
|
|
107
|
|
|
107
|
|
||
Computer equipment
|
3
|
|
171
|
|
|
206
|
|
||
Software
|
3
|
|
25
|
|
|
25
|
|
||
Leasehold improvements
|
Lesser of useful life
or remaining lease term |
|
100
|
|
|
100
|
|
||
|
|
|
2,364
|
|
|
2,233
|
|
||
Less accumulated depreciation and amortization
|
|
|
(1,957
|
)
|
|
(1,747
|
)
|
||
Total property and equipment, net
|
|
|
$
|
407
|
|
|
$
|
486
|
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Development costs
|
$
|
931
|
|
|
$
|
834
|
|
Employee compensation
|
573
|
|
|
874
|
|
||
Professional fees
|
194
|
|
|
195
|
|
||
Interest
|
88
|
|
|
84
|
|
||
Other
|
8
|
|
|
—
|
|
||
|
$
|
1,794
|
|
|
$
|
1,987
|
|
2016
|
$
|
4,263
|
|
2017
|
4,978
|
|
|
2018
|
4,883
|
|
|
|
$
|
14,124
|
|
2016
|
$
|
642
|
|
2017
|
671
|
|
|
2018
|
227
|
|
|
|
$
|
1,540
|
|
|
As of December 31,
|
||||
|
2015
|
|
2014
|
||
Unvested restricted stock
|
41,657
|
|
|
125,027
|
|
Restricted stock units
|
150,932
|
|
|
—
|
|
Options to purchase common stock
|
2,319,772
|
|
|
1,904,107
|
|
Warrants to purchase common stock
|
926,840
|
|
|
899,340
|
|
Employee stock purchase plan
|
157,480
|
|
|
—
|
|
|
3,596,681
|
|
|
2,928,474
|
|
|
May 11, 2015
|
November 25,
2014
|
||
Risk-free interest rate
|
2.28
|
%
|
2.27
|
%
|
Expected dividend yield
|
—
|
%
|
—
|
%
|
Expected term (in years)
|
10
|
|
10
|
|
Expected volatility
|
94.60
|
%
|
79.28
|
%
|
|
December 31,
2015
|
|
December 31,
2014
|
|
December 2,
2014
|
|||
Risk-free interest rate
|
1.06
|
%
|
|
1.10
|
%
|
|
0.96
|
%
|
Expected dividend yield
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Expected term (in years)
|
1.92
|
|
|
2.92
|
|
|
3
|
|
Expected volatility
|
70.67
|
%
|
|
56.79
|
%
|
|
57.28
|
%
|
|
Shares
|
|
Weighted-Average
Exercise Price
|
|
Remaining
Contractual Life
(in years)
|
|||
Outstanding at December 31, 2014
|
1,438,528
|
|
|
$
|
4.93
|
|
|
7.86
|
Granted
|
802,828
|
|
|
8.66
|
|
|
|
|
Exercised
|
(78,585
|
)
|
|
0.74
|
|
|
|
|
Cancelled or forfeited
|
(359,197
|
)
|
|
7.40
|
|
|
|
|
Outstanding at December 31, 2015
|
1,803,574
|
|
|
$
|
6.28
|
|
|
7.78
|
Exercisable at December 31, 2015
|
855,711
|
|
|
$
|
4.80
|
|
|
7.11
|
Vested and expected to vest at December 31, 2015 (1)
|
1,589,145
|
|
|
$
|
6.58
|
|
|
7.88
|
|
Restricted
Stock
|
|
Weighted-Average
Grant Date
Fair Value
|
|||
Unvested at December 31, 2014
|
125,027
|
|
|
$
|
5.39
|
|
Granted
|
6,660
|
|
|
4.03
|
|
|
Vested
|
(90,030
|
)
|
|
2.67
|
|
|
Unvested at December 31, 2015
|
41,657
|
|
|
$
|
11.05
|
|
|
Restricted
Stock Units
|
|
Weighted-Average
Grant Date
Fair Value
|
|||
Unvested at December 31, 2014
|
—
|
|
|
$
|
—
|
|
Granted
|
221,400
|
|
|
2.82
|
|
|
Vested
|
(70,468
|
)
|
|
2.76
|
|
|
Unvested at December 31, 2015
|
150,932
|
|
|
$
|
2.85
|
|
|
Year Ended December 31,
|
||||
|
2015
|
|
2014
|
|
2013
|
Risk-free interest rate
|
1.42-1.92%
|
|
1.67-2.02%
|
|
1.09-2.07%
|
Expected dividend yield
|
—%
|
|
—%
|
|
—%
|
Expected term (in years)
|
5.75-6
|
|
5.75-6
|
|
6
|
Expected volatility
|
69.06-74.11%
|
|
60.00-69.58%
|
|
72.13-77.80%
|
|
Year Ended December 31,
|
||||
|
2015
|
|
2014
|
|
2013
|
Risk-free interest rate
|
1.19-2.26%
|
|
1.67-2.04%
|
|
1.82-2.99%
|
Expected dividend yield
|
0.00%
|
|
0.00%
|
|
0.00%
|
Expected option life (years)
|
10
|
|
10
|
|
10
|
Expected stock price volatility
|
67.24-92.40%
|
|
57.65-80.98%
|
|
76.28-78.14%
|
|
Year Ended December 31,
|
|||||||
|
2015
|
|
2014
|
|
2013
|
|||
Income tax benefit computed at federal statutory tax rate
|
34.00%
|
|
|
34.00%
|
|
|
34.00%
|
|
State taxes, net of federal benefit
|
5.59
|
|
|
5.05
|
|
|
4.67
|
|
General business credits and other credits
|
1.77
|
|
|
1.33
|
|
|
4.28
|
|
Permanent differences
|
2.38
|
|
|
(1.29
|
)
|
|
(3.52
|
)
|
Change in valuation allowance
|
(43.74
|
)
|
|
(39.09
|
)
|
|
(39.43
|
)
|
Total
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Deferred tax assets:
|
|
|
|
||||
Net operating loss carryforwards
|
$
|
46,749
|
|
|
$
|
33,267
|
|
Research and development credit carryforwards
|
2,462
|
|
|
1,979
|
|
||
Accruals and other
|
1,385
|
|
|
948
|
|
||
Capitalized license and organization costs
|
66
|
|
|
73
|
|
||
Capitalized start-up costs
|
278
|
|
|
309
|
|
||
Depreciation
|
21
|
|
|
—
|
|
||
Total gross deferred tax asset
|
50,961
|
|
|
36,576
|
|
||
Deferred tax liability
|
—
|
|
|
(18
|
)
|
||
Valuation allowance
|
(50,961
|
)
|
|
(36,558
|
)
|
||
Net deferred tax asset
|
$
|
—
|
|
|
$
|
—
|
|
|
2015
|
||||||||||||||||||
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
|
Total
|
||||||||||
|
(in thousands, except per share data)
|
||||||||||||||||||
Total revenue
|
$
|
244
|
|
|
$
|
114
|
|
|
$
|
67
|
|
|
$
|
565
|
|
|
$
|
990
|
|
Total operating expenses
|
7,841
|
|
|
8,516
|
|
|
9,426
|
|
|
10,403
|
|
|
36,186
|
|
|||||
Loss from operations
|
(7,597
|
)
|
|
(8,402
|
)
|
|
(9,359
|
)
|
|
(9,838
|
)
|
|
(35,196
|
)
|
|||||
Net loss
|
(6,524
|
)
|
|
(6,906
|
)
|
|
(9,693
|
)
|
|
(10,329
|
)
|
|
(33,452
|
)
|
|||||
Net loss applicable to common stockholders
|
(6,524
|
)
|
|
(6,906
|
)
|
|
(9,693
|
)
|
|
(10,329
|
)
|
|
(33,452
|
)
|
|||||
Net loss per share applicable to common stockholders—basic and diluted
|
$
|
(0.36
|
)
|
|
$
|
(0.36
|
)
|
|
$
|
(0.50
|
)
|
|
$
|
(0.53
|
)
|
|
$
|
(1.76
|
)
|
|
2014
|
||||||||||||||||||
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
|
Total
|
||||||||||
|
(in thousands, except per share data)
|
||||||||||||||||||
Total revenue
|
$
|
568
|
|
|
$
|
761
|
|
|
$
|
539
|
|
|
$
|
375
|
|
|
$
|
2,243
|
|
Total operating expenses
|
7,757
|
|
|
8,806
|
|
|
11,141
|
|
|
7,470
|
|
|
35,174
|
|
|||||
Loss from operations
|
(7,189
|
)
|
|
(8,045
|
)
|
|
(10,602
|
)
|
|
(7,095
|
)
|
|
(32,931
|
)
|
|||||
Net loss
|
(7,222
|
)
|
|
(8,121
|
)
|
|
(10,674
|
)
|
|
(8,139
|
)
|
|
(34,156
|
)
|
|||||
Net loss applicable to common stockholders
|
(7,741
|
)
|
|
(8,121
|
)
|
|
(10,674
|
)
|
|
(8,139
|
)
|
|
(34,675
|
)
|
|||||
Net loss per share applicable to common stockholders—basic and diluted
|
$
|
(0.80
|
)
|
|
$
|
(0.51
|
)
|
|
$
|
(0.66
|
)
|
|
$
|
(0.49
|
)
|
|
$
|
(2.37
|
)
|
A.
|
If a Qualifying Termination occurs: (i) Eleven Bio will pay you severance in the form of continuation of your base salary for a total of twelve (12) months, such amount to be paid in accordance with the Company’s then current payroll practices, except as otherwise specified in this letter, beginning on the Company’s first regular payroll date that occurs after the Payment Date (as defined below); and (ii) subject to the terms and conditions provided for in COBRA, and subject to your timely election of COBRA and copayment of premium amounts at the active employee’s rate, the Company shall pay its then current share of premium payments for group health and dental program after the termination date through (1) your severance period as outlined above, or (2) the date you become employed with benefits substantially comparable to the benefits provided under the corresponding Company plan, or (3) the date you become ineligible for COBRA benefits;
provided, however
, that such Company-paid premiums may be recorded as additional income pursuant to Section 6041 of the Internal Revenue Code of 1986, as amended (the “Code”) and not entitled to any tax qualified treatment to the extent necessary to comply with or avoid the discriminatory treatment prohibited by the Patient Protection and Affordable Care Act of 2010 and the Health Care and Education Reconciliation Act of 2010 or Section 105(h) of the Code. You shall be responsible for the entire COBRA premium should you elect to maintain this coverage after the earlier of the dates specified in sections 8.A.(ii)(1)-(3) above.
|
B.
|
If a Qualifying Termination occurs within twelve (12) months after a Change in Control Transaction (as defined below), then: (i) you will be eligible for the same severance payments and COBRA premium assistance as set forth in sections 8.A.(i)-A.(ii) above, subject to the same terms, conditions, and limitations as described therein; and (ii) the vesting of 100% of your then outstanding unvested equity grants shall be accelerated, such that all unvested equity grants vest and become fully exercisable or non-forfeitable as of the termination date.
|
C.
|
The Severance Benefits will be subject to the following terms:
|
A.
|
The Company shall not be obligated to provide to you any portion of any “Contingent Compensation Payments” (as defined below) that you would otherwise be entitled to receive to the extent necessary to eliminate any “excess
|
B.
|
Notwithstanding the provisions of Section 10.A, no such reduction in Contingent Compensation Payments shall be made if (1) the Eliminated Amount (computed without regard to this sentence) exceeds (2) 100% of the aggregate present value (determined in accordance with Treasury Regulation Section 1.280G-1, Q/A-31 and Q/A-32 or any successor provisions) of the amount of any additional taxes that would be incurred by you if the Eliminated Payments (determined without regard to this sentence) were paid to you (including state and federal income taxes on the Eliminated Payments, the excise tax imposed by Section 4999 of the Code payable with respect to all of the Contingent Compensation Payments in excess of your “base amount” (as defined in Section 280G(b)(3) of the Code), and any withholding taxes). The override of such reduction in Contingent Compensation Payments pursuant to this Section 10.B shall be referred to as a “Section 10.B Override.” For purpose of this paragraph, if any federal or state income taxes would be attributable to the receipt of any Eliminated Payment, the amount of such taxes shall be computed by multiplying the amount of the Eliminated Payment by the maximum combined federal and state income tax rate provided by law.
|
C.
|
For purposes of this Section 10 the following terms shall have the following respective meanings:
|
D.
|
Any payments or other benefits otherwise due to you following a Change in Ownership or Control that could reasonably be characterized (as determined by
|
E.
|
The Contingent Compensation Payments to be treated as Eliminated Payments shall be determined by the Company by determining the “Contingent
|
F.
|
The provisions of this Section 10 are intended to apply to any and all payments or benefits available to you under this Agreement or any other agreement or plan of the Company under which you receive Contingent Compensation Payments.
|
BANK
|
BORROWER
|
SILICON VALLEY BANK
By:
/s/ Ryan Roller
Name:
Ryan Roller
Title:
Vice President
|
ELEVEN BIOTHERAPEUTICS, INC.
By:
/s/ Abbie Celniker
Name:
Abbie Celniker
Title:
CEO and President
|
|
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Double asterisks denote omissions.
|
|
|
|
|
|
Exhibit 10.26
|
|
ELEVEN BIOTHERAPEUTICS, INC.
|
THE SCHEPENS EYE RESEARCH INSTITUTE, INC.
|
By:
/s/ Abbie C. Celniker
______________
|
By: __
/s/ Ojas P. Mehta
______________
|
Name: ___
Abbie C. Celniker, Ph.D.
_______
|
Name: ___
Ojas P. Mehta, JD
_____________
|
Title:
President & Chief Executive Officer
__
|
Title: ___
Director, Intellectual Property & Commercial Ventures
_____________
|
Date: ___
January 27, 2016
______________
|
Date: __
Dec. 22, 2015
_________________
|
(1)
|
Registration Statement (Form S-3 No. 333-202676) of Eleven Biotherapeutics, Inc.,
|
(2)
|
Registration Statement (Form S-8 No. 333-202677) pertaining to the Eleven Biotherapeutics, Inc. 2014 Stock Incentive Plan, and
|
(3)
|
Registration Statement (Form S-8 No. 333-195170) pertaining to the Eleven Biotherapeutics, Inc. Amended and Restated 2009 Stock Incentive Plan;
|
1.
|
I have reviewed this Annual Report on Form 10-K of Eleven Biotherapeutics, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/ Abbie C. Celniker
|
Abbie C. Celniker
|
President and Chief Executive Officer
|
(Principal Executive Officer)
|
1.
|
I have reviewed this Annual Report on Form 10-K of Eleven Biotherapeutics, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ John J. McCabe
|
John J. McCabe
|
Chief Financial Officer
|
(Principal Financial Officer)
|
(1)
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Abbie C. Celniker
|
Abbie C. Celniker
|
President and Chief Executive Officer
|
(Principal Executive Officer)
|
/s/ John J. McCabe
|
John J. McCabe
|
Chief Financial Officer
|
(Principal Financial Officer)
|