Outlook Therapeutics, Inc.: Form 10-Q for the period ended Jun 30, 2025

You should read this section in conjunction with our unaudited interim consolidated financial statements and related notes included in Part I, Item 1 of this report and our audited consolidated financial statements and related notes thereto and management’s discussion and analysis of financial condition and results of operations for the years ended September 30, 2024 and 2023 included in our Annual Report on Form 10-K for the year ended September 30, 2024, filed with the Securities and Exchange Commission, or SEC, on December 27, 2024.

Forward-Looking Statements

This discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Forward-looking statements are identified by words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potentially,” “seek,” “should,” “will,” “would,” or the negative of these terms or similar expressions in this report. You should read these statements carefully because they discuss future expectations, contain projections of future results of operations or financial condition, or state other forward-looking information. These statements relate to our future plans, objectives, expectations, intentions and financial performance and the assumptions that underlie these statements. These forward-looking statements are subject to certain risks and uncertainties that could cause a material difference including, but not limited to, those discussed under the caption “Risk Factors” in our Annual Report on Form 10-K for the year ended September 30, 2024, filed with the SEC on December 27, 2024, and elsewhere in this report. See “Special Note Regarding Forward-Looking Statements.” Forward-looking statements are based on our management’s current beliefs and assumptions and based on information currently available to our management. These statements, like all statements in this report, speak only as of their date, and we undertake no obligation to update or revise these statements in light of future developments.

Overview

We are a biopharmaceutical company that has developed ONS-5010/LYTENAVATM as the first ophthalmic formulation of bevacizumab approved by the European Commission in the European Union, or EU, and the Medicines and Healthcare products Regulatory Agency, or MHRA, in the United Kingdom, or UK, for use in adults for the treatment of wet age-related macular degeneration, or wet AMD. In June 2025, we launched directly into the initial markets of Germany and the UK. Additionally, our Biologics License Application, or BLA, is currently under review at the U.S. Food and Drug Administration, or FDA, for the use of ONS-5010/LYTENAVA as a treatment for wet AMD in the United States. If approved in the US., our goal is to also launch directly in the United States as the first and only approved ophthalmic bevacizumab for the treatment of wet AMD. In addition to Europe and the U.S., our plans also include potentially seeking approval and launching the product in other markets.

Bevacizumab is a full-length, humanized anti-VEGF (Vascular Endothelial Growth Factor) recombinant monoclonal antibody, or mAb, that inhibits VEGF and associated angiogenic activity. Prior to the approval of ONS-5010/LYTENAVA in the EU and UK, bevacizumab had only been approved for use in the treatment of various forms of cancer and had not been optimized for use in the treatment of retina diseases. Because there previously were no approved bevacizumab products for the treatment of retinal diseases in the United States and other major markets, we submitted standard biologic therapeutic applications and are not using the biosimilar drug regulatory pathway that would be required if bevacizumab were an approved drug for the targeted disease. Off-label repackaged bevacizumab is a frequently used first-line anti-VEGF treatment in Europe (approximately 2.8 million injections annually) and the United States (approximately 2.7 million injections annually) based on data compiled from various sources (Citeline (2023), Global Data (2023) and Market Scope (2022); ASRS 2024 Membership Survey; Market Scope 2024 US Retina Quarterly Updates; GlobalData: Age-Related Macular Degeneration: Global Drug Forecast and Market Analysis to 2028 (April 2020)). We believe ONS-5010/LYTENAVA has potential to mitigate risks associated with off-label use of unapproved bevacizumab. We believe there is significant opportunity in Europe with a total anti-VEGF retina market estimated to be approximately $3.6 billion, including approximately 1.52 million treated patients and approximately 8.3 million total anti-VEGF units (Global Data (2023); Market Scope (2022); IQVIA MIDAS data Q3 2023; Graefe's Archive for Clinical and Experimental Ophthalmology (2020) 258:503–511). We similarly see significant opportunity in the United States, with an estimated $8.5 billion total anti-VEGF retina market, where 55% of physician state off-label repackaged bevacizumab is the preferred first-line product. It is estimated that 34% of the total anti-VEGF market is off-label bevacuzimab (new and maintenance therapy) (Citeline (2023); Global Data (2023); Market Scope (2022); ASRS 2024 Membership Survey; Market Scope 2024 US Retina Quarterly Updates; GlobalData: Age-Related Macular Degeneration: Global Drug Forecast and Market Analysis to 2028 (April 2020)). We estimate the global market for anti-VEGF retina to be approximately $16 billion (Citeline (2023), Global Data (2023) and Market Scope (2022)).

In May 2024, the European Commission granted the Marketing Authorization for ONS-5010/LYTENAVA for the treatment of wet AMD in the EU. The decision applied automatically in all 27 EU Member States, and, within 30 days, also to Iceland, Norway and Liechtenstein. In July 2024, the MHRA granted marketing authorization for ONS-5010/LYTENAVA for the treatment of wet AMD in the UK under the new International Recognition Procedure, or IRP, which allows the MHRA to rely on an authorization received for the same product from one of MHRA’s specified Reference Regulators, or RRs, when considering an application for marketing authorization in the UK. ONS-5010/LYTENAVA is the first and only authorized ophthalmic formulation of bevacizumab for use in treating wet AMD in the EU and UK.

Separately, in March 2022, we submitted a BLA with the FDA for ONS-5010/LYTENAVA for the treatment of wet AMD. In May 2022, we voluntarily withdrew our BLA to provide additional information requested by the FDA. We re-submitted the BLA to the FDA for ONS-5010/LYTENAVA on August 30, 2022, and in October 2022, we received confirmation from the FDA that our BLA had been accepted for filing with a goal date of August 29, 2023 for a review decision by the FDA. On August 29, 2023, we received a Complete Response Letter, or CRL, in which the FDA concluded it could not approve the BLA during this review cycle due to several chemical, manufacturing and control, or CMC, issues, open observations from pre-approval manufacturing inspections, and a lack of substantial evidence. At subsequent Type A meetings with the FDA, we learned that the FDA requires the completion of an additional adequate and well-controlled clinical trial evaluating ONS-5010/LYTENAVA, as well as additional requested CMC data indicated in the CRL to approve ONS-5010/LYTENAVA for use in wet AMD.

We agreed to conduct an additional adequate and well-controlled clinical trial following discussions with the FDA in support of our BLA for ONS-5010/LYTENAVA. In December 2023, we submitted a Special Protocol Assessment, or SPA, to the FDA for this study (NORSE EIGHT) seeking confirmation that, if successful, it will address the FDA’s requirement for a second adequate and well-controlled clinical trial to support our planned resubmission of the ONS-5010/LYTENAVA BLA. In January 2024, we received confirmation that the FDA had reviewed and agreed upon the NORSE EIGHT trial protocol pursuant to the SPA. If the NORSE EIGHT trial is successful, it would satisfy the FDA’s requirement for a second adequate and well-controlled clinical trial to address fully the clinical deficiency identified in the CRL. In addition, through a Type A meeting and additional interactions with the FDA, including Type C and Type D meetings, we identified the approaches needed to resolve the CMC comments in the CRL. We believe that we have addressed the open CMC items to help resolve these comments. In November 2024, we reported that ONS-5010/LYTENAVA did not meet the pre-specified non-inferiority endpoint at week 8 set forth in the SPA. However, the data from the trial demonstrated an improvement in vision and the presence of biologic activity, as well as a continued favorable safety profile for ONS-5010/LYTENAVA. Analysis of the complete week 12 data set for NORSE EIGHT provided additional evidence of improvement in vision and biological activity. We resubmitted the BLA application for ONS-5010/LYTENAVA in February 2025. In April 2025, we received notification from the FDA that the Prescription Drug User Fee Act, or PDUFA, goal date for a decision on the BLA is August 27, 2025. If approved, we expect to receive 12 years of regulatory exclusivity in the United States.

Our initial BLA submission for ONS-5010/LYTENAVA in wet AMD involved three clinical trials, which we refer to as NORSE ONE, NORSE TWO and NORSE THREE. The study design for our clinical program to evaluate ONS-5010/LYTENAVA as an ophthalmic formulation of bevacizumab was reviewed at an end of Phase 2 meeting with the FDA in April 2018, and we filed our investigational new drug application, or IND, with the FDA in the first quarter of calendar 2019. In August 2020, we reported achieving the anticipated safety and efficacy proof-of-concept results from NORSE ONE, a clinical experience study. NORSE TWO was our pivotal Phase 3 clinical trial comparing ONS-5010/LYTENAVA to ranibizumab (LUCENTIS). The topline results reported from NORSE TWO in August 2021 showed that ONS-5010/LYTENAVA met the primary and key secondary endpoints for efficacy with clinically impactful change observed for treated patients. In March 2021, we reported that the results from NORSE THREE showed a positive safety profile for ONS-5010/LYTENAVA.

As agreed to with the FDA in the SPA, NORSE EIGHT was a randomized, controlled, parallel-group, masked, non-inferiority study of approximately 400 newly diagnosed, wet AMD subjects randomized in a 1:1 ratio to receive 1.25 mg ONS-5010/LYTENAVA or 0.5 mg ranibizumab intravitreal injections. Subjects received injections at Day 0 (randomization), Week 4, and Week 8 visits, with a final follow-up visit at Week 12. The primary endpoint was the mean change in best corrected visual acuity (BCVA) from baseline to week 8. In November 2024, we reported that ONS-5010/LYTENAVA did not meet the pre-specified non-inferiority endpoint at week 8 set forth in the SPA. The difference in the means between the ONS-5010/LYTENAVA and ranibizumab arms in the NORSE EIGHT trial was -2.257 BCVA letters with a 95% confidence interval of (-4.044, -0.470) while the lower bound of the pre-specified non-inferiority margin in the SPA was -3.5 at a 95% confidence interval; the hypothesis of noninferiority was not met (p>0.025). In the intent-to-treat, or ITT, primary dataset, NORSE EIGHT demonstrated a mean +4.2 letter improvement in BCVA in the ONS-5010/LYTENAVA arm and +6.3 letter improvement in BCVA in the ranibizumab arm. However, the preliminary data from the trial demonstrated an improvement in vision and the presence of biologic activity, as well as a continued favorable safety profile for ONS-5010/LYTENAVA. In January 2025, we reported the complete week 12 data and safety results from NORSE EIGHT, which continued to demonstrate an improvement in vision and the presence of biologic activity, as well as a continued favorable safety profile. At week 12, the difference in the mean between ONS-5010/LYTENAVA and ranibizumab was -1.009 BCVA letters with a 95% confidence interval of (-2.865, 0.848) in the NORSE EIGHT trial. Applying the statistical parameters from the week 8 primary endpoint with the lower bound of the non-inferiority margin at -3.5 with a 95% confidence interval, the noninferiority margin was met at week 12, indicating that the two study arms are not different at this timepoint. In the ITT population, NORSE EIGHT demonstrated a mean 5.5 letter improvement in BCVA in the ONS-5010/LYTENAVA arm and 6.5 letter improvement in BCVA in the ranibizumab arm. Additionally, the change in central retinal thickness, a measure of anatomical response, was similar in both study arms at all three study timepoints. The safety results demonstrated across the full duration of NORSE EIGHT are consistent with previously reported safety results from the NORSE ONE, NORSE TWO, and NORSE THREE clinical trials, with no cases of retinal vasculitis reported in either study arm.

Previously, in November 2021, we began enrolling patients in our NORSE SEVEN clinical trial. The study compares the safety of ophthalmic bevacizumab in vials versus pre-filled syringes in subjects diagnosed with a retinal condition that would benefit from treatment with intravitreal injection of bevacizumab, including exudative age-related macular degeneration, DME, or BRVO. Subjects will be treated for three months, and the enrollment of subjects in the arm of the study receiving ONS-5010/LYTENAVA in vials has been completed.

We have also received agreement from the FDA on three Special Protocol Assessments, or SPAs, for three additional registration clinical trials for our ongoing Phase 3 program for ONS-5010/LYTENAVA. The agreements reached with the FDA on these SPAs cover the protocols for NORSE FOUR, a registration clinical trial evaluating ONS-5010/LYTENAVA to treat BRVO, and NORSE FIVE and NORSE SIX, two registration clinical trials evaluating ONS-5010/LYTENAVA to treat DME. The timing for initiating these studies has not been determined pending initial FDA approval for wet AMD.

Macroeconomic and Geopolitical Factors

Global uncertainty due to tariffs and global macroeconomic conditions may have a material adverse effect on our commercialization efforts for LYTENAVA in various markets. The global financial markets recently have experienced significant disruptions due to various macroeconomic factors, including, among other things, the impacts of fluctuations in inflation and interest rates, tariffs and trade tensions, and ongoing overseas conflict, resulting in a general global economic slowdown. If these disruptions and slowdown deepen or persist, we may not be able to access additional capital on favorable terms, or at all, which could in the future negatively affect our ability to pursue our business strategy. Finally, there is inherent risk, based on the complex relationships among the U.S. and the countries in which we conduct our business, that political, diplomatic, and national security factors can lead to global trade restrictions and changes in trade policies and export regulations that may adversely affect our business and operations. The current international trade and regulatory environment is subject to significant ongoing uncertainty. The U.S. government has recently announced substantial new tariffs affecting a wide range of products and jurisdictions and has indicated an intention to continue developing new trade policies, including with respect to the pharmaceutical industry. In response, certain foreign governments have announced or implemented retaliatory tariffs and other protectionist measures. These developments have created a dynamic and unpredictable trade landscape, which may adversely impact our business, results of operations, financial condition and prospects. Current or future tariffs will result in increased research and development expenses, including with respect to increased costs associated with raw materials, laboratory equipment and research materials and components. In addition, such tariffs will increase our supply chain complexity and could also potentially disrupt our existing supply chain. Trade restrictions affecting the import of materials necessary for clinical trials could result in delays to our development timelines. Increased development costs and extended development timelines could place us at a competitive disadvantage compared to companies operating in regions with more favorable trade relationships and could reduce investor confidence, negatively impacting our ability to secure additional financing on favorable terms or at all. In addition, as we continue to expand our commercialization efforts, tariffs and trade restrictions could hinder our ability to establish cost-effective production capabilities, negatively impacting our growth prospects. Currently, we manufacture ONS-5010/LYTENAVA in the US.

Going Concern

Through June 30, 2025, we have funded substantially all of our operations with $598.1 million in net proceeds from the sale and issuance of our equity and debt securities. We have also received $29.0 million pursuant to our collaboration and licensing agreements through such date. Our net loss for the nine months ended June 30, 2025 was $49.1 million. We also had a net loss of $81.1 million for the nine months ended June 30, 2024. We have not generated any significant revenue from product sales. We anticipate incurring additional losses until such time, if ever, that we can generate significant sales of ONS-5010/LYTENAVA or any other product candidate we may develop.

Subsequent to June 30, 2025, we sold 940,478 shares of common stock under the ATM Agreement (as defined below), generating $1.9 million in net proceeds after deducting fees paid to BTIG and other issuance costs, which were assessed as immaterial. For additional information regarding the ATM Agreement with BTIG, refer to Note 9 to the unaudited interim consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

On July 31, 2025, we paid $1,000,000 on the March 2025 Note. This payment covered part of the required debt reduction for the quarter ending June 30, 2025. For further information regarding the March 2025 Note, refer to Note 7 of the unaudited interim consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

We evaluated whether there are conditions or events considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern. We do not believe that the existing cash and cash equivalents as of June 30, 2025, together with $1.9 million in net proceeds from the sale of shares of common stock under the ATM Agreement since June 30, 2025, are sufficient to fund our operations through one year from the date of this Quarterly Report on Form 10-Q. As a result, there is substantial doubt about our ability to continue as a going concern. Our unaudited interim consolidated financial statements do not include any adjustments that might be necessary if it is unable to continue as a going concern.

Components of our Results of Operations

Revenues, net

We recognize revenue from sales of a single product, LYTENAVA (bevacizumab gamma), which became available for commercial sale and shipment to patients in the UK and Germany in June 2025.

Cost of revenues

Cost of revenues consists primarily of the cost of inventory sold, which includes direct manufacturing, production and packaging materials for LYTENAVA sales. Prior to receiving authorization to sell LYTENAVA in Europe, we expensed costs associated with manufacturing of LYTENAVA as a component of research and development expense that would have been included in cost of goods.

Research and development expenses

Research and development expense consists of expenses incurred in connection with the discovery and development of our product candidates. We expense research and development costs as incurred. These expenses include:

• expenses incurred under agreements with contract research organizations, or CROs, as well as investigative sites and consultants that conduct our preclinical studies and clinical trials;
• expenses incurred by us directly, as well as under agreements with contract manufacturing organizations, or CMOs, for manufacturing scale-up expenses and the cost of acquiring and manufacturing preclinical and clinical trial materials and commercial materials, including manufacturing validation batches;
• outsourced professional scientific development services;
• employee-related expenses, which include salaries, benefits and stock-based compensation;
• payments made under a third-party assignment agreement, under which we acquired intellectual property;
• expenses relating to regulatory activities, including filing fees paid to regulatory agencies;
• laboratory materials and supplies used to support our research activities; and
• allocated expenses, utilities and other facility-related costs.

The successful development of our product candidates is highly uncertain. At this time, we cannot reasonably estimate or know the nature, timing and costs of the efforts that will be necessary to complete the remainder of the development of, or when, if ever, material net cash inflows may commence from any of our other product candidates. This uncertainty is due to the numerous risks and uncertainties associated with the duration and cost of clinical trials, which vary significantly over the life of a project as a result of many factors, including:

• the number of clinical sites included in the trials;
• the length of time required to enroll suitable patients;
• the number of patients that ultimately participate in the trials;
• the number of doses patients receive;
• the duration of patient follow-up;
• the results of our clinical trials;
• the establishment of commercial manufacturing capabilities;
• the receipt of marketing approvals; and
• the commercialization of product candidates.

Our expenditures are subject to additional uncertainties, including the terms and timing of regulatory approvals. We may never succeed in achieving regulatory approval for any of our biosimilar product candidates. We may obtain unexpected results from our clinical trials. We may elect to discontinue, delay or modify clinical trials of some product candidates or focus on others. A change in the outcome of any of these variables with respect to the development of a product candidate could mean a significant change in the costs and timing associated with the development of that product candidate. For example, if the FDA or other regulatory authorities were to require us to conduct clinical trials beyond those that we currently anticipate, or if we experience significant delays in enrollment in any of our clinical trials, we could be required to expend significant additional financial resources and time on the completion of clinical development. Full product commercialization will take several years and millions of dollars in additional costs.

Research and development activities are central to our business model. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size, complexity and duration of later-stage clinical trials.

Selling, general and administrative expenses

Selling, general and administrative expenses consist principally of distribution expenses, salaries and related costs for personnel in executive, administrative, finance and legal functions, including stock-based compensation, travel expenses and recruiting expenses. Other general and administrative expenses include facility related costs, patent filing and prosecution costs and professional fees for business development, legal, auditing and tax services and insurance costs.

We anticipate that our general and administrative expenses will increase if and when we believe a regulatory approval of a product candidate appears likely, and we anticipate an increase in payroll and expense as a result of our preparation for commercial operations, particularly as it relates to the sales and marketing of our product.

Loss on equity method investment

Loss on equity method investment represents our proportionate share for the period of the net loss of our investee to which the equity method of accounting is applied. We account for equity investments where we own a non-controlling interest, but have the ability to exercise significant influence, under the equity method of accounting.

Interest expense (income), net

Interest expense (income), net consists of original issue discount and debt issuance costs that were written off, net of interest income. We elected to account for the unsecured convertible promissory notes at fair value and were not required to bifurcate the conversion option as a derivative and as a result the original issue discount and debt issuance costs were written off upon election to fair value and accounted for as interest. Interest income is earned from short term investments primarily money market investments.

Loss (gain) from change in fair value of promissory notes

The change in fair value relates to convertible promissory notes that we elected to account for at fair value. As permitted under ASC 825, we elected the fair value option to account for our convertible promissory notes. We recorded the convertible promissory note at fair value with changes in fair value recorded in the unaudited interim consolidated statements of operations. The changes in fair value are primarily driven by variations in risk yield, stock price, and the remaining term of the notes.

Warrant related expenses

The warrant related expense relates to the excess of the fair value of the warrants upon issuance over the proceeds of the private placement that closed on March 18, 2024. The excess fair value of the warrants over the net proceeds was recorded in the unaudited interim consolidated statement of operations.

Warrant inducement expenses

The warrant inducement expenses are composed of the remeasurement charges for existing warrants that were exercised in a warrant inducement transaction, which were exercised at a modified, reduced exercise price. Additionally, this expense includes the fair value of the inducement warrants that were issued concurrently with the exercise of the existing warrants. For further details on warrant inducement transaction, refer to Note 9 of the unaudited interim consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Loss (gain) from change in fair value of warrant liability

We issued warrants to purchase our common stock in conjunction with convertible senior secured notes issued pursuant to a certain Note and Warrant Purchase Agreement dated December 22, 2017. Additionally, we issued warrants in connection with private placements that closed on March 18, 2024 and April 15, 2024. These warrants are categorized as liabilities and recorded at fair value. The warrants are subject to re-measurement at each balance sheet date, and we recognize any change in fair value in our statements of operations.

Income taxes

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the United States. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented in subsequent years. We are currently assessing its impact on our consolidated financial statements.

Since inception, we have not recorded any U.S. federal or state income tax benefits (excluding the sale of New Jersey state NOLs and research and development, or R&D, tax credits) for the net losses we have incurred in each year or on our earned R&D tax credits, due to our uncertainty of realizing a benefit from those items. As of September 30, 2024, we had federal and state NOL carryforwards of $406.7 million and $242.5 million, respectively, that will begin to expire in 2030 and 2039, respectively. As of September 30, 2024, we had federal foreign tax credit carryforwards of $0.3 million available to reduce future tax liabilities, which begin to expire starting in 2023. As of September 30, 2024, we also had federal and state R&D tax credit carryforwards of $13.0 million and $0.8 million, respectively, that will begin to expire in 2032 and 2033, respectively.

In general, under Section 382 of the Internal Revenue Code of 1986, as amended, or the Code, a corporation that undergoes an “ownership change” is subject to limitations on its ability to utilize its NOLs to offset future taxable income. We have not completed a study to assess whether an ownership change has occurred in the past. Our existing NOLs may be subject to limitations arising from previous ownership changes, and if we undergo an ownership change in connection with or after our Initial Public Offering, our ability to utilize NOLs could be further limited by Section 382 of the Code. Future changes in our stock ownership, some of which are outside of our control, could result in an ownership change under Section 382 of the Code. Our NOLs are also subject to international regulations, which could restrict our ability to utilize our NOLs. Furthermore, our ability to utilize NOLs of companies that we may acquire in the future may be subject to limitations. There is also a risk that due to regulatory changes, such as suspensions on the use of NOLs, or other unforeseen reasons, our existing NOLs could expire or otherwise be unavailable to offset future income tax liabilities.

Furthermore, our ability to utilize NOLs of companies that we may acquire in the future may be subject to limitations. There is also a risk that due to regulatory changes, such as suspensions on the use of NOLs, or other unforeseen reasons, our existing NOLs could expire or otherwise be unavailable to offset future income tax liabilities.

Results of Operations

Comparison of Three Months Ended June 30, 2025 and 2024

Revenues, net

During the three months ended June 30, 2025, we recognized revenues of $1.5 million from sales of LYTENAVA in Germany and the UK. This revenue represents the initial shipments of product into Germany and the UK in June 2025.

Cost of revenues

Cost of revenues for the three months ended June 30, 2025, were $0.4 million, consists primarily of the cost of inventory sold, which includes direct manufacturing, production and packaging materials for LYTENAVA sales. Prior to receiving regulatory approval for LYTENAVA for the treatment of wet AMD by the European Commission in the EU and the MHRA in the UK, inventory and related manufacturing costs were recognized as research and development expenses. The research and development expenses that would have been classified as cost of revenues for the three and nine months ended June 30, 2025, was $0.3 million in both periods. Accordingly, these amounts are not included in cost of revenues.

Research and development expenses

The following table summarizes our research and development expenses by functional area for the three months ended June 30, 2025 and 2024:

Research and development expenses for the three months ended June 30, 2025 decreased by $4.1 million compared to the three months ended June 30, 2024. The decrease was primarily due to a decrease of $4.2 million in ONS-5010/LYTENAVA development expenses related to conducting the NORSE EIGHT clinical trial, which was initiated and began enrolling patients in January 2024 and completed enrollment in September 2024.

Selling, general and administrative expenses

The following table summarizes our selling, general and administrative expenses by type for the three months ended June 30, 2025 and 2024:

Selling, general and administrative expenses for the three months ended June 30, 2025 increased by $1.3 million when compared to the three months ended June 30, 2024. The increase was primarily driven by $2.3 million in launch expenses related to ONS-5010/LYTENAVA in Europe and a $0.8 million increase in compensation and related benefits related to accruals for incentive compensation in 2025. These increases were partially offset by a $1.4 million reduction in professional fees driven by ongoing efforts to reduce expenditures unrelated to launch costs.

Interest expense (income), net

During the three months ended June 30, 2025, the Company recognized minimal interest expense related to exit fees on cash debt payments made during the period partially offset by interest income from money market instruments. During the three months ended June 30, 2024, the Company recorded interest income of $0.4 million, primarily earned from money market instruments.

Loss (gain) from change in fair value of promissory notes

The change in fair value relates to the promissory notes that we elected to account for at fair value. As permitted under ASC 825, we elected the fair value option to account for our promissory note. We record the promissory note at fair value with changes in fair value recorded in the unaudited interim consolidated statements of operations. The changes in fair value are primarily driven by variations in risk yield, stock price, and the remaining term of the notes.

Warrant related expenses

During the three months ended June 30, 2024, we recognized charges associated with warrants issued during the quarter, which were categorized as liabilities. These expenses amounted to the difference between the fair value of the warrants and the net proceeds received from a private placement that closed on March 18, 2024. For further details on warrants to purchase shares of common stock, refer to Note 9 of the unaudited interim consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Loss (gain) from change in fair value of warrant liability

The loss recognized during the three months ended June 30, 2025 resulted from an increase in the price per share of common stock from March 31, 2025 to June 30, 2025. The gain recognized during the three months ended June 30, 2024 was primarily attributable to a decrease in the price per share of common stock from March 31, 2024 to June 30, 2024.

Comparison of Nine Months Ended June 30, 2025 and 2024

Revenues, net

During the nine months ended June 30, 2025, we recognized revenues of $1.5 million from sales of LYTENAVA in Germany and the UK. This revenue represents the initial shipments of product into Germany and the UK in June 2025.

Cost of revenues

Cost of revenues for the nine months ended June 30, 2025, were $0.4 million, consists primarily of the cost of inventory sold, which includes direct manufacturing, production and packaging materials for LYTENAVA sales. Prior to receiving regulatory approval for LYTENAVA for the treatment of wet AMD by the European Commission in the EU and the MHRA in the UK, inventory and related manufacturing costs were recognized as research and development expenses. The research and development expenses that would have been classified as cost of revenues for the three and nine months ended June 30, 2025, was $0.3 million in both periods. Accordingly, these amounts are not included in cost of revenues.

Research and development expenses

The following table summarizes our research and development expenses by functional area for the nine months ended June 30, 2025 and 2024:

Research and development expenses for the nine months ended June 30, 2025 decreased by $8.0 million compared to the nine months ended June 30, 2024. This reduction was primarily attributable to a $7.6 million decrease in ONS-5010/LYTENAVA development expenses associated with the NORSE EIGHT clinical trial, which commenced patient enrollment in January 2024 and completed enrollment in September 2024.

Selling, general and administrative expenses

The following table summarizes our selling, general and administrative expenses by type for the nine months ended June 30, 2025 and 2024:

Selling, general and administrative expenses for the nine months ended June 30, 2025 increased by $10.0 million when compared to the nine months ended June 30, 2024. This increase was due to $7.2 million in launch expenses for ONS-5010/LYTENAVA in Europe, an increase of $4.4 million in combined cash and stock-based compensation, which was primarily related to severance costs from the departure of our former Chief Executive Officer and our December 2024 reduction in headcount. These increases were partially offset by a $1.0 million reduction in professional fees and $0.5 million decrease in other general and administration expenses driven by ongoing efforts to reduce expenditures unrelated to launch costs.

Interest expense, net

Interest expense, net decreased by $2.5 million primarily due to convertible promissory note maturity extension fees of $3.1 million recognized during the nine months ended June 30, 2024, partially offset by interest income earned of $0.7 million from money market investments.

Loss from change in fair value of promissory notes

The change in fair value relates to the promissory notes that we elected to account for at fair value. As permitted under ASC 825, we elected the fair value option to account for our promissory note. We record the promissory note at fair value with changes in fair value recorded in the unaudited interim consolidated statements of operations. The changes in fair value are primarily driven by variations in risk yield, stock price, and the remaining term of the notes.

Warrant related expenses

During the nine months ended June 30, 2024, we recognized charges associated with warrants issued during the quarter, which were categorized as liabilities. These expenses amounted to the difference between the fair value of the warrants and the net proceeds received from a private placement that closed on March 18, 2024. For further details on warrants to purchase shares of common stock, refer to Note 9 of the unaudited interim consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Warrant inducement expenses

During the nine months ended June 30, 2025, we recognized inducement charges associated with warrants exercised in the period. For further details on warrant inducement transaction refer to Note 9 of the unaudited interim consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Gain from change in fair value of warrant liability

The gain recorded during the nine months ended June 30, 2025 and 2024 was primarily due to the reduction in the price per share of common stock.

Liquidity and Capital Resources

We have not generated any significant revenue from product sales. Since inception, we have incurred net losses and negative cash flows from our operations. Through June 30, 2025, we have funded substantially all of our operations with $598.1 million in net proceeds from the sale and issuance of our equity securities, debt securities and borrowings under debt facilities. We have also received an aggregate of $29.0 million pursuant to emerging markets collaboration and licensing agreements for our inactive biosimilar development programs.

We anticipate incurring additional losses until such time, if ever, that we can generate significant sales of ONS-5010/LYTENAVA or any other product candidate we may develop. We will need additional financing to fund our operations in the future, fully commercialize ONS-5010/LYTENAVA, to develop any other product candidates and to continue as a going concern. Management is currently evaluating various strategic opportunities to obtain the required funding for future operations. These strategies may include but are not limited to potential licensing and/or marketing arrangements or collaborations with pharmaceutical or other companies, the issuance of equity securities, including through an at-the-market offering program, the issuance of additional debt, and revenues from potential future product sales, if any. Alternatively, we may be required to, among other things, modify our clinical trial plans for ONS-5010/LYTENAVA in additional indications, make reductions in our workforce, scale back our plans and place certain activities on hold, discontinue our development programs, liquidate all or a portion of our assets, and/or seek protection under the provisions of the U.S. Bankruptcy Code.

On May 16, 2023, we entered into an At-the-Market Sales Agreement with BTIG, LLC, or BTIG, as sales agent, as amended, the ATM Agreement or the ATM Offering, under which we may issue and sell shares of our common stock having an aggregate offering price of up to $100.0 million from time to time through BTIG. Under the ATM Agreement, we pay BTIG a commission equal to 3.0% of the aggregate gross proceeds of any sales of common stock under the ATM Agreement. The offering of common stock pursuant to the ATM Agreement will terminate upon the earlier of (i) the sale of all common stock subject to the ATM Agreement or (ii) termination of the ATM Agreement in accordance with its terms.

During the nine months ended June 30, 2025, we sold 3,202,004 shares of common stock under the ATM Offering and generated approximately $5.3 million in net proceeds after paying fees to BTIG and other issuance costs of $0.2 million.

Subsequent to June 30, 2025, we sold 940,478 shares of common stock under the ATM Agreement and generated $1.9 million in net proceeds after paying fees to BTIG and other issuance costs assessed as immaterial.

On December 22, 2022, we entered into a Securities Purchase Agreement and issued an unsecured convertible promissory note with a face amount of $31.8 million, or the December 2022 Note, to Streeterville Capital, LLC, or the Lender, who was the holder of our November 2021 Note. The December 2022 Note had an original issue discount of $1.8 million. A portion of the proceeds from the December 2022 Note was used to repay in full the remaining outstanding principal and accrued interest on the November 2021 Note, which was cancelled upon repayment. We received net proceeds of $18.1 million upon the closing on December 28, 2022, after deducting the Lender’s transaction costs in connection with the issuance and November 2021 Note repayment. In December 2023, we extended the maturity of the December 2022 Note from January 1, 2024, to April 1, 2024. We incurred a $475 thousand extension fee. The December 2022 Note bore interest at 9.5% per annum through April 1, 2024. On January 22, 2024, we entered into an amendment to the December 2022 Note, or the Note Amendment, with the Lender, which became effective on April 1, 2024, after the satisfaction of certain closing conditions, including various required stockholder approvals and the closing of the private placement that closed on March 18, 2024. The maturity of the December 2022 Note was extended to July 1, 2025. An extension fee of $2.7 million (calculated as 7.5% of the outstanding balance of the December 2022 Note) was added to the outstanding balance on March 18, 2024. Under the Note Amendment, the initial conversion price with respect to $15.0 million in aggregate principal amount of the December 2022 Note was changed to $7.00, the price per share in the private placement that closed on March 18, 2024, and the remaining aggregate principal amount was converted at a price of $40.00 per share. Effective April 1, 2024, the December 2022 Note bore interest at the prime rate (as published in the Wall Street Journal) plus 3% (subject to a floor of 9.5%), and we had an obligation to repay at least $3.0 million (by either cash or conversion into common stock) of the outstanding balance of the December 2022 Note for each calendar quarter beginning with the second calendar quarter of 2024 (subject to adjustment for conversions by the Lender and to payment of an exit fee as set forth in the December 2022 Note) and continuing until the December 2022 Note was repaid in full. On March 13, 2025, we used the proceeds from the March 2025 Note (as defined below) to pay off the December 2022 Note.

On March 13, 2025, we issued an unsecured convertible promissory note for $33.1 million, or the March 2025 Note, to Avondale Capital, LLC, or Avondale, pursuant to a Securities Purchase Agreement, or the SPA, dated January 31, 2025. Certain terms of the March 2025 Note were approved at our annual meeting of stockholders on March 11, 2025, and we used the proceeds from the March 2025 Note to pay off the December 2022 Note. For a description of the SPA and the March 2025 Note, see “Description of Indebtedness” below for additional detail.

During the nine months ended June 30, 2025, Avondale converted $25,000 of accrued interest on the March 2025 Note into shares of common stock and we made cash payments totaling $975,000. These transactions constituted a $1,000,000 payment toward the Quarterly Debt Reduction Obligations for the calendar quarter ending June 30, 2025.

On June 26, 2025, we and Avondale entered into an agreement to temporarily amend the payment schedule for the Quarterly Debt Reduction Obligations for the calendar quarter ended June 30, 2025, which permits staged monthly payments of $1,000,000, to be made on June 30, July 31, and August 31, 2025.

On January 16, 2025, we entered into warrant inducement offer letter agreements, or the Warrant Inducement Transaction, with GMS Ventures and Investments, or GMS, and certain other holders of existing warrants to purchase our common Stock, or Existing Warrants, pursuant to which the holders agreed to exercise their Existing Warrants for an aggregate of 7,074,637 shares of common stock at a reduced exercise price of $2.51 per share. In exchange, we issued two new inducement warrants for each Existing Warrant exercised, which are exercisable for an aggregate of up to 14,149,274 shares of common stock at an exercise price of $2.26 per share. We received net proceeds of $15.9 million, after capital markets advisory fees and offering costs, from the Warrant Inducement Transaction.

Concurrently with the Warrant Inducement Transaction, we entered into the Syntone Warrant Inducement Transaction, pursuant to which Syntone agreed to exercise the Existing Syntone Warrants for an aggregate of 1,071,429 shares of common stock at a reduced exercise price of $2.51 per share. In exchange, we agreed to issue two new Syntone Inducement Warrants for each existing warrant exercised, which will be exercisable for up to 2,142,858 Syntone Inducement Warrant Shares at an exercise price of $2.26 per share. The closing of the Syntone Warrant Inducement Transaction is subject to receipt of regulatory approval. We expect to generate net proceeds of approximately $2.4 million after capital markets advisory fees and estimated offering costs. As of the date of this filing, Syntone has not received regulatory approval and, thus, we have not yet received the proceeds from the exercise of the Existing Syntone Warrants, and the Syntone Inducement Warrants have not been issued. There can be no assurance that Syntone will receive the requisite regulatory approval in the near term or at all, and we may never receive the proceeds from the exercise of the Existing Syntone Warrants, or issue, or receive proceeds from the exercise of, the Syntone Inducement Warrants. For further details on the Warrant Inducement Transaction and Syntone Warrant Inducement Transaction, refer to Note 9 to the unaudited interim consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

On May 27, 2025, we completed an underwritten public offering (the “Public Offering”) of 9,285,714 shares of common stock and warrants to purchase an aggregate of 18,571,428 shares of common stock pursuant to an underwriting agreement, dated May 22, 2025, between us and BTIG, LLC. The combined price for each share of common stock and accompanying warrant to purchase two shares of common stock was $1.40. We received aggregate net proceeds of $11.6 million after payment of placement agent fees and other offering costs. GMS purchased an aggregate of 4,285,714 shares of common stock and warrants to purchase an aggregate of 8,571,428 shares of common stock in the Public Offering. The warrants have an exercise price of $1.40 per share of common stock and will expire on May 27, 2030. Holders of the warrants may not exercise the warrants if it would result in such holder owning more than 4.99%, 9.99%, or 19.99%, as applicable, of our outstanding common stock.

We evaluated whether there are conditions or events considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern. We do not believe that the existing cash and cash equivalents as of June 30, 2025, together with $1.9 million in net proceeds from the sale of shares of common stock under the ATM Agreement since June 30, 2025, are sufficient to fund the Company’s operations through one year from the date of this Quarterly Report on Form 10-Q. As a result, there is substantial doubt about the Company’s ability to continue as a going concern. Our unaudited interim consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.

Our future operations are highly dependent on a combination of factors, including: (i) the timely and successful completion of additional financing discussed above; (ii) our ability to successfully commercialize ONS-5010/LYTENAVA, including executing marketing arrangements, or complete revenue-generating partnerships with other companies; (iii) the success of our research and development; (iv) the development of competitive therapies by other biotechnology and pharmaceutical companies; and, ultimately; (v) regulatory approval and market acceptance of our proposed future products. See “Overview—Macroeconomic and Geopolitical Factors” for additional information regarding the macroeconomic and geopolitical factors that could have a material adverse effect on our business and results of operations.

Funding Requirements

We plan to focus in the near term on supporting the review of our BLA submission for ONS-5010/LYTENAVA with the FDA and to prepare for the potential launch of ONS-5010/LYTENAVA, if approved, to support the generation of commercial revenues, in the U.S. We anticipate we will incur net losses and negative cash flow from operations for the foreseeable future. We may not be able to successfully commercialize ONS-5010/LYTENAVA if, among other things, the FDA does not approve our BLA when we expect, or at all, or if we are not able to secure sufficient funding of our expected post-launch commercial costs.

Our primary uses of capital are, and we expect will continue to be, compensation and related expenses, manufacturing and facility costs, external research and development services, legal and other regulatory expenses and administrative and overhead costs. Our future funding requirements will be heavily determined by the resources needed to support the development of our lead product candidate and any other product candidates we may choose to pursue.

We do not believe that the existing cash and cash equivalents as of June 30, 2025, together with $1.9 million in net proceeds from the sale of shares of common stock under the ATM Agreement since June 30, 2025, are sufficient to fund our operations through one year from the date of this Quarterly Report on Form 10-Q. Our unaudited interim consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.

We plan to finance our future operations with a combination of proceeds from potential licensing and/or marketing arrangements or collaborations with pharmaceutical or other companies, sale of the development and commercial rights to our drug product candidates in regions outside of the U.S., the issuance of additional debt, the issuance of equity securities, including accessing capital through at-the-market offering agreements, and revenues from potential future product sales, if any. If we raise additional capital through the sale of equity or convertible debt securities, your ownership will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a holder of our common stock. Further, due to current market volatility, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. There are no assurances that we will be successful in obtaining an adequate level of financing for the commercialization of ONS-5010/LYTENAVA or the development of any other current or future product candidates. Alternatively, we will be required to, among other things, modify our clinical trial plans for ONS-5010/LYTENAVA in additional indications, make reductions in our workforce, scale back our plans and place certain activities on hold, discontinue our development programs, liquidate all or a portion of our assets, and/or seek protection under the provisions of the U.S. Bankruptcy Code.

Cash Flows

The following table summarizes our cash flows for each of the periods presented:

Operating Activities

During the nine months ended June 30, 2025, we used $39.5 million of cash in operating activities resulting primarily from our net loss of $49.1 million. This use of cash was partially offset by $6.5 million of non-cash items such as stock-based compensation, loss from change in fair value of promissory notes, warrant inducement expenses, gain from change in fair value of warrant liability, loss on equity method investment and amortization expense. The net cash inflow of $3.2 million from changes in our operating assets and liabilities was primarily due to a decrease in prepaid expenses of $6.2 million associated mainly with ONS-5010/LYTENAVA development costs relating to clinical trial and drug development costs, and an increase in accounts payable and accrued expenses of $3.0 million, primarily due to timing of payments, partially offset by an increase in inventory of $4.1 million relating to commercial inventory manufactured during the period and accounts receivable of $1.8 million.

During the nine months ended June 30, 2024, we used $51.8 million of cash in operating activities resulting primarily from our net loss of $81.1 million. This use of cash was partially offset by $36.5 million of non-cash items such as stock-based compensation, non-cash interest expense, change in fair value of promissory notes, warrant related expense, gain from change in fair value of warrant liability, loss on equity method investment and amortization expense. The net cash outflow of $7.2 million from changes in our operating assets and liabilities was primarily due to a decrease in accounts payable and accrued expenses of $1.2 million, and an increase in prepaid expenses of $6.0 million for timing of payments associated with ONS-5010 development costs relating to clinical trial and drug development costs.

Financing Activities

During the nine months ended June 30, 2025, net cash provided by financing activities totaled $33.4 million. The primary sources of these funds included $33.1 million in net proceeds from the issuance of the March 2025 Note, $16.8 million from the exercise of common stock warrants related to the Warrant Inducement Transaction with GMS and other holders of Existing Warrants, $12.1 million from the Public Offering, and $5.3 million from sales of common stock under the ATM Offering. The proceeds from the March 2025 Note were utilized to fully repay the December 2022 Note, with a payment of $32.9 million. In addition, the Company made cash debt repayments totaling $1.0 million on the March 2025 Note during the period.

During the nine months ended June 30, 2024, net cash provided by financing activities was $60.4 million, primarily attributable to $60.4 million in net proceeds from private placements in March 2024 and April 2024 of an aggregate of 9,285,709 common stock shares and warrants to purchase an aggregate of 13,928,562 shares of common stock.

Description of Indebtedness

On March 13, 2025, we issued the March 2025 Note for $33,100,000 to Avondale pursuant to the SPA. Certain terms of the March 2025 Note were approved at our annual meeting of stockholders on March 11, 2025, and we used the proceeds from the March 2025 Note to pay off the December 2022 Note. On March 28, 2025, we filed a registration statement registering the resale of common stock issuable upon conversion of the March 2025 Note.

The March 2025 Note will initially bear interest at the prime rate as published in the Wall Street Journal, plus an additional 3%, subject to a floor of 9.5%. The March 2025 Note is scheduled to mature on July 1, 2026, and will be convertible into common stock. We are obligated to repay a minimum of $3,000,000 of the outstanding balance of the March 2025 Note each calendar quarter starting with the second calendar quarter of 2025, subject to adjustments for conversions by Avondale and the payment of an exit fee of 7.5%, or the Quarterly Debt Reduction Obligations. Any amount converted by Avondale during a given calendar quarter in excess of the Quarterly Debt Reduction Obligations will be credited toward meeting the Quarterly Debt Reduction Obligations for the next quarter or quarters.

On June 26, 2025, we and Avondale entered into an agreement to temporarily amend the payment schedule for the Quarterly Debt Reduction Obligations for the calendar quarter ended June 30, 2025, which permits staged monthly payments of $1,000,000, to be made on June 30, July 31, and August 31, 2025.

Commencing on the earlier of (i) six months following the issuance of the March 2025 Note and (ii) the date on which the Registration Statement is declared effective, or the Conversion Commencement Date, Avondale shall have the right to convert all or any portion of the outstanding balance under the March 2025 Note into shares of common stock, calculated by dividing the amount of the March 2025 Note being converted by the Conversion Price (as defined below). Furthermore, we retain the right to convert any portion of the outstanding balance under the March 2025 Note into shares of common stock at the Conversion Price, provided certain conditions are met at the time of conversion, including, but not limited to, the condition that the daily volume-weighted average price of our common stock on Nasdaq equals or exceeds $3.00 per share (subject to adjustments for stock splits and combinations) for a period of 30 consecutive trading days, and that the median daily dollar trading volume during the preceding 30 trading day period meets or exceeds $1,000,000. We reserve the right to make payments (i) in cash, (ii) in shares of common stock, calculated as the applicable payment amount divided by the Conversion Price, or (iii) a combination of both cash and shares of common stock. Any cash payments made by us, including prepayments or payments made at maturity, will incur an additional fee of 7.5%.

The March 2025 Note stipulates that we shall not permit any conversion of the March 2025 Note if, following such conversion, Avondale and its affiliates would beneficially own shares of common stock exceeding 4.99% of the total number of outstanding shares as of that date, or the Beneficial Ownership Limitation. However, this limitation shall increase to 9.99% when our market capitalization falls below $25,000,000. Avondale may, by written notice to us, adjust the Beneficial Ownership Limitation for itself, though any such adjustment will not take effect until the 61st day after such notice is received.

In the event of specific occurrences outlined in the March 2025 Note—such as our failure to fulfill payment obligations, non-compliance with the Quarterly Debt Reduction Obligations, insolvency or bankruptcy events, breaches of covenants in the SPA and the March 2025 Note, and unauthorized transactions without Avondale’s consent, collectively referred to as Trigger Events—Avondale reserves the right to increase the balance of the March 2025 Note by 10% in the case of a Major Trigger Event (as defined in the March 2025 Note) and by 5% for a Minor Trigger Event (as defined in the March 2025 Note). Should any Trigger Event persist without resolution for ten trading days following written notification from Avondale, this will constitute an event of default, such event, an Event of Default. Upon an Event of Default, Avondale may accelerate the March 2025 Note, resulting in all amounts becoming immediately due and payable, with interest accruing at a rate of 22% per annum until full payment is made.

Under the terms of the March 2025 Note, the “Conversion Price” is defined as $2.26 per share prior to a Major Trigger Event (subject to adjustments for stock splits and combinations). Following a Major Trigger Event, the Conversion Price will be the lesser of (i) $2.26 per share (subject to adjustments) or (ii) 90% of the lowest closing bid price over the three trading days preceding the conversion notice. Furthermore, if the Conversion Price falls below $0.404 per share (subject to adjustments), we will be required to fulfill a conversion notice from Avondale in cash.

Critical Accounting Policies and Significant Judgments and Estimates

The Critical Accounting Policies and Significant Judgments and Estimates included in our Form 10-K for the fiscal year ended September 30, 2024, filed with the SEC on December 27, 2024, have not materially changed except revenue recognition.

Revenue Recognition

We recognize revenue from sales of a single product, LYTENAVA (bevacizumab gamma) (the “Product”) in accordance with ASC Topic 606 – Revenue from Contracts with Customers. Our revenue recognition analysis consists of the following steps: (i) identification of the promised goods in the contract; (ii) determination of whether the promised goods are performance obligations, including whether they are capable of being distinct; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue as we satisfy each performance obligation.

LYTENAVA (bevacizumab gamma) became available for commercial sale and shipment to patients in Europe in fiscal year 2025. We sell the Product to several customers who are pharmaceutical wholesalers/distributors (the “Customers”) who in turn sell the Product directly to clinics, hospitals, and pharmacies. Revenue is recognized as the Product is physically delivered to the customers.

The transaction price that we recognize for LYTENAVA (bevacizumab gamma) revenue is our gross product sales reduced by our corresponding gross-to-net, or GTN, estimates using the expected value method, resulting in our reported “Revenues, net” in the accompanying Consolidated Statements of Operations. Revenues, net reflects the amount we ultimately expect to realize in net cash proceeds, taking into account our current period gross sales and related cash receipts, and the subsequent cash disbursements on these sales that we estimate for the various GTN categories discussed below. The GTN estimates are based upon information received from external sources, such as written or oral information obtained from customers with respect to their period-end inventory levels and sales to end-users during the period, in combination with management’s informed judgments. Due to the inherent uncertainty of these estimates, the actual amount of product returns, rebates and administrative fees may be materially above or below the amount estimated. The variance between actual amounts and estimated amounts may result in prospective adjustments to the reported net revenues.

Each of the GTN estimate categories are discussed below:

• Sales returns are estimated by the Company based on the relative risk of return based on expiration date, and other qualitative factors that can impact the volume of future returns, including competitive developments, product discontinuation, or new product introductions. The Company will consider the level of inventory in the distribution channel by monitoring inventories held at the distributor and wholesalers to assess whether historical rates of returns continue to be appropriate.
• Administrative fees are contractually charged by the wholesalers and are typically credited directly against amounts due to the Company.
• Rebates are contractually charged to the Company by customers, including a Voluntary Scheme for Branded Medicines Pricing, Access and Growth rebate with the National Health System in the UK.

Evaluation of Disclosure Controls and Procedures

The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, refers to controls and procedures that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Because there are inherent limitations in all control systems, a control system, no matter how well conceived and operated, can provide only reasonable, as opposed to absolute, assurance that the objectives of the control system are met. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Our management, with the participation of our interim chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, our interim chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective, at the reasonable assurance level, as of the end of the period covered by this report.

Changes in Internal Control over Financial Reporting

During the third fiscal quarter ended June 30, 2025, we implemented new processes and controls in relation to the commercialization of LYTENAVA™ (bevacizumab gamma) in the UK and Germany, including processes and controls relating to revenue recognition and inventory which we plan to document the design and test the effectiveness of the controls during our fiscal year ending September 30, 2025. There were no further changes in our internal control over financial reporting (as defined in Rules 13a-15(d) and 15d-15(f) under the Exchange Act) during third fiscal quarter ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Except as set forth below, as of June 30, 2025, there have been no material changes to the risk factors that were previously disclosed in Item 1A in the Company’s Form 10-K for the year ended September 30, 2024 filed with the SEC on December 27, 2024.

International trade policies, including tariffs, sanctions and trade barriers may adversely affect our business, financial condition, results of operations and prospects.

We operate in a global economy, which includes utilizing third-party suppliers in several countries outside the United States. There is inherent risk, based on the complex relationships among the U.S. and the countries in which we conduct our business, that political, diplomatic, and national security factors can lead to global trade restrictions and changes in trade policies and export regulations that may adversely affect our business and operations. The current international trade and regulatory environment is subject to significant ongoing uncertainty. The U.S. government has recently announced substantial new tariffs affecting a wide range of products and jurisdictions and has indicated an intention to continue developing new trade policies, including with respect to the pharmaceutical industry. In response, certain foreign governments have announced or implemented retaliatory tariffs and other protectionist measures. These developments have created a dynamic and unpredictable trade landscape, which may adversely impact our business, results of operations, financial condition and prospects. The Bureau of Industry and Security, U.S. Department of Commerce, has initiated an investigation to determine whether pharmaceutical ingredients, including finished drug product, manufactured outside the United States pose a national security risk and should be subject to additional tariffs.

Current or future tariffs will result in increased research and development expenses, including with respect to increased costs associated with APIs, raw materials, laboratory equipment and research materials and components. In addition, such tariffs will increase our supply chain complexity and could also potentially disrupt our existing supply chain. Unlike consumer goods, pharmaceuticals face unique regulatory constraints that make rapid supply chain adjustments particularly difficult and costly. Trade restrictions affecting the import of materials necessary for clinical trials could result in delays to our development timelines. Increased development costs and extended development timelines could place us at a competitive disadvantage compared to companies operating in regions with more favorable trade relationships and could reduce investor confidence, negatively impacting our ability to secure additional financing on favorable terms or at all. In addition, as we advance toward commercialization in the future, tariffs and trade restrictions could hinder our ability to establish cost-effective production capabilities, negatively impacting our growth prospects.

The complexity of announced or future tariffs may also increase the risk that we or our customers or suppliers may be subject to civil or criminal enforcement actions in the United States or foreign jurisdictions related to compliance with trade regulations. Foreign governments may also adopt non-tariff measures, such as procurement preferences or informal disincentives to engage with, purchase from or invest in U.S. entities, which may limit our ability to compete internationally and attract non-U.S. investment, employees, customers and suppliers. Foreign governments may also take other retaliatory actions against U.S. entities, such as decreased intellectual property protection, increased enforcement actions, or delays in regulatory approvals, which may result in heightened international legal and operational risks. In addition, the United States and other governments have imposed and may continue to impose additional sanctions, such as trade restrictions or trade barriers, which could restrict us from doing business directly or indirectly in or with certain countries or parties and may impose additional costs and complexity to our business.

Trade disputes, tariffs, restrictions and other political tensions between the United States and other countries may also exacerbate unfavorable macroeconomic conditions including inflationary pressures, foreign exchange volatility, financial market instability, and economic recessions or downturns. The ultimate impact of current or future tariffs and trade restrictions remains uncertain and could materially and adversely affect our business, financial condition, and prospects. While we actively monitor these risks, any prolonged economic downturn, escalation in trade tensions, or deterioration in international perception of U.S.-based companies could materially and adversely affect our business, ability to access the capital markets or other financing sources, results of operations, financial condition and prospects. In addition, tariffs and other trade developments have and may continue to heighten the risks related to the other risk factors described elsewhere in this report and in our Annual Report for the fiscal year ended September 30, 2024.

We have incurred significant losses and negative cash flows from operations since our inception and expect to continue to incur significant losses and negative cash flows from operations for at least the next 12 months.

We have incurred net losses in each year since our inception in January 5, 2010, including net losses of $75.4 million and $59.0 million for the years ended September 30, 2024 and 2023, respectively. We have had minimal revenue to date and have a substantial accumulated deficit and recurring operating losses. We have not generated material revenue from the sales of any product. Our success as a company is substantially dependent on our ability to generate revenue from the sales of ONS-5010/LYTENAVA, which has been approved for the treatment of wet AMD in the EU and UK.

We have devoted substantially all of our financial resources to identify, develop and manufacture our product candidates, including conducting, among other things, analytical characterization, process development and manufacture, formulation and clinical trials, regulatory filing and communication activities and providing general and administrative support for these operations. To date, only one of our product candidates, ONS-5010/LYTENAVA, has been approved for sale in the EU and UK, and we have financed our operations primarily through the sale of equity securities and debt financings, as well as to a limited degree, payments under our co-development and license agreements. The amount of our future net losses will depend, in part, on our ability to continue to generate revenue from product sales, the rate of our future expenditures and our ability to obtain funding through equity or debt financing or our ability to enter into and receive funding under strategic licensing or co-development collaborations.

We expect to continue to incur significant expenses and operating losses for at least the next 12 months. We anticipate that our expenses may increase substantially if and as we:

• continue to commercialize and market ONS-5010/LYTENAVA in the EU and UK, and in other countries if the product is approved in these territories;
• continue the clinical development of ONS-5010/LYTENAVA;
• advance ONS-5010/LYTENAVA into additional clinical trials;
• change or add contract manufacturing providers, clinical research service providers, testing laboratories, device suppliers, legal service providers or other vendors or suppliers;
• seek regulatory and marketing approvals for ONS-5010/LYTENAVA in the United States and other markets if we successfully complete clinical trials;
• establish a sales, marketing and distribution infrastructure to commercialize any products for which we may obtain marketing approval and for which we retain such rights;
• seek to identify, assess, acquire or develop other product candidates that may be complementary to ONS-5010/LYTENAVA;
• make upfront, milestone, royalty or other payments under any license agreements;
• seek to create, maintain, protect and expand our intellectual property portfolio;
• engage in litigation, including the pending securities class action lawsuit, as well as any other potential litigation;
• seek to attract and retain skilled personnel;
• create additional infrastructure to support our operations as a public company and any future commercialization efforts; and
• experience any delays or encounter issues with any of the above, including but not limited to failed clinical trials, conflicting results, safety issues or regulatory challenges that may require longer follow-up of existing studies, additional major studies or additional supportive studies in order to pursue marketing approval.

Our failure to become and remain profitable would decrease our value and could impair our ability to raise capital, maintain our research and development efforts, expand our business or continue our operations. A decline in our value could also cause you to lose all or part of your investment.

We have generated minimal revenue from product sales and may never be profitable.

We have one product, ONS-5010/LYTENAVA, approved for commercialization in the EU and UK and have generated minimal revenue from product sales. Our ability to continue to generate revenue and achieve profitability depends on our ability, alone or with strategic collaboration partners, to successfully complete the development of, and obtain the regulatory and marketing approvals necessary to commercialize, ONS-5010/LYTENAVA for the treatment of wet AMD, and our other targeted indications, and as appropriate, any of our other product candidates. We currently estimate that we could potentially begin generating revenue from product sales in Europe as early as the first half of calendar 2025, but this depends heavily on our success in many areas, including but not limited to:

• Securing capital sufficient to continue to fund our commercialization efforts;
• continuing to commercialize ONS-5010/LYTENAVA and any other product candidates for which we or our partners obtain regulatory and marketing approval;
• maintaining and obtaining regulatory and marketing approvals for ONS-5010/LYTENAVA and any other product candidates for which we or our partners complete clinical trials;
• retaining our manufacturing partner for ONS-5010/LYTENAVA and any approved product candidates to support clinical development, regulatory requirements and the market demand for any such approved product candidates;
• obtaining third-party coverage and adequate reimbursements of ONS-5010/LYTENAVA and any other product candidates, if approved;
• obtaining market acceptance of ONS-5010/LYTENAVA and any other product candidates for which we obtain regulatory and marketing approval as viable treatment options;
• establishing or demonstrating in the medical community the safety and efficacy of ONS-5010/LYTENAVA and its potential advantages over and side effects compared to existing products used to treat wet AMD;
• negotiating favorable terms in any collaboration, licensing or other arrangements into which we may enter;
• maintaining, protecting and expanding our portfolio of intellectual property rights, including patents, trade secrets and know-how;
• attracting, hiring and retaining qualified personnel; and
• completing clinical development of ONS-5010/LYTENAVA for the treatment of wet AMD in the United States and the other targeted indications, and any other product candidates we may develop in the future.

We anticipate incurring significant costs to continue to commercialize ONS-5010/LYTENAVA and any of our other product candidates that may be approved for commercialization in the future. Our expenses could increase beyond our expectations if we are required by the FDA, or other regulatory authorities, supranational, domestic or foreign, or by any unfavorable outcomes in intellectual property litigation filed against us, to change our manufacturing processes or assays or to perform clinical, preclinical or other types of studies in addition to those that we currently anticipate.

Our ability to continue to generate revenue from the sales of ONS-5010/LYTENAVA in the EU, UK or in any other country where the product is approved, or in relation to any other product candidate that may be approved, will be dependent, in part, upon:

• our ability to execute our sales and marketing strategy for ONS-5010/LYTENAVA in the EU and UK;
• ​our ability to maintain and manage the necessary sales, marketing and other capabilities and infrastructure that are required to successfully commercialize ONS-5010/LYTENAVA in the EU and UK;
• ​the size of the markets in the territories for which we gain regulatory approval;
• the number of competitors in such markets;
• the market acceptance of ONS-5010/LYTENAVA and any other product candidate that may be approved;
• the accepted price for the product;
• the ability to obtain coverage and adequate reimbursement for ONS-5010/LYTENAVA and any other product candidate that may be approved;
• the quality and performance of ONS-5010/LYTENAVA and any other product candidate that may be approved, including the relative safety and efficacy; and
• whether we own, or have partnered, the commercial rights for that territory.

If the market for ONS-5010/LYTENAVA or any other product candidates we may develop in the future, or our share of that market, is not as large as we expect, the number of indications approved by regulatory authorities is narrower than we expect or the target population for treatment is narrowed by competition, physician choice or treatment guidelines, we may not generate significant revenue from sales of such products to become profitable. If we are unable to successfully complete development and obtain regulatory approval for ONS-5010/LYTENAVA outside the EU and UK, our business will be harmed.

We are highly dependent on the success of ONS-5010/LYTENAVA, our only product that has been approved in the EU and UK. If ONS-5010/LYTENAVA does not receive regulatory approval outside the EU and UK, or is not successfully commercialized, our business may be harmed.

We currently have one product, ONS-5010/LYTENAVA, that is approved for commercial sale in the EU and UK. We may never be able to obtain regulatory approval for ONS-5010/LYTENAVA outside the EU or UK, develop other marketable products or be able to continue commercializing LYTENAVA in the EU or UK. We expect that a substantial portion of our efforts and expenditures in the foreseeable future will be devoted to the advancement of ONS-

5010/LYTENAVA, our only approved product and only product candidate in active development. We also expect that we will need to devote significant effort to the continued commercialization of LYTENAVA in the EU, UK, and other markets following regulatory approval, if received. We cannot assure you that we will be able to successfully obtain regulatory approval of ONS-5010/LYTENAVA outside of the EU and UK and develop sufficient commercial capabilities for ONS-5010/LYTENAVA if and when necessary. Accordingly, our business currently depends heavily on the successful regulatory approval of ONS-5010/LYTENAVA outside the EU and UK, and commercialization of ONS-5010/LYTENAVA.

We cannot be certain that ONS-5010/LYTENAVA will receive regulatory approval outside of the EU or UK, or be successfully commercialized even in the EU or UK, or any other targeted market in which we receive regulatory approval. The research, testing, manufacturing, labeling, approval, sale, marketing and distribution of products are, and will remain, subject to extensive regulation by the FDA and other regulatory authorities in the United States and other countries that each have differing regulations. We are not permitted to market ONS-5010/LYTENAVA in the United States until we receive approval from the FDA, or in any foreign country until we receive the requisite approvals from the appropriate authorities in such countries for marketing authorization.

Obtaining approval from the FDA or similar regulatory approval is an extensive, lengthy, expensive and inherently uncertain process, and the FDA or other foreign regulatory authorities may delay, limit or deny approval of ONS-5010/LYTENAVA for many reasons, including:

• we may not be able to demonstrate that ONS-5010/LYTENAVA is effective as a treatment for any of our currently targeted indications to the satisfaction of the FDA or other relevant regulatory authorities;
• the relevant regulatory authorities may require additional pre-approval studies or clinical trials, which would increase our costs and prolong our development timelines;
• the results of our clinical trials may not meet the level of statistical or clinical significance required by the FDA or other relevant regulatory authorities for marketing approval;
• the FDA or other relevant regulatory authorities may disagree with the number, design, size, conduct or implementation of our clinical trials;
• the FDA or other relevant regulatory authorities may not find the data from nonclinical studies or clinical trials sufficient to demonstrate that the clinical and other benefits of these products outweigh their safety risks;
• the FDA or other relevant regulatory authorities may disagree with our interpretation of data or significance of results from the nonclinical studies and clinical trials of ONS-5010/LYTENAVA and any future product candidate, or may require that we conduct additional trials;
• the FDA or other relevant regulatory authorities may require development of a risk evaluation and mitigation strategy, or REMS, or its equivalent, as a condition of approval;
• the FDA or other relevant regulatory authorities may require additional post-marketing studies, which would be costly;
• the FDA or other relevant regulatory authorities may identify deficiencies in the manufacturing processes or facilities of our third-party manufacturers; or
• the FDA or other relevant regulatory authorities may change their approval policies or adopt new regulations.

There can be no assurance that our BLA or MAAs of ONS-5010/LYTENAVA for wet AMD, or planned future, clinical trials for other retina indications, will ultimately meet the requirements sufficient for us to receive regulatory approval outside of the EU and UK. For example, in May 2022, we voluntarily withdrew our BLA to provide additional information requested by the FDA. We re-submitted the BLA to the FDA for ONS-5010/LYTENAVA on August 30, 2022. On August 29, 2023, we received a CRL in which the FDA concluded it could not approve the BLA during this review cycle due to several CMC issues, open observations from pre-approval manufacturing inspections, and a lack of substantial evidence. At subsequent Type A meetings with the FDA, we learned that the FDA requires the successful completion of an additional adequate and well-controlled clinical trial evaluating ONS-5010/LYTENAVA, as well as additional requested CMC data indicated in the CRL to approve ONS-5010/LYTENAVA for use in wet AMD. We received agreement from FDA under the SPA for the NORSE EIGHT trial protocol and completed enrollment in the trial in September 2024. In November 2024, we reported that ONS-5010/LYTENAVA did not meet the pre-specified non-inferiority endpoint at week 8 set forth in the special protocol assessment (SPA) with the FDA. However, the preliminary data from the trial demonstrated an improvement in vision and the presence of biologic activity, as well as a continued favorable safety profile for ONS-5010.

Analysis of the data is ongoing as the month 3 data from NORSE EIGHT is being collected, which is expected to be available in January 2025. We resubmitted the BLA to the FDA in February 2025 and in April 2025 we announced that the FDA set a PDUFA goal date for August 27, 2025. There can be no assurance that we will address the deficiencies identified in the CRL to the satisfaction of the FDA.