DRMA 10-K

Dermata Therapeutics, Inc. (DRMA)

10-K 2025-03-17 For: 2024-12-31

View Original

Added on April 10, 2026

Delaware		86-3218736
(State or Other Jurisdiction of		(I.R.S. Employer
Incorporation or Organization)		Identification Number)

Title of Each Class:	Trading Symbol	Name of Each Exchange on which Registered
Common Stock, par value $0.0001 per share	DRMA	The Nasdaq Capital Market
Warrants, exercisable for one share of Common Stock	DRMAW	The Nasdaq Capital Market

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated Filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

		Page
Part I		4
Item 1.	Business	4
Item 1A.	Risk Factors	41
Item 1B.	Unresolved Staff Comments	89
Item 1C.	Cybersecurity	89
Item 2.	Properties	89
Item 3.	Legal Proceedings	89
Item 4.	Mine Safety Disclosures	89

Part II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	90
Item 6.	[Reserved]	90
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	90
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	100
Item 8.	Financial Statements and Supplementary Data	100
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	100
Item 9A.	Controls and Procedures	100
Item 9B.	Other Information	101
Item 9C.	Disclosure Regarding Foreign Jurisdiction That Prevent Inspections	101

Part III
Item 10.	Directors, Executive Officers and Corporate Governance	102
Item 11.	Executive Compensation	109
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	114
Item 13.	Certain Relationships and Related Transactions, and Director Independence	120
Item 14.	Principal Accountant Fees and Services	121

Part IV
Item 15.	Exhibits and Financial Statement Schedules	122
Item 16.	Form 10-K Summary	126
Signatures		127

	·	our lack of operating history;

	·	the expectation that we will incur significant operating losses for the foreseeable future and will need significant additional capital;

	·	our current and future capital requirements to support our development and commercialization efforts for our product candidates and our ability to satisfy our capital needs;

	·	our dependence on our product candidates, which are still in various stages of clinical development;

	·	our ability to acquire sufficient quantities of raw material needed to manufacture our drug product;

	·	our, or that of our third-party manufacturers, ability to manufacture cGMP quantities of our product candidates as required for pre-clinical and clinical trials and, subsequently, our ability to manufacture commercial quantities of our product candidates;

	·	our ability to complete required clinical trials for our product candidates and obtain approval from the FDA or other regulatory agencies in different jurisdictions;

	·	our lack of a sales and marketing organization and our ability to commercialize our product candidates if we obtain regulatory approval;

	·	our dependence on third-parties to manufacture our product candidates;

	·	our reliance on third-party CROs to conduct our clinical trials;

	·	our ability to maintain or protect the validity of our intellectual property;

	·	our ability to internally develop new inventions and intellectual property;

	·	interpretations of current laws and the passages of future laws;

	·	Impacts of increased trade tariffs, import quotas or other trade restrictions or measures taken by the United States and other countries, including the recent and potential changes in U.S. trade policies that may be made by the Trump presidential administration;

	·	acceptance of our business model by investors;

	·	the accuracy of our estimates regarding expenses and capital requirements; and

	·	our ability to adequately support organizational and business growth.

	·	Complete development and regulatory approval of XYNGARI™ for acne. We initiated the first of two STAR-1 Phase 3 clinical studies of XYNGARI™ for the treatment of moderate-to-severe acne in December 2023 and completed enrollment of the STAR-1 Phase 3 trial in November 2024. We expect to receive top-line results from the STAR-1 trial in March of 2025. If the results of the STAR-1 trial are positive, in 2025, we plan on initiating the second XYNGARI™ Phase 3 clinical trial entitled STAR-2, followed by a long-term extension study as requested by FDA. We also plan to initiate the FDA required dermal carcinogenicity studies in rats and the repeat dose dermal toxicity study in minipigs. Assuming positive results from the Phase 3 program, we plan on submitting a New Drug Application (NDA) to FDA approximately 6 months after completion of the studies.
	·	Explore mutually beneficial partnership opportunities for our XYNGARI™ program. If we receive positive results from our XYNGARI™ STAR-1 Phase 3 trial, we will look for a partner that may be interested in helping Dermata complete the development of the XYNGARI™ Phase 3 program, with the ultimate goal to commercialize XYNGARI™. If we are unable to find a mutually beneficial partner for the XYNGARI™ program, then we plan to continue the development program and prepare to file an NDA with FDA.

	·	Expand on the mutually beneficial partnership with Revance for our DMT410 program in hyperhidrosis and aesthetic skin conditions. In January 2025, we entered into a Clinical Trial Collaboration Agreement with Revance to explore the use of XYNGARI™ with DAXXIFY® for the topical treatment of axillary hyperhidrosis in a Phase 2a clinical trial. If successful, we will look to expand on the partnership with Revance in other indications.

	·	Complete a Phase 2 trial of XYNGARI™ for the treatment of psoriasis. In October 2021, we announced top-line results of our Phase 1b POC trial in patients with mild-to-moderate psoriasis. We believe the results of this POC study warrant further development of XYNGARI™ for the treatment of psoriasis. If successfully developed and commercialized, we believe XYNGARI™ would be the first once weekly topical product available to treat psoriasis. The XYNGARI™ program for psoriasis is currently on hold with further advancement subject to obtaining additional financing and/or a strategic partner.

	·	Acquire or in-license additional dermatology programs to our portfolio that complement our current product candidates. We continuously evaluate potential partnering opportunities that will bolster our current product candidate portfolio and provide substantial value to our organization. We intend to focus on early to mid-stage development product candidates to generate clinical data and potentially move to later stages of development and ultimately on to commercialization.

	·	Maximize the value of our portfolio by partnering with companies who can assist with commercializing our product candidates in territories throughout the world. We plan to explore partnerships with companies throughout the world who have established commercial organizations focused on dermatologists.

	·	Further strengthen our intellectual property portfolio, path to new chemical entity, or NCE, exclusivity, raw material supply and advance our regulatory filings. We plan to continue to strengthen our IP portfolio for XYNGARI™ and DMT410, seek NCE exclusivity for XYNGARI™, maintain our exclusive supply agreement for our raw material requirements, and continue to protect our proprietary information. We believe these activities will be our primary competitive advantages if our product candidates receive regulatory approval.

	·	the absolute reduction in non-inflammatory lesions from baseline;

	·	the IGA with a responder being a patient with a 2-grade change in IGA scale and being a 0 or 1 at study exit; and

	·	safety and tolerability.

System Organ Class Preferred Team	XYNGARI™ (N=91) N (%)		Placebo (N=90) N (%)
General disorders and administration site conditions		5(5.5)		2(2.2)
Application site erythema		4(4.4)		1(1.1)
Application site pruritus		2(2.2)		2(2.2)
Application site dryness		1(1.1)		0(0.0)
Application site exfoliation		1(1.1)		0(0.0)

	·	Physicians Global Assessment (PGA) of disease severity with success defined as absent or very mild disease, a score of 0 or 1 respectively on a 5-point scale, at the target lesion site.

	·	Psoriasis Area Severity Index (PASI) at the target lesion site defined as absent or mild, a score of 0 or 1 respectively, on a 6-point scale. This required each psoriatic sign of scaling, erythema, and plaque elevation to have a score of 0 or 1 for the subject to be considered a responder.

	·	Pruritus Visual Analog Scale (VAS) looking at the mean change and percent change from baseline in pruritis (itch).

	·	percent of patients with less than 50% reduction in gravimetrically measured sweat production from baseline,

	·	percent of patients with gravimetric sweat production of greater than 50 mg, and

	·	percentage change in gravimetric sweat production.

	·	Portion of patients achieving a grade of none or mild on the investigator’s assessment of lateral canthal, forehead, and glabellar lines based on the Facial Wrinkle Scale (FWS), which consists of a 5-point scale with 0 being none and 1 being almost none. To be considered a responder, both the patient and physician had to agree on the score.

	·	Portion of patients achieving improvement on the physician’s assessment of pore size improvement, based on the Global Aesthetic Improvement Scale (GAIS), which consists of a 5-point scale with 0 being no improvement, 1 being less than or equal to 25% improvement, 2 being a 26-50% improvement, 3 being a 51-75% improvement, and 4 being a 76-100% improvement.

	·	Mean and percent change from baseline in brightness based on the 10-point visual analog scale.

	·	Mean and percent change from baseline in luminosity based on the 10-point visual analog scale.

	·	Portion of patients achieving a two- grade improvement on the physician’s assessment of FWS of fine lines under the eye.

	·	the federal healthcare program anti-kickback law which prohibits, among other things, persons from soliciting, receiving or providing remuneration, directly or indirectly, to induce either the referral of an individual, for an item or service or the purchasing or ordering of a good or service, for which payment may be made under federal healthcare programs such as the Medicare and Medicaid programs;
	·	federal false claims laws which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid, or other government reimbursement programs that are false or fraudulent. The government may assert that a claim including items or services resulting from a violation of the federal healthcare program anti-kickback law or related to off-label promotion constitutes a false or fraudulent claim for purposes of the federal false claims laws;
	·	the Federal Physician Payments Sunshine Act within the ACA, and its implementing regulations, require that certain manufacturers of drugs, devices, biological and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report information related to certain payments or other transfers of value made or distributed to physicians and teaching hospitals, or to entities or individuals at the request of, or designated on behalf of, the physicians and teaching hospitals and to report annually certain ownership and investment interests held by physicians and their immediate family members;
	·	the Health Insurance Portability and Accountability Act, or HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH, and its implementing regulations, imposes certain requirements relating to the privacy, security and transmission of individually identifiable health information. Among other things, HITECH makes HIPAA’s privacy and security standards directly applicable to “business associates”—independent contractors or agents of covered entities that receive or obtain protected health information in connection with providing a service on behalf of a covered entity. HITECH also created four new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates and possibly other persons, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorneys’ fees and costs associated with pursuing federal civil actions;
	·	applicable child-resistant packaging requirements under the U.S. Poison Prevention Packaging Act;
	·	The Lanham Act and federal antitrust laws; and
	·	state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws, which may apply to items or services reimbursed by any third-party payer, including commercial insurers, and state 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 federal laws, thus complicating compliance efforts.

	·	We are a pre-revenue company with a limited operating history;
	·	We may not be able to successfully develop or commercialize our product candidates or do so on a timely or cost-effective basis;
	·	Our business may be negatively affected by the impacts of public health emergencies, epidemics and pandemics;
	·	We depend on a limited number of product candidates and our business could be materially adversely affected if one or more of our key product candidates do not perform as well as expected and do not receive regulatory approval;
	·	The market for our product candidates, including XYNGARI™ and DMT 410, may not be as large as we expect;
	·	Our competitors and other third parties may allege that we are infringing their intellectual property, forcing us to expend substantial resources in resulting litigation, and any unfavorable outcome of such litigation could have a material adverse effect on our business;
	·	We may experience failures of or delays in clinical trials which could jeopardize or delay our ability to obtain regulatory approval and commence product sales;
	·	We face intense competition from both brand and generic companies which could limit our growth and adversely affect our financial results;
	·	We are subject to extensive governmental regulation and we face significant uncertainties and potentially significant costs associated with our efforts to comply with applicable regulations;
	·	We may not be able to develop or maintain sales capabilities or effectively market or sell any products that we may successfully commercialize;
	·	Manufacturing or quality control problems may damage our reputation, require costly remedial activities, or otherwise negatively impact our business;
	·	Our profitability will depend on coverage and reimbursement by third-party payors, and healthcare reform and other future legislation may lead to reductions in coverage or reimbursement levels;
	·	We currently, and may in the future need to, license certain intellectual property from third parties, and such licenses may not be available or may not be available on commercially reasonable terms;
	·	We may not identify relevant third-party patents or may incorrectly interpret the relevance, scope or expiration of a third-party patent, which might adversely affect our ability to develop, manufacture and market our products and product candidates;
	·	The raw material for our product candidates, XYNGARI™ and DMT410, is derived from naturally occurring ingredient that grow only in limited areas that need to be harvested annually. Due to unforeseen environmental conditions or circumstances, our supplier may not be able to harvest as much raw material as we require, or any at all, which may negatively impact our ability to conduct preclinical studies, clinical trials, and ultimately commercialize our product candidates;
	·	We currently rely on a third party for the raw materials needed for XYNGARI™ and DMT410, and if we encounter any difficulties in accessing or procuring alternative sources on acceptable terms, or at all, our business may suffer;
	·	Our current licensed patents covering XYNGARI™ expired between 2022 and 2023, which was prior to our anticipated date for any market launch. While we have been issued patents covering XYNGARI™ and DMT410 in certain jurisdictions, other of our current pending patents covering XYNGARI™ and DMT410 have not been issued yet and there is no guarantee they will get issued. We may not be able to obtain additional patent coverage, which could limit our market opportunity due to competition from other products;
	·	If we fail to comply with our obligations under any of our third-party agreements, we could lose license rights that are necessary to develop our product candidates;
	·	Our directors, executive officers and certain stockholders (one of which is an affiliate of our Chief Executive Officer) own a significant percentage of our common stock and, if they choose to act together, will be able to exert significant control over matters subject to stockholder approval; and
	·	We will need to add personnel, which will increase the size and complexity of our organization and we may experience difficulties executing growth and corporate strategies.

	·	successfully implement or execute our current business plan, and we cannot assure you that our business plan is sound;

	·	successfully complete the clinical trials, non-clinical testing and other requirements necessary to obtain regulatory approval for the marketing of our drug candidates, including XYNGARI™ and DMT410;

	·	successfully manufacture our clinical products and establish commercial drug supply;

	·	secure, maintain and, as necessary, defend our intellectual property rights;

	·	secure market exclusivity and/or adequate intellectual property protection for our drug candidates;

	·	attract and retain an experienced management and advisory team;

	·	secure acceptance of our drug candidates in the medical community and with third-party payors and consumers;

	·	launch commercial sales of our drug candidates, whether alone or in collaboration with others;
	·	comply with post-marketing regulatory requirements;

	·	raise sufficient funds in the capital markets or otherwise to effectuate our business plan; and

	·	utilize the funds that we have and may raise in the future to efficiently execute our business strategy.

	·	the timing, rate of progress and cost of any preclinical and clinical trials and other product development activities for our current and any future product candidates that we develop, in-license or acquire;

	·	the results of the clinical trials for our product candidates in the United States and any foreign countries;

	·	the timing of, and the costs involved in, FDA approval and any foreign regulatory approval of our product candidates, if at all;

	·	the number and characteristics of any additional future product candidates we develop or acquire;

	·	our ability to establish and maintain strategic collaborations, licensing, co-promotion or other arrangements and the terms and timing of such arrangements;

	·	the cost of commercialization activities if our current or any future product candidates are approved for sale, including manufacturing, marketing, sales and distribution costs;

	·	the degree and rate of market acceptance of any approved products;

	·	costs under our third-party manufacturing and supply arrangements for our current and any future product candidates and any products we commercialize;

	·	costs and timing of completion of any additional outsourced commercial manufacturing or supply arrangements that we may establish;

	·	costs of preparing, filing, prosecuting, maintaining, defending and enforcing any patent claims and other intellectual property rights associated with our product candidates;

	·	costs associated with prosecuting or defending any litigation that we are or may become involved in and any damages payable by us that result from such litigation;

	·	costs associated with any product recall that could occur;

	·	costs of operating as a public company;

	·	the emergence, approval, availability, perceived advantages, relative cost, relative safety and relative efficacy of alternative and competing products or treatments;

	·	costs associated with any acquisition or in-license of products and product candidates, technologies or businesses; and

	·	personnel, facilities and equipment requirements.

	·	changes in direction of our research and development programs;

	·	the time and expense for preclinical studies and clinical trials for our product candidates;

	·	the time and costs involved in obtaining regulatory approval for our product candidates;

	·	the cost increases and other potential impacts of macroeconomic factors, including heightened inflation and rising interest rates, liquidity concerns at and failures of banks and other financial institutions, exchange rate fluctuations, tariffs, trade wars, supply chain disruptions and increases in commodity, energy and fuel prices, costs associated with protecting our intellectual property rights;

	·	successful commercialization of our product candidates;

	·	competitive and technical advances;

	·	patent development or regulatory changes;

	·	development of marketing and sales capabilities;

	·	payments received under current and future collaboration agreements, if any; and

	·	market acceptance of our products.

	·	the ability to raise additional capital on acceptable terms, or at all;

	·	timely completion of our clinical trials, which may be significantly slower or cost more than we currently anticipate and will depend substantially upon the performance of third-party contractors;

	·	whether we are required by the U.S. Food and Drug Administration, or the FDA, or similar foreign regulatory agencies to conduct additional clinical trials beyond those planned to support the approval and commercialization of our product candidates or any future product candidates;

	·	acceptance of our proposed indications and primary endpoint assessments relating to the proposed indications of our product candidates by the FDA and similar foreign regulatory authorities;

	·	our ability to demonstrate to the satisfaction of the FDA and similar foreign regulatory authorities, the safety and efficacy of our product candidates or any future product candidates;

	·	our ability to develop a suitable drug product release assay;

	·	our ability to identify an active compound within the drug product that can be detected in a pharmacokinetics study;

	·	the prevalence, duration and severity of potential side effects experienced in connection with our product candidates or future approved products, if any;

	·	the timely receipt of necessary marketing approvals from the FDA and similar foreign regulatory authorities;

	·	achieving and maintaining, and, where applicable, ensuring that our third-party contractors achieve and maintain, compliance with our contractual obligations and with all regulatory requirements applicable to our product candidates or any future product candidates or approved products, if any;

	·	the ability of third parties with whom we contract to manufacture clinical trial and commercial supplies of our product candidates or any future product candidates, remain in good standing with regulatory agencies and develop, validate and maintain commercially viable manufacturing processes that are compliant with current good manufacturing practices, or cGMP, or good agricultural and collection practices, or GACP;

	·	a continued acceptable safety profile during clinical development and following approval of our product candidates or any future product candidates;

	·	our ability to successfully commercialize our product candidates or any future product candidates in the United States and internationally, if approved for marketing, sale and distribution in such countries and territories, whether alone or in collaboration with others;

	·	acceptance by physicians, patients and payors of the benefits, safety and efficacy of our product candidates or any future product candidates, if approved, including relative to alternative and competing treatments;

	·	our ability to comply with numerous post-approval regulatory requirements;

	·	our and our partners’ ability to establish and enforce intellectual property rights in and to our product candidates or any future product candidates;

	·	our and our partners’ ability to avoid third-party patent interference or intellectual property infringement claims; and

	·	our ability to in-license or acquire additional product candidates or commercial-stage products that we believe we can successfully develop and commercialize.

	·	discovery of safety or tolerability concerns, such as serious or unexpected toxicities or side effects or exposure to otherwise unacceptable health risks, experienced by study participants or other safety issues;

	·	lack of effectiveness of any product candidate during clinical trials or the failure of our product candidates to meet specified endpoints;

	·	slower than expected rates of subject recruitment and enrollment rates or inability to enroll a sufficient number of patients in clinical trials resulting from numerous factors, including the prevalence of other companies’ clinical trials for their product candidates for the same indication, or clinical trials for indications for which patients do not as commonly seek treatment;

	·	delays or difficulties in our clinical trials due to quarantines or other restrictions resulting from public health emergencies, epidemics, and/or pandemics;

	·	difficulty in retaining subjects who have initiated a clinical trial but may withdraw at any time due to adverse side effects from the therapy, insufficient efficacy, fatigue with the clinical trial process or for any other reason;

	·	difficulty in obtaining IRB approval for studies to be conducted at each clinical trial site;

	·	delays in manufacturing or obtaining, or inability to manufacture or obtain, sufficient quantities of materials for use in clinical trials;

	·	difficulty or inability to find a partner that will allow us to test their product for our DMT410 program;

	·	inadequacy of or changes in our manufacturing process or the product formulation or method of delivery;

	·	changes in applicable laws, regulations and regulatory policies;

	·	delays or failure in reaching agreement on acceptable terms in clinical trial contracts or protocols with prospective CROs, clinical trial sites and other third-party contractors;

	·	inability to add a sufficient number of clinical trial sites;

	·	uncertainty regarding proper formulation and dosing;

	·	failure by us, our employees, our CROs or their employees or other third-party contractors to comply with contractual and applicable regulatory requirements or to perform their services in a timely or acceptable manner;

	·	failure by us, our employees, our CROs or their employees or any partner with which we may collaborate or their employees to comply with applicable FDA or other regulatory requirements relating to the conduct of clinical trials or the handling, storage, security and recordkeeping for drug and biologic products;

	·	scheduling conflicts with participating clinicians and clinical institutions;

	·	failure to design appropriate clinical trial protocols;

	·	insufficient data to support regulatory approval;

	·	inability or unwillingness of medical investigators to follow our clinical protocols; or

	·	difficulty in maintaining contact with subjects during or after treatment, which may result in incomplete data.

	·	delays related to disruptions at CROs and contract manufacturers, or in the supply chain;

	·	delays in receiving approval from regulatory authorities to initiate our planned clinical trials;

	·	delays or difficulties in clinical site initiation, including difficulties in recruiting clinical site investigators and clinical site staff who, as healthcare providers, may have heightened exposure;

	·	delays or difficulties in enrolling and retaining patients in clinical trials;

	·	delays in clinical sites receiving the supplies and materials needed to conduct our planned clinical trials;

	·	difficulties interpreting data from clinical trials;

	·	diversion of healthcare resources away from the conduct of clinical trials;

	·	interruption of key clinical trial activities, such as clinical trial site monitoring, due to limitations on travel imposed or recommended by federal or state governments, employers and others;

	·	interruption or delays in the operations of the FDA or other regulatory authorities, which may impact review and approval timelines; and interruptions, difficulties or delays arising in our existing operations and company culture as a result of many of our employees working remotely.

	·	disagree with the design or implementation of one or more clinical trials;

	·	not deem a product candidate safe and effective for its proposed indication, or may deem a product candidate’s safety or other perceived risks to outweigh its clinical or other benefits;

	·	not find the data from preclinical studies and clinical trials sufficient to support approval, or the results of clinical trials may not meet the level of statistical or clinical significance required by the FDA or the applicable foreign regulatory body for approval;

	·	disagree with our interpretation of data from preclinical studies or clinical trials performed by us or third parties, or with the interpretation of any partner with which we may collaborate;

	·	determine the data collected from clinical trials may not be sufficient to support the submission of an NDA, or other applicable regulatory filing;

	·	require additional preclinical studies or clinical trials;

	·	identify deficiencies in the formulation, quality control, labeling or specifications of our current or future product candidates;

	·	require clinical trials in pediatric patients in order to establish pharmacokinetics or safety for this more drug-sensitive population;

	·	grant approval contingent on the performance of costly additional post-approval clinical trials;

	·	approve our current or any future product candidates for a more limited indication or a narrower patient population than we originally requested or with strong warnings that may affect marketability;

	·	not approve the labeling that we believe is necessary or desirable for the successful commercialization of our product candidates;

	·	not approve of the manufacturing processes, controls or facilities of third-party manufacturers or testing labs with which we contract;

	·	consider our products a device instead of a drug requiring a different approval process and manufacturing needs;

	·	consider one of our products a combination product instead of a singular drug requiring additional clinical trials or increased number of patients per study, or

	·	change its approval policies or adopt new regulations in a manner rendering our clinical data or regulatory filings insufficient for approval.

	·	the severity of the disease under investigation;

	·	the eligibility criteria for the study in question;

	·	the perceived risks and benefits of the product candidate under study;

	·	the efforts to facilitate timely enrollment in clinical trials;

	·	the patient referral practices of physicians;

	·	he ability to monitor patients adequately during and after treatment;

	·	the proximity and availability of clinical trial sites for prospective patients; and

	·	factors we may not be able to control, such as potential pandemics that may limit subjects, principal investigators or staff or clinical site availability (e.g., a resurgence of COVID-19).

	·	the clinical indications for which the product is approved and patient demand for approved products that treat those indications;

	·	the effectiveness of our product as compared to other available therapies;

	·	the availability of coverage and adequate reimbursement from managed care plans and other healthcare payors for any of our product candidates that may be approved;

	·	the cost of treatment with our product candidates in relation to alternative treatments and willingness to pay for the product, if approved, on the part of patients;

	·	acceptance by physicians, major operators of clinics and patients of the product as a safe and effective treatment;

	·	physician and patient willingness to adopt a new therapy, including for XYNGARI™ , a sponge product, over other available therapies to treat approved indications;

	·	patients’ perception of a product derived from a freshwater sponge as one for which will provide medical treatment;

	·	overcoming any biases physicians or patients may have toward particular therapies for the treatment of approved indications;

	·	proper training and administration of our product candidates by physicians and medical staff;

	·	patient satisfaction with the results and administration of our product candidates and overall treatment experience;

	·	the willingness of patients to pay for certain of our product candidates relative to other discretionary items, especially during economically challenging times;

	·	the revenue and profitability that our product candidate may offer a physician as compared to alternative therapies;

	·	the prevalence and severity of any side effects of our product candidates;

	·	limitations or warnings contained in the FDA-approved labeling for our product candidates;

	·	any FDA requirement to undertake a risk evaluation and mitigation strategy, or REMS;

	·	the effectiveness of our sales, marketing and distribution efforts;

	·	our ability to maintain sufficient quantities of supply to meet demand;

	·	adverse publicity about our product candidates or favorable publicity about competitive products; and

	·	potential product liability claims.

	·	impose restrictions on the marketing or manufacturing of the product, suspend or withdraw product approvals or revoke necessary licenses;

	·	mandate modifications to promotional materials or require us to provide corrective information to healthcare practitioners;

	·	require us or our partners to enter into a consent decree, which can include imposition of various fines, reimbursements for inspection costs, required due dates for specific actions and penalties for noncompliance;

	·	issue warning letters, show cause notices or untitled letters describing alleged violations, which may be publicly available;

	·	commence criminal investigations and prosecutions;

	·	impose injunctions, suspensions or revocations of necessary approvals or other licenses;

	·	impose other civil or criminal penalties;

	·	suspend any ongoing clinical trials;

	·	delay or refuse to approve pending applications or supplements to approved applications filed by us or our potential partners;

	·	refuse to permit drugs or precursor chemicals to be imported or exported to or from the United States;

	·	suspend or impose restrictions on operations, including costly new manufacturing requirements; or

	·	seize or detain products or require us or our partners to initiate a product recall.

	·	regulatory authorities may withdraw their approval of the product;

	·	regulatory authorities may require a recall of the product or we or our potential partners may voluntarily recall a product;

	·	regulatory authorities may require the addition of warnings or contraindications in the product labeling, narrowing of the indication in the product label or field alerts to physicians and pharmacies;

	·	we may be required to create a medication guide outlining the risks of such side effects for distribution to patients or institute a REMS;

	·	we may have limitations on how we promote the product;

	·	we may be required to change the way the product is administered or modify the product in some other way; the FDA or applicable foreign regulatory authority may require additional clinical trials or costly post-marketing testing and surveillance to monitor the safety or efficacy of the product;

	·	the FDA or applicable foreign regulatory authority may require additional clinical trials or costly post-marketing testing and surveillance to monitor the safety or efficacy of the product

	·	sales of the product may decrease significantly;

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

	·	our brand and reputation may suffer.

	·	withdrawal of clinical trial participants;

	·	termination of clinical trial sites or entire trial programs;

	·	inability to gain regulatory approval of our product candidates;

	·	the inability to commercialize our product candidates;

	·	decreased demand for our product candidates;

	·	impairment of our business reputation;

	·	product recall or withdrawal from the market or labeling, marketing or promotional restrictions;

	·	substantial costs of any related litigation or similar disputes;

	·	distraction of management’s attention and other resources from our primary business;

	·	substantial monetary awards to patients or other claimants against us that may not be covered by insurance; or

	·	loss of revenue.

	·	additional clinical trials to be conducted prior to obtaining approval;

	·	changes to manufacturing methods;

	·	recalls, replacements, or discontinuance of one or more of our products; and

	·	additional recordkeeping.

	·	the federal Anti-Kickback Statute, which prohibits, among other things, any person or entity from knowingly and willfully offering, soliciting, receiving or providing any remuneration (including any kickback, bribe or rebate), directly or indirectly, overtly or covertly, in cash or in kind, to induce either the referral of an individual or in return for the purchase, lease, or order of any good, facility item or service, for which payment may be made, in whole or in part, under federal healthcare programs such as the Medicare and Medicaid programs;

	·	federal civil and criminal false claims laws and civil monetary penalty laws, including, for example, the federal civil False Claims Act, which impose criminal and civil penalties, including civil whistleblower or qui tam actions, against individuals or entities for, among other things, knowingly presenting, or causing to be presented, to the federal government, including the Medicare and Medicaid programs, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government;

	·	the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created new federal criminal statutes that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private), knowingly and willfully embezzling or stealing from a health care benefit program, willfully obstructing a criminal investigation of a health care offense and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters;

	·	HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, and their implementing regulations, which impose obligations on covered entities, including healthcare providers, health plans, and healthcare clearinghouses, as well as their respective business associates that create, receive, maintain or transmit individually identifiable health information for or on behalf of a covered entity, with respect to safeguarding the privacy, security and transmission of individually identifiable health information;

	·	the Physician Payments Sunshine Act requirements under the Affordable Care Act, which require manufacturers of drugs, devices, biologics and medical supplies to report annually to the Centers for Medicare & Medicaid Services information related to payments and other transfers of value provided to physicians and teaching hospitals, and ownership and investment interests held by physicians and their immediate family members; and

	·	state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws, which may apply to items or services reimbursed by any third-party payor, including commercial insurers; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the applicable compliance guidance promulgated by the federal government, or otherwise restrict payments that may be provided to healthcare providers and other potential referral sources; state laws that require drug manufacturers to report information related to payments and other transfers of value to healthcare providers or marketing expenditures; and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.