Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 5, 2026. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties and should be read together with the "Risk Factors" section of our Annual Report on Form 10-K for the year ended December 31, 2025 for a discussion of important factors that could cause actual results to differ materially from the results described in, or implied by, the forward-looking statements contained in the following discussion and analysis.

Overview

Our Company

We are an integrated biopharmaceutical company committed to redefining the retina experience. AXPAXLI, also known as OTX-TKI, our investigational, bioresorbable, intravitreal hydrogel incorporating axitinib, a small molecule, multi-target, tyrosine kinase inhibitor with anti-angiogenic properties. AXPAXLI is currently being evaluated in a Phase 3 registrational program for wet age-related macular degeneration, or wet AMD, which we refer to as the SOL program. AXPAXLI is currently also being evaluated in a Phase 3 registrational program for diabetic retinal disease, including non-proliferative diabetic retinopathy, or NPDR, which we refer to as the HELIOS program.

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We also leverage the ELUTYX technology in our commercial product DEXTENZA, a corticosteroid approved by the U.S. Food and Drug Administration, or FDA, for the treatment of ocular inflammation and pain following ophthalmic surgery in adults and pediatric patients and for the treatment of ocular itching associated with allergic conjunctivitis in adults and pediatric patients aged two years or older, and in our product candidate OTX-TIC, which is a travoprost intracameral hydrogel that has completed a Phase 2 clinical trial for the treatment of open-angle glaucoma, or OAG, or ocular hypertension, or OHT. We are evaluating next steps for the OTX-TIC program.

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Key Business and Financial Developments

AXPAXLI for Wet AMD

The SOL-1 Trial

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In February 2026, we announced positive topline Week 52 results for the SOL-1 trial, a repeat-dosing registrational Phase 3 clinical trial, to assess the safety and efficacy of AXPAXLI in subjects with wet AMD. The SOL-1 trial is designed as a prospective, multi-center, double-masked, randomized (1:1), parallel-group, two-arm superiority trial comparing a single injection of AXPAXLI with a drug load of 450 µg of axitinib, or AXPAXLI 450 µg, to a single injection of aflibercept 2 mg.

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The SOL-1 trial involves more than 100 trial sites located in the United States and Argentina. In December 2024, the SOL-1 trial completed the randomization of 344 subjects with a diagnosis of wet AMD in the study eye at screening. Under the trial protocol, subjects were eligible for enrollment in the SOL-1 trial if they were treatment-naïve for wet AMD in the study eye; had central subfield thickness, or CSFT, of less than or equal to 500 microns; and had a Best Corrected Visual Acuity, or BCVA, of at least 54 letters as measured by the Early Treatment of Diabetic Retinopathy Study, or ETDRS, letters chart (approximately 20/80 Snellen equivalent vision). After initial screening, every enrolled subject received two aflibercept 2 mg loading doses between the screening visit and Day 1: one at Week -8 and another at Week -4. Subjects reaching either a BCVA of greater than or equal to 84 ETDRS letters (approximately 20/20 Snellen equivalent vision) or experiencing an improvement of at least 10 ETDRS letters with a reduction in CSFT to no greater than 350 microns in the study eye after these injections were randomized in the trial on Day 1 (Baseline).

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Retention in the SOL-1 trial continues to be outstanding, with greater than 95% of randomized subjects remaining on trial to date, and rescues reviewed under masking show greater than 95% of rescue events to date have met pre-established protocol defined criteria. All subjects have completed their Week 52 visit and have been re-dosed according

to their baseline treatment assignment. Oversight by an independent data and safety monitoring committee has not identified any safety signals in the SOL-1 trial to date.

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The primary endpoint of the SOL-1 trial is the proportion of subjects who maintained visual acuity, defined as a loss of fewer than 15 ETDRS letters from baseline, at Week 36. One of the key secondary endpoints is the proportion of subjects who maintained visual acuity measured at Week 52. At Weeks 52 and 76, all subjects that were randomized in the trial at Day 1, including subjects who previously received supplemental anti-vascular endothelial growth factor, or anti-VEGF treatment, are eligible to be re-dosed with their respective initial treatment of a single injection of AXPAXLI 450 μg in the investigational arm or a single injection of aflibercept 2 mg in the control arm.

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Subjects who were successfully randomized in the SOL-1 trial on Day 1 are being followed every month and will receive a supplemental dose of aflibercept 2 mg as needed based on pre-specified criteria. Our pre-specified rescue criteria are a loss of 15 or more letters on the ETDRS chart compared to baseline due to wet AMD, or a new hemorrhage that is deemed to be likely to cause irreversible vision loss due to progression of wet AMD. The first time a subject is observed to have lost 15 or more ETDRS letters in BCVA in the study eye due to wet AMD at any time up to Week 36 in the trial would be considered as a treatment failure. Subjects will be followed for safety until the end of Week 104. Trial subjects and designated trial personnel will remain masked through the end of Week 104.

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We are conducting the SOL-1 trial in accordance with a special protocol assessment, or SPA, agreement with the FDA.

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SOL-1 Topline Results

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Primary Endpoint (Week 36)

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AXPAXLI met its primary endpoint with statistical significance. The proportion of subjects who maintained visual acuity, defined as a loss of fewer than 15 ETDRS letters from baseline at Week 36 was 74.1% in the AXPAXLI arm compared to 55.8% in the aflibercept 2 mg arm, with a risk difference of 17.5% and a p-value of 0.0006 per the pre-specified statistical model, and with an observed difference of 18.3%. The risk difference is the difference in the probability of maintaining vision in the treatment arm compared to the control arm as per the pre-specified statistical model. The observed difference is the numerical difference of the observed event rate between the two arms.

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Key Secondary Endpoint (Week 52 Durability)

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AXPAXLI also met a key secondary pre-specified endpoint measuring the proportion of subjects who maintained visual acuity at Week 52, using the same analysis as the primary endpoint, with high statistical significance. The proportion of subjects who maintained vision at Week 52 was 65.9% in the AXPAXLI arm compared to 44.2% in

the aflibercept 2 mg arm, with a risk difference of 21.1%, and a p-value of <0.0001 per the pre-specified statistical model compared to aflibercept 2 mg subjects, and with an observed difference of 21.7%.

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Safety Overview

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As of the Week 52 database lock on February 5, 2026, AXPAXLI was generally well-tolerated in the SOL-1 trial. No treatment-related ocular or systemic serious adverse events were observed. No cases of endophthalmitis, occlusive retinal vasculitis, non-occlusive retinal vasculitis, retinal detachment, or implant migration to the anterior chamber were observed in the AXPAXLI arm. As previously noted, in accordance with the trial design, subjects will continue to be followed for safety through Week 104, with re-dosing at Week 52 and Week 76. A summary of the safety results is included in the following tables:

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In the AXPAXLI treatment arm, there were 3 subjects (1.8%) with iritis, and 3 subjects (1.8%) with uveitis (one was bilateral and recurrent). All cases were mild to moderate in severity and resolved with topical treatment. There

was one subject (0.6%) with vitreous cells, mild in severity, that resolved without treatment. There were no observed cases of endophthalmitis or occlusive or non-occlusive retinal vasculitis, confirmed by fluorescein angiography in the uveitis cases.

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On Protocol Rescue-Free Rates

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As a pre-specified exploratory endpoint, we evaluated the proportion of subjects who did not require rescue injections as specified by the SOL-1 trial protocol rescue criteria. The rescue-free rates in the AXPAXLI arm were 80.6%, 74.7%, and 68.8% at Weeks 24, 36, and 52, respectively, compared to 72.1%, 56.4%, and 47.7% in the aflibercept 2 mg arm at the same time periods. The observed differences were 8.5%, 18.3%, and 21.1% in favor of the AXPAXLI arm at Weeks 24, 36, and 52, respectively.

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Fluid Control

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As a post hoc analysis, we evaluated the proportion of subjects maintaining CSFT within 30 μm from baseline. At Weeks 36 and 52, subjects in the AXPAXLI arm demonstrated superior and sustained CSFT control as compared to subjects in the aflibercept 2 mg arm. At Week 36, 55.9% of subjects treated with AXPAXLI maintained CSFT within 30 μm from baseline compared to 37.8% of subjects in the aflibercept 2 mg arm, representing a risk difference of 17.1% in favor of AXPAXLI and a nominal p-value of 0.0013. At Week 52, 44.1% of subjects treated with AXPAXLI maintained CSFT within 30 μm from baseline compared to 34.9% of subjects in the aflibercept 2 mg arm representing a risk difference of 8.4% and a nominal p-value of 0.1094.

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SOL-1 Rescue Free Analysis Using SOL-R Rescue Criteria

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We also conducted a pre-specified exploratory analysis of the SOL-1 data in which we applied the SOL-R trial protocol rescue criteria, which are designed to align more closely with real-world clinical practice as compared to the protocol rescue criteria in the SOL-1 trial. The SOL-R trial protocol has established rescue criteria of >5 ETDRS letter loss in BCVA plus a ≥75 μm increase in CSFT. When applied to the SOL-1 trial results, AXPAXLI demonstrated a 77.1% rescue-free rate at Week 24. Week 24 was selected as the timepoint for this analysis to align with the re-dosing interval being used in the SOL-R trial. The SOL-R trial's streamlined rescue criteria reflect our strategic design decision to more closely replicate real-world clinical practice, and we believe the complementary designs of the SOL-1 and SOL-R trials, taken together, are intended to provide physicians with a comprehensive picture of the durability, flexibility, and repeatability of AXPAXLI across a range of dosing intervals and patient populations.

The SOL-R Trial

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We are also conducting the SOL-R trial, a repeat-dosing registrational Phase 3 clinical trial to evaluate the non-inferiority of AXPAXLI 450 μg dosed every 24 weeks for the treatment of wet AMD compared to aflibercept 2 mg dosed on-label every eight weeks. The SOL-R trial includes sites located in the U.S., Argentina, India, and Australia. The SOL-R trial is designed as a multi-center, double-masked, randomized (2:2:1), three-arm trial requiring subjects that were either treatment naïve or have been diagnosed with wet AMD in the study eye within about four months prior to screening. To qualify for screening in the SOL-R trial, a subject's study eye must have had a BCVA of at least 34 ETDRS letters (approximately 20/200 Snellen equivalent vision).

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Over the six month screening and lead-in period prior to Baseline (Day 1) randomization, enrolled subjects were given three screening doses and two loading doses of any anti-VEGF therapy, excluding brolucizumab-dbll, and monitored to exclude subjects demonstrating early persistent fluid or significant retinal fluid fluctuations. Subjects maintaining a CSFT of no greater than 350 microns at Weeks -12 and -8, and not experiencing a CSFT increase of greater than 35 microns at Week -8 from their lowest CSFT at any prior visit, then received two loading doses of aflibercept 2 mg at Weeks -8 and -4 prior to randomization on Day 1.

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Subjects in the first arm of the SOL-R trial received a single dose of AXPAXLI 450 μg at Day 1 and are re-dosed with AXPAXLI 450 μg at Weeks 24, 48, and 72. Subjects in the second arm received aflibercept 2 mg on Day 1 and per label every eight weeks thereafter. Subjects in the third arm received a single dose of aflibercept 8 mg at Day 1 and are re-dosed at Weeks 24, 48, and 72. Subjects will be followed for safety until Week 96. Trial subjects and designated trial personnel will remain masked through the end of Week 96.

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The primary endpoint of the SOL-R trial is to demonstrate non-inferiority in mean BCVA change from baseline between the AXPAXLI and on-label aflibercept 2 mg arms at Week 56. The third arm (aflibercept 8 mg) of the SOL-R trial, which has only been included for masking purposes, is not part of the non-inferiority analysis. Based on FDA guidance, the non-inferiority margin for the lower bound for the trial has been established at -4.5 letters of mean BCVA.

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In a written Type C response received in August 2024, and a subsequent written response received in December 2024, the FDA agreed that the SOL-R repeat dosing wet AMD trial, with a primary endpoint at Week 56, should be appropriate as an adequate and well-controlled trial in support of a potential new drug application, or NDA, and for a potential product label for AXPAXLI for the treatment of wet AMD. The FDA also noted that the use of one superiority trial and one non-inferiority trial is generally acceptable as the basis of an eventual NDA in wet AMD.

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On November 4, 2025, we announced that the SOL-R trial achieved its randomization target of 555 subjects. We continued to allow randomization of previously enrolled subjects that were still in the loading phase when we achieved target randomization to maintain our commitment to both patients and investigators. We have now completed randomization of the SOL-R trial with a total of 631 subjects randomized. Subject retention in the SOL-R trial remains high. Topline data for the SOL-R trial are expected to be available in the first quarter of 2027.

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The SOL-X Trial

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In April 2026, the first patient was enrolled in the SOL-X trial, a multi-center, open-label, long-term safety extension clinical trial to evaluate subjects who have completed their two-year safety follow-up visits in either the SOL-1 or SOL-R trial for an additional three years. The primary objectives of the SOL-X trial are to evaluate the long-term safety of AXPAXLI; to explore long-term visual outcomes, including visual acuity and the incidence and/or progression of fibrosis and macular atrophy; and to evaluate the impact of delayed initiation of AXPAXLI in patients who initially were randomized to receive aflibercept in either the SOL-1 or SOL-R trial. Subjects enrolled in the SOL-X trial will receive AXPAXLI 450 μg every 24 weeks and are to be evaluated at Week 4, Week 12, and every 12 weeks thereafter.

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Plans for Registration

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We plan to submit an NDA with the FDA for marketing approval of AXPAXLI for the treatment of wet AMD based on the Week 52 data from the SOL-1 trial, subject to ongoing formal discussions with the FDA. Because axitinib is FDA-approved for non-ophthalmic indications, we plan to leverage the 505(b)(2) NDA review pathway which has the potential to shorten the review timeline for AXPAXLI by up to two months compared to the traditional review pathway for new molecular entities. If approved, AXPAXLI would be the first tyrosine kinase inhibitor commercialized for the

treatment of wet AMD. AXPAXLI has the potential to receive a superiority label as compared to a single injection of anti-VEGF, with redosing potentially as infrequently, if approved, as every 12 months, based on the SOL-1 trial results. We will continue to conduct the SOL-R trial as planned, with topline data expected in the first quarter of 2027.

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AXPAXLI for Diabetic Eye Disease

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Diabetic Retinopathy Program Highlights

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In September 2025, we announced plans for two superiority registrational trials of AXPAXLI for the treatment of NPDR, which we refer to as the HELIOS-2 and HELIOS-3 trials. We plan to target a broad label in diabetic retinopathy, or DR, by including subjects with non-center-involved diabetic macular edema, or non-CI-DME.

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The potential HELIOS-2 trial and the ongoing HELIOS-3 trial are designed to leverage a novel ordinal primary endpoint of 2 or more steps on the diabetic retinopathy severity scale, or DRSS. Historically, DR trials have relied on binary endpoints measuring either an improvement of 2 or more steps in DRSS or the prevention of a 2 or more step DRSS worsening. The HELIOS program is the first time an ordinal endpoint is being used in a DR trial, which means the statistical analysis will measure changes across the DRSS spectrum, including disease improvement, stability, and worsening. These are all clinically meaningful measures for retina specialists in the context of a disease that gets progressively worse if untreated. The use of the novel ordinal endpoint means that every patient will contribute data to the statistical analysis, allowing for a smaller trial size to achieve statistically significant outcomes relative to the size required for a binary analysis. We believe the ordinal DRSS endpoint enables a higher probability of success with smaller, shorter, more relevant, and less expensive trials, relative to other potential endpoints.

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In August 2025, we received written agreement regarding the overall design of the HELIOS-2 clinical trial, including the proposed novel ordinal endpoint and statistical analysis plan, from the FDA under an SPA agreement.

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The HELIOS-3 Trial

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On November 24, 2025, we announced that the first subject in the HELIOS-3 trial was randomized. The ongoing HELIOS-3 trial is evaluating the safety and efficacy of AXPAXLI and is intended to randomize approximately 930 subjects with moderately severe to severe NPDR without center-involved diabetic macular edema, or CI-DME. The HELIOS-3 trial is a multi-center, double-masked, randomized (1:1:1), three-arm superiority trial comparing two dosing regimens of AXPAXLI 450 μg to a sham comparator.

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In February 2026, we amended the HELIOS-3 trial protocol to, among other things, extend the primary endpoint assessment from Week 52 to Week 56, update the subject assessment schedule to approximately every four weeks through Week 56 and every eight weeks thereafter through Week 96. The primary endpoint of the HELIOS-3 clinical trial is subjects' ordinal 2-step DRSS change status from baseline, comparing whether subjects have experienced at least a two-step improvement, at least a two-step worsening, or less than a two-step change in either direction, assessed at Week 56.

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Eligible subjects in the HELIOS-3 trial are randomized as follows: subjects in the first arm will receive a single injection of AXPAXLI 450 μg at Day 1 and will be re-dosed with AXPAXLI 450 μg at Weeks 24, 48 and 72; subjects in the second arm will receive a single injection of AXPAXLI 450 μg at Day 1 and Week 48, and a sham injection at Weeks 24, and 72; and subjects in the third arm will receive sham injections at Day 1, and Weeks 24, 48 and 72. Subjects will be assessed every four weeks through Week 56, and every eight weeks thereafter through Week 96. The study subjects and designated trial personnel will remain masked through the end of Week 96.

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The HELIOS-2 Trial

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Our potential second Phase 3 trial for the treatment of diabetic retinal disease, HELIOS-2, has not yet been initiated.

The HELIOS-2 trial is designed to evaluate the safety and efficacy of AXPAXLI in approximately 432 subjects with moderately severe to severe NPDR without CI-DME. This multi-center, double-masked, superiority trial is designed to randomize subjects (1:1), in parallel-groups comparing a single injection of AXPAXLI 450 μg to a single injection of ranibizumab 0.3 mg. We expect that this trial would also include subjects with non-CI-DME.

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According to the planned trial design, eligible subjects in the HELIOS-2 trial would be randomized to receive either a single dose of AXPAXLI 450 μg or a single dose of ranibizumab 0.3mg. At Week 52, all subjects would be re-dosed with their respective initial assigned study treatments at Day 1. Subjects would be assessed monthly through Year 1 and every other month thereafter for safety through the end of Year 2. Subjects and designated trial personnel would remain masked through the end of Year 2.

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The primary endpoint of the HELIOS-2 trial would be identical to the primary endpoint of the HELIOS-3 trial, subjects' ordinal 2-step DRSS change status from baseline, but would be assessed at Week 52.

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Commercial

Our net product revenue is generated from the sale of DEXTENZA to specialty distributors, or SDs, for resale to certain ambulatory surgery centers, or ASCs, certain hospital outpatient departments, or HOPDs, and certain physicians' offices, and from the direct sale by us to ASCs and physicians' offices, or Direct Sales.

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Our net product revenue was $10.8 million for the three months ended March 31, 2026, reflecting an increase of $0.2 million or 1.9% over the three months ended March 31, 2025, as unit growth was partially offset by increased year over year gross to net adjustments and increases in OID following a price increase implemented in the second quarter of 2025.

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Demand for DEXTENZA is determined by In-Market Sales, defined as unit sales from the SDs to ASCs, HOPDs, and physicians' offices, and Direct Sales. We recorded In-Market Sales of approximately 42,000 units in the three months ended March 31, 2026, an increase of approximately 2,000 units compared to the three months ended March 31, 2025. Differences between In-Market Sales figures and the number of units of DEXTENZA sold by us to SDs and through Direct Sales as included in net product revenue recognized in our unaudited condensed consolidated financial statements are attributable to distributor stocking patterns. For the remainder of 2026, we expect to see continued revenue growth from increased sales efforts directed toward HOPDs, partially offset by a slightly higher gross to net adjustments based on the increases in OID described above.

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Components of our Financial Performance

Revenue

We record DEXTENZA product sales net of applicable reserves for variable consideration, including off-invoice discounts, or OIDs, estimated chargebacks, rebates, distribution fees, product returns, and other incentives. Collectively, these discounts, allowances and other reserves are generally referred to as gross-to-net provisions, or GTN Provisions.

Operating Expenses

Cost of Product Revenue

Cost of product revenue consists primarily of costs of DEXTENZA product revenue, which include:

Research and Development Expenses

Research and development expenses consist primarily of costs incurred for the development of our product candidates, which include:

We expense research and development costs as incurred. We recognize external development costs based on an evaluation of the progress to completion of specific tasks using information provided to us by our vendors and our clinical investigative sites.

Our direct research and development expenses are tracked on a program-by-program basis and consist primarily of external costs, such as fees paid to investigators, consultants, central laboratories and CROs in connection with our clinical trials and regulatory fees. We do not allocate employee and contractor-related costs, costs associated with our proprietary bioresorbable hydrogel-based formulation technology ELUTYX, costs related to manufacturing or purchasing clinical trial materials, and facility expenses, including depreciation or other indirect costs, to specific product development programs because these costs are deployed across multiple product development programs and, as such, are not separately classified. We use internal resources in combination with third-party CROs, including clinical monitors and clinical research associates, to manage our clinical trials, monitor patient enrollment and perform data analysis for many of our clinical trials. These employees work across multiple development programs and, therefore, we do not track their costs by program.

The successful development and commercialization of our products or product candidates is highly uncertain. This is due to the numerous risks and uncertainties associated with product development and commercialization, including the uncertainty of:

Any changes in the outcome of any of these variables with respect to the development of our product candidates in clinical and preclinical development could mean a significant change in the costs and timing associated with the development of these product candidates. For example, if the FDA or another regulatory authority were to require us to conduct clinical trials or other testing beyond those that we currently expect 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 of that product candidate. We anticipate that our research and development expenses will increase in the future as we support our continued development of our product candidates.

Selling and Marketing Expenses

Selling and marketing expenses consist primarily of salaries and related costs, including stock-based compensation, for personnel in selling and marketing functions as well as consulting, advertising and promotion costs.

General and Administrative Expenses

General and administrative expenses consist primarily of salaries and related costs, including stock-based compensation, for personnel in executive, finance, information technology, human resources and administrative functions. General and administrative expenses also include insurance, facility-related costs and professional fees for legal, patent, consulting and accounting and audit services.

Other Income (Expense)

Interest Income. We earn interest income primarily from investments of our cash and cash equivalents in money market funds.

Interest Expense. Interest expense is incurred on our debt. In August 2023, we entered into a credit and security agreement, or the Barings Credit Agreement, with Barings Finance LLC, or Barings, as administrative agent, and the lenders party thereto, providing for a secured term loan facility, or the Barings Credit Facility, in the aggregate principal amount of $82.5 million. For the three months ended March 31, 2026 and 2025, our interest-bearing debt included the Barings Credit Facility ($82.5 million outstanding principal).

Change in Fair Value of Derivative Liabilities. In August 2023, in connection with entering into the Barings Credit Agreement, we identified an embedded derivative liability, which we were required to measure at fair value at inception and then are required to measure at the end of each reporting period until the embedded derivative is settled. The change in fair value of any derivative liabilities are recorded through the unaudited condensed consolidated statements of operations and comprehensive loss and are presented under the caption "change in fair value of derivative liabilities".

Results of Operations

Comparison of the Three Months Ended March 31, 2026 and 2025

The following table summarizes our results of operations for the three months ended March 31, 2026 and 2025:

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Product Revenue, net

Our product revenue, net, was $10.8 million and $10.6 million for the three months ended March 31, 2026 and 2025, respectively, reflecting an increase of $0.2 million year-over-year. All of our product revenue, net, was attributable to sales of DEXTENZA.

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Our total GTN Provisions for the three months ended March 31, 2026 and 2025 were 54.1% and 49.4%, respectively, of gross DEXTENZA product sales. We are required to estimate the expected GTN Provisions when we sell DEXTENZA to SDs, ASCs and physicians' offices and accrue for them at that time. We adjust the OID, a significant component of the GTN Provisions for DEXTENZA from time to time and typically on a quarterly basis as part of our overall pricing strategy. The actual OID amounts are generally determined at the time of resale by SDs or direct sales to ASCs or physicians' offices by us. Compared to the three months ended March 31, 2025, the GTN Provisions relative to gross DEXTENZA product sales increased during the three months ended March 31, 2026, primarily as a result of the changes in the OID. We expect that GTN Provisions relative to gross DEXTENZA product sales will remain at this increased level or may increase further, for the remainder of 2026 and beyond.

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Research and Development Expenses

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Research and development expenses were $66.2 million and $42.9 million for the three months ended March 31, 2026 and 2025, respectively, reflecting an increase of $23.4 million year-over-year. Within research and development expenses, expenses for clinical programs increased $17.7 million, unallocated expenses increased $5.7 million, and expenses for preclinical programs remained constant.

For the three months ended March 31, 2026, we incurred $43.2 million in direct research and development expenses for our products and product candidates compared to $25.5 million for the three months ended March 31, 2025. The increase of $17.7 million is related to timing and scale of our various clinical trials for our product candidates, including the progression of the SOL-1, SOL-R, SOL-X and HELIOS-3 clinical trials as well as a one-time cost and the disposal of fixed assets as we transitioned back to the two-piece injector used in the SOL-1 trial to support a potential NDA filing based on SOL-1 Week 52 data.

We expect that direct research and development expenses for our products and product candidates will continue to increase significantly for the remainder of 2026 and beyond as we prepare for the planned NDA submission for AXPAXLI for wet AMD, progress the SOL-R trial toward topline data expected in the first quarter of 2027, enroll additional patients in the SOL-X and HELIOS-3 trials; and perform increased registration-enabling manufacturing scale-up activities for AXPAXLI. We expect that personnel costs will continue to increase for the remainder of 2026 and beyond as we plan to hire additional personnel to support our planned clinical trials, NDA preparation activities, and pre-commercial manufacturing scale-up.

Selling and Marketing Expenses

Selling and marketing expenses were $16.6 million and $14.1 million for the three months ended March 31, 2026 and 2025, respectively, reflecting an increase of $2.5 million year-over-year.

The increase is due to an increase in personnel-related costs, including stock-based compensation, of $2.0 million, primarily reflecting the expansion of our pre-commercial team to prepare for a potential AXPAXLI wet AMD launch; an increase in professional fees of $0.1 million, including costs related to our corporate branding; and an increase in facility-related and other costs of $0.4 million with the associated headcount expansion.

We expect our selling and marketing expenses to increase for the remainder of 2026 and beyond as we continue to invest in additional AXPAXLI pre-launch activities and support ongoing DEXTENZA commercialization efforts.

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General and Administrative Expenses

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General and administrative expenses were $20.0 million and $16.3 million for the three months ended March 31, 2026 and 2025, respectively, reflecting an increase of $3.7 million year-over-year.

The increase was due to an increase in personnel-related costs, including stock-based compensation, of $2.6 million, an increase in facility-related and other costs of $0.2 million, and an increase in professional fees of $0.9 million.

We anticipate that our general and administrative expenses will increase for the remainder of 2026 and beyond, as we continue to further strengthen operations and processes that support our clinical trials of AXPAXLI, including the SOL-1 trial, the SOL-R trial, the SOL-X trial and the HELIOS-3 trial.

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Other Income (Expense), Net

Interest Income. Interest income was $6.1 million and $3.8 million for the three months ended March 31, 2026 and 2025, respectively, reflecting an increase of $2.3 million year-over-year. The increase is attributable primarily to a higher average balance of interest-generating cash and cash equivalents as a result of our October 2025 equity financing.

Interest Expense. Interest expense was $2.8 million and $3.0 million for the three months ended March 31, 2026 and 2025, respectively, reflecting a decrease of $0.2 million year-over-year.

Change in Fair Value of Derivative Liabilities. We recognized a net gain from the change in fair value of our derivative liability related to the Barings Credit Agreement of $1.5 million for the three months ended March 31, 2026. We recognized a net loss from the change in fair value of our derivative liability related to the Barings Credit Agreement of $1.0 million for the three months ended March 31, 2025. The net gain for the three months ended March 31, 2026 is comprised of a non-cash gain of $1.8 million from the change in the fair value of the derivative liability, partially offset by an expense of $0.4 million related to DEXTENZA royalty fees under the Barings Credit Agreement that we paid or accrued. The net loss for the three months ended March 31, 2025 is comprised of a non-cash loss of $0.6 million from the change in the fair value of the derivative liability and an expense of $0.4 million expense related to royalty fees under the Barings Credit Agreement that we paid or accrued. We cannot predict how the fair value of the derivative liability related to the Barings Credit Agreement will change in the remainder of 2026 and beyond.

Liquidity and Capital Resources

Sources of Liquidity

We have financed our operations primarily through private placements of our preferred stock, public offerings and private placements of our common stock and pre-funded warrants to purchase our common stock, borrowings under credit facilities, private placements of our convertible notes, and sales of our products.

As of March 31, 2026, we had cash and cash equivalents of $666.7 million, and outstanding notes payable with a principal amount of $82.5 million par value under the Barings Credit Facility.

In October 2025, we completed an underwritten offering of 37,909,018 shares of our common stock, resulting in net proceeds to us of $445.6 million after deducting underwriting discounts and commissions and other offering expenses.

In August 2021, we entered into an Open Market Sale Agreement, or the 2021 Sales Agreement, with Jefferies LLC, or Jefferies, under which we may offer and sell shares of our common stock from time to time through Jefferies, acting as agent. In November 2023, we filed a prospectus in connection with the 2021 Sales Agreement for the issuance and sale of common stock having an aggregate offering price of up to $100.0 million thereunder. In June 2025, we sold 11,548,364 shares of our common stock under the 2021 Sales Agreement, resulting in gross proceeds to us of $96.8 million and net proceeds, after accounting for issuance costs, of $94.0 million. We did not sell any shares of our common stock under the 2021 Sales Agreement for the three months ended March 31, 2026.

In February 2024, we sold 32,413,560 shares of our common stock at $7.52 per share and, in lieu of common stock to certain investors, pre-funded warrants to purchase up to an aggregate of 10,805,957 shares of our common stock at a price of $7.519 per pre-funded warrant for total net proceeds of approximately $316.4 million, after deducting placement agent fees and other offering expenses, in a private placement. Each pre-funded warrant that remains outstanding has an exercise price of $0.001 per share, is currently exercisable and will remain exercisable until exercised in full. During the three months ended March 31, 2026, pre-funded warrants to purchase 1,749,453 shares of our common stock were exercised via cashless exercise for 1,749,300 shares of our common stock. As of March 31, 2026, 5,818,592 pre-funded warrants remained outstanding.

In August 2023, we borrowed $82.5 million under the Barings Credit Facility and received proceeds of $77.3 million, after the application of an original issue discount and fees.

Funding Requirements

We have a history of incurring significant operating losses. Our net losses were $88.6 million for the three months ended March 31, 2026, and $265.9 million, $193.5 million, and $80.7 million for the years ended December 31, 2025, 2024 and 2023, respectively. As of March 31, 2026, we had an accumulated deficit of $1,245.6 million.

We expect to continue to incur losses in connection with our ongoing activities, particularly as we advance the clinical trials of our product candidates in development, specifically the SOL-1, SOL-R, SOL-X and HELIOS-3 trials; if and as we initiate new clinical trials, including the potential HELIOS-2 trial; and as we support the commercialization of DEXTENZA and the potential commercialization of AXPAXLI and our other product candidates, subject to receiving FDA approval.

We anticipate we will incur substantial expenses if and as we:

The amount and timing of these expenses determine our future capital requirements.

Based on our current operating plan, which includes estimates of anticipated cash inflows from DEXTENZA product sales and cash outflows from operating expenses and capital expenditures and reflects our observance of the minimum liquidity covenant of $20.0 million under the Barings Credit Agreement, we believe that our existing cash and cash equivalents as of March 31, 2026, will enable us to fund our planned operating expenses, debt service obligations and capital expenditure requirements into 2028. Although we believe our current and available cash resources are sufficient to fund the potential approval of AXPAXLI for the treatment of wet AMD by the FDA, additional funding will likely be required to support the commercialization of AXPAXLI, if approved. These estimates are subject to various assumptions, including assumptions as to the revenues and expenses associated with the commercialization of DEXTENZA, the pace of our research and clinical development programs, the timing of commencement of dosing and enrollment of our clinical trials, the progress of our manufacturing validation and scale-up and other aspects of our business. We have based our estimates on assumptions that may prove to be wrong, and we could use our capital resources sooner than we currently expect.

Our future capital requirements will depend on many factors, including:

Until such time, if ever, as we can generate product revenues sufficient to achieve profitability, we expect to finance our cash needs through equity offerings, debt financings, collaborations, strategic alliances, licensing arrangements, royalty agreements, and marketing and distribution arrangements. We do not have any committed external source of funds, although our license agreement with AffaMed provides for AffaMed's reimbursement of certain clinical expenses incurred by us in connection with our collaboration and for our potential receipt of development and sales milestone payments and royalty payments. To the extent that we raise additional capital through the sale of equity, preferred equity or convertible debt securities, our securityholders' ownership interests will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect our existing securityholders' rights as holders or beneficial owners of our common stock. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. The covenants under the Barings Credit Facility and our pledge of our assets as collateral to secure our obligations under the Barings Credit Facility pursuant to which we have a total borrowing capacity of $82.5 million, which has been fully drawn down, may limit our ability to obtain additional debt or other financing. If we raise additional funds through collaborations, strategic alliances, licensing arrangements, royalty agreements or marketing and distribution arrangements, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs, products or product candidates or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings or other arrangements when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market products or product candidates that we would otherwise prefer to develop and market ourselves.

Cash Flows

The following table summarizes our sources and uses of cash for each of the periods presented:

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Operating activities. Net cash used in operating activities was $66.0 million for the three months ended March 31, 2026, primarily resulting from our net loss of $88.6 million, partially offset by non-cash adjustments of $21.7 million and net favorable changes in operating assets and liabilities of $1.0 million. Our net loss was attributed to operating expenses of $104.1 million, which we incurred for research and development activities, selling and marketing activities, general and administrative activities, and cost of product revenue, and net non-operating income of $4.7 million, partially offset by $10.8 million of net revenue. Non-cash adjustments primarily include stock-based compensation expense of $15.6 million, non-cash interest expense of $1.4 million, depreciation and amortization expense of $1.3 million, loss on disposal of equipment of $4.9 million, and a net non-cash gain related to changes in the fair value of our derivative liability of $1.5 million. Net cash provided by net favorable changes in our operating assets and liabilities during the three months ended March 31, 2026 consisted primarily of increases of prepaid expenses and other current assets of $0.4 million, decreases of accounts receivable, net, of $6.3 million, resulting primarily from decreased sales of DEXTENZA, and decreases of accrued expenses of $8.4 million, resulting primarily from the payout of accrued bonus compensation in the first quarter of 2026, partially offset by other changes, net, of $3.5 million.

Net cash used in operating activities was $44.7 million for the three months ended March 31, 2025, primarily resulting from our net loss of $64.1 million, partially offset by non-cash adjustments of $13.9 million and net favorable changes in operating assets and liabilities of $5.5 million. Our net loss was primarily attributed to operating expenses of $74.6 million, which we incurred primarily for research and development activities, selling and marketing activities, and general and administrative activities, partially offset by $10.7 million of revenue. Non-cash adjustments primarily

include stock-based compensation expense of $10.5 million, non-cash interest expense of $1.4 million, depreciation and amortization expense of $1.0 million, and a net non-cash loss related to changes in the fair value of our derivative liability of $1.0 million. Net cash provided by net favorable changes in our operating assets and liabilities during the three months ended March 31, 2025 consisted primarily of decreases of accounts receivable of $7.2 million, resulting primarily from decreased sales of DEXTENZA, and decreases of prepaid expenses and other current assets of $3.9 million, resulting predominantly from our clinical development activities, partially offset by decreases in accrued expenses of $5.1 million, resulting predominantly from our clinical development activities, and other changes, net, of $0.4 million.

Investing activities. Net cash used in investing activities was $4.7 million for the three months ended March 31, 2026, consisting of cash used to purchase property and equipment and leasehold improvements. Net cash used in investing activities was $1.9 million for the three months ended March 31, 2025, consisting of cash used to purchase property and equipment, primarily consisting of leasehold improvements.

Financing activities. Net cash provided by financing activities for the three months ended March 31, 2026 was $0.3 million and consisted of total net proceeds from the exercise of stock options. Net cash provided by financing activities for the three months ended March 31, 2025 was $4.2 million and consisted of total net proceeds from the exercise of stock options.

Contractual Obligations and Commitments

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The table above includes our enforceable and legally binding obligations and future commitments at March 31, 2026, as well as obligations related to contracts that we are likely to continue, regardless of the fact that they may be cancelable at March 31, 2026. Some of the figures that we include in this table are based on management's estimates and assumptions about these obligations, including their duration, and other factors. Because these estimates and assumptions are necessarily subjective, the amounts we will actually pay in future periods may vary from those reflected in the table.

We enter into contracts in the normal course of business to assist in the performance of our research and development activities, including agreements with clinical research organizations regarding the SOL-1 trial, the SOL-R trial, the SOL-X trial, and the HELIOS-3 trial, and other services and products for operating purposes. These contracts generally provide for termination on notice and therefore are cancelable contracts which are not included in contractual obligations and commitments.

Operating lease commitments represent payments due under our leases of office, laboratory and manufacturing space in Bedford, Massachusetts, which expire in July 2027, July 2028, and March 2031, and leases of equipment that expire between 2026 and 2028.

In January 2026, we entered into a sublease for office space at 14 Crosby Drive in Bedford, Massachusetts, which now serves as our corporate headquarters. The sublease expires March 30, 2031. We are obligated to pay monthly fixed rent commencing March 1, 2026, following a two-month rent-free period, at rates subject to annual escalation over the lease term, in addition to our proportionate share of operating cost and real estate tax increases above a 2026 base year and all utilities for the subleased premises. Aggregate undiscounted fixed rent payments remaining under this sublease as of March 31, 2026 are approximately $3.3 million.

The commitments under the Barings Credit Agreement represent repayment of principal only. Future payments of interest under the Barings Credit Agreement depend on the level of the Secured Overnight Financing Rate, or SOFR, and future payments of royalty fees depend on our future revenue from DEXTENZA, both of which cannot be estimated at this time.

We have in-licensed a significant portion of our intellectual property from Incept, LLC, or Incept, an intellectual property holding company, under an amended and restated license agreement, or the License Agreement, that we entered into with Incept in January 2012, which was most recently amended in September 2018. We are obligated to pay Incept a royalty equal to a low-single-digit percentage of net sales made by us or our affiliates of any products, devices, materials, or components thereof, or the Licensed Products, including or covered by Original IP (as defined in the License Agreement), excluding the Shape-Changing IP (as defined in the License Agreement), in the Ophthalmic Field of Use (as defined in the License Agreement). We are obligated to pay Incept a royalty equal to a mid-single-digit percentage of net sales made by us or our affiliates of any Licensed Products including or covered by Original IP, excluding the Shape-Changing IP, in the Additional Field of Use (as defined in the License Agreement). We are obligated to pay Incept a royalty equal to a low-single-digit percentage of net sales made by us or our affiliates of any Licensed Products including or covered by Incept IP (as defined in the License Agreement) or Joint IP (as defined in the License Agreement) in the field of drug delivery. Any sublicensee of ours also will be obligated to pay Incept a royalty on net sales of Licensed Products made by it and will be bound by the terms of the agreement to the same extent as we are. We are obligated to reimburse Incept for our share of the reasonable fees and costs incurred by Incept in connection with the prosecution of the patent applications licensed to us under the agreement. Our share of these fees and costs is equal to the total amount of such fees and costs divided by the total number of Incept's exclusive licensees of the patent application. We have not included in the table above any payments to Incept under this license agreement as the amount, timing and likelihood of such payments are not known.

Off-Balance Sheet Arrangements

We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations of the Securities and Exchange Commission, such relationships with unconsolidated entities or financial partnerships, which are often referred to as structured finance or special purpose entities, established for the purpose of facilitating financing transactions that are not required to be reflected on our balance sheets.

Critical Accounting Policies and Significant Judgments and Estimates

Our unaudited condensed consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America.

We define our critical accounting policies as those accounting policies that require us to make subjective estimates and judgments about matters that are uncertain and have had or are likely to have a material impact on our financial condition and results of operations, as well as the specific manner in which we apply those policies. Our critical accounting policies, which relate to revenue recognition and our derivative liabilities, are described under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Policies and Significant Judgments and Estimates" in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 5, 2026.

The preparation of our unaudited condensed consolidated financial statements and related disclosures requires us to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, revenue, costs and expenses, and the disclosure of contingent assets and liabilities in our consolidated financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to revenue recognition, accrued research and development expenses and stock-based compensation. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Recently Issued Accounting Pronouncements

Information regarding new accounting pronouncements is included in Note 2 - Summary of Significant Accounting Policies to the current period's unaudited condensed consolidated financial statements.

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