Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

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, is our investigational, bioresorbable, intravitreal hydrogel incorporating axitinib, a small molecule, multi-target, tyrosine kinase inhibitor with anti-angiogenic properties. AXPAXLI is based on our proprietary ELUTYX hydrogel-based formulation technology. 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.

​

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.

​

Key Business and Financial Developments

AXPAXLI for Wet AMD

The SOL-1 Trial

​

The SOL-1 trial is a prospective, multi-center, double-masked, randomized (1:1), parallel-group, two-arm superiority trial to assess the safety and efficacy of a single injection of AXPAXLI with a drug load of 450 µg of axitinib, or AXPAXLI 450 µg, compared with a single injection of aflibercept 2 mg, in subjects with wet AMD up to Week 52 and repeat-dosing thereafter. We are conducting the SOL-1 trial in accordance with a special protocol assessment, or SPA, agreement with the FDA.

​

The SOL-1 trial involves more than 100 trial sites located in the United States and Argentina. The primary endpoint of the SOL-1 trial is the proportion of subjects who maintained visual acuity at Week 36. One of the key secondary endpoints is the proportion of subjects who maintained visual acuity measured at Week 52. Subjects who were successfully randomized are assessed every month and will receive a supplemental dose of aflibercept 2 mg as needed based on pre-specified criteria. At Weeks 52 and 76, all subjects, including subjects who previously received supplemental rescue treatment, were re-dosed with their respective initial treatment of either a single injection of AXPAXLI 450 μg in the investigational arm or a single injection of aflibercept 2 mg in the control arm. In accordance with the trial design, subjects will be followed for safety, and subjects and designated trial personnel will remain masked, through Week 104.

​

In February 2026, we announced positive topline Week 52 results for the SOL-1 trial. AXPAXLI met its primary endpoint with statistical significance. The proportion of subjects who maintained visual acuity, defined as a loss of fewer than 15 Early Treatment of Diabetic Retinopathy Study, or 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.

​

AXPAXLI also met a pre-specified key secondary 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%.

​

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 points. The observed differences were 8.5%, 18.3%, and 21.1% in favor of the AXPAXLI arm at Weeks 24, 36, and 52, respectively.

​

Plans for Registration

​

We anticipate submitting a new drug application, or NDA, to the FDA for marketing approval of AXPAXLI for the treatment of wet AMD during the fourth quarter of 2026. We held a Type C meeting in May 2026 and a pre-NDA meeting in September 2026 with the FDA to review our plans to submit our NDA and our expectations for the NDA submission package. The NDA is expected to include the Week 52 efficacy and safety data from the SOL-1 trial, together with interim Week 52 safety data for a subset of subjects in the SOL-R trial and confirmatory evidence. To provide safety information for a minimum of 300 subjects in the aggregate with at least one year of treatment with AXPAXLI in accordance with FDA guidance and to supplement the 170 subjects who received AXPAXLI in the SOL-1 trial, we plan to conduct an interim safety analysis of the SOL-R trial during the fourth quarter of 2026 assessing all subjects who have completed the Week 52 time point at the time of analysis. SOL-R efficacy data is not part of our planned NDA submission.

​

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 as 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.

​

The SOL-R Trial

​

We are also conducting the SOL-R trial, a repeat-dosing 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 who 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 Best Corrected Visual Acuity, or BCVA, of at least 34 ETDRS letters (approximately 20/200 Snellen equivalent vision).

​

Over the six-month screening and lead-in period prior to Baseline (Day 1) randomization, enrolled subjects were given three screening doses of any anti-vascular endothelial growth factor, or anti-VEGF, therapy, excluding brolucizumab-dbll, and two monthly loading doses of aflibercept 2 mg prior to Day 1, and monitored to exclude subjects demonstrating early persistent fluid or significant retinal fluid fluctuations. Subjects maintaining a central subfield thickness, or 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, received these loading doses at Weeks -8 and -4 prior to randomization on Day 1.

​

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, similar to subjects in the AXPAXLI arm. Subjects will be followed for safety until Week 96. Trial subjects and designated trial personnel will remain masked through the end of Week 96.

​

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 40. The third arm (aflibercept 8 mg) of the SOL-R trial is not part of the non-inferiority analysis at Week 40. 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.

​

During the third quarter of 2026, we amended the SOL-R trial protocol to change the timing of the primary efficacy endpoint from Week 56 to Week 40. We decided to move the primary endpoint to Week 40 to preserve the integrity of the ongoing masked trial by ensuring all subjects will have passed the new primary endpoint visit and that the primary efficacy database will be complete before the planned interim Week 52 safety analysis takes place. Using Week 40 as the primary endpoint is consistent with the FDA's 2023 Neovascular AMD Draft Guidance minimum 36-week recommendation.

​

At the same time, we also amended the protocol to add two key secondary endpoints and extend sponsor masking through Week 96 to permit evaluation of a new Week 96 key secondary endpoint on a masked basis. We initiated this process in May 2026 and subsequently finalized the protocol amendment and submitted it for review by the relevant institutional review boards in July 2026 and then to the FDA in early August 2026, allowing time for FDA questions or feedback prior to implementation. As of the date of this report, the FDA has not raised any questions regarding the protocol amendment, the revised primary endpoint timing or the new key secondary endpoints.

​

The first new key secondary endpoint will evaluate the superiority of AXPAXLI to aflibercept (8 mg), each dosed every 24 weeks, based on the proportion of subjects receiving any supplemental injection prior to Week 96. This new key secondary endpoint was added to align as closely as possible with the aflibercept (8 mg) Year 2 approved dosing interval, which was recently expanded to up to every five months after one year of treatment. To further assess differentiation from aflibercept (2 mg), dosed every eight weeks in the SOL-R trial, we also intend to evaluate the prevention of fibrosis and atrophy through secondary endpoints at Week 96 with the goal of expanding a potential AXPAXLI label in the future. We expect that this new key secondary superiority endpoint and the secondary fibrosis and atrophy endpoints have the potential to establish AXPAXLI as a best-in-disease agent for wet AMD and to further support our efforts to obtain broad global regulatory approvals and adoption of AXPAXLI if approved. The second key secondary endpoint will assess non-inferiority in mean change in BCVA from baseline at Week 56, which was previously the primary endpoint.

​

In November 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 subjects and investigators. We have subsequently completed randomization of the SOL-R trial with a total of 640 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 2028.

​

As discussed above under "Plans for Registration", we plan to conduct an interim safety analysis of the SOL-R trial in the fourth quarter of 2026 to provide Week 52 safety data on subjects dosed with AXPAXLI in the trial in support of our NDA for AXPAXLI for the treatment of wet AMD. All data other than safety data for the interim analysis population will remain masked following the interim analysis, and SOL-R will incur a 0.0001 alpha penalty in connection with its primary endpoint analysis as a result of conducting the interim safety analysis.

​

The SOL-X Trial

​

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. To date, the vast majority of eligible subjects in the SOL-1 and SOL-R trials have elected to participate in the SOL-X trial. 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. Under the original protocol, subjects enrolled in the SOL-X trial received AXPAXLI 450 μg every 24 weeks and are evaluated at Week 4, Week 12, and every 12 weeks thereafter. Based on the durability of AXPAXLI observed in the SOL-1 trial we plan to amend the SOL-X trial protocol to change the dosing interval to every 48 weeks, which we believe may more closely reflect potential real-world dosing of AXPAXLI, if approved.

​

AXPAXLI for Diabetic Eye Disease

​

Diabetic Retinopathy Program Highlights

​

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.

​

In August 2025, we received written agreement regarding the overall design of the HELIOS-2 clinical trial, including a proposed novel ordinal endpoint and statistical analysis plan, from the FDA under an SPA agreement. The SPA agreement for HELIOS-2 informed our design of the HELIOS-3 trial, as both trials were designed to use the same ordinal endpoint.

​

We have now streamlined our diabetic retinopathy, or DR, program to prioritize a single global registrational superiority study, the HELIOS-3 trial. Based on the strength of the SOL-1 trial data and prior data from our Phase 1 clinical trial of AXPAXLI for the treatment of NPDR (HELIOS-1), along with emerging market research indicating a strong physician preference for a once-yearly treatment paradigm in DR, we are advancing the HELIOS-3 trial as a superiority trial evaluating AXPAXLI dosed every 12 months versus sham. We expect this focused approach will preserve our ability to achieve global regulatory objectives and maximize the commercial opportunity for AXPAXLI in DR. The trial is intended to support a broad DR label, including patients with non-center-involved diabetic macular edema.

​

The HELIOS-3 Trial

​

In November 2025, we announced that the first subject in the HELIOS-3 trial was randomized. As initially designed, the HELIOS-3 trial was intended to randomize approximately 930 subjects with moderately severe to severe NPDR without center-involved diabetic macular edema and was designed to be 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. In June 2026, we amended the HELIOS-3 trial to eliminate the arm dosing AXPAXLI every 24 weeks and reduce the overall number of subjects intended for enrollment to approximately 620 subjects.

​

In the HELIOS-3 trial, NPDR subjects receive either AXPAXLI or a sham injection at Day 1 and again at Week 48 as determined by the treatment arm to which they were randomized. The primary endpoint is an ordinal 2-step change status in diabetic retinopathy severity scale, or DRSS, from baseline at Week 56. 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.

​

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.

​

Our net product revenue was $12.9 million for the three months ended September 30, 2026, reflecting a decrease of $1.6 million or 11.0% as compared to the three months ended September 30, 2025. Our net product revenue was $37.1 million for the nine months ended September 30, 2026, reflecting a decrease of $1.4 million or 3.9% as compared to the nine months ended September 30, 2025, as unit growth was offset by increased year-over-year gross to net adjustments including increases in off-invoice discounts, or OIDs, following a price increase implemented in the second quarter of 2025.

​

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. In-Market Sales were approximately 49,000 units in the three months ended

September 30, 2026, a decrease of approximately 1,000 units compared to the three months ended June 30, 2026. 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 and beyond, we expect unit sales volume to grow at an incremental rate as compared to prior quarters in 2026 with a stabilization in our gross-to-net provisions, or GTN Provisions.

​

Components of our Financial Performance

Revenue

We record DEXTENZA product sales net of applicable reserves for variable consideration, including OIDs, estimated chargebacks, rebates, distribution fees, product returns, and other incentives. Collectively, these discounts, allowances and other reserves are generally referred to as 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 and nine months ended September 30, 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 September 30, 2026 and 2025

The following table summarizes our results of operations for the three months ended September 30, 2026 and 2025:

​

Product Revenue, net

Our product revenue, net, was $12.9 million and $14.5 million for the three months ended September 30, 2026 and 2025, respectively, reflecting a decrease of $1.6 million year-over-year. All of our product revenue, net, was attributable to sales of DEXTENZA.

​

Our total GTN Provisions for the three months ended September 30, 2026 and 2025 were 57.7% and 52.5%, 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 September 30, 2025, the GTN Provisions relative to gross DEXTENZA product sales increased during the three months ended September 30, 2026, primarily as a result of the changes in the OID. We expect that GTN Provisions relative to gross DEXTENZA product sales will remain relatively stable for the remainder of 2026 and beyond.

​

Collaboration Revenue

​

We did not recognize any collaboration revenue during the three months ended September 30, 2026 and 2025.

​

Research and Development Expenses

​

The following table summarizes research and development expenses for the three months ended September 30, 2026 and 2025:

​

Research and development expenses were $74.8 million and $52.4 million for the three months ended September 30, 2026 and 2025, respectively, reflecting an increase of $22.4 million year-over-year.

Within research and development expenses, our expenses for clinical programs increased by $13.5 million as enrollment in our HELIOS-3 diabetic retinopathy study and SOL-X long-term extension study for wet AMD began to ramp up in the third quarter of 2026, and unallocated expenses increased $9.0 million in support of expanded clinical trial activity.

For the three months ended September 30, 2026, we incurred $49.4 million in direct research and development expenses for our products and product candidates compared to $35.9 million for the three months ended September 30, 2025. The increase of $13.5 million is related primarily to increased activities for AXPAXLI clinical trials.

We expect that direct research and development expenses for our products and product candidates will increase 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 2028, 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, planned NDA preparation activities, and pre-commercial manufacturing scale-up.

Selling and Marketing Expenses

The following table summarizes our selling and marketing expenses for the three months ended September 30, 2026 and 2025:

​

Selling and marketing expenses were $15.7 million and $13.1 million for the three months ended September 30, 2026 and 2025, respectively, reflecting an increase of $2.6 million year-over-year.

The increase is due to an increase in personnel-related costs, including stock-based compensation, of $1.3 million, primarily reflecting the expansion of our pre-commercial team to prepare for a potential AXPAXLI wet AMD launch, and an increase in professional fees of $1.3 million, including costs related to our corporate branding and launch planning, partially offset by a slight decrease in facility-related and other costs.

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

​

General and Administrative Expenses

​

The following table summarizes our general and administrative expenses for the three months ended September 30, 2026 and 2025:

​

General and administrative expenses were $18.8 million and $16.0 million for the three months ended September 30, 2026 and 2025, respectively, reflecting an increase of $2.8 million year-over-year.

The increase was due to an increase in personnel-related costs, including stock-based compensation, of $1.1 million, an increase in professional fees of $1.2 million, and an increase in facility-related and other costs of $0.5 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.

Other Income (Expense), Net

Interest Income. Interest income was $5.0 million and $3.7 million for the three months ended September 30, 2026 and 2025, respectively, reflecting an increase of $1.3 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 September 30, 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 $0.9 million for the three months ended September 30, 2026. We recognized a net loss from the change in fair value of our derivative liability related to the Barings Credit Agreement of $1.4 million for the three months ended September 30, 2025.

The net gain for the three months ended September 30, 2026 is comprised of a non-cash gain of $1.4 million from the change in the fair value of the derivative liability, partially offset by an expense of $0.5 million related to DEXTENZA royalty fees under the Barings Credit Agreement that we paid or accrued.

The net loss for the three months ended September 30, 2025 is comprised of a non-cash loss of $0.9 million from the change in the fair value of the derivative liability and an expense of $0.5 million 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.

Comparison of the Nine Months Ended September 30, 2026 and 2025

The following table summarizes our results of operations for the nine months ended September 30, 2026 and 2025:

​

Product Revenue, net

​

Our product revenue, net was $37.1 million and $38.6 million for the nine months ended September 30, 2026 and 2025, respectively, reflecting a decrease of $1.4 million year-over-year. All of our product revenue, net, was attributable to sales of DEXTENZA.

​

Our total GTN Provisions for the nine months ended September 30, 2026 and 2025 were 55.7% and 51.4%, respectively, of gross DEXTENZA product sales. Compared to the nine months ended September 30, 2025, the GTN Provisions relative to gross DEXTENZA product sales increased during the nine months ended September 30, 2026, primarily as a result of the changes in the OID. We expect that GTN Provisions relative to gross DEXTENZA product sales will remain relatively stable for the remainder of 2026 and beyond.

​

Collaboration Revenue

​

We did not recognize any collaboration revenue during the nine months ended September 30, 2026. Our collaboration revenue was $0.1 million for the nine months ended September 30, 2025. All of our collaboration revenue was attributable to the performance obligation under our license agreement with AffaMed to conduct a Phase 2 clinical trial of OTX-TIC. We do not expect to recognize additional collaboration revenue for the remainder of 2026, as we have fully satisfied this performance obligation.

​

Research and Development Expenses

​

The following table summarizes our research and development expenses for the nine months ended September 30, 2026 and 2025:

​

Research and development expenses were $195.1 million and $146.3 million for the nine months ended September 30, 2026 and 2025, respectively, reflecting an increase of $48.8 million year-over-year.

Within research and development expenses, expenses for clinical programs increased $25.9 million, unallocated expenses increased $23.0 million, and expenses for preclinical programs were not material.

For the nine months ended September 30, 2026, we incurred $122.1 million in direct research and development expenses for our products and product candidates compared to $96.2 million for the nine months ended September 30, 2025. The increase of $25.9 million is primarily related to increases in activities related to AXPAXLI clinical trials and a $4.9 million cost for 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, offset by costs related to timing and conduct of our ongoing programs and clinical trials for our product candidates.

We expect that direct research and development expenses for our products and product candidates will continue to increase 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 2028, 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, planned NDA preparation activities, and pre-commercial manufacturing scale-up.

Selling and Marketing Expenses

The following table summarizes our selling and marketing expenses for the nine months ended September 30, 2026 and 2025:

​

Selling and marketing expenses were $49.5 million and $41.0 million for the nine months ended September 30, 2026 and 2025, respectively, reflecting an increase of $8.5 million year-over-year.

​

The increase was primarily due to an increase in personnel-related costs, including stock-based compensation, of $6.3 million, and costs related to the expansion of our marketing team for AXPAXLI; an increase in professional fees of $1.7 million, including costs related to our corporate branding and launch planning; and an increase in facility-related and other costs of $0.5 million.

​

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

​

General and Administrative Expenses

​

The following table summarizes our general and administrative expenses for the nine months ended September 30, 2026 and 2025:

​

General and administrative expenses were $61.0 million and $46.7 million for the nine months ended September 30, 2026 and 2025, respectively, reflecting an increase of $14.3 million year-over-year.

The increase was primarily due to an increase in personnel-related costs, including stock-based compensation, of $7.8 million; an increase in professional fees of $4.6 million; and an increase in facility-related and other costs of $1.9 million. Personnel-related costs, including stock-based compensation, for the nine months ended September 30, 2025 include $1.5 million related to acceleration of stock-based compensation for former executives.

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.

Other Income (Expense), Net

Interest Income. Interest income was $16.5 million and $11.0 million for the nine months ended September 30, 2026 and 2025, respectively, reflecting an increase of $5.5 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 $8.4 million and $9.0 million for the nine months ended September 30, 2026 and 2025, respectively, reflecting a decrease of $0.6 million year-over-year.

Change in Fair Value of Derivative Liabilities. We recognized a net gain from the change in fair values of our derivative liabilities of $3.1 million for the nine months ended September 30, 2026. The net gain is comprised of a gain of $4.4 million from the change in the fair value of the derivative liability related to the Barings Credit Agreement and an expense of $1.3 million related to royalty fees under the Barings Credit Agreement that we paid or accrued.

We recognized a net loss from the change in fair values of our derivative liabilities of $3.1 million for the nine months ended September 30, 2025. The net loss for the nine months ended September 30, 2025 is comprised of a non-cash loss of $1.7 million from the change in the fair value of the derivative liability related to the Barings Credit Agreement and an expense of $1.4 million 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 September 30, 2026, we had cash and cash equivalents of $530.6 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. The offering of securities under the registration statement pursuant to which the prospectus was filed was terminated in September 2025. We did not sell any shares of our common stock under the 2021 Sales Agreement during the nine months ended September 30, 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 nine months ended September 30, 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 September 30, 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 $262.2 million for the nine months ended September 30, 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 September 30, 2026, we had an accumulated deficit of $1,419.2 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; 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 September 30, 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 FDA approval and launch of AXPAXLI for the treatment of wet AMD, additional funding will likely be required to scale our manufacturing capacity and commercial team, if AXPAXLI is 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:

​

Operating activities. Net cash used in operating activities was $198.9 million for the nine months ended September 30, 2026, primarily resulting from our net loss of $262.2 million, partially offset by non-cash adjustments of $55.3 million and net favorable changes in operating assets and liabilities of $8.0 million. Our net loss was attributed to operating expenses of $310.4 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 $11.2 million, partially offset by $37.1 million of net revenue. Non-cash adjustments primarily include stock-based compensation expense of $45.3 million, non-cash interest expense of $2.6 million, depreciation and amortization expense of $5.6 million, loss on disposal of equipment of $4.9 million, offset, in part, by a net non-cash gain related to changes in the fair value of our derivative liability of $3.1 million. Net favorable changes in our operating assets and liabilities during the nine months ended September 30, 2026 consisted primarily of an increase in accrued expenses of $8.3 million, a decrease of prepaid expenses and other current assets of $2.5 million, an increase of accounts payable of $2.3 million, each of which were predominantly impacted from our clinical development and research activities. These amounts were partially offset by an increase of other changes, net, of $5.1 million.

Net cash used in operating activities was $150.6 million for the nine months ended September 30, 2025, primarily resulting from our net loss of $201.3 million, partially offset by non-cash adjustments of $40.8 million and net favorable changes in operating assets and liabilities of $9.8 million. Our net loss was attributed to operating expenses of $239.0 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 expenses of $1.0 million, partially offset by $38.7 million of net revenue. Non-cash adjustments primarily include stock-based compensation expense of $31.8 million, non-cash interest expense of $2.9 million, depreciation and amortization expense of $3.1 million, and a net non-cash loss related to changes in the fair value of our derivative liability of $3.1 million. Net cash provided by net favorable changes in our operating assets and liabilities during the nine months ended September 30, 2025 consisted primarily of decreases of prepaid expenses and other current assets of $5.5 million, decreases of accounts receivable, net, of $1.6 million, resulting primarily from decreased sales of DEXTENZA, and increases of accrued expenses of $3.1 million, resulting primarily from our clinical development activities, partially offset by other changes, net, of $0.4 million.

Investing activities. Net cash used in investing activities was $11.1 million for the nine months ended September 30, 2026, consisting of cash used to purchase property and equipment and leasehold improvements. Net cash used in investing activities was $9.0 million for the nine months ended September 30, 2025, consisting of cash used to purchase property and equipment and leasehold improvements of $9.2 million, partially offset by $0.1 million cash received from the sale of obsolete items of property and equipment.

Financing activities. Net cash provided by financing activities for the nine months ended September 30, 2026 was $3.5 million and consisted of proceeds from the exercise of stock options of $2.6 million and proceeds from issuing shares under our Employee Stock Purchase Plan, or ESPP, of $0.9 million. Net cash provided by financing activities for the nine months ended September 30, 2025 was $112.3 million and consisted of total net proceeds from the issuance of common stock under the 2021 Sales Agreement of $94.0 million, proceeds from the exercise of stock options of $17.6 million, and proceeds from issuing shares under our ESPP of $0.7 million.

Contractual Obligations and Commitments

​

The table above includes our enforceable and legally binding obligations and future commitments at September 30, 2026, as well as obligations related to contracts that we are likely to continue, regardless of the fact that they may be cancelable at September 30, 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 September 30, 2026, are approximately $3.0 million.

In August 2026, we entered into a first amendment, or the First Amendment, to our existing sublease at 14 Crosby Drive, pursuant to which we agreed to lease an additional 8,600 square feet of office space through March 30, 2031. The commencement date for the First Amendment occurred on August 7, 2026. Aggregate undiscounted fixed rent payments remaining under the First Amendment as of September 30, 2026, are approximately $1.0 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 as 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.

​