Quarterly Report for Quarter Ending September 30, 2025 (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, 2024, filed with the SEC on March 3, 2025. 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, 2024 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 product candidate for retinal disease, is an axitinib intravitreal hydrogel based on our ELUTYX proprietary bioresorbable hydrogel-based formulation technology. AXPAXLI is currently in Phase 3 clinical trials for wet age-related macular degeneration, or wet AMD, with a Phase 3 clinical program for non-proliferative diabetic retinopathy, or NPDR, planned to be initiated imminently.

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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 investigational 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 currently 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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We are currently conducting 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. The SOL-1 trial completed the randomization of 344 subjects with a diagnosis of active macular choroidal neovascularization at screening in December 2024. 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 screening, enrolled subjects received two aflibercept 2 mg loading doses at Weeks -8 and -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 after these injections were randomized in the trial.

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The primary endpoint of the SOL-1 trial is the proportion of subjects who maintain visual acuity, defined as a loss of fewer than 15 ETDRS letters from baseline, at Week 36. One of the secondary endpoints being evaluated is the proportion of subjects who maintain 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 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. Subjects will be followed for safety until the end of Year 2.

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Retention in the trial continues to be outstanding, with greater than 95% of randomized subjects remaining on-trial to date, and rescues reviewed under masking shows greater than 95% of rescue events to date have met pre-established protocol-defined criteria. 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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We are conducting the SOL-1 trial in accordance with a special protocol assessment, or SPA, agreement with the FDA. We continue to expect topline results for the SOL-1 trial to be available in the first quarter of 2026 after the completion of the Week 52 visits for all subjects in the trial.

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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 and is intended to randomize approximately 555 subjects that are either treatment naïve or have been diagnosed with wet AMD in the study eye within about four months prior to enrollment. To qualify for screening in the SOL-R trial, a subject's study eye must have a BCVA of at least 34 ETDRS letters (approximately 20/200 Snellen equivalent vision).

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Over the six months prior to randomization, enrolled subjects are given three screening 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 from their lowest CSFT at any prior visit then receive two loading doses of aflibercept 2 mg at Weeks -8 and -4 prior to randomization.

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Subjects in the first arm of the SOL-R trial receive a single dose of AXPAXLI 450 μg at Day 1 and are re-dosed at Weeks 24, 48, and 72. Subjects in the second arm receive aflibercept 2 mg on-label every eight weeks. Subjects in the third arm receive a single dose of aflibercept 8 mg at Day 1 and are re-dosed at Weeks 24, 48, and 72.

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The primary endpoint of SOL-R 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 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 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 has achieved its randomization target of 555 subjects. We will continue to allow randomization of previously enrolled subjects currently in the loading phase of the trial to maintain our commitment to both patients and investigators, with topline data remaining on track for the first half of 2027.

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The SOL-X Trial

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We plan to initiate a long-term, multi-center, open-label extension clinical trial, which we refer to as the SOL-X trial, to evaluate subjects who have completed their two-year safety follow-up visits in either the SOL-1 or SOL-R trials for an additional three years. The primary objectives of the planned 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 SOL-1 or SOL-R. According to the planned trial design, subjects enrolled in

the SOL-X trial are to 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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Next Steps

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If we obtain favorable results from the SOL-1 trial and the SOL-R trial, we plan to submit an NDA with the FDA for marketing approval of AXPAXLI for the treatment of wet AMD. 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 two months compared to the traditional review pathway for new molecular entities. If approved, we believe AXPAXLI has the potential to be the first product for wet AMD with a superiority label as compared to a single injection of anti-VEGF based on the SOL-1 trial, with redosing potentially as infrequently as every 12 months.

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AXPAXLI for Diabetic Eye Disease

Diabetic Eye Disease

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Diabetic eye disease is an increasingly prevalent global health concern, driven by the rapidly rising number of individuals diagnosed with diabetes each year.

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Diabetic retinopathy, or DR, is the most common category of retinal diseases, affecting over an estimated 103 million people worldwide. DR is a progressive condition in which retinal blood vessels are damaged following a cascade of events triggered by chronically elevated levels of blood glucose. As many as half of all diabetic patients are expected to develop some form of DR in their lifetime. DR can progress from the non-proliferative stages, or the NPDR stages, to the proliferative stage, or the PDR stage, characterized by the growth of abnormal new blood vessels. The severity of DR is commonly assessed using an objective severity score based on graded retinal images, which is referred to as the diabetic retinopathy severity score, or DRSS. Based on third-party market research data, we estimate that fewer than 1% of the 6.4 million NPDR patients in the U.S. receive treatment today, despite the availability of anti-VEGF therapies approved for the indication, largely due to the burden of frequent injections.

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Diabetic macular edema, or DME, is also a leading cause of vision loss in the working-age population. DME, the result of an accumulation of fluid in the macula that can afflict patients with diabetes, can occur at any stage of DR. In patients with DME, blood vessels in the eyes leak and start to swell, which can cause vision loss or blindness. Anti-VEGF drugs are approved to treat DME, but these treatments typically require frequent intravitreal injections, placing a significant burden on patients and physicians alike.

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DR Program Highlights

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In September 2025, we announced plans to initiate 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 DR by including subjects with non-center-involved DME, or non-CI-DME. We are preparing to initiate the HELIOS registrational program imminently with the goal of evaluating 6- and 12-month dosing intervals.

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The HELIOS-2 and HELIOS 3 trials will leverage a novel ordinal primary endpoint of 2 or more steps on the 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 have been used as binary endpoints. The HELIOS program will be the first time an ordinal endpoint is being used in DR trials, 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-2 Trial

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We plan to initiate the HELIOS-2 trial, a Phase 3 clinical trial to evaluate the safety and efficacy of AXPAXLI in

approximately 432 subjects with moderately severe to severe NPDR without center-involved DME, or CI-DME. The planned HELIOS-2 trial is designed to be a multi-center, double-masked, randomized (1:1), parallel-group, two-arm superiority trial comparing a single injection of AXPAXLI 450 μg to a single injection of ranibizumab 0.3 mg. The trial is expected to include subjects with non-CI-DME.

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

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The primary endpoint of the HELIOS-2 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 52.

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The HELIOS-3 Trial

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We also plan to initiate the HELIOS-3 trial, a second Phase 3 clinical trial to evaluate the safety and efficacy of AXPAXLI in approximately 930 subjects with moderately severe to severe NPDR without CI-DME. The planned HELIOS-3 trial is designed to be a multi-center, double-masked, randomized (1:1:1), three-arm superiority trial comparing two dosing regimens of AXPAXLI to a sham comparator. Similar to the HELIOS-2 trial, the HELIOS-3 clinical trial is also expected to include subjects with non-CI-DME.

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According to the planned trial design, eligible subjects in the HELIOS-3 trial will be 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 Week 24; subjects in the second arm will receive a single injection of AXPAXLI 450 μg at Day 1 and a sham injection at Week 24; and subjects in the third arm will receive sham injections at both Day 1 and Week 24. Subjects will be assessed every three months throughout the trial, and subjects and designated trial personnel will remain masked through the end of Week 52.

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

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Update on Intellectual Property Portfolio in Connection with AXPAXLI

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In September 2025, we received a notice of allowance from the United States Patent and Trademark Office in connection with a patent application submitted by us that recites claims covering methods of treating ocular diseases with AXPAXLI. This notice of allowance resulted in the issuance of a U.S. patent in October 2025. Subject to any patent term adjustments that we may obtain, we expect this patent to expire in 2044. We will continue to prosecute our patents and patent applications for AXPAXLI and our other product candidates and technologies in the United States and various other jurisdictions around the world.

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OTX-TIC for OAG or OHT

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We completed a pilot repeat-dose sub-study in a subset of subjects from our Phase 2 clinical trial of OTX-TIC to evaluate the safety of a repeat, sustained release dose of OTX-TIC 26 µg. Subjects in the primary Phase 2 study who had received either OTX-TIC 26 μg or DURYSTA and who did not require rescue therapy during the primary study (prior to Visit 10) were eligible to participate in the repeat dose sub-study. Subjects who had received OTX-TIC 26 µg in the primary study received a repeat-dose of OTX-TIC 26 μg in the sub-study once the initial dose of OTX-TIC from the primary study had fully reabsorbed (6 patients at sub-study enrollment; 3 additional patients received sham at sub-study enrollment and OTX-TIC 26 μg at a later study visit following full reabsorption). As DURYSTA cannot be administered more than once in the same eye, there were 16 subjects who received DURYSTA in the primary study who received sham in their assigned study eye in the repeat-dose sub-study. Subjects were followed for at least six months after their enrollment in the sub-study and repeat dosing with OTX-TIC 26 µg or sham.

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Data from the sub-study were consistent with data previously observed in the OTX-TIC primary study. We observed a decrease from baseline (Day 0, Visit 2 of the primary study) in mean intraocular pressure, or IOP, values at 8 AM, 10 AM, and 4 PM at all repeat-dose post-injection visits in the study eye in the OTX-TIC 26 µg group and sham group, with mean IOP values similar or lower than those seen at Month 6 of the primary study. During the repeat-dose sub-study, the mean decrease in diurnal IOP values from baseline was greater at all time points for subjects who received a repeat-dose of OTX-TIC than for subjects who received DURYSTA in the main study and a sham injection in the repeat-dose sub-study.

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OTX-TIC 26 µg was generally well tolerated after both single and repeat dosing in patients with OAG or OHT. In addition, no new safety concerns were identified following repeat-dosing of OTX-TIC 26 µg in the small subset of subjects who participated in the sub-study.

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We are currently evaluating next steps for the OTX-TIC program.

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2025 Offering

In October 2025, we completed an underwritten offering of 37,909,018 shares of our common stock for an offering price of $12.53 per share (the "2025 Offering"). We received net proceeds of approximately $445.4 million, after deducting underwriting discounts and commissions and estimated other offering expenses, from the 2025 Offering.

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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 $14.5 million for the three months ended September 30, 2025, reflecting a decrease of $0.8 million or 5.2% over the three months ended September 30, 2024. Our net product revenue was $38.6 million for the nine months ended September 30, 2025, reflecting a decrease of $7.8 million or 16.8% over the nine months ended September 30, 2024.

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We believe that the year-over-year decrease in net product revenue is primarily attributable to the Medicare reimbursement cap, the impact of rebates and discounts, and the impact of the inclusion of DEXTENZA into the cost performance category of the Centers for Medicare & Medicaid Services' Merit-based Incentive Payment System, or MIPS, for 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 unit sales made directly by us to ASCs and physicians' offices. We recorded In-Market Sales of approximately 48,000 units in the three months ended September 30, 2025, an increase of approximately 6,000 units compared to the three months ended September 30, 2024, and an increase of approximately 4,000 units compared to the three months ended June 30, 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. We believe that clinicians are adjusting to the impact of MIPS, and together with our increased sales efforts directed towards HOPDs, which receive separate payment for DEXTENZA in 2025 after being ineligible for separate payments in 2024, we expect DEXTENZA unit growth to continue.

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The final Medicare Physician Fee Schedule, or MPFS, for 2026, or the CY 2026 MPFS Final Rule, was released on October 31, 2025. Under the CY 2026 MPFS Final Rule, DEXTENZA remains included in MIPS. We expect the Outpatient Prospective Payment System, or OPPS, rule for 2026 to be released in November 2025.

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Other Developments

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The Trump administration has announced or imposed a series of tariffs on U.S. trading partners. In response, several countries have threatened or imposed retaliatory measures. At this time, we do not anticipate the tariffs and changes in

trade policies in place as of the filing of this Quarterly Report on Form 10-Q will have a significant adverse effect on our business or operations.

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Following recent changes more broadly within the FDA, and the more recent federal government shutdown, we have not noticed any disruption in the cadence and nature of our dialogue with the FDA to date.

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On July 4, 2025, President Trump signed the One Big Beautiful Bill Act, or the OBBBA, which includes, among other provisions, significant changes to healthcare policy. At this time, we do not anticipate the changes implemented by the OBBBA to have a significant adverse effect on our business or operations.

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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.

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Operating Expenses

Cost of Product Revenue

Cost of product revenue consists 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, 2025, our interest-bearing debt included the Barings Credit Facility ($82.5 million outstanding principal). For the three months ended September 30, 2024, our interest-bearing debt included the Barings Credit Facility ($82.5 million outstanding principal). For the nine months ended September 30, 2024, our interest-bearing debt included the Barings Credit Facility ($82.5 million outstanding principal) and our $37.5 million unsecured senior subordinated convertible notes, or the Convertible Notes ($37.5 million outstanding principal through March 28, 2024, no outstanding principal thereafter).

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. In 2019, in connection with the issuance of our Convertible Notes, we identified an embedded derivative liability, which we were required to measure at fair value at inception and then at the end of each reporting period until the embedded derivative was settled. The settlement of the derivative liability related to the Convertible Notes occurred on March 28, 2024. The changes in fair value of these derivative liabilities are recorded through the condensed consolidated statements of operations and comprehensive loss and are presented under the caption "change in fair value of derivative liabilities".

Loss on Extinguishment of Debt. In March 2024, the holder of the Convertible Notes converted the Convertible Notes. In connection with the conversion, our obligations under the Convertible Notes extinguished, resulting in a loss on extinguishment.

Results of Operations

Comparison of the Three Months Ended September 30, 2025 and 2024

The following table summarizes our results of operations for the three months ended September 30, 2025 and 2024:

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Product Revenue, net

Our product revenue, net was $14.5 million and $15.3 million for the three months ended September 30, 2025 and 2024, respectively, reflecting a decrease of $0.8 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 September 30, 2025 and 2024 were 52.5% and 39.0%, 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. Effective July 1, 2025, we increased the OID, and subsequently, effective October 1, 2025, we decreased the OID. The total GTN Provisions for the three months ended September 30, 2025 therefore include timing effects related to the decreased OID, as the estimated GTN Provisions for units that we sold to SDs during the three months ended September 30, 2025 under the pre-October 2025 OID and that were not sold as In-Market Sales during that period will be subject to the decreased OID. Compared to the three months ended September 30, 2024, the GTN Provisions relative to gross DEXTENZA product sales increased during the three months ended September 30, 2025, 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 might increase further, for the remainder of 2025 and beyond.

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Research and Development Expenses

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Research and development expenses were $52.4 million and $37.1 million for the three months ended September 30, 2025 and 2024, respectively, reflecting an increase of $15.3 million year-over-year.

Within research and development expenses, expenses for clinical programs increased $17.8 million, unallocated expenses decreased $2.4 million, and expenses for preclinical programs decreased $0.1 million.

For the three months ended September 30, 2025, we incurred $35.9 million in direct research and development expenses for our products and product candidates compared to $18.2 million for the three months ended September 30, 2024. The increase of $17.7 million is related to timing and conduct of our various clinical trials for our product candidates, including the progression of the SOL-1 trial and the SOL-R trial.

We expect that direct research and development expenses for our products and product candidates will continue to increase significantly for the remainder of 2025 and beyond as we progress with the SOL-1 and the SOL-R trials; initiate the planned SOL-X, HELIOS-2, and HELIOS-3 trials; and perform increased activities regarding the pre-commercial manufacturing of AXPAXLI. We expect that personnel costs will continue to increase for the remainder of 2025 and beyond as we plan to hire additional personnel to support our planned clinical trials.

Selling and Marketing Expenses

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Selling and marketing expenses were $13.1 million and $10.6 million for the three months ended September 30, 2025 and 2024, 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 $1.4 million, primarily reflecting an increase related to the expansion of our marketing team for AXPAXLI; an increase in professional fees of $0.9 million, including costs related to our corporate branding; and an increase in facility-related and other costs of $0.2 million.

We expect our selling and marketing expenses to increase for the remainder of 2025 and beyond as we continue to support the commercialization of DEXTENZA and initiate and continue marketing-related activities in connection with the potential commercial launch of AXPAXLI.

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General and Administrative Expenses

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General and administrative expenses were $16.0 million and $12.2 million for the three months ended September 30, 2025 and 2024, respectively, reflecting an increase of $3.8 million year-over-year.

The increase was due to an increase in personnel-related costs, including stock-based compensation, of $4.5 million and an increase in facility-related and other costs of $0.3 million, partially offset by a decrease in professional fees of $0.9 million. The increase in personnel-related costs, including stock-based compensation, primarily relates to increased stock-based compensation expenses of $4.0 million.

We anticipate that our general and administrative expenses will increase for the remainder of 2025 and beyond, as we continue to further strengthen certain functions and processes that support our clinical trials of AXPAXLI, including the SOL-1 trial, the SOL-R trial, and our planned SOL-X, HELIOS-2, and HELIOS-3 trials.

Other Income (Expense), Net

Interest Income. Interest income was $3.7 million and $5.7 million for the three months ended September 30, 2025 and 2024, respectively, reflecting a decrease of $2.0 million year-over-year. The decrease is attributable primarily to a lower average balance of interest-generating cash and cash equivalents.

Interest Expense. Interest expense was $3.0 million and $3.2 million for the three months ended September 30, 2025 and 2024, respectively, reflecting a decrease of $0.2 million year-over-year.

Change in Fair Value of Derivative Liabilities. 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. We recognized a net gain from the change in fair value of our derivative liability related to the Barings Credit Agreement of $7.1 million for the three months ended September 30, 2024. 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. The net gain for the three months ended September 30, 2024 is comprised of a non-cash gain of $7.6 million from the change in the fair value of the derivative liability, partially offset by a $0.5 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 2025 and beyond.

Comparison of the Nine Months Ended September 30, 2025 and 2024

The following table summarizes our results of operations for the nine months ended September 30, 2025 and 2024:

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Product Revenue, net

Our product revenue, net was $38.6 million and $46.4 million for the nine months ended September 30, 2025 and 2024, respectively, reflecting a decrease of $7.8 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 nine months ended September 30, 2025 and 2024 were 51.4% and 38.3%, 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. Effective April 1, 2025, we increased the wholesale acquisition cost, or WAC, and we concurrently increased the OID for DEXTENZA as part of our overall pricing strategy. Subsequently, effective July 1, 2025, we increased the OID further. Effective October 1, 2025, we decreased the OID. The total GTN Provisions for the nine months ended September 30, 2025 therefore include timing effects related to the increased WAC and the changes to the OID, as the estimated GTN Provisions for units that we sold to SDs during the three months ended September 30, 2025 under the pre-October 2025 OID and that were not sold as In-Market Sales during that period will be subject to the decreased OID. 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, 2025, primarily as a result of these changes. We expect that GTN Provisions relative to gross DEXTENZA product sales will remain at this increased level, or might increase further, for the remainder of 2025 and beyond.

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Collaboration Revenue

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Our collaboration revenue was $0.1 million and $0.2 million for the nine months ended September 30, 2025 and 2024, respectively. 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 recognize collaboration revenue based on a

cost-to-cost method. We do not expect to recognize additional collaboration revenue for the remainder of 2025, as we have fully satisfied the performance obligation.

Research and Development Expenses

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Research and development expenses were $146.3 million and $86.6 million for the nine months ended September 30, 2025 and 2024, respectively, reflecting an increase of $59.7 million year-over-year.

Within research and development expenses, expenses for clinical programs increased $55.1 million, unallocated expenses increased $5.5 million, and expenses for preclinical programs decreased $0.9 million.

For the nine months ended September 30, 2025, we incurred $96.2 million in direct research and development expenses for our products and product candidates compared to $42.0 million for the nine months ended September 30, 2024. The increase of $54.2 million is related to timing and conduct of our various clinical trials for our product candidates, including the progression of the SOL-1 trial, the initiation and progression of the SOL-R trial, and the completion of the HELIOS-1 trial.

The increase in personnel-related costs, including stock-based compensation, of $9.6 million primarily relates to the addition of headcount, increased stock-based compensation expenses of $3.2 million, and other adjustments to employee compensation.

We expect that direct research and development expenses for our products and product candidates will continue to increase significantly for the remainder of 2025 and beyond as we progress with the SOL-1 and the SOL-R trials; initiate the planned SOL-X, HELIOS-2, and HELIOS-3 trials; and perform increased activities regarding the pre-commercial manufacturing of AXPAXLI. We expect that personnel costs will continue to increase for the remainder of 2025 and beyond as we plan to hire additional personnel to support our planned clinical trials.

Selling and Marketing Expenses

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Selling and marketing expenses were $41.0 million and $30.8 million for the nine months ended September 30, 2025 and 2024, respectively, reflecting an increase of $10.2 million year-over-year.

The increase was primarily due to an increase in professional fees of $5.4 million, including costs related to our corporate branding; an increase in personnel-related costs, including stock-based compensation, of $4.1 million, including costs related to the expansion of our marketing team for AXPAXLI; and an increase in facility-related and other costs of $0.7 million.

We expect our selling and marketing expenses to increase for the remainder of 2025 and beyond as we continue to support the commercialization of DEXTENZA and as we continue marketing-related activities regarding our corporate branding and initiate and continue marketing-related activities in connection with the potential commercial launch of AXPAXLI.

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General and Administrative Expenses

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General and administrative expenses were $46.7 million and $46.1 million for the nine months ended September 30, 2025 and 2024, respectively, reflecting an increase of $0.6 million year-over-year.

The increase was primarily due to an increase in facility-related and other costs of $1.9 million and an increase in personnel-related costs, including stock-based compensation, of $0.5 million, partially offset by a decrease in professional fees of $1.7 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. In the nine months ended September 30, 2024, we executed and substantially completed a strategic reduction in force as part of an initiative to prioritize our resources on the clinical development of AXPAXLI for wet AMD, or the Strategic Restructuring. Personnel-related costs, including stock-based compensation, for the nine months ended September 30, 2024 include $1.6 million related to wages, severance, and other benefits under the Strategic Restructuring, and $9.9 million related to accrued severance and acceleration of stock-based compensation for certain employees who departed during the nine months ended September 30, 2024 separate from the Strategic Restructuring, including our former Chief Executive Officer, our former Chief Business Officer, and our former Chief Medical Officer.

We anticipate that our general and administrative expenses will increase for the remainder of 2025 and beyond, as we continue to further strengthen certain functions and processes that support our clinical trials of AXPAXLI, including the SOL-1 trial, the SOL-R trial, and our planned SOL-X, HELIOS-2, and HELIOS-3 trials.

Other Income (Expense), Net

Interest Income. Interest income was $11.0 million and $15.6 million for the nine months ended September 30, 2025 and 2024, respectively, reflecting a decrease of $4.6 million year-over-year. The decrease is attributable primarily to a lower average balance of interest-generating cash and cash equivalents.

Interest Expense. Interest expense was $9.0 million and $10.5 million for the nine months ended September 30, 2025 and 2024, respectively, reflecting a decrease of $1.5 million year-over-year. The decrease is primarily due to lower average balances of debt outstanding as a result of the conversion of the Convertible Notes in March 2024.

Change in Fair Value of Derivative Liabilities. We recognized a net loss from the change in fair values of our derivative liabilities of $3.1 million and $1.1 million for the nine months ended September 30, 2025 and 2024, respectively. 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. The net loss for the nine months ended September 30, 2024 is comprised of a non-cash loss of $2.1 million from the change in the fair value of

the derivative liability related to the Barings Credit Agreement, and an expense of $1.6 million related to royalty fees under the Barings Credit Agreement that we paid or accrued, partially offset by a gain of $2.6 million from the change in the fair value of the derivative liability related to a conversion option embedded in the Convertible Notes. We cannot predict how the fair value of the derivative liability related to the Barings Credit Agreement will change in the remainder of 2025 and beyond.

Loss on Extinguishment of Debt. We recognized a non-cash loss on extinguishment of debt of $28.0 million for the nine months ended September 30, 2024, resulting from the conversion of the Convertible Notes in March 2024.

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, 2025, we had cash and cash equivalents of $344.8 million, and outstanding notes payable with a principal amount of $82.5 million par value under the Barings Credit Facility.

In October 2025, we settled the sale of 37,909,018 shares of our common stock pursuant to the 2025 Offering, resulting in net proceeds to us of $445.4 million after deducting underwriting discounts and commissions and estimated 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.

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. In June 2025, pre-funded warrants to purchase 1,092,273 shares of our common stock were exercised via cashless exercise for 1,092,148 shares of our common stock. As of September 30, 2025, 9,713,684 pre-funded warrants remained outstanding.

In December 2023, we sold 35,420,000 shares of our common stock in an underwritten public offering at a public offering price of $3.25 per share. The total net proceeds of the public offering to us were approximately $107.7 million, after deducting underwriting discounts and commissions and other offering expenses payable by us.

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 $201.3 million for the nine months ended September 30, 2025, and $193.5 million, $80.7 million, and $71.0 million for the years ended December 31, 2024, 2023 and 2022, respectively. As of September 30, 2025, we had an accumulated deficit of $1,092.4 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 and SOL-R trials, as we initiate new clinical trials, specifically the HELIOS-2 and HELIOS-3 trials and the SOL-X trial, and as we support the commercialization of DEXTENZA and the potential commercialization of our 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 determines 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, 2025, together with the net proceeds from the 2025 Offering, will enable us to fund our planned operating expenses, debt service obligations and capital expenditure requirements into 2028. This cash projection factors in the topline data readout from the SOL-registrational and HELIOS-registrational trials, the initiation of the SOL-X wet AMD open label extension study, and investments in pre-commercial activities associated with AXPAXLI, but does not include the full expenses we anticipate we need to support the commercialization of AXPAXLI,

if approved. 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 $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.

Net cash used in operating activities was $95.2 million for the nine months ended September 30, 2024, primarily resulting from our net loss of $145.1 million and net unfavorable changes in operating assets and liabilities of $11.1 million, partially offset by non-cash adjustments of $61.0 million. Our net loss was attributed to operating expenses of $167.8 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 $23.9 million, partially offset by $46.6 million of revenue. Non-cash adjustments primarily include a loss on extinguishment of debt of $28.0 million, stock-based compensation expense of $25.9 million, a non-cash loss related to changes in the fair value of our derivative liabilities of $1.1 million, non-cash interest expense of $3.2 million, and depreciation and amortization expense of $2.8 million.

Net cash used by net unfavorable changes in our operating assets and liabilities during the nine months ended September 30, 2024 consisted primarily of net increases of prepaid expenses and other current assets, resulting primarily from our clinical development activities, of $5.4 million, net increases of accounts receivable, net, of $4.1 million, and other changes, net, of $1.7 million. Other changes, net, include a $11.4 million payment of interest to the holder of the Convertible Notes in March 2024.

Investing activities. 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. Net cash used in investing activities was $1.1 million for the nine months ended September 30, 2024, consisting of cash used to purchase property and equipment, primarily consisting of leasehold improvements.

Financing activities. 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 Employee Stock Purchase Plan, or ESPP, of $0.7 million. Net cash provided by financing activities for the nine months ended September 30, 2024 was $327.6 million and consisted of total net proceeds from the issuance of common stock and pre-funded warrants in a private placement of approximately $316.4 million, proceeds from the exercise of stock options of $10.8 million, and proceeds from issuing shares under our ESPP of $0.5 million.

Contractual Obligations and Commitments

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The table above includes our enforceable and legally binding obligations and future commitments at September 30, 2025, 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, 2025. 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, the HELIOS-2 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 that expire in July 2027 and July 2028, and leases of equipment that expire between 2026 and 2028.

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.

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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, 2024, filed with the SEC on March 3, 2025.

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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