isee-20211231
0001410939FALSE2021FYP3YP6MP5DP6M00014109392021-01-012021-12-3100014109392021-06-30iso4217:USD00014109392022-02-21xbrli:shares00014109392021-12-3100014109392020-12-31iso4217:USDxbrli:shares00014109392020-01-012020-12-3100014109392019-01-012019-12-310001410939isee:JuniorSeriesAConvertiblePreferredStockMember2018-12-310001410939us-gaap:CommonStockMember2018-12-310001410939us-gaap:AdditionalPaidInCapitalMember2018-12-310001410939us-gaap:RetainedEarningsMember2018-12-310001410939us-gaap:AccumulatedOtherComprehensiveIncomeMember2018-12-3100014109392018-12-310001410939us-gaap:CommonStockMember2019-01-012019-12-310001410939us-gaap:AdditionalPaidInCapitalMember2019-01-012019-12-310001410939us-gaap:RetainedEarningsMember2019-01-012019-12-310001410939isee:JuniorSeriesAConvertiblePreferredStockMember2019-12-310001410939us-gaap:CommonStockMember2019-12-310001410939us-gaap:AdditionalPaidInCapitalMember2019-12-310001410939us-gaap:RetainedEarningsMember2019-12-310001410939us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-12-3100014109392019-12-310001410939isee:UnderwrittenOfferingMemberus-gaap:CommonStockMember2020-01-012020-12-310001410939us-gaap:AdditionalPaidInCapitalMemberisee:UnderwrittenOfferingMember2020-01-012020-12-310001410939isee:UnderwrittenOfferingMember2020-01-012020-12-310001410939us-gaap:PrivatePlacementMemberus-gaap:CommonStockMember2020-01-012020-12-310001410939us-gaap:PrivatePlacementMemberus-gaap:AdditionalPaidInCapitalMember2020-01-012020-12-310001410939us-gaap:PrivatePlacementMember2020-01-012020-12-310001410939us-gaap:CommonStockMember2020-01-012020-12-310001410939us-gaap:AdditionalPaidInCapitalMember2020-01-012020-12-310001410939us-gaap:RetainedEarningsMember2020-01-012020-12-310001410939us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-01-012020-12-310001410939isee:JuniorSeriesAConvertiblePreferredStockMember2020-12-310001410939us-gaap:CommonStockMember2020-12-310001410939us-gaap:AdditionalPaidInCapitalMember2020-12-310001410939us-gaap:RetainedEarningsMember2020-12-310001410939us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-310001410939isee:UnderwrittenOfferingMemberus-gaap:CommonStockMember2021-01-012021-12-310001410939us-gaap:AdditionalPaidInCapitalMemberisee:UnderwrittenOfferingMember2021-01-012021-12-310001410939isee:UnderwrittenOfferingMember2021-01-012021-12-310001410939us-gaap:CommonStockMember2021-01-012021-12-310001410939us-gaap:AdditionalPaidInCapitalMember2021-01-012021-12-310001410939us-gaap:RetainedEarningsMember2021-01-012021-12-310001410939us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-12-310001410939isee:JuniorSeriesAConvertiblePreferredStockMember2021-12-310001410939us-gaap:CommonStockMember2021-12-310001410939us-gaap:AdditionalPaidInCapitalMember2021-12-310001410939us-gaap:RetainedEarningsMember2021-12-310001410939us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310001410939isee:PublicStockOfferingMember2021-01-012021-12-310001410939isee:PublicStockOfferingMember2020-01-012020-12-310001410939isee:PublicStockOfferingMember2019-01-012019-12-310001410939us-gaap:PrivatePlacementMember2021-01-012021-12-310001410939us-gaap:PrivatePlacementMember2019-01-012019-12-310001410939isee:AdenoAssociatedVirusMediatedGeneTherapyProgramMember2021-12-31isee:segment0001410939srt:MinimumMember2021-01-012021-12-310001410939srt:MaximumMember2021-01-012021-12-31xbrli:pure0001410939us-gaap:EmployeeStockOptionMember2021-01-012021-12-310001410939us-gaap:EmployeeStockOptionMember2020-01-012020-12-310001410939us-gaap:EmployeeStockOptionMember2019-01-012019-12-310001410939us-gaap:EmployeeStockMembersrt:MaximumMember2016-04-300001410939us-gaap:EmployeeStockMember2016-06-012016-06-300001410939us-gaap:ResearchAndDevelopmentExpenseMember2021-01-012021-12-310001410939us-gaap:ResearchAndDevelopmentExpenseMember2020-01-012020-12-310001410939us-gaap:ResearchAndDevelopmentExpenseMember2019-01-012019-12-310001410939us-gaap:GeneralAndAdministrativeExpenseMember2021-01-012021-12-310001410939us-gaap:GeneralAndAdministrativeExpenseMember2020-01-012020-12-310001410939us-gaap:GeneralAndAdministrativeExpenseMember2019-01-012019-12-310001410939isee:PublicStockOfferingMember2021-10-012021-10-310001410939us-gaap:OverAllotmentOptionMember2021-10-012021-10-310001410939isee:PublicStockOfferingMember2021-10-310001410939us-gaap:OverAllotmentOptionMember2021-10-3100014109392021-10-012021-10-310001410939isee:PublicStockOfferingMember2021-07-012021-07-310001410939us-gaap:OverAllotmentOptionMember2021-07-012021-07-310001410939isee:PublicStockOfferingMember2021-07-300001410939us-gaap:OverAllotmentOptionMember2021-07-3000014109392021-07-012021-07-310001410939isee:UnderwrittenOfferingMember2020-06-012020-06-300001410939isee:UnderwrittenOfferingMember2020-06-300001410939isee:UnderwrittenOfferingUnderwritersMember2020-06-3000014109392020-06-300001410939us-gaap:PrivatePlacementMember2020-06-300001410939isee:PrivatePlacementUnderwritersMember2020-06-300001410939us-gaap:PrivatePlacementMember2020-06-012020-06-3000014109392020-06-012020-06-300001410939isee:EmployeeAndNonemployeeStockOptionMember2021-01-012021-12-310001410939isee:EmployeeAndNonemployeeStockOptionMember2020-01-012020-12-310001410939isee:EmployeeAndNonemployeeStockOptionMember2019-01-012019-12-310001410939us-gaap:RestrictedStockMember2021-01-012021-12-310001410939us-gaap:RestrictedStockMember2020-01-012020-12-310001410939us-gaap:RestrictedStockMember2019-01-012019-12-310001410939us-gaap:USTreasurySecuritiesMember2021-12-310001410939us-gaap:CorporateDebtSecuritiesMember2021-12-310001410939us-gaap:AssetBackedSecuritiesMember2021-12-310001410939isee:SupranationalSecuritiesMember2021-12-310001410939us-gaap:USTreasurySecuritiesMember2020-12-310001410939us-gaap:CorporateDebtSecuritiesMember2020-12-310001410939us-gaap:AssetBackedSecuritiesMember2020-12-310001410939us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel1Member2021-12-310001410939us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel2Member2021-12-310001410939us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel3Member2021-12-310001410939us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2021-12-310001410939us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2021-12-310001410939us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2021-12-310001410939us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueInputsLevel1Member2021-12-310001410939us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Member2021-12-310001410939us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueInputsLevel3Member2021-12-310001410939us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:AssetBackedSecuritiesMember2021-12-310001410939us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberus-gaap:AssetBackedSecuritiesMember2021-12-310001410939us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Memberus-gaap:AssetBackedSecuritiesMember2021-12-310001410939us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberisee:SupranationalSecuritiesMember2021-12-310001410939us-gaap:FairValueMeasurementsRecurringMemberisee:SupranationalSecuritiesMemberus-gaap:FairValueInputsLevel2Member2021-12-310001410939us-gaap:FairValueMeasurementsRecurringMemberisee:SupranationalSecuritiesMemberus-gaap:FairValueInputsLevel3Member2021-12-310001410939us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel1Member2020-12-310001410939us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel2Member2020-12-310001410939us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel3Member2020-12-310001410939us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2020-12-310001410939us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2020-12-310001410939us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2020-12-310001410939us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueInputsLevel1Member2020-12-310001410939us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Member2020-12-310001410939us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueInputsLevel3Member2020-12-310001410939us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:AssetBackedSecuritiesMember2020-12-310001410939us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberus-gaap:AssetBackedSecuritiesMember2020-12-310001410939us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Memberus-gaap:AssetBackedSecuritiesMember2020-12-310001410939isee:C5LicensedProductsMemberisee:ArchemixCorpMemberisee:AchievementOfSpecifiedClinicalAndRegulatoryMilestonesMemberus-gaap:LicenseAgreementTermsMember2011-09-012011-09-300001410939us-gaap:SeriesAPreferredStockMemberisee:C5LicensedProductsMemberisee:ArchemixCorpMemberisee:AchievementOfSpecifiedClinicalAndRegulatoryMilestonesMemberus-gaap:LicenseAgreementTermsMember2011-09-012011-09-300001410939isee:C5LicensedProductsMemberus-gaap:SeriesBPreferredStockMemberisee:ArchemixCorpMemberisee:AchievementOfSpecifiedClinicalAndRegulatoryMilestonesMemberus-gaap:LicenseAgreementTermsMember2011-09-012011-09-300001410939isee:C5LicensedProductsMemberisee:ArchemixCorpMemberisee:AchievementOfSpecifiedClinicalAndRegulatoryMilestonesMemberus-gaap:LicenseAgreementTermsMember2011-09-012020-10-310001410939isee:C5LicensedProductsMemberisee:ArchemixCorpMemberisee:AchievementOfSpecifiedClinicalAndRegulatoryMilestonesMemberus-gaap:LicenseAgreementTermsMember2020-03-012020-10-31isee:milestone_payment_number0001410939isee:C5LicensedProductsMemberisee:ArchemixCorpMemberisee:AchievementOfSpecifiedClinicalAndRegulatoryMilestonesMemberus-gaap:LicenseAgreementTermsMember2020-03-012020-03-310001410939isee:C5LicensedProductsMemberisee:ArchemixCorpMemberisee:AchievementOfSpecifiedClinicalAndRegulatoryMilestonesMemberus-gaap:LicenseAgreementTermsMember2020-10-012020-10-310001410939isee:C5LicensedProductsMemberisee:ArchemixCorpMemberisee:AchievementOfSpecifiedClinicalAndRegulatoryMilestonesMemberus-gaap:LicenseAgreementTermsMember2020-01-012020-12-310001410939isee:C5LicensedProductsMemberisee:ArchemixCorpMemberisee:AchievementOfSpecifiedClinicalAndRegulatoryMilestonesMembersrt:MaximumMemberus-gaap:LicenseAgreementTermsMember2011-09-300001410939isee:C5LicensedProductsMemberisee:ArchemixCorpMemberisee:FirstIndicationMemberus-gaap:LicenseAgreementTermsMember2011-09-300001410939isee:SecondandThirdIndicationMemberisee:C5LicensedProductsMemberisee:ArchemixCorpMemberus-gaap:LicenseAgreementTermsMember2011-09-300001410939isee:C5LicensedProductsMemberisee:SustainedDeliveryApplicationsMemberisee:ArchemixCorpMemberus-gaap:LicenseAgreementTermsMember2011-09-300001410939isee:C5LicensedProductsMemberisee:AchievementOfSpecifiedCommercialMilestonesMemberisee:ArchemixCorpMembersrt:MaximumMemberus-gaap:LicenseAgreementTermsMember2011-09-300001410939isee:C5LicensedProductsMemberisee:ArchemixCorpMemberus-gaap:LicenseAgreementTermsMember2011-09-012011-09-300001410939isee:UniversityofFloridaResearchFoundationUFRFMemberisee:SpecifiedClinicalMarketingApprovalandReimbursementApprovalMilestonesRelatedtoaLicensedProductMemberisee:RHOadRPLicenseAgreementMemberus-gaap:ResearchAndDevelopmentExpenseMember2018-06-012018-06-300001410939isee:UniversityofFloridaResearchFoundationUFRFMemberisee:SpecifiedCommercialSalesMilestonesRelatedtoaLicensedProductMemberisee:RHOadRPLicenseAgreementMemberus-gaap:ResearchAndDevelopmentExpenseMember2018-06-012018-06-300001410939isee:UniversityofFloridaResearchFoundationUFRFMemberisee:RHOadRPLicenseAgreementMember2018-06-012018-06-300001410939isee:SpecifiedClinicalMarketingApprovalandReimbursementApprovalMilestonesRelatedtoaLicensedProductMemberisee:BEST1LicenseAgreementMemberisee:PrimaryLicensedProductMemberus-gaap:ResearchAndDevelopmentExpenseMemberisee:UniversityOfPennsylvaniaMember2019-05-012019-05-310001410939isee:UniversityofFloridaResearchFoundationUFRFMemberisee:SpecifiedClinicalMarketingApprovalandReimbursementApprovalMilestonesRelatedtoaLicensedProductMemberisee:BEST1LicenseAgreementMemberisee:PrimaryLicensedProductMemberus-gaap:GeneralAndAdministrativeExpenseMember2019-05-012019-05-310001410939isee:SpecifiedClinicalMarketingApprovalandReimbursementApprovalMilestonesRelatedtoaLicensedProductMemberisee:BEST1LicenseAgreementMemberisee:PrimaryLicensedProductMemberisee:UniversityOfFloridaResearchFoundationUFRFAndUniversityOfPennsylvaniaPennMemberus-gaap:ResearchAndDevelopmentExpenseMember2019-05-012019-05-3100014109392019-05-012019-05-31isee:licensedProduct0001410939isee:SpecifiedClinicalMarketingApprovalandReimbursementApprovalMilestonesRelatedtoaLicensedProductMemberisee:BEST1LicenseAgreementMemberisee:OtherLicensedProductMemberisee:UniversityOfFloridaResearchFoundationUFRFAndUniversityOfPennsylvaniaPennMemberus-gaap:ResearchAndDevelopmentExpenseMember2019-05-012019-05-310001410939isee:SpecifiedCommercialSalesMilestonesRelatedtoaLicensedProductMemberisee:BEST1LicenseAgreementMemberisee:PrimaryLicensedProductMemberisee:UniversityOfFloridaResearchFoundationUFRFAndUniversityOfPennsylvaniaPennMemberus-gaap:ResearchAndDevelopmentExpenseMember2019-05-012019-05-310001410939isee:SpecifiedCommercialSalesMilestonesRelatedtoaLicensedProductMemberisee:BEST1LicenseAgreementMemberisee:OtherLicensedProductMemberisee:UniversityOfFloridaResearchFoundationUFRFAndUniversityOfPennsylvaniaPennMemberus-gaap:ResearchAndDevelopmentExpenseMember2019-05-012019-05-310001410939isee:BEST1LicenseAgreementMemberisee:UniversityOfFloridaResearchFoundationUFRFAndUniversityOfPennsylvaniaPennMember2019-05-012019-05-310001410939isee:UniversityOfMassachusettsUMassMemberisee:MiniCEP290Memberus-gaap:LicenseAgreementTermsMember2019-07-012019-07-310001410939isee:UniversityOfMassachusettsUMassMemberisee:MiniCEP290Memberus-gaap:LicenseAgreementTermsMemberus-gaap:ResearchAndDevelopmentExpenseMember2019-09-012019-09-300001410939isee:UniversityOfMassachusettsUMassMemberisee:MiniCEP290Memberus-gaap:GeneralAndAdministrativeExpenseMemberus-gaap:LicenseAgreementTermsMember2019-09-012019-09-300001410939isee:UniversityOfMassachusettsUMassMemberisee:MiniCEP290Memberisee:AchievementOfSpecifiedClinicalAndRegulatoryMilestonesMemberus-gaap:ResearchAndDevelopmentExpenseMemberus-gaap:LicenseAgreementTermsMember2019-07-012019-07-310001410939isee:SpecifiedCommercialSalesMilestonesRelatedtoaLicensedProductMemberisee:UniversityOfMassachusettsUMassMemberisee:MiniCEP290Memberus-gaap:ResearchAndDevelopmentExpenseMemberus-gaap:LicenseAgreementTermsMember2019-07-012019-07-310001410939srt:MinimumMemberus-gaap:EquipmentMember2021-01-012021-12-310001410939srt:MaximumMemberus-gaap:EquipmentMember2021-01-012021-12-310001410939us-gaap:EquipmentMember2021-12-310001410939us-gaap:EquipmentMember2020-12-310001410939isee:ComputerSoftwareandOtherOfficeEquipmentMember2021-01-012021-12-310001410939isee:ComputerSoftwareandOtherOfficeEquipmentMember2021-12-310001410939isee:ComputerSoftwareandOtherOfficeEquipmentMember2020-12-310001410939us-gaap:AutomobilesMember2021-01-012021-12-310001410939us-gaap:AutomobilesMember2021-12-310001410939us-gaap:AutomobilesMember2020-12-310001410939us-gaap:DomesticCountryMember2021-12-310001410939isee:CARESActMember2021-04-012021-04-300001410939isee:C5LicensedProductsMemberisee:ArchemixCorpMemberisee:FirstIndicationMembersrt:MaximumMemberus-gaap:LicenseAgreementTermsMember2011-09-300001410939isee:SecondandThirdIndicationMemberisee:C5LicensedProductsMemberisee:ArchemixCorpMembersrt:MaximumMemberus-gaap:LicenseAgreementTermsMember2011-09-300001410939isee:C5LicensedProductsMemberisee:SustainedDeliveryApplicationsMemberisee:ArchemixCorpMembersrt:MaximumMemberus-gaap:LicenseAgreementTermsMember2011-09-300001410939isee:UniversityofFloridaResearchFoundationUFRFMemberisee:SpecifiedClinicalMarketingApprovalandReimbursementApprovalMilestonesRelatedtoaLicensedProductMemberisee:RHOadRPLicenseAgreementMember2018-12-310001410939isee:UniversityofFloridaResearchFoundationUFRFMemberisee:SpecifiedCommercialSalesMilestonesRelatedtoaLicensedProductMemberisee:RHOadRPLicenseAgreementMember2018-12-310001410939isee:UniversityOfMassachusettsUMassMemberisee:MiniCEP290Memberisee:AchievementOfSpecifiedClinicalAndRegulatoryMilestonesMemberus-gaap:ResearchAndDevelopmentExpenseMemberus-gaap:LicenseAgreementTermsMember2019-05-012019-05-310001410939isee:SpecifiedCommercialSalesMilestonesRelatedtoaLicensedProductMemberisee:UniversityOfMassachusettsUMassMemberisee:MiniCEP290Memberus-gaap:ResearchAndDevelopmentExpenseMemberus-gaap:LicenseAgreementTermsMember2019-05-012019-05-310001410939isee:Inception4Member2018-10-300001410939isee:GAProductMemberisee:Inception4Member2018-10-012018-10-310001410939isee:Inception4Memberisee:WetAMDProductMember2018-10-012018-10-310001410939isee:Inception4Member2018-10-302018-10-3000014109392021-04-232021-04-230001410939us-gaap:SettledLitigationMember2021-09-0800014109392021-06-222021-06-220001410939isee:StockIncentive2013PlanMembersrt:MaximumMember2013-08-310001410939isee:StockIncentive2007PlanMember2013-08-310001410939isee:StockIncentive2013PlanMember2013-08-012013-08-310001410939us-gaap:SubsequentEventMemberisee:StockIncentive2013PlanMember2014-01-012022-02-240001410939us-gaap:SubsequentEventMemberisee:StockIncentive2013PlanMember2022-01-012022-02-240001410939isee:StockIncentive2013PlanMember2021-12-310001410939isee:TwoThousandNineteenInducementPlanMemberus-gaap:EmployeeStockOptionMember2019-10-310001410939isee:TwoThousandNineteenInducementPlanMemberus-gaap:EmployeeStockOptionMember2020-03-012020-03-310001410939isee:TwoThousandNineteenInducementPlanMemberus-gaap:EmployeeStockOptionMember2021-02-012021-02-280001410939isee:TwoThousandNineteenInducementPlanMemberus-gaap:EmployeeStockOptionMember2021-09-012021-09-300001410939isee:TwoThousandNineteenInducementPlanMemberus-gaap:EmployeeStockOptionMember2021-12-012021-12-310001410939isee:TwoThousandNineteenInducementPlanMemberus-gaap:EmployeeStockOptionMember2021-12-310001410939us-gaap:EmployeeStockMember2016-04-012016-04-300001410939isee:ExercisePriceRangeOneMember2021-01-012021-12-310001410939isee:ExercisePriceRangeOneMember2021-12-310001410939isee:ExercisePriceRangeTwoMember2021-01-012021-12-310001410939isee:ExercisePriceRangeTwoMember2021-12-310001410939isee:ExercisePriceRangeThreeMember2021-01-012021-12-310001410939isee:ExercisePriceRangeThreeMember2021-12-310001410939isee:ExercisePriceRangeFourMember2021-01-012021-12-310001410939isee:ExercisePriceRangeFourMember2021-12-310001410939isee:ExercisePriceRangeFiveMember2021-01-012021-12-310001410939isee:ExercisePriceRangeFiveMember2021-12-310001410939us-gaap:EmployeeStockOptionMemberisee:EmployeesMember2021-01-012021-12-310001410939us-gaap:EmployeeStockOptionMemberisee:EmployeesMember2020-01-012020-12-310001410939us-gaap:EmployeeStockOptionMemberisee:EmployeesMember2019-01-012019-12-310001410939us-gaap:EmployeeStockOptionMember2021-12-310001410939us-gaap:RestrictedStockMember2020-12-310001410939us-gaap:RestrictedStockMember2021-01-012021-12-310001410939us-gaap:RestrictedStockMember2021-12-310001410939isee:EmployeesMemberus-gaap:RestrictedStockMember2021-01-012021-12-310001410939isee:EmployeesMemberus-gaap:RestrictedStockMember2020-01-012020-12-310001410939isee:EmployeesMemberus-gaap:RestrictedStockMember2019-01-012019-12-310001410939isee:EmployeesMemberus-gaap:RestrictedStockMember2021-12-310001410939us-gaap:EmployeeStockMember2021-01-012021-12-310001410939us-gaap:EmployeeStockMember2020-01-012020-12-310001410939us-gaap:EmployeeStockMember2021-12-310001410939us-gaap:RestrictedStockMember2020-01-012020-12-31
TABLE OF CONTENTS
PART IV
INDEX TO FINANCIAL STATEMENTS


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)  
 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2021
Or
 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from            to         
Commission file number 001-36080
IVERIC bio, Inc.
(Exact name of registrant as specified in its charter)
Delaware 20-8185347
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
8 Sylvan Way 
Parsippany NJ07054
(Address of principal executive offices)(Zip Code)
(609474-6455
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.001 par valueISEEThe Nasdaq Global Select Market
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☒ Yes    ☐ No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ☐ Yes    ☒ No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes    ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes    ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filerNon-accelerated filerSmaller reporting companyEmerging growth company
  
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.    Yes    ☐ No
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes    ☒ No
As of June 30, 2021, the aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant was approximately $546.1 million, based on the closing price of the registrant's common stock on June 30, 2021.
The number of shares outstanding of the registrant's class of common stock, as of February 21, 2022: 115,680,118
DOCUMENTS INCORPORATED BY REFERENCE
Part III of this Annual Report incorporates by reference information from the definitive Proxy Statement for the registrant's 2022 Annual Meeting of Shareholders, which is expected to be filed with the Securities and Exchange Commission not later than 120 days after the registrant's fiscal year ended December 31, 2021.


Table of Contents                                 

TABLE OF CONTENTS




i

Table of Contents                                 
FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, contained in this Annual Report on Form 10-K, including statements regarding our strategy, future operations, future financial position, future revenues, projected costs, prospects, plans and objectives of management, are forward-looking statements. The words "anticipate," "believe," "goals," "estimate," "expect," "intend," "may," "might," "plan," "predict," "project," "target," "potential," "will," "would," "could," "should," "continue" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.
The forward-looking statements in this Annual Report on Form 10-K include, among other things, statements about:
the potential benefits of our business plan and strategy, including our goal to deliver treatment options for all stages of age-related macular degeneration (AMD);
our expectations regarding the impact of results from GATHER1, our completed Phase 3 clinical trial evaluating Zimura for the treatment of Geographic Atrophy (GA) secondary to AMD, on our business and regulatory strategy, including our plans to pursue development of Zimura in intermediate AMD;
the timing, costs, conduct and outcome of GATHER2, our ongoing Phase 3 clinical trial evaluating Zimura for the treatment of GA secondary to AMD, including expectations regarding receipt of topline data from the trial and regarding patient retention, and expectations regarding the potential for Zimura to receive regulatory approval for the treatment of GA based on the clinical trial results we have received to date and the future results from the GATHER2 clinical trial and any other trials we or a potential collaborator may conduct;
our plans and expectations for initiating a clinical trial evaluating Zimura for the treatment of intermediate AMD, and for evaluating, obtaining rights to and developing sustained release delivery technologies for Zimura;
our plans and strategy for the potential commercialization of Zimura, including hiring of medical affairs and commercialization personnel, building a commercialization infrastructure, including sales, marketing and distribution capabilities, and our expectations regarding the market dynamics for treatments for GA and other commercial matters;
our ability to establish and maintain arrangements and capabilities for the manufacture of Zimura and our other product candidates, including scale up and validation of the manufacturing process for Zimura drug substance and drug product, and securing the supply of Zimura drug product and the polyethylene glycol (PEG) starting material for our expected needs;
the timing, costs, conduct and outcome of STAR, our ongoing Phase 2b screening trial evaluating Zimura for the treatment of autosomal recessive Stargardt disease, including expectations regarding the recruitment of additional patients for this trial;
our plans and ability to consummate business development transactions, including potential collaboration opportunities for further development and potential commercialization of Zimura outside the United States and potential collaboration opportunities for further development of IC-100 and IC-200; and in-licenses or other opportunities to acquire rights to additional product candidates or technologies to treat retinal diseases, including sustained release delivery technologies for Zimura;
the actual and expected effects of the COVID-19 pandemic and related response measures on our business and operations, including the timing, costs, conduct and outcome of our research and development programs, our supply chain, the work of our third-party vendors and collaborators, the work and well-being of our employees, and our financial position;
our estimates regarding expenses, future revenues, capital requirements and needs for, and ability to obtain, additional financing;
the timing, costs, conduct and outcome of our ongoing and planned clinical trials, including statements regarding the timing of the initiation and completion of, and the receipt of results from, such clinical trials, the costs to conduct such clinical trials, and the impact of the results of such clinical trials on our business strategy;
1

Table of Contents                                 
the timing, costs, conduct and outcome of our ongoing and planned research and preclinical development activities, including statements regarding the timing of the initiation and completion of, and the receipt of results from, such activities, the costs to conduct such activities, and the impact of the results of such activities on our business strategy;
the timing of and our ability to submit investigational new drug applications for, and to submit new drug applications or marketing authorization applications for and to obtain marketing approval of our product candidates, and the ability of our product candidates to meet existing or future regulatory standards;
the potential advantages of our product candidates and other technologies that we are pursuing, including our hypotheses regarding complement factor C5 inhibition and HtrA1 inhibition as potentially relevant mechanisms of action to treat GA and other stages of AMD, and of gene therapy, including the use of minigenes;
our estimates regarding the number of patients affected by the diseases our product candidates and development programs are intended to treat;
our estimates regarding the potential market opportunity for our product candidates, including our ability to obtain coverage and reimbursement for those product candidates, if approved;
the rate and degree of potential market acceptance and clinical utility of our product candidates, if approved;
the potential receipt of revenues from future sales of our product candidates, if approved;
our personnel and human capital resources;
our intellectual property position;
the impact of existing and new governmental laws and regulations; and
our competitive position.
We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and our stockholders should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. We have included important factors in the cautionary statements included in this Annual Report on Form 10-K, particularly under the section "Summary of Principal Risk Factors" below and the risk factors detailed further in Item 1A, "Risk Factors" of Part I of this report and in our Securities and Exchange Commission reports filed after this report, that could cause actual results or events to differ materially from the forward-looking statements that we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.
You should read this Annual Report on Form 10-K and the documents that we have filed as exhibits to this Annual Report on Form 10-K completely and with the understanding that our actual future results may be materially different from what we expect. The forward-looking statements contained in this Annual Report on Form 10-K are made as of the date of this Annual Report on Form 10-K, and we do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.
This Annual Report on Form 10-K includes statistical and other industry and market data that we obtained from industry publications and research, surveys and studies conducted by third parties. Industry publications and third-party research, surveys and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information.
Summary of Principal Risk Factors
The following is a summary of the principal factors that make an investment in our company speculative or risky. This summary does not address all of the risks and uncertainties that we face. Additional risk and uncertainties not presently known to us or that we presently deem less significant may also impair our business operations. Additional discussion of the risks summarized in this summary, and other risks that we face, can be found in Item 1A. Risk Factors section of this Annual Report on
Form 10-K, and should be carefully considered, together with other information in this Annual Report on Form 10-K and
our other filings with the Securities Exchange Commission, before making an investment decision regarding our common
stock. The forward-looking statements discussed above are qualified by these risk factors. If any of the following risks occur,
our business, financial condition, results of operations and future growth prospects could be materially and adversely affected.
2

Table of Contents                                 

1.We are a development-stage company without any approved products. The value of your investment is highly dependent on the success of Zimura and our other research and development programs, which carry numerous risks. We are working to transition to being a company capable of commercializing a pharmaceutical product, if approved, and may not be successful in this transition.

2.We have had a history of operating at significant losses and expect to continue to do so until we can successfully commercialize one or more of our product candidates, if ever. We may never achieve profitability.

3.We may need additional financing in order to finish developing and start commercializing one or more of our product candidates, if approved. Securing financing may be challenging and/or dilutive to our shareholders, and if we are unable to secure financing when needed, we may need to curtail our development programs or planned commercialization activities.

4.The COVID-19 pandemic has adversely affected our business, for example, by impacting the initiation and conduct of our clinical trials, the work of our contract manufacturing organizations, contract research organizations and other vendors, and aspects of our supply chain. Because of the ongoing and fluid nature of the pandemic, it will continue to affect our business.

5.We may not be successful in obtaining rights to and developing a sustained release delivery technology for Zimura.

6.Drug development is inherently risky with numerous scientific, technical, regulatory and other challenges. A promising drug candidate can fail at any time and for any number of reasons.

7.We are pursuing the development of our product candidates using novel mechanisms of action targeting indications for which there are no approved products. These include, for example, complement inhibition and inhibition of High temperature requirement A serine peptidase 1 protein for GA, and complement inhibition for intermediate AMD and autosomal recessive Stargardt disease. These approaches carry numerous scientific, regulatory and other risks.

8.Regulatory authorities, including the U.S. Food and Drug Administration, or FDA, and the European Medicines Agency, or EMA, may disagree with the design of or our analyses or conclusions from our clinical trials of Zimura in GA or our planned development pathway for Zimura in intermediate AMD. Since receipt of the 12-month results from GATHER1, we have not had any formal interactions with the EMA regarding our planned regulatory pathway for Zimura in GA and the EMA and other regulatory authorities may disagree with the requirements of the FDA. We may need to conduct additional clinical trials or nonclinical studies for Zimura in order to obtain marketing approval or reimbursement approval.

9.The results of the GATHER2 trial may not replicate the results of the GATHER1 trial. We may discover safety issues with our product candidates due to known and currently unknown factors, which could hamper their further development.

10.Manufacturing our product candidates is technically complex, expensive and time consuming. We may face issues with scaling up and validating the manufacturing process for Zimura. We may not be able to secure adequate manufacturing capacity of Zimura drug product or adequate supply of the PEG starting material for our future needs, including potential commercial launch. Issues with manufacturing can derail the further development or commercialization of our product candidates.

11.We face substantial competition from large pharmaceutical companies, smaller biotech companies and others.

12.To commercialize any of our product candidates, if approved, we will need to set up a sales and marketing infrastructure. We have only recently hired commercialization personnel and will need to continue building our commercial infrastructure. The success of our commercialization efforts will depend in part on the degree of acceptance of our product candidates by regulatory authorities, patients, the medical community and payors.

13.We do not have any internal manufacturing facilities and rely heavily on our third-party contract manufacturers. They may have different business priorities than we do and may fail to meet our expectations or follow regulatory requirements, including current good manufacturing practices requirements. We may need to engage alternative manufacturers or suppliers sooner than we currently expect.

3

Table of Contents                                 
14.We rely heavily on our third-party contract research organizations as well as our clinical trial sites. They may have different priorities than we do and may fail to follow regulatory requirements, including good laboratory practice, good clinical practice and other data integrity requirements.

15.We may pursue a collaboration for the further development and potential commercialization of Zimura in one or more territories outside the United States, and plan to pursue a collaboration for the further development and potential commercialization of IC-100 and IC-200. We may also pursue a collaboration for the further development of any promising sustained release delivery technologies for Zimura. For any of these, we may not be able to enter into a collaboration agreement on favorable terms, or at all. Even if we are able to do so, the collaboration may not be successful.

16.We rely on patents to protect our proprietary position. We may not obtain the patent rights that we seek and/or we may not be able to exclude our competitors from relevant markets. We may be subject to litigation involving our patents or those of third parties.

17.We are highly dependent on our information security systems and those of third parties we work with. A cybersecurity incident may cause interruptions to the progress of our development programs and operations, financial or regulatory penalties and/or harm to our reputation.

18.We rely on a limited number of employees to conduct our operations, including supervising our outside vendors. The skills needed to advance our research and development programs and plan for commercialization of our product candidates are highly specialized. We plan to hire additional qualified personnel, including commercialization and medical affairs personnel, to support the growth of our business. Hiring these personnel and retaining existing employees may be challenging.

19.We need to satisfy numerous regulatory requirements in order to secure marketing approval and reimbursement approval, if applicable, for any of our product candidates. These requirements differ across jurisdictions. Failure to satisfy and maintain those requirements can preclude us from commercializing our products.

20.We and any commercialization partners are subject to numerous healthcare laws and regulations governing our relationships with patients, healthcare professionals and third-party payors. Failure to comply with these requirements may adversely affect our business, including as we prepare for potential commercialization of Zimura.

21.The reimbursement and payment regime for pharmaceutical products in the United States remains in flux, including as a result of the implementation of and litigation involving the Affordable Care Act. There are ongoing, and often bipartisan, efforts to reduce the prices of pharmaceutical products.
USE OF TRADEMARKS
    The trademarks, trade names and service marks appearing in this Annual Report on Form 10-K are the property of their respective owners. We have omitted the ® and ™ designations, as applicable, for the trademarks named in this Annual Report on Form 10-K after their first reference in this Annual Report on Form 10-K.
4

Table of Contents                                 

PART I
Item 1.    Business
Overview and Our Strategy
    We are a science-driven biopharmaceutical company focused on the discovery and development of novel treatments for retinal diseases with significant unmet medical needs. We are committed to having a positive impact on patients’ lives by delivering high-quality, safe and effective treatments designed to address debilitating retinal diseases, including earlier stages of age-related macular degeneration, or AMD.
Our lead asset is our clinical stage product candidate Zimura® (avacincaptad pegol), a complement C5 inhibitor. We are currently targeting the following diseases with Zimura:
Geographic Atrophy, or GA, which is the advanced stage of AMD and is characterized by marked thinning or atrophy of retinal tissue, leading to irreversible loss of vision;
intermediate AMD, which is an earlier stage of AMD that precedes GA; and
autosomal recessive Stargardt disease, or STGD1, which is an orphan inherited condition characterized by progressive damage to the central portion of the retina, or the macula, and other retinal tissue, leading to loss of vision.
In July 2021, we completed patient enrollment for GATHER2, our Phase 3 clinical trial evaluating the safety and efficacy of Zimura for the treatment of GA secondary to AMD. We also received a written agreement from the U.S. Food and Drug Administration, or the FDA, under a Special Protocol Assessment, or SPA, for the overall design of GATHER2. We expect topline data from the GATHER2 trial to become available during the second half of 2022, approximately one year after the enrollment of the last patient plus the time needed for database lock and analysis. We also plan to initiate a Phase 3 clinical trial evaluating Zimura for patients with intermediate AMD during the second half of 2022.
In addition to Zimura, we are developing our preclinical product candidate IC-500, a High temperature requirement A serine peptidase 1 protein, or HtrA1, inhibitor, for GA and potentially other age-related retinal diseases. Based on current timelines, we expect to submit an investigational new drug application, or IND, to the FDA for IC-500 in mid-2023.
Our portfolio also includes two preclinical stage gene therapy product candidates (IC-100 and IC-200) and several ongoing gene therapy research programs, each of which uses adeno-associated virus, or AAV, for gene delivery. These AAV mediated gene therapy programs are targeting the following orphan inherited retinal diseases, or IRDs:
rhodopsin-mediated autosomal dominant retinitis pigmentosa, or RHO-adRP, which is characterized by progressive and severe bilateral loss of vision leading to blindness;

IRDs associated with mutations in the BEST1 gene, including Best vitelliform macular dystrophy, or Best disease;

Leber Congenital Amaurosis type 10, or LCA10, which is characterized by severe bilateral loss of vision at or soon after birth;

STGD1; and

IRDs associated with mutations in the USH2A gene, which include Usher syndrome type 2A, or Usher 2A, and USH2A-associated non-syndromic autosomal recessive retinitis pigmentosa.
As we focus our efforts on and prioritize the development and potential commercialization of Zimura, we have been considering our development options for IC-100 and IC-200, which we have been developing for RHO-adRP and BEST1-related IRDs, respectively. We currently plan to seek a collaborator for the future development and potential commercialization of these product candidates.
5

Table of Contents                                 
Research and Development Pipeline
    We have summarized the current status of our ongoing research and development programs in the table below.
https://cdn.kscope.io/8525d158f7621e4de099b987b1cffe05-isee-20211231_g1.jpg
*We have an option to exclusively in-license intellectual property resulting from these programs.
2021 Highlights
In 2021, we achieved a number of significant company milestones, including the following:
In July 2021, we completed patient enrollment in GATHER2, four months ahead of our original schedule. We expect 12-month top-line data from this trial to become available during the second half of 2022, approximately one year after the enrollment of the last patient plus the time needed for database lock and analysis.
In July 2021, we received a written agreement from the FDA under a SPA for the overall design of GATHER2. We also had a number of other interactions with the FDA throughout 2021, which we believe clarified our regulatory pathway and plans for submitting a new drug application, or NDA, to the FDA for marketing approval of Zimura for the treatment of GA, if the GATHER2 data are positive.
In June 2021, we announced data from post-hoc analyses on the GATHER1 data, in which we evaluated the progression of incomplete Retinal Pigment Epithelial and Outer Retinal Atrophy, or iRORA, to complete Retinal Pigment Epithelial and Outer Retinal Atrophy, or cRORA, and the progression of drusen to iRORA or cRORA, in patients receiving Zimura 2 mg as compared to patients in the corresponding sham group. The post-hoc analysis data show a 19.6% absolute reduction in the rate of progression from drusen to iRORA or cRORA, for the Zimura 2 mg group as compared to sham at 18 months, representing a relative reduction of 72%. The data also show a 21.8% absolute reduction in the rate of progression from iRORA to cRORA for the Zimura 2 mg group as compared to sham at 18 months, representing a relative reduction of 52%. We have been encouraged by the post-hoc analyses data and are planning a Phase 3 clinical trial studying Zimura in patients with intermediate AMD, which we plan to initiate during the second half of 2022.
In July 2021 and October 2021, we closed two underwritten public offerings in which we sold 13,397,500 shares of our common stock and 10,350,000 shares of our common stock, respectively. The net proceeds from the public offerings, after deducting underwriting discounts and commissions and other offering expenses payable by us, were approximately $107.8 million and $162.6 million, respectively.
We continued to hire strategically to support key areas of our business, such as commercial planning, medical affairs and clinical development, manufacturing, preclinical research, and regulatory affairs and pharmacovigilance, with a total of 37 full-time employees joining our team over the course of 2021.
6

Table of Contents                                 
Business Development and Financing Activities
Beginning in 2017, we pursued a business development strategy focused on evaluating various available technologies to treat ophthalmic diseases, particularly those in the back of the eye, and exploring opportunities to obtain rights to additional products and product candidates employing these technologies. Our efforts resulted in the expansion of our research and development pipeline, including the addition of IC-500, IC-100, IC-200 and a number of collaborative gene therapy sponsored research programs.
As we continue the development of our product candidates and programs, prepare for the potential commercialization of Zimura and evaluate our overall strategic priorities, we will continue to pursue selective business development and financing opportunities that advance us toward our strategic goals. We plan to continue to evaluate, on a selective and targeted basis, opportunities to potentially obtain rights to additional product candidates and technologies for retinal diseases, with a focus on sustained release delivery technologies for Zimura. In addition, we continue to explore potential collaboration and out-licensing opportunities for the future development and potential commercialization of our product candidates, including potential collaboration opportunities for the future development and potential commercialization of Zimura in one or more territories outside the United States and collaboration opportunities for the future development and potential commercialization of IC-100 and IC-200.
For information about our follow-on public offerings that we completed in July 2021 and October 2021, please see the Liquidity and Capital Resources section of Management' s Discussion and Analysis of Financial Condition and Results of Operations set forth in Part I, Item 7 of this Annual Report on Form 10-K. We expect to continue to pursue capital raising transactions when they are available on terms favorable to us and if the opportunity advances our strategic goals.
Impact of COVID-19
Beginning in March 2020, the COVID-19 pandemic and measures taken to contain it have affected various aspects of our business and operations, including our clinical trials, our supply chain, our workforce and the work of our third-party contract manufacturers, contract research organizations, or CROs, and other vendors. For example, in March 2020, we decided to delay the initiation of patient enrollment in our GATHER2 trial. We completed patient enrollment for GATHER2 in July 2021, and we and our clinical trial sites have implemented a number of changes to our clinical trial operations to protect the health and safety of our clinical trial participants and site staff. Additionally, many of our third-party contract manufacturers and CROs limited their operations and staff and have recently been facing increased demand from clients due to the ongoing uncertainties associated with the COVID-19 pandemic, which resulted in delays to some of our manufacturing and research and development activities. For example, we anticipate that the start of the IND-enabling toxicology studies we are planning for IC-500 will be later than what we originally planned, primarily due to the limited availability of study slots at CROs attributable to rising demand for their services as well as increased absenteeism of staff at those CROs in wake of the COVID-19 pandemic and the recent Omicron variant. In addition, shortages, delays and governmental restrictions arising from the COVID-19 pandemic, including the ongoing issues with the global supply chain, have disrupted and may continue to disrupt the ability of our contract manufacturers and CROs to source needed materials.
In March 2020, as a result of the COVID-19 pandemic, we instituted company-wide remote working and we expect to continue working in a hybrid (partially remote and partially in office) working model for the foreseeable near future. We are continuing to monitor and support the health and well-being of our employees and their productivity as remote working continues. Starting in the middle of 2021, we began permitting employees to return to the office on a voluntary basis subject to compliance with our newly implemented health and safety policies.
    For a more detailed discussion of the actual and potential impacts to us as a result of the COVID-19 pandemic, see the other sections of this Annual Report on Form 10-K, including Management's Discussion and Analysis of Results of Operations and Financial Position set forth in Part I, Item 7 and the Risk Factors set forth in Part I, Item 1A.
Eye Diseases
    Eye diseases can be caused by many factors and can affect both the front or back of the eye. In more severe cases, eye diseases can result in total loss of vision. In the developed world, the most common eye diseases that can result in total loss of vision are those affecting the retina and optic nerve, including AMD, diabetic retinopathy and glaucoma. These diseases deprive patients of their sight and, as a result, impair their ability to live independently and perform daily activities. Any improvement in vision, or even a slowing of the rate of progression of vision loss, has a tremendous impact on the quality of life of people with impaired vision. There are many other eye diseases that are less common but still represent an unmet medical need, particularly orphan IRDs that are associated with mutations in a single gene, referred to as monogenic, that lead to retinal degeneration and vision loss, generally in younger patients. We believe that these disease areas present several potential
7

Table of Contents                                 
opportunities for ophthalmic drug development. A 2014 report from Prevent Blindness, a patient advocacy group, estimated that the total real annual costs in the United States related to eye diseases and vision problems expressed in constant 2014 dollars would increase from $145 billion in 2014 to $376 billion by 2050.

Age Related Macular Degeneration, including Geographic Atrophy and intermediate AMD

    AMD is an age-related disease characterized by progressive degenerative abnormalities in the macula, a small area in the central portion of the retina responsible for central vision. AMD is characteristically a disease of the elderly and is the leading cause of visual loss in individuals over 50 years of age in developed countries. Based on a 2016 epidemiology paper published in Eye and Vision, we estimate that currently approximately 11 million individuals in the United States and 170 million individuals worldwide have a form of AMD. Because of increasing life expectancy in developed and developing countries, the elderly population is expected to grow significantly in coming decades. Projections based on U.S. Census Bureau data suggest that the number of Americans over the age of 65 will more than double to approximately 80 million by the middle of this century. In the absence of adequate prevention or treatment measures, the number of cases of AMD with visual loss is expected to grow in parallel with the aging population, leading to a major public health challenge with significant socioeconomic implications.

    AMD, at its early stages, presents with abnormalities in the retinal pigment epithelium, or the RPE, and yellow-white deposits under the RPE known as drusen, which generally become larger and more numerous as AMD progresses. The RPE is a layer of cells within the retina on which photoreceptors, the cells in the retina that are responsible for capturing light and converting it to electrochemical signals to the brain, are dependent for nutrients, waste disposal and other needs. As the disease progresses with age to the advanced stage, it generally progresses as either the non-neovascular or dry form of AMD or the neovascular or wet form of the disease. In the dry form of AMD, the eventual loss of photoreceptors, RPE cells and associated capillary blood vessels in the macula results in marked thinning and/or atrophy of retinal tissue. This advanced stage of dry AMD is called GA. In the wet form of AMD, abnormal new blood vessels originate beneath the retina, in a layer called the choroid, and invade into the overlying retinal layers, through a process called choroidal neovascularization, or CNV. The macula of patients diagnosed with the wet form of AMD, who are usually treated with currently approved standard of care anti-vascular endothelial growth factor, or anti-VEGF, therapies, can continue to atrophy resulting in GA, which suggests that in many AMD patients, regardless of whether they have the dry or the wet form, the final anatomic outcome leading to loss of vision is GA.

    GA is a significant cause of bilateral, irreversible and severe loss of functional vision. Many individuals with GA experience dark spots in their field of vision, referred to as scotoma, even if their central vision remains normal. As a result, GA has a major impact on the functional vision, quality of life, and independence of affected individuals. The median time for development of central GA from the time of diagnosis is two and a half years with the condition expected to develop in the fellow eye within approximately seven years. Based on a comprehensive epidemiology study published in 2004 in Archives of Ophthalmology, we estimate that there are currently approximately 1.5 million people in the United States with GA. Furthermore, based on a study published in 2015 in the American Journal of Ophthalmology, we estimate that approximately 159,000 people in the United States develop GA each year. Although anti-VEGF therapy is available for treatment of wet AMD, no FDA or European Medicines Agency, or EMA, approved treatment is currently available for GA.

Before the development of central GA or wet AMD, many AMD patients experience a less advanced form of the disease, commonly referred to as intermediate AMD. Intermediate AMD is typically characterized by the presence of extensive medium-size drusen (>63 µm and <125 µm in height) and/or one or more large drusen (>125 µm in height). While most of these patients have well preserved best corrected visual acuity, or BCVA, and are otherwise asymptomatic, many experience other visual disturbances such as blurred vision while reading or difficulty with adapting to seeing in low light. We estimate that by 2039, there will be approximately six million individuals with drusen in the United States and eight million individuals with drusen in France, Germany, Italy, Spain and United Kingdom, which we refer to as the EU5 countries, on a combined basis. Intermediate AMD is a subset of drusen.

    The absence of treatment options for GA and many other stages of AMD, including intermediate AMD, represents an area of urgent unmet medical need and a major public health concern for the expanding elderly population.

8

Table of Contents                                 
Inherited Retinal Diseases
    IRDs are a group of eye disorders caused by one or more inherited gene mutations that result in lack of functional proteins necessary for normal vision. Generally, IRDs are severe and progressive and will result in vision loss or blindness, either at birth or in early childhood, or gradually over time. IRDs are generally orphan diseases, meaning that these diseases affect fewer than 200,000 individuals in the United States. Partially due to their orphan nature, there are no approved treatment options available for most IRDs. Recently, gene therapies have emerged as potential therapies for monogenic IRDs, where a mutation to a single gene has been identified as the cause.
    Humans generally inherit a complete set of genes from each of their parents, and therefore have two copies, or alleles, for each gene, either of which may carry a mutation, and either, or both, of which may be expressed in particular cells throughout the body. An inherited condition is referred to as autosomal recessive when the subject must inherit mutated alleles from each parent for the condition to manifest. An inherited condition is referred to as autosomal dominant when the subject must only inherit one mutated allele from either parent for the condition to manifest. The predominant or standard, non-mutated form of a gene is referred to as the wildtype form, and the protein resulting from expression of the wildtype gene is referred to as wildtype protein. In autosomal recessive conditions, because both alleles for a particular gene carry a mutation, the subject cannot produce any wildtype protein, and instead the proteins that are expressed, if any, have either limited or no function. In autosomal dominant conditions, a number of factors may contribute to the condition:
a subject may express only the mutant allele and not the wildtype allele, resulting in production of only protein with limited or no function and not the wildtype protein;
a subject may be expressing both alleles, but because of the mutation on one of the alleles, the amount of functional protein may not be sufficient; or
the protein expressed by the mutant allele may be toxic to the cells in which it is produced.
    Stargardt Disease
    Stargardt disease is an IRD that causes progressive damage to the macula and retina, leading to loss of vision in children and adolescents. The most common form of Stargardt disease is STGD1, the autosomal recessive form. STGD1 is caused by mutations in the ABCA4 gene, which is responsible for making a protein that helps to clear byproducts resulting from the visual cycle from inside photoreceptor cells in the eye.

    Multiple sources, including the National Eye Institute and Genetics Home Reference, both of which are affiliated with the U.S. National Institutes of Health, or NIH, estimate the prevalence of Stargardt disease to be between 1 in 8,000 and 1 in 10,000, implying that in the United States and the EU5 on a combined basis there are currently a total of 62,000 to 77,000 affected persons. There are currently no therapies approved by the FDA or EMA to treat Stargardt disease. The FDA has recognized Stargardt disease as an orphan disease, with several treatments in development having received orphan drug designation from the FDA.

    Rhodopsin-Mediated Autosomal Dominant Retinitis Pigmentosa

    RHO-adRP is a form of retinitis pigmentosa, or RP. RP is the most prevalent IRD and is typically characterized by the initial degeneration of the rod photoreceptors, which are responsible for low light vision and peripheral vision. The degeneration of the rod photoreceptors over time leads to the degeneration of the cone photoreceptors, which are the photoreceptors in the central part of the retina that are responsible for color and sharp vision. This degeneration causes night blindness and severe and progressive visual impairment. Although often diagnosed during adolescence or young adulthood, most RP patients become legally blind by age 40.

    Rhodopsin is a biological pigment found in the rod photoreceptors that is extremely sensitive to light and thus is crucial for low light vision. There are more than 150 identified mutations in RHO, the gene that encodes for rhodopsin. The presence of a mutated RHO gene is linked to the occurrence of RHO-adRP.

    Based on disease prevalence rates contained in a study published in the Archives of Ophthalmology in 2007, we estimate that in the United States and EU5 on a combined basis, there are a total of approximately 11,000 affected persons with RHO-adRP. There is currently no FDA or EMA approved therapy to treat RHO-adRP.

9

Table of Contents                                 
    BEST1-Related IRDs

    The BEST1 gene encodes for a multifunctional protein known as bestrophin-1, or BEST1, which regulates chemical transport and signaling in RPE cells and helps maintain homeostasis in the subretinal space, the space between the photoreceptors and the RPE. The most common BEST1-related IRD is Best disease, which is generally autosomal dominant and generally affects individuals in both eyes. In Best disease, the lack of functional BEST1 protein results in the formation of egg yolk-like lesions in the macula that, over time, progress to macular atrophy and permanent loss of vision. In addition, because there are over 200 known mutations in the BEST1 gene, there are other BEST1-related IRDs being studied, including autosomal dominant and autosomal recessive forms.

    Based on disease prevalence rates contained in a study published in Ophthalmic Genetics in 2017, we estimate that in the United States and EU5 on a combined basis, there are a total of approximately 10,000 to 40,000 affected persons with BEST1-related IRDs, the substantial majority of whom we believe have the autosomal dominant form of Best disease. There are currently no FDA or EMA approved therapies to treat any BEST1-related IRD.

    Leber Congenital Amaurosis Type 10

    Leber Congenital Amaurosis, or LCA, is an IRD that manifests at birth or early in childhood. It is characterized by early onset of vision loss in children leading to blindness. Affected individuals often manifest symptoms such as roving eye movements, deep-set eyes and sensitivity to bright light. There are multiple types of LCA, which are associated with mutations in different genes. The most common type is LCA10, which is caused by mutations in the CEP290 gene. Mutations in the CEP290 gene are believed to lead to the abnormal function and potentially loss of photoreceptor cells.

    Based on disease prevalence rates contained in a study published in the American Journal of Human Genetics in 2006, we estimate that in the United States and EU5 on a combined basis, there are a total of approximately 2,700 to 4,100 affected persons with LCA10. There is currently no FDA or EMA approved therapy to treat LCA10.

    USH2A-Related IRDs

    The USH2A gene encodes for a protein called usherin. Usherin is believed to be important in the development and maintenance of cells in the retina and the inner ear. There are two principal IRDs associated with mutations in the USH2A gene: Usher 2A and USH2A-associated nonsyndromatic autosomal recessive retinitis pigmentosa. Usher 2A is an autosomal recessive syndrome characterized by hearing loss from birth and progressive vision loss, due to RP, that begins in adolescence or adulthood. USH2A-associated nonsyndromatic autosomal recessive retinitis pigmentosa is a genetic condition that manifests as vision loss without associated hearing loss.

    Based on a study published in Experimental Eye Research in 2004, we estimate that in the United States and EU5 on a combined basis, there are a total of approximately 20,000 to 62,000 affected persons with USH2A-related IRDs. There are currently no FDA or EMA approved therapies to treat Usher 2A or USH2A-associated nonsyndromatic autosomal recessive retinitis pigmentosa.

Zimura
    We are currently developing our product candidate Zimura, a C5 complement inhibitor, for the treatment of GA and intermediate AMD, both of which are different stages of AMD, and STGD1. Zimura is a chemically-synthesized, pegylated RNA aptamer. Aptamers are short molecules made up of a single stranded nucleic acid sequence or an amino acid sequence. The specific three-dimensional structure of an aptamer, which results from its specific sequence, allows it to bind molecular targets with high selectivity and specificity. Zimura is a pegylated aptamer, which means that polyethylene glycol, or PEG, a common biochemical compound attached to drugs to increase their duration of action in the human body and to decrease immune response, is linked to the chemically-synthesized strand of RNA.
The Complement System and Its Potential Role in AMD and STGD1

    The complement system consists of a series of proteins that are involved in the defense of the body against infectious agents, or pathogens, and other foreign proteins. The complement system modulates a variety of immune and inflammatory responses to these pathogens and foreign proteins. Under normal circumstances, complement proteins, together with antibodies and white blood cells, act beneficially to protect the body by removing the pathogens and foreign proteins, along with other cellular debris. The complement system is generally tightly regulated, achieving the proper balance of activation and inhibition depending on the body’s requirements. Poorly regulated or aberrant activation of the complement system, without a balanced or
10

Table of Contents                                 
proportional inhibition of complement proteins, may result in a variety of pathological conditions. For example, in a study published in Histology and Histopathology in 2012, researchers found that human retinal drusen deposits, which are the hallmark of AMD, contained components of complement proteins.
     The complement system is generally activated via one of three biological pathways commonly referred to as the classical pathway, the alternative pathway and the lectin pathway. These pathways eventually converge with the generation of an enzyme known as C3 convertase. C3 convertase cleaves, or separates, a serum protein called C3, into C3a and C3b. C3b is an important element of the body’s immune system, as it binds to pathogens and makes them susceptible to destruction by white blood cells. C3b also cleaves complement protein C5. The cleavage of C5 results in the formation of the terminal complement fragments C5a and C5b. A study published in the Journal of Biological Chemistry in 2015 concluded that C5a primes RPE cells for inflammasome activation in the presence of waste products from the visual cycle. Inflammasomes are intracellular protein structures that lead to cell death. Other studies have shown the presence of inflammasomes inside the RPE cells of post-mortem eyes of patients with GA. Formation of C5b, in combination with serum proteins C6, C7, C8 and C9, leads to the generation of C5b-9, referred to as membrane attack complex, or MAC, which has been shown to cause cell death. In particular, various studies have shown that MAC, together with the presence of lipofuscin, a yellow-brown waste byproduct from the visual cycle that is commonly found in the RPE cells of AMD patients, interferes with the proper functioning of RPE cells, leading to their dysfunction and death.

    A simplified illustration of the complement system and the relationships between the complement proteins appears below:
https://cdn.kscope.io/8525d158f7621e4de099b987b1cffe05-isee-20211231_g2.jpg
    Although the causes of AMD are not completely understood—in addition to advanced age, there are environmental and genetic risk factors that contribute to the development of AMD including ocular pigmentation, dietary factors, a positive family history for AMD, high blood pressure and smoking—a body of recent scientific literature suggests that complement system activation may also contribute to the pathogenesis of AMD. A study published in the Journal of Immunology in 2015 concluded that MAC accumulation in RPE cells leads to mitochondrial damage and cellular dysfunction, which we believe eventually leads to RPE cell death. Additionally, a study published in the American Journal of Ophthalmology in 2002 described the presence of MAC in post-mortem human donor eyes with dry AMD and GA. A study published in Nature Communications in 2021 used patient-derived induced pluripotent stem cells to show that local activation of the complement system could induce drusen formation in RPE cells and that the inhibition of C5a could mitigate AMD-like pathology in the RPE cells. We believe these findings suggest that inhibition of the complement system, especially an inhibitor that prevents the cleavage of C5 into C5a and C5b, could prevent RPE cell death and potentially other pathological causes of AMD.
11

Table of Contents                                 

    The pathogenesis of STGD1, which is caused by a mutation in the ABCA4 gene, also may involve activation of the complement system. With a defective copy of the ABCA4 protein, waste byproducts that a normal ABCA4 protein would otherwise help to clear accumulate in the RPE. Waste byproducts that accumulate in the RPE are referred to as bisretinoids. We believe that the accumulation of bisretinoids in RPE cells leads to activation of the complement system and the accumulation of MAC. In RPE cells, MAC is normally cleared by lysosomes, which are organelles within cells responsible for waste degradation and disposal. Bisretinoid accumulation leads to lysosomal dysfunction, potentially preventing the clearance of MAC. MAC accumulation also negatively impacts energy production by mitochondria inside RPE cells. Bisretinoid and MAC accumulation may lead to RPE cell deterioration and contribute to the subsequent loss of photoreceptor cells, leading to a decrease in vision over time.
    In April 2017, Proceedings of the National Academy of Sciences, or PNAS, published a study reporting on the effects of complement system modulation in the RPE of a mouse model of Stargardt disease. The researchers injected recombinant AAV containing the coding sequence for CRRY, a protein that inhibits complement system activation, into albino ABCA4 mutant mice, which led to a two-fold reduction in the accumulation of bisretinoids and a 30% increase in the number of photoreceptor nuclei at one year. The study findings indicate that the inhibition of complement activation in the albino ABCA4 mutant mice leads to healthier RPE cells as compared to RPE cells of untreated mice. Researchers at Duke University published a 2013 paper in Investigative Ophthalmology & Visual Science, in which they found in an in vitro experiment that RPE cell damage resulting from the combination of complement system activation and visual cycle waste was more damaging than either component individually. When complement factor C5 was blocked, there was a significant improvement in RPE cell viability in vitro. Based on the data from these in vitro and in vivo experiments, we believe molecules involved in the inhibition or regulation of the complement system and MAC activation are prime targets for therapeutic intervention in STGD1.

    Zimura is designed to target and inhibit the cleavage of complement protein C5 and the formation of the terminal fragments, C5a and C5b. By inhibiting the formation of complement system terminal fragments, Zimura may decrease the activation of inflammasomes and decrease the formation of MAC, thereby potentially avoiding or slowing the degeneration of RPE cells and providing the rationale as a potential therapy for various stages of AMD and STGD1.
Our Zimura Clinical Programs
    The following is a brief description of the completed GATHER1 trial, the ongoing GATHER2 and STAR trials and the planned intermediate AMD trial, and their current status:

GATHER1 (GA secondary to AMD - completed): an international, randomized, double-masked, sham controlled, multi-center Phase 2/3 clinical trial evaluating the safety and efficacy of Zimura for the treatment of GA secondary to AMD. We enrolled 286 patients in this trial across multiple treatment groups, including various Zimura doses and sham control groups, and patients were treated and followed for 18 months. In October 2019, we announced positive 12-month data from this trial and in June 2020, we completed this trial and announced 18-month data from this trial, which supported the 12-month data. In this trial, the treatment effect was observed as early as 6 months, with an increase in the absolute difference of the mean change in GA growth for treatment with either Zimura 2 mg or Zimura 4 mg, as compared to sham, at each subsequent time point, suggesting the progressive benefit of continuous treatment with Zimura.

GATHER2 (also known as ISEE2008; GA secondary to AMD - ongoing): an international, randomized, double-masked, sham controlled, multi-center Phase 3 clinical trial evaluating the safety and efficacy of Zimura for the treatment of GA secondary to AMD. In July 2021, we completed patient enrollment with a total of 448 patients enrolled. Patients were randomized on a 1:1 basis into either a treatment group with monthly intravitreal injections of Zimura 2 mg or a sham control group. As agreed to with the FDA in connection with the SPA, the primary efficacy endpoint will be the mean rate of growth (slope) estimated based on GA area measured by fundus autofluorescence, or FAF, in at least three timepoints: baseline, month 6 and month 12. We plan to analyze the primary efficacy endpoint at 12 months, and treat and follow patients for 24 months. We expect 12-month top-line data to be available during the second half of 2022, approximately one year following the enrollment of the last patient plus the time needed for database lock and analysis.

Planned intermediate AMD trial: We expect this trial to be an international, randomized, double-masked, sham-controlled, multi-center Phase 3 trial with approximately 200 patients per treatment group. We expect to follow and treat patients for 24 months. We are currently evaluating other aspects of the design of this trial, including patient inclusion criteria and primary efficacy endpoints. We plan to obtain feedback from regulatory authorities on our plans for this trial and our development strategy in this indication, before initiating this trial during the second half of 2022.
12

Table of Contents                                 

STAR (also known as OPH2005; STGD1 - ongoing): an international, randomized, double-masked, sham controlled, multi-center Phase 2b clinical trial evaluating the safety and efficacy of Zimura for the treatment of STGD1. We initially enrolled 95 patients in this trial, none of whom have remaining study visits. In July 2020, we reopened enrollment in this trial in the United States. We continue to enroll patients and plan to enroll approximately 25 additional patients, with the goal of enrolling a total of approximately 120 patients. We have been and will remain masked until results are analyzed for all the patients in this trial. We expect data from this trial to become available after the top-line data from the GATHER2 trial.

In addition to the GATHER1 trial, we have completed multiple clinical trials evaluating various doses of Zimura in age-related retinal diseases, including:

OPH2001, a Phase 1/2a clinical trial of various doses of Zimura for the treatment of GA, with a total of 47 patients enrolled;

OPH2000: a Phase 1/2a clinical trial of various doses of Zimura administered in combination with Lucentis® (ranibizumab), an anti-vascular endothelial growth factor, or anti-VEGF, agent, for the treatment of wet AMD, with a total of 60 patients enrolled;

OPH2007, a Phase 2a clinical trial of various doses of Zimura administered in combination with Lucentis for the treatment of wet AMD, with a total of 64 patients enrolled and treated; and

OPH2002: a very small Phase 2a clinical trial of Zimura in combination with anti-VEGF agents for the treatment of idiopathic polypoidal choroidal vasculopathy, or IPCV, in patients for whom anti-VEGF monotherapy had failed.

Over 350 patients have been treated with Zimura in these completed clinical trials, with treatment durations extending up to 18 months. All doses of Zimura administered in these trials were well-tolerated, with only a single occurrence of an adverse event, mild subcapsular cataract, assessed to be drug-related by participating investigators.

    Zimura is administered by intravitreal injection. Patients receiving intravitreal injections typically receive topical numbing drops or injection of a numbing agent prior to the injection. The administering physician also typically rinses the ocular surface with an antiseptic solution. By injecting the active agent into the vitreous cavity, the physician delivers the agent in close vicinity to the active disease site while minimizing the risk for systemic exposure to non-ocular tissues.

    An intravitreal injection results in elevation of intraocular pressure, or IOP, which is usually transient. In our clinical trials, the IOP is monitored after each intravitreal injection. Certain of the dosing regimens we are evaluating in STAR involve multiple intravitreal injections administered on the same day. Based on our clinical experience to date, we have not seen any meaningful or sustained increase in IOP in clinical trials involving multiple intravitreal injections on the same day, and we believe that multiple intravitreal injections likely could be delivered safely on the same day.

    Our Zimura clinical experience to date, as well as our ongoing and planned clinical trials for Zimura, are described in greater detail below.

Zimura - GA Trials
    
    GATHER1: Completed Clinical Trial Assessing the Safety and Efficacy of Various Doses of Zimura for GA Secondary to AMD
    In October 2019, we announced 12-month data from the GATHER1 trial and in June 2020, we completed and announced 18-month data from this trial. The primary efficacy analysis was performed at the 12-month time point. Pursuant to the clinical trial protocol, patients continued to be treated and followed through month 18. We remained masked regarding the treatment group to which each individual patient was randomized throughout the duration of the trial. Following the conclusion of the trial, we have continued to review and analyze the unmasked, individual patient data from this trial. In June 2021, July 2021 and February 2022, we announced data from additional post-hoc analyses that we performed.
    Trial Design and Enrollment
    A total of 286 patients were enrolled across two parts of the trial.
    Part 1. In Part 1 of the trial, 77 patients were randomized into one of three treatment groups in a 1:1:1 ratio as follows:
13

Table of Contents                                 
CohortZimura 1 mgZimura 2 mgSham
Patients262526
In Part 1 of the trial, Zimura was administered by monthly intravitreal injections, while patients in the sham control group received monthly sham injections. In 2017, based on the announcement of positive data from a competitor studying a different complement inhibitor in a Phase 2 clinical trial in GA and following review of additional third-party clinical trial data and further statistical analysis, we modified the trial design to change the total number of patients to be enrolled, to change the primary efficacy endpoint from a vision endpoint to an anatomic endpoint, to shorten the time point for the primary efficacy analysis to month 12 and to include a Zimura 4 mg dose group. The patients who were enrolled in Part 1 remained in the trial following these modifications and we remained masked regarding the treatment group to which each patient was randomized.
    Part 2. In Part 2 of the trial, we enrolled 209 additional patients, who were randomized into one of three treatment groups in a 1:2:2 ratio as follows:
CohortZimura 2 mgZimura 4 mgSham
Patients428384
In Part 2 of the trial, patients in the Zimura 2 mg group received one intravitreal injection of Zimura 2 mg and one sham injection at each monthly visit; patients in the Zimura 4 mg group received two intravitreal injections of Zimura 2 mg at each monthly visit; and patients in the sham control group received two sham injections at each monthly visit. In its current formulation, doses of Zimura above 2 mg would require more than one intravitreal injection.
    The primary efficacy endpoint was the mean rate of growth of GA over 12 months, while secondary efficacy endpoints evaluated mean changes in patients' visual acuity in different lighting conditions over the same period.
    Key Inclusion and Exclusion Criteria
    In order to determine eligibility to participate in the trial, the location and size of each patient’s GA was assessed using FAF images. FAF is a common imaging technique used by retina specialists for photographing and documenting the size of GA present in the back of the eye, or fundus. Autofluorescence refers to the natural emission of light by biological structures. In FAF images, areas of atrophy are characterized by lower autofluorescence. An independent masked reading center assessed FAF images throughout the trial, including at baseline to determine eligibility.
    The fovea is the central portion of the macula where visual acuity is the highest. We sought to enroll patients whose GA was located, in whole or in part, within 1500 microns of the foveal center but that did not enter the foveal center. A disc area is the size of the area of the retina where a standard sized optic nerve emerges, which is generally accepted to be 2.5 mm2. We sought to enroll patients with a total GA area of between 1 and 7 disc areas (or 2.5 mm2 to 17.5 mm2) inclusive. If the GA was multifocal, meaning it was not continuous and had multiple locations, at least one focal lesion needed to measure at least 0.5 disc areas (or 1.25 mm2). Each patient's BCVA was also assessed using the Snellen equivalent scale, which equates the detail a patient can see at a distance of 20 feet with the detail an individual with 20/20 vision can see at a greater distance. For example, a patient with 20/50 vision sees at 20 feet what a person with 20/20 vision would see at 50 feet. To be eligible to participate in the trial, patients' BCVA in the study eye was initially required to be between 20/25 and 20/100 inclusive during Part 1 of the trial. As part of the modifications we made for Part 2 of the trial, we expanded the inclusion criteria to include patients whose BCVA in the study eye was between 20/25 and 20/320 inclusive. BCVA on the Snellen equivalent scale can be equated to a number of letters of vision on the Early Treatment of Diabetic Retinopathy Study, or ETDRS, chart. BCVAs of 20/25, 20/100 and 20/320 on the Snellen equivalent scale are equivalent to 80 ETDRS letters, 50 ETDRS letters and 25 ETDRS letters, respectively.
    Patients were stratified across treatment groups by baseline BCVA, baseline GA area and the baseline pattern of autofluorescence at the margins of the GA lesion, referred to as the junctional zone. Stratification for baseline characteristics is a method for allocating patients to treatment groups to ensure that there are approximately the same ratio of patients with a given baseline characteristic in each treatment group as the overall randomization ratio. For vision, patients were stratified based on whether their vision was above or below 50 ETDRS letters. For GA area, patients were stratified based on whether their GA area was above or below 4 disc areas. For autofluorescence pattern, patients were stratified based on several well-known patterns that have been described in the scientific literature.
    As part of the modifications for Part 2 of the trial, we amended the clinical trial protocol to provide that patients in any arm of the trial who developed CNV in the study eye would be removed from the trial and any future study treatments and assessments, since we did not believe, at the time of the modifications, that GA lesions for patients with CNV in the study eye could be reliably measured with FAF images.
14

Table of Contents                                 
    Additionally, patients who had a prior history of intravitreal treatment for any indication in either eye were excluded, as well as patients with any ocular condition in the study eye that could affect central vision or otherwise confound assessments.
    Baseline Characteristics
    We collected baseline characteristics for all patients participating in the trial. GA area was measured based on the area of GA in square millimeters (mm2). Reported scientific literature indicates that the rate of GA growth may be dependent on the baseline lesion size, with larger GA lesions generally growing faster than smaller lesions, subject to an overall plateau effect as the GA grows to consume almost the entire macula. For this reason, patients were stratified in this trial based on their baseline lesion size. To further mitigate for the impact of baseline lesion size on the growth of GA, a square root transformation was performed. It is reported in the scientific literature and accepted in the field that using the square root of the lesion size for calculating the mean change in size over time mitigates for the impact of the baseline lesion size. We used the square root transformation of GA area, measured in millimeters (mm), to perform the assessment of the primary efficacy endpoint in the GATHER1 trial.
    Although GA can be associated with profound and irreversible vision loss, the vision loss that patients experience is not necessarily linearly correlated to the progression of GA. The specific location of the GA within patients' retinas can affect patients' vision differently. In general, patients whose GA expands into the fovea experience vision loss that is disproportionate to the vision loss experienced by patients whose GA does not expand into the fovea. Further, patients with GA may demonstrate good visual acuity but poor functional vision if their GA results in dark spots, referred to as scotomas, in their central visual field. Patients with scotomas may be able to read a vision chart letter-by-letter, especially if their GA has not entered the fovea, but they may have trouble reading a paragraph of text or driving, as these activities of daily living draw upon a field of vision that is broader than a single point of focus. For this reason, and based on our prior interactions with the FDA, we believe the efficacy assessment that is most likely to demonstrate clinical relevance for an investigational product across a heterogeneous GA patient population is reduced rate of growth in GA. If an investigational product can slow the growth of GA, it has the potential to preserve, or slow the loss of, functional vision for patients whose GA is expanding into critical areas of their central visual field, which would be clinically meaningful.
    In addition to baseline GA area, it has been reported in the scientific literature that GA that is non-subfoveal, or that has not impacted the foveal center, is positively correlated with a higher rate of GA area progression and growth. We believe that once a GA lesion expands into the fovea, the rate of growth may be slowed. In addition, once GA expands to encompass the central fovea, additional progression can be limited in the central region of the retina, with any continued expansion occurring predominantly in the outer part of the retina.
    In addition to measuring the area of GA, we followed patients for changes in their vision (BCVA), as measured both at a standard light level, or luminance, and lower light level, or low luminance (LL BCVA), measured in each case by ETDRS letters. Testing for visual acuity serves as an important safety assessment to assure that the decrease in visual acuity in the Zimura treatment groups was not different from the sham control groups. Because we believe that BCVA is not the optimal assessment to evaluate the impact of GA on patients’ functional vision, we included vision in the prespecified statistical analysis as a secondary, and not as a primary, endpoint.
    For patients within each treatment group, where a numerical measurement was collected, we calculated the mean and standard deviation, or SD, for each measurement. SD is a statistical measure of the variability of a particular measurement within a patient population. Generally, two-thirds of all patients fall within approximately one SD, plus or minus, of the mean for any particular measurement.
    The baseline characteristics are presented below for each treatment group in each Part of the trial. These baseline characteristics include the ITT, or intent-to-treat, population, which includes all patients who were randomized in the trial and who received at least one dose of study drug in the relevant treatment group. Based on these data, we believe that the baseline characteristics were generally balanced across the treatment groups.
15

Table of Contents                                 
Part 1Part 2
Cohort
Zimura 1 mg
(N = 26)
Zimura 2 mg
(N = 25)
Sham
(N = 26)
Zimura 2 mg
(N = 42)
Zimura 4 mg
(N = 83)
Sham 4 mg
(N = 84)
Mean age, years (SD)73.8 (8.0)77.7 (9.6)78.1 (8.4)79.4 (10.7)79.2 (8.3)78.2 (9.0)
Female gender, number (%)15 (57.7%)18 (72.0%)18 (69.2%)27 (64.3%)58 (69.9%)61 (72.6%)
Active smokers, number (%)6 (23.1%)10 (40.0%)7 (26.9%)15 (35.7%)26 (31.3%)29 (34.5%)
Caucasian race, number (%)25 (96.2%)25 (100%)25 (96.2%)42 (100%)82 (98.8%)82 (97.6%)
Iris color:
    Light13 (50.0%)16 (64.0%)17 (65.4%)29 (69.0%)54 (65.1%)57 (67.9%)
    Medium7 (26.9%)6 (24.0%)7 (26.9%)9 (21.4%)22 (26.5%)21 (25.0%)
    Dark6 (23.1%)3 (12.0%)2 (7.7%) 4 (9.5%)7 (8.4%)6 (7.1%)
Mean intraocular pressure, mmHg (SD)15.0 (1.9)14.6 (2.6)14.5 (2.8)14.1 (2.4)15.2 (2.5)14.9 (2.5)
Non-subfoveal GA, number (%)23 (88.5%)20 (80.0%)22 (84.6%)42 (100%)81 (97.6%)82 (97.6%)
Mean GA area, mm2 (SD)
7.37 (4.32)6.60 (3.35)7.33 (3.73)7.77 (4.01)7.90 (4.18)7.45 (3.89)
Mean Sq. Root of GA area, mm (SD)2.591 (0.827)2.471 (0.717)2.623 (0.687)2.705 (0.684)2.715 (0.732)2.636 (0.709)
Bilateral GA, number (%)26 (100%)25 (100%)25 (96.2%)42 (100%)83 (100%)83 (98.8%)
Mean BCVA, ETDRS letters (SD)70.5 (8.0)71.6 (7.5)71.3 (7.5)69.4 (11.3)69.5 (9.8)68.3 (11.0)
Mean LL BCVA, ETDRS letters (SD)38.1 (22.7)43.0 (19.7)36.7 (21.2)33.1 (21.3)36.8 (20.9)33.9 (18.8)
Patients with Hyperautofluorscence (%)25 (96.2%)25 (100%)26 (100%)41 (97.6%)82 (98.8%)83 (98.8%)
Height, cm (SD)168.7 (12.0)165.9 (8.6)164.9 (12.1)164.9 (11.0)163.7 (10.6)163.7 (9.3)
Weight, kg (SD)81.9 (17.8)75.6 (14.9)74.7 (15.6)80.8 (22.3)76.2 (18.2)78.4 (17.8)
    12-Month Data
12-Month Safety Data
    Based on our review of the safety data to date, Zimura was generally well tolerated after 12 months of administration. Over this 12-month time period, there were no investigator-reported ocular serious adverse events, no Zimura-related adverse events, no cases of Zimura-related intraocular inflammation, no cases of Zimura-related increased intraocular pressure, no cases of endophthalmitis, and no discontinuations attributed by investigators to Zimura in the trial. The numbers below are based on investigator-reported adverse events occurring up through the month 12 time point for all patients.
16

Table of Contents                                 
    The number of patients with one or more serious, systemic, treatment emergent adverse events, or TEAEs, organized by MedDRA system organ class, a standard method of reporting adverse events, are set forth in the table below:
Patients with One or More Serious TEAEs in Any Organ Class
Part 1Part 2
Zimura 1 mg
(N = 26)
Zimura 2 mg
(N = 25)
Sham
(N = 26)
Zimura 2 mg
(N = 42)
Zimura 4 mg
(N = 83)
Sham 4 mg
(N = 84)
Cardiac disorders1 (3.8%)0002 (2.4%)3 (3.6%)
Gastrointestinal disorders1 (3.8%)1 (4.0%)1 (3.8%)02 (2.4%)6 (7.1%)
General disorders and administration site conditions0001 (2.4%)00
Hepatobiliary disorders01 (4.0%)1 (3.8%)01 (1.2%)0
Infections and infestations01 (4.0%)01 (2.4%)6 (7.2%)2 (2.4%)
Injury, poisoning and procedural complications01 (4.0%)01 (2.4%)3 (3.6%)2 (2.4%)
Metabolism and nutrition disorders001 (3.8%)000
Musculoskeletal and connective tissue disorders1 (3.8%)00002 (2.4%)
Benign, malignant and unspecified neoplasms (including cysts and polyps)00001 (1.2%)2 (2.4%)
Nervous system disorders1 (3.8%)1 (4.0%)1 (3.8%)1 (2.4%)3 (3.6%)1 (1.2%)
Psychiatric disorders001 (3.8%)001 (1.2%)
Respiratory, thoracic and mediastinal disorders01 (4.0%)002 (2.4%)3 (3.6%)
    The number of patients with one or more systemic TEAEs, including serious systemic TEAEs, identified by the investigator as related to the study drug (Zimura or sham) are set forth in the table below:
Reported Systemic TEAEs Related to Zimura or Sham
Part 1Part 2
Zimura 1 mg
(N = 26)
Zimura 2 mg
(N = 25)
Sham
(N = 26)
Zimura 2 mg
(N = 42)
Zimura 4 mg
(N = 83)
Sham 4 mg
(N = 84)
Subjects with at least one TEAE000000
    The number of patients with one or more ocular TEAEs in the study eye are set forth in the table below:
Reported Ocular TEAEs in Study Eyes
Part 1Part 2
Zimura 1 mg
(N = 26)
Zimura 2 mg
(N = 25)
Sham
(N = 26)
Zimura 2 mg
(N = 42)
Zimura 4 mg
(N = 83)
Sham 4 mg
(N = 84)
Eye disorders12 (46.2%)8 (32.0%)4 (15.4%)24 (57.1%)50 (60.2%)33 (39.3%)
Eye disorders related to injection procedure3 (11.5%)4 (16.0%)2 (7.7%)14 (33.3%)36 (43.4%)23 (27.4%)

    All of the above TEAEs that were not related to the injection procedure were also not related to the study drug. The number of patients with one or more ocular TEAEs in the study eye, identified by the investigator as related to the study drug (Zimura or sham) is set forth in the table below:
Reported Ocular TEAEs in the Study Eye Related to Zimura or Sham
Part 1Part 2
Zimura 1 mg
(N = 26)
Zimura 2 mg
(N = 25)
Sham
(N = 26)
Zimura 2 mg
(N = 42)
Zimura 4 mg
(N = 83)
Sham 4 mg
(N = 84)
Subjects with at least one TEAE000000
    Incidence of CNV. During the first 12 months of this trial, the incidence of investigator reported CNV in the untreated fellow eyes was 10 patients (3.5%) and in the study eyes was 3 patients (2.7%) in the sham group, 1 patient (4.0%) in the Zimura 1 mg group, 6 patients (9.0%) in the Zimura 2 mg group, and 8 patients (9.6%) in the Zimura 4 mg group.
17

Table of Contents                                 
    Statistical Analysis for Efficacy Measures
    GATHER1 was designed as a Phase 2b screening trial based on the criteria described by Drs. Thomas Fleming and Barbara Richardson in their publication regarding clinical trial design in the context of microbicides for the prevention of HIV in the Journal of Infectious Disease in 2004. A screening trial uses the same primary efficacy endpoint as an anticipated Phase 3 clinical trial that would be used to support potential marketing approval. However, screening trials generally have a considerably smaller sample size than the anticipated Phase 3 clinical trial. Because it is particularly important to avoid false negative outcomes in a screening trial, screening trials may have higher false positive error rates than would typically be allowed in a Phase 3 trial.
    A Phase 2b screening trial has three possible outcomes:
If the estimated effect size indicates low levels of benefit, the experimental intervention would be judged as not plausibly more efficacious than the sham control, and should be discarded in its current dosage in the indication evaluated;
If the estimated effect size is moderate but clinically relevant, with a relatively low likelihood of being achieved (for example, a probability of less than 10%) if there truly were no effect, the experimental intervention would be judged as plausibly more efficacious than the sham control and should be evaluated definitively in subsequent Phase 3 clinical trials; or
If the estimated effect size is clinically relevant and reaches the traditional threshold for statistical significance, as was the case in the GATHER1 trial for both the Zimura 2 mg and Zimura 4 mg dose groups as compared to the corresponding sham control groups, the trial could potentially serve as one of the two pivotal trials typically required for marketing approval.
A properly designed Phase 2b screening trial has a considerable likelihood of ruling out ineffective or harmful interventions, while providing encouraging (or even statistically significant) evidence of benefit that likely would require confirmation by one additional, independent Phase 3 trial.
    For the primary and secondary efficacy analyses we evaluated the ITT population in accordance with a prespecified statistical analysis plan.
    The statistical evidence from the GATHER1 trial regarding the comparison of Zimura 2 mg to sham control is provided by data from both Part 1, with a 1:1 randomization ratio of patients receiving Zimura 2 mg (25 patients) and sham (26 patients), as well as data from Part 2, with a 1:2 randomization ratio of patients receiving Zimura 2 mg (42 patients) and sham (84 patients), for a total of 67 patients receiving Zimura 2 mg and 110 patients receiving sham. While we believe it is appropriate to use the aggregate data from Parts 1 and 2 in the analysis of the relative effects of Zimura 2 mg as compared to sham, it would not be appropriate to simply pool the data from patients in both Parts 1 and 2, in particular, because the randomization fraction differs across these two parts of the trial. However, based on the randomization procedures used in each part of the trial, for purposes of statistical comparisons, within Part 1 of the trial, the 25 patients receiving Zimura 2 mg should be comparable to the 26 patients receiving sham. Similarly, for purposes of statistical comparisons, within Part 2 of the trial, the 42 patients receiving Zimura 2 mg should be comparable to the 84 patients receiving sham. The efficacy of Zimura 2 mg was therefore evaluated through an analysis which included a regression factor by trial part. The statistical analysis for the Zimura 4 mg group as compared to sham compares data for patients from Part 2 of the trial only. Data from patients receiving Zimura 1 mg in Part 1 of the trial was not part of the prespecified statistical analysis for the efficacy endpoints.
    The prespecified statistical analysis plan for the primary and secondary endpoints of this trial used the mixed-effects repeated measures model, or MRM, to compare data for the Zimura 2 mg and Zimura 4 mg groups to the corresponding sham groups. Repeated measures models are often used when the same outcome is measured at several time points for each patient. These models make use of all available data points to estimate the measurement of interest, the mean rate of change of GA growth, without making overly restrictive assumptions. In addition, these models are generally robust to missing data under the assumption that data are missing at random. During the course of a clinical trial, patients may withdraw from the clinical trial because their condition is asymptomatic, because patients believe that continued participation in the trial is not justified based on the time commitment or treatment burden, such as receiving monthly intravitreal injections, at the recommendation of the investigator or because the protocol requires it. Additionally, patients may not come to a scheduled visit at which key assessments are scheduled to be taken or patient data may not be evaluable because of poor image quality or data recording errors. Early withdrawal, missed visits and unevaluable data all result in data missing from the final data set for a clinical trial. Although the protocol called for collection of FAF images of GA at baseline, at month 6 and at month 12, for patients who withdrew from the trial before month 12, the study protocol required the collection of an FAF image to provide a measurement of GA at the time of withdrawal, which was included in the primary analysis so long as it was taken within the month prior to either the month 6 or month 12 time point. Because the MRM model would only need measurements from at least two different
18

Table of Contents                                 
time points for analysis purposes, one of which must be the baseline, we were able to include in the primary analysis all patients who had GA measurements at baseline and within the month prior to either month 6 or month 12, or both.
    The following table sets forth for the data in the primary statistical analysis the number of patients for whom GA measurements were missing for purposes of performing this analysis. Patients whose GA measurements were missing at baseline, or at both month 6 and month 12, could not be included in the primary analysis. All other patients were included in the primary analysis.
CohortZimura 2 mg
(N = 67)
Sham 2 mg
(N = 110)
Zimura 4 mg
(N = 83)
Sham 4 mg
(N = 84)
Missing GA measurement at BL, M6 and M120 (0%)0 (0%)0 (0%)0 (0%)
Missing GA measurement at M6 and M12 only8 (11.9%)11 (10.0%)17 (20.5%)5 (6.0%)
Missing GA measurement at BL only0 (0%)0 (0%)1 (1.2%)0 (0%)
Total patients excluded from MRM analysis8 (11.9%)11 (10%)18 (21.7%)5 (6.0%)
Missing GA measurement at M6 only1 (1.5%)7 (6.4%)3 (3.6%)6 (7.1%)
Missing GA measurement at M12 only10 (14.9%)9 (8.1%)11 (13.3%)7 (8.3%)
No missing GA measurements(a)
48 (71.6%)83 (75.5%)51 (61.5%)66 (78.6%)
Total patients included in MRM analysis59 (88.0%)99 (90.0%)65 (78.3%)79 (94.1%)
    BL = Baseline; M6 = Month 6; M12 = Month 12
    (a) = complete observations
    In total, 53 (18.5%) patients withdrew from the trial during the first 12 months. Of the patients who withdrew during the first 12 months, 2 patients were from the Zimura 1 mg group (7.7% withdrawals), 12 patients were from the combined Zimura 2 mg group (17.9% withdrawals), 25 patients were from the Zimura 4 mg group (30.1% withdrawals) and 14 patients were from the combined sham group (12.7% withdrawals). GA measurements for patients who withdrew from the study prior to the 12 month time point may have been included in the MRM analysis, as detailed in the table above.
    Sensitivity analyses. We performed several sensitivity analyses to assess the impact of missing data on the robustness of the GATHER1 trial results.  The analyses we performed were based on approaches that the FDA generally recommends sponsors of investigational products use to evaluate their clinical data. Based on these analyses, and accounting for the data missing from our data set because of patient withdrawals or for other reasons, the statistical analysis for the 12 month data from the GATHER1 trial appear to be robust. Descriptions of these sensitivity analyses and their outcomes are summarized below. For a description of the thresholds we used to determine statistical significance on the primary efficacy endpoint, see the paragraph below the tables below under "Primary Efficacy Endpoint Data."
A "shift imputation" approach, in which missing data are imputed, or replaced, by values calculated from similar patients with observed values, plus a defined shift. The analysis is repeated assuming a progressively larger shift with each iteration.  The analysis becomes increasingly conservative as the shift increases (because missing values are replaced by worse values than would have been observed, had the values not been missing). The shift is increased until a tipping point is reached and statistical significance is lost. If significance is lost for smaller shift values, the results of the analyses are sensitive to missing data, whereas if significance is lost for larger shift values, the results of the analyses are robust to missing data.
A shift of at least 0.05 mm in terms of square root of GA growth was required to lose statistical significance for both the Zimura 2 mg and Zimura 4 mg groups. The difference between the Zimura treatment groups and the corresponding sham groups, in terms of mean change of square root of GA growth, was 0.11 mm for the Zimura 2 mg group and 0.12 mm for the Zimura 4 mg group, so a shift of 0.05 mm represents more than 40% of the observed treatment effect, which is large.
Arbitrary imputation approaches, in which missing data are replaced by:
the mean value of the same treatment group, which seems a reasonable imputation approach since it replaces missing values by the mean of all observed values in the same treatment group;
the mean value of the comparator treatment group, which is a very conservative approach. If there is a treatment effect, missing values in the sham control group are replaced by better values, on average, from the Zimura treatment group, while missing values in the Zimura treatment group are replaced by worse values, on average, from the sham control group;
19

Table of Contents                                 
the mean value of both treatment groups, which is a conservative approach because it assumes no treatment effect for missing values; and
the mean value of the sham control group, which is also a conservative approach because it draws only upon data from the sham control group, which by definition did not have any treatment benefit.
Statistical significance for the reduction in mean rate of GA growth for the Zimura 2 mg and Zimura 4 mg groups as compared to the corresponding sham groups was retained for all arbitrary imputation approaches.
A “pattern mixture model imputation” approach, which is a technically complex model and is especially useful when data are suspected to be missing “not at random”.
Statistical significance for the reduction in mean rate of GA growth for the Zimura 2 mg and Zimura 4 mg groups as compared to the corresponding sham groups was retained for the pattern mixture model imputation approach, which suggests again that the results of the analyses are robust to missing data, even if these data had been missing not at random.
Based on our sensitivity analyses, and accounting for the data missing from our data set because of patient withdrawals or for other reasons, we believe the statistical analysis for the 12 month data from the GATHER1 trial is robust.
    Primary Efficacy Endpoint Data
    The prespecified primary efficacy endpoint was an anatomic endpoint, the mean change in rate of GA growth over 12 months, as measured by FAF based on readings at three time points: baseline, month 6 and month 12, calculated using the square root transformation of the GA area. The readings were performed by an independent masked reading center. The primary efficacy endpoint data are summarized in the following table:
Mean Rate of Change in GA Area from Baseline to Month 12
(MRM Analysis) (Square Root Transformation)
CohortZimura 2 mg
(N = 67)
Sham 2 mg
(N = 110)
DifferenceP-value% Difference
Mean Change in GA(a) (mm)
0.292(b)
0.402(b)
0.11
0.0072(c)
27.38%
CohortZimura 4 mg
(N = 83)
Sham 4 mg
(N = 84)
DifferenceP-value% Difference
Mean Change in GA(a) (mm)
0.3210.4440.124
0.0051(c)
27.81%
(a)Based on the least squares mean from the MRM model.
(b)These least squares means are estimates from the MRM model, drawing on all available data, including data from groups with different randomization ratios in Part 1 and Part 2, and should not be interpreted as directly observed data.
(c)Reflects statistically significant p-value; Hochberg procedure was used for significance testing.
    
20

Table of Contents                                 
    The analysis of the mean change in GA growth for Zimura 2 mg as compared to Sham 2 mg was adjusted for the fact that this dose of Zimura was tested in the two parts of the trial, which had different randomization ratios. The least squares mean changes in GA in Part 1 and Part 2 are shown separately in the following table:
Mean Rate of Change in GA Area from Baseline to Month 12
(MRM Analysis) (Square Root Transformation)
CohortZimura 2 mg
(N = 25)
Sham 2 mg
(N = 26)
Difference
Part 1
Mean Change in GA(a) (mm)
0.3290.422490.093
(a)Based on the least squares mean from the MRM model.
CohortZimura 2 mg
(N = 42)
Sham 2 mg
(N = 84)
Difference
Part 2
Mean Change in GA(a) (mm)
0.3080.422450.114
(a)Based on the least squares means from the MRM model.
    When the data from the Zimura 2 mg comparisons from each Part of the trial are analyzed using the MRM model, which includes a regression factor by part, the mean difference in GA growth over 12 months between the Zimura 2 mg and sham control groups is 0.110 mm.
    Statistical significance is established by performing statistical analysis on a data set to assess the degree to which an observed outcome is likely to be associated with variability in the studied patient population or chance as compared to the impact of the investigational product being studied. A higher degree of statistical significance is associated with a lower p-value. Typically, a two-sided p-value of 0.05 or less represents statistical significance when performing only a single prespecified primary analysis for a single primary endpoint. However, when multiple doses of a drug are tested, a more stringent statistical method that accounts for multiple comparisons must be applied. For this purpose, we used the Hochberg multiple comparison procedure to assess the statistical significance of the results observed in the GATHER1 trial. Under the Hochberg procedure, it is necessary to use a stricter standard for statistical significance (a two-sided p-value of 0.025 or less) for any particular dose. For GATHER1, the results for the primary efficacy endpoint observed for both the Zimura 2 mg and Zimura 4 mg groups, as compared to the corresponding sham group, achieved p-values of 0.0072 and 0.0051, respectively, both of which are less than 0.025, indicating that both results were statistically significant.
    Observed GA Data (non-square root transformation)
    In addition to analyzing the mean rate of change in GA area at month 12 using the square root transformation of the GA area (measured in millimeters (mm)), we also analyzed the mean rate of change in GA area using the observed GA area (without the square root transformation, measured in square millimeters (mm2)), with the MRM model. This descriptive analysis was also part of the prespecified statistical analysis plan for this trial. The observed mean GA area data for the Zimura 2 mg and Zimura 4 mg groups as compared to the corresponding sham control groups are summarized in the following table:
Mean Rate of Change in GA Area from Baseline to Month 12
(MRM Analysis) (Observed)
CohortZimura 2 mg
(N = 67)
Sham 2
(N = 110)
Difference% Difference
Mean Change in GA(a) (mm2)
1.592(b)
2.290(b)
0.69730.45%
CohortZimura 4 mg
(N = 83)
Sham
(N = 84)
Difference% Difference
Mean Change in GA(a) (mm2)
2.0612.770.70925.59%
(a)Based on the least squares mean from the MRM model.
(b)These least squares means are estimates from the MRM model, drawing on all available data, including data from groups with different randomization ratios in Part 1 and Part 2, and should not be interpreted as directly observed data.

Secondary Efficacy Endpoints Data
    The prespecified secondary endpoints in this trial were the mean change in BCVA from baseline to month 12 and the mean change in LL BCVA from baseline to month 12, both as measured by ETDRS letters. Testing for visual acuity serves as an important safety assessment to assure that the decrease in visual acuity in the Zimura treatment groups was not different
21

Table of Contents                                 
from the sham control groups. Because we believe that BCVA is not the optimal assessment to evaluate the impact of GA on patients’ functional vision, we included vision in the prespecified statistical analysis as a secondary, and not as a primary, endpoint.
    The GATHER1 trial was not designed to reliably assess differences in mean changes in BCVA or LL BCVA with statistical significance. Data for the secondary endpoints are summarized in the following tables:
Mean Change in BCVA from Baseline to Month 12
(MRM Analysis) (ETDRS letters)
CohortZimura 2 mg
(N = 67)
Sham 2 mg
(N = 110)
Difference
Mean Change in BCVA(a)
-7.90(b)
-9.29(b)
1.39
CohortZimura 4 mg
(N = 83)
Sham 4 mg
(N = 84)
Difference
Mean Change in BCVA(a)
-3.79-3.51-0.28
(a)     Based on the least squares mean from the MRM model.
(b)    These least squares means are estimates from the MRM model, drawing on all available data, including data from groups with different randomization ratios in Part 1 and Part 2, and should not be interpreted as directly observed data.

Mean Change in LL BCVA from Baseline to Month 12
(MRM Analysis) (ETDRS letters)
CohortZimura 2 mg
(N = 67)
Sham 2 mg
(N = 110)
Difference
Mean Change in LL BCVA(a)
-1.03(b)
-1.41(b)
0.38
CohortZimura 4 mg
(N = 83)
Sham 4 mg
(N = 84)
Difference
Mean Change in LL BCVA(a)
1.532.97-1.44
(a)     Based on the least squares mean from the MRM model.
(b) These least squares means are estimates from the MRM model, drawing on all available data, including data from groups with different randomization ratios in Part 1 and Part 2, and should not be interpreted as directly observed data.

    Zimura 1 mg 12-Month Efficacy Data
    Efficacy data from patients receiving Zimura 1 mg was not part of the prespecified statistical analysis. The total number of patients randomized to the Zimura 1 mg group (26 patients) is relatively small, and the trial was not powered to reliably assess differences in outcomes for these patients as compared to patients in the sham control group in Part 1 (26 patients). However, we performed descriptive analyses on the 12 month data for patients in the Zimura 1 mg as compared to the patients in the sham control group in Part 1 of the trial to aid our assessment of whether a dose response relationship was present across treatment groups included in the clinical trial.
    GA area data for the Zimura 1 mg group and the sham group from Part 1 of the trial are summarized in the following tables:
Summary of GA Area (mm) and Mean Percentage Change from Baseline to Month 12
(Square Root Transformation)
CohortZimura 1 mg
(N = 26)
Sham Part 1
(N = 26)
Mean Sq. Root of GA at BL, mm (SD)2.591 (0.827)2.623 (0.687)
Mean Sq. Root of GA at M12, mm (SD)3.055 (0.604)3.021 (0.722)
Difference0.4640.398
Mean % Change(a) (SD)
14.48% (8.2%)16.49% (7.2%)
BL = Baseline; M12 = Month 12
(a) Mean % Change in GA area is an average of the percentage change in GA area observed for each patient.
    Although the sample size for the Zimura 1 mg group is small, we believe the apparent reduction in mean percentage change in GA area from baseline to month 12 in the Zimura 1 mg group as compared to the sham control group in Part 1, when
22

Table of Contents                                 
combined with the statistically significant results observed for the primary efficacy endpoint for the Zimura 2 mg and Zimura 4 mg groups as compared to their corresponding sham control groups, suggest a potential dose response relationship across treatment groups.
    18-Month Data
    The primary purpose of the 18 month time point was to gather additional safety data. This trial was not designed to assess, and the prespecified statistical analysis plan for the trial did not include assessing, the statistical significance of the 18 month efficacy data for the treatment groups as compared to the corresponding sham control groups. The reduction in the mean rate of GA growth over 18 months was 28.11% for the Zimura 2 mg group as compared to the corresponding sham control group and 29.97% for the Zimura 4 mg group as compared to the corresponding sham control group. The descriptive p-values for the treatment effects at month 18 were p=0.0014 for the Zimura 2 mg group and p=0.0021 for the Zimura 4 mg group. The analysis of the 18-month efficacy data is descriptive only.
GA Growth Data over 18 Months
The mean rate of change in GA growth over 18 months was measured by FAF based on readings at four time points (baseline, month 6, month 12 and month 18) and was calculated using the square root transformation of the GA area. The FAF images were assessed by an independent masked reading center. The prespecified statistical analysis plan used MRM to compare data for the Zimura 2 mg and Zimura 4 mg groups to the corresponding sham groups. Detailed data are shown below (the p-values for the 18 month statistical analyses are descriptive in nature):

Mean Rate of Change in Geographic Atrophy (GA) Area from Baseline to Month 18
(Square Root Transformation)
CohortZimura 2 mg
(N = 67)
Sham
(N = 110)
Difference% DifferenceP-Value
(Descriptive)
Mean Change in GA(a) (mm)
0.4300.5990.16828.11%0.0014
CohortZimura 4 mg
(N = 83)
Sham
(N = 84)
Difference% DifferenceP-Value
(Descriptive)
Mean Change in GA(b) (mm)
0.3910.5590.16729.97%0.0021

(a) Based on least squares means from MRM model, drawing on all available data at the month 18 time point, including data from groups with different randomization ratios in Part 1 and Part 2, and should not be interpreted as directly observed data.
(b) These least squares means are estimates of the MRM model, drawing on all available data, at the month 18 time point.

The graphs below illustrate the difference in mean rate of GA growth between each of the Zimura 2 mg and Zimura 4 mg treatment groups and their corresponding sham control groups based on the MRM analysis at both 12 months and 18 months.

Primary Efficacy Endpoint Met at 12 MonthsDecrease in GA Growth Over 18 Months
Zimura 2 mg vs ShamZimura 2 mg vs Sham
(Square Root Transformation)(Square Root Transformation)
https://cdn.kscope.io/8525d158f7621e4de099b987b1cffe05-isee-20211231_g3.gifhttps://cdn.kscope.io/8525d158f7621e4de099b987b1cffe05-isee-20211231_g4.gif

ITT Population; Based on the least squares means from MRM model drawing on all available data at the respective 12 month and 18 month analysis time points, including data from groups with different randomization ratios in Part 1 and Part 2, and should not be interpreted as directly observed data; Hochberg procedure used for significance testing for 12 month data.

23

Table of Contents                                 
Primary Efficacy Endpoint Met at 12 MonthsDecrease in GA Growth Over 18 Months
Zimura 4 mg vs ShamZimura 4 mg vs Sham
(Square Root Transformation)(Square Root Transformation)

https://cdn.kscope.io/8525d158f7621e4de099b987b1cffe05-isee-20211231_g5.gifhttps://cdn.kscope.io/8525d158f7621e4de099b987b1cffe05-isee-20211231_g6.gif

ITT Population; Based on the least squares means from the MRM model drawing on all available data at the respective 12 month and 18 month analysis time points; Hochberg procedure used for significance testing for 12 months data.

    18-Month Zimura 2 mg GA Data by Part

    Consistent with the analysis performed at 12 months, the analysis of the mean change in GA growth for Zimura 2 mg as compared to the corresponding sham control group over 18 months was adjusted for the fact that this dose of Zimura was tested in both Part 1 and Part 2 of the trial, each of which had different randomization ratios.
    
    The least squares mean changes in GA in Part 1 and Part 2 at month 18 are shown separately in the following table:

Mean Rate of Change in GA Area from Baseline to Month 18
(MRM Analysis) (Square Root Transformation)
CohortZimura 2 mg
(N = 25)
Sham
(N = 26)
Difference% Difference
Part 1
Mean Change in GA(a) (mm)
0.4640.6350.17026.84%
(a)Based on the least squares mean from the MRM model.
CohortZimura 2 mg
(N = 42)
Sham
(N = 84)
Difference% Difference
Part 2
Mean Change in GA(a) (mm)
0.4400.6080.16827.67%
(a)Based on the least squares means from the MRM model.
    When the data for the Zimura 2 mg groups from each Part of the trial as compared to the corresponding sham control groups are analyzed using the MRM model, which includes a regression factor by part, the mean difference in GA growth over 18 months between the Zimura 2 mg and sham control groups is 0.168 mm, representing a 28.11% relative benefit in the Zimura 2 mg group as compared to the corresponding sham control group.
    Observed 18-Month GA Data (non-square root transformation)
    In addition to analyzing the mean rate of change in GA area at month 18 using the square root transformation of the GA area (measured in millimeters (mm)), we also analyzed the mean rate of change in GA area using the observed GA area (without the square root transformation, measured in square millimeters (mm2)), with the MRM model. This descriptive
24

Table of Contents                                 
analysis was also part of the prespecified statistical analysis plan for this trial. The observed mean GA area data for the Zimura 2 mg and Zimura 4 mg groups as compared to the corresponding sham control groups are summarized in the following table:
Mean Rate of Change in GA Area from Baseline to Month 18
(MRM Analysis) (Observed)
CohortZimura 2 mg
(N = 67)
Sham 2
(N = 110)
Difference% Difference
Mean Change in GA(a) (mm2)
2.431(b)
3.587(b)
1.15632.24%
CohortZimura 4 mg
(N = 83)
Sham
(N = 84)
Difference% Difference
Mean Change in GA(a) (mm2)
2.4603.4861.02629.44%
(a)Based on the least squares mean from the MRM model.
(b)These least squares means are estimates from the MRM model, drawing on all available data, including data from groups with different randomization ratios in Part 1 and Part 2, and should not be interpreted as directly observed data.

18-Month Visual Acuity Data
    In addition to analyzing mean change in GA area, we also performed pre-specified analyses of the mean change in BCVA from baseline to month 18 and the mean change in LL BCVA from baseline to month 18, both as measured by ETDRS letters. Testing for visual acuity serves as an important safety assessment to assure that the decrease in visual acuity in the Zimura treatment groups was not clinically different from the sham control groups.
    The GATHER1 trial was not designed to reliably assess differences in mean changes in BCVA or LL BCVA with statistical significance. Data for the mean change in BCVA and LL BCVA at month 18 are summarized in the following tables:
Mean Change in BCVA from Baseline to Month 18
(MRM Analysis) (ETDRS letters)
CohortZimura 2 mg
(N = 67)
Sham
(N = 110)
Difference
Mean Change in BCVA(a)
-12.7(b)
-15.1(b)
2.37
CohortZimura 4 mg
(N = 83)
Sham
(N = 84)
Difference
Mean Change in BCVA(a)
-4.27-7.072.80
(a)     Based on the least squares mean from the MRM model.
(a)These least squares means are estimates from the MRM model, drawing on all available data, including data from groups with different randomization ratios in Part 1 and Part 2, and should not be interpreted as directly observed data.

Mean Change in LL BCVA from Baseline to Month 18
(MRM Analysis) (ETDRS letters)
CohortZimura 2 mg
(N = 67)
Sham
(N = 110)
Difference
Mean Change in LL BCVA(a)
-2.72(b)
-3.10(b)
0.37
CohortZimura 4 mg
(N = 83)
Sham
(N = 84)
Difference
Mean Change in LL BCVA(a)
2.851.681.17
(a)     Based on the least squares mean from the MRM model.
(b) These least squares means are estimates from the MRM model, drawing on all available data, including data from groups with different randomization ratios in Part 1 and Part 2, and should not be interpreted as directly observed data.

25

Table of Contents                                 
Zimura 1 mg 18-Month Efficacy Data

    We performed descriptive analyses on the 18 month data for patients in the Zimura 1 mg group as compared to the patients in the sham control group in Part 1 of the trial.
    The mean rate of change in GA area for the Zimura 1 mg group and the corresponding sham group from Part 1 of the trial over 18 months is summarized in the following table:
Summary of GA Area (mm) and Mean Percentage Change from Baseline to Month 18
(Square Root Transformation)
CohortZimura 1 mg
(N = 26)
Sham
(N = 26)
Mean Sq. Root of GA at BL, mm2.5912.623
Mean Sq. Root of GA at M18, mm3.258 3.230
Difference0.6670.607
Mean % Change(a)
21.91%23.87%
BL = Baseline; M18 = Month 18
(a) Mean % change in GA area is an average of the percentage change in GA area observed for each patient.
    Although the sample size for the Zimura 1 mg group is small, we believe the apparent reduction in mean percentage change in GA area from baseline to month 18 in the Zimura 1 mg group as compared to the sham control group, when compared with the results observed in the Zimura 2 mg and Zimura 4 mg groups as compared to their corresponding sham control groups, may suggest a potential dose response relationship across treatment groups.
18-Month Safety Data
    Based on our review of the safety data in the trial, Zimura was generally well tolerated after 18 months of administration. During the trial, there were no investigator-reported Zimura-related adverse events, no Zimura-related intraocular inflammation, no Zimura-related increased intraocular pressure, no cases of endophthalmitis, and no discontinuations attributed by investigators to Zimura in the trial. Through month 18, the reported incidence of CNV in the untreated fellow eye was 11 patients (3.8%), and in the study eye was 3 patients (2.7%) in the sham control group, 2 patients (7.7%) in the Zimura 1 mg group, 8 patients (11.9%) in the Zimura 2 mg group, and 13 patients (15.7%) in the Zimura 4 mg group. The most frequently reported ocular adverse events were related to the injection procedure. The numbers below are based on investigator-reported adverse events occurring during the 18-month duration of the trial for all patients.
26

Table of Contents                                 
    The number of patients with one or more serious TEAEs organized by MedDRA system organ class are set forth in the table below:
Patients with One or More Serious TEAEs in Any Organ Class
Part 1Part 2
Zimura 1 mg
(N = 26)
Zimura 2 mg
(N = 25)
Sham
(N = 26)
Zimura 2 mg
(N = 42)
Zimura 4 mg
(N = 83)
Sham 4 mg
(N = 84)
Blood and lymphatic system disorders00001 (1.2%)0
Cardiac disorders1 (3.8%)01 (3.8%)1 (2.4%)2 (2.4%)3 (3.6%)
Eye disorders0001 (2.4%)1 (1.2%)0
Gastrointestinal disorders1 (3.8%)1 (4.0%)2 (7.7%)02 (2.4%)6 (7.1%)
General disorders and administration site conditions0001 (2.4%)00
Hepatobiliary disorders01 (4.0%)1 (3.8%)01 (1.2%)0
Infections and infestations01 (4.0%)02 (4.8%)8 (9.6%)2 (2.4%)
Injury, poisoning and procedural complications01 (4.0%)1 (3.8%)1 (2.4%)3 (3.6%)2 (2.4%)
Metabolism and nutrition disorders002 (7.7%)000
Musculoskeletal and connective tissue disorders1 (3.8%)00003 (3.6%)
Benign, malignant and unspecified neoplasms (including cysts and polyps)001 (3.8%)1 (2.4%)1 (1.2%)3 (3.6%)
Nervous system disorders1 (3.8%)1 (4.0%)2 (7.7%)2 (4.8%)3 (3.6%)2 (2.4%)
Psychiatric disorders001 (3.8%)001 (1.2%)
Respiratory, thoracic and mediastinal disorders01 (4.0%)002 (2.4%)5 (6.0%)
Vascular disorders000001 (1.2%)
    Of the reported serious TEAEs that were eye disorders, one TEAE was an ischaemic optic neuropathy (in the Zimura 2 mg group) and one TEAE was a retinal detachment (in the Zimura 4 mg group). Neither of these TEAEs were reported as related to Zimura.
    The number of patients with one or more TEAEs, including serious TEAEs, identified by the investigator as related to the study drug (Zimura or sham) are set forth in the table below:
Reported TEAEs Related to Zimura or Sham
Part 1Part 2
Zimura 1 mg
(N = 26)
Zimura 2 mg
(N = 25)
Sham
(N = 26)
Zimura 2 mg
(N = 42)
Zimura 4 mg
(N = 83)
Sham 4 mg
(N = 84)
Subjects with at least one TEAE000000
    The number of patients with one or more ocular TEAEs in the study eye are set forth in the table below:

Reported Ocular TEAEs in Study Eyes
Part 1Part 2
Zimura 1 mg
(N = 26)
Zimura 2 mg
(N = 25)
Sham
(N = 26)
Zimura 2 mg
(N = 42)
Zimura 4 mg
(N = 83)
Sham 4 mg
(N = 84)
Eye disorders12 (46.2%)11 (44.0%)6 (23.1%)28 (66.7%)61 (73.5%)39 (46.4%)
Eye disorders related to injection procedure4 (15.4%)5 (20.0%)2 (7.7%)18 (42.9%)46 (55.4%)24 (28.6%)
    The number of patients with one or more ocular TEAEs in the study eye, identified by the investigator as related to the study drug (Zimura or sham) is set forth in the table below:
27

Table of Contents                                 
Reported Ocular TEAEs in the Study Eye Related to Zimura or Sham
Part 1Part 2
Zimura 1 mg
(N = 26)
Zimura 2 mg
(N = 25)
Sham
(N = 26)
Zimura 2 mg
(N = 42)
Zimura 4 mg
(N = 83)
Sham 4 mg
(N = 84)
Subjects with at least one TEAE000000
    In addition to us collecting investigator-reported adverse events, the independent masked reading center performed multi-modal imaging analysis. Multi-modal imaging analysis is a process used to assess patient retinal findings by reviewing different image types, in this case optical coherence tomography, or OCT, images and fluorescein angiography, to provide a more comprehensive view of the patient's retinal tissue. OCT is an ultra-high resolution imaging technology commonly used to visualize the retinal tissue. OCT is capable of rendering images in multiple dimensions and from multiple perspectives, and is an imaging technique commonly used by retinal specialists to diagnose, treat and follow patients with CNV. Fluorescein angiography is a technique that involves injection of a fluorescent dye into the systemic circulation and capturing images showing the circulating dye during transit through the retinal circulation using a specialized camera. In this trial, the reading center's multi-modal imaging analysis identified one additional case of macular CNV for a patient in the Zimura 4 mg group at month 12. Because this patient's investigator did not detect the CNV, the patient remained in the trial through month 18.
Post-hoc Analysis of GATHER1 Data in connection with the GATHER2 SPA
In parallel discussions with those for the GATHER2 SPA, the FDA indicated that, as part of a future NDA for Zimura, the results from GATHER1 will be considered using the original prespecified primary efficacy endpoint analysis, as described above, together with a post-hoc analysis using the same FDA-preferred method that will be used for the GATHER2 trial (mean rate of growth (slope) estimated based on GA area measured by FAF in the relevant timepoints). The 12 month and 18 month results of this post-hoc analysis, as compared to the results of the original prespecified analysis for GATHER1, for the Zimura 2 mg and Zimura 4 mg treatment arms as compared to their corresponding sham arms, are described below. Safety results from GATHER1 were not impacted as part of this analysis.
Although we believe that the results of the post-hoc analysis from the GATHER1 trial are consistent with the positive results from the original prespecified analysis from the trial, any analyses, whether prespecified or post-hoc, that are intended to
support an application for marketing approval are a matter of review for the FDA and other regulatory authorities.

Zimura 2 mg Data

MRM AnalysisZimura 2 mg
(N = 67)
Sham
(N = 110)
Difference% DifferenceP-Value
12 Month Sq. Rt. Transformation:
Mean Rate of Change in GA Area (mm)0.2920.4020.11027.38%
0.0072(a)
Mean Rate of GA Growth (Slope) (mm)0.2830.3920.10927.73%
0.0063(b)
12 Month Observed Data:
Mean Rate of Change in GA Area (mm2)
1.5922.290.69730.45%
0.0059(b)
Mean Rate of GA Growth (Slope) (mm2)
1.2211.8890.66835.37%
0.0050(b)
18 Month Sq. Rt. Transformation:
Mean Rate of Change in GA Area (mm)0.4300.5990.16828.11%
0.0014(b)
Mean Rate of GA Growth (Slope) (mm)0.4510.6070.15625.75%
0.0027(b)
18 Month Observed Data:
Mean Rate of Change in GA Area (mm2)
2.4313.5871.15632.24%
0.0009(b)
Mean Rate of GA Growth (Slope) (mm2)
1.9142.9511.03735.13%
0.0023(b)

Explanatory notes:
the estimates for the Zimura 2 mg group vs. sham are from the MRM model, drawing on all available data, including data from groups with different randomization ratios in Part 1 and Part 2 of the trial, and should not be interpreted as directly observed data;
(a)     indicates prespecified primary endpoint; statistically significant;
(b)     indicates descriptive p-value.

Zimura 4 mg Data
28

Table of Contents                                 


MRM AnalysisZimura 4 mg
(N = 83)
Sham
(N = 84)
Difference% DifferenceP-Value
12 Month Sq. Rt. Transformation:
Mean Rate of Change in GA Area (mm)0.3210.4440.12427.81%
0.0051(a)
Mean Rate of GA Growth (Slope) (mm)0.3070.4160.10926.31%
0.0100(b)
12 Month Observed Data:
Mean Rate of Change in GA Area (mm2)
2.0612.7700.70925.59%
0.0082(b)
Mean Rate of GA Growth (Slope) (mm2)
1.6742.2730.59926.34%
0.0147(b)
18 Month Sq. Rt. Transformation:
Mean Rate of Change in GA Area (mm)0.3910.5590.16729.97%
0.0021(b)
Mean Rate of GA Growth (Slope) (mm)0.3730.5120.13927.11%
0.0086(b)
18 Month Observed Data:
Mean Rate of Change in GA Area (mm2)
2.4603.4861.02629.44%
0.0034(b)
Mean Rate of GA Growth (Slope) (mm2)
2.1423.0100.86828.82%
0.0106(b)

Explanatory notes:
(a)     indicates prespecified primary endpoint; statistically significant;
(b)     indicates descriptive p-value.
Zimura 2 mg Data by Part
As previously discussed, we enrolled patients for the GATHER1 trial in two different parts, Part 1 and Part 2, with different dosages and randomization ratios in each Part. Twenty-five patients receiving Zimura 2mg were enrolled in Part 1 of the trial and 42 patients receiving Zimura 2mg were enrolled in Part 2 of the trial.
Below are the month 12 and month 18 results for the Zimura 2 mg group as compared to its corresponding sham group, for both Part 1 and Part 2 of the trial, using both the original prespecified primary efficacy endpoint analysis for the GATHER1 trial and the post-hoc analysis using the FDA-preferred method that will be used for the GATHER2 trial:

Part 1 Only Data

MRM AnalysisZimura 2 mg
(N = 25)
Sham
(N = 26)
Difference% Difference
12 Month Sq. Rt. Transformation:
Mean Rate of Change in GA Area (mm)0.3290.4220.09322.07%
Mean Rate of GA Growth (Slope) (mm)0.3070.4230.11627.39%
12 Month Observed Data:
Mean Rate of Change in GA Area (mm2)
1.9102.5930.68326.35%
Mean Rate of GA Growth (Slope) (mm2)
1.6552.2380.58426.08%
18 Month Sq. Rt. Transformation:
Mean Rate of Change in GA Area (mm)0.4640.6350.17026.84%
Mean Rate of GA Growth (Slope) (mm)0.4460.6300.18429.23%
18 Month Observed Data:
Mean Rate of Change in GA Area (mm2)
2.7894.1031.31432.03%
Mean Rate of GA Growth (Slope) (mm2)
2.4823.3930.91126.85%

Part 2 Only Data

MRM AnalysisZimura 2 mg
(N = 42)
Sham
(N = 84)
Difference% Difference
12 Month Sq. Rt. Transformation:
29

Table of Contents                                 
Mean Rate of Change in GA Area (mm)0.3080.4220.11427.02%
Mean Rate of GA Growth (Slope) (mm)0.3030.4240.12128.51%
12 Month Observed Data:
Mean Rate of Change in GA Area (mm2)
1.7432.4340.69028.36%
Mean Rate of GA Growth (Slope) (mm2)
1.4192.1540.73534.14%
18 Month Sq. Rt. Transformation:
Mean Rate of Change in GA Area (mm)0.4400.6080.16827.67%
Mean Rate of GA Growth (Slope) (mm)0.4740.6220.14823.85%
18 Month Observed Data:
Mean Rate of Change in GA Area (mm2)
2.5503.6491.09930.12%
Mean Rate of GA Growth (Slope) (mm2)
2.2033.2641.06132.51%

    Post-Hoc Analysis of GATHER1 data - Foveal Preservation
In February 2022, we announced the results from a post-hoc analysis that evaluated various GA growth parameters to explore the rate of disease progression within various regions in the fovea in a subset of patients from the GATHER1 trial. The post-hoc analysis evaluated GA growth in five standardized regions in the retina for patients for whom images were available at relevant time points, which consisted of 47 patients from the Zimura 2 mg group and 79 patients from the corresponding sham control group. The five regions included the central foveal region, consisting of a 2 mm diameter circle around the foveal center point, and four quadrants, temporal, nasal, superior and inferior, in a concentric 8 mm diameter circle around the foveal center point. The accompanying schematic illustrates the five standardized regions:

https://cdn.kscope.io/8525d158f7621e4de099b987b1cffe05-isee-20211231_g7.jpg
We observed a reduction in lesion growth in the five standardized regions surrounding and including the central foveal area for patients receiving Zimura 2 mg as compared to patients receiving sham over a period of 18 months. We believe the results of this subgroup analysis are consistent with the primary analysis results in the ITT population in the GATHER1 trial. The accompanying graphs illustrate the results:

Decrease in GA growth observed in patients receiving Zimura 2 mg versus patients receiving sham injections in five standardized regions and in line with circumferential progression found in natural history, square-root transformed (mm)

30

Table of Contents                                 
https://cdn.kscope.io/8525d158f7621e4de099b987b1cffe05-isee-20211231_g8.jpg

https://cdn.kscope.io/8525d158f7621e4de099b987b1cffe05-isee-20211231_g9.jpg

    OPH2001: Completed Phase 1/2a Clinical Trial of Zimura for GA Secondary to Dry AMD

    In 2011, we completed a multicenter, uncontrolled, open label Phase 1/2a clinical trial to evaluate the safety and tolerability of Zimura administered as a monotherapy in patients with GA. We enrolled 47 patients in this trial. We randomly assigned patients in this trial to one of two dose groups. Patients received a total of five intravitreal injections of either 0.3 mg or 1 mg of Zimura over a 36-week treatment period. Patients received an intravitreal injection of Zimura at day 0, week 4, week 8, week 24 and week 36 of the trial, with a final follow-up visit at week 48.

    Zimura was generally well-tolerated in this trial. We did not observe any evidence of drug related adverse events. We also did not observe any incidence of conversion to wet AMD in eyes treated with Zimura. Adverse events were primarily ocular adverse events in the study eye which were related to the injection procedure.

    In addition, we performed assessments of visual acuity to detect any potential decrease in vision associated with intravitreal injections, the administered drug or natural progression of the disease if left untreated. We did not identify any drug related safety issues through measurements of visual acuity.    

    Our Phase 1/2a clinical trial was an uncontrolled study with a small sample size and was not powered to detect a difference between Zimura dose groups, or the efficacy of Zimura monotherapy, with statistical significance. The primary purpose of the study was to assess safety and tolerability. However, during the more frequent dosing period, which is the first 24 weeks, we observed a trend, in favor of the higher of two dose groups, of a relative reduction in the mean growth of the GA lesion area, as measured by fundus autofluorescence images read by an independent reading center.

    The mean growth from baseline in the GA lesion area during the first 24 weeks of the trial, when the injections were administered more regularly, was 1.00 mm2 for the 24 patients receiving the 0.3 mg dose and 0.78 mm2 for the 23 patients receiving the 1 mg dose. When the injections were administered on a reduced dosing schedule during the subsequent 24 weeks,
31

Table of Contents                                 
this relative trend in reduced growth in GA lesion area was no longer present.

The following graph sets forth the mean change in GA lesion area from baseline for the two treatment groups over the course of the trial.
https://cdn.kscope.io/8525d158f7621e4de099b987b1cffe05-isee-20211231_g10.jpg
We believe this apparent trend in the relative reduction of mean growth in GA lesion area when Zimura was dosed more frequently, together with the relative loss of the benefit when Zimura was dosed less frequently, may suggest a possible drug effect.

    GATHER2: Ongoing Phase 3 Clinical Trial Assessing Safety and Efficacy of Zimura 2 mg for GA Secondary to AMD
Trial Design
In this trial, we enrolled 448 patients, who were randomized into two groups: a first group receiving monthly administrations of Zimura 2 mg for 12 months, and a second group receiving monthly administrations of sham. In accordance with our SPA with the FDA, the prespecified primary efficacy endpoint will be the mean rate of growth (slope) estimated based on GA area measured by FAF in at least three timepoints: baseline, month 6 and month 12. At month 12, we are re-randomizing patients in the Zimura 2 mg arm to receive either monthly or every other month administrations of Zimura 2 mg, and patients receiving monthly administrations of sham will continue to receive monthly administrations of sham. We plan to treat and follow patients for 24 months.
    The key ophthalmic inclusion criteria for GATHER2 include the following:
non-foveal GA secondary to dry AMD;
total GA area between 2.5 mm2 and 17.5 mm2, inclusive;
if GA is multifocal, at least one focal lesion should measure 1.25 mm2 or greater;
GA in part within 1500 microns from the foveal center; and
Snellen equivalent BVCA in the study eye between 20/25 and 20/320, inclusive.
    As discussed above, when we initiated the GATHER1 trial, we did not believe that reliable measurements of GA by FAF images for patients with CNV in the study eye could be performed. Therefore, in the clinical trial protocol for the GATHER1 trial, we indicated that patients in any arm of the trial who developed CNV in the study eye, as observed by the investigator, would be removed from the trial and any future study treatments and assessments. Based on third-party clinical data published since the GATHER1 trial commenced and discussions with our independent reading center, we believe that GA for patients developing CNV in the study eye who receive standard of care anti-VEGF treatment for the CNV, could potentially be assessed by FAF. Based on the foregoing, the protocol for GATHER2 provides that patients will undergo monthly OCT imaging, and if an investigator suspects that a patient has CNV or if a patient experiences a decrease in visual acuity, as
32

Table of Contents                                 
measured by a loss of more than five ETDRS letters between a visit and the immediately prior visit, the independent masked reading center will confirm whether the patient has CNV using multi-modal imaging. In the event a CNV case is confirmed, the investigator will treat the CNV with one of two anti-VEGF agents, Lucentis or Eylea® (aflibercept), in accordance with the label for that anti-VEGF agent. These patients will remain in the trial and measurements of these patients' GA will be included in the primary efficacy analysis if their FAF images can be assessed by the masked reading center.
Trial Conduct
In July 2021, we completed patient enrollment for GATHER2, four months ahead of our original schedule. In response to the COVID-19 pandemic, we and our clinical trial sites implemented a number of initiatives to protect the safety and well-being of our patients and to ensure they are able to attend their scheduled study visits. We continue to closely monitor the COVID-19 pandemic and the impact it may have on this trial.
In particular, we continue to monitor patient retention in this trial. We are targeting and remain on track for an injection fidelity rate at month 12 of greater than 90%. The injection fidelity rate for GATHER1 at 12 months was 87%. We believe injection fidelity, which is calculated by dividing the total number of actual injections for all patients by the total number of expected injections based on the total number of patients enrolled in the trial, to be an accurate and meaningful measure of patient retention. In addition, more than 84% of the scheduled first-year visits in the GATHER2 trial, which consists of all study visits up to and including the timepoint for assessing the primary efficacy endpoint, have been completed or elapsed.
We expect top-line data from this trial to be available during the second half of 2022, approximately one year following the enrollment of the last patient plus the time needed for database lock and analysis. We are actively working with our third-party imaging and other vendors to review and prepare the GATHER2 data for database lock.
Requirements for Marketing Approval of Zimura in GA

    To obtain marketing approval for Zimura for the treatment of GA, we expect that we will need to obtain favorable results from a total of two independent, adequate and well-controlled pivotal clinical trials, demonstrating the safety and efficacy of Zimura in this indication. To establish efficacy, we believe it would be sufficient to demonstrate statistically significant results showing a clinically relevant reduction in the rate of growth of GA over 12 months, based on measurements over three time points (baseline, month 6 and month 12) in two independent trials. We selected this measure as the primary endpoint for the GATHER1 trial based on prior interactions with the FDA, as well as our understanding of clinical trials for other investigational products in development for the treatment of GA. We designed the GATHER1 trial as a well-controlled screening trial such that, in the event that the prespecified primary efficacy endpoint results were statistically significant, the trial could potentially serve as one of the two pivotal clinical trials typically required for marketing approval. Based on the results we have received, the statistical analysis that we have performed and additional discussions we have had with the FDA, we believe that the safety and efficacy results from the GATHER1 trial would satisfy the FDA’s requirements as one of the two pivotal clinical trials typically required for marketing approval. In the paragraphs that follow, we describe in detail the basis for our belief about the sufficiency of the GATHER1 trial and, if the data from this trial are positive, the GATHER2 trial, to support an application for marketing approval for GA.
    Requirements for Safety Data
    Zimura has generally been well tolerated in our clinical trials to date. In the GATHER1 trial, there were no investigator reported ocular serious adverse events, Zimura-related adverse events, cases of Zimura-related intraocular inflammation, cases of Zimura-related increased intraocular pressure, cases of endophthalmitis, or discontinuations attributed by investigators to Zimura. We believe the investigator reported CNV rate in the study eye for patients receiving Zimura as compared to sham and the untreated fellow eyes during the trial is within an acceptable range when compared to published clinical trial data for another complement inhibitor currently in development for GA. The most frequently reported ocular adverse events in the GATHER1 trial were related to the injection procedure.
    To demonstrate the safety of Zimura to a degree sufficient to support marketing approval, we believe that the FDA and potentially other regulatory authorities would require data from a minimum of 300 patients having received the dose of Zimura for which we are seeking approval, or a higher Zimura dose, independent of indication, for a minimum of 12 months, with 24-month safety data available for some portion, but not all, of these 300 patients. Based on the safety profile of Zimura observed to date and the number of patients treated across our Zimura clinical trials, we believe that the remaining minimum safety requirements could potentially be satisfied by the GATHER2 trial, in which we plan to treat and follow patients for 24 months.
33

Table of Contents                                 
    Requirements for Efficacy Data
    Statistical Significance. In our GATHER1 trial, the reduction in the mean rate of GA growth over 12 months using the square root transformation was 0.110 mm (p-value = 0.0072) for the Zimura 2 mg group as compared to the corresponding sham control group and 0.124 mm (p-value = 0.0051) for the Zimura 4 mg group as compared to the corresponding sham control group, corresponding to an approximate 27% relative reduction in the mean rate of GA growth over 12 months when compared with sham. These data for both dose groups were statistically significant. See above under “Primary Efficacy Endpoint Data” for a discussion of the procedures we used to confirm the statistical significance of these data.
    In clinical trials, it is common for data for some number of subjects to be missing for assessments performed throughout the trial. The degree of data that is missing from a clinical data set can impact the results and conclusions, including their statistical significance. See above under “Statistical Analysis for Efficacy Measures” for information regarding the GA measurement data that was missing from the analysis of the primary efficacy endpoint in the GATHER1 trial, as well as a description of the sensitivity analyses we performed. Based on our sensitivity analyses, and accounting for the data missing from our data set because of patient withdrawals or for other reasons, we believe the statistical analysis for the 12 month data from the GATHER1 trial is valid.
    Although we seek to apply our enrollment criteria consistently, there may be instances when an investigator proposes that a patient participate in the trial and the reading center determines that, although a patient may not meet all criteria precisely, participation in the trial is warranted based on the overall GA pattern and size. For example, this can result in the enrollment of patients with baseline GA area slightly below 1 disc area, as was the case with one patient in each of the Zimura 4 mg group and the Part 2 sham control group (which is part of the comparison for both the Zimura 2 mg and Zimura 4 mg groups) in the GATHER1 trial. These patients were included in the ITT analysis for our primary efficacy endpoint. The FDA or other regulatory authorities may not agree with the inclusion of these patients in our statistical analysis.
    Clinical Relevance. Clinical relevance refers to an assessment of how meaningful the observed outcome is or would be for patients. The FDA and other regulatory authorities consult with clinicians in the field of study to advise on the relevance of an observed outcome for patients. Our GATHER1 and GATHER2 trials use anatomic endpoints measuring the reduction of GA growth as the primary efficacy endpoints. We obtained a written agreement with the FDA through the GATHER2 SPA that the mean rate of growth (slope) estimated based on GA area, measured by FAF in at least three time points: Baseline, Month 6, and Month 12, and the design and planned analysis of the GATHER2 trial adequately address the objectives necessary to support a regulatory submission. Since established literature and clinical experience indicate that patients' functional vision is impacted by the growth of the GA over time, which ultimately leads to severe vision loss, we believe that reduction of GA growth would have a meaningful impact on the patients’ well-being and quality of life and therefore is clinically relevant.

    Adequate and Well-Controlled. In addition to statistical significance and clinical relevance, pivotal clinical trials must be adequate and well-controlled. We believe:

the method of selecting subjects for GATHER1 and GATHER2 was based on the same prospectively defined inclusion and exclusion criteria and provided adequate assurance that they have GA secondary to AMD;

the randomized method of assigning patients to GATHER1 and GATHER2 treatment groups and corresponding sham control groups minimizes potential confounding factors and bias, and is intended to ensure comparability of the groups for all pertinent variables; and

GATHER1 and GATHER2 are appropriately masked. The primary endpoint was objectively measured by an independent masked reading center. Adequate measures were taken to minimize bias on the part of the subject, the investigator, the reading center and the sponsor.

We believe, based on the above and other aspects of the designs of the two trials and their similar primary efficacy endpoints and statistical analysis plans, that both trials are adequate and well-controlled to establish the efficacy and safety of Zimura for GA. GATHER2 is intended to provide independent substantiation of the statistically significant results we observed in GATHER1.

Our Regulatory Pathway Following GATHER1 and GATHER2

    Based on the foregoing, assuming that Zimura’s safety profile remains consistent with findings observed to date and subject to regulatory review of the GATHER1 trial results, we believe that one additional international, randomized, double-masked, sham controlled, Phase 3 clinical trial is needed to demonstrate the safety and efficacy of Zimura in GA in a manner
34

Table of Contents                                 
sufficient to support an application for marketing approval from the FDA and EMA in this indication. We designed the GATHER2 trial in accordance with this belief and understanding. Our belief and understanding of the remaining clinical requirements to demonstrate the safety and efficacy of Zimura for the treatment of GA in a manner sufficient to support an application for marketing approval from the FDA and EMA is based on our review of the data from the GATHER1 trial as well as discussions with the FDA. As described above, in parallel discussions with those for the GATHER2 SPA, the FDA indicated that, as part of a future NDA for Zimura, the results from GATHER1 will be considered using the original prespecified primary efficacy endpoint analysis (mean rate of change in GA area over 12 months measured by FAF at three timepoints: baseline, month 6 and month 12), together with a post-hoc analysis using the same FDA-preferred method that we are using for the GATHER2 trial (mean rate of growth (slope) estimated based on GA area measured by FAF in the relevant timepoints). We believe the GATHER1 data, when analyzed using the FDA's preferred method, are consistent with and supportive of the results from the original prespecified analysis. However, it is possible that unexpected or inconsistent findings could emerge as we continue to evaluate the unmasked, individual patient data, which could cause us to evaluate and change our conclusions about this data.
In July 2021, we received a written agreement from the FDA under a SPA for the overall design of GATHER2. We believe that the safety and efficacy data we will collect from the GATHER2 trial, if positive, would satisfy the FDA’s and could potentially satisfy the EMA's requirements as the second pivotal clinical trial typically required for marketing approval. If the 12-month results from GATHER2 are positive, we plan to file applications with the FDA and the EMA for marketing approval of Zimura for GA. Our expectations regarding the minimum clinical requirements to demonstrate the safety and efficacy of Zimura for GA may change as new regulatory or third party information becomes available. We have not had any interactions to date with the EMA regarding the GATHER1 data or the design of GATHER2. Ultimately, for the GATHER1 and GATHER2 trials to be accepted as pivotal trials, the FDA, EMA and other regulatory authorities would need to agree that the overall data package meet the applicable requirements with an acceptable safety profile and a clinically relevant efficacy outcome with statistical significance, and that the data support an overall favorable benefit-to-risk determination.
Zimura - Planned Phase 3 Clinical Trial for Patients With Intermediate AMD
Post-hoc Analyses of GATHER1 Data in Drusen, iRORA and cRORA
We conducted additional post-hoc analyses on the GATHER1 data, in which we evaluated the progression of iRORA to cRORA, and the progression of drusen to iRORA or cRORA, in patients treated with Zimura 2 mg as compared to patients in the corresponding sham group. Drusen, iRORA and cRORA represent progressive stages of AMD.
The post-hoc analysis data show a 19.6% absolute reduction in the rate of progression from drusen to iRORA or cRORA, for the Zimura 2 mg group as compared to sham at 18 months, representing a relative reduction of 72%. The data also show a 21.8% absolute reduction in the rate of progression from iRORA to cRORA for the Zimura 2 mg group as compared to sham at 18 months, representing a relative reduction of 52%. The following graphs illustrate these results:
Proportion of patients that progress from drusen to iRORA or cRORA (Zimura 2 mg compared to sham)
https://cdn.kscope.io/8525d158f7621e4de099b987b1cffe05-isee-20211231_g11.jpg
Proportion of patients that progress from iRORA to cRORA (Zimura 2 mg compared to sham).
35

Table of Contents                                 
https://cdn.kscope.io/8525d158f7621e4de099b987b1cffe05-isee-20211231_g12.jpg
Planned Phase 3 Clinical Trial in Intermediate AMD
We were encouraged by the results of the post-hoc analyses, and plan to initiate a Phase 3 clinical trial studying Zimura in patients with intermediate AMD. We expect this trial to be an international, randomized, double-masked, sham-controlled, multi-center trial with approximately 200 patients per treatment group. We expect to treat and follow patients for 24 months. We are currently evaluating other aspects of the design of this trial, including patient inclusion criteria and primary efficacy endpoints. We plan to obtain feedback from regulatory authorities on our plans for this trial and our development strategy in this indication, before initiating this trial during the second half of 2022.
Zimura - STGD1 Trials    
    
    STAR: Ongoing Phase 2b Clinical Trial of Zimura for STGD1

    We initially completed patient enrollment for this clinical trial in February 2019 with a total of 95 patients enrolled, none of whom have any remaining study visits. In July 2020, we reopened enrollment in this trial in the United States. We continue to enroll patients and plan to enroll approximately 25 additional patients, with the goal of enrolling a total of approximately 120 patients. We continue to monitor the COVID-19 pandemic closely and may need to slow down or stop patient enrollment in certain geographies depending on the local situation.

All initially enrolled patients were, and any newly enrolled patients are, randomized in a 1:1 ratio as follows:

Zimura 2 mg, followed by Zimura 2mg 14 days later, monthly for three months during an induction phase; followed by Zimura 4 mg, administered as two injections of Zimura 2 mg on the same day, monthly for 15 additional months during a maintenance phase; and

a sham injection, followed by a sham injection 14 days later, monthly for three months; followed by two sham injections on the same day, monthly for 15 months.

    We plan to evaluate the primary efficacy endpoint in this trial at 18 months. The primary efficacy endpoint is an anatomic endpoint, the mean rate of change in the area of ellipsoid zone defect, as measured by en-face OCT. OCT allows the demonstration of various layers of the retinal tissue, including the ellipsoid zone, which is a part of the photoreceptor cells. Scientific literature correlates defects in the ellipsoid zone with the loss of visual acuity and visual dysfunction. The ellipsoid zone is rendered in OCT images as a defined layer of photoreceptor cell segments. Areas of defects in the ellipsoid zone can be detected and measured by en-face OCT, which shows an OCT image from the perspective of looking at the retina head-on.

    We have not previously studied Zimura in STGD1 patients and thus do not have any clinical data regarding the effect of Zimura in STGD1. We previously engaged the Foundation Fighting Blindness to provide us with data from the Foundation's publicly available ProgStar study, the largest natural history study on Stargardt disease to date. We have used this natural history data, as well as the perspectives of the key opinion leaders involved in the ProgStar study, as resources to assist in the design of the STAR trial. As STGD1 is an orphan indication, to our knowledge there is only very limited natural history data currently available regarding the variability of the planned primary efficacy endpoint in the STGD1 patient population we enrolled in this trial. Given the information above, this trial could be underpowered to demonstrate a potential clinical benefit for Zimura in this indication.

36

Table of Contents                                 
    Similar to GATHER1, STAR is designed to be a Phase 2b screening trial, with the potential to demonstrate statistically significant results depending on the magnitude of the potential benefit observed. If the results are positive and statistically significant, we believe this trial could potentially serve as a clinical trial that can support an application for marketing approval. However, we have not yet engaged with the FDA or the EMA about this belief and expectation.

Even though we have reopened patient enrollment, we have been and plan to remain masked to the treatment condition of all patients in the trial. In addition, we have not reviewed and do not plan to review or analyze efficacy data for any patients in the trial, until the 18-month data has been collected and analyzed for all patients enrolled in the trial. We expect data from this trial will be available after the top-line data from the GATHER2 trial.

Zimura - Wet AMD Trials    

    OPH2000: Completed Phase 1/2a Clinical Trial of Zimura for Wet AMD

    In 2009, we completed a multicenter, uncontrolled, ascending dose and parallel group, open-label, first in human Phase 1/2a clinical trial to evaluate the safety and tolerability of multiple intravitreal injections of Zimura given in combination with multiple doses of Lucentis 0.5 mg in patients with wet AMD. We enrolled 60 patients in this trial, of which 58 were treatment-naïve patients, and two were treatment-experienced patients.

    Patients were treated at one of five Zimura dose levels: 0.03 mg, 0.3 mg, 1 mg, 2 mg and 3 mg. Zimura was generally well tolerated in this trial when tested in combination with Lucentis. None of the patients experienced any dose limiting toxicities at any of the dose levels tested. We observed only a single adverse event assessed by the investigators to be related to Zimura, mild subcapsular cataract in one patient in the group treated with Zimura 2 mg. Despite this event, this patient's visual acuity improved during the study. Adverse events were primarily ocular adverse events in the study eye which were related to the injection procedure. One patient from the 0.3 mg Zimura treatment group withdrew from the trial as a result of a serious adverse event of bacteremia unrelated to study drug or injection procedure, which resulted in a subsequent fatality. Another patient from the 0.3 mg treatment group withdrew from the trial due to the investigator's decision. Systemic adverse events in this trial were not frequently reported. No systemic adverse events were assessed as drug related.

    Our Phase 1/2a clinical trial was an uncontrolled study with a small sample size and was not powered to detect a difference between Zimura dose groups or the efficacy of Zimura combination therapy with statistical significance. The primary purpose of the study was to assess safety and tolerability. In addition to our safety assessment, however, we also performed assessments of visual acuity. There was a general trend towards an improvement in visual acuity seen in all treatment groups. We focused our assessment of vision outcomes on the subgroup of 43 treatment-naïve patients who had received all six Zimura injections at the same dosage. We observed a mean increase in visual acuity from baseline at all time points for these patients, based on the number of ETDRS letters the patient could read. For this subgroup, at week 24 of the trial, we noted improvements in mean visual acuity from baseline as follows: 13.6 letters for the 13 patients receiving the 0.3 mg dose, 11.7 letters for the 15 patients receiving the 1 mg dose and 15.3 letters for the 15 patients receiving the 2 mg dose. In this subgroup, 22 patients (51%) gained at least 15 ETDRS letters, defined as significant visual gain, consisting of six patients (46%) in the 0.3 mg dose group, seven patients (47%) in the 1 mg dose group and nine patients (60%) in the 2 mg dose group.

    OPH2004: Discontinued Phase 2a Trial of Zimura for Treatment-Experienced Wet AMD Patients

    During the fourth quarter of 2015, we initiated an open-label Phase 2a clinical trial to evaluate Zimura’s potential role when administered in combination with anti-VEGF therapy for the treatment of wet AMD in anti-VEGF treatment-experienced patients who did not respond adequately to anti-VEGF monotherapy. In 2017, following our reassessment of our Zimura development programs, we stopped enrolling patients in this trial as we determined that we would initiate a new Zimura wet AMD trial, the OPH2007 trial described below, for treatment-naïve patients. One patient continued to receive treatment in this trial until the first half of 2018. This patient did not experience any drug-related adverse events and there were no unexpected safety issues.

    OPH2007: Completed Phase 2a Clinical Trial of Zimura for Treatment-Naïve Wet AMD Patients

    In 2018, we completed a randomized, dose-ranging, open-label, multi-center Phase 2a clinical trial of Zimura in combination with Lucentis 0.5 mg to evaluate the safety of different dosing regimens of Zimura in combination with an anti-VEGF agent in treating wet AMD. We enrolled and treated a total of 64 treatment-naïve patients for this trial. We assigned patients in this trial to one of four groups:

37

Table of Contents                                 
In Groups 1 and 2, consisting of ten patients in each group, patients received monthly combination therapy consisting of Lucentis 0.5 mg followed by, in Group 1, Zimura 4 mg two days later and in Group 2, Zimura 2 mg on the same day as the Lucentis treatment;

In Groups 3 and 4, consisting of 22 patients in each group, patients received dosages in two phases, consisting of:

first, an induction phase from day one to the second month, during which the patients received Lucentis 0.5 mg followed by Zimura 2 mg on the same day, followed by Zimura 2 mg fourteen days later; and

second, a maintenance phase from the third month to the fifth month, during which the patients received, in Group 3, Lucentis 0.5 mg followed by Zimura 2 mg on the same day and in Group 4, Zimura 2 mg followed two days later with Lucentis 0.5 mg and Zimura 2 mg.

    From a safety perspective, Zimura combination therapy with Lucentis was generally well tolerated after six months of treatment. The most frequently reported ocular adverse events were related to the injection procedure. We did not observe any adverse events attributable to Zimura combination therapy.

    Our Phase 2a clinical trial was an uncontrolled trial with a small sample size designed to assess safety at different dosages and to detect a potential efficacy signal. This trial was not designed to detect a statistically significant difference between Zimura dose groups or to evaluate the efficacy of Zimura combination therapy with statistical significance.

    We evaluated the mean change in BCVA at the six-month timepoint as compared to baseline. The data are summarized as follows:

In Group 1, the mean change in visual acuity was 9.0 ETDRS letters with a median of 7.0 letters, and 40% of the patients gained greater than or equal to three lines of vision, or 15 ETDRS letters, defined as significant visual gain;

In Group 2, the mean change in visual acuity was 10.2 ETDRS letters with a median of 16.0 letters, and 60% of patients gained greater than or equal to 15 ETDRS letters;

In Group 3, the mean change in visual acuity was 10.7 ETDRS letters with a median of 10.0 letters, and 40.9% of patients gained greater than or equal to 15 ETDRS letters; and

In Group 4, the mean change in visual acuity was 9.9 ETDRS letters with a median of 11.0 letters, and 18.2% of patients gained greater than or equal to 15 ETDRS letters.

Zimura - IPCV Trials

    OPH2002: Completed Phase 2a Clinical Trial of Zimura for IPCV
    
    In late 2014, we initiated a very small, uncontrolled, open-label, Phase 2a clinical trial to evaluate Zimura’s potential role when administered in combination with anti-VEGF agents for the treatment of IPCV in treatment-experienced patients for whom anti-VEGF monotherapy failed. IPCV is an age-related disease that is similar to wet AMD and is commonly characterized by leakage under the RPE, subretinal hemorrhage and RPE detachment. We enrolled four patients in the trial. None of the patients had a greater than 15-ETDRS letter decrease in visual acuity, which is considered a significant loss in visual acuity, following treatment in this study. None of the patients experienced any drug-related adverse events and there were no unexpected safety issues from this trial.

    OPH2006: Discontinued Phase 2a Trial of Zimura for IPCV

    In late 2017, we initiated a randomized, dose-ranging, open-label Phase 2a clinical trial of Zimura in combination with Eylea in treatment-experienced patients with IPCV. We did not enroll any patients in this clinical trial and decided to discontinue this clinical trial.

IC-500: HtrA1 Inhibitor Product Candidate

    In October 2018, we acquired from funds controlled by Versant Ventures a number of HtrA1 inhibitors. In previous experiments conducted before the acquisition, these HtrA1 inhibitors showed high affinity and specificity for HtrA1 when tested in vitro. In 2020, we selected the lead compound from this group of HtrA1 inhibitors, which we call IC-500, for
38

Table of Contents                                 
preclinical development. We are currently developing IC-500 for the treatment of GA and evaluating HtrA1 inhibition as a potential treatment for other stages of AMD and potentially other age-related retinal diseases.

    The HtrA1 gene encodes for an enzyme that may affect cellular structure, function and homeostasis, which is the dynamic equilibrium maintained in cells and tissue required for normal physiology. Genetic linkage studies, including a study published in Molecular Vision in 2017, show a correlation between the expression of HtrA1 and a certain set of genes conferring risk for AMD. A study of post-mortem eyes from subjects with AMD published in EBioMedicine in 2018 found overexpression of HtrA1 in RPE cells as compared to the eyes of non-AMD subjects. Additionally, the overexpression of HtrA1 was found, in an in vitro experiment published in the same article, to lead to alterations and disruptions in the morphology and function of RPE cells. Although the causal pathway between expression of HtrA1 and AMD is still not well understood, we believe that these findings suggest that HtrA1 overexpression may play a role in AMD and that molecules involved in the regulation and inhibition of HtrA1 may have therapeutic benefit in the treatment of GA as well as other stages of AMD and potentially other age-related retinal diseases.
    We are continuing the preclinical development of IC-500. In early 2021, we reviewed our IC-500 development program and explored the potential of a less frequent dosing regimen than monthly dosing. In 2021, we initiated a number of preclinical tolerability and pharmacokinetic studies for IC-500, and we are planning for IND-enabling GLP toxicology studies. We anticipate that the start of the IND-enabling toxicology studies will be later than what we originally planned, primarily due to the limited availability of study slots at CROs attributable to rising demand for their services as well as increased absenteeism of staff at those CROs in wake of the COVID-19 pandemic and the recent Omicron variant.
We have developed a formulation that we believe will be safe and effective for intravitreal administration into the eye, and are conducting current Good Manufacturing Practices, or cGMP, manufacturing activities for IC-500. Based on current timelines and subject to successful preclinical development and cGMP manufacturing, we expect to submit an IND to the FDA for IC-500 in mid-2023.
Gene Therapy Research and Development Programs
    Since 2017, as we evaluated our strategic priorities and the market for orphan and age-related retinal diseases with unmet medical needs, as well as the available technologies in development to potentially address these needs, we have been encouraged by the prospects for gene therapy as a potential treatment option for retinal diseases. We in-licensed two gene therapy product candidates (IC-100 and IC-200) and established collaborative gene therapy sponsored research programs with three leading academic research institutions in the United States. These sponsored research programs were focused on generating data to support the preclinical development of our gene therapy product candidates and discovering and developing other novel gene therapy technologies to treat a number of orphan IRDs.
Since 2021, as we evaluated the results from our preclinical toxicology and efficacy studies for IC-100 and IC-200 and assessed the additional resources that would be needed to advance those programs in light of our focus on Zimura and other strategic goals, we have been considering our development options for both product candidates. We are currently planning to seek a collaborator for the future development and potential commercialization of IC-100 and IC-200. We continue to believe in gene therapy as a promising mechanism of action for the treatment of many retinal diseases. We continue to advance our minigene research programs, which we have transitioned to us from the University of Massachusetts Medical School, or UMMS.
The Potential of Gene Therapies for Retinal Diseases
    Gene therapy consists of delivering DNA encoding for a functional protein to a target tissue to facilitate protein synthesis using a recipient's existing cellular machinery. Gene therapy can be used to replace a non-functional protein produced innately by the subject as a result of a genetic mutation or as a means of producing and delivering a therapeutic protein that would not otherwise be produced within the body. Many IRDs are monogenic, meaning they are caused by mutations in a single gene, and therefore could potentially be addressed by a gene replacement approach. For genetic diseases where the mutant protein has toxic effect, we have been encouraged by the potential for a “knockdown” and “replace” approach in which gene therapy not only can introduce a wildtype version of the gene into the host body but also can suppress the expression of the mutant gene. Furthermore, because gene therapy may result in a lasting, or even permanent, addition to a host body's genetic code, gene therapy has potential for an extended treatment effect through a single administration. We therefore believe that gene therapy also holds promise as a potential treatment for age-related and other non-orphan retinal diseases, especially for diseases where patients might otherwise require chronic therapy over years, if not decades.
39

Table of Contents                                 
    Currently, most gene therapies for application in the eye are administered via subretinal injection. Subretinal injection is a surgical procedure in which the gene therapy vector is injected by a retinal surgeon into the potential space between the photoreceptors and the RPE and often as close as practicable to the site of desired protein expression. Once the vector is present in the target tissue area, the process by which the gene of interest is inserted into host cells by the delivery vehicle can begin. This process is referred to as transduction and the gene therapy delivery vehicle is referred to as a vector.
Gene Therapy Products and AAV Vectors
    A gene therapy product typically includes the gene of interest, or transgene, together with a promoter sequence. The composition of the transgene may differ from that of the wildtype form of the gene—for example, the gene may be modified to increase the expression of the target protein. Promoters are DNA sequences that are linked to a gene and control the transcription of a gene into RNA in the host body's cells. There are cell-specific promoters, which tend to drive gene expression in particular cell or tissue types - for example, the RPE and photoreceptors. The choice of the specific promoter that is to be linked to a given transgene is an important consideration in constructing a gene therapy product.
    The promoter-transgene combination is packaged together into a delivery vehicle to facilitate localization within the relevant tissue within the body. Gene therapies are typically delivered via viral vectors and among those, AAV has become the most common choice for gene therapy applications inside the eye. AAV is a small, non-pathogenic virus. To create the vector, the DNA encoding the AAV viral genes is removed, disarming the virus, and is replaced with the therapeutic gene sequence. In addition to AAV, other gene delivery vehicles include vectors derived from lentivirus and non-viral based vectors.
    We are focused on AAV gene therapies, as AAV vectors have generally been found to transduce RPE, photoreceptors and other retinal cells at a high rate, and their safety profile in humans is relatively well-documented as compared to other delivery vehicles, such as lentiviral vectors. Gene editing approaches, such as CRISPR, in which the host DNA is modified, altered or removed via therapeutic intervention, are also emerging as a potential treatment options for genetic diseases. Unlike lentiviral vectors or gene editing approaches, with AAV gene therapy, the delivered genetic cargo does not incorporate into or alter the host cell's existing DNA and chromosomes, but rather remains separate in the host cell, where it can be transcribed by the host cell's existing machinery.
    There are several naturally-occurring serotypes of AAV, including AAV2, AAV5, AAV8 and AAV9, as well as countless synthetic AAV serotypes. The AAV genome consists of two genetic sequences: a "Rep" gene that encodes for certain viral life-cycle proteins, and a "Cap" gene that encodes for proteins that form the viral capsid, which is the outer shell of the AAV. Recombinant AAV vectors can be created by combining the Rep sequence for one AAV serotype with the Cap sequence for another AAV serotype. For example, a recombinant AAV 2/5 vector is produced using the AAV2 Rep sequence and the AAV5 Cap sequence to package the transgene inside an AAV5 capsid. Because different capsid proteins have different transduction capabilities within different types of cells, the selection of the capsid serotype is an important consideration in constructing an AAV gene therapy product.
    One of the primary limitations with AAV gene therapy is AAV's packaging capacity: an AAV vector can hold only up to approximately 4,700 base pairs of DNA, whereas the genes associated with a number of monogenic IRDs, such as the CEP290 gene associated with LCA10 and the ABCA4 gene associated with STGD1, exceed that size. A possible solution to the size limitation would be to develop a minigene form of transgene that would be small enough to fit within the packaging capacity of AAV, but large enough for the resulting protein to maintain its function. Another potential limitation for AAV and other viral vector gene therapies is the potential to trigger an immune response. Because many types of AAV are naturally occurring, gene therapy patients may have built up neutralizing antibodies to specific AAV serotypes prior to gene therapy administration, which may result in an inflammatory immune response and tissue damage. The safety profile of AAV, however, is well-documented, and furthermore, the relative isolation of the human eye and ocular immune system within the body may mitigate the potential immune response from the administration of AAV into the eye. Our current gene therapy programs, which are described in further detail below, use AAV vectors for delivery of the genetic cargo to cells within the retina.
IC-100: RHO-adRP Product Candidate
    In June 2018, we entered into an exclusive global license agreement with the University of Florida Research Foundation, or UFRF, and the University of Pennsylvania, or Penn, for rights to develop and commercialize IC-100, our novel AAV gene therapy product candidate for the treatment of RHO-adRP. There are over 150 known mutations in the RHO gene that can result in RHO-adRP. In individuals with RHO-adRP, the rhodopsin that is produced by the mutant gene is toxic. The construct for our RHO-adRP product candidate combines in a single AAV2/5 vector:
40

Table of Contents                                 
a transgene for a highly-efficient, novel short hairpin RNA, or shRNA, designed to target and "knockdown" expression of the subject's innate rhodopsin, regardless of the specific mutation a subject has, with
a transgene for a healthy rhodopsin protein that is resistant to the shRNA.
    Our RHO-adRP construct was tested by investigators at Penn in a naturally occurring canine model of RHO-adRP, resulting in long term, i.e., over 8 months, anatomic and functional preservation of the photoreceptors, which was demonstrated with histology and electrophysiology. The investigators had initially tested a dual vector construct in which the shRNA and the healthy RHO transgenes were delivered by different AAV vectors. The investigators found, however, that the dual vector approach caused inflammation and other complications in the retina, leading the investigators to develop this single vector construct. The results from these experiments were published by scientists at Penn and UF in PNAS in August 2018 in a paper titled: "Mutation-independent Rhodopsin Gene Therapy by Knockdown and Replacement with a Single AAV Vector."
    We worked with a gene therapy contract development and manufacturing organization, or CDMO, to develop a manufacturing process for IC-100, and this CDMO produced and we released a cGMP batch of IC-100. In addition, we and Penn conducted a number of preclinical studies of IC-100 and a natural history study of RHO-adRP patients.
We have completed two preclinical toxicology studies of IC-100, one of which was a toxicology and efficacy study in the naturally occurring canine model of RHO-adRP and the other study was a GLP toxicology study in non-human primates. We tested the same three doses of IC-100 in both studies. In the canine study, we believe the results demonstrated there was efficacy across all three dose groups. We observed, through clinical examination, ocular inflammation in the high dose group in the canines and at varying degrees at different dosing levels in the non-human primates. Because of the different findings across the two species, we planned to discuss with the FDA the results from these toxicology studies and the design of our planned first-in-human clinical trial before submitting an IND. The FDA advised, in lieu of this meeting, additional discussion should be conducted during the 30-day IND review period following IND submission.
We have been considering our development options for this product candidate and currently plan to seek a collaborator for the future development and potential commercialization of IC-100.
IC-200: Product Candidate for BEST1-Related IRDs
    In April 2019, we entered into an exclusive global license agreement with Penn and UFRF for rights to develop and commercialize IC-200, our novel AAV gene therapy product candidate for the treatment of Best disease and other BEST1-related IRDs. Investigators at Penn and UFRF tested IC-200 in a naturally occurring autosomal recessive canine model for Best disease, resulting in the reversal of subretinal lesions and micro-detachments associated with the canine disease. The results of this work were published in PNAS in February 2018 in a paper titled: "BEST1 gene therapy corrects a diffuse retina-wide microdetachment modulated by light exposure." We believe the results from these experiments in a naturally occurring canine disease model with distinct phenotypic similarities to human Best disease demonstrate the potential therapeutic benefit of IC-200 for BEST1-related IRDs.
    We worked with a gene therapy CDMO to develop a manufacturing process for IC-200, and this CDMO produced and we released a cGMP batch of IC-200. In addition, we and Penn conducted a number of preclinical studies of IC-200 and natural history studies of patients with BEST1-related IRDs, which included a preclinical toxicology and efficacy study of IC-200 in the naturally occurring canine model of Best disease. We believe the results of the toxicology and efficacy study show IC-200 had an efficacy effect in these canines with minimal adverse effects from inflammation or other safety issues.
We have been considering our development options for this product candidate and currently plan to seek a collaborator for the future development and potential commercialization of IC-200.
Minigene Programs
AAV vectors are generally limited as a delivery vehicle by the size of their genetic cargo, which is restricted to approximately 4,700 base pairs of genetic code. The use of minigenes seeks to deliver a smaller but still functional form of a larger gene packaged into a standard-size AAV delivery vector.  The goal of minigene therapy is to deliver a gene expressing a protein that, although smaller than the naturally occurring protein, is nonetheless functional for purposes of treating the associated disease.
    Starting in 2018, we funded several sponsored research programs at UMMS seeking to use a minigene approach to develop new gene therapies for several orphan IRDs. These programs (miniCEP290, miniABCA4 and miniUSH2A) are described below. In July 2021, we hired four individuals who were previously at UMMS and working on these sponsored research programs, including the principal investigator for these programs. We have transitioned the preclinical research
41

Table of Contents                                 
activities for these programs from UMMS to us and have established a laboratory for these employees to continue working on these programs and other preclinical ocular research and development activities.
    miniCEP290 Program for LCA10
    Our miniCEP290 program is targeting LCA10, which is associated with mutations in the CEP290 gene. The naturally occurring CEP290 gene is approximately 8,000 base pairs. In a 2018 publication in Human Gene Therapy, researchers at UMMS presented their findings that injection of a CEP290 minigene into a newborn mouse model for LCA10 resulted in rescue of photoreceptor cells, as evidenced by both anatomical and functional measures. The goal of our sponsored research with UMMS was to create and evaluate other CEP290 minigene constructs in the mouse model and optimize the effect observed in that publication.
    We were encouraged by the results of the sponsored research. One of the new minigene constructs shows five times longer duration of functional rescue of the photoreceptors as compared to what was observed in the 2018 publication. In July 2019, we entered into a license agreement with the University of Massachusetts, or UMass, for exclusive development and commercialization rights to this program. UMMS continued experiments to optimize the constructs, which were delayed during 2020 because of restrictions placed by UMMS on animal research activities as a result of the COVID-19 pandemic. We have identified a lead construct from this program and are considering preclinical development options.
    miniABCA4 Program for STGD1
    Our miniABCA4 program is targeting STGD1, which is associated with mutations in the ABCA4 gene. The size of the naturally occurring ABCA4 gene is approximately 7,000 base pairs. As part of the sponsored research, UMMS generated and evaluated several ABCA4 minigene constructs in both in vitro and in vivo experiments, which yielded what we believe to be encouraging results. We are conducting additional experiments to optimize the constructs and assess their efficacy in the mouse model.
UMMS granted us an option to obtain an exclusive license to certain patent applications for this program.
    miniUSH2A Program for USH2A-Related IRDs
    The miniUSH2A program seeks to develop a mutation independent, minigene therapy for the vision loss associated with USH2A mutations, including vision loss associated with Usher 2A and USH2A-associated nonsyndromic autosomal recessive retinitis pigmentosa. Some of the activities in this program were delayed during 2020 as a result of the closure of UMMS animal research laboratories due to the COVID-19 pandemic. UMMS generated and evaluated several USH2A minigene constructs in in vitro experiments and we are planning to evaluate their efficacy in animals. The animal experiments have been delayed as a result of transitioning the work from UMMS to us.
UMMS granted us an option to obtain an exclusive license to certain patent applications for this program.
Manufacturing
We do not currently own or operate manufacturing facilities for the production of clinical or commercial quantities of Zimura, IC-500, IC-100, IC-200 or any other product candidate we may develop. Although we rely and intend to continue to rely upon third-party contract manufacturing organizations, or CMOs, to produce our products and product candidates, we have personnel with experience to manage the third-party CMOs that we have engaged or may engage to produce our product candidates.
Manufacturing of pharmaceutical and biological products is a process that involves procurement of starting materials, chemical synthesis or cell culture processing in controlled environments, purification and post-production testing and analysis before the product can be released. Manufacturing processes can be complex and difficult to develop, especially for products such as oligonucleotides and gene therapies. Even when a manufacturing process is successfully developed, there are challenges associated with scaling up a manufacturing process to produce quantities sufficient for clinical trials or potential commercial sales and producing high-quality materials consistently using a clearly defined manufacturing process. The manufacture of pharmaceutical and biological products is subject to FDA review and oversight. Having a well-defined process that can be validated is crucial to obtaining FDA approval of any product candidate we may bring forward.
Zimura Manufacturing
The process for manufacturing Zimura consists of chemical synthesis, purification, pegylation, purification and finally freeze drying to form a powder, which is the active pharmaceutical ingredient, or API. Each of these steps involves relatively common unit operations. In a separate process that follows the freeze drying, the Zimura API is dissolved in a liquid solution
42

Table of Contents                                 
that includes certain chemicals and then is aseptically filled into vials from which the intravitreal injection solution is drawn. This process of rendering the API into a liquid solution and placing it into vials is referred to as fill/finish services.
In early 2017, we completed the small scale manufacture of multiple batches of Zimura drug substance that we are using to support clinical drug supply for the GATHER2 trial and the expanded STAR trial. We are working with our historical contract manufacturer for Zimura drug substance, Agilent Technologies, Inc., or Agilent, to scale up and potentially validate the manufacturing process for Zimura drug substance. In parallel, we are working with a new contract manufacturer with the goal of assessing whether this manufacturer can produce Zimura drug substance at an adequate scale for potential commercial use. We have experienced issues during technology transfer of the existing manufacturing process to this manufacturer, which has resulted in delays to our timelines with this manufacturer. Subject to successful completion of scale up and validation activities, we currently plan to use Agilent as the primary source of supply of Zimura drug substance upon launch, if approved, and the new manufacturer as a second source of supply of Zimura drug substance. Validation requires that we demonstrate that the drug substance produced through the scaled up process can be produced consistently, delivering quality product within a range of acceptable specifications. We are continuing analytical method development and qualification with our contract manufacturers and laboratories.
Starting in 2020, we have worked with a contract manufacturer to provide us with additional supply of finished Zimura drug product to support our needs for the GATHER2 trial and the expanded STAR trial. We believe we have sufficient finished Zimura drug product for these two clinical trials. In addition, we are working with our historical fill/finish manufacturer, Ajinomoto Bio-Pharma Services, or Ajinomoto, on fill/finish of Zimura drug product with a new vial, which we believe will allow us to support a more efficient and robust fill/finish operation at a commercial scale. Ajinomoto has produced finished Zimura drug product using the new vial, which we plan to use for a portion of the second-year study visits for patients in the GATHER2 trial. We believe Ajinomoto has the capacity to supply us with finished Zimura drug product with the new vial for our expected commercial supply needs upon launch, if approved.
We order the polyethylene glycol, or PEG, starting material used to make Zimura drug substance from a sole source third-party manufacturer outside the United States. We currently procure the supply on a purchase order basis and are continuing discussions regarding a long-term supply agreement with this manufacturer for the PEG starting material. We believe this supplier will have the capacity to supply us with the PEG that we will need for commercial manufacturing.
Zimura Sustained Release Delivery Technologies

We are exploring lifecycle management initiatives for Zimura with efforts focused on potential sustained release delivery technologies. Our goal is to derive a formulation of Zimura with a sustained release delivery technology that reduces the frequency of intravitreal injections that a patient must undergo, while maintaining comparable efficacy and safety to monthly injections. We have been exploring a number of potential sustained release delivery technologies with various technology providers. Preliminary evaluation of the sustained release delivery technologies and the resulting formulations is ongoing. We intend to evaluate multiple sustained release delivery technologies for Zimura, and may pursue long-term development collaborations with technologies that meet our feasibility and other criteria.

IC-500 Manufacturing

The process for manufacturing IC-500 consists of chemical synthesis, purification and spray drying to form a powder, which is the spray dried active pharmaceutical ingredient, or SDAPI. Each of these steps involves relatively common unit operations. In a separate process that follows the spray drying, the IC-500 SDAPI is dispersed in a liquid solution to form a suspension that includes certain pharmaceutical excipients and then is aseptically filled into vials and terminally sterilized. The filled drug product suspension is then diluted to the clinical dose concentration using a diluent. This process of rendering the SDAPI into a liquid suspension and placing it into vials, from which the intravitreal injection is drawn, is referred to as fill/finishing.

We have engaged multiple contract manufacturers to support the various processes necessary for the scale-up and cGMP manufacturing of IC-500 drug substance and drug product for larger scale batches for potential clinical trials.

Gene Therapy Manufacturing
    The manufacture of AAV gene therapies requires the use of high quality starting materials, such as plasmids and cells. Plasmids are circular double-stranded DNA that can exist separately from chromosomes in cells. A plasmid can be engineered and transfected into cells to express a specific transgene with different combinations of AAV serotypes. The plasmids and cells are generally sourced from a limited number of qualified suppliers.
43

Table of Contents                                 
The process for producing AAV vectors typically consists of growing the cells, transfection of the cells with appropriate plasmids and harvesting the viral vectors from the cell culture. The subsequent purification process is designed to capture, purify and concentrate the viral vector product while removing process and product-related impurities. The purified AAV vector is then formulated, filtered and filled into vials, from which the injection solution is drawn.
 
                We obtain the plasmids that are used for IC-100 and IC-200 from a single third-party supplier on a purchase order basis. We worked with a gene therapy CDMO for preclinical and Phase 1/2 clinical supply of IC-100 and IC-200 drug substance and drug product. This CDMO has produced, and we have released, a cGMP batch of IC-100 and a cGMP batch of IC-200.

Human Capital
Our Workforce
    As of January 31, 2022, we had 94 full-time employees, compared to 57 full-time employees as of January 31, 2021. These employees support key areas of our business and operations, including commercial planning, medical affairs, clinical development and clinical operations, regulatory affairs and drug safety, data management, scientific research, process and analytical development, drug substance and drug product manufacturing, quality control, materials and supply chain management, and quality assurance, as well as our general and administrative functions and public company infrastructure. We plan to continue to hire strategically to support key areas of our business, including the hiring of medical science liaisons. The following are additional data about our full-time employees, as of January 31, 2022:
67 are in research and development, manufacturing and quality control and assurance;
32 have M.D., O.D., Pharm.D. or Ph.D. degrees;
45 self-identify as women;
45 self-identify as racial or ethnic minorities; and
32 reside in a state where we do not have any physical offices (currently, New Jersey, New York and Massachusetts).
In addition to our full-time employees, we engage various consultants and advisors to support key areas of our business, including formulating our research and development, manufacturing, commercialization and lifecycle management strategies. Many of these consultants and advisors have specialized expertise that also makes them attractive for other companies. We generally engage them as independent contractors and they are generally free to work for other companies, subject to the terms of any non-compete arrangements that we enter into with them.
Human Capital Initiatives

During the COVID-19 pandemic, we increased our efforts to support our employees and transitioned to full-time remote working in March 2020. We conducted numerous surveys over the course of the year to gauge employee sentiment and understand their needs. Throughout the pandemic, we have provided employees with technology and training sessions to support remote working. We took efforts to enhance company communication, such as holding weekly company meetings to provide business updates and provide a forum for guest speakers, including several offering education in best practices for remote working and general wellness. Our employees adopted various software tools to support virtual communication and collaboration, both internally and with third parties.

Starting in the middle of 2021, we adopted health and safety policies for employees who started voluntarily returning to the office. We have also adopted a vaccination policy and we provide COVID-19 testing to employees who regularly work in our offices. We continue to provide flexible work policies to support our employees. We continue to monitor the COVID-19 situation closely and, other than for our laboratory-based employees, currently expect to continue working predominantly in a hybrid (partially remote, partially in office) working model for the foreseeable near future.

In 2021, we continued to develop our new employee integration and professional development programs. Similar to 2020, most of our newly hired employees in 2021 joined us as remote- or hybrid-based employees, and we continued to enhance our new employee orientation program. For 2021, we continued to expand our training programs for new and continuing employees.

44

Table of Contents                                 
In mid-2020, we formed an employee committee on diversity, equity and inclusion, or CDEI, to assess issues of diversity, equity and inclusion among our workforce and provide recommendations. In 2021, we worked to implement some of the recommendations from the CDEI, including conducting trainings on topics such as unconscious bias and interviewing skills. We entered into a corporate sponsorship with Genspace NYC, a community life sciences lab in Brooklyn, New York. We also rolled out an employee volunteering and company match program.

Sales and Marketing
    We expect that our commercial strategy for any of our product candidates, including whether to retain commercial rights and market and sell the product candidate ourselves or to utilize collaboration, distribution or other marketing arrangements with third parties in some or all geographic markets, will be determined based on a variety of factors, including the size and nature of the patient population, the disease area, the particular indication for which the product candidate is approved, the territory in which the product candidate may be marketed and the commercial potential for such product candidate. In addition, our commercial strategy will vary depending on whether the disease is typically treated by general ophthalmology practitioners, specialists, such as retina specialists, or other sub-specialists, and the degree and potential degree of acceptance of our product candidate by the relevant physicians in various markets. For example, in the United States, retina specialists perform most of the medical procedures involving diseases of the back of the eye, including intravitreal injections. We believe that retina specialists in the United States are sufficiently concentrated such that we could effectively promote an approved product candidate to these specialists. We also understand that a majority of GA patients in the United States currently are not cared for by retina specialists and instead see general ophthalmologists (GOs) and optometrists (ODs); this will be a factor in our sales and marketing strategy for Zimura for GA.
We are working to build our commercial capabilities and infrastructure and develop our sales and marketing strategy for the potential launch of Zimura in the United States for GA, if approved. If we are successful in expanding the potential label for Zimura to intermediate AMD and/or STGD1, which, in contrast to GA and other forms of AMD, is a condition affecting a more limited number of individuals, our commercial strategy for Zimura may change.
Competition
The development and commercialization of new drug products is highly competitive. We face competition with respect to our product candidates from major pharmaceutical companies, specialty pharmaceutical companies and biotechnology companies, as well as generic and biosimilar companies, worldwide. Potential competitors also include academic institutions, government agencies and other public and private research organizations that conduct research, seek patent protection and establish collaborative arrangements for research, development, manufacturing and commercialization. Some of these competitive products and therapies are based on scientific approaches that are the same as or similar to our approaches, and others are based on entirely different approaches. We also will face similar competition with respect to any product candidates that we may seek to develop or commercialize in the future. In particular, many companies are pursuing gene therapy approaches for orphan and age-related retinal diseases.
Based on publicly available information, we are aware of the following research and development programs that may be competitive with programs we are pursuing. Other competitive programs may exist of which we are not aware.
Competitive considerations for GA or dry AMD:

We are aware that LumiThera, Inc. has a medical device using its LT-300 light delivery system, which is approved in the European Union for the treatment of dry AMD. In addition, there are a number of products in preclinical and clinical development by third parties to treat GA or dry AMD. In general, these product candidates can be categorized based on their proposed mechanisms of action. The mechanisms of action for these product candidates include complement system and inflammation suppression, visual cycle modulators, antioxidants and neuroprotectants, cell and gene therapies and vascular perfusion enhancers. We are aware that AstraZeneca PLC (which acquired Alexion Pharmaceuticals, Inc. in 2021), Annexon Inc., Apellis Pharmaceuticals, Inc., or Apellis, Applied Genetic Technologies Corporation, or AGTC, Biogen Inc., Gemini Therapeutics, Inc., Gyroscope Therapeutics (which was recently acquired by Novartis AG), IONIS Pharmaceuticals, Inc. (in collaboration with Roche AG), Janssen Pharmaceuticals Inc. (which acquired its program through the acquisition of Hemera Biosciences, LLC), MorphoSys AG, NGM Biopharmaceuticals Inc. and Novartis AG each have complement inhibitors in development for GA or dry AMD, including, in the cases of Gemini Therapeutics, Gyroscope Therapeutics and Janssen Pharmaceuticals, complement inhibitor gene therapies and AGTC and Gemini Therapeutics each has a research program on complement factor H gene therapy. We believe that the most advanced of these programs is Apellis's pegylated, synthetic peptide targeting complement protein C3, for which Apellis announced top-line data from two Phase 3 clinical trials in September 2021 and Apellis stated it would file an application for marketing approval with the FDA during the second quarter of 2022.
45

Table of Contents                                 
Apellis could obtain marketing approval for its product candidate in advance of when we might reasonably expect to obtain marketing approval for Zimura in GA or IC-500 in GA, if at all. Moreover, we are aware that several other companies, including Abbvie Pharmaceuticals, Inc., Allegro Ophthalmics, LLC, Alkeus Pharmaceuticals Inc., Astellas Pharma Inc., Boehringer Ingelheim, Lineage Cell Therapeutics, Inc., Ocugen, Inc., ONL Therapeutics, Inc., Regenerative Patch Technologies, Roche AG and Stealth BioTherapeutics Corp., are pursuing development programs for the treatment GA or dry AMD using different mechanisms of action outside of the complement system, including Genentech, Inc. (an affiliate of Roche AG) and Gemini Therapeutics, which are pursuing HtrA1 inhibition as a mechanism of action. We believe that the most advanced HtrA1 inhibitor program in development is Genentech's monoclonal antibody HtrA1 inhibitor, which is currently being studied in a Phase 2 clinical trial and whose results are expected to become available in 2022 or 2023.
 
Competitive considerations for Stargardt disease:

There are a number of products in preclinical research and clinical development by third parties to treat Stargardt disease. We are aware that AGTC, Alkeus Pharmaceuticals, Inc., Beam Therapeutics Inc., Biogen, Generation Bio Co., Kubota Vision Inc. (formerly Acucela), Lin BioScience, Inc., ProQR Therapeutics N.V., or ProQR, and Spark Therapeutics (a subsidiary of Roche AG) each have research or development programs in Stargardt disease. Three of these programs, Alkeus, Kubota and Lin BioScience, are exploring the use of oral therapeutics, while AGTC, Nightstar and Spark are each using a gene therapy approach, Beam is using a base editing approach, and ProQR is using an RNA-based approach. Kubota’s product candidate, to which the FDA and the EMA granted orphan drug designation in August 2020, is in Phase 3 development while Alkeus’s product candidate is in Phase 2 development. In addition, several academic organizations have early stage programs in Stargardt disease.

Competitive considerations for RHO-adRP:

We are aware that ProQR is developing an RNA-based therapeutic for RHO-adRP, for which it is currently conducting a Phase 1/2 clinical trial. Ocugen, Inc. is developing a preclinical gene therapy for RHO-adRP, for which the FDA granted orphan drug designation in July 2020. In addition, Biogen has a preclinical AAV gene therapy program in RHO-adRP. Editas Medicine, Inc. is also developing a preclinical gene editing product candidate for this disease. We are also aware that multiple academic institutions have early stage gene therapy development programs in RHO-adRP.
  
Competitive considerations for BEST1-related IRDs:

We are aware that Biogen has a preclinical AAV gene therapy program for one or more BEST1-related IRDs.

Competitive considerations for LCA10:

We are aware that Editas Medicine, Inc. has a gene editing program for LCA10, for which a Phase 1/2 clinical trial is ongoing, ProQR is developing an RNA-based therapeutic for LCA10 that is currently in Phase 2/3 development, Generation Bio Co. has a preclinical program that utilizes ceDNA technology to target LCA10 and Oxford Biomedica plc is developing a lentiviral gene therapy program for LCA10 that is in preclinical development. In addition, several academic institutions have preclinical programs in LCA10.

Competitive considerations for USH2A-related IRDs:

There are a number of products in preclinical research and clinical development by third parties to treat USH2A-related IRDs. We are aware that ProQR is pursuing two RNA based approaches for different mutations causing Usher 2A, one of which is currently in Phase 1/2 clinical development and the other of which is in preclinical development. We are also aware that Editas Medicine, Inc., Odylia Therapeutics and Wave Life Sciences, Inc. are exploring potential programs in USH2A-related IRDs.
Intellectual Property
    Our success depends in part on our ability to obtain and maintain proprietary protection for our product candidates, technology and know-how, to operate without infringing the proprietary rights of others and to prevent others from infringing our proprietary rights. We seek to protect our proprietary position, among other methods and where patent protection is available, by filing U.S. and certain foreign patent applications related to our proprietary technology, inventions and improvements that are important to the development of our business, and by maintaining our issued patents. For our collaborative gene therapy sponsored research programs, we have generally relied on our university collaborators to perform
46

Table of Contents                                 
research and generate data to support new patent applications, and to file, prosecute and maintain any patents or patent applications resulting from the sponsored research with our input. We also rely upon trade secrets, know-how, continuing technological innovation and in-licensing opportunities to develop and maintain our proprietary position.
    Our patent portfolio includes the following:
patents and patent applications in-licensed from Archemix Corp., or Archemix:
patents covering Zimura's composition-of-matter, which have issued in the United States, the countries covered by the European Patent Organisation, which we refer to as the EPO Countries, Japan and certain other jurisdictions, and which are expected to expire in the United States and the EPO Countries in 2025 and elsewhere, including China and Japan, in 2026; and
patents covering the treatment of certain complement mediated disorders with Zimura, Zimura for use in a method of treating certain complement mediated disorders or a composition comprising Zimura for treating certain complement mediated disorders, which have issued in the United States, the EPO Countries, Japan and certain other jurisdictions, and which are expected to expire in the EPO Countries in 2025 and elsewhere, including the United States and Japan, in 2026; and
patents and patent applications owned by IVERIC bio, Inc.:
patent applications covering formulations, methods of use for treating GA, Stargardt disease and other conditions, and other proprietary technology relating to Zimura, which have resulted in claims covering methods of using Zimura to treat GA that have been allowed by the USPTO and are expected to expire in 2034, and others are pending in the United States, the EPO Countries, Japan and certain other jurisdictions, which, if granted, are expected to expire in 2034; and
patent applications covering methods of using Zimura to treat intermediate AMD and other forms of AMD, which are pending under the Patent Cooperation Treaty, or PCT, and which, if granted, are expected to expire in 2041; and
patents and patent applications owned by our subsidiary Orion Ophthalmology LLC, or Orion:
three families of composition-of-matter and method-of-treatment patent applications covering IC-500 and other HtrA1 inhibitors owned by Orion, some of which have resulted in issued patents in the United States or claims that have been allowed by the USPTO, as well as issued patents or allowed claims in other jurisdictions, all of which are expected to expire in 2037, and others are pending in the United States, the EPO Countries, Japan and certain other jurisdictions, which, if granted, are expected to expire in 2037; and
patents and patent applications in-licensed from UFRF and Penn:
patents covering composition-of-matter and method-of-treatment relating to IC-100 and the proprietary RHO-adRP AAV technology of UFRF and Penn, which have issued in the United States and are expected to expire in 2037, and applications covering the same subject matter that are pending in the United States, EPO countries, Japan and certain other jurisdictions, which, if granted, are expected to expire in 2037; and
two families of composition-of-matter and method-of-treatment patent applications relating to the proprietary RHO-adRP AAV technology of UFRF and Penn, one family of which is pending in the United States, and both families are pending in the EPO Countries, Japan and certain other jurisdictions, which, if granted, are expected to expire in 2037 and 2039, respectively; and
patent applications covering composition-of-matter and method-of-treatment relating to proprietary BEST1 AAV technology from UFRF, which are pending in the United States, the EPO Countries, Japan and certain other jurisdictions, and which, if granted, are expected to expire in 2039; and
47

Table of Contents                                 
patent applications covering methods of treating autosomal dominant BEST1-related IRDs and autosomal recessive BEST1-related IRDs, which are pending under the PCT, and which, if granted, are expected to expire in 2041; and
patent applications in-licensed from UMass:
two families of composition-of-matter and method-of-treatment patent applications relating to certain proprietary minigene technology for the treatment of diseases associated with mutations in the CEP290 gene, which are pending in the United States, the EPO Countries and China, and which, if granted, are expected to expire in 2038 and 2040, respectively.
The term of individual patents depends upon the legal term for patents in the countries in which they are granted. In most countries, including the United States, the patent term is generally 20 years from the earliest claimed filing date of a non-provisional patent application in the applicable country. In the United States, a patent’s term may, in certain cases, be lengthened by patent term adjustment, which compensates a patentee for administrative delays by the U.S. Patent and Trademark Office in examining and granting a patent, or may be shortened if a patent or patent application claims patentably indistinct subject matter as another commonly owned patent or patent application having an earlier expiration date and the patentee terminally disclaims the portion of the term beyond such earlier expiration date. The Hatch-Waxman Act permits a patent term extension of up to five years beyond the expiration date of a U.S. patent as partial compensation for the length of time a drug is undergoing clinical development or under regulatory review while the patent is in force. A patent term extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval, only one patent applicable to each regulatory review period may be extended and only those claims covering the approved drug, a method for using it or a method for manufacturing it may be extended.
Similar provisions are available in the EPO Countries and certain other foreign jurisdictions to extend the term of a patent that covers an approved drug. In the future, if and when our product candidates receive approval by the FDA or foreign regulatory authorities, we expect to apply for patent term extensions on issued patents covering those products, depending upon the length of the clinical trials for each drug and other factors. The expiration dates referred to above are without regard to any patent term adjustments or potential patent term extension or other market exclusivity that may be available to us. See "—Government Regulation and Product Approvals" below for a description of market exclusivity mechanisms that may be available to us.
We may rely, in some circumstances, upon trade secrets to protect our technology. However, trade secrets can be difficult to protect. We seek to protect our proprietary technology and processes, in part, by confidentiality agreements with our employees, consultants, scientific advisors and contractors. We also seek to preserve the integrity and confidentiality of our data and trade secrets by maintaining physical security of our premises and physical and electronic security of our information technology systems.
Licensing and Other Arrangements

    We are party to a number of license, acquisition, option and other agreements that have granted us rights to develop our product candidates and conduct our research and development programs. These agreements generally impose license fee, milestone payment, royalty payment and diligence obligations on us. Our material in-license and acquisition agreements are described below.

    In the future, we may enter into additional acquisition or license agreements, particularly if we choose to acquire or in-license additional product candidates or other technologies, including sustained release delivery technologies for Zimura, and further expand our product pipeline. We expect that any future acquisition or license agreements would impose similar obligations on us. In the future, we may also enter into agreements to out-license intellectual property to our collaboration and research partners to assist in the development and, if approved, commercialization of our product candidates, including for the future development and potential commercialization of IC-100 and IC-200. We may out-license certain rights to any of our product candidates if we believe the arrangement could assist us in the development or potential commercialization of such product candidate and would otherwise help us pursue our business plan and strategic goals.

Zimura - Archemix C5 License Agreement

In September 2011, we entered into an amended and restated exclusive license agreement with Archemix relating to anti-C5 aptamers, which we refer to as the C5 License Agreement. The C5 License Agreement superseded a July 2007 agreement between us and Archemix. Under the C5 License Agreement, we hold exclusive worldwide licenses, subject to
48

Table of Contents                                 
certain pre–existing rights, under specified patents and technology owned or controlled by Archemix to develop, make, use, sell, offer for sale, distribute for sale, import and export pharmaceutical products comprised of or derived from an anti-C5 aptamer for the prevention, treatment, cure or control of human indications, diseases, disorders or conditions of the eye, adnexa of the eye, orbit and optic nerve, other than certain expressly excluded applications.

Financial Terms

In connection with the C5 License Agreement, as amended, we paid Archemix an upfront licensing fee of $1.0 million and issued to Archemix an aggregate of 2,000,000 shares of our series A-1 preferred stock and 500,000 shares of our series B-1 preferred stock. We have paid Archemix an aggregate of $9.0 million in fees based on our achievement of specified clinical milestone events under the C5 License Agreement, including two milestone payments of $1.0 million and $6.0 million triggered by the positive 12-month data from, and by completion of, the GATHER1 trial, which we paid in March 2020 and October 2020, respectively.

Under the C5 License Agreement, for each anti-C5 aptamer product that we may develop under the agreement, including Zimura, we are obligated to make additional payments to Archemix of up to an aggregate of $50.5 million if we achieve specified development, clinical and regulatory milestones, with $24.5 million of such payments relating to a first indication, $23.5 million of such payments relating to second and third indications and $2.5 million of such payments relating to sustained delivery applications. Under the C5 License Agreement, we are also obligated to make additional payments to Archemix of up to an aggregate of $22.5 million if we achieve specified commercial milestones based on net product sales of all anti-C5 products licensed under the agreement. We are also obligated to pay Archemix a double-digit percentage of specified non-royalty payments we may receive from any sublicensee of our rights under the C5 License Agreement. We are not obligated to pay Archemix a running royalty based on net product sales in connection with the C5 License Agreement.

Diligence Obligations

We are required to exercise commercially reasonable efforts in developing and commercializing at least one anti-C5 aptamer product and in undertaking actions required to obtain regulatory approvals necessary to market such product in the United States, the European Union, and Japan, and in such other markets where we determine that it is commercially reasonable to do so.

Term and Termination

Unless earlier terminated, the C5 License Agreement will expire upon the latest of 12 years after the first commercial sale in any country of the last licensed product, the expiration of the last-to-expire valid claim of the licensed patents that covers a licensed product, and the date on which no further payments of sublicensing income are to be received by us.
Either we or Archemix may terminate the C5 License Agreement if the other party materially breaches the agreement and the breach remains uncured for a specified period. Archemix may also terminate the C5 License Agreement, or may convert our exclusive license under the agreement to a non-exclusive license, if we challenge or assist a third party in challenging the validity or enforceability of any of the patents licensed under the agreement. We may terminate the agreement at any time and for any or no reason effective at the end of a specified period following our written notice of termination to Archemix.

IC-500 - Inception 4 Merger Agreement
    In October 2018, we acquired IC-500 and a number of other HtrA1 inhibitors through our acquisition of Inception 4, Inc., or Inception 4, which was previously a privately held biotechnology company controlled by funds owned by Versant Ventures. We and Inception 4 entered into an agreement and plan of merger, which we refer to as the Inception 4 Merger Agreement, pursuant to which we acquired Inception 4 through a merger transaction, referred to as the Inception 4 Merger. Following the Inception 4 Merger, Inception 4 was merged into our wholly-owned subsidiary Orion, which currently owns the rights to IC-500 and the other HtrA1 inhibitors acquired in the Inception 4 Merger. 
    As upfront consideration for the Inception 4 Merger, the former equityholders of Inception 4 received 5,044,201 shares of our common stock, and in December 2018, they received an additional 130,526 shares of our common stock following finalization of customary post-closing adjustments.  As part of the transaction, we received approximately $6.1 million in cash.
    Contingent Consideration
    In addition, pursuant to the Inception 4 Merger Agreement, the former equityholders of Inception 4 will be entitled to receive contingent future payments from us based on the achievement of certain clinical and regulatory milestones of up to an
49

Table of Contents                                 
aggregate maximum amount of $105 million, with $45 million of such potential payments relating to GA and $60 million of such potential payments relating to wet AMD.  These future milestone payments will be payable in the form of shares of our common stock, calculated based on the price of our common stock over a five-trading day period preceding the achievement of the relevant milestone, unless and until the issuance of such shares would, together with all other shares issued in connection with the Inception 4 Merger, exceed an overall maximum limit of approximately 7.2 million shares, which is equal to 19.9% of the number of issued and outstanding shares of our common stock as of the close of business on the business day prior to the closing date of the Inception 4 Merger, and will be payable in cash thereafter.
    Diligence Obligation
    We agreed to use commercially reasonable efforts to perform the activities described in an agreed-upon development plan outlining certain activities for developing at least one HtrA1 inhibitor for the treatment of GA.  Our maximum aggregate liability for any and all breaches of our obligation under the Inception 4 Merger Agreement to use commercially reasonable efforts to develop an HtrA1 inhibitor is limited to $5 million.
    Other Terms and Conditions
    The Inception 4 Merger Agreement contains customary representations, warranties and covenants for both Inception 4 and our company as the purchaser. The representations and warranties generally survived until the first anniversary of the closing date, with certain specified representations and warranties surviving to 30 months after the closing date and other specified representations and warranties surviving to the expiration of the applicable statute of limitations. The Inception 4 Merger Agreement also contains customary indemnification provisions whereby the former equityholders of Inception 4 will indemnify us and certain affiliated parties for any losses arising out of breaches of the representations, warranties and covenants of Inception 4 under the Inception 4 Merger Agreement; pre-closing tax matters; appraisal claims of former Inception 4 stockholders; any pre-closing indebtedness or expenses not previously adjusted for at the closing; fraud with respect to representations and warranties of Inception 4; and certain other matters.
License Agreement with UFRF and Penn for IC-100
    In June 2018, we entered into an exclusive global license agreement with UFRF and Penn, which we refer to as the RHO-adRP License Agreement. Under the RHO-adRP License Agreement, UFRF and Penn granted us a worldwide, exclusive license under specified patent rights and a worldwide, non-exclusive license under specified know-how, including specified preclinical data, to manufacture, develop and commercialize certain AAV gene therapy products for the treatment of rhodopsin-mediated diseases. The rights granted under the RHO-adRP License Agreement included certain patent rights covering IC-100, our novel AAV gene therapy product candidate intended to treat RHO-adRP.
    We may grant sublicenses of the licensed patent rights and know-how without the consent of the UFRF and Penn to certain affiliates and to biopharmaceutical companies that have a minimum market capitalization at the time such sublicense is granted and may otherwise grant sublicenses of the licensed patent rights and know-how with the consent of UFRF and Penn, not to be unreasonably withheld.
    Diligence Obligations
    We agreed to use commercially reasonable efforts to pursue an agreed-upon development plan with the intent to develop a licensed product for sale within at least the United States and two major European countries and, subject to obtaining marketing approval, to commercialize a licensed product in at least the United States and two major European countries. In addition, we agreed to meet specified development and commercial milestones with respect to a licensed product by specified dates, as the same may be extended under the terms of the RHO-adRP License Agreement.
    Financial Terms
    In June 2018, we paid a $0.5 million upfront license issuance fee in connection with entry into the agreement, as well as accrued patent prosecution expenses of approximately $30 thousand. Under the agreement, we agreed to pay an annual license maintenance fee in the low double-digit thousands of dollars, which will be payable on an annual basis until the first commercial sale of a licensed product. In addition, we agreed to reimburse UFRF for the costs and expenses of patent prosecution and maintenance related to the licensed patent rights.
We further agreed to pay UFRF, on behalf of both licensors, up to an aggregate of $23.5 million if we achieve specified clinical, marketing approval and reimbursement approval milestones with respect to a licensed product and additionally, up to an aggregate of $70.0 million if we achieve specified commercial sales milestones with respect to a licensed product.
50

Table of Contents                                 
    We are also obligated to pay UFRF, on behalf of both licensors, royalties at a low single-digit percentage of net sales of licensed products. Such royalties are subject to customary reductions for lack of patent coverage and loss of regulatory exclusivity. In addition, such royalties with respect to any licensed product in any country may be offset by a specified portion of any royalty payments actually paid by us with respect to such licensed product in such country under third-party licenses for patent rights or other intellectual property rights that are necessary to manufacture, develop and commercialize the licensed product in such country. Our obligation to pay royalties under the RHO-adRP License Agreement will continue on a licensed product-by-licensed product and country-by-country basis until the latest of:
the expiration of the last-to-expire licensed patent rights covering a licensed product in the country of sale;
the expiration of regulatory exclusivity covering a licensed product in the country of sale; and
ten years from the first commercial sale of the applicable licensed product in the country of sale.
Beginning on the earlier of the calendar year following the first commercial sale of a licensed product and the first business day of 2031, we are also obligated to pay certain minimum royalties, not to exceed an amount in the low hundreds of thousands of dollars on an annual basis, which minimum royalties are creditable against our royalty obligation with respect to net sales of licensed products due for the year in which the minimum royalty is paid.
    If we or an affiliate sublicenses any of the licensed patent rights to a third party, we will be obligated to pay UFRF, on behalf of both licensors, a low double-digit percentage of the consideration received in exchange for such sublicense, with the applicable percentage based upon the stage of development of the sublicensed product at the time we or the applicable affiliate enters into the sublicense.
    If we receive a rare pediatric disease priority review voucher from the FDA in connection with obtaining marketing approval for a licensed product and we subsequently use such priority review voucher in connection with a different product candidate, we will be obligated to pay UFRF, on behalf of both licensors, aggregate payments in the low double-digit millions of dollars based on certain marketing approval and commercial sales milestones with respect to such other product candidate. In addition, if we sell such a priority review voucher to a third party, we will be obligated to pay UFRF, on behalf of both licensors, a low double-digit percentage of any consideration received from such third party in connection with such sale.
    Term and Termination
    Unless earlier terminated by us, the RHO-adRP License Agreement will expire upon the expiration of our obligation to pay royalties to UFRF on net sales of licensed products. We may terminate the agreement at any time for any reason upon prior written notice to UFRF. Penn or UFRF may terminate the agreement if we materially breach the agreement and do not cure such breach within a specified cure period, if we experience a specified insolvency event, if we cease to carry on the entirety of our business related to the licensed patent rights, if we cease for more than four consecutive quarters to make any payment of earned royalties on net sales of licensed products following the commencement of commercialization thereof, unless such cessation is based on safety concerns that we are actively attempting to address, or if we or an affiliate challenges or assists a third party in challenging the validity, scope, patentability, and/or enforceability of the licensed patent rights.
    Following any termination of the agreement prior to expiration of the term of the agreement, all rights to the licensed patent rights and know-how granted to us will revert to UFRF and Penn.
License Agreement with Penn and UFRF for IC-200

    In April 2019, we entered into an exclusive global license agreement, which we refer to as the BEST1 License Agreement, with Penn and UFRF. We entered into the BEST1 License Agreement by exercising our exclusive option rights under an option agreement that we previously entered into with Penn and UFRF in October 2018. Under the BEST1 License Agreement, Penn and UFRF granted us a worldwide, exclusive license under specified patent rights and specified know-how and a worldwide, non-exclusive license under other specified know-how to research, develop, manufacture and commercialize certain AAV gene therapy products, including IC-200, for the treatment of Best disease and other BEST1-related IRDs.

We have agreed to use commercially reasonable efforts to pursue an agreed-upon development plan with the intent to develop a licensed product for sale within at least the United States and two major European countries and, subject to obtaining marketing approval, to commercialize such product in at least the United States and two major European countries. In addition, we have agreed to meet specified development and regulatory milestones with respect to a licensed product by specified dates, as the same may be extended under the terms of the agreement.

We may grant sublicenses of the licensed patent rights and know-how, without the consent of Penn or UFRF, to certain affiliates and to biopharmaceutical companies that have a minimum market capitalization at the time such sublicense is
51

Table of Contents                                 
granted, and may otherwise grant sublicenses to the licensed patent rights and know-how with the consent of Penn and UFRF, not to be unreasonably withheld.
    Financial Terms
In May 2019, we paid Penn, for the benefit of Penn and UFRF, a $0.2 million upfront license issuance fee, which was recorded as a research and development expense, and we paid UFRF accrued patent prosecution expenses of approximately $18 thousand, which was recorded as a general and administrative expense. We have also agreed to pay Penn, for the benefit of Penn and UFRF, an annual license maintenance fee in the low double-digit thousands of dollars, which fee will be payable on an annual basis until the first commercial sale of a licensed product. In addition, we have agreed to pay Penn, for the benefit of Penn and UFRF, a one-time patent grant fee in the low triple-digit thousands of dollars, upon the issuance of a U.S. patent that claims inventions disclosed in the licensed patent rights or know-how or inventions generated under certain related sponsored research agreements with Penn or UFRF, and that is exclusively licensed to us. Furthermore, we have agreed to reimburse Penn and UFRF for the costs and expenses of patent prosecution and maintenance related to the licensed patent rights.

We have further agreed to pay Penn, for the benefit of Penn and UFRF, up to an aggregate of $15.7 million if we achieve specified clinical, marketing approval and reimbursement approval milestones with respect to one licensed product, and up to an aggregate of an additional $3.1 million if we achieve these same milestones with respect to a different licensed product. In addition, we have agreed to pay Penn, for the benefit of Penn and UFRF, up to an aggregate of $48.0 million if we achieve specified commercial sales milestones with respect to one licensed product, and up to an aggregate of an additional $9.6 million if we achieve these same milestones with respect to a different licensed product.
 
We are also obligated to pay Penn, for the benefit of Penn and UFRF, royalties at a low single-digit percentage of net sales of licensed products. Such royalties are subject to customary deductions, credits, and reductions for lack of patent coverage and loss of regulatory exclusivity. In addition, such royalties with respect to any licensed product in any country may be offset by a specified portion of any royalty payments actually paid by us with respect to such licensed product in such country under third-party licenses to patent rights or other intellectual property rights that are necessary to research, develop, manufacture and commercialize the licensed product in such country. Our obligation to pay royalties under the BEST1 License Agreement will continue on a licensed product-by-licensed product and country-by-country basis until the latest of:
the expiration of the last-to-expire licensed patent rights covering the sale of the applicable licensed product in the country of sale;
the expiration of regulatory exclusivity covering the applicable licensed product in the country of sale; and
10 years from the first commercial sale of the applicable licensed product in the country of sale.
Beginning on the earlier of the calendar year following the first commercial sale of a licensed product and calendar year 2032, we are also obligated to pay certain minimum royalties, not to exceed an amount in the mid tens of thousands of dollars on an annual basis, which minimum royalties are creditable against our royalty obligation with respect to net sales of licensed products due in the year the minimum royalty is paid.
If we or any of our affiliates sublicense any of the licensed patent rights to a third party, we will be obligated to pay Penn, for the benefit of Penn and UFRF, a high single-digit to a mid ten's percentage of the consideration received in exchange for such sublicense, with the applicable percentage based upon the stage of development of the sublicensed product at the time we or the applicable affiliate enters into the sublicense.
If we receive a rare pediatric disease priority review voucher from the FDA in connection with obtaining marketing approval for a licensed product and we subsequently use such priority review voucher in connection with a different product candidate outside the scope of the BEST1 License Agreement, we will be obligated to pay Penn, for the benefit of Penn and UFRF, aggregate payments in the low double-digit millions of dollars based on certain approval and commercial sales milestones with respect to such other product candidate. In addition, if we sell such a priority review voucher to a third party, we will be obligated to pay Penn, for the benefit of Penn and UFRF, a high single-digit percentage of any consideration received from such third party in connection with such sale.
    Term and Termination 
The BEST1 License Agreement, unless earlier terminated by us or Penn or UFRF, will expire upon the expiration of our obligation to pay royalties to Penn, for the benefit of Penn and UFRF, on net sales of licensed products. Before the effectiveness of an IND for a licensed product, we may terminate the BEST1 License Agreement with respect to such licensed product or in its entirety, at any time for any reason upon prior written notice to Penn and UFRF. Following the effectiveness of an IND for a licensed product, we may terminate the BEST1 License Agreement with respect to such licensed product by
52

Table of Contents                                 
providing Penn prior written notice and a certification that we are ceasing all use, research and development and commercialization of such licensed product, subject to certain limited exceptions. We may also terminate the BEST1 License Agreement if Penn or UFRF materially breaches the BEST1 License Agreement and does not cure such breach within a specified cure period.
Penn or UFRF may terminate the BEST1 License Agreement if we materially breach the BEST1 License Agreement and do not cure such breach within a specified cure period, if we experience a specified insolvency event, if we cease to carry on the entirety of our business related to the licensed patent rights, if we cease for more than four consecutive quarters to make any payment of earned royalties on net sales of licensed products following the commencement of commercialization thereof, unless such cessation is based on safety concerns that we are actively attempting to address, or if we, any of our affiliates or any of our sublicensees challenge or assist a third party in challenging the validity, scope, patentability, and/or enforceability of the licensed patent rights. If we materially breach certain diligence obligations under the BEST1 License Agreement with respect to only one licensed product, then Penn and UFRF may only terminate our rights and licenses under the BEST1 License Agreement for such licensed product, but not for other licensed products.
Following any termination of the BEST1 License Agreement prior to expiration of the term of the BEST1 License Agreement, all rights to the licensed patent rights and know-how that Penn and UFRF granted to us will revert to Penn and UFRF.
License Agreement with UMass for the miniCEP290 Program
In July 2019, we entered into an Exclusive License Agreement, which we refer to as the miniCEP290 License Agreement, with UMass.  We entered into the miniCEP290 License Agreement by exercising our exclusive option rights under an option agreement and a sponsored research agreement that we previously entered into with UMass in February 2018. Under the miniCEP290 License Agreement, UMass granted us a worldwide, exclusive license under specified patent rights and specified biological materials and a non-exclusive license under specified know-how to make, have made, use, offer to sell, sell, have sold and import products for the treatment of diseases associated with mutations in the CEP290 gene, including LCA10. We may grant sublicenses of the licensed patent rights and know-how without the consent of UMass.
We have agreed to use diligent efforts to develop licensed products and to introduce such licensed products into the commercial market. Subject to obtaining marketing approval, we agreed to make any approved licensed product reasonably available to the public. In addition, we have agreed to meet specified development and regulatory milestones with respect to a licensed product by specified dates, as the same may be extended under the terms of the miniCEP290 License Agreement.
    Financial Terms
In July 2019, we issued to UMass 75,000 shares of our common stock following execution of the miniCEP290 License Agreement pursuant to an exemption from registration afforded by Section 4(a)(2) of the Securities Act of 1933, as amended, or the Securities Act. In September 2019, we paid UMass a $0.4 million upfront license fee, which was recorded as a research and development expense, and we paid UMass accrued patent prosecution expenses of approximately $18 thousand, which was recorded as a general and administrative expense.
We have also agreed to pay UMass an annual license maintenance fee in the low double-digit thousands of dollars, which fee will be payable on an annual basis until the expiration of the royalty term for the licensed products. Furthermore, we have agreed to reimburse UMass for the costs and expenses of patent prosecution and maintenance related to the licensed patent rights.
We have further agreed to pay UMass up to an aggregate of $14.75 million in cash and issue up to 75,000 shares of our common stock if we achieve specified clinical and regulatory milestones with respect to a licensed product. In addition, we have agreed to pay UMass up to an aggregate of $48.0 million if we achieve specified commercial sales milestones with respect to a licensed product.
We are also obligated to pay UMass royalties at a low single-digit percentage of net sales of licensed products. Our obligation to pay royalties under the miniCEP290 License Agreement will continue on a licensed product-by-licensed product and country-by-country basis until the later of: (a) the expiration of the last-to-expire licensed patent rights covering the sale of the applicable licensed product in the country of sale, or (b) 10 years from the first commercial sale of the applicable licensed product in the country of sale. Beginning with the calendar year following receipt of marketing approval for a licensed product, we are also obligated to pay certain minimum royalties, not to exceed an amount in the mid-double-digit thousands of dollars on an annual basis, which minimum royalties are creditable against our royalty obligation with respect to net sales of licensed products due in the year the minimum royalty is paid.
53

Table of Contents                                 
If we or any of our affiliates sublicenses any of the licensed patent rights or know-how to a third party, we will be obligated to pay UMass a high single-digit to a mid-tens percentage of the consideration received in exchange for such sublicense, with the applicable percentage based upon the stage of development of the licensed products at the time we or the applicable affiliate enters into the sublicense.
If we receive a rare pediatric disease priority review voucher, or a priority review voucher, from the FDA in connection with obtaining marketing approval for a licensed product, and we subsequently use such priority review voucher in connection with a different product candidate outside the scope of the miniCEP290 License Agreement, we will be obligated to pay UMass a low-tens percentage of the fair market value of the priority review voucher at the time of approval of such product candidate and a low-twenties percentage of the fair market value of the priority review voucher at the time of achievement of a specified commercial sales milestone for such other product candidate. In addition, if we sell such a priority review voucher to a third party, we will be obligated to pay UMass a low-thirties percentage of any consideration received from such third party in connection with such sale.
Term and Termination
The miniCEP290 License Agreement, unless earlier terminated by us or UMass, will expire upon the expiration of our obligation to pay royalties to UMass on net sales of licensed products.  We may terminate the miniCEP290 License Agreement at any time for any reason upon prior written notice to UMass. We may also terminate the miniCEP290 License Agreement if UMass materially breaches the miniCEP290 License Agreement and does not cure such breach within a specified cure period.
UMass may terminate the miniCEP290 License Agreement if we materially breach the miniCEP290 License Agreement and do not cure such breach within a specified cure period.
Following any termination of the miniCEP290 License Agreement prior to expiration of the term of the miniCEP290 License Agreement, all rights to the licensed patent rights and know-how that UMass granted to us will revert to UMass.
Government Regulation and Product Approvals
Government authorities in the United States, at the federal, state and local level, and in other countries and jurisdictions, including the European Union, extensively regulate, among other things, the research, development, testing, manufacture, pricing, quality control, approval, packaging, storage, recordkeeping, labeling, advertising, promotion, distribution, marketing, post-approval monitoring and reporting, and import and export of pharmaceutical products. The processes for obtaining marketing approvals in the United States and in foreign countries and jurisdictions, along with subsequent compliance with applicable statutes and regulations and other legal requirements of regulatory authorities, require the expenditure of substantial time and financial resources.
Review and Approval of Drugs and Biologics in the United States
In the United States, the FDA approves and regulates drugs under the Federal Food, Drug, and Cosmetic Act, or FDCA, and implementing regulations. Biologic products, including gene therapy products, are licensed for marketing under the Public Health Service Act, or PHSA. A company, institution, or organization which takes responsibility for the initiation and management of a clinical development program for such products, and for their regulatory approval, is typically referred to as a sponsor. The failure to comply with requirements under the FDCA or PHSA and other applicable laws at any time during the product development process, approval process or after approval may subject an applicant and/or sponsor to a variety of administrative or judicial sanctions, including refusal by the FDA to approve pending applications, withdrawal of an approval, imposition of a clinical hold, issuance of warning letters and other types of letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement of profits, or civil or criminal investigations and penalties brought by the FDA and the Department of Justice or other governmental entities, including state agencies.
A drug candidate must be approved by the FDA through a new drug application, or NDA. A biologic candidate is licensed by the FDA through approval of a biologic license application, or BLA. A sponsor seeking approval to market and distribute a new product in the United States must typically undertake the following:
completion of preclinical laboratory tests, animal studies and formulation studies in compliance with the FDA’s good laboratory practice, or GLP, regulations;

completion of the manufacture, under current Good Manufacturing Practices, or cGMP, conditions, of the drug substance and drug product that the sponsor intends to use in human clinical trials along with required analytical and stability testing;
54

Table of Contents                                 

design of a clinical trial protocol and submission to the FDA of an IND, which must take effect before human clinical trials may begin;

approval by an independent institutional review board, or IRB, representing each clinical trial site before each clinical trial may be initiated at that clinical site;

performance of adequate and well-controlled human clinical trials in accordance with good clinical practices, or GCP, to establish the safety and efficacy of the proposed drug product for each indication for which the sponsor is seeking approval and the safety, potency and purity of a candidate biologic product for each indication for which the sponsor is seeking approval;

preparation and submission to the FDA of an application requesting marketing approval for one or more proposed indications;

review by an FDA advisory committee, where appropriate or if applicable;

satisfactory completion of one or more FDA inspections of the manufacturing facility or facilities at which the product, or components thereof, are produced to assess compliance with cGMP requirements and to assure that the facilities, methods and controls are adequate to preserve the product’s identity, strength, quality and purity;

satisfactory completion of FDA audits of clinical trial sites to assure compliance with GCPs and the integrity of the clinical data;

payment of user fees and securing FDA approval of the application; and

compliance with any post-approval requirements, including the potential requirement to implement a Risk Evaluation and Mitigation Strategy, or REMS, and the potential requirement to conduct post-approval studies.

    Preclinical Studies
Before a sponsor begins testing a drug or biologic with potential therapeutic value in humans, the product candidate must undergo preclinical testing. Preclinical studies include laboratory evaluation of product chemistry, toxicity and formulation, and the purity and stability of the substance, as well as in vitro and animal studies to assess the potential safety and activity of the product candidate for initial testing in humans and to establish a rationale for therapeutic use. The conduct of preclinical studies is subject to federal regulations and requirements, including GLP regulations and the United States Department of Agriculture’s Animal Welfare Act, if applicable.
    The IND and IRB Processes
An IND is an exemption from the FDCA that allows an unapproved product to be shipped in interstate commerce for use in an investigational clinical trial and a request for FDA authorization to administer an investigational product to humans. Such authorization must be secured prior to interstate shipment and administration of any product candidate that is not the subject of an approved application. In support of a request for an IND, sponsors must submit a protocol for each clinical trial and any subsequent protocol amendments must be submitted to the FDA as part of the IND. In addition, the results of the preclinical tests, together with manufacturing information, analytical data and any available clinical data or literature and plans for clinical trials, among other things, are submitted to the FDA as part of an IND. The FDA requires a 30-day waiting period after the filing of each IND before clinical trials may begin. This waiting period is designed to allow the FDA to review the IND to determine whether human research subjects will be exposed to unreasonable health risks. At any time during this 30-day period, or thereafter, the FDA may raise concerns or questions about the conduct of the trials as outlined in the IND and impose a clinical hold or partial clinical hold. In this case, the IND sponsor and the FDA must resolve any outstanding concerns before clinical trials can begin or re-commence.
In addition to the foregoing IND requirements, an IRB or ethics committee representing each institution participating in the clinical trial must review and approve the plan for any clinical trial before it commences at that institution, and the IRB must conduct continuing review and re-approve the study at least annually. The IRB must review and approve, among other things, the study protocol and informed consent information to be provided to study subjects. An IRB must operate in compliance with FDA regulations. An IRB can suspend or terminate approval of a clinical trial at its institution, or an institution
55

Table of Contents                                 
it represents, if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the product candidate has been associated with unexpected serious harm to patients.
Additionally, some trials are overseen by an independent group of qualified experts organized by the trial sponsor, known as a data safety monitoring board or committee, or DSMB. This group provides authorization as to whether or not a trial may move forward at designated check points based on certain available data from the study to which only the DSMB may access. Suspension or termination of development during any phase of clinical trials can occur if it is determined that the participants are being exposed to an unacceptable health risk. Other reasons for suspension or termination may be made by the sponsor based on evolving business objectives and/or competitive climate.
    Human Clinical Trials in Support of an Application
Clinical trials involve the administration of an investigational product to human subjects under the supervision of qualified investigators in accordance with GCP requirements, which include, among other things, the requirement that all research subjects provide their informed consent in writing before their participation in any clinical trial. Clinical trials are conducted under written study protocols detailing, among other things, the inclusion and exclusion criteria, the objectives of the study, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated.
Human clinical trials are typically conducted in four sequential phases, which may overlap or be combined:
Phase 1. The product candidate is initially introduced into a small number of healthy human subjects or, in certain indications, patients with the target disease or condition and tested for safety, dosage tolerance, absorption, metabolism, distribution, excretion and, if possible, to gain an early indication of its effectiveness and to determine optimal dosage.

Phase 2. The product candidate is administered to a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and optimal dosage. Phase 2a clinical trials tend to be smaller pilot studies for the purpose of demonstrating biological activity and clinical "proof of concept." Phase 2b studies tend to be larger studies focused on finding the optimal dosage and may be controlled.

Phase 3. These clinical trials are commonly referred to as “pivotal” studies, which denotes a study that presents the data that the FDA or other relevant regulatory agency will use to determine whether or not to approve a product candidate. The product candidate is administered to an expanded patient population, generally at geographically dispersed clinical trial sites, in well-controlled clinical trials to generate enough data to statistically evaluate the efficacy and safety of the product for approval, identify adverse effects, establish the overall risk–benefit profile of the product and to provide adequate information for the labeling of the product.

Phase 4. Post-approval studies may be required to be conducted after initial marketing approval. These studies are used to gain additional experience from the treatment of patients in the intended therapeutic indication.

A clinical trial may combine the elements of more than one phase and the FDA often requires more than one Phase 3 trial to support marketing approval of a product candidate. A company’s designation of a clinical trial as being of a particular phase is not necessarily indicative that the study will be sufficient to satisfy the FDA requirements of that phase because this determination cannot be made until the protocol and data have been submitted to and reviewed by the FDA. Moreover, a pivotal trial is a clinical trial that is believed to satisfy FDA requirements for the evaluation of a product candidate’s safety and efficacy such that it can be used, alone or with other pivotal or non-pivotal trials, to support regulatory approval. Generally, pivotal trials are Phase 3 trials, but they may be Phase 2 trials if the design provides a well-controlled and reliable assessment of clinical benefit, particularly in an area of unmet medical need.
Progress reports detailing the safety results of the clinical trials must be submitted at least annually to the FDA and more frequently if serious adverse events occur. In addition, IND safety reports must be submitted to the FDA for any of the following: serious and unexpected suspected adverse reactions; findings from other studies or animal or in vitro testing that suggest a significant risk to humans exposed to the product candidate; and any clinically important increase in the rate of a serious suspected adverse reaction over that listed in the protocol or investigator brochure. The FDA, the sponsor or the DSMB may suspend or terminate a clinical trial at any time on various grounds, including a finding that the research subjects are being exposed to an unacceptable health risk.
56

Table of Contents                                 
Finally, sponsors of clinical trials are required to register and disclose certain clinical trial information on a public registry (clinicaltrials.gov) maintained by the U.S. National Institutes of Health, or NIH. In particular, information related to the product, patient population, phase of investigation, study sites and investigators and other aspects of the clinical trial is made public as part of the registration of the clinical trial. Both NIH and the FDA have recently signaled the government’s willingness to begin enforcing those requirements against non-compliant clinical trial sponsors. The failure to submit clinical trial information to clinicaltrials.gov, as required, is a prohibited act under the FDCA with violations subject to potential civil monetary penalties of up to $10,000 for each day the violation continues.
    Expanded Access to an Investigational Drug for Treatment Use

Expanded access, sometimes called “compassionate use,” is the use of investigational new drug products outside of clinical trials to treat patients with serious or immediately life-threatening diseases or conditions when there are no comparable or satisfactory alternative treatment options. Expanded access allows a patient to obtain an investigational new drug when enrolling in a clinical trial for that drug is difficult or not feasible for the patient. FDA regulations allow access to investigational drugs under an IND by the sponsor or the treating physician for treatment purposes on a case-by-case basis in certain circumstances, subject to FDA approval. There is no obligation for a sponsor to make its drug products available for expanded access. In April 2020, we adopted an expanded access policy, which is, as required by the 21st Century Cures Act, or Cures Act, available on our website.
In addition, the Right to Try Act, signed into law in May 2018, provides a federal framework for certain patients to access certain investigational new drug products that have completed a Phase 1 clinical trial and that are undergoing investigation for FDA approval. Under certain circumstances, eligible patients can seek treatment without enrolling in clinical trials and without needing FDA approval under the expanded access program. There is no obligation for a drug manufacturer to make its drug products available to eligible patients under the Right to Try Act.
    Manufacturing and Other Regulatory Requirements

Concurrent with clinical trials, sponsors usually complete additional animal safety studies, develop additional information about the chemistry and physical characteristics of the product candidate and finalize a process for manufacturing commercial quantities of the product candidate in accordance with cGMP requirements. The manufacturing process must be capable of consistently producing quality batches of the product candidate and, among other criteria, the sponsor must develop methods for testing the identity, strength, quality, and purity of the finished product. Additionally, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate that the product candidate does not undergo unacceptable deterioration over its shelf life.

Specifically, the FDA’s regulations require that pharmaceutical products be manufactured in specific approved facilities and in accordance with cGMPs. The cGMP regulations include requirements relating to organization of personnel, buildings and facilities, equipment, control of components and product containers and closures, production and process controls, packaging and labeling controls, holding and distribution, laboratory controls, records and reports and returned or salvaged products. Manufacturers and other entities involved in the manufacture and distribution of approved pharmaceuticals are required to register their establishments with the FDA and some state agencies, and they are subject to periodic unannounced inspections by the FDA for compliance with cGMPs and other requirements. Inspections must follow a “risk-based schedule” that may result in certain establishments being inspected more frequently. Manufacturers may also have to provide, on request, electronic or physical records regarding their establishments. Delaying, denying, limiting, or refusing inspection by the FDA may lead to a product being deemed to be adulterated. Changes to the manufacturing process, specifications or container closure system for an approved product are strictly regulated and often require prior FDA approval before being implemented. The FDA’s regulations also require, among other things, the investigation and correction of any deviations from cGMP and the imposition of reporting and documentation requirements upon the sponsor and any third-party manufacturers involved in producing the approved product.

Special Regulations and Guidance Governing Gene Therapy Products

The FDA has defined a gene therapy product as one that mediates its effects by transcription and/or translation of transferred genetic material and/or by integrating into the host genome and which is administered as nucleic acids, viruses, or genetically engineered microorganisms. The products may be used to modify cells in vivo or transferred to cells ex vivo prior to administration to the recipient.
The FDA has issued various guidance documents regarding gene therapies, including final guidance documents released in January 2020 relating to chemistry, manufacturing and controls information for gene therapy INDs, long-term
57

Table of Contents                                 
follow-up after the administration of gene therapy products, gene therapies for rare diseases and gene therapies for retinal disorders. Although the FDA has indicated that these and other guidance documents it previously issued are not legally binding, we believe that our compliance with them is likely necessary to gain approval for any gene therapy product candidate we may develop. The guidance documents provide additional factors that the FDA will consider at each of the above stages of development and relate to, among other things, the proper preclinical assessment of gene therapies; the proper design of tests to measure product potency in support of an IND or BLA application; and measures to observe delayed adverse effects in subjects who have been exposed to investigational gene therapies when the risk of such effects is high. Further, the FDA usually recommends that sponsors observe subjects for potential gene therapy-related delayed adverse events for a 15-year period, including a minimum of five years of annual examinations followed by 10 years of annual queries, either in person or by questionnaire. We expect the FDA to issue additional guidance on gene therapies.
Special Protocol Assessment Agreements
A Special Protocol Assessment, or SPA, agreement is an agreement between a drug manufacturer and the FDA on the design and size of studies and clinical trials that can be used for approval of a drug or biological product. The FDA’s guidance on such agreements states that an agreement may not be changed by the manufacturer or the agency unless through a written agreement of the two entities or if FDA determines a substantial scientific issue essential to determining the safety or effectiveness of the drug. The protocols that are eligible for SPA agreements are: animal carcinogenicity protocols, final product stability protocols and clinical protocols for Phase 3 trials whose data will form the primary basis for an efficacy claim.

The FDA may meet with sponsors, provided certain conditions are met, for the purpose of reaching an SPA agreement on the design and size of clinical trials intended to form the primary basis of an efficacy claim in a marketing application. If a sponsor makes a reasonable written request to meet with the FDA for the purpose of reaching agreement on the design and size of a clinical trial, then the FDA will meet with the sponsor. If an agreement is reached, the FDA will reduce the agreement to writing and make it part of the administrative record. An agreement may not be changed by the sponsor or FDA after the trial begins, except with the written agreement of the sponsor and FDA, or if the director of the FDA reviewing division determines that “a substantial scientific issue essential to determining the safety or effectiveness of the drug” was identified after the testing began. If a sponsor and the FDA meet regarding the design and size of a clinical trial and the parties cannot agree that the trial design is adequate to meet the goals of the sponsor, the FDA will clearly state the reasons for the disagreement in a letter to the sponsor.

    Review of a Product Candidate by the FDA
If clinical trials are successful, the next step in the development process is the preparation and submission to the FDA of an application for marketing approval. The application is the vehicle through which sponsors formally propose that the FDA approve a new drug for marketing and sale in the United States for one or more indications. The application must contain a description of the manufacturing process and quality control methods, as well as results of preclinical tests, toxicology studies, clinical trials and proposed labeling, among other things. Every new product must be the subject of an approved application before it may be commercialized in the United States. Under federal law, the submission of most applications is subject to an application user fee, which for federal fiscal year 2022 is $3,117,218 for an application requiring clinical data. The sponsor of an approved application is also subject to an annual program fee, which for fiscal year 2022 is $369,413. Certain exceptions and waivers are available for some of these fees, such as an exception from the application fee for products with orphan designation and a waiver for certain small businesses.
Following submission of an application, the FDA conducts a preliminary review of an application within 60 calendar days of its receipt and must inform the sponsor by that time or before whether the application is sufficiently complete to permit substantive review. In the event that FDA determines that an application does not satisfy this standard, it will issue a Refuse to File, or RTF, determination to the sponsor. The FDA may request additional information rather than accept an application for filing. The resubmitted application is also subject to review before the FDA accepts it for filing. Once the submission is accepted for filing, the FDA begins an in depth substantive review. Under the Prescription Drug User Fee Act, or PDUFA, the FDA has agreed to specified performance goals and timelines in the review process of applications, which goals and timelines depend on the type of product candidate for which review is sought and whether the sponsor has applied for and received from the FDA any special review status for the particular product candidate allowing for expedited review. Special review status is available for certain products that are intended to address an unmet medical need in the treatment of a serious or life–threatening disease or condition under one of the following FDA-designations: fast track designation, breakthrough therapy designation, priority review designation and regenerative medicine advanced therapy designation. The review process and the PDUFA goal date may be extended by the FDA for three additional months to consider new information or clarification provided by the sponsor to address an outstanding deficiency identified by the FDA following the original submission.
58

Table of Contents                                 
In connection with its review of an application, the FDA typically will inspect the facility or facilities where the product is or will be manufactured, stored, packaged and tested. These pre–approval inspections may cover all facilities associated with an application submission, including component manufacturing (e.g., active pharmaceutical ingredients), finished product manufacturing, and control testing laboratories. The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications. Additionally, before approving an application, the FDA will typically inspect one or more clinical sites to assure compliance with GCP and the integrity of the clinical data submitted.
In addition, as a condition of approval, the FDA may require a sponsor to develop a REMS. REMS use risk minimization strategies beyond the professional labeling to ensure that the benefits of the product outweigh the potential risks. To determine whether a REMS is needed, the FDA will consider the size of the population likely to use the product, seriousness of the disease, expected benefit of the product, expected duration of treatment, seriousness of known or potential adverse events, and whether the product is a New Molecular Entity.
The FDA is required to refer an application for a novel product candidate to an advisory committee or explain why such referral was not made. Typically, an advisory committee is a panel of independent experts, including clinicians and other scientific experts, that reviews, evaluates and provides a recommendation as to whether the application should be approved and under what conditions. The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions.
Under the Pediatric Research Equity Act, or PREA, an application or supplement thereto must contain data that are adequate to assess the safety and effectiveness of the product for the claimed indications in all relevant pediatric subpopulations, and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective. With enactment of the Food and Drug Administration Safety and Innovation Act, or FDASIA, in 2012, sponsors must also submit pediatric study plans prior to the submission of the assessment data required under PREA. These plans are subject to FDA review before beginning the pediatric study. Product candidates that have received orphan designation are generally exempt from the requirements of PREA. In addition, a sponsor may apply for a waiver of the PREA requirements, which the FDA has indicated it will automatically grant for certain diseases that do not affect pediatric populations, including AMD.
    The FDA’s Decision on an Application
The FDA reviews an application to determine, among other things, whether the product is safe and whether it is effective for its intended use(s), with the latter determination being made on the basis of substantial evidence. The FDA has interpreted this evidentiary standard to require at least two adequate and well-controlled clinical investigations to establish effectiveness of a new product. Under certain circumstances, however, the FDA has indicated that a single trial with certain characteristics and additional information may satisfy this standard.
After evaluating the application and all related information, including the advisory committee recommendations, if any, and inspection reports of manufacturing facilities and clinical trial sites, the FDA will issue either a Complete Response Letter, or CRL, or an approval letter. To reach this determination, the FDA must determine that the expected benefits of the proposed product outweigh its potential risks to patients. This “benefit-risk” assessment is informed by the extensive body of evidence about the product’s safety and efficacy in the NDA or potency, purity and safety in a BLA.

A CRL generally outlines the deficiencies in the submission and may require substantial additional testing or information in order for the FDA to reconsider the application. If and when those deficiencies have been addressed to the FDA’s satisfaction in a resubmission of the application, the FDA will issue an approval letter. The FDA has committed to reviewing such resubmissions in two or six months depending on the type of information included. Even with submission of this additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval. If a CRL is issued, the sponsor will have one year to respond to the deficiencies identified by the FDA, at which time the FDA can deem the application withdrawn or, in its discretion, grant the sponsor an additional six month extension to respond.
If the FDA approves a product, it may limit the approved indications for use of the product, require that contraindications, warnings or precautions be included in the product labeling, require that post-approval studies, including Phase 4 clinical trials, be conducted to further assess the product’s safety after approval, require testing and surveillance programs to monitor the product after commercialization, or impose other conditions, including distribution restrictions or other risk management mechanisms, including REMS, which can materially affect the potential market and profitability of the product. The FDA may prevent or limit further marketing of a product based on the results of post–market studies or surveillance programs.
59