optn-20240930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)


			☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024


			☐			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: 001-38241

OPTINOSE, INC.

(Exact name of registrant as specified in its charter)


Delaware			42-1771610
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification Number)

777 Township Line Road, Suite 300

Yardley, Pennsylvania 19067

(Address of principal executive offices, including zip code)

(267) 364-3500

(Registrant’s telephone number including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol(s)

Name of each exchange on which registered

Common stock, par value $0.001 per share

OPTN

Nasdaq Global Select Market

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 filer ☐	Accelerated filer	☐
Non-accelerated filer ☒	Smaller reporting company	☒
	Emerging 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 is a shell company (as defined in Rule 12b-2 of the Act).Yes ☐ No ☒

The number of shares of the registrant's common stock outstanding at October 31, 2024 was 150,829,507 shares.

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	NOTE REGARDING FORWARD-LOOKING STATEMENTS	1
	PART I — FINANCIAL INFORMATION

Item 1.		4
	Consolidated Balance Sheets as of Sep te mber 30, 2024 and December 31, 2023	4
	Consolidated Statements of Operations for the three and nine months ended September 30, 2024 and 2023	5
	Consolidated Statements of Comprehensive Loss for the three and nine months ended September 30, 2024 and 2023	6
	Consolidated Statements of Changes in Stockholders' Equity (Deficit) for the nine months ended September 30, 2024 and 2023	7
	Consolidated Statements of Cash Flows for the nine months ended September 30, 2024 and 2023	9
	Notes to Unaudited Interim Consolidated Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Qualitative and Quantitative Disclosure About Market Risk	36
Item 4.	Controls and Procedures	36
	PART II — OTHER INFORMATION	38






Item 1A.	Risk Factors	38
Item 6.	Exhibits	41
	Signatures	43

_________________________

Unless the context otherwise requires, all references in this Form 10-Q to "Optinose," "Company," "we," "us," and "our" refer to OptiNose, Inc. and its subsidiaries.

_________________________

Trademark Notice

XHANCE, EDS, EXHALATION DELIVERY SYSTEM, OPTINOSE and the OptiNose logo are trademarks of ours in the United States. All other trademarks, trade names and service marks appearing in this Form 10-Q are the property of their respective owners. We do not intend our use or display of other companies' trademarks, trade names or service marks to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, among others, statements relating to:

▪the potential uses for and advantages of XHANCE®, the EXHALATION DELIVERY SYSTEM™ (also referred to as, the EDS®) and related technologies;

▪the potential benefits of the recent FDA approval of XHANCE for the treatment of chronic rhinosinusitis without nasal polyps;

▪our commercial plans and expectations for XHANCE including, among other things, the launch of XHANCE for its new indication;

▪the potential to expand promotion of XHANCE into the primary care segment and our plans to seek a partner for such expansion;

▪our belief that the current practice of postoperative intranasal steroid (INS) use could support XHANCE’s adoption as a maintenance therapy to improve outcomes following sinus surgery;

▪the potential for XHANCE to be the standard of care for the treatment of chronic rhinosinusitis with and without nasal polyps;

▪the potential for direct-to-consumer (DTC) advertising to be a future driver of XHANCE prescription growth;

▪the potential benefits of our patient affordability programs (including changes made to the XHANCE co-pay assistance program) and their potential effect on XHANCE demand and financial results;

▪the potential benefits of, and impact of transitioning XHANCE business to, a Hub model;

▪our expectation for XHANCE prescriptions to be impacted by the seasonality observed in the INS market and the seasonal variation in patient visits with their doctor;

▪our expectation for XHANCE prescriptions and average net revenue per prescription to be adversely impacted by the annual resetting of patient healthcare insurance plan deductibles and changes in individual patients' healthcare insurance coverage, both of which often occur in January;

▪our expectations relating to the impact on average net product revenues per prescription resulting from changes we made to the XHANCE co-pay support program and disruptions that occurred at Change Healthcare, the claims processor for our vendor that administers the XHANCE co-pay support program;

▪XHANCE prescription, net revenue, prescriber and other business trends;

▪the potential for payor utilization management criteria to negatively impact XHANCE prescription volumes;

▪the rate and degree of market acceptance and market opportunity of XHANCE;

▪our belief that an inflection in new prescriptions commenced in September and continued through the week ended October 25, 2024 (which is the most recent week for which a full prescription data set was available prior to the filing of this Form 10-Q);

▪our expectation that our operating expenses (consisting of selling, general & administrative expenses and research & development expenses) in 2024 will be between $90.0 million and $93.0 million and that our non-cash stock-based compensation expense will be approximately $6.0 million;

▪our expectation that XHANCE net product revenues for the full year of 2024 will be between $75.0 million and $79.0 million;

▪our expectation that the average net product revenue per prescription for XHANCE for the full year of 2024 will be approximately $270;

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▪our potential non-compliance with certain covenants of the A&R Note Purchase Agreement, the consequences of failing to achieve compliance with such covenants and our plans to seek to mitigate such risks;

▪our belief that our existing cash and cash equivalents will be sufficient to fund our operations and debt service obligations for at least the next 12 months if we are able to maintain compliance with or obtain a waiver or modification of the financial and other covenants under A&R Note Purchase Agreement;

▪our expectations and the accuracy of our estimates regarding our future expenses, revenue, capital requirements, potential sources of capital and consequences of failing to obtain additional capital;

▪our ability to continue as a going concern;

as well as other statements relating to our future operations, financial performance and financial condition, prospects, strategies, objectives or other future events. Forward-looking statements appear primarily in the sections of this Form 10-Q entitled “Item 1. Financial Statements,” and “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.” In some cases, you can identify forward-looking statements by words such as “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” "target," “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing,” “scheduled” and similar expressions, although not all forward-looking statements contain these identifying words.

Forward-looking statements are based upon our current expectations and assumptions and are subject to a number of known and unknown risks, uncertainties and other factors that could cause actual results to differ materially and adversely from those expressed or implied by such statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in this Form 10-Q and in our annual report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission (SEC), and in particular, the risks and uncertainties discussed therein under the caption “Risk Factors”. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. As a result, you should not place undue reliance on forward-looking statements.

Additionally, the forward-looking statements contained in this Form 10-Q represent our views only as of the date of this Form 10-Q (or any earlier date indicated in such statement). While we may update certain forward-looking statements from time to time, we specifically disclaim any obligation to do so, even if new information becomes available in the future. However, you are advised to consult any further disclosures we make on related subjects in the reports that we file with the SEC.

The foregoing cautionary statements are intended to qualify all forward-looking statements wherever they may appear in this Form 10-Q. For all forward-looking statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

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MARKET, INDUSTRY AND OTHER DATA

This Form 10-Q contains estimates, projections, market research and other information concerning our industry, our business, markets for XHANCE and the size of those markets, the prevalence of certain medical conditions, XHANCE market access, prescription data and other physician, patient and payor data. Unless otherwise expressly stated, we obtain this information from reports, research surveys, studies and similar data prepared by market research firms and other third parties, industry, medical and general publications, government data and similar sources as well as from our own internal estimates and research and from publications, research, surveys and studies conducted by third parties on our behalf. Information that is based on estimates, projections, market research or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances that are reflected in this information. As a result, you are cautioned not to give undue weight to such information.

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PART I

ITEM 1. FINANCIAL STATEMENTS

OptiNose, Inc.

Consolidated Balance Sheets

(in thousands, except share and per share data)


	September 30, 2024		December 31, 2023
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	82,497	$	73,684
Accounts receivable, net	29,772		19,926
Inventory	11,301		8,052
Prepaid expenses and other current assets	4,645		3,671
Total current assets	128,215		105,333
Property and equipment, net	670		815
Other assets	2,135		1,581
Total assets	$	131,020	$	107,729
Liabilities and stockholders' deficit
Current liabilities:
Accounts payable	$	3,777	$	3,886
Accrued expenses and other current liabilities	32,668		42,411
Short term debt, net	125,985		130,227
Total current liabilities	162,430		176,524

Warrant liability	8,500		17,200
Other liabilities	1,187		611
Total liabilities	172,117		194,335
Stockholders' deficit
Preferred stock, no par value; 5,000,000 shares authorized; no shares issued in 2024 or 2023	—		—
Common stock, $0.001 par value; 350,000,000 shares authorized;150,829,507 and 112,399,495 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively.	151		112
Additional paid-in capital	700,393		633,742
Accumulated deficit	(741,557)		(720,376)
Accumulated other comprehensive loss	(84)		(84)
Total stockholders' deficit	(41,097)		(86,606)
Total liabilities and stockholders' deficit	$	131,020	$	107,729

See accompanying notes to unaudited interim consolidated financial statements.

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OptiNose, Inc.

Consolidated Statements of Operations

(in thousands, except share and per share data)

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024			2023
Revenues:
Net product revenues	$	20,437	$	19,823	$	55,807		$	51,122

Total revenues	20,437		19,823		55,807			51,122
Costs and expenses:
Cost of product sales	2,065		2,225		5,277			6,502
Research and development	949		1,281		3,083			4,017
Selling, general and administrative	19,475		18,011		64,121			60,839
Total costs and expenses	22,489		21,517		72,481			71,359
Loss from operations	(2,052)		(1,694)		(16,674)			(20,236)
Other (income) expense:
Unrealized (gain) loss on fair value of warrants	(6,900)		3,200		(8,700)			(7,190)
Interest income	(913)		(545)		(2,018)			(1,974)
Interest expense	5,294		4,940		15,212			14,436
Foreign currency loss	—		5		13			8
Net income (loss)	$	467	$	(9,294)	$	(21,181)		$	(25,516)

Less: undistributed earnings to participating shareholders	(74)		—		—			—
Net income (loss) - basic	$	393	$	(9,294)	$	(21,181)		$	(25,516)
Net income (loss) per share of common stock, basic	$	—	$	(0.08)	$	(0.15)		$	(0.23)
Weighted average common shares outstanding, basic	174,328,570		112,230,155		144,900,726			111,996,456


Net income (loss) - basic	$	393	$	(9,294)	$	(21,181)		$	(25,516)

Add: Unrealized gain on fair value of warrants	—		—		(8,700)			—
Net income (loss) - diluted	$	393	$	(9,294)	$	(29,881)	—	$	(25,516)
Net (loss) per share of common stock - diluted	$	—	$	(0.08)	$	(0.20)		$	(0.23)
Weighted average common shares outstanding - diluted	174,369,875		112,230,155		149,634,133			111,996,456

See accompanying notes to unaudited interim consolidated financial statements.

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OptiNose, Inc.

Consolidated Statements of Comprehensive Loss

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Net income (loss)	$	467	$	(9,294)	$	(21,181)	$	(25,516)
Other comprehensive income (loss):
Foreign currency translation adjustment	—		—				—
Comprehensive income (loss)	$	467	$	(9,294)	$	(21,181)	$	(25,516)

See accompanying notes to unaudited interim consolidated financial statements.

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OptiNose, Inc.

Consolidated Statements of Changes in Stockholders' Deficit

(in thousands, except share data)

(unaudited)


Nine months ended September 30, 2024
	Stockholders' Equity (Deficit)
	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Stockholders' Equity (Deficit)
	# of Shares	Par Amount $
Balance at December 31, 2023	112,399,495	$	112	$	633,742	$	(720,376)	$	(84)	$	(86,606)
Stock compensation expense	—	—		1,456		—		—		1,456
Vesting of restricted stock units	478,520	1		—		—		—		1
Issuance of common stock under employee stock purchase plan	160,711	—		—		—		—		—

Net loss	—	—		—		(14,067)				(14,067)
Balance at March 31, 2024	113,038,726	$	113	$	635,198	$	(734,443)	$	(84)	$	(99,215)
Issuance of stock per amended debt agreement	4,680,000	$	5	5,745		—		—		5,750
Proceeds from sales of common stock and warrants, net	31,800,000	$	32	55,262		—		—		55,294
Stock compensation expense		$	—	2,735		—		—		2,735
Vesting of restricted stock units	159,684	—		—		—		—		0
Issuance of common stock under employee stock purchase plan	—	—		165		—		—		165

Net loss	—	—		—		(7,581)		—		(7,581)
Balance at June 30, 2024	149,678,410	$	150	$	699,105	$	(742,024)	$	(84)	$	(42,853)
Stock compensation expense		$	—	1,288		$	—	$	—	1,288
Vesting of restricted stock units	1,039,080	1		—		—		—		1
Issuance of common stock under employee stock purchase plan	112,017	—		—		—		—		—

Net income	—	—		—		467		—		467
Balance at September 30, 2024	150,829,507	$	151	$	700,393	$	(741,557)	$	(84)	$	(41,097)

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Nine Months Ended September 30, 2023
	Stockholders' Equity (Deficit)
	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Stockholders' Equity (Deficit)
	Shares	Par Amount $
Balance at December 31, 2022	111,492,761	111		$	628,242	$	(684,893)	$	(84)	$	(56,624)
Stock compensation expense	—	—		1,520		—		—		1,520
Vesting of restricted stock units	343,406	1		—		—		—		1
Issuance of common stock under employee stock purchase plan	119,727	—		164		—		—		164

Net loss	—	—		—		(18,847)		—		(18,847)
Balance at March 31, 2023	111,955,894	$	112	$	629,927	$	(703,740)	$	(84)	$	(73,785)
Stock compensation expense	—			1,499		—		—		1,499
Vesting of restricted stock units	135,840	—		—		—		—		—
Issuance of common stock under employee stock purchase plan	—	—				—		—		—

Net income	—	—				2,626				2,626
Balance at June 30, 2023	112,091,734	$	112	$	631,426	$	(701,114)	$	(84)	$	(69,660)
Stock compensation expense	—	—		1,204		—		—		1,204
Vesting of restricted stock units	88,667	—		—		—		—		—
Issuance of common stock under employee stock purchase plan	131,582	—		135		—		—		135

Net loss	—	—				(9,294)				(9,294)
Balance at September 30, 2023	112,311,983	$	112	$	632,765	$	(710,408)	$	(84)	$	(77,615)

See accompanying notes to unaudited interim consolidated financial statements.

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OptiNose, Inc.

Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)


	Nine Months Ended September 30,
	2024		2023
Operating activities:
Net loss	$	(21,181)	$	(25,516)
Adjustments to reconcile net loss to cash used in operating activities:
Depreciation and amortization	218		282
Stock-based compensation	5,481		4,219
Change in fair value of warrant liability	(8,700)		(7,190)
Amortization of debt discount and issuance costs	1,531		1,242
Changes in operating assets and liabilities:
Accounts receivable	(9,847)		12,559
Prepaid expenses and other assets	(128)		2,432
Inventory	(3,249)		1,348
Accounts payable	(109)		(346)
Accrued expenses and other liabilities	(10,568)		(16,471)
Cash used in operating activities	(46,552)		(27,441)
Investing activities:
Purchases of property and equipment	(72)		(255)
Cash used in investing activities	(72)		(255)
Financing activities:
Proceeds from sale of common stock and warrants	55,476		—
Proceeds from the exercise of stock options			1
Proceeds from issuance of common stock under employee stock purchase plan	166		299
Cash paid for financing costs	(206)		(4)
Cash provided by financing activities	55,436		296

Net increase (decrease) in cash and cash equivalents	8,812		(27,400)
Cash and cash equivalents at beginning of period	73,684		94,244
Cash and cash equivalents at end of period	$	82,496	$	66,844
Supplemental disclosure of cash flow information:
Cash paid for interest	$	18,340	$	13,194
Supplemental disclosure of noncash activities:


Recognition of right-of-use assets and lease liabilities	$	1,402	$	890

See accompanying notes to unaudited interim consolidated financial statements

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OptiNose, Inc.

Notes to Unaudited Interim Consolidated Financial Statements

(in thousands, except share and per share data)

1. Organization and Description of Business

OptiNose, Inc. (the Company) was incorporated in Delaware in May 2010 (inception) and has facilities in Yardley, Pennsylvania and Ewing, New Jersey. The Company's predecessor entity, OptiNose AS, was formed under the laws of Norway in September 2000. In 2010, OptiNose AS became a wholly-owned subsidiary of the Company as part of an internal reorganization. Optinose AS was liquidated in October 2023. During 2022, the Company's board of directors also approved the liquidation of Optinose UK, in order to simplify the corporate structure. Optinose UK was liquidated in July 2024.

The Company is a specialty pharmaceutical company focused on the development and commercialization of products for patients treated by ear, nose and throat (ENT) and allergy specialists. The Company's first commercial product, XHANCE® (fluticasone propionate) nasal spray, 93 microgram (mcg), is a therapeutic utilizing the Company's proprietary Exhalation Delivery System™ (EDS®) that delivers a topically-acting corticosteroid for the treatment of chronic rhinosinusitis with and without nasal polyps.

2. Liquidity

SEC Form 10-Q filed by OptiNose Inc.