0.100.061655200071605083731655200071605083730.100.06000000http://www.trevenainc.com/20220331#LeaseLiabilityCurrenthttp://www.trevenainc.com/20220331#LeaseLiabilityCurrenthttp://www.trevenainc.com/20220331#LeaseLiabilityNoncurrenthttp://www.trevenainc.com/20220331#LeaseLiabilityNoncurrenthttp://www.trevenainc.com/20220331#LeaseLiabilityCurrenthttp://www.trevenainc.com/20220331#LeaseLiabilityCurrenthttp://www.trevenainc.com/20220331#LeaseLiabilityNoncurrenthttp://www.trevenainc.com/20220331#LeaseLiabilityNoncurrent0001429560--12-312022Q1false165520007165520007Non-accelerated Filer0001429560us-gaap:CommonStockMember2021-01-012021-03-310001429560us-gaap:RetainedEarningsMember2022-03-310001429560us-gaap:AdditionalPaidInCapitalMember2022-03-310001429560us-gaap:RetainedEarningsMember2021-12-310001429560us-gaap:AdditionalPaidInCapitalMember2021-12-310001429560us-gaap:RetainedEarningsMember2021-03-310001429560us-gaap:AdditionalPaidInCapitalMember2021-03-310001429560us-gaap:RetainedEarningsMember2020-12-310001429560us-gaap:AdditionalPaidInCapitalMember2020-12-310001429560us-gaap:RestrictedStockUnitsRSUMembertrvn:EquityIncentivePlan2013Member2022-03-310001429560us-gaap:EmployeeStockOptionMembertrvn:InducementPlanMember2022-03-310001429560us-gaap:EmployeeStockOptionMembertrvn:EquityIncentivePlan2013Member2022-03-310001429560us-gaap:EmployeeStockOptionMember2021-01-012021-03-310001429560trvn:InducementPlanMember2022-03-310001429560trvn:EquityIncentivePlan2013Member2022-03-310001429560trvn:EmployeeStockPurchasePlanMember2022-03-310001429560trvn:InducementPlanMember2021-12-310001429560trvn:EquityIncentivePlan2013Member2021-12-310001429560trvn:InducementPlanMember2016-12-152016-12-150001429560srt:WeightedAverageMemberus-gaap:EmployeeStockOptionMember2022-01-012022-03-310001429560srt:WeightedAverageMemberus-gaap:EmployeeStockOptionMember2021-01-012021-03-310001429560srt:MaximumMember2022-01-012022-03-310001429560trvn:PharmbioKoreaIncMemberus-gaap:LicenseMember2022-01-012022-03-310001429560us-gaap:LicenseMember2022-01-012022-03-310001429560us-gaap:ProductMember2021-01-012021-03-310001429560trvn:ClassActionsInEasternDistrictOfPennsylvaniaMemberus-gaap:SettledLitigationMember2020-01-012020-12-310001429560trvn:RoyaltyBasedLoanAgreementFirstTrancheMemberus-gaap:SubsequentEventMembertrvn:RBridgeFinancingMember2022-04-012022-04-300001429560trvn:HcWainwrightAtMarketProgramMember2022-01-012022-03-310001429560us-gaap:RetainedEarningsMember2022-01-012022-03-310001429560us-gaap:RetainedEarningsMember2021-01-012021-03-310001429560trvn:ShareholderDerivativeActionsMemberus-gaap:PendingLitigationMember2019-02-012019-02-280001429560trvn:ClassActionsInEasternDistrictOfPennsylvaniaMemberus-gaap:PendingLitigationMember2021-02-112021-02-110001429560trvn:ShareholderDerivativeActionsMemberus-gaap:SettledLitigationMember2020-12-310001429560us-gaap:CashAndCashEquivalentsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:MoneyMarketFundsMember2022-03-310001429560us-gaap:FairValueInputsLevel1Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:MoneyMarketFundsMember2022-03-310001429560us-gaap:FairValueInputsLevel1Memberus-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:MoneyMarketFundsMember2022-03-310001429560us-gaap:CashAndCashEquivalentsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2022-03-310001429560us-gaap:FairValueInputsLevel1Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2022-03-310001429560us-gaap:FairValueInputsLevel1Memberus-gaap:CarryingReportedAmountFairValueDisclosureMember2022-03-310001429560us-gaap:CashAndCashEquivalentsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:MoneyMarketFundsMember2021-12-310001429560us-gaap:FairValueInputsLevel1Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:MoneyMarketFundsMember2021-12-310001429560us-gaap:FairValueInputsLevel1Memberus-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:MoneyMarketFundsMember2021-12-310001429560us-gaap:CashAndCashEquivalentsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2021-12-310001429560us-gaap:FairValueInputsLevel1Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2021-12-310001429560us-gaap:FairValueInputsLevel1Memberus-gaap:CarryingReportedAmountFairValueDisclosureMember2021-12-310001429560trvn:ShareholderDerivativeActionsMemberus-gaap:SettledLitigationMember2021-08-020001429560trvn:ClassActionsInEasternDistrictOfPennsylvaniaMemberus-gaap:SettledLitigationMember2020-12-3100014295602021-01-012021-12-310001429560us-gaap:RestrictedStockUnitsRSUMember2022-03-310001429560us-gaap:EmployeeStockOptionMember2022-03-310001429560us-gaap:EmployeeStockOptionMember2022-01-012022-03-310001429560us-gaap:CommonStockMember2021-12-310001429560us-gaap:CommonStockMember2020-12-310001429560us-gaap:CommonStockMember2022-03-310001429560us-gaap:CommonStockMember2021-03-310001429560trvn:H.c.WainwrightCo.LlcMember2022-03-310001429560trvn:RoyaltyBasedLoanAgreementMemberus-gaap:SubsequentEventMembertrvn:RBridgeFinancingMember2022-04-300001429560trvn:H.c.WainwrightCo.LlcMember2019-01-3100014295602021-03-3100014295602020-12-310001429560us-gaap:CashAndCashEquivalentsMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2022-03-310001429560trvn:RestrictedCashMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2022-03-310001429560us-gaap:EstimateOfFairValueFairValueDisclosureMember2022-03-310001429560us-gaap:CarryingReportedAmountFairValueDisclosureMember2022-03-310001429560us-gaap:CashAndCashEquivalentsMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2021-12-310001429560trvn:RestrictedCashMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2021-12-310001429560us-gaap:EstimateOfFairValueFairValueDisclosureMember2021-12-310001429560us-gaap:CarryingReportedAmountFairValueDisclosureMember2021-12-310001429560us-gaap:WarrantMember2022-01-012022-03-310001429560us-gaap:RestrictedStockUnitsRSUMember2022-01-012022-03-310001429560us-gaap:EmployeeStockOptionMember2022-01-012022-03-310001429560us-gaap:WarrantMember2021-01-012021-03-310001429560us-gaap:RestrictedStockUnitsRSUMember2021-01-012021-03-310001429560us-gaap:EmployeeStockOptionMember2021-01-012021-03-310001429560us-gaap:RestrictedStockUnitsRSUMember2022-01-012022-03-310001429560us-gaap:ResearchAndDevelopmentExpenseMember2022-01-012022-03-310001429560us-gaap:GeneralAndAdministrativeExpenseMember2022-01-012022-03-310001429560us-gaap:CostOfSalesMember2022-01-012022-03-310001429560us-gaap:ResearchAndDevelopmentExpenseMember2021-01-012021-03-310001429560us-gaap:GeneralAndAdministrativeExpenseMember2021-01-012021-03-310001429560us-gaap:CostOfSalesMember2021-01-012021-03-310001429560us-gaap:AdditionalPaidInCapitalMember2022-01-012022-03-310001429560us-gaap:AdditionalPaidInCapitalMember2021-01-012021-03-310001429560trvn:FinanceLeasedAssetsMember2022-03-310001429560trvn:FinanceLeasedAssetsMember2021-12-310001429560trvn:JiangsuNhwaPharmaceuticalCoLtdMembertrvn:LicensingAgreementMember2018-07-310001429560us-gaap:LicenseMembertrvn:LicensingAgreementMember2018-06-300001429560trvn:JiangsuNhwaPharmaceuticalCoLtdMembersrt:MinimumMembertrvn:LicensingAgreementMember2020-08-012020-08-310001429560trvn:PharmbioKoreaIncMembersrt:MinimumMembertrvn:LicensingAgreementMember2018-06-012018-06-300001429560trvn:JiangsuNhwaPharmaceuticalCoLtdMembertrvn:LicensingAgreementMember2020-08-012020-08-310001429560trvn:HcWainwrightAtMarketProgramMember2022-03-310001429560trvn:EquityIncentivePlan2013Member2022-01-012022-03-310001429560trvn:H.c.WainwrightCo.LlcMembertrvn:AtMarketSalesFacility20201231Member2020-12-310001429560trvn:H.c.WainwrightCo.LlcMembersrt:MaximumMembertrvn:AtMarketSalesFacility20190417Member2019-04-300001429560trvn:VanguardGroupIncMembertrvn:ChesterbrookPennsylvaniaMembertrvn:SubleaseAgreementsMember2020-10-022020-10-020001429560trvn:ClassActionsInEasternDistrictOfPennsylvaniaMemberus-gaap:PendingLitigationMember2018-10-012018-11-300001429560trvn:VanguardGroupIncMembertrvn:ChesterbrookPennsylvaniaMembertrvn:SubleaseAgreementsMember2018-10-112018-10-1100014295602021-01-012021-03-310001429560trvn:JiangsuNhwaPharmaceuticalCoLtdMembertrvn:LicensingAgreementMember2018-07-012018-07-310001429560trvn:PharmbioKoreaIncMembersrt:MaximumMembertrvn:LicensingAgreementMember2018-06-012018-06-300001429560trvn:JiangsuNhwaPharmaceuticalCoLtdMembercountry:CNus-gaap:SubsequentEventMembertrvn:RBridgeFinancingMember2022-04-012022-04-300001429560country:CNtrvn:RoyaltyBasedLoanAgreementMemberus-gaap:SubsequentEventMembertrvn:RBridgeFinancingMember2022-04-012022-04-300001429560trvn:JiangsuNhwaPharmaceuticalCoLtdMembercountry:CNus-gaap:SubsequentEventMembertrvn:RBridgeFinancingMember2022-04-300001429560trvn:JiangsuNhwaPharmaceuticalCoLtdMembertrvn:LicensingAgreementMember2020-08-310001429560trvn:RoyaltyBasedLoanAgreementMemberus-gaap:SubsequentEventMembertrvn:RBridgeFinancingMember2022-04-012022-04-300001429560trvn:PharmbioKoreaIncMembertrvn:LicensingAgreementMember2018-06-012018-06-300001429560trvn:VanguardGroupIncMembertrvn:ChesterbrookPennsylvaniaMembertrvn:SubleaseAgreementsMember2018-10-110001429560trvn:ChesterbrookPennsylvaniaMember2022-03-3100014295602021-12-3100014295602022-03-3100014295602022-05-0900014295602022-01-012022-03-31xbrli:sharesiso4217:USDutr:sqftxbrli:puretrvn:itemtrvn:areaiso4217:USDutr:sqftiso4217:USDxbrli:sharestrvn:segment

Table of Contents

f

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 March 31, 2022

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 001-36193

Trevena, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware
(State or Other Jurisdiction of Incorporation or Organization)

26-1469215
(I.R.S. Employer Identification No.)

955 Chesterbrook Boulevard, Suite 110
Chesterbrook, PA
(Address of Principal Executive Offices)

19087
(Zip Code)

Registrant’s telephone number, including area code: (610354-8840

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

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.001 par value

TRVN

The Nasdaq Stock Market LLC

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, or 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 Exchange Act). Yes   No 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practical date.

Common Stock, $0.001 par value

Shares outstanding as of May 9, 2022: 165,520,007

Table of Contents

TABLE OF CONTENTS

Page

Cautionary Note Regarding Forward-Looking Statements

iii

PART I- FINANCIAL INFORMATION

Item 1.

Consolidated Financial Statements (Unaudited)

1

Consolidated Balance Sheets

1

Consolidated Statements of Operations and Comprehensive Loss

2

Consolidated Statements of Stockholders’ Equity

3

Consolidated Statements of Cash Flows

4

Notes to Unaudited Consolidated Financial Statements

5

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

15

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

23

Item 4.

Controls and Procedures

23

PART II- OTHER INFORMATION

Item 1.

Legal Proceedings

24

Item 1A.

Risk Factors

24

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

24

Item 3.

Defaults Upon Senior Securities

25

Item 4.

Mine Safety Disclosures

25

Item 5.

Other Information

25

Item 6.

Exhibits

26

SIGNATURES

27

ii

Table of Contents

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q, or this “Quarterly Report,” contains forward-looking statements that involve substantial risks and uncertainties. The forward-looking statements are contained principally in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” but also are contained elsewhere in this Quarterly Report, as well as in sections such as “Risk Factors” that are incorporated by reference into this Quarterly Report from our most recent Annual Report on Form 10-K, or the “Annual Report.” In particular, we caution you that our forward-looking statements are subject to the ongoing and developing circumstances related to the COVID-19 pandemic, which may have a material adverse effect on our business, operations and future financial results. In some cases, you can identify forward-looking statements by the words “may,” “might,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “objective,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue” and “ongoing,” or the negative of these terms, or other comparable terminology intended to identify statements about the future. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. Although we believe that we have a reasonable basis for each forward-looking statement contained in this Quarterly Report, we caution you that these statements are based on a combination of facts and factors currently known by us and our expectations of the future, about which we cannot be certain. Forward-looking statements include statements about:

our ability to successfully commercialize OLINVYK and any other product candidates for which we may obtain regulatory approval;
our sales, marketing and manufacturing capabilities and strategies;
any ongoing or planned clinical trials and nonclinical studies for our product candidates;
the extent of future clinical trials potentially required by the U.S. Food and Drug Administration for our product candidates;
our ability to fund future operating expenses and capital expenditures with our current cash resources or to secure additional funding in the future;
the timing and likelihood of obtaining and maintaining regulatory approvals for our product candidates;
our plan to develop and potentially commercialize our product candidates;
the clinical utility and potential market acceptance of our product candidates, particularly in light of existing and future competition;
the size of the markets for our product candidates;
the performance of third-parties upon which we depend, including contract manufacturing organizations, suppliers, contract research organizations, distributors and logistics providers;
our ability to identify or acquire additional product candidates with significant commercial potential that are consistent with our commercial objectives;
the extent to which health epidemics and other outbreaks of communicable diseases, including the ongoing COVID-19 pandemic and the effects to mitigate it, could disrupt our operations and/or materially and adversely affect our business and financial conditions;
our intellectual property position and our ability to obtain and maintain patent protection and defend our intellectual property rights against third parties; and
our ability to satisfy all applicable Nasdaq continued listing requirements.

iii

Table of Contents

You should refer to the “Risk Factors” section of this Quarterly Report and our Annual Report for a discussion of important factors that may cause our actual results to differ materially from those expressed or implied by our forward-looking statements. As a result of these factors, we cannot assure you that the forward-looking statements in this Quarterly Report will prove to be accurate. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame, or at all. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

iv

Table of Contents

PART I

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

TREVENA, INC.

Consolidated Balance Sheets

(in thousands, except share and per share data)

    

March 31, 2022

    

December 31, 2021

(unaudited)

Assets

 

  

 

  

Current assets:

 

  

 

  

Cash and cash equivalents

$

48,664

$

66,923

Inventories

2,745

2,352

Prepaid expenses and other current assets

 

2,840

 

1,448

Total current assets

 

54,249

 

70,723

Restricted cash

 

1,311

 

1,311

Property and equipment, net

 

1,736

 

1,841

Right-of-use lease asset

4,592

4,706

Other assets

 

2,529

 

1,543

Total assets

$

64,417

$

80,124

Liabilities and stockholders’ equity

 

  

 

  

Current liabilities:

 

  

 

  

Accounts payable, net

$

2,408

$

4,547

Accrued expenses and other current liabilities

 

5,703

 

3,847

Lease liability

815

792

Total current liabilities

 

8,926

 

9,186

Leases, net of current portion

 

6,096

 

6,309

Total liabilities

 

15,022

 

15,495

Commitments and contingencies (Note 9)

 

  

 

  

Stockholders’ equity:

 

  

 

  

Preferred stock—$0.001 par value; 5,000,000 shares authorized, none issued or outstanding at March 31, 2022 and December 31, 2021

 

 

Common stock—$0.001 par value; 200,000,000 shares authorized at March 31, 2022 and December 31, 2021; 165,520,007 shares issued and outstanding at March 31, 2022 and December 31, 2021

 

165

 

165

Additional paid-in capital

 

559,721

 

558,566

Accumulated deficit

 

(510,491)

 

(494,102)

Total stockholders’ equity

 

49,395

 

64,629

Total liabilities and stockholders’ equity

$

64,417

$

80,124

See accompanying notes to consolidated financial statements.

1

Table of Contents

TREVENA, INC.

Consolidated Statements of Operations and Comprehensive Loss (Unaudited)

(in thousands, except share and per share data)

Three Months Ended

    

2022

    

2021

Revenue:

  

  

Product revenue

$

$

209

License revenue

20

Total revenue

 

20

 

209

Operating expenses:

 

 

Cost of goods sold

207

163

Selling, general and administrative

 

11,014

 

7,368

Research and development

 

5,259

 

2,636

Total operating expenses

 

16,480

 

10,167

Loss from operations

 

(16,460)

 

(9,958)

Other income (expense):

 

  

 

Change in fair value of warrant liability

 

 

3

Other income, net

 

45

 

69

Interest income

 

24

 

48

Gain (loss) on foreign currency exchange

2

(4)

Total other income, net

 

71

 

116

Net loss and comprehensive loss

$

(16,389)

$

(9,842)

Per share information:

 

  

 

  

Net loss per share of common stock, basic and diluted

$

(0.10)

$

(0.06)

Weighted average common shares outstanding, basic and diluted

165,520,007

 

160,508,373

See accompanying notes to consolidated financial statements.

2

Table of Contents

TREVENA, INC.

Consolidated Statements of Stockholders’ Equity (Unaudited)
(in thousands, except share data)

Stockholders' Equity

Common Stock

Number

$0.001

Additional

Total

of

Par

Paid-in

Accumulated

Stockholders'

    

Shares

    

Value

    

Capital

    

Deficit

    

Equity

Balance, January 1, 2022

 

165,520,007

$

165

$

558,566

$

(494,102)

$

64,629

Stock-based compensation expense

 

1,155

 

1,155

Net loss

 

(16,389)

 

(16,389)

Balance, March 31, 2022

 

165,520,007

$

165

$

559,721

$

(510,491)

$

49,395

Balance, January 1, 2021

 

159,999,917

$

160

$

546,422

$

(442,514)

$

104,068

Stock-based compensation expense

 

1,111

 

1,111

Exercise of stock options

 

5,000

9

 

9

Issuance of common stock upon vesting of RSUs, net of shares withheld for employee taxes

 

49,720

(69)

 

(69)

Issuance of common stock, net of issuance costs

 

1,219,023

1

2,791

 

2,792

Net loss

 

(9,842)

 

(9,842)

Balance, March 31, 2021

 

161,273,660

$

161

$

550,264

$

(452,356)

$

98,069

See accompanying notes to consolidated financial statements.

3

Table of Contents

TREVENA, INC.

Consolidated Statements of Cash Flows (Unaudited)

(in thousands)

Three Months Ended

    

2022

    

2021

Operating activities:

Net loss

$

(16,389)

$

(9,842)

Adjustments to reconcile net loss to net cash used in operating activities:

 

  

 

Depreciation

 

105

 

108

Stock-based compensation

 

1,155

 

1,111

Revaluation of warrant liability

 

 

(3)

Change in right-of-use asset

114

97

Changes in operating assets and liabilities:

 

 

Prepaid expenses and other assets

 

(2,378)

 

(2,645)

Inventories

(393)

Operating lease liabilities

(188)

(166)

Accounts payable, accrued expenses and other liabilities

 

(283)

 

(3,073)

Net cash used in operating activities

 

(18,257)

 

(14,413)

Financing activities:

 

  

 

  

Proceeds from exercise of common stock options

 

 

9

Proceeds from issuance of common stock, net

 

 

2,792

Payment of employee withholding taxes on vested restricted stock units

(69)

Finance lease payments

 

(2)

 

(2)

Net cash (used in) provided by financing activities

 

(2)

 

2,730

Net decrease in cash, cash equivalents and restricted cash

 

(18,259)

 

(11,683)

Cash, cash equivalents and restricted cash—beginning of period

 

68,234

 

110,713

Cash, cash equivalents and restricted cash—end of period

$

49,975

$

99,030

See accompanying notes to consolidated financial statements.

4

Table of Contents

TREVENA, INC.

Notes to Unaudited Consolidated Financial Statements

March 31, 2022

1. Organization and Description of the Business

Trevena, Inc., or the Company, was incorporated in Delaware as Parallax Therapeutics, Inc. on November 9, 2007. The Company began operations in December 2007, and its name was changed to Trevena, Inc. on January 3, 2008. The Company is a biopharmaceutical company focused on the development and commercialization of novel medicines for patients affected by central nervous system, or CNS, disorders. The Company operates in one segment and has its principal office in Chesterbrook, Pennsylvania.

Since commencing operations in 2007, the Company has devoted substantially all of its financial resources and efforts to commercializing its lead asset, OLINVYK® (oliceridine) injection, or OLINVYK, and to research and development, including nonclinical studies and clinical trials. The Company has never been profitable. In late 2017, the Company submitted a new drug application, or NDA, for OLINVYK™ (OLINVYK) injection, or OLINVYK, to the United States Food and Drug Administration, or the FDA. In August 2020, the FDA approved the NDA for OLINVYK and the Company initiated commercial launch of OLINVYK in the first quarter of 2021.

Since its inception, the Company has incurred losses and negative cash flows from operations. At March 31, 2022, the Company had an accumulated deficit of $510.5 million. The Company’s net loss was $16.4 million and $9.8 million for the three months ended March 31, 2022 and 2021, respectively. The Company follows the provisions of Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, Topic 205-40, Presentation of Financial Statements—Going Concern, or ASC 205-40, which requires management to assess the Company’s ability to continue as a going concern for one year after the date the financial statements are issued. The Company expects that its existing balance of cash and cash equivalents as of March 31, 2022 is sufficient to fund operations into 2023, but not for more than one year after the date of this filing and therefore management has concluded that substantial doubt exists about the Company’s ability to continue as a going concern. Management’s plans to mitigate this risk include raising additional capital through equity or debt financings, or through strategic transactions. Management’s plans may also include the deferral of certain operating expenses unless and until additional capital is received. However, there can be no assurance that the Company will be successful in raising additional capital or that such capital, if available, will be on terms that are acceptable to the Company, or that the Company will be successful in deferring certain operating expenses, or that the COVID-19 pandemic will not have an impact on the Company’s ability to raise capital or fund its operations as planned. If the Company is unable to raise sufficient additional capital or defer sufficient operating expenses, the Company may be compelled to reduce the scope of its operations and planned capital expenditures.

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, or U.S. GAAP. Any reference in these notes to applicable guidance is meant to refer to the authoritative United States generally accepted accounting principles as found in the ASC and Accounting Standards Updates, or ASUs, of the FASB. The Company’s functional currency is the U.S. dollar.

The consolidated financial statements include all normal and recurring adjustments that are considered necessary for the fair presentation of the Company’s consolidated balance sheets as of March 31, 2022, its results of operations and its comprehensive loss for the three months ended March 31, 2022 and 2021, its consolidated statements of stockholders’ equity for the period from January 1, 2022 to March 31, 2022 and for the period January 1, 2021 to March 31, 2021, and its consolidated statements of cash flows for the three months ended March 31, 2022 and 2021. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the financial statements and accompanying notes included in the Company’s most recent Annual Report on Form 10-K for the year ended December 31, 2021. Since the date of those financial statements, there have been no changes to the Company’s significant accounting policies. The financial data and other information disclosed in these notes related to the three

5

Table of Contents

months ended March 31, 2022 and 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2022, any other interim periods, or any future year or period.

We have been actively monitoring the novel coronavirus, or COVID-19, situation and its impact globally. Remote working arrangements and travel restrictions imposed by various jurisdictions have had a limited impact on our ability to maintain operations. The full extent to which the COVID-19 pandemic will directly or indirectly impact our business, results of operations and financial condition will depend on future developments that are highly uncertain, including vaccine adoption and effectiveness, the impact of emerging variants of the novel coronavirus, and the actions taken to contain or treat COVID-19.

Principles of Consolidation

In connection with the royalty-based financing agreement disclosed in Note 10, the Company established three wholly owned subsidiaries, Trevena Royalty Corporation, Trevena SPV1 LLC and Trevena SPV2 LLC to facilitate the financing. The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries as of March 31, 2022. All intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting period. These estimates and assumptions are based on current facts, historical experience as well as other pertinent industry and regulatory authority information, including the potential future effects of COVID-19, the results of which form the basis for making judgements about the carrying values of assets and liabilities and the recording expenses that are not readily apparent from other sources. Actual results may differ materially and adversely from these estimates. To the extent there are material differences between the estimates and actual results, the Company’s future results of operations will be affected.

Fair Value of Financial Instruments

The carrying amount of the Company’s financial instruments, which include cash and cash equivalents, restricted cash, accounts payable and accrued expenses approximate their fair values, given their short-term nature.

3. Fair Value of Financial Instruments

ASC 820, Fair Value Measurement, establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances.

ASC 820 identifies fair value as the exchange price, or exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As a basis for considering market participant assumptions in fair value measurements, ASC 820 establishes a three-tier fair value hierarchy that distinguishes among the following:

Level 1 – Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.
Level 2 – Valuations based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and models for which all significant inputs are observable, either directly or indirectly.
Level 3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

6

Table of Contents

To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

Cash, Cash Equivalents and Marketable Securities

The following table presents fair value of the Company’s cash, cash equivalents, and marketable securities as of March 31, 2022 and December 31, 2021 (in thousands):

March 31, 2022

    

Adjusted 

Unrealized

Unrealized

Cash and Cash

Restricted

Cost

    

Gains

    

Losses

    

Fair Value

    

Equivalents

    

Cash

Cash

$

10,176

$

$

$

10,176

$

8,865

$

1,311

Level 1 (1):

 

 

  

 

  

 

  

 

 

  

Money market funds

 

39,799

 

 

 

39,799

 

39,799

 

Subtotal

 

39,799

 

 

 

39,799

 

39,799

 

Total

$

49,975

$

$

$

49,975

$

48,664

$

1,311

December 31, 2021

Adjusted 

Unrealized

Unrealized

Cash and Cash

Restricted

    

Cost

    

Gains

    

Losses

    

Fair Value

    

Equivalents

    

Cash

Cash

$

9,459

$

$

$

9,459

$

8,148

$

1,311

Level 1 (1):

 

  

 

  

 

  

 

  

 

  

 

  

Money market funds

 

58,775

 

 

 

58,775

 

58,775

 

Subtotal

 

58,775

 

 

 

58,775

 

58,775

 

Total

$

68,234

$

$

$

68,234

$

66,923

$

1,311

(1)The fair value of Level 1 securities is estimated based on quoted prices in active markets for identical assets or liabilities.

The Company maintains $1.3 million as collateral under a letter of credit for the Company’s facility lease obligations in Chesterbrook, Pennsylvania. The Company has recorded this deposit and accumulated interest thereon as restricted cash on its consolidated balance sheet.

The Company recognizes transfers between levels of the fair value hierarchy as of the end of the reporting period. There were no transfers between Level 2 and Level 3 during the three months ended March 31, 2022, or the year ended December 31, 2021.

4. Inventories

Inventories are valued at the lower of cost or net realizable value. Cost is determined using the first-in, first-out method for all inventories. Inventory includes the cost of API, raw materials and third-party contract manufacturing and packaging services. Indirect overhead costs associated with production and distribution are recorded as period costs in the period incurred. OLINVYK was approved by the FDA in August 2020. Prior to FDA approval, all manufacturing costs for OLINVYK were expensed to research and development. Upon FDA approval, manufacturing costs for OLINVYK manufactured for commercial sale have been capitalized as inventory cost. Costs of drug product to be consumed in any current or future clinical trials will continue to be recognized as research and development expense.

The Company periodically evaluates the carrying value of inventory on hand using the same lower of cost or net realizable value approach as that used to initially value the inventory. Valuation adjustments may be required for slow-moving or obsolete inventory or in any situations where market conditions have caused net realizable value to fall below the carrying cost of the inventory.

7

Table of Contents

Inventory consists of the following (in thousands):

    

March 31, 2022

    

December 31, 2021

Finished goods

$

2,880

$

2,488


As of March 31, 2022 and December 31, 2021, the Company had an inventory reserve of $0.1 million.

5. Stockholders’ Equity

Equity Offerings

Under its certificate of incorporation, the Company was authorized to issue up to 200,000,000 shares of common stock as of March 31, 2022. The Company also was authorized to issue up to 5,000,000 shares of preferred stock as of March 31, 2022. The Company is required, at all times, to reserve and keep available out of its authorized but unissued shares of common stock sufficient shares to effect the conversion of the shares of the preferred stock and all outstanding stock options and warrants.

ATM Programs

In April 2019, the Company entered into a Common Stock Sales Agreement with H.C. Wainwright & Co., LLC, or Wainwright, pursuant to which the Company may offer and sell through Wainwright, from time to time at the Company’s sole discretion, shares of its common stock, having an aggregate offering price of up to $50.0 million, or the HCW ATM Program. Sales of the shares of common stock are deemed to be “at-the-market offerings,” as defined in Rule 415 under the Securities Act. In December 2020, the Company and Wainwright entered into Amendment No. 1 to Common Stock Sales Agreement, or the Amendment, to amend the Common Stock Sales Agreement to, among other things, update the reference to the registration statement pursuant to which the shares of common stock may be sold and to include an additional $50.0 million of shares of common stock in the HCW ATM Program. There were no sales under the HCW ATM Program during the three months ended March 31, 2022. As of March 31, 2022, there was approximately $41.9 million remaining available for future issuances under the HCW ATM Program.

Registered Direct Offering and Concurrent Warrant Issuance

In connection with the Company’s January 2019 securities purchase agreements, the Company issued warrants to purchase 500,000 shares of common stock to certain designees of H.C. Wainwright & Co., LLC. These warrants have a term of five years, are immediately exercisable and have an exercise price of $1.25 per share. As of March 31, 2022, 172,500 of these warrants remain outstanding.

Equity Incentive Plans

In 2008, the Company adopted the 2008 Equity Incentive Plan, as amended on February 29, 2008, January 7, 2010, July 8, 2010, December 10, 2010, June 23, 2011 and June 17, 2013, collectively, the 2008 Plan, that authorized the Company to grant restricted stock and stock options to eligible employees, directors and consultants to the Company.

In 2013, the Company adopted the 2013 Equity Incentive Plan, as amended on May 14, 2014, collectively, 2013 Plan. The 2013 Plan became effective upon the Company’s entry into the underwriting agreement related to its IPO in January 2014 and, as of such date, no further grants were permitted under the 2008 Plan. The 2013 Plan provides for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance-based stock awards and other forms of equity compensation (collectively, stock awards), all of which may be granted to employees, including officers, non-employee directors and consultants of the Company. Additionally, the 2013 Plan provides for the grant of cash and stock-based performance awards. The 2013 Plan contains an “evergreen” provision, pursuant to which the number of shares of common stock available for issuance under the plan automatically increases on January 1 of each year beginning in 2015.

On December 15, 2016, the Company adopted the Trevena, Inc. Inducement Plan, or the Inducement Plan, effective January 1, 2017, pursuant to which the Company reserved 500,000 shares of the Company’s common stock for issuance under the Inducement Plan. The Inducement Plan provides for nonqualified stock options and restricted stock

8

Table of Contents

unit awards. The only persons eligible to receive grants of awards under the Inducement Plan are individuals who satisfy the standards for inducement grants under Nasdaq Marketplace Rule 5635(c)(4) and the related guidance under Nasdaq IM 5635-1, including individuals who were not previously an employee or director of the Company or are following a bona fide period of non-employment, in each case as an inducement material to such individual’s agreement to enter into employment with the Company.

Under all of the Company’s equity incentive plans, the amount, terms of grants and exercisability provisions are determined by the board of directors or its designee. The term of the options may be up to 10 years, and options are exercisable in cash or as otherwise determined by the board of directors or its designee. Vesting generally occurs over a period of not greater than four years. For performance-based stock awards, the Company recognizes expense when achievement of the performance condition is probable, over the requisite service period.

The estimated grant date fair value of the Company’s share based awards is amortized on a straight-line basis over the awards’ service periods. Share based compensation expense recognized was as follows (in thousands):

Three Months Ended March 31, 

    

2022

    

2021

    

Research and development

$

275

$

260

Selling, general and administrative

 

873

 

840

Cost of goods sold

7

11

Total stock-based compensation

$

1,155

$

1,111

Stock Options

A summary of stock option activity and related information through March 31, 2022 follows:

Options Outstanding

    

    

    

Weighted 

Average 

Weighted 

Remaining 

Average 

Contractual 

Number of 

Exercise 

Term 

Shares

Price

(in years)

Balance, December 31, 2021

 

12,449,870

$

2.67

 

7.11

Granted

 

244,950

 

0.60

Exercised

 

 

Forfeited/Cancelled

 

(435,809)

 

1.85

Balance, March 31, 2022

 

12,259,011

$

2.65

 

6.97

Vested or expected to vest at March 31, 2022

 

12,259,011

$

2.65

 

6.97

Exercisable at March 31, 2022

 

7,457,237

$

3.30

 

5.66

The aggregate intrinsic value of options exercisable as of March 31, 2022 was zero, based on the difference between the Company’s closing stock price of $0.55 and the exercise price of each stock option. At March 31, 2022, there was $5.5 million of total unrecognized compensation expense related to unvested options that will be recognized over the weighted average remaining vesting period of 2.84 years.

The Company uses the Black Scholes option pricing model to estimate the fair value of stock options at the grant date. The Black Scholes model requires the Company to make certain estimates and assumptions, including estimating the fair value of the Company’s common stock, assumptions related to the expected price volatility of the Company’s common stock, the period during which the options will be outstanding, the rate of return on risk free investments and the expected dividend yield for the Company’s common stock.

9

Table of Contents

The per-share weighted-average grant date fair value of the options granted to employees and directors during the three months ended March 31, 2022 and 2021 was estimated at $0.46 and $1.65 per share, respectively, on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions:

March 31, 

    

2022

    

2021

    

    

Expected term of options (in years)

 

6.3

 

6.2

 

 

Risk-free interest rate

 

1.5

%  

0.8

%  

 

Expected volatility

 

92.5

%  

97.5

%  

 

Dividend yield

 

%  

%  

 

Restricted Stock Units

RSU-related expense is recognized on a straight-line basis over the vesting period. Upon vesting, these awards may be settled on a net-exercise basis to cover any required withholding tax with the remaining amount converted into an equivalent number of shares of common stock.

As of March 31, 2022, there were 5,918,496 non-vested RSUs with a weighted average grant date fair value of $1.08.

For the three months ended March 31, 2022, the Company recorded $0.5 million in stock-based compensation expense related to RSUs, which is reflected in the consolidated statements of operations and comprehensive loss.

As of March 31, 2022, there was $5.7 million of total unrecognized compensation expense related to unvested RSUs that will be recognized over the weighted average remaining period of 3.14 years.

Shares Available for Future Grant

At March 31, 2022, the Company has the following shares available to be granted under its equity incentive plans:

    

    

Inducement 

2013 Plan

Plan

Available at December 31, 2021

 

4,178,805

 

252,500

Authorized

 

6,620,800

Granted

 

(244,950)

Shares withheld for taxes not issued

Forfeited/Cancelled

 

27,871

Available at March 31, 2022

 

10,582,526

 

252,500

Shares Reserved for Future Issuance

At March 31, 2022, the Company has reserved the following shares of common stock for issuance:

Stock options outstanding under 2013 Plan

    

12,011,511

Restricted stock units outstanding under 2013 Plan

5,918,496

Stock options outstanding under Inducement Plan

 

247,500

Shares reserved for future issuance under Inducement Plan

 

252,500

Shares reserved for future issuance under 2013 Employee Stock Purchase Plan

 

225,806

Warrants outstanding

 

275,430

Total shares of common stock reserved for future issuance

 

18,931,243

10

Table of Contents

6. Commitments and Contingencies

Leases

The Company leases office space in Chesterbrook, Pennsylvania and equipment. The Company’s principal office is located at 955 Chesterbrook Boulevard, Chesterbrook, Pennsylvania, where the Company currently leases approximately 8,231 square feet of developed office space on the first floor and 40,565 square feet of developed office space on the second floor. The lease term for this space extends through May 2028. On October 11, 2018, the Company entered into an agreement with The Vanguard Group, Inc., or Vanguard, whereby Vanguard agreed to sublease the 40,565 square feet of space on the second floor for an initial term of 37 months. On October 2, 2020, Vanguard notified the Company that they exercised the first option to extend the sublease term for three years through November 30, 2024. Vanguard has a second option to extend the sublease term for an additional three years through November 30, 2027. The sublease provides for rent abatement for the first month of the term; thereafter, the rent payable to the Company by Vanguard under the sublease is (i) $0.50 less during months 2 through 13 of the sublease and (ii) in month 14 and thereafter of the sublease, $1.00 less than the base rent payable by the Company under its master lease with Chesterbrook Partners, L.P. Vanguard also is responsible for paying to the Company all tenant energy costs, annual operating costs, and annual tax costs attributable to the subleased space during the term of the sublease. Rent expense and associated sublease income are recorded in the Company’s consolidated statements of operations and comprehensive loss as other income (expense).

Supplemental balance sheet information related to leases was as follows (in thousands):

    

March 31, 2022

    

December 31, 2021

Operating leases:

 

  

 

  

Operating lease right-of-use assets

 

$

4,592

 

$

4,706

Other current lease liabilities

813

788

Operating lease liabilities

6,096

6,309

Total operating lease liabilities

$

6,909

$

7,097

Finance leases:

Property and equipment, at cost

$

45

$

45

Accumulated depreciation

(43)

(41)

Property and equipment, net

2

4

Other current lease liabilities

2

4

Other long-term liabilities

Total finance lease liabilities

$

2

$

4

The components of lease expense were as follows (in thousands):

Three Months Ended

March 31, 

    

2022

    

2021

Operating lease costs:

Operating lease rental expense

$

327

$

293

Other income

(315)

(312)

Total operating lease costs

$

12

$

(19)

Finance lease costs:

Amortization of right-of-use assets

1

2

Interest on lease liabilities

Total finance lease costs

$

1

$

2

11

Table of Contents

Supplemental cash flow information related to leases was as follows (in thousands):

Three Months Ended

March 31, 

    

2022

    

2021

Cash paid for amounts included in the measurement of lease liabilities

 

  

 

  

Operating cash flows from operating leases

$

(70)

$

(48)

Operating cash flows from finance leases

 

 

Financing cash flows from finance leases

(2)

 

(2)

Our operating lease liabilities will mature, as follows (in thousands):

    

Operating Leases

 

Financing Leases

2022 (April 1 - December 31)

$

1,053

$

2

2023

1,425

2024

1,450

2025

1,474

2026

1,498

2027 and beyond

2,163

Total minimum lease payments

$

9,063

$

2

Interest Expense

(2,154)

Lease liability

$

6,909

$

2

Per the terms of our sublease, we expect the following inflows (in thousands):

    

Sublease

2022 (April 1 - December 31)

$

839

2023

1,139

2024

 

996

Total minimum lease payments

$

2,974

Lease term and discount rates are as follows:

Three Months Ended March 31, 

 

2022

 

2021

Weighted average remaining lease term (years)

Operating leases

6

7

Finance leases

1

Weighted average discount rate

Operating leases

9.2%

9.2%

Finance leases

6.5%

6.5%

Legal Proceedings

In October and November 2018, the Company and certain current and former officers and directors were sued in three purported class actions filed in the U.S. District Court for the Eastern District of Pennsylvania, or the EDPA, alleging violations of the federal securities laws. In January 2019, the three lawsuits were consolidated into one action. On February 11, 2021, the parties agreed in principle to a settlement of $8.5 million, all of which was to be paid by the Company’s insurance carriers, subject to approval by the Court. The Court approved the settlement on August 2, 2021. The Company and the individual defendants did not acknowledge any wrongdoing as part of the settlement. The Company recorded the $8.5 million estimated settlement liability and the $8.5 million estimated insurance recovery in its

12

Table of Contents

2020 financial statements. As expected, the $8.5 million was paid by the Company’s insurance carriers, and the litigation is now resolved. The Company continues to believe that the claims were without merit.

In December 2018, a shareholder derivative action was filed on behalf of the Company and against certain current and former officers and directors in the EDPA, and in February 2019, two additional, similar shareholder derivative actions were filed in the U.S. District Court for the District of Delaware. A fourth similar shareholder derivative action was filed in the EDPA in September 2019, and a fifth, similar derivative action was filed in the EDPA in November 2019. A similar sixth derivative action was filed in the EDPA in September 2020. These cases involved facts similar to the consolidated securities lawsuits. The parties agreed to a settlement, which was approved by the Court on August 2, 2021. The individual defendants did not acknowledge any wrongdoing as part of the settlement. The Company agreed to make certain corporate governance changes, and a monetary payment of $500,000 was made to plaintiffs’ counsel, all of which was funded by the Company’s insurance carriers. The Company recorded in the fourth quarter of 2020 an estimated liability of $0.5 million and a corresponding insurance recovery of the same amount. The litigation is now resolved.

7. Product Revenue

Performance Obligation

The Company’s performance obligation is the supply of finished pharmaceutical products to its customers. The Company’s customers consist of major wholesale distributors. The Company’s customer contracts generally consist of both a master agreement, which is signed by the Company and its customer, and a customer submitted purchase order, which is governed by the terms and conditions of the master agreement.

Revenue is recognized when the Company transfers control of its products to the customer, which occurs at a point-in-time, upon delivery.

The Company offers standard payment terms to its customers and has elected the practical expedient to not adjust the promised amount of consideration for the effects of a significant financing, since the period between when the Company transfers the product to the customer and when the customer pays for that product is one year or less. Taxes collected from customers relating to product revenue and remitted to governmental authorities are excluded from revenues. The consideration amounts due from customers as a result of product revenue are subject to variable consideration.

The Company offers standard product warranties which provide assurance that the product will function as expected and in accordance with specifications. Customers cannot purchase warranties separately and these warranties do not give rise to a separate performance obligation. The Company permits the return of product under certain circumstances, mainly upon at or near product expiration, instances of shipping errors or where product is damaged in transit. The Company accrues for the customer’s right to return as part of its variable consideration.

Sales-Related Deductions

The following table presents a rollforward of the major categories of sales-related deductions included in trade receivable allowances for the three months ended March 31, 2022 (in thousands):

    

Sales Discounts

    

Chargebacks

    

Fee for Service

Balance, January 1, 2022

$

1

$

41

$

45

Provision related to current period sales

Adjustment related to prior period sales

 

Credit or payments made during the period

Balance, March 31, 2022

$

1

$

41

$

45

As of March 31, 2022, the Company does not have any outstanding accounts receivable and, as a result, the sales allowance of $87,000 has been included with accrued expenses and other current liabilities on the Company’s consolidated balance sheets.

13

Table of Contents

8. License Revenue

License and Commercialization Agreement with Pharmbio Korea Inc.

In April 2018, the Company entered into an exclusive license agreement with Pharmbio Korea Inc., or Pharmbio, for the development and commercialization of OLINVYK for the management of moderate to severe acute pain in South Korea. Under the terms of the agreement, the Company received an upfront, non-refundable cash payment of $3.0 million (less applicable withholding taxes of $0.5 million) in June 2018, and will receive a cash commercial milestone of up to $0.5 million if OLINVYK is approved in South Korea and tiered royalties on product sales in South Korea ranging from high single digits to 20%, less applicable withholding taxes. As part of the agreement, the Company also granted Pharmbio an option to manufacture OLINVYK, on a non-exclusive basis, for the development and commercialization of the product in South Korea, subject to a separate arrangement to be entered into if Pharmbio exercises the option. The license agreement is terminable by Pharmbio for any reason upon 180 days written notice.

In accordance with the terms of the agreement, Pharmbio is solely responsible for all development and regulatory activities in South Korea. The parties have formed a Joint Development Committee with equal representation from the Company and Pharmbio to provide overall coordination and oversight of the development of OLINVYK in South Korea. The parties also agreed to form a Joint Manufacturing and Commercialization Committee at least six months prior to the anticipated date of regulatory approval of OLINVYK in South Korea to provide overall coordination and oversight of the manufacture and commercialization of OLINVYK in South Korea.

License Agreement with Jiangsu Nhwa Pharmaceutical Co. Ltd.

In April 2018, the Company also entered into an exclusive license agreement with Jiangsu Nhwa Pharmaceutical Co. Ltd., or Nhwa, for the development and commercialization of OLINVYK for the management of moderate to severe acute pain in China. Under the terms of this agreement, the Company received an upfront, non-refundable cash payment of $2.5 million (less applicable withholding taxes of $0.3 million) in July 2018. In August 2020, the Company received a milestone payment of $3.0 million (less applicable withholding taxes of $0.3 million), that became payable by Nhwa upon FDA approval of OLINVYK. The Company is also eligible to receive a cash milestone payment of $3.0 million, subject to Chinese withholding taxes, upon regulatory approval of OLINVYK in China, up to an additional $6.0 million of commercialization milestone payments based on product sales levels in China, and a ten percent royalty on all net product sales in China, less applicable withholding taxes. As part of the agreement, the Company also granted Nhwa an option to manufacture OLINVYK, on an exclusive basis in China, for the development and commercialization of the product in China. In the second quarter of 2018, Nhwa elected to exercise this manufacturing option. The license agreement is terminable by Nhwa for any reason upon 180 days written notice.

In accordance with the terms of the agreement, Nhwa is solely responsible for all development and regulatory activities in China. The parties have formed a Joint Development Committee with equal representation from the Company and Nhwa to provide overall coordination and oversight of the development of OLINVYK in China. The parties also agreed to form a Joint Manufacturing and Commercialization Committee at least six months prior to the anticipated date of regulatory approval of OLINVYK in China to provide overall coordination and oversight of the manufacture and commercialization of OLINVYK in China.

For the three months ended March 31, 2022 and 2021, license revenue in the accompanying consolidated statements of operations and comprehensive loss is comprised of the following:

Three Months Ended

March 31, 

2022

2021

Pharmbio Korea Inc.

$

20

$

Jiangsu Nhwa Pharmaceutical Co. Ltd.

Total license revenues

$

20

$

14

Table of Contents

9. Net Loss Per Common Share

The following table sets forth the computation of basic and diluted net loss per share for the periods indicated (in thousands, except share and per share data):

Three Months Ended March 31, 

    

2022

    

2021

    

Basic and diluted net loss per common share calculation:

 

  

 

  

 

Net loss

$

(16,389)

$

(9,842)

Weighted average common shares outstanding

 

165,520,007

 

160,508,373

Net loss per share of common stock - basic and diluted

$

(0.10)

$

(0.06)

The following outstanding securities at March 31, 2022 and 2021 have been excluded from the computation of diluted weighted shares outstanding, as they would have been anti-dilutive:

March 31, 

    

2022

    

2021

    

Options outstanding

 

12,259,011

 

10,350,543

 

RSUs outstanding

5,918,496

3,696,342

Warrants

 

275,430

 

295,591

 

Total

 

18,452,937

 

14,342,476

 

10. Subsequent Events

In April 2022, the Company received the first $15.0 million tranche from its royalty-based loan agreement with an affiliate of R-Bridge Healthcare Fund, or the R-Bridge Financing. The R-Bridge Financing calls for an initial $15.0 million tranche within 15 days of the closing of the deal. The Company will receive an additional $10.0 million upon achievement of either a financing or commercial milestone and an additional $15.0 million upon the first commercial sale of OLINVYK® in China, subject to customary bring down conditions and deliverables. R-Bridge Healthcare Fund is an affiliate of CBC Group, one of Asia’s largest and most active healthcare-dedicated investment firms focusing in three core areas: pharmaceutical & biotech, medtech, and healthcare services. The R-Bridge Financing is secured by and repaid with proceeds from (i) royalties from the Company’s license agreement with its partner in China, Jiangsu Nhwa Pharmaceutical Co. Ltd. (Nhwa), and (ii) a revenue interest based on the Company’s U.S. net sales of OLINVYK in an initial amount of 4% of such net sales. This U.S. revenue interest will be capped at $10.0 million if Chinese approval of OLINVYK occurs by year-end 2023. In the event Chinese approval does not occur by that time, the U.S. revenue interest will increase to 7% and will continue until certain combined totals of U.S. revenue interest and Chinese royalties are paid. The Company retains all milestones from its partnership with Nhwa, including a $3.0 million milestone on Chinese approval of OLINVYK.

In connection with the Company’s R-Bridge Financing, the Company issued a warrant to purchase 5,000,000 shares of common stock. This warrant has a term of 3 years, is immediately exercisable and has an exercise price of $0.82 per share. It was issued in April 2022 upon receipt of the first $15.0 million tranche.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited consolidated financial statements and related notes that appear in Item 1 of this Quarterly Report on Form 10-Q and with our audited financial statements and related notes for the year ended December 31, 2021, which are included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission, or SEC, on March 31, 2022. Unless the context otherwise requires, we use the terms “Trevena,” “Company,” “we,” “us” and “our” to refer to Trevena, Inc.

Overview

We are a biopharmaceutical company focused on developing and commercializing novel medicines for patients affected by central nervous system, or CNS, disorders. Our lead product, OLINVYK™ (oliceridine) injection, or

15

Table of Contents

OLINVYK, was approved by the United States Food and Drug Administration, or the FDA, in August 2020. In October 2020, we announced that OLINVYK had received scheduling from the U.S. Drug Enforcement Administration, or DEA, and was classified as a Schedule II controlled substance. OLINVYK is an opioid agonist for use in adults for the management of acute pain severe enough to require an intravenous opioid analgesic and for whom alternative treatments are inadequate.

We initiated commercial launch of OLINVYK in the first quarter of 2021. Our commercial launch strategy is to focus on a subset of core specialties and clinically challenging patient, such as those patients with certain co-morbidities, elderly, obese or renal impairment. We intend to evolve and expand this focus as customers gain experience with OLINVYK. We are also developing a pipeline of product candidates based on our proprietary product platform, including TRV045 for diabetic neuropathic pain and epilepsy; TRV250 for acute migraines; and TRV734 for opioid use disorders.

Since our incorporation in late 2007, our operations have included organizing and staffing our company, business planning, raising capital, discovering and developing our product candidates, establishing our intellectual property portfolio, and commercializing our lead product. We have financed our operations primarily through private placements and public offerings of our equity securities, debt borrowings and royalty-based financing. As of March 31, 2022, we had an accumulated deficit of $510.5 million. Our net loss was $16.4 million and $9.8 million for the three months ended March 31, 2022 and 2021, respectively. Our ability to become and remain profitable depends on our ability to generate revenue or sales. We do not expect to generate significant revenue or sales unless and until we or a collaborator successfully commercialize OLINVYK or obtain marketing approval for and commercialize TRV250, TRV734, or TRV045.

We expect to incur significant expenses and operating losses for the foreseeable future as we continue to commercialize OLINVYK and continue the development and clinical trials of our other product candidates. We will need to obtain substantial additional funding in connection with our continuing operations. We will seek to fund our operations through the sale of equity, debt financings or other sources, including potential collaborations. However, we may be unable to raise additional funds or enter into such other agreements when needed on favorable terms, or at all. If we fail to raise capital or enter into such other arrangements as, and when, needed, we may have to significantly delay, scale back or discontinue our operations, development programs, and/or any future commercialization efforts.

Recent Developments

Receipt of First $15.0 million Tranche of Financing

In April 2022, we received the first $15.0 million tranche from our royalty-based financing agreement with an affiliate of R-Bridge Healthcare Fund, or the R-Bridge Financing. The R-Bridge Financing calls for an initial $15.0 million tranche within 15 days of the closing of the deal. We will receive an additional $10.0 million upon achievement of either a financing or commercial milestone and an additional $15.0 million upon the first commercial sale of OLINVYK® in China, subject to customary bring down conditions and deliverables. R-Bridge Healthcare Fund is an affiliate of CBC Group, one of Asia’s largest and most active healthcare-dedicated investment firms focusing in three core areas: pharmaceutical & biotech, medtech, and healthcare services. The R-Bridge Financing is secured by, and repaid with proceeds from (i) royalties from the license with our partner in China, Jiangsu Nhwa Pharmaceutical Co. Ltd. (Nhwa) and (ii) a revenue interest based on our U.S. net sales of OLINVYK in an initial amount of 4% of such net sales. This U.S. revenue interest will be capped at $10.0 million if Chinese approval of OLINVYK occurs by year-end 2023. In the event Chinese approval does not occur by that time, the U.S. revenue interest will increase to 7% and will continue until certain combined totals of U.S. revenue interest and Chinese royalties are paid. We retain all milestones from our partnership with Nhwa, including a $3.0 million milestone on Chinese approval of OLINVYK.

Enrollment in ACTIV-4 Host Tissue Platform Ceased

In April 2022, we announced that we had received notice that enrollment for TRV027 as part of the ACTIV-4 (Accelerating COVID-19 Therapeutic Interventions and Vaccines-4) Host Tissue platform (the “ACTIV-4 Platform”) has ceased. Based upon data at the interim analysis, the ACTIV-4 Platform Data and Safety Monitoring Board has recommended that certain trials in the ACTIV-4 Platform, including the TRV027 vs placebo trial, should cease enrollment due to these study arms having crossed the inferiority/harm boundary and safety concerns, based on an analysis of the primary endpoint, a composite of mortality and oxygen use within the first 28 days. The 90-day follow up

16

Table of Contents

of participants in the TRV027 trial will proceed as planned. Details about the trial results and conclusions will be disseminated once all data have been fully analyzed.

Other than us supplying drug for the study, the ACTIV-4 Platform is fully funded by the National Heart, Lung, and Blood Institute, a part of the National Institutes of Health.

OLINVYK Results from Respiratory Physiology Study of Head-to-Head Comparison versus IV Morphine in Elderly/Overweight Subjects

In April 2022, we announced that OLINVYK showed a statistically significant reduced impact on respiratory function compared to IV morphine, among elderly/overweight subjects. This data replicated observations previously seen in a comparative study of respiratory physiology in younger subjects with OLINVYK and IV morphine. The results were from a double-blinded, crossover study comparing the analgesic and respiratory effects of two doses of OLINVYK (0.5mg and 2.0mg) and morphine (2.0mg and 8.0mg) administered intravenously in a population of elderly individuals across a range of body weight. Both OLINVYK and IV morphine achieved comparable levels of pain relief. However, a statistically significantly reduced impact on respiratory function was observed in patients treated with OLINVYK compared to IV morphine as measured by the mean respiratory ventilation profiles over time (P < 0.0001).

In contrast to the lower dose of IV morphine, very little impact on respiratory function was observed with the lower dose of OLINVYK. At the higher dose of both drugs studied, less respiratory depression over the 6 hour measurement period was observed with OLINVYK. The peak level was also lower for OLINVYK compared to morphine, though this difference was not statistically significant. In addition, in contrast to morphine, respiratory function at the higher dose of OLINVYK rapidly returned toward baseline from 3 hours onward (all time points P < 0.05 in pairwise comparison).

COVID-19

The impact of the COVID-19 pandemic on the global economy and on our business continues to be a fluid situation. We responded quickly across our organization to guard the health and safety of our team and participants in our clinical trials, support our partners and vendors and mitigate risk. Thus far, our employees have rapidly adapted to working remotely and we are monitoring the COVID-19 pandemic on a daily basis to ensure we have all necessary plans in place for mitigating disruptions in our operations. Our commercial launch was impacted by the pandemic via a lack of traditional access to our customers and delayed formulary review processes. Many of our customers experienced capacity constraints as a result of COVID-19 and this frequently limited their ability to fully assess the clinical profile of OLINVYK. Like other companies, our clinical trials have experienced some degree of disruption due to access limitations to institutions currently impacted, and we may need to make further adjustments to clinical trials in the future to comply with evolving FDA guidance or otherwise. The extent to which the COVID-19 pandemic will impact our efforts to commercialize OLINVYK and to achieve market acceptance is uncertain and will depend upon future developments.

We continue to proactively assess, monitor and respond to domestic and international developments related to the COVID-19 pandemic, and we will implement risk-mitigation plans as needed to minimize the impact on our clinical trials and business operations, including our commercialization efforts of OLINVYK.

Senior Secured Tranched Term Loan Credit Facility

In September 2014, we entered into a loan and security agreement with Oxford Finance LLC and Pacific Western Bank (formerly Square 1 Bank), pursuant to which the lenders agreed to lend us up to $35.0 million in a three-tranche series of term loans, or the Term Loans. On March 2, 2020, we made our final payment under the loan and security agreement with the lenders.

In connection with entering into the agreement, we issued to the lenders and the placement agent certain warrants to purchase an aggregate of 7,678 shares of our common stock. As of March 31, 2022, warrants exercisable for 5,728 shares of common stock remain outstanding. These warrants were exercisable upon issuance and have an exercise price of $5.8610 per share. The warrants may be exercised on a cashless basis and will terminate on the earlier of September 19, 2024 or the closing of a merger or consolidation transaction in which we are not the surviving entity. In connection with our draw of the second term loan tranche, we issued to the lenders and the placement agent additional warrants to purchase an aggregate of 34,961 shares of our common stock. These warrants have substantially the same

17

Table of Contents

terms as those noted above and have an exercise price of $10.6190 per share and an expiration date of December 23, 2025. In connection with our draw of the third term loan tranche, we issued to the lenders and placement agent additional warrants to purchase an aggregate of 62,241 shares of our common stock. These warrants have substantially the same terms as those noted above and have an exercise price of $3.6150 per share and an expiration date of March 31, 2027. These detachable warrant instruments qualified for equity classification and were allocated based upon the relative fair value of the base instrument and the warrants, according to the guidance of ASC 470-20-25-2.

Critical Accounting Policies and Significant Judgments and Estimates

The preparation of our consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of our consolidated financial statements, as well as the reported revenues and expenses during the reported periods. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

A summary of our significant accounting policies appears in the notes to our audited consolidated financial statements for the year ended December 31, 2021 included in our Annual Report. However, we believe that the following accounting policies are important to understanding and evaluating our reported financial results, and we have accordingly included them in this discussion.

Stock-Based Compensation

We have applied the fair value recognition provisions of Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation — Stock Compensation, or ASC 718, to account for stock-based compensation for employees. We recognize compensation costs related to stock options granted to employees based on the estimated fair value of the awards on the date of grant.

We have equity incentive plans under which various types of equity-based awards including, but not limited to, incentive stock options, non-qualified stock options, and restricted stock unit awards, may be granted to employees, non-employee directors, and non-employee consultants. We also have an inducement plan under which various types of equity-based awards, including non-qualified stock options and restricted stock unit awards, may be granted to new employees.

We recognize compensation expense for all stock-based awards based on the estimated grant-date fair values. For restricted stock unit awards to employees, the fair value is based on the closing price of our common stock on the date of grant. The value of the portion of the award that is ultimately expected to vest is recognized as expense on a straight-line basis over the requisite service period. The fair value of stock options is determined using the Black-Scholes option pricing model. We utilize a dividend yield of zero based on the fact that we have never paid cash dividends and have no current intention of paying cash dividends. In connection with the early adoption of ASU 2016-09 in the quarter ended December 31, 2016, we elected an accounting policy to record forfeitures as they occur.

See Note 5, included in Part 1, Item 1 of this Quarterly Report, for a discussion of the assumptions we used in determining the grant date fair value of options granted under the Black-Scholes option pricing model, as well as a summary of the stock option activity under our stock-based compensation plan for all years presented.

Recent Accounting Pronouncements

There are no recent accounting pronouncements to disclose.

18

Table of Contents

Results of Operations

Comparison of the three months ended March 31, 2022 and 2021 (in thousands)

Three Months Ended

    

2022

    

2021

    

Change

    

Revenue:

 

  

 

  

 

  

 

Product revenue

$

$

209

$

(209)

License revenue

20

20

Total revenue

20

209

(189)

Operating expenses:

 

  

 

  

 

  

Cost of goods sold

207

163

44

Selling, general and administrative

 

11,014

 

7,368

 

3,646

Research and development

 

5,259

 

2,636

 

2,623

Total operating expenses

 

16,480

 

10,167

 

6,313

Loss from operations

 

(16,460)

 

(9,958)

 

(6,502)

Other income (expense):

 

  

 

  

 

  

Change in fair value of warrant liability

 

 

3

 

(3)

Other income, net

 

45

 

69

 

(24)

Interest income

 

24

 

48

 

(24)

Loss on foreign currency exchange

2

(4)

6

Total other income, net

 

71

 

116

 

(45)

Net loss attributable to common stockholders

$

(16,389)

$

(9,842)

$

(6,547)

Revenue

To date, we have derived revenue mainly from activities pursuant to our licensing agreements related to the development and commercialization of OLINVYK in China and South Korea. For the three months ended March 31, 2022, we recorded no product revenue. For the three months ended March 31, 2021, we recorded $0.2 million in product revenue from the shipment of drug product to wholesalers.

Cost of goods sold

Cost of goods sold for product revenue includes third party logistics costs, shipping costs, and indirect overhead costs which are recorded as period costs in the period incurred.

We expensed the cost of producing validation batches of OLINVYK that we are using in the commercial launch as research and development expense prior to the regulatory approval and DEA scheduling of OLINVYK. We expect cost of sales to increase as we deplete these inventories.

The following table provides information regarding cost of goods sold during the periods indicated, including percent changes (dollar amounts in thousands):

Three Months Ended March 31, 

2022

    

2021

% Increase (Decrease)

Cost of goods sold

$

207

$

163

27%

Cost of goods sold increased by less than $0.1 million for the three months ended March 31, 2022 compared to the same period in 2021, primarily related to distribution and indirect costs following the regulatory approval and DEA scheduling of OLINVYK.

Selling, general and administrative expense

Selling, general and administrative expenses consist principally of salaries and related costs for personnel in our executive, finance, commercial, and other administrative areas, including expenses associated with stock‑based

19

Table of Contents

compensation and travel. Other selling, general and administrative expenses include professional fees for legal, field sales organization, medical affairs, market research, consulting, and accounting services.

Selling, general and administrative expenses for the three months ended March 31, 2022 increased by $3.6 million or 50% as compared to the same period in 2021. The increase was primarily related to increases in commercialization activities and the launch of our customer-facing sales team.

Research and development expense

Research and development expenses consist primarily of costs incurred for research and the development of our product candidates, including costs associated with the regulatory approval process. In addition, research and development expenses include salaries and related costs for our research and development personnel and stock-based compensation expense and travel expenses for such individuals. Research and development activities are central to our business model. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size, complexity and duration of later-stage clinical trials.

Research and development costs are expensed as incurred and are tracked by discovery program and subsequently by product candidate once a product candidate has been selected for development. We record costs for some development activities, such as clinical trials, based on an evaluation of the progress to completion of specific tasks using data such as patient enrollment, clinical site activations or information provided to us by our vendors.

Research and development expenses increased by $2.6 million, or 100%, for the three months ended March 31, 2022, as compared to the same period in 2021. The following table summarizes our research and development expenses (in thousands):

Three Months Ended

 

    

2022

    

2021

 

Personnel-related costs

$

1,671

$

1,277

OLINVYK

 

1,246

 

185

TRV027

 

361

 

109

TRV045

1,044

895

TRV250

 

428

 

Other research and development

 

509

 

170

$

5,259

$

2,636

The higher research and development expenses incurred during the three months ended March 31, 2022 compared to the same period in 2021 were the result of increased spend on OLINVYK post-approval clinical studies in respiratory physiology and cognitive function and continued development of TRV045 and TRV027.

Total other income

Total other income, net for the three months ended March 31, 2022 was lower than prior year primarily because of lower interest income.

Liquidity and Capital Resources

We have historically funded substantially all of our operations through the sale and issuance of our equity securities, debt securities and borrowings under debt facilities. We have also received an aggregate of $8.8 million pursuant to licensing agreements for the development and commercialization of OLINVYK in China and South Korea.

At March 31, 2022, we had an accumulated deficit of $510.5 million, working capital of $45.3 million, cash and cash equivalents of $48.7 million, and restricted cash of $1.3 million, and no marketable securities. In November 2020, we filed a $250.0 million shelf registration statement, which includes the HCW ATM Program, of which there was approximately $41.9 million of available capacity as of March 31, 2022.

20

Table of Contents

Our primary use of cash is to fund operating expenses, which consist of research and development expenditures, commercialization expenditures, and other selling, general and administrative expenditures. These expenses have increased in the three months ended March 31, 2022 as compared to the same period in 2021 as a result of the commercial launch of OLINVYK. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in accounts payable and accrued expenses. Net cash used in operating activities was $18.3 million and $14.4 million for the three months ended March 31, 2022 and 2021, respectively. We incurred net losses of $16.4 million and $9.8 million for those same periods.

Cash Flows

The following table summarizes our cash flows for the three months ended March 31, 2022 and 2021 (in thousands):

March 31, 

    

2022

    

2021

    

Net cash (used in) provided by:

 

  

 

  

 

Operating activities

$

(18,257)

$

(14,413)

Financing activities

 

(2)

 

2,730

Net decrease in cash, cash equivalents and restricted cash

$

(18,259)

$

(11,683)

Net cash used in operating activities

Net cash used in operating activities was $18.3 million for the three months ended March 31, 2022 and consisted primarily of a net loss of $16.4 million and changes in operating assets and liabilities of $3.2 million, partially offset by stock-based compensation of $1.2 million and depreciation expense of $0.1 million. Changes in prepaid expenses and other assets, accounts payable and accrued expenses result from timing differences between the receipt and payment of cash and when the transactions are recognized in our results of operations.

Net cash used in operating activities was $14.4 million for the three months ended March 31, 2021 and consisted primarily of a net loss of $9.8 million and changes in operating assets and liabilities of $5.9 million, partially offset by stock-based compensation of $1.1 million and depreciation expense of $0.1 million. Changes in prepaid expenses and other assets, accounts payable and accrued expenses result from timing differences between the receipt and payment of cash and when the transactions are recognized in our results of operations.

Net cash provided by financing activities

Net cash used in financing activities was less than $0.1 million for the three months ended March 31, 2022, which was due to capital lease payments. Net cash provided by financing activities was $2.7 million for the three months ended March 31, 2021, which was primarily due to net proceeds of $2.8 million from the HCW ATM Program.

Operating and Capital Expenditure Requirements

We have not achieved profitability since our inception, and we expect to continue to incur net losses and negative cash flows from operations for the foreseeable future. We expect our cash expenditures to continue to be significant in the near term as we commercialize OLINVYK, and continue to advance TRV045 and TRV250. Over the next twelve months, we anticipate that our total operating expenses will increase compared to the previous twelve months.

21

Table of Contents

We believe that our cash and cash equivalents as of March 31, 2022, together with interest thereon, will be sufficient to fund our operating expenses and capital expenditure requirements into 2023, but not for more than one year after the date of this filing and as a result, there is substantial doubt about our ability to continue as a going concern through the year from the date of this filing. Our anticipated operating expenses involve significant risks and uncertainties and are dependent on our current assessment of the extent and costs of activities required to commercialize OLINVYK and advance our other product candidates. In the future, we anticipate that we will need to raise substantial additional financing to fund our operations. To meet these requirements, we may seek to sell equity or convertible securities in public or private transactions that may result in significant dilution to our stockholders. We may offer and sell shares of our common stock under the existing registration statement or any registration statement we may file in the future. If we raise additional funds through the issuance of convertible securities, these securities could have rights senior to those of our common stock and could contain covenants that restrict our operations.

Ultimately, there can be no assurance that we will be able to obtain additional equity or debt financing on terms acceptable to us, if at all. Our future capital requirements will depend on many factors, including:

our ability to successfully commercialize OLINVYK and our other product candidates;
our ability to generate sales and other revenues from OLINVYK or any of our other product candidates, once approved, including setting an acceptable price for and obtaining adequate coverage and hospital formulary acceptance of such products;
the size and growth potential of the markets for OLINVYK and our ability to serve those markets;
the scope, progress, results and costs of researching and developing our product candidates or any future product candidates, both in the United States and in territories outside the United States;
the number and development requirements of any other product candidates that we may pursue;
our ability to enter into collaborative agreements for the development and/or commercialization of our product candidates, including for OLINVYK;
the costs, timing, and outcome of any regulatory review of OLINVYK and any future product candidates, both in the United States and in territories outside the United States;
the costs, timing, and extent of future commercialization activities, including product manufacturing, marketing, sales and distribution, for any of our product candidates for which we receive marketing approval;
the revenue, if any, received from commercial sales of our product candidates for which we receive marketing approval;
any product liability or other lawsuits, including the recently filed class action complaints, related to our products or us;
the expenses needed to attract and retain skilled personnel; and
the costs involved in preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending our intellectual property-related claims, both in the United States and in territories outside the United States.

Please see “Risk Factors” section of this Quarterly Report and our Annual Report for additional risks associated with our substantial capital requirements.

Other Commitments

22

Table of Contents

In the course of normal business operations, we have agreements with contract service providers to assist in the performance of our research and development and manufacturing activities. We can elect to discontinue the work under these agreements at any time. We also could enter into additional collaborative research, contract research, manufacturing and supplier agreements in the future, which may require upfront payments and even long-term commitments of cash.