[10-Q] Orchestra BioMed Holdings, Inc. Quarterly Earnings Report
Orchestra BioMed (OBIO) reported Q3 2025 results with total revenue of $861 thousand (partnership $721 thousand; product $140 thousand) and a net loss of $20.8 million. Operating expenses were $21.2 million, driven by research and development of $14.0 million and selling, general and administrative of $7.1 million.
Liquidity improved during the period. Cash and cash equivalents were $42.0 million and marketable securities were $53.8 million as of September 30, 2025. Financing cash inflows totaled $75.7 million for the nine months, including $57.8 million net from a private placement and $20.0 million from a royalty purchase agreement. A related royalty liability of $16.2 million was recorded. Loan payable was $14.2 million. Deferred revenue was $13.3 million, reflecting the Terumo collaboration balance.
Partnership updates: the company amended its Medtronic agreement on August 4, 2025 to include a framework for AVIM-therapy integration into a dual‑chamber leadless pacemaker. On October 24, 2025, the Terumo agreement for Virtue SAB was terminated under a termination and right of first refusal agreement. Shares outstanding were 56,464,731 as of November 6, 2025.
- None.
- None.
Insights
Losses widened, liquidity strengthened; Terumo deal ended.
Q3 revenue was modest at $861 thousand while net loss reached
Liquidity rose via a private placement (
The Medtronic amendment adds a pathway for AVIM integration into a dual‑chamber leadless pacemaker. The Terumo agreement’s termination was disclosed as a subsequent event; actual revenue impact depends on future arrangements. Subsequent filings may provide additional detail on commercialization pathways.
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
(Mark One)
For the quarterly period ended
OR
For the transition period from __________________ to __________________
Commission file number:
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of |
| (IRS Employer |
(Address of principal executive offices, including zip code)
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 |
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| The |
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.
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).
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 | ☐ |
☒ | 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
As of November 6, 2025, the registrant had
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Page | ||
PART I. FINANCIAL INFORMATION | 1 | |
Item 1. | Financial Statements | 1 |
Unaudited Condensed Consolidated Financial Statements: | ||
Condensed Consolidated Balance Sheets as of September 30, 2025 (Unaudited) and December 31, 2024 | 1 | |
Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Nine Months Ended September 30, 2025 and 2024 | 2 | |
Condensed Consolidated Statements of Stockholders’ Equity (Deficit) for the Three and Nine Months Ended September 30, 2025 and 2024 | 3 | |
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2025 and 2024 | 4 | |
Notes to Unaudited Condensed Consolidated Financial Statements | 5 | |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 32 |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 50 |
Item 4. | Controls and Procedures | 50 |
PART II. OTHER INFORMATION | 51 | |
Item 1. | Legal Proceedings | 51 |
Item 1A. | Risk Factors | 51 |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 51 |
Item 3. | Defaults Upon Senior Securities | 51 |
Item 4. | Mine Safety Disclosures | 51 |
Item 5. | Other Information | 51 |
Item 6. | Exhibits | 53 |
Signatures | 54 | |
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (this “Quarterly Report”) contains forward-looking statements. All statements other than statements of historical facts contained in this report, including statements regarding our future results of operations and financial position, business strategy, product candidates, planned preclinical studies and clinical trials, results of clinical trials, research and development costs, regulatory approvals, timing, and likelihood of success, as well as plans and objectives of management for future operations, are forward-looking statements. These statements involve known and unknown risks, uncertainties, and other important factors that are in some cases beyond our control and may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements.
In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “would,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential,” or “continue” or the negative of these terms or other similar expressions. Forward-looking statements contained in this report include, but are not limited to, statements about:
| ● | our ability to raise financing in the future, including our ability to borrow additional funds under our current debt financing arrangement; |
| ● | our receipt of committed capital, including the payment of the Second Installment under the Royalty Purchase Agreement (each as defined herein) and the timing of the funding of the Medtronic Loan Agreement (as defined herein); |
| ● | our success in retaining or recruiting, or changes required in, our officers, key employees or directors; |
| ● | our ability and/or the ability of third-party vendors and partners to manufacture our product candidates; |
| ● | our ability to source critical components or materials for the manufacture of our product candidates; |
| ● | our ability to achieve and sustain profitability; |
| ● | our ability to achieve our projected development and commercialization goals; |
| ● | the rate of progress, costs and results of our clinical studies and research and development activities, including, among other things, the date by which we expect to complete enrollment of our BACKBEAT global pivotal study; |
| ● | market acceptance of our product candidates, if approved; |
| ● | our ability to compete successfully with larger companies in a highly competitive industry; |
| ● | changes in our operating results, which make future operations results difficult to predict; |
| ● | serious adverse events, undesirable side effects that could halt the clinical development, regulatory approval or certification, of our product candidates; |
| ● | our ability to manage growth or control costs related to growth; |
| ● | economic conditions that may adversely affect our business, financial condition and stock price; |
| ● | our reliance on third parties to drive successful marketing and sale of our initial product candidates, if approved; |
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| ● | our reliance on third parties to manufacture and provide important materials and components for our products and product candidates; |
| ● | our and our partners’ abilities to obtain necessary regulatory approvals and certifications for our product candidates in an uncomplicated and inexpensive manner; |
| ● | our ability to maintain compliance with regulatory and post-marketing requirements; |
| ● | adverse medical events, failure or malfunctions in connection with our product candidates and possible subjection to regulatory sanctions; |
| ● | healthcare costs containment pressures and legislative or administrative reforms which affect coverage and reimbursement practices of third-party payors; |
| ● | our ability to protect or enforce our intellectual property, unpatented trade secrets, know-how and other proprietary technology; |
| ● | our ability to obtain necessary intellectual property rights from third parties; |
| ● | our ability to protect our trademarks, trade names and build our names recognition; |
| ● | our ability to maintain the listing of our common stock on The Nasdaq Stock Market LLC (“Nasdaq”); |
| ● | the success of our licensing agreements; and |
| ● | our public securities’ liquidity and trading. |
We have based these forward-looking statements largely on our current expectations and projections about our business, the industry in which we operate and financial trends that we believe may affect our business, financial condition, results of operations, and prospects, and these forward-looking statements are not guarantees of future performance or development. These forward-looking statements speak only as of the date of this report and are subject to a number of risks, uncertainties, and assumptions described under the headings “Item 1A. Risk Factors” in Part I of our Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 10-K”), and “Item 1A. Risk Factors” in Part II of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, as well as elsewhere in this Quarterly Report. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. We do not plan to publicly update or revise any forward-looking statements contained herein whether as a result of any new information, future events, or otherwise, except as required by law.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this report, and, while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and you are cautioned not to unduly rely upon these statements.
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PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
ORCHESTRA BIOMED HOLDINGS, INC.
Condensed Consolidated Balance Sheets
(in thousands, except share and per share data)
(Unaudited)
| September 30, |
| December 31, | |||
2025 | 2024 | |||||
ASSETS |
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CURRENT ASSETS: |
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Cash and cash equivalents | $ | | $ | | ||
Marketable securities |
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Accounts receivable, net |
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Inventory |
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Prepaid expenses and other current assets |
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Total current assets |
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Property and equipment, net |
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Right-of-use assets |
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Strategic investments |
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Deposits and other assets |
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TOTAL ASSETS | $ | | $ | | ||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
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CURRENT LIABILITIES: |
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Accounts payable | $ | | $ | | ||
Accrued expenses and other liabilities |
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Operating lease liability, current portion |
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Deferred revenue, current portion |
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Total current liabilities |
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Deferred revenue, less current portion |
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Royalty purchase agreement | | — | ||||
Loan payable | | | ||||
Operating lease liability, less current portion |
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Other long-term liabilities |
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TOTAL LIABILITIES |
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STOCKHOLDERS’ EQUITY |
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Preferred stock, $ |
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Common stock, $ |
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Additional paid-in capital |
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Accumulated other comprehensive income |
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Accumulated deficit |
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TOTAL STOCKHOLDERS’ EQUITY |
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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | | $ | | ||
The accompanying notes are an integral part of these condensed consolidated financial statements.
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ORCHESTRA BIOMED HOLDINGS, INC.
Condensed Consolidated Statements of Operations and Comprehensive Loss
(in thousands, except share and per share data)
(Unaudited)
| Three Months Ended September 30, |
| Nine Months Ended September 30, | |||||||||
2025 | 2024 | 2025 | 2024 | |||||||||
Revenue: |
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Partnership revenue | $ | | $ | | $ | | $ | | ||||
Product revenue |
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Total revenue |
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Expenses: |
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Cost of product revenues |
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Research and development |
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Selling, general and administrative |
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Total expenses |
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Loss from operations |
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Other (expense) income: |
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Interest (expense) income, net |
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Loss on fair value of strategic investments |
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Other expense | — | — | — | ( | ||||||||
Total other (expense) income |
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Net loss | $ | ( | $ | ( | $ | ( | $ | ( | ||||
Net loss per share |
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Basic and diluted | $ | ( | $ | ( | $ | ( | $ | ( | ||||
Weighted-average shares used in computing net loss per share, basic and diluted |
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Comprehensive loss |
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Net loss | $ | ( | $ | ( | $ | ( | $ | ( | ||||
Unrealized gain (loss) on marketable securities |
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Comprehensive loss | $ | ( | $ | ( | $ | ( | $ | ( | ||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
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ORCHESTRA BIOMED HOLDINGS, INC.
Condensed Consolidated Statements of Stockholders’ Equity (Deficit)
(in thousands, except share and per share data)
(Unaudited)
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Additional | Other | Stockholders’ | |||||||||||||||
Common Stock | Paid-in | Comprehensive | Accumulated | Equity | |||||||||||||
Shares |
| Amount | Capital | (Loss) Income | Deficit | (Deficit) | |||||||||||
Balance, January 1, 2025 |
| | $ | | $ | | $ | | $ | ( | $ | | |||||
Unrealized loss on marketable securities |
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Stock-based compensation |
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Restricted stock unit vesting | | — | ( | — | — | ( | |||||||||||
Exercise of stock options |
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Net loss |
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Balance, March 31, 2025 |
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Unrealized loss on marketable securities | — | — | — | ( | — | ( | |||||||||||
Stock-based compensation | — | — | | — | — | | |||||||||||
Restricted stock unit vesting | | — | ( | — | — | ( | |||||||||||
Net loss | — | — | — | — | ( | ( | |||||||||||
Balance, June 30, 2025 |
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Issuance of common stock and pre-funded warrants in private placement, net of issuance costs of $ | | | | — | — | | |||||||||||
Unrealized gain on marketable securities | — | — | — | | — | | |||||||||||
Stock-based compensation | — | — | | — | — | | |||||||||||
Restricted stock unit vesting | | — | ( | — | — | ( | |||||||||||
Issuance of warrants pursuant to debt financing | — | — | | — | — | | |||||||||||
Issuance of warrants pursuant to the royalty purchase agreement | — | — | | — | — | | |||||||||||
Net loss | — | — | — | — | ( | ( | |||||||||||
Balance, September 30, 2025 | | $ | | $ | | $ | | $ | ( | $ | | ||||||
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Common Stock | Paid-in | Comprehensive | Accumulated | Equity | |||||||||||||
Shares | Amount | Capital | (Loss) Income | Deficit | (Deficit) | ||||||||||||
Balance, January 1, 2024 |
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Unrealized gain on marketable securities |
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Stock-based compensation |
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Exercise of stock options |
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Net loss |
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Balance, March 31, 2024 |
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Unrealized loss on marketable securities | — | — | — | ( | — | ( | |||||||||||
Stock-based compensation | — | — | | — | — | | |||||||||||
Restricted stock unit vesting | | — | — | — | — | — | |||||||||||
Exercise of stock options | | — | | — | — | | |||||||||||
Net loss | — | — | — | — | ( | ( | |||||||||||
Balance, June 30, 2024 |
| | $ | | $ | | $ | ( | $ | ( | $ | | |||||
At-the-Market offering, net of issuance costs of $ | | — | | — | — | | |||||||||||
Unrealized gain on marketable securities | — | — | — | | — | | |||||||||||
Stock-based compensation | — | — | | — | — | | |||||||||||
Restricted stock unit vesting | | — | — | — | — | — | |||||||||||
Net loss | — | — | — | — | ( | ( | |||||||||||
Balance, September 30, 2024 | | $ | | $ | | $ | | $ | ( | $ | | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
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ORCHESTRA BIOMED HOLDINGS, INC.
Condensed Consolidated Statements of Cash Flows
(in thousands, except share and per share data)
(Unaudited)
| Nine Months Ended September 30, | |||||
2025 | 2024 | |||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
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Net loss | $ | ( | $ | ( | ||
Adjustments to reconcile net loss to net cash used in operating activities: |
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Depreciation and amortization |
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Stock-based compensation |
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Loss on fair value of strategic investments |
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Non-cash interest expense on liability related to the royalty purchase agreement | | — | ||||
Accretion and interest related to marketable securities |
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Non-cash lease expense |
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Amortization of deferred financing fees | |
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Other | — | | ||||
Changes in operating assets and liabilities: |
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Accounts receivable |
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Inventory |
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Prepaid expenses and other assets |
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Accounts payable, accrued expenses and other liabilities |
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Operating lease liabilities – current and non-current |
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Deferred revenue |
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Net cash used in operating activities |
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CASH FLOWS FROM INVESTING ACTIVITIES: |
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Purchases of property and equipment |
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Sales of marketable securities | | | ||||
Purchases of marketable securities |
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Net cash (used in) provided by investing activities |
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CASH FLOWS FROM FINANCING ACTIVITIES: |
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Proceeds from sale of common stock and pre-funded warrants, net of issuance costs | | — | ||||
Proceeds from the royalty purchase agreement | | — | ||||
Proceeds from At-The-Market offering, net of issuance costs | — | | ||||
Proceeds from exercise of stock options |
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Restricted stock units withheld for tax |
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Deferred financing costs - royalty purchase agreement |
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Net cash provided by financing activities |
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Net increase (decrease) in cash and cash equivalents |
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Cash and cash equivalents, beginning of the period |
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Cash and cash equivalents, end of the period | $ | | $ | | ||
Supplemental Disclosures of Cash Flow Information |
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Cash paid during the nine months ended September 30: |
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Interest | $ | | $ | — | ||
Supplemental disclosure of noncash activities | ||||||
Operating lease right-of-use asset obtained in exchange for new operating lease liabilities | $ | — | $ | | ||
Increase in accounts payable, accrued expenses and other liabilities related to fixed assets | $ | | $ | | ||
Warrants issued pursuant to debt financing | $ | | $ | — | ||
Warrants issued pursuant to the royalty purchase agreement | $ | | $ | — | ||
Deferred issuance costs included in accrued expenses and other current liabilities | $ | | $ | — | ||
The accompanying notes are an integral part of these condensed consolidated financial statements.
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ORCHESTRA BIOMED HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. Organization and Basis of Presentation
Orchestra BioMed Holdings, Inc. (collectively, with its subsidiaries, “Orchestra” or the “Company”) (formerly known as Health Sciences Acquisitions Corporation 2) is a biomedical innovation company accelerating high-impact technologies to patients through risk-reward sharing partnerships with leading medical device companies. The Company’s partnership-enabled business model focuses on forging strategic collaborations with leading medical device companies to drive successful global commercialization of products it develops. The Company’s flagship product candidates are Atrioventricular Interval Modulation Therapy (“AVIM Therapy”) for the treatment of hypertension (“HTN”), the leading risk factor for death worldwide, and Virtue® Sirolimus AngioInfusionTM Balloon (“Virtue SAB”) for the treatment of atherosclerotic artery disease, the leading cause of mortality worldwide.
Prior to January 26, 2023, the Company was a special purpose acquisition company formed for the purpose of entering into a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities. On January 26, 2023 (the “Closing”), the Company consummated the business combination contemplated by the Agreement and Plan of Merger, dated as of July 4, 2022 (as amended by Amendment No. 1 to Agreement and Plan of Merger, dated July 21, 2022, and Amendment No. 2 to Agreement and Plan of Merger, dated November 21, 2022, the “Merger Agreement”) by and among Health Sciences Acquisitions Corporation 2, a special purpose acquisition company incorporated as a Cayman Islands exempted company in 2020 (“HSAC2”), HSAC Olympus Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of HSAC2 (“Merger Sub”), and Orchestra BioMed, Inc. Pursuant to the Merger Agreement, (i) HSAC2 deregistered in the Cayman Islands in accordance with the Companies Act (2022 Revision) (As Revised) of the Cayman Islands and domesticated as a Delaware corporation in accordance with Section 388 of the Delaware General Corporation Law (the “Domestication”) and (ii) Merger Sub merged with and into Orchestra BioMed, Inc., with Orchestra BioMed, Inc. as the surviving company in the merger and, after giving effect to such merger, continuing as a wholly owned subsidiary of Orchestra (the “Merger” and, together with the Domestication and the other transactions contemplated by the Merger Agreement, the “Business Combination”). As part of the Domestication, the Company’s name was changed from “Health Sciences Acquisitions Corporation 2” to “Orchestra BioMed Holdings, Inc.” On January 27, 2023, our common stock (“Company Common Stock”) began trading on the Nasdaq Global Market under the symbol “OBIO.”
Orchestra BioMed, Inc., the Company’s wholly owned subsidiary, was incorporated in Delaware in January 2017 and was formed to acquire operating and other assets as well as to raise capital conducted through private placements. In May 2018, Orchestra BioMed, Inc. concurrently completed its formation mergers (the “Formation Mergers”) with Caliber Therapeutics, Inc., a Delaware corporation, BackBeat Medical, Inc., a Delaware Corporation, and FreeHold Surgical, Inc., a Delaware corporation. Orchestra BioMed, Inc. completed the conversions of BackBeat Medical, Inc. to BackBeat Medical, LLC (“BackBeat”), a Delaware limited liability company, of FreeHold Surgical, Inc. to FreeHold Surgical, LLC (“FreeHold”) and of Caliber Therapeutics, Inc. to Caliber Therapeutics, LLC (“Caliber”), a Delaware limited liability company, in 2019.
Caliber
Caliber Therapeutics, Inc. was incorporated in Delaware in October 2005 and began development of its lead product Virtue SAB in 2008. Virtue SAB is a patented drug/device combination product candidate for the treatment of artery disease that delivers a proprietary extended release formulation of sirolimus called SirolimusEFR to the vessel wall during balloon angioplasty without any coating on the balloon surface or the need for leaving a permanent implant such as a stent in the artery. In 2019, Orchestra BioMed, Inc. entered into a distribution agreement with Terumo Corporation (“Terumo Corporation”) and Terumo Medical Corporation (“TMC” and, collectively with Terumo Corporation, “Terumo”) for global development and commercialization of Virtue SAB (the “Terumo Agreement”) (See Note 3 – “Terumo Agreement”).
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BackBeat
BackBeat Medical, Inc. was incorporated in Delaware in January 2010 and began development of its lead product AVIM Therapy that same year. AVIM Therapy is a patented implantable cardiac stimulation-based treatment for HTN that is designed to immediately, substantially and persistently lower blood pressure while simultaneously modulating autonomic nervous system responses that normally drive and maintain blood pressure higher. Refer to Note 4 for details regarding the Exclusive License and Collaboration Agreement, dated as of June 30, 2022, by and among, Orchestra BioMed, Inc., BackBeat and Medtronic, Inc. (an affiliate of Medtronic plc) (the “Medtronic Agreement”).
FreeHold
FreeHold Surgical, Inc. was incorporated in Delaware in May 2010 and began development of its hands-free, intracorporeal retractor device for minimally invasive surgery in 2012. FreeHold is engaged in the development, sales and marketing of its retractor products that provide optimized visual and total surgeon control during laparoscopic and robotic procedures.
Basis of Presentation and Liquidity
The accompanying unaudited interim condensed consolidated financial statements have been prepared pursuant to the rules and regulation of the U.S. Securities and Exchange Commission (“SEC”) for interim financial reporting. These condensed statements are unaudited and, in the opinion of management, include all adjustments (consisting of normal recurring adjustments and accruals) necessary to fairly present the results of the interim periods. The condensed consolidated balance sheet at December 31, 2024 has been derived from the audited financial statements at that date. Operating results and cash flows for the nine months ended September 30, 2025 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2025 or any other future period. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been omitted in accordance with the rules and regulations for interim reporting of the SEC. These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on March 31, 2025 together with the related notes thereto.
The Company has a limited operating history and the sales and income potential of its businesses and markets are unproven. As of September 30, 2025, the Company had an accumulated deficit of $
The Company follows the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 205-40, Presentation of Financial Statements — Going Concern, which requires management to assess the Company’s ability to continue as a going concern within one year after the date the financial statements are issued.
Based on the available balance of cash and cash equivalents and marketable securities as of September 30, 2025, and subsequent proceeds received (see Note 17 – “Subsequent Events”) management has concluded that sufficient capital is available to fund its operations and meet cash requirements through the one-year period subsequent to the issuance date of these financial statements. Management may consider plans to raise capital through the one-year period subsequent to the issuance date of these financial statements through issuance of equity securities, debt securities, and/or additional development and commercialization partnerships for other products within the Company’s development pipeline. The source, timing and availability of any future financing will depend principally upon market conditions and on the progress of the Company’s research and development programs.
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2. Summary of Significant Accounting Policies
Use of Estimates
The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures in the condensed consolidated financial statements and accompanying notes. Management bases its estimates on historical experience and on assumptions believed to be reasonable under the circumstances. Actual results could differ materially from those estimates. Areas where significant estimates exist include, but are not limited to, the fair value of stock-based compensation, research and development costs incurred, effective interest expense related to the Royalty Purchase Agreement (See Note 13 – “Royalty Purchase Agreement” for additional information) and the estimated costs to complete the combined performance obligation pursuant to the Terumo Agreement (See Note 3 – “Terumo Agreement” for additional information).
Cash and Cash Equivalents
Cash and cash equivalents are held in banks or in custodial accounts with banks. Cash equivalents are defined as all liquid investments and money market funds with maturity from date of purchase of 90 days or less that are readily convertible into cash.
Marketable Securities
The Company accounts for its marketable securities with remaining maturities of less than one year, or where its intent is to use the investments to fund current operations or to make them available for current operations, as short-term investments. These investments represent debt investments in corporate or government securities that are designated as available-for-sale and are carried at fair value, with unrealized gains and losses reported in stockholders’ equity as accumulated other comprehensive income (loss). The disclosed fair value related to the Company’s investments is based on market prices from a variety of industry standard data providers and generally represent quoted prices for similar assets in active markets or have been derived from observable market data.
Strategic Investments
Management has made investments in affiliated companies and assesses whether the Company exerts significant influence over its strategic investments. The Company considers the nature and magnitude of its investment, any voting and protective rights it holds, any participation in the governance of the other company, and other relevant factors such as the presence of a collaboration or other business relationships. To date, the Company has concluded that it does not have the ability to exercise significant influence over its strategic investments.
The Company’s strategic investments consist of preferred shares of Vivasure Medical Limited (“Vivasure”), a privately-held company and related party. The investments in Vivasure do not have readily determinable fair values and are recorded at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer. Additionally, as the investments in Vivasure are not readily marketable, the Company categorized the investments as non-current assets. As of September 30, 2025 and December 31, 2024, the carrying value of the investments in Vivasure was $
Fair Value of Financial Instruments
The Company applies ASC 820, Fair Value Measurement (“ASC 820”), which establishes a framework for measuring fair value and clarifies the definition of fair value within that framework. ASC 820 defines fair value as an exit price, which is the price that would be received for an asset or paid to transfer a liability in the Company’s principal or most advantageous market in an orderly transaction between market participants on the measurement date. The fair value hierarchy established in ASC 820 generally requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs reflect the assumptions that market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of
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the reporting entity. Unobservable inputs reflect the entity’s own assumptions based on market data and the entity’s judgments about the assumptions that market participants would use in pricing the asset or liability and are to be developed based on the best information available in the circumstances.
The carrying value of the Company’s cash and cash equivalents, accounts receivable, prepaid expense, accounts payable, and accrued expenses approximate fair value because of the short-term maturity of these financial instruments. In addition, the Company records its investment in marketable securities at fair value. See Note 5 – “Financial Instruments and Fair Value Measurements” for additional information regarding fair value measurements.
The valuation hierarchy is composed of three levels. The classification within the valuation hierarchy is based on the lowest level of input that is significant to the fair value measurement. The levels within the valuation hierarchy are described below:
Level 1 — Assets and liabilities with unadjusted, quoted prices listed on active market exchanges. Inputs to the fair value measurement are observable inputs, such as quoted prices in active markets for identical assets or liabilities.
Level 2 — Inputs to the fair value measurement are determined using prices for recently traded assets and liabilities with similar underlying terms, as well as direct or indirect observable inputs, such as interest rates and yield curves that are observable at commonly quoted intervals.
Level 3 — Inputs to the fair value measurement are unobservable inputs, such as estimates, assumptions, and valuation techniques when little or no market data exists for the assets or liabilities.
Accounts Receivable and Allowance for Doubtful Accounts
Accounts receivable represent amounts due from customers. The allowance for doubtful accounts is recorded for estimated losses by evaluating various factors, including relative creditworthiness of each customer, historical collections experience and aging of the receivable. As of September 30, 2025 and December 31, 2024, an allowance for doubtful accounts was
Inventory
Inventory is stated at the lower of standard cost (which approximates actual cost on a first-in, first-out basis) and net realizable value. Net realizable value represents the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The Company analyzes its inventory levels and writes down inventory that has become obsolete or has a cost basis in excess of its expected net realizable value or inventory quantities in excess of expected requirements. Excess requirements are determined based on comparison of existing inventories to forecasted sales, with consideration given to inventory shelf life. Expired inventory is disposed of, and the related costs are recognized in cost of goods sold. As of September 30, 2025 and December 31, 2024, an impairment charge as a result of obsolete inventory was
Research and Development Prepayments, Accruals and Related Expenses
The Company incurs costs of research and development activities conducted by its third-party service providers, which include the conduct of preclinical and clinical studies. The Company is required to estimate its prepaid and accrued research and development costs at each reporting date. These estimates are made as of the reporting date of the work completed over the life of the individual study in accordance with agreements established with the Company’s service providers. The Company determines the estimates of research and development activities incurred at the end of each reporting period through discussion with internal personnel and outside service providers, as to the progress or stage of completion of trials or services, as of the end of the reporting period, pursuant to contracts with the third parties and the agreed upon fee to be paid for such services. Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are deferred and capitalized. The capitalized amounts are expensed
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as the related goods are accepted by the Company or the services are performed. Accruals are recorded for the amounts of services provided that have not yet been invoiced.
Property and Equipment
Property and equipment are stated at cost, net of accumulated depreciation and amortization. Depreciation and amortization is computed using the straight-line method over the estimated useful lives of the respective assets. Leasehold improvements are amortized over the lesser of their useful life or the remaining life of the lease. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation and amortization are removed from the balance sheet and any resulting gain or loss is reflected in operations in the period realized. Maintenance and repairs are charged to operations as incurred.
Asset category |
| Depreciable life |
Manufacturing equipment |
| |
Office equipment |
| |
Research and development equipment |
|
Leases
At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the terms of the arrangement. The Company accounts for a contract as a lease when it has the right to control the asset for a period of time while obtaining substantially all of the asset’s economic benefits. The Company determines the initial classification and measurement of its operating right-of-use (“ROU”) assets and operating lease liabilities at the lease commencement date, and thereafter if modified. The lease term includes any renewal options that the Company is reasonably assured to exercise. The Company’s policy is to not record leases with a lease term of 12 months or less on its balance sheets.
The ROU asset represents the right to use the leased asset for the lease term. The lease liability represents the present value of the lease payments under the lease. The present value of lease payments is determined by using the interest rate implicit in the lease, if that rate is readily determinable; otherwise, the Company uses its estimated secured incremental borrowing rate for that lease term. Lease expense for operating leases is recognized on a straight-line basis over the reasonably assured lease term based on the total lease payments and is included in operating expense in the condensed consolidated statements of operations and comprehensive loss.
Payments due under each lease agreement include fixed and variable payments. Variable payments relate to the Company’s share of the lessor’s operating costs associated with the underlying asset and are recognized when the event on which those payments are assessed occurs. Variable payments have been excluded from the lease liability and associated right-of-use asset.
The interest rate implicit in lease agreements is typically not readily determinable, and as such, the Company utilizes the incremental borrowing rate to calculate lease liabilities, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.
Debt Discount and Debt Issuance Costs
Debt discounts and debt issuance costs incurred in connection with the issuance of debt are capitalized and reflected as a reduction to the related debt liability. The costs are amortized to interest expense over the term of the debt using the effective-interest method.
Impairment of Long-Lived Assets
The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparing the carrying amount to the future net undiscounted cash flows that the assets are expected to generate. If such assets are considered to be impaired,
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the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the projected discounted future net cash flows arising from the asset. The Company has
Revenue Recognition
The Company recognizes revenue under the core principle according to ASC 606, Revenue from Contracts with Customers (“ASC 606”), to depict the transfer of control to the Company’s customers in an amount reflecting the consideration the Company expects to be entitled to. In order to achieve that core principle, the Company applies the following five step approach: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when a performance obligation is satisfied.
The Company’s revenues are currently comprised of partnership revenues from the Terumo Agreement related to the development and commercialization of Virtue SAB, and product revenue from the sale of FreeHold’s intracorporeal organ retractors.
Partnership Revenues
To date, the Company’s partnership revenues have related to the Terumo Agreement as further described in Note 3. On October 24, 2025, the Terumo Agreement was terminated pursuant to a termination and right of first refusal agreement (the “Termination and ROFR Agreement”) (see Note 17 – “Subsequent Events”). In future periods, partnership revenues may also include revenues related to the Medtronic Agreement as discussed in Note 4.
The Company assessed whether the Terumo Agreement fell within the scope of ASC 808, Collaborative Arrangements (“ASC 808”) based on whether the arrangement involved joint operating activities and whether both parties have active participation in the arrangement and are exposed to significant risks and rewards. The Company determined that the Terumo Agreement did not fall within the scope of ASC 808. The Company then analyzed the arrangement pursuant to the provisions of ASC 606 and determined that the arrangement represents a contract with a customer and is therefore within the scope of ASC 606.
The promised goods or services in the Terumo Agreement include (i) license rights to the Company’s intellectual property, and (ii) research and development services. The Company also has optional additional items in the Terumo Agreement which are considered marketing offers and are accounted for as separate contracts with the customer if such option is elected by the customer, unless the option provides a material right which would not be provided without entering into the contract. Performance obligations are promised goods or services in a contract to transfer a distinct good or service to the customer. Promised goods or services are considered distinct when (i) the customer can benefit from the good or service on its own or together with other readily available resources or (ii) the promised good or service is separately identifiable from other promises in the contract. In assessing whether promised goods or services are distinct in the Terumo Agreement, the Company considered factors such as the stage of development of the underlying intellectual property, the capabilities of the customer to develop the intellectual property on their own or whether the required expertise is readily available.
The Company estimates the transaction price for the Terumo Agreement performance obligations based on the amount expected to be received for transferring the promised goods or services in the contract. The consideration includes both fixed consideration and variable consideration. At the inception of the Terumo Agreement, as well as at each reporting period, the Company evaluates the amount of potential payments and the likelihood that the payments will be received. The Company utilizes either the most likely amount method or expected amount method to estimate the amount expected to be received based on which method better predicts the amount expected to be received. If it is probable that a significant revenue reversal would not occur, the variable consideration is included in the transaction price.
The Terumo Agreement contains development and regulatory milestone payments. At contract inception and at each reporting period, the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant
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revenue reversal would not occur, the associated milestone value is included in the transaction price. At the end of each subsequent reporting period, the Company re-evaluates the probability of achievement of such development milestones and any related constraint, and if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect partnership revenues and earnings in the period of adjustment.
The Terumo Agreement also includes sales-based royalties and the license is deemed to be the predominant item to which the royalties relate. Accordingly, the Company will recognize royalty revenue when the related sales occur. To date, the Company has not recognized any royalty revenue under the arrangement.
The Company has determined that intellectual property licensed to Terumo and the research and development services to be provided to support the premarket approval by the U.S. Food and Drug Administration (the “FDA”) for the in-stent restenosis (“ISR”) indication represent a combined performance obligation that is satisfied over time, and that the appropriate method of measuring progress for purposes of recognizing revenues relates to a proportional performance model that measures the proportional performance based on the costs incurred to date relative to the total costs expected to be incurred through the completion of the performance obligation. The Company evaluates the measure of progress at each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition.
The Company receives payments from Terumo based on billing schedules established in the contract. Such billings for milestone related events have
Product Revenues
Product revenues related primarily to sales of FreeHold’s intracorporeal organ retractors are recognized at a point-in-time upon the shipment of the product to the customer, and there are no significant estimates or judgments related to estimating the transaction price. The product revenues consist of a single performance obligation, and the payment terms are typically 30 days. Product revenues are recognized solely in the United States.
Stock-Based Compensation
The Company applies ASC 718-10, Compensation — Stock Compensation, which requires the measurement and recognition of compensation expenses for all stock-based payment awards made to employees and directors including employee stock options under the Company’s stock plans based on estimated fair values (see Note 10 – “Stock-Based Compensation”). Each award vests over the subsequent period during which the recipient is required to provide service in exchange for the award (the vesting period). The cost of each award is recognized as an expense in the financial statements over the respective vesting period on a straight-line basis.
Under the requirements of ASU 2018-07, the Company accounts for stock-based compensation to nonemployees under the fair value method, which requires all such compensation to be calculated based on the fair value at the measurement date (generally the grant date) and recognized in the Company’s condensed consolidated statements of operations and comprehensive loss over the requisite service period. The Company accounts for forfeitures of stock-based awards as they occur.
Net Loss Per Share
Basic net loss per share is calculated by dividing net loss by the weighted-average number of shares of common stock outstanding for the period, without consideration of potential dilutive shares of common stock. Since the Company was in a loss position for the periods presented, basic net loss is the same as diluted net loss since the effects of potentially dilutive securities are antidilutive. Potentially dilutive securities include all outstanding warrants, stock options, Earnout Consideration (see Note 16 – “Net Loss Per Share”), unvested restricted stock awards and restricted stock units. Shares of Company Common Stock outstanding but subject to forfeiture and cancellation by the Company (e.g., the Forfeitable
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Shares (as defined in Note 16 – “Net Loss Per Share”)) are excluded from the weighted-average number of shares until the period in which such shares are no longer subject to forfeiture. Pre-funded warrants (see Note 9 – “Warrants”) are considered outstanding for the purposes of computing basic and diluted net loss per share because shares may be issued for little or no additional consideration and are fully vested and exercisable after the original issuance date of the pre-funded warrant. In periods in which there is net income, the Company would apply the two-class method to compute net income per share. Under this method, earnings are allocated to common stock and participating securities based on their respective rights to receive dividends, as if all undistributed earnings for the period were distributed. The two-class method does not apply in periods in which a net loss is reported.
Income Taxes
The Company accounts for income taxes using the asset-and-liability method in accordance with ASC 740, Income Taxes (“ASC 740”). Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on the deferred tax assets and liabilities of a change in tax rate is recognized in the period that includes the enactment date. A valuation allowance is recorded if it is more-likely-than-not that some portion or all the deferred tax assets will not be realized in future periods. At September 30, 2025 and December 31, 2024, the Company recorded a full valuation allowance on its deferred tax assets.
The Company follows the guidance in ASC Topic 740-10 in assessing uncertain tax positions. The standard applies to all tax positions and clarifies the recognition of tax benefits in the financial statements by providing for a two-step approach of recognition and measurement. The first step involves assessing whether the tax position is more-likely-than-not to be sustained upon examination based upon its technical merits. The second step involves measurement of the amount to be recognized. Tax positions that meet the more-likely than-not threshold are measured at the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate finalization with the taxing authority. The Company recognizes the impact of an uncertain income tax position in the financial statements if it believes that the position is more likely than not to be sustained by the relevant taxing authority. The Company will recognize interest and penalties related to tax positions in income tax expense as applicable.
Defined Contribution Plan
The Company has a defined retirement savings plan under Section 401(k) of the Internal Revenue Code. This plan allows eligible employees to defer a portion of their annual compensation on a pre-tax basis. Effective January 1, 2023, the Company participates in a matching safe harbor 401(k) Plan with a Company contribution of up to
Comprehensive Loss
Comprehensive loss is comprised of net loss and changes in unrealized gains and losses on the Company’s available-for-sale investments.
Segment Reporting
Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s CODM is its Chief Executive Officer. The Company has determined it operates in
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New Accounting Standards
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), which requires additional income tax disclosures in the annual consolidated financial statements. The amendments in ASU 2023-09 are intended to enhance the transparency and decision usefulness of income tax disclosures. For public entities, ASU 2023-09 is effective for annual periods beginning after December 15, 2024, with early adoption permitted. As an emerging growth company that has not opted out of the extended transition period for complying with new or revised financial accounting standards, the amendments in ASU 2023-09 are effective for the Company for fiscal years beginning after December 15, 2025, with early adoption permitted. We expect to lose emerging growth company status on December 31, 2025.
In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (“ASU 2024-03”) to improve the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses in commonly presented expense captions. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026. Early adoption is permitted. The Company is currently evaluating the impact of adopting ASU 2024-03 on its condensed consolidated financial statements.
3. Terumo Agreement
In June 2019, Orchestra BioMed, Inc. entered into the Terumo Agreement, pursuant to which Terumo secured global commercialization rights for Virtue SAB in coronary and peripheral vascular indications. Under the Terumo Agreement, Orchestra BioMed, Inc. received an upfront payment of $
As previously disclosed, the Company entered into a mediation procedure with Terumo pursuant to the Terumo Agreement and the International Mediation Rules of the International Centre for Dispute Resolution. As a result of this mediation procedure, the Company and Terumo entered into the Termination and ROFR Agreement on October 24, 2025, pursuant to which, among other things, the Terumo Agreement was terminated (see Note 17 – “Subsequent Events”).
Pursuant to the terms of the Terumo Agreement, Orchestra BioMed, Inc. licensed intellectual property rights to Terumo and the Company is primarily responsible for completing the development of the product in the United States to support premarket approval by the FDA for the ISR indication. These research and development services to be provided by the Company include (i) manufacturing, testing and packaging the drug required for the clinical trials, (ii) supplying Terumo with information related to the design and manufacture of the delivery device and the technology transfer needed for Terumo to ultimately commence manufacture of the delivery device, and (iii) carrying out regulatory activities related to clinical trials in the United States for the ISR indication.
The Company has concluded that the license granted to Terumo is not distinct from the research and development services that will be provided to Terumo through the completion of the development of ISR indication, as Terumo cannot obtain the benefit of the license without the related research and development services. Accordingly, the Company will recognize revenues for this combined performance obligation over the estimated period of research and development services using a proportional performance model. The Company measures proportional performance based on the costs incurred relative to the total estimated costs of the research and development services.
In 2019, Orchestra BioMed, Inc. received a total of $
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$
The Company recorded the $
Deferred Revenue – December 31, 2024 |
| $ | |
Revenue recognized |
| ( | |
Deferred Revenue – September 30, 2025 | $ | |
Deferred Revenue – December 31, 2023 |
| $ | |
Revenue recognized |
| ( | |
Deferred Revenue – September 30, 2024 | $ | |
The Company’s balance of deferred revenue contains the transaction price from the Terumo Agreement allocated to the combined license and research and development performance obligation, which was partially unsatisfied as of September 30, 2025.
As of each quarterly reporting date, the Company evaluates its estimates of the total costs expected to be incurred through the completion of the combined performance obligation and updates its estimates as necessary. For the three months ended September 30, 2025 and 2024, the expenses incurred related to the Terumo Agreement were approximately $
The Company will also manufacture, or have manufactured, SirolimusEFR and has exclusive rights to sell it on a per unit basis to Terumo for use in the Virtue SAB product. The Company has determined that this promise does not contain a material right as the pricing is based on standalone selling prices. Through September 30, 2025, there have been no additional amounts recognized as revenue under the Terumo Agreement other than the recognition of a portion of the upfront payment described above.
4. Medtronic Agreement
In June 2022, Orchestra BioMed, Inc., BackBeat and Medtronic entered into the Medtronic Agreement for the development and commercialization of AVIM Therapy for the treatment of pacemaker-indicated patients with uncontrolled HTN despite the use of anti-hypertensive medications (the “Primary Field”). Under the terms of the Medtronic Agreement, the Company is sponsoring an ongoing multinational pivotal study, to support regulatory approval of AVIM Therapy in the Primary Field and be financially responsible for development, clinical and regulatory costs
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associated with this pivotal study. AVIM Therapy has been integrated into the Medtronic top-of-the-line, commercially available dual-chamber pacemaker system specifically for use in the pivotal trial and will provide development, clinical and regulatory resources in support of the pivotal trial, for which the Company will reimburse Medtronic at cost.
Under the terms of the Medtronic Agreement, Medtronic will have exclusive rights to commercialize AVIM-enabled pacing systems globally following receipt of regulatory approval. Medtronic would be entirely responsible for global commercialization following receipt of regulatory approvals, including manufacturing, sales, marketing and distribution costs.
The Company is expected to receive between $
Medtronic has a right of first negotiation through FDA approval of AVIM Therapy in the Primary Field, to expand its global rights to AVIM Therapy for the treatment of HTN patients not indicated for a pacemaker.
The Company assessed whether the Medtronic Agreement fell within the scope of ASC 808 and concluded that the Medtronic Agreement is a collaboration within the scope of ASC 808. In addition, the Company determined that Medtronic is a customer for a good or service that is a distinct unit of account, and therefore, the transactions in the Medtronic Agreement should be accounted for under ASC 606.
The Company has concluded that the license granted to Medtronic is not distinct from the development and implementation services that will be provided to Medtronic through the completion of the development of HTN indication, as Medtronic cannot obtain the benefit of the license without the related development and implementation services. ASC 606-10-55-65 includes an exception for the recognition of revenue relating to licenses of intellectual property with sales-based or usage-based royalties. Under this exception, royalty revenue is not recorded until the subsequent sale or usage occurs, or the performance obligation has been satisfied, whichever is later.
The Company concluded that the exemption applies and therefore, the royalty revenue associated with these performance obligations will be recognized as the underlying sales occur. Additionally, pursuant to the Medtronic Agreement, expenses incurred by Medtronic in connection with clinical device development and regulatory activities performed will be reimbursed by the Company. The Company will record such expenses as research and development expenses as incurred. During the three and nine months ended September 30, 2025, the Company incurred approximately $
Concurrently with the close of the Medtronic Agreement, Orchestra BioMed, Inc. also received a $
On July 31, 2025, Orchestra BioMed, Inc., BackBeat and Medtronic entered into an amendment to the Medtronic Agreement, which became effective on August 4, 2025 (the “Medtronic Agreement Amendment”), to provide, among other things, a development and commercialization framework for future AVIM-therapy integration into a dual-chamber leadless pacemaker. Pursuant to the Medtronic Agreement Amendment, the Company will, among other things, be required to reimburse Medtronic for certain expenses incurred in connection with the integration of AVIM-therapy into Medtronic’s dual-chamber leadless pacemaker, up to a specified cap.
Concurrently with the close of the Medtronic Agreement Amendment on August 4, 2025, Medtronic, through an affiliate, Covidien Group S.à.r.l. (“Covidien”), purchased
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the “Medtronic Stock Purchase Agreement”). Pursuant to the terms of the Medtronic Stock Purchase Agreement, Covidien purchased an additional
Through September 30, 2025, there have been
5. Financial Instruments and Fair Value Measurements
The following tables summarize the Company’s financial assets and liabilities measured at fair value on a recurring basis by level within the fair value hierarchy:
| September 30, 2025 | |||||||||||
(in thousands) | Level 1 |
| Level 2 |
| Level 3 |
| Total | |||||
Assets |
|
|
|
|
|
|
|
| ||||
Money market fund (included in Cash and cash equivalents) | $ | | $ | — | $ | — | $ | | ||||
Corporate and government debt securities (included in Marketable securities) |
| — |
| |
| — |
| | ||||
Total assets | $ | | $ | | $ | — | $ | | ||||
| December 31, 2024 | |||||||||||
(in thousands) | Level 1 |
| Level 2 |
| Level 3 |
| Total | |||||
Assets |
|
|
|
|
|
|
|
| ||||
Money market fund (included in Cash and cash equivalents) | $ | | $ | — | $ | — | $ | | ||||
Corporate and government debt securities (included in Marketable securities) |
| — |
| |
| — |
| | ||||
Total assets | $ | | $ | | $ | — | $ | | ||||
The Level 2 assets consist of government and corporate debt securities which are valued using market observable inputs, including the current interest rate and other characteristics for similar types of investments, whose fair value may not represent actual transactions of identical securities. There were
6. Marketable Securities and Strategic Investments
Marketable Securities
The following is a summary of the Company’s marketable securities as of September 30, 2025 and December 31, 2024:
| September 30, 2025 | |||||||||||
Amortized |
| Unrealized |
| Unrealized |
| Fair | ||||||
(in thousands) | Cost Basis | Gains | Losses | Value | ||||||||
Corporate debt securities | $ | | $ | | $ | ( | $ | | ||||
Government debt securities |
| |
| — |
| — |
| | ||||
Total | $ | | $ | | $ | ( | $ | | ||||
| December 31, 2024 | |||||||||||
Amortized |
| Unrealized |
| Unrealized |
| Fair | ||||||
(in thousands) | Cost Basis | Gains | Losses | Value | ||||||||
Corporate debt securities | $ | | $ | | $ | ( | $ | | ||||
Government debt securities |
| |
| — |
| — |
| | ||||
Total | $ | | $ | | $ | ( | $ | | ||||
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The Company believes it is more likely than not that its marketable securities in an unrealized loss position will be held until maturity or the recovery of the cost basis of the investment. To date, the Company has not recorded any allowance for credit losses on its investment securities. The Company determined that the unrealized losses were not attributed to credit risk but were primarily driven by the broader change in interest rates. As of September 30, 2025, $
For the three and nine months ended September 30, 2025 and 2024, the Company did
Strategic Investments
The Company’s long-term strategic investments as of September 30, 2025 represent investments made in Vivasure in 2022, 2021 and 2020 that were originally recorded at cost. There were
7. Balance Sheet Components
Property and Equipment, Net
Property and equipment, net consists of the following:
| September 30, |
| December 31, | |||
(in thousands) | 2025 | 2024 | ||||
Equipment | $ | | $ | | ||
Office furniture |
| |
| | ||
Leasehold improvements |
| |
| | ||
Property and equipment, gross |
| |
| | ||
Less accumulated depreciation and amortization |
| ( |
| ( | ||
Total Property and equipment, net | $ | | $ | | ||
As of September 30, 2025, $
Accrued Expenses and Other Liabilities
Accrued expenses and other liabilities consist of the following:
| September 30, |
| December 31, | |||
(in thousands) | 2025 | 2024 | ||||
Clinical trial accruals |
| $ | |
| $ | |
Accrued compensation |
| |
| | ||
Other accrued expenses |
| |
| | ||
Total Accrued expenses and other liabilities | $ | | $ | | ||
8. Common and Preferred Stock
Common Stock
The Company is authorized to issue up to
Preferred Stock
The Company is authorized to issue
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board of directors of the Company (the “Board”) has the authority to issue preferred stock and to determine the rights, privileges, preferences, restrictions, and voting rights of those shares. As of September 30, 2025,
Equity Offerings
The Company completed an underwritten public offering and private placements in August 2025. Pursuant to the public offering, (i) on August 4, 2025, the Company sold (a)
At-the-Market Offering and Shelf Registration Statement
On May 15, 2024, the Company entered into an Open Market Sale AgreementSM (the “Prior Agreement”) with Jefferies LLC (“Jefferies”), pursuant to which the Company could offer and sell, from time to time through Jefferies, up to $
Also on May 15, 2024, the Company filed a shelf registration statement on Form S-3 with the SEC (the “Shelf Registration Statement”), which contains a base prospectus, covering up to a total aggregate offering price of $
On July 11, 2024, the Company sold
On August 12, 2024, the Company entered into a sales agreement (the “Sales Agreement”) with TD Securities (USA) LLC, as agent (“TD Cowen”), pursuant to which the Company may offer and sell, from time to time through TD Cowen, up to $
Termination of Prior Agreement
In connection with the entry into the Sales Agreement, on August 12, 2024, the Company terminated the Prior Agreement between the Company and Jefferies (the “Termination”), in accordance with its terms and with the mutual agreement of Jefferies. The purpose of the Termination was to eliminate restrictions under certain SEC rules relating to the publication or dissemination of new research reports on the Company’s business by Jefferies in light of its role as sales agent under the Prior Agreement. The Company had $
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9. Warrants
The Company evaluates its outstanding warrants to determine if the instruments qualify for equity or liability classification.
Ligand Warrants
In connection with the sale of the Royalty Interest pursuant to the Royalty Purchase Agreement (each as defined in Note 13 – “Royalty Purchase Agreement”), on August 4, 2025, the Company issued equity-classified warrants to Ligand Pharmaceuticals Incorporated (“Ligand”) (the “Ligand Warrants”) to purchase up to
Summarized Outstanding Warrants
The following table summarizes outstanding warrants to purchase shares of Company Common Stock as of September 30, 2025 and December 31, 2024:
| Number of Shares |
|
|
| ||||
September 30, | December 31, | Exercise | Expected | |||||
2025 |
| 2024 | Price | Term | ||||
Equity-classified Warrants | ||||||||
Pre-Funded Warrants(1) | | — | $ | N/A | ||||
Ligand Warrants (Note 13) | | — | $ | |||||
Orchestra BioMed, Inc. Warrants |
| |
| | $ |
| ||
Hercules Warrants (Note 14) | | | $ | |||||
Avenue Warrants | | | $ | |||||
Non-employee Warrants (Note 10) | | — | $ | |||||
Private Warrants Held by Sponsor(2) |
| |
| | $ |
| ||
Private Warrants Held by Employees |
| |
| | $ |
| ||
Total Outstanding |
| |
| | ||||
| (1) | In August 2025, the Company received $ |
| (2) | Sponsor is defined as HSAC2 Holdings, LLC |
10. Stock-Based Compensation
As of September 30, 2025, the only equity compensation plan from which the Company may issue new awards is the Company’s 2023 Equity Incentive Plan (the “2023 Plan”), as more fully described below.
Orchestra BioMed Holdings, Inc. 2023 Equity Incentive Plan
At the Closing, the Company adopted the 2023 Plan which permits the granting of incentive stock options, non-qualified options, stock appreciation rights, restricted stock, restricted stock units, performance awards and other stock-based award to employees, directors, and non-employee consultants and/or advisors. As of September 30, 2025, approximately
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Stock-based Compensation Expense
Total stock-based compensation related to option issuances was as follows:
| Three Months Ended September 30, |
| Nine Months Ended September 30, | |||||||||
(in thousands) | 2025 |
| 2024 | 2025 |
| 2024 | ||||||
Research and development | $ | | $ | | $ | | $ | | ||||
Selling, general and administrative |
| |
| |
| |
| | ||||
Total stock-based compensation | $ | | $ | | $ | | $ | | ||||
As of September 30, 2025, there was approximately $
Total stock-based compensation related to restricted stock awards and restricted stock units was as follows:
| Three Months Ended September 30, |
| Nine Months Ended September 30, | |||||||||
(in thousands) | 2025 |
| 2024 | 2025 |
| 2024 | ||||||
Research and development | $ | | $ | | $ | | $ | | ||||
Selling, general and administrative |
| |
| |
| |
| | ||||
Total stock-based compensation | $ | | $ | | $ | | $ | | ||||
As of September 30, 2025, there was approximately $
On February 28, 2025, the Company issued equity-classified warrants to purchase
Total stock-based compensation related to warrants was as follows:
| Three Months Ended September 30, |
| Nine Months Ended September 30, | |||||||||
(in thousands) | 2025 |
| 2024 | 2025 |
| 2024 | ||||||
Research and development | $ | | $ | | $ | | $ | | ||||
Selling, general and administrative |
| |
| |
| |
| | ||||
Total stock-based compensation | $ | | $ | | $ | | $ | | ||||
As of September 30, 2025, there was approximately $
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Stock Option Activity
The following table summarizes the stock option activity of the Company under the 2023 Plan:
|
| Weighted |
| Weighted |
| |||||
Shares | Average | Average | Aggregate | |||||||
Underlying | Exercise | Remaining | Intrinsic | |||||||
Options | Price | Term (years) | Value | |||||||
Outstanding at January 1, 2025 | |
| $ | |
| $ | | |||
Granted |
| |
| |
| — |
| — | ||
Exercised |
| ( |
| |
| — |
| | ||
Forfeited/canceled |
| ( |
| |
| — |
| — | ||
Outstanding September 30, 2025 |
| |
| $ | |
| $ | — | ||
Exercisable at September 30, 2025 |
| |
| $ | |
| $ | — | ||
The weighted average grant-date fair value of stock options granted during the nine months ended September 30, 2025 and 2024 was $
Restricted Equity Awards Activity
The following table summarizes the restricted stock awards and restricted stock units activity of the Company under the Plan:
Restricted Stock | Weighted Average | |||
Awards/Units | Grant Date Fair | |||
Outstanding | Value | |||
Outstanding at January 1, 2025 | | $ | | |
Granted | | | ||
Vested | ( | | ||
Outstanding September 30, 2025 | | $ | | |
Determination of Stock Option Awards Fair Value
The estimated grant-date fair value of all the Company’s option awards was calculated using the Black-Scholes option pricing model, based on the following weighted average assumptions:
| Nine Months Ended September 30, |
| |||||
2025 | 2024 |
| |||||
Expected term (in years) |
|
| |||||
Expected volatility |
| | % | | % | ||
Risk-free interest rate |
| | % | | % | ||
Expected dividend yield |
| % | % | ||||
Fair value of common stock | | ||||||
The fair value of each stock option grant was determined by the Company using the methods and assumptions discussed below. Each of these inputs is subjective and generally requires significant judgment and estimation by management.
Expected Term — The expected term represents the period that stock-based awards are expected to be outstanding. The Company’s historical share option exercise information is limited due to a lack of sufficient data points and did not provide a reasonable basis upon which to estimate an expected term. The expected term for option grants is therefore determined using the “simplified” method, as prescribed in the Securities and Exchange Commission’s Staff Accounting Bulletin (SAB) No. 107. The simplified method deems the expected term to be the midpoint between the vesting date and the contractual life of the stock-based awards.
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Expected Volatility — The Company consummated the Business Combination on January 26, 2023 and lacks sufficient company-specific historical and implied volatility information. Therefore, it derives expected stock volatility using a weighted average blend of historical volatility of comparable peer public companies and its own historical volatility, over a period equivalent to the expected term of the stock-based awards.
Risk-Free Interest Rate — The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the date of grant for zero-coupon U.S. Treasury notes with maturities approximately equal to the stock-based awards’ expected term.
Expected Dividend Yield — The expected dividend yield is zero as neither the Company nor Orchestra BioMed, Inc. has paid, and the Company does not anticipate paying, any dividends on the Company Common Stock in the foreseeable future.
Fair Value of Common Stock — Prior to the Business Combination, as Orchestra BioMed, Inc. Common Stock has not historically been publicly traded, its board of directors periodically estimated the fair value of its common stock considering, among other things, contemporaneous valuations of its common stock prepared by an unrelated third-party valuation firm in accordance with the guidance provided by the American Institute of Certified Public Accountants 2013 Practice Aid, Valuation of Privately-Held-Company Equity Securities Issued as Compensation. Subsequent to the Business Combination, the Company utilizes the price of its publicly-traded Company Common Stock to determine the grant date fair value of awards.
11. Leases
Office Lease
In August 2024, the Company entered into an additional addendum to the lease agreement for office space in New Hope, PA originally entered into by Orchestra BioMed, Inc. in December 2009 (as amended, the “New Hope Lease”). The New Hope Lease covers
In November 2019, Orchestra BioMed, Inc. entered into a new lease agreement for approximately
In September 2024, the Company entered into a new lease for
Operating cash flow supplemental information for the nine months ended September 30, 2025:
Cash paid for amounts included in the present value of operating lease liabilities was $
As of September 30, 2025: |
|
|
|
Weighted average remaining lease term – operating leases, in years |
| ||
Weighted average discount rate – operating leases |
| | % |
Operating Leases
Rent/lease expense for office and lab space was approximately $
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common area maintenance costs, insurance and taxes which are paid based upon actual costs incurred by the lessor. The table below shows the future minimum rental payments, exclusive of taxes, insurance, and other costs, under the leases as of September 30, 2025:
| Operating | ||
Leases | |||
Year ending December 31: | (in thousands) | ||
2025 (remaining three months) | $ | | |
2026 |
| | |
2027 |
| | |
2028 |
| | |
2029 |
| ||
Thereafter |
| ||
Total future minimum lease payments | $ | | |
Imputed interest |
| ( | |
Total liability | $ | | |
12. Related Party Transactions
As part of the Public Offering, on August 4, 2025, (i) entities associated with RTW Investments, LP (collectively, “RTW”), which beneficially owned approximately
13. Royalty Purchase Agreement
On July 31, 2025, the Company entered into a revenue participation right purchase and sale agreement (the “Royalty Purchase Agreement”) with Ligand. Under the terms of the Royalty Purchase Agreement, in exchange for payment of $
Pursuant to the Royalty Purchase Agreement, the Investment Amount shall be paid in
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The Royalty Interest in respect of Annual Net Sales of the Products will end on the date in which no Product is being developed or commercialized by or on behalf of the Company, any of its affiliates, or any of its or their licensees or distributors and Ligand has received the last Royalty Interest payment payable under the terms of the Royalty Purchase Agreement. The obligations arising under the Royalty Purchase Agreement are secured by security interests in, and pledges over, the Royalty Interest, the Revenue Participation Right (as defined in the Royalty Purchase Agreement) and the Company’s interests in the Products and associated intellectual property rights, subject to certain agreed security principles, permitted liens and other customary exceptions and qualifications, and the security interests in the Products and associated intellectual property rights of the Company are subordinate in right of payment to the prior payment in full of the outstanding indebtedness under the 2024 LSA (as defined below). The Royalty Purchase Agreement contains customary representations, warranties and indemnities of the Company and Ligand, and customary covenants on the part of the Company.
In connection with the sale of the Royalty Interest, and pursuant to the terms of the Royalty Purchase Agreement, on August 4, 2025, the Company issued to Ligand the Ligand Warrants to purchase up to
The Company accounted for its sale of royalty revenues to Ligand, pursuant to the Royalty Purchase Agreement, in accordance with ASC 470, Debt (“ASC 470”), which addresses situations in which an entity receives cash from an investor in return for an agreement to pay the investor a specified percentage of the revenue from a contractual right. The Company classified the proceeds received from the sale to Ligand as debt as the Company determined that it had significant continuing involvement in the generation of the cash flows to Ligand. Interest related to the Royalty Purchase Agreement will be recognized utilizing the effective interest method over the estimated term. When the Company receives the Second Installment, such Second Installment will also be recorded as a liability related to the sale of future royalties when they are received and amortized under the effective interest method over the estimated remaining term of the Royalty Purchase Agreement.
As of the Ligand Closing, the Company’s estimate of this total interest expense associated with the Royalty Interest resulted in an effective annual interest rate of approximately
The following table shows the activity of the Royalty Purchase Agreement since the transaction inception through the period indicated (in thousands):
September 30, | ||
2025 | ||
Upfront payment from the royalty purchase agreement | $ | |
Fair value of warrants | ( | |
Deferred financing costs | ( | |
Non-cash interest expense on liability | | |
Royalty purchase agreement | $ | |
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14. Debt Financing
2025 Medtronic Loan Agreement
On July 31, 2025, the Company and its wholly-owned subsidiaries, Orchestra BioMed, Inc. and BackBeat, entered into a Loan Agreement (the “Medtronic Loan Agreement”) with Medtronic, pursuant to which Medtronic agreed to extend a convertible loan to the Company in the aggregate original principal amount of $
The Medtronic Note will accrue simple interest at a rate of
The principal balance of the Medtronic Note, together with all accrued and unpaid interest thereon (collectively, the “Balance”) will automatically convert into a revenue share (the “Revenue Share Credit”), if FDA approval of a Medtronic device incorporating AVIM is achieved prior to the Repayment Date. Upon conversion of the then outstanding Balance the Company shall pay to Medtronic the Revenue Share Credit, which shall equal
The Medtronic Loan Agreement contains customary representations, warranties and affirmative and negative covenants. In addition, the Medtronic Loan Agreement contains customary events of default that entitle Medtronic to cause the Company’s indebtedness under the Note to become immediately due and payable, and to exercise remedies against the Company and the collateral securing the Loan. Upon the occurrence and for the duration of an event of default, an additional default interest rate equal to
The proceeds from the Medtronic Loan Agreement have not yet been received so they are not included in the principal payments table below nor included in the Condensed Consolidated Balance Sheets.
2024 Loan and Security Agreement
On November 6, 2024 (the “LSA Closing Date”), the Company and certain of its subsidiaries (together with the Company, the “Borrower”) entered into a Loan and Security Agreement, by and among the Borrower, the several banks and other financial institutions or entities party thereto, as lenders (collectively, the “Hercules Lenders”), and Hercules Capital, Inc. (“Hercules”), as administrative agent and collateral agent for itself and the Hercules Lenders, as amended by that certain First Amendment to Loan and Security Agreement dated as of December 30, 2024 and Second Amendment (as defined below) dated as of July 31, 2025 (as amended, the “2024 LSA”). Prior to July 31, 2025, the 2024 LSA provided a secured term loan facility of up to $
On July 31, 2025, the Borrower, the Hercules Lenders and Hercules entered into the Second Amendment to the 2024 LSA (the “Second Amendment”), which, among other things, amended the existing 2024 LSA to (i) delay the initial date upon which the Company has to begin amortizing term loans under the 2024 LSA from (a) December 1, 2026 (with amortization payments delayed to as late as December 1, 2027 if certain conditions were met) to (b) July 1, 2027 (with amortization payments delayed to as late as January 1, 2028 if certain conditions are met); (ii) increase by $
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lender’s investment committee and (iii) eliminate the Company’s ability to draw up to $
The Term Loans accrue interest at a floating per annum rate equal to the greater of (i) (x) the “” as reported in The Wall Street Journal plus (y)
In connection with the entry into the 2024 LSA, on the LSA Closing Date, the Company issued each of the Hercules Lenders a warrant to purchase Company Common Stock, which warrants were amended effective August 4, 2025 in connection with the Second Amendment (as amended, each a “Hercules Warrant” and, collectively, the “Hercules Warrants”). Pursuant to the terms of the Hercules Warrants, each Hercules Lender could purchase that number of shares of Company Common Stock equal to (i)(x)
The Amended 2024 LSA includes customary affirmative and negative covenants and representations and warranties, including a covenant against the occurrence of a “change in control,” financial reporting obligations, and certain limitations on indebtedness, liens, investments, distributions (including dividends), collateral, transfers, mergers or acquisitions, taxes, corporate changes, and bank accounts. The 2024 LSA also includes customary events of default, including payment defaults, breaches of covenants following any applicable cure period, the occurrence of certain events that could reasonably be expected to have a “material adverse effect” as set forth in the 2024 LSA, cross acceleration to third-party indebtedness and certain events relating to bankruptcy or insolvency. Upon the occurrence of an event of default, Hercules may declare all outstanding obligations immediately due and payable and take such other actions as set forth in the Amended 2024 LSA.
The Company must maintain Qualified Cash (as defined in the 2024 LSA), beginning on December 1, 2025, in an amount greater than or equal to (x) the outstanding principal amount of the Term Loan Advances, multiplied by (y) the applicable Cash Coverage Percentage (as defined in the Second Amendment), which percentage ranges from a minimum of
The following table shows the amount of principal payments due pursuant to the Term Loans by year:
| Principal | ||
Payments | |||
Year ending December 31: | (in thousands) | ||
2025 (remaining three months) | $ | ||
2026 |
| ||
2027 |
| | |
2028 |
| | |
Total | $ | | |
Total interest expense recorded on this facility during the three and nine months ended September 30, 2025 was approximately $
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15. Segment Disclosures
The Company has
The following table presents selected financial information, including significant expenses regularly reviewed by the CODM, about the Company’s single operating segment for the three and nine months ended September 30, 2025, and 2024:
| Three Months Ended September 30, |
| Nine Months Ended September 30, | |||||||||
2025 | 2024 | 2025 | 2024 | |||||||||
(in thousands) |
|
|
|
|
|
|
|
| ||||
Partnership revenue | $ | | $ | | $ | | $ | | ||||
Product revenue |
| |
| |
| |
| | ||||
Expenses: | ||||||||||||
Cost of product revenues |
| |
| |
| |
| | ||||
Non-clinical development costs |
| |
| |
| |
| | ||||
Clinical development costs |
| |
| |
| |
| | ||||
Personnel and consulting costs |
| |
| |
| |
| | ||||
Stock-based compensation |
| |
| |
| |
| | ||||
Depreciation expense |
| |
| |
| |
| | ||||
Other segment expenses(1) |
| |
| |
| |
| | ||||
Interest expense (income), net |
| |
| ( |
| |
| ( | ||||
Net Loss | $ | ( | $ | ( | $ | ( | $ | ( | ||||
| (1) | Other segment expenses primarily include general and administrative costs not presented in other line items. |
16. Net Loss Per Share
Basic net loss per share of Company Common Stock is computed by dividing net loss by the weighted-average number of shares of Company Common Stock which includes the weighted average effect of the Pre-Funded Warrants, for the purchase of shares of common stock, for which the remaining unfunded exercise price is $
In connection with the Business Combination, existing Orchestra BioMed, Inc. stockholders had the opportunity to elect to participate in an earnout (the “Earnout”) pursuant to which such each electing stockholder (each, an “Earnout Participant”) may receive a portion of additional contingent consideration of up to
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Milestone Event occurs; and (ii) an additional
Diluted net loss per share of Company Common Stock includes the effect, if any, from the potential exercise or conversion of securities, such as stock options, Orchestra BioMed, Inc. Warrants and Private Warrants, and Forfeitable Shares and Earnout Consideration, which would result in the issuance of incremental shares of Company Common Stock, unless their effect would be anti-dilutive.
The following outstanding potentially dilutive securities have been excluded from the calculation of diluted net loss per share for the three and nine months ended September 30, 2025 and September 30, 2024, as their effect is anti-dilutive:
|
| |||
Three and Nine Months Ended September 30, | ||||
2025 |
| 2024 | ||
Stock options |
| |
| |
Company common stock warrants |
| |
| |
Unvested restricted stock equity awards |
| |
| |
Forfeitable shares |
| |
| |
Earnout consideration |
| |
| |
Total |
| |
| |
17. Subsequent Events
Initiation of the Virtue Trial
On October 27, 2025, the Company announced the first patient enrollments in the Virtue SAB in the Treatment of Coronary ISR Trial (“Virtue Trial”), the Company’s U.S. IDE pivotal trial comparing its highly differentiated Virtue SAB to the AGENT paclitaxel-coated balloon, currently the only drug-coated balloon FDA-approved for a coronary indication. The initial procedures were successfully completed by the teams at The Christ Hospital Heart & Vascular Institute in Cincinnati, OH, and St. Francis Hospital & Heart Center in Roslyn, NY, marking the initiation of the Virtue Trial. Designed to support regulatory approval of Virtue SAB, the Virtue Trial is expected to enroll
Termination and Right of First Refusal Agreement
On October 24, 2025 (the “Effective Date”), Orchestra BioMed, Inc., entered into a termination and right of first refusal agreement (the “Termination and ROFR Agreement”) with Terumo, pursuant to which that certain Distribution Agreement by and between Orchestra and Terumo, dated June 13, 2019 (as subsequently amended, the “Terumo Agreement”), was terminated, and Orchestra BioMed, Inc. agreed to grant Terumo a right of first refusal (the “ROFR”) with respect to certain transactions involving Virtue SAB for the treatment of coronary artery disease globally in exchange for a fee of $
The ROFR has a term that began on the Effective Date and will end on the date that is
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make, use, sell, offer to sell or distribute a Competing Product (as defined in the Termination and ROFR Agreement) in the United States.
Notice of Third-Party Proposal
The ROFR provides that, in the event that during the ROFR Period, Orchestra BioMed, Inc. receives a written proposal (a “Third-Party Proposal”) reflecting the material terms of an agreement pursuant to which Orchestra BioMed, Inc. would grant to a third party either (i) an outright or staged acquisition rights to Virtue SAB or its components or (ii) a license of or the right to distribute Virtue SAB, in each case, in the treatment of coronary artery diseases (a “Virtue Transaction”), Orchestra BioMed, Inc. will promptly deliver notice of each such Third-Party Proposal together with a copy of the applicable Third-Party Proposal to Terumo (a “Third Party Proposal Notice”).
Exercise of ROFR
Pursuant to the Termination and ROFR Agreement, Terumo will have
If Terumo fails to deliver a ROFR Notice to Orchestra BioMed, Inc. prior to the expiration of the ROFR Determination Period, Terumo shall be deemed to have waived the ROFR with respect to the applicable Third-Party Proposal. If Terumo is deemed to have waived a Terumo ROFR pursuant to the preceding sentence, or if Terumo delivers a ROFR Notice within the applicable ROFR Determination Period, but the parties fail to enter into a definitive agreement regarding a Virtue Transaction prior to expiration of the Terumo ROFR Negotiation Period, then, in either case, effective upon such expiration, (i) the ROFR shall terminate, and be of no further force or effect, with respect to the applicable Third-Party Proposal Notice and (ii) Orchestra BioMed, Inc. shall be free to terminate negotiations with Terumo and to enter into a Virtue Transaction with the applicable third party; provided that Orchestra BioMed, Inc. shall not enter into a definitive agreement with the applicable third party on terms and conditions that are materially different than the applicable Third Party Proposal without first providing Terumo with a renewed Third Party Proposal Notice and ROFR Determination Period; provided, further, that, if Orchestra BioMed, Inc. does not consummate a transaction with respect to such Third Party Proposal within
Sale Transaction
In the event that Orchestra BioMed, Inc. receives a written proposal reflecting the material terms of an agreement for a Sale Transaction (as defined in the Termination and ROFR Agreement) of Orchestra BioMed, Inc. (such transaction an “Orchestra Sale”), or if Orchestra BioMed, Inc.’s board of directors approves a formal transaction process for a Orchestra BioMed, Inc. Sale (a “Sale Process”), Orchestra BioMed, Inc. will promptly give Terumo written notice (an “Orchestra Sale Notice”). During the period of
Term
The Termination and ROFR Agreement will remain in effect for (a) the ROFR Period or (b) the end of any Terumo ROFR Negotiation Period and expiration of the parties rights and obligations under Section 3.2 of the Termination and ROFR Agreement with respect to the exercise of the ROFR, whichever comes later; provided that the Termination and ROFR Agreement will automatically terminate in the event that Orchestra BioMed, Inc. has not disclosed primary endpoint
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data from a U.S. clinical trial pursuant to its IDE for coronary ISR to Terumo or the public prior to the tenth anniversary of the Effective Date.
Terumo Stock Purchase Agreement
On October 24, 2025, concurrent with the execution of the Termination and ROFR Agreement, the Company and TMC entered into a stock purchase agreement (the “Terumo Stock Purchase Agreement”), pursuant to which TMC agreed to purchase
Series A Preferred Stock
On November 6, 2025, the Company filed a Certificate of Designation of Series A Convertible Preferred Stock (the “Certificate of Designation”) with the Secretary of State of the State of Delaware. The Certificate of Designation sets forth the rights, preferences, powers, restrictions, and limitations of the Series A Preferred Stock. Below is a summary of certain of the provisions of the Certificate of Designation.
Rank; Liquidation
With respect to distribution of assets upon liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, a holder of Series A Preferred Stock (a “Holder” or, collectively, “Holders”) will be entitled to be paid out of the assets of the Company available for distribution to its stockholders before any payment is made to the holders of Company Common Stock (or any other class of securities junior to the Series A Preferred Stock) in an amount equal to the liquidation value of the Shares held by such Holder. The liquidation value of the Series A Preferred Stock will equal the Purchase Price of $
Conversion
Under the terms of the Certificate of Designation, a Holder may convert its Shares into Company Common Stock on or after the earlier of (i) the date that both (a) the Company has publicly disclosed primary endpoint data from its U.S. IDE study for ISR and (b) the trading price of the Company Common Stock has been above $
Redemption at the Option of Holders upon a Change of Control
Upon the occurrence of a Change of Control, subject to limited exceptions, each Holder of Shares shall have the right to require the Company to redeem all or any part of such Holder’s Shares at a redemption price in cash equal to the aggregate Liquidation Value of such Shares.
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No Voting Rights
Except as otherwise required by the Delaware General Corporation Law, the Holders shall have
Participating Dividends
If the Company declares or pays a dividend or distribution on all shares of the Company Common Stock, whether such dividend or distribution is payable in cash, securities, or other property but excluding any dividend or distribution payable on the Company Common Stock in shares of Company Common Stock, the Company shall simultaneously declare and pay a dividend on the Series A Preferred Stock on a pro rata basis with the Company Common Stock determined on an as-converted basis assuming all Shares had been converted as of immediately prior to the record date of the applicable dividend (or if no record date is fixed, the date as of which the record holders of Company Common Stock entitled to such dividends are to be determined).
Lockup Agreement
On October 24, 2025, concurrent with the execution of the Termination and ROFR Agreement, the Company and Terumo entered into a Lockup Agreement (the “Lockup Agreement”), pursuant to which Terumo agreed, subject to limited exceptions, that it and its affiliates will not Transfer (as such term is defined in the Lockup Agreement) or enter into any swap, hedging or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any shares of Company Common Stock held by Terumo until October 24, 2026; provided that the Lockup Agreement only applies to Company Common Stock held by Terumo and its affiliates as of the date of the Lockup Agreement.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Unless otherwise indicated or the context otherwise requires, references to “Orchestra,” “Orchestra’s,” “the Company,” “we,” “its” and “our” refer to Orchestra BioMed Holdings, Inc. and its consolidated subsidiaries. All references to years, unless otherwise noted, refer to the Company’s fiscal years, which end on December 31.
The following discussion should be read together with “Special Note Regarding Forward-Looking Statements” and the Company’s unaudited condensed consolidated financial statements, together with the related notes thereto, included elsewhere in this Quarterly Report on Form 10-Q (the “Consolidated Financial Statements”), and the Company’s audited consolidated financial statements, together with the related notes thereto, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on March 31, 2025.
Closing of Business Combination
Prior to January 26, 2023, we were a special purpose acquisition company formed for the purpose of entering into a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities. On January 26, 2023, we consummated the business combination contemplated by the Agreement and Plan of Merger, dated as of July 4, 2022 (as amended by Amendment No. 1 to Agreement and Plan of Merger, dated July 21, 2022, and Amendment No. 2 to Agreement and Plan of Merger, dated November 21, 2022, the “Merger Agreement”) by and among Health Sciences Acquisitions Corporation 2, a special purpose acquisition company incorporated as a Cayman Islands exempted company in 2020 and Orchestra’s predecessor (“HSAC2”), HSAC Olympus Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of HSAC2 (“Merger Sub”), and Orchestra BioMed, Inc. Pursuant to the Merger Agreement, (i) HSAC2 deregistered in the Cayman Islands in accordance with the Companies Act (2022 Revision) (As Revised) of the Cayman Islands and domesticated as a Delaware corporation in accordance with Section 388 of the Delaware General Corporation Law (the “Domestication”) and (ii) Merger Sub merged with and into Orchestra BioMed, Inc., with Orchestra BioMed, Inc. as the surviving company in the merger and, after giving effect to such merger, continuing as a wholly owned subsidiary of Orchestra (the “Merger” and, together with the Domestication and the other transactions contemplated by the Merger Agreement, the “Business Combination”). As part of the Domestication, we changed our name from “Health Sciences Acquisitions Corporation 2” to “Orchestra BioMed Holdings, Inc.” On January 27, 2023, our common stock (“Company Common Stock”) began trading on the Nasdaq Global Market under the symbol “OBIO.”
Overview
We are a biomedical innovation company accelerating high-impact technologies to patients through risk-reward sharing partnerships with leading medical device companies. Our partnership-enabled business model focuses on forging strategic collaborations with leading medical device companies to drive successful global commercialization of products we develop. We are led by a highly accomplished, multidisciplinary management team and a board of directors (our “Board”) with extensive experience in all phases of therapeutic device development. Our business was formed in 2018 by assembling a pipeline of multiple late-stage clinical product candidates originally developed by our founding team.
Our flagship product candidates are Atrioventricular Interval Modulation Therapy (“AVIM Therapy”) for the treatment of hypertension (“HTN”), the leading risk factor for death worldwide, and Virtue® Sirolimus AngioInfusion™ Balloon (“Virtue SAB”) for the treatment of atherosclerotic artery disease, the leading cause of mortality worldwide. We have an exclusive license and collaboration agreement with Medtronic Inc. (an affiliate of Medtronic plc) (“Medtronic”) for the development and commercialization of AVIM Therapy for the treatment of uncontrolled HTN in patients indicated for a cardiac pacemaker (as amended, the “Medtronic Agreement”). We are actively conducting a double-blind, randomized, global pivotal study (the “BACKBEAT study”), enrolling up to 500 patients with uncontrolled hypertension who are indicated for a Medtronic dual-chamber pacemaker. We currently estimate completion of enrollment of the BACKBEAT study in mid-2026. We recently initiated patient enrollments in the Virtue SAB in the Treatment of Coronary In-Stent Restenosis (“ISR”) Trial (the “Virtue Trial”) for our U.S. investigational device exemption (“IDE”) pivotal study randomizing Virtue SAB vs. Boston Scientific Corporation’s AGENT™ drug coated balloon. Designed to support regulatory approval of Virtue SAB, the Virtue Trial is expected to enroll 740 patients in the United States with enrollment
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completion currently planned for mid-2027. We cannot provide assurance that we will be able to complete enrollment of the BACKBEAT study or the Virtue Trial in the timeframes we anticipate.
Since Orchestra BioMed, Inc.’s inception, we have devoted the substantial majority of our resources to performing research and development and clinical activities in support of our product development and collaboration efforts. We have funded our operations primarily through the issuance of common stock, convertible preferred stock, and warrants, as well as proceeds from the Business Combination, our distribution agreement with Terumo (the “Terumo Agreement”), borrowings under debt arrangements, the sale of future revenues, and, to a lesser extent, from product revenue from our subsidiary, FreeHold Surgical, LLC. (“FreeHold”). As of September 30, 2025, we have raised a cumulative $334.9 million in gross proceeds. On November 7, 2025, we received $30.0 million pursuant to the Termination and Right of First Refusal Agreement and Terumo Stock Purchase Agreement. Future committed cash receipts expected in April 2026 include $20.0 million from the Medtronic Loan Agreement, and an additional $15.0 million from Ligand pursuant to the Royalty Purchase Agreement. We have incurred net losses each year since inception. Our net losses were $58.9 million and $44.9 million for the nine months ended September 30, 2025 and 2024, respectively. We expect to continue to incur significant losses for the foreseeable future. As of September 30, 2025, we had an accumulated deficit of $368.8 million.
Orchestra BioMed, Inc., our wholly owned subsidiary, was incorporated in Delaware in 2017 and completed a recapitalization and mergers with Caliber Therapeutics, Inc., a Delaware corporation that has, among other things, the rights to the Virtue SAB product candidate and BackBeat Medical, Inc., a Delaware Corporation that has, among other things, the rights to the AVIM Therapy product candidate, in 2018. Orchestra BioMed, Inc. completed the conversions of Caliber Therapeutics, Inc. to Caliber Therapeutics, LLC, a Delaware limited liability company, and BackBeat Medical, Inc. to BackBeat Medical, LLC, a Delaware limited liability company, in 2019.
Recent Developments
Initiation of the Virtue Trial
On October 27, 2025, we announced the first patient enrollments in the Virtue SAB in the Treatment of Coronary ISR Trial (“Virtue Trial”), our U.S. IDE pivotal trial comparing its highly differentiated Virtue SAB to the AGENT paclitaxel-coated balloon, currently the only drug-coated balloon FDA-approved for a coronary indication. The initial cases were successfully completed by the teams at The Christ Hospital Heart & Vascular Institute in Cincinnati, OH, and St. Francis Hospital & Heart Center in Roslyn, NY, marking the initiation of the Virtue Trial. Designed to support regulatory approval of Virtue SAB, the Virtue Trial is expected to enroll 740 patients at up to 75 centers in the United States with enrollment completion currently planned for mid-2027.
Termination and Right of First Refusal Agreement
On October 24, 2025 (the “Effective Date”), Orchestra BioMed, Inc. entered into a termination and right of first refusal agreement (the “Termination and ROFR Agreement”) with Terumo Corporation (“Terumo Corporation”) and Terumo Medical Corporation (“TMC” and, collectively with Terumo Corporation, “Terumo”), pursuant to which the Terumo Agreement was terminated, and Orchestra BioMed, Inc. agreed to grant Terumo a right of first refusal (the “ROFR”) with respect to certain transactions involving Virtue SAB for the treatment of coronary artery disease globally in exchange for a fee of $10.0 million, which is to be paid no later than 10 business days after the Effective Date. The ROFR does not apply to other vascular indications, such as below-the-knee peripheral artery disease, which were covered by the Terumo Agreement prior to its termination. Accordingly, all rights to these indications are fully retained by us. Pursuant to the terms of the Termination and ROFR Agreement, Orchestra BioMed, Inc. has no further performance obligations under the Terumo Agreement.
The ROFR has a term that began on the Effective Date and will end on the date that is 90 days after Orchestra BioMed, Inc. discloses primary endpoint data from the Virtue Trial to Terumo or the public, whichever occurs first (the “ROFR Period”); provided, however, that the ROFR Period will immediately expire if Terumo completes the acquisition from a third party of the exclusive right to make, use, sell, offer to sell or distribute a Competing Product (as defined in the Termination and ROFR Agreement) in the United States.
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Notice of Third-Party Proposal
The ROFR provides that, in the event that during the ROFR Period, Orchestra BioMed, Inc. receives a written proposal (a “Third-Party Proposal”) reflecting the material terms of an agreement pursuant to which Orchestra BioMed, Inc. would grant to a third party either (i) an outright or staged acquisition rights to Virtue SAB or its components or (ii) a license of or the right to distribute Virtue SAB, in each case, in the treatment of coronary artery diseases (a “Virtue Transaction”), Orchestra BioMed, Inc. will promptly deliver notice of each such Third-Party Proposal together with a copy of the applicable Third-Party Proposal to Terumo (a “Third Party Proposal Notice”).
Exercise of ROFR
Pursuant to the Termination and ROFR Agreement, Terumo will have 30 days after delivery of the Third-Party Proposal Notice (the “ROFR Determination Period”) to exercise the ROFR by providing written notice to Orchestra BioMed, Inc. (the “ROFR Notice”). In the event that Terumo exercises the ROFR during the ROFR Determination Period, we and Terumo will negotiate in good faith and on an exclusive basis during the period beginning on the date of delivery of the ROFR Notice and ending 90 days thereafter (the “Terumo ROFR Negotiation Period”) to enter into a Virtue Transaction on substantially the same terms set forth in the applicable Third-Party Proposal.
If Terumo fails to deliver a ROFR Notice to Orchestra BioMed, Inc. prior to the expiration of the ROFR Determination Period, Terumo shall be deemed to have waived the ROFR with respect to the applicable Third-Party Proposal. If Terumo is deemed to have waived a Terumo ROFR pursuant to the preceding sentence, or if Terumo delivers a ROFR Notice within the applicable ROFR Determination Period, but the parties fail to enter into a definitive agreement regarding a Virtue Transaction prior to expiration of the Terumo ROFR Negotiation Period, then, in either case, effective upon such expiration, (i) the ROFR shall terminate, and be of no further force or effect, with respect to the applicable Third-Party Proposal Notice and (ii) Orchestra BioMed, Inc. shall be free to terminate negotiations with Terumo and to enter into a Virtue Transaction with the applicable third party; provided that Orchestra BioMed, Inc. shall not enter into a definitive agreement with the applicable third party on terms and conditions that are materially different than the applicable Third Party Proposal without first providing Terumo with a renewed Third Party Proposal Notice and ROFR Determination Period; provided, further, that, if Orchestra BioMed, Inc. does not consummate a transaction with respect to such Third Party Proposal within 90 days after termination of the ROFR, Terumo will retain its ROFR during the remaining portion of the ROFR Period.
Sale Transaction
In the event that Orchestra BioMed, Inc. receives a written proposal reflecting the material terms of an agreement for a Sale Transaction (as defined in the Termination and ROFR Agreement) of Orchestra BioMed, Inc. (such transaction an “Orchestra Sale”), or if Orchestra BioMed, Inc.’s board of directors approves a formal transaction process for a Orchestra BioMed, Inc. Sale (a “Sale Process”), Orchestra BioMed, Inc. will promptly give Terumo written notice (an “Orchestra Sale Notice”). During the period of 30 days that begins with the delivery of the Orchestra Sale Notice (the “Orchestra Sale Notice Period”), Orchestra BioMed, Inc. will not enter into a binding agreement or other arrangement for an Orchestra Sale with any third party. During the Orchestra Sale Notice Period, Terumo shall be given the opportunity to make an offer with respect to a Virtue Transaction, and Orchestra BioMed, Inc. will consider in good faith any such offer made. In addition, Orchestra BioMed, Inc. shall give Terumo the opportunity to participate in any Sale Process and shall consider any offer by Terumo in connection therewith in good faith.
Term
The Termination and ROFR Agreement will remain in effect for (a) the ROFR Period or (b) the end of any Terumo ROFR Negotiation Period and expiration of the parties rights and obligations under Section 3.2 of the Termination and ROFR Agreement with respect to the exercise of the ROFR, whichever comes later; provided that the Termination and ROFR Agreement will automatically terminate in the event that Orchestra BioMed, Inc. has not disclosed primary endpoint data from a U.S. clinical trial pursuant to its IDE for coronary ISR to Terumo or the public prior to the tenth anniversary of the Effective Date.
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Terumo Stock Purchase Agreement
On October 24, 2025, concurrent with the execution of the Termination and ROFR Agreement, we entered into a stock purchase agreement with TMC (the “Terumo Stock Purchase Agreement”), pursuant to which TMC agreed to purchase 200,000 shares (the “Shares”) of our Series A Convertible Preferred Stock, par value $0.0001 per share (“Series A Preferred Stock”) at a purchase price equal to $100.00 per Share (the “Purchase Price”) for gross proceeds to us of $20.0 million. The closing of the sale of the Shares pursuant to the Terumo Stock Purchase Agreement occurred on November 7, 2025.
Series A Preferred Stock
On November 6, 2025, we filed a Certificate of Designation of Series A Convertible Preferred Stock (the “Certificate of Designation”) with the Secretary of State of the State of Delaware. The Certificate of Designation sets forth the rights, preferences, powers, restrictions, and limitations of the Series A Preferred Stock. Below is a summary of certain of the provisions of the Certificate of Designation.
Rank; Liquidation
With respect to distribution of assets upon liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, a holder of Series A Preferred Stock (a “Holder” or, collectively, “Holders”) will be entitled to be paid out of the assets of the Company available for distribution to its stockholders before any payment is made to the holders of Company Common Stock (or any other class of securities junior to the Series A Preferred Stock) in an amount equal to the liquidation value of the Shares held by such Holder. The liquidation value of the Series A Preferred Stock will equal the Purchase Price of $100.00 per Share (the “Liquidation Value”) and will be subject to adjustment for stock splits and the like in accordance with the terms of the Certificate of Designation.
Conversion
Under the terms of the Certificate of Designation, a Holder may convert its Shares into Company Common Stock on or after the earlier of (i) the date that both (a) we have publicly disclosed primary endpoint data from its U.S. IDE study for ISR and (b) the trading price of the Company Common Stock has been above $15.00 per share on any trading day subsequent to such public disclosure or (ii) the consummation of a Change of Control (as defined in the Certificate of Designation). A Holder may convert all or any portion of the outstanding whole Shares held by such Holder into an aggregate number of shares of Company Common Stock as is determined by (i) multiplying the number of Shares to be converted by the Liquidation Value thereof, and then (ii) dividing the result by the Conversion Price (as defined below) in effect immediately prior to such conversion, with cash being paid in lieu of fractional shares The “Conversion Price” for the Series A Preferred Stock will be the greater of (i) $12.00 per share and (ii) a 20% discount to the closing price of the Company Common Stock on the Nasdaq Global Market on the date of conversion. Assuming no adjustments to the Conversion Price or the Liquidation Value as a result of stock splits or similar transactions, the 200,000 Shares to be issued would convert into a maximum of 1,666,666 shares of Company Common Stock.
Redemption at the Option of Holders upon a Change of Control
Upon the occurrence of a Change of Control, subject to limited exceptions, each Holder of Shares shall have the right to require the Company to redeem all or any part of such Holder’s Shares at a redemption price in cash equal to the aggregate Liquidation Value of such Shares.
No Voting Rights
Except as otherwise required by the Delaware General Corporation Law, the Holders shall have no voting rights.
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Participating Dividends
If we declare or pay a dividend or distribution on all shares of the Company Common Stock, whether such dividend or distribution is payable in cash, securities, or other property but excluding any dividend or distribution payable on the Company Common Stock in shares of Company Common Stock, we shall simultaneously declare and pay a dividend on the Series A Preferred Stock on a pro rata basis with the Company Common Stock determined on an as-converted basis assuming all Shares had been converted as of immediately prior to the record date of the applicable dividend (or if no record date is fixed, the date as of which the record holders of Company Common Stock entitled to such dividends are to be determined).
Lockup Agreement
On October 24, 2025, concurrent with the execution of the Termination and ROFR Agreement, we and Terumo entered into a Lockup Agreement (the “Lockup Agreement”), pursuant to which Terumo agreed, subject to limited exceptions, that it and its affiliates will not Transfer (as such term is defined in the Lockup Agreement) or enter into any swap, hedging or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any shares of Company Common Stock held by Terumo until October 24, 2026; provided that the Lockup Agreement only applies to Company Common Stock held by Terumo and its affiliates as of the date of the Lockup Agreement.
Registration Statement
Due to the significant number of redemptions of HSAC2’s ordinary shares in connection with the Business Combination, there was a significantly lower number of HSAC2 ordinary shares that converted into shares of Company Common Stock in connection with the Business Combination. Pursuant to the Amended and Restated Registration Rights Agreement we entered into in connection with the closing of the Business Combination and certain warrant agreements, we filed a registration statement (the “Resale Registration Statement”), which was declared effective on May 9, 2024, that registers, among other things, the resale of an aggregate of 18,586,201 shares of Company Common Stock, which constitutes approximately 33% of the outstanding Company Common Stock as of November 6, 2025. Additionally, some of the shares of the Company Common Stock being registered for resale were originally purchased by selling stockholders pursuant to investments in Orchestra BioMed, Inc. or HSAC2 at prices considerably below the current market price of the Company Common Stock. These selling stockholders may realize a positive rate of return on the sale of their shares of Company Common Stock covered by the Resale Registration Statement and therefore will have an incentive to sell their shares. Public shareholders may not experience a similar rate of return on shares of Company Common Stock they purchased. This discrepancy in purchase prices may have an impact on the market perception of the Company Common Stock’s value and could increase the volatility of the market price of the Company Common Stock or result in a significant decline in the public trading price of the Company Common Stock. The registration of these shares of Company Common Stock for resale creates the possibility of a significant increase in the supply of the Company Common Stock in the market. The increased supply, coupled with the potential disparity in purchase prices, may lead to heightened selling pressure, which could negatively affect the public trading price of the Company Common Stock.
Components of Our Results of Operations
Partnership Revenue
To date, our partnership revenues have related to the Terumo Agreement described below. In future periods, partnership revenues may also include revenues related to the Exclusive License and Collaboration Agreement, dated as of June 30, 2022, by and among, Orchestra BioMed, Inc., BackBeat Medical, LLC and Medtronic, Inc. (an affiliate of Medtronic plc) (the “Medtronic Agreement”), discussed in Note 4 to the Consolidated Financial Statements.
Orchestra BioMed, Inc. entered into the Terumo Agreement in June 2019, and has determined that the arrangement represents a contract with a customer and is therefore in scope of ASC 606, Revenues from Contracts with Customers (“ASC 606”). Under the Terumo Agreement, Orchestra BioMed, Inc. received an upfront payment of $30.0 million in
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2019 and an equity commitment of up to $5 million of which $2.5 million was invested in June 2019 as part of Orchestra BioMed, Inc. Series B-1 financing and $2.5 million was invested in June 2022 as part of Orchestra BioMed, Inc. Series D-2 financing.
Under the Terumo Agreement, we were initially eligible for certain milestone payments in the amount of $65.0 million from Terumo upon completion of certain minimum enrollments in clinical studies, making certain filings and submissions, and obtaining certain regulatory approvals and certifications, and are also eligible to earn royalties on future sales by Terumo based on royalty rates ranging from 10 - 15%. Of these milestone payments, $35.0 million relate to achieving certain milestones by specified target achievement dates. As of September 30, 2025, the target achievement dates for all time-based milestone payments had passed, in each case, without achieving the related milestones.
As previously disclosed, we entered into a mediation procedure with Terumo pursuant to the Terumo Agreement and the International Mediation Rules of the International Centre for Dispute Resolution. As a result of this mediation procedure, we and Terumo entered into the Termination and ROFR Agreement on October 24, 2025, pursuant to which, among other things, the Terumo Agreement was terminated. See “Recent Developments—Termination and Right of First Refusal Agreement” above in this Item 2. Accordingly, we will not earn any milestone payments under the Terumo Agreement.
We recorded the $30.0 million upfront payment received in 2019 from Terumo within deferred revenue and are recognizing the upfront payment over time based on a proportional performance model based on the costs incurred to date relative to the total costs expected to be incurred through the completion of the development of the Coronary ISR indication, for which we are primarily responsible. We have recognized $16.7 million in cumulative partnership revenues from 2019 through September 30, 2025. There were no other proceeds received pursuant to the Terumo Agreement from 2019 through September 30, 2025.
In June 2022, Orchestra BioMed, Inc. entered into the Medtronic Agreement for the development and commercialization of AVIM Therapy for the treatment of pacemaker-indicated patients with uncontrolled HTN despite the use of anti-hypertensive medications. On July 31, 2025, Orchestra BioMed, Inc., our wholly owned subsidiary BackBeat Medical, LLC, and Medtronic entered into an amendment the Medtronic Agreement, which became effective on August 4, 2025 (the “Medtronic Agreement Amendment”), to provide, among other things, a development and commercialization framework for future AVIM-therapy integration into a dual-chamber leadless pacemaker. Pursuant to the Medtronic Agreement Amendment, we will be required, among other things, to reimburse Medtronic for certain expenses incurred in connection with the integration of AVIM-therapy into Medtronic’s dual-chamber leadless pacemaker, up to a specified cap.
We have determined that the arrangement is a collaboration within the scope of ASC 808, Collaborative Arrangements (“ASC 808”). In addition, we concluded that Medtronic, Inc., an affiliate of Medtronic plc (“Medtronic”), is a customer for a good or service that is a distinct unit of account, and therefore, the transactions in the Medtronic Agreement, as amended pursuant to the Medtronic Agreement Amendment (the “Amended Medtronic Agreement”), should be accounted for under ASC 606. Through September 30, 2025, there have been no amounts recognized as revenue under the Amended Medtronic Agreement.
Product Revenue
Product revenues related to sales of FreeHold’s intracorporeal organ retractors and such revenues are recognized at a point-in-time upon the shipment of the product to the customer given payment terms are typically 30 days. FreeHold products are currently only sold in the United States.
Cost of Product Revenue and Gross Margin
Cost of product revenue consists primarily of costs of finished goods components for use in FreeHold’s products and assembled, warehoused and inventoried by a third-party vendor. We expect the cost of finished goods product revenue to increase in absolute terms as our revenue grows.
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Our gross margin has been, and will continue to be, affected by a variety of factors, including finished goods manufactured component parts, as well as the cost to assemble and warehouse the FreeHold product finished goods inventory.
Research and Development Expenses
Research and development expenses consist of applicable personnel, consulting, materials and clinical study expenses. Research and development expenses include:
| ● | Certain personnel-related expenses, including salaries, benefits, bonus, travel and stock-based compensation; |
| ● | Cost of clinical studies to support new products and product enhancements, including expenses for clinical research organizations and site payments; |
| ● | Product device materials and drug supply, and manufacturing used for internal research and development, and clinical activities; |
| ● | Allocated overhead including facilities and information technology expenses; and |
| ● | Cost of outside consultants who assist with device and drug development, regulatory affairs, clinical affairs and quality assurance. |
Research and development costs are expensed as incurred. 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 and duration of later-stage clinical studies. In the future, we expect research and development expenses to increase in absolute dollars as we continue to develop new products, enhance existing products and technologies, initiate clinical studies, manufacture drug supply for internal research and development and clinical trial supply and perform activities related to obtaining additional regulatory approvals. We do not track expenses by product candidate, unless tracking such expenses is required pursuant to the revenue recognition model for a collaborative arrangement.
Selling, General and Administrative Expenses
Selling, general and administrative expenses consist of personnel-related expenses, including salaries, benefits, bonus, travel and stock-based compensation. Other selling, general and administrative expenses include professional services fees, including legal, audit, investor/public relations, and insurance costs, outside consultants costs, employee recruiting and training costs, and non-income taxes. Moreover, we incur and expect to continue to incur additional expenses associated with operating as a public company, including legal, accounting, insurance, exchange listing and U.S. Securities and Exchange Commission (“SEC”) compliance, and investor relations expenses. We expect quarterly selling, general and administrative expenses to continue to increase as we conduct additional clinical trials and expand our operations as a public company.
Interest (Expense) Income, Net
Interest (expense) income, net reflects the income generated from marketable securities during the year. Interest expense is attributable to loan interest and interest related to the Royalty Purchase Agreement.
On July 31, 2025, we entered into a revenue participation right purchase and sale agreement (the “Royalty Purchase Agreement”) with Ligand Pharmaceuticals Incorporated (“Ligand”). Under the terms of the Royalty Purchase Agreement, in exchange for payment of $35.0 million (the “Investment Amount”), less certain reimbursable expenses, Ligand acquired the right to receive tiered royalty payments from us (the “Royalty Interest”) with respect to revenue (including certain licensing revenue) received by us in a calendar year in connection with worldwide net product sales, or other product revenue received by, by us and our licensees (“Annual Net Sales”) of (a) AVIM Therapy (the “Primary Product”) and (b)
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Virtue SAB (the “Secondary Product” and together with the Primary Product, the “Products”) in the field of coronary artery treatment. At execution of the Royalty Purchase Agreement, our estimate of this total interest expense resulted in an effective annual interest rate of approximately 22.5%. This estimate contains significant assumptions that impact both the amount recorded at execution and the interest expense that will be recognized over the royalty period. We will periodically assess the estimated amounts due and payable to Ligand and to the extent the amount or timing of such payments is materially different than the original estimates, an adjustment will be recorded prospectively to increase or decrease interest expense. There are a number of factors that could materially affect the amount and timing of the royalty payments to be paid by us to Ligand and, correspondingly, the amount of interest expense recorded by us.
On November 6, 2024 (the “LSA Closing Date”), we and certain of our subsidiaries (together, the “Borrower”) entered into a Loan and Security Agreement, by and among the Borrower, the several banks and other financial institutions or entities party thereto, as lenders (collectively, the “Hercules Lenders”), and Hercules Capital, Inc. (“Hercules”), as administrative agent and collateral agent for itself and the Hercules Lenders, as amended by that certain First Amendment to Loan and Security Agreement dated as of December 30, 2024 ( “2024 LSA”). Prior to July 31, 2025, the 2024 LSA provided a secured term loan facility of up to $50.0 million available in up to four tranches (collectively, the “Term Loans”), with the first tranche of $15.0 million drawn on the LSA Closing Date, and a second and third tranche of up to an aggregate of $15.0 million were available upon achievement of certain performance and financing milestones. Additionally, we had access to a fourth tranche of $20.0 million subject to future approval. On July 31, 2025, the Borrower, the Hercules Lenders and Hercules entered into the Second Amendment to the 2024 LSA, which, amended the existing 2024 LSA to, among other things, (i) delay the initial date upon which we must begin amortizing term loans under the 2024 LSA from (a) December 1, 2026 (with amortization payments delayed to as late December 1, 2027 if certain conditions were met) to (b) July 1, 2027 (with amortization payments delayed to as late as January 1, 2028 if certain conditions are met); (ii) increase by $15.0 million (from $20.0 million to $35.0 million) the amount that that may be borrowed by us in the discretion of the lender’s investment committee’s and (iii) eliminate our ability to draw up to $15.0 million if certain milestones are achieved. The Term Loan has a maturity date of November 6, 2028 and accrues interest at a floating per annum rate equal to the greater of (i) (x) the “prime rate” as reported in The Wall Street Journal plus (y) 2.0%, and (ii) 9.50%. Refer to Note 14 – “Debt Financing” to our Consolidated Financial Statements.
Loss on Fair Value of Strategic Investments
The loss on fair value of strategic investments represents a change in the preferred shares and convertible notes of Vivasure Medical Limited (“Vivasure”), a privately-held company and related party, and fair value of our investment in common stock holdings of a previously publicly-held company. The investments in Vivasure do not have readily determinable fair values and are recorded at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer. The common stock held represented equity securities with a readily determinable fair value and were required to be measured at fair value at each reporting period using readily determinable pricing available on a securities exchange, in accordance with the provisions of ASU 2016-01.
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Results of Operations
Comparison of the Nine Months Ended September 30, 2025 and 2024
The following table presents our statement of operations data for the nine months ended September 30, 2025 and 2024, and the dollar and percentage change between the two periods (in thousands):
Nine Months Ended September 30, | |||||||||||||
| 2025 | 2024 | Change $ | Change % | |||||||||
Revenue: |
|
|
|
|
|
|
|
| |||||
Partnership revenue | $ | 2,120 | $ | 1,928 | $ | 192 |
| 10 | % | ||||
Product revenue |
| 445 |
| 457 |
| (12) |
| (3) | % | ||||
Total revenue |
| 2,565 |
| 2,385 |
| 180 |
| 8 | % | ||||
Expenses: |
|
|
|
|
|
|
|
|
| ||||
Cost of product revenues |
| 139 |
| 146 |
| (7) |
| (5) | % | ||||
Research and development |
| 41,362 |
| 31,833 |
| 9,529 |
| 30 | % | ||||
Selling, general and administrative |
| 19,625 |
| 18,030 |
| 1,595 |
| 9 | % | ||||
Total expenses |
| 61,126 |
| 50,009 |
| 11,117 |
| 22 | % | ||||
Loss from operations |
| (58,561) |
| (47,624) |
| (10,937) |
| (23) | % | ||||
Other (expense) income: |
|
|
|
|
|
|
|
|
| ||||
Interest (expense) income, net |
| (385) |
| 2,834 |
| (3,219) |
| (114) | % | ||||
Loss on fair value of strategic investments |
| — |
| (68) |
| 68 |
| 100 | % | ||||
Other expense |
| — | (11) | 11 | 100 | % | |||||||
Total other (expense) income |
| (385) |
| 2,755 |
| (3,140) |
| (114) | % | ||||
Net loss | $ | (58,946) | $ | (44,869) | $ | (14,077) |
| (31) | % | ||||
Partnership Revenue
Partnership revenue increased by $192,000, or approximately 10%, to $2.1 million in the nine months ended September 30, 2025 from $1.9 million for the nine months ended September 30, 2024. Partnership revenue relates to the recognition of the combined performance obligation for the license granted to Terumo and the ongoing research and development services over the estimated performance period for the Virtue SAB coronary ISR indication, using a proportional performance model, based on the costs incurred relative to the total estimated costs of the research and development services. Prior to the termination of the Terumo Agreement, as of each quarterly reporting date, we evaluated our estimates of the total costs expected to be incurred through the completion of the combined performance obligation and updated our estimates as necessary.
For the nine months ended September 30, 2025 and 2024, the expenses incurred related to the Terumo Agreement were approximately $10.1 million and $10.5 million, respectively. The estimated total costs associated with the Terumo Agreement through completion were similar as of September 30, 2025 compared to the estimates as of December 31, 2024, and increased by approximately 2.6% as of September 30, 2024, as compared to the estimates as of December 31, 2023.
While we believe we have historically estimated total costs associated with the Terumo Agreement through completion, these estimates encompass a broad range of expenses over a multi-year period and, as such, are subject to periodic changes as new information becomes available.
Product Revenue
Product revenue decreased by $12,000, or approximately 3%, to $445,000 in the nine months ended September 30, 2025 from $457,000 for the nine months ended September 30, 2024.
Product revenue primarily consisted of the sale of FreeHold Duo and Trio intracorporeal organ retractors and revenue is recognized when product is shipped to customers. The decrease in product revenue was due to a decrease in the purchase volume. There were no changes to the per unit sale price between the periods presented.
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Cost of Product Revenue
Cost of product revenue decreased by $7,000, or approximately 5%, to $139,000 in the nine months ended September 30, 2025 from $146,000 for the nine months ended September 30, 2024. The decrease was primarily due to lower sales volume of FreeHold Duo and Trio intracorporeal organ retractors.
Research and Development Expenses
The following table summarizes our research and development expenses for the nine months ended September 30, 2025 and 2024 (in thousands):
| Nine Months Ended September 30, | |||||||||||
2025 |
| 2024 | ||||||||||
Personnel and consulting costs | $ | 18,965 | $ | 14,416 | ||||||||
Non-clinical development costs | 13,095 |
| 13,424 | |||||||||
Clinical development costs |
| 9,302 |
| 3,993 | ||||||||
Total research and development expenses | $ | 41,362 | $ | 31,833 | ||||||||
Research and development expenses increased by $9.5 million, or approximately 30%, to $41.4 million for the nine months ended September 30, 2025 from $31.8 million for the nine months ended September 30, 2024. This is primarily due to an increase in support of ongoing work to advance the BACKBEAT study and to advance Virtue SAB into the Virtue Trial, which commenced in October 2025. The increase included an increase of $5.3 million in clinical development costs, an increase in personnel-related expenses of $3.4 million due to increased headcount and consulting costs, and an increase in stock-based compensation of $1.1 million, partially offset by a decrease of $329,000 in non-clinical development costs associated with research and development program costs, supplies, and testing.
The total research and development expenses summarized above include $10.0 million for the nine months ended September 30, 2025 and $10.4 million for the nine months ended September 30, 2024 related to the Terumo Agreement. The decrease of $400,000 is due to decreased expense activity related to the Terumo Agreement during the nine months ended September 30, 2025 compared to the same period in 2024.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased by $1.6 million, or approximately 9%, to $19.6 million for the nine months ended September 30, 2025, from $18.0 million of expense for the nine months ended September 30, 2024. The increase primarily resulted from an increase of $1.3 million in accounting, finance, legal, marketing, investor relations and public relations expenses and an increase of $396,000 in stock-based compensation.
Interest (Expense) Income, Net
Interest (expense) income, net, decreased by $3.2 million, or approximately 114%, to $385,000 of interest expense for the nine months ended September 30, 2025, from $2.8 million of income for the nine months ended September 30, 2024. The net interest income in the 2025 period consisted primarily of interest earned from marketable securities partially offset by monthly interest expense resulting from the Amended 2024 LSA and the Royalty Purchase Agreement. The net interest income in the 2024 period consisted primarily of interest earned from marketable securities. The decrease in interest (expense) income, net resulted from interest expense related to the Amended 2024 LSA and the Royalty Purchase Agreement, which was not in place during 2024.
Loss on Fair Value of Strategic Investments
No gain or loss on fair value of strategic investments was recognized for the nine months ended September 30, 2025. The loss of $68,000 for the nine months ended September 30, 2024 related to the change in fair value in our common stock holdings of a previously publicly-held company.
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Comparison of the Three Months Ended September 30, 2025 and 2024
The following table presents our statement of operations data for the three months ended September 30, 2025 and 2024, and the dollar and percentage change between the two periods (in thousands):
Three Months Ended September 30, | |||||||||||||
| 2025 | 2024 | Change $ | Change % | |||||||||
Revenue: |
|
|
|
|
|
|
|
| |||||
Partnership revenue | $ | 721 | $ | 803 | $ | (82) | $ | (10) | % | ||||
Product revenue |
| 140 |
| 184 |
| (44) |
| (24) | % | ||||
Total revenue |
| 861 |
| 987 |
| (126) |
| (13) | % | ||||
Expenses: |
|
|
|
|
|
|
|
|
| ||||
Cost of product revenues |
| 49 |
| 68 |
| (19) |
| (28) | % | ||||
Research and development |
| 14,027 |
| 11,595 |
| 2,432 |
| 21 | % | ||||
Selling, general and administrative |
| 7,098 |
| 5,666 |
| 1,432 |
| 25 | % | ||||
Total expenses |
| 21,174 |
| 17,329 |
| 3,845 |
| 22 | % | ||||
Loss from operations |
| (20,313) |
| (16,342) |
| (3,971) |
| (24) | % | ||||
Other (expense) income: |
|
|
|
|
|
|
|
|
| ||||
Interest (expense) income, net |
| (515) |
| 916 |
| (1,431) |
| (156) | % | ||||
Total other (expense) income |
| (515) |
| 916 |
| (1,431) |
| (156) | % | ||||
Net loss | $ | (20,828) | $ | (15,426) | $ | (5,402) | $ | (35) | % | ||||
Partnership Revenue
Partnership revenue decreased by $82,000, or approximately 10%, to $721,000 in the three months ended September 30, 2025 from $803,000 for the three months ended September 30, 2024. Partnership revenue relates to the recognition of the combined performance obligation for the license granted to Terumo and the ongoing research and development services over the estimated performance period for the Virtue SAB Coronary ISR indication, using a proportional performance model, based on the costs incurred relative to the total estimated costs of the research and development services. As of each quarterly reporting date, we evaluated our estimates of the total costs expected to be incurred through the completion of the combined performance obligation and updated our estimates as necessary.
For the three months ended September 30, 2025 and 2024, the expenses incurred related to the Terumo Agreement were approximately $3.3 million and $3.6 million, respectively. The estimated total costs associated with the Terumo Agreement through completion decreased by approximately 0.3% as of September 30, 2025 as compared to the estimates as of June 30, 2025, and were similar as of September 30, 2024, as compared to the estimates as of June 30, 2024.
Product Revenue
Product revenue decreased by $44,000, or approximately 24%, to $140,000 in the three months ended September 30, 2025 from $184,000 for the three months ended September 30, 2024.
Product revenue primarily consisted of the sale of FreeHold Duo and Trio intracorporeal organ retractors and revenue is recognized when product is shipped to customers. The decrease in product revenue was primarily due to a decrease in the purchase volume. There were no changes to the per unit sale price in either period presented.
Cost of Product Revenue
Cost of product revenue decreased by $19,000, or approximately 28%, to $49,000 in the three months ended September 30, 2025 from $68,000 for the three months ended September 30, 2024. The decrease was primarily due to lower sales volume of FreeHold Duo and Trio intracorporeal organ retractors.
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Research and Development Expenses
The following table summarizes our research and development expenses for the three months ended September 30, 2025 and 2024 (in thousands):
|
| Three Months Ended September 30, | ||||||||||
2025 |
| 2024 | ||||||||||
Personnel and consulting costs | $ | 6,421 | $ | 4,800 | ||||||||
Non-clinical development costs | 3,879 |
| 5,349 | |||||||||
Clinical development costs |
| 3,727 |
| 1,446 | ||||||||
Total research and development expenses | $ | 14,027 | $ | 11,595 | ||||||||
Research and development expenses increased by $2.4 million, or approximately 21%, to $14.0 million for the three months ended September 30, 2025, from $11.6 million for the three months ended September 30, 2024. This is primarily due to an increase in support of ongoing work to advance the BACKBEAT study and to advance Virtue SAB into the Virtue Trial, which commenced in October 2025. The increase included an increase of $2.3 million in clinical development costs, an increase in personnel-related expenses of $1.2 million due to increased headcount and consulting costs, and an increase in stock-based compensation of $409,000, partially offset by a decrease of $1.5 million in non-clinical development costs associated with research and development program costs, supplies, and testing.
The total research and development expenses summarized above include $3.2 million for the three months ended September 30, 2025 and $3.6 million for the three months ended September 30, 2024 related to the Terumo Agreement. The decrease of $400,000 is due to decreased expense activity related to the Terumo Agreement during the three months ended September 30, 2025 compared to the same period in 2024.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased by $1.4 million, or approximately 25%, to $7.1 million for the three months ended September 30, 2025, from $5.7 million of expense for the three months ended September 30, 2024. The increase was primarily due to an increase in accounting, finance, legal, marketing, investor relations, and public relations expenses.
Interest (Expense) Income, Net
Interest (expense) income, net, decreased by $1.4 million, or approximately 156%, to $515,000 of net interest expense for the three months ended September 30, 2025, from $916,000 of net interest income for the three months ended September 30, 2024. The decrease in interest (expense) income, net resulted from interest expense related to the Amended 2024 LSA and the Royalty Purchase Agreement.
Liquidity and Capital Resources
Overview
From inception through September 30, 2025, we have incurred significant operating losses and negative cash flows from our operations. Our net losses were $58.9 million and $44.9 million for the nine months ended September 30, 2025 and 2024, respectively. As of September 30, 2025, we had an accumulated deficit of $368.8 million. We have funded our operations primarily through the issuance of common stock, convertible preferred stock, and warrants, as well as proceeds from the Business Combination, the Terumo Agreement, borrowings under debt arrangements, the sale of future revenues, and to a lesser extent, revenue from FreeHold products. As of September 30, 2025, we have raised a cumulative total of $334.9 million in gross proceeds. We had $95.8 million in cash and cash equivalents and marketable securities at September 30, 2025, comprised of $42.0 million in cash and cash equivalents and $53.8 million in marketable securities. Cash and cash equivalents consisted primarily of bank deposits and money market funds while short-term marketable securities consisted primarily of our investments in corporate debt securities. Future committed cash receipts expected in April 2026 include $20.0 million from the Medtronic Loan Agreement, and an additional $15.0 million from Ligand
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pursuant to the Royalty Purchase Agreement. On November 7, 2025, we received $30.0 million pursuant to the Termination and Right of First Refusal Agreement and Terumo Stock Purchase Agreement.
Funding Requirements
We intend to prioritize spending on our two flagship product candidates and expect operating expenses to increase accordingly. The additional investment will support clinical study costs and expanded research and development activities related to our AVIM-enabled Therapy and Virtue SAB programs, as well as the continued execution of the BACKBEAT study and Virtue Trial.
Based on internally prepared budget estimates that reflect our operating priorities, we anticipate that our Cash and cash equivalents, Marketable securities, proceeds received subsequent to September 30, 2025 but prior to the filing of this Quarterly Report on Form 10-Q, expected future proceeds from contractual financing commitments and other potential future proceeds described below are sufficient to fund our operations into the fourth quarter of 2027. The amount and timing of our future funding requirements may change from this current estimate and are dependent on many factors, including the cost and pace of execution of clinical studies and research and development activities, the strength of results from clinical studies and other research, development and manufacturing efforts, as well as the receipt of payments under the Royalty Purchase Agreement and the Amended Medtronic Loan Agreement, and the realization of cash from the sale of some or all of our strategic holdings, most notably, Vivasure Medical. There are no assurances that any of these factors will be favorable to us, and we may need to seek additional sources of liquidity to meet our funding requirements earlier than current estimates, including the issuance of new equity, and/or other financing structures. In this regard, as of the date of this Quarterly Report on Form 10-Q, we may sell up to $100.0 million of shares of Company Common Stock under the sales agreement we entered into with TD Securities (USA) LLC (the “Sales Agreement”).
Our future viability is dependent on our ability to raise additional capital to finance our operations. Our inability to raise capital as and when needed could have a negative impact on our financial condition and ability to pursue our business strategies. There can be no assurance that our current operating plan will be achieved or that additional funding will be available on terms acceptable to us, or at all.
As noted above, the sale of Company Common Stock pursuant to the Resale Registration Statement may result in a decline in the value of the Company Common Stock, which may make it more difficult and more dilutive to the existing holders of Company Common Stock to raise funds from the sale of our equity securities.
Cash Flows
The following table summarizes our cash flow data for the periods indicated (in thousands):
| Nine Months Ended September 30, | |||||||||||
2025 |
| 2024 | ||||||||||
Net cash used in operating activities | $ | (46,693) | $ | (37,020) | ||||||||
Net cash (used in) provided by investing activities |
| (9,229) |
| 16,842 | ||||||||
Net cash provided by financing activities |
| 75,673 |
| 15,224 | ||||||||
Net increase (decrease) in cash and cash equivalents | $ | 19,751 | $ | (4,954) | ||||||||
Comparison of the Nine Months Ended September 30, 2025 and 2024
Net Cash Flows from Operating Activities
Net cash used in operating activities for the nine months ended September 30, 2025 was $46.7 million and primarily consisted of our net loss of $58.9 million and changes in net operating assets and liabilities of $1.9 million, partially offset by non-cash charges of $10.3 million. Our non-cash charges primarily consisted of stock-based compensation of $9.2 million, partially offset by $491,000 related to accretion and interest of marketable securities. The net change in operating assets and liabilities was primarily due to an increase in accounts payable, accrued expenses and other liabilities of $4.3 million, partially offset by a decrease in deferred revenue of $2.1 million.
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Net cash used in operating activities for the nine months ended September 30, 2024 was $37.0 million and primarily consisted of our net loss of $44.9 million, partially offset by non-cash charges of $7.3 million and changes in net operating assets and liabilities of $598,000. Our non-cash charges primarily consisted of stock-based compensation of $7.7 million, partially offset by $1.3 million related to accretion and interest of marketable securities. The net change in operating assets and liabilities was primarily due to an increase in accounts payable and accrued expenses of $3.7 million and a decrease in deferred revenue of $1.9 million.
Net Cash Flows from Investing Activities
Net cash used in investing activities for the nine months ended September 30, 2025 was $9.2 million, which primarily consisted of the purchase of $50.7 million of marketable securities and purchases of property and equipment of $456,000, partially offset by the sale of $41.9 million of marketable securities.
Net cash provided by investing activities for the nine months ended September 30, 2024 was $16.8 million, which primarily consisted of the sale of $69.4 million of marketable securities, partially offset by the purchase of $52.4 million of marketable securities.
Net Cash Flows from Financing Activities
Net cash provided by financing activities for the nine months ended September 30, 2025 was $75.7 million, which primarily consisted of $57.8 million of proceeds from the sale of common stock and the pre-funded warrants, net of issuance costs and $20.0 million of proceeds from the sale of future royalties, partially offset by $1.1 million of deferred financing costs related to the Royalty Purchase Agreement and $1.1 million used to settle taxes associated with restricted stock vesting.
Net cash provided by financing activities of $15.2 million for the nine months ended September 30, 2024 was primarily attributable to the proceeds of $15.0 million, net of issuance costs, from the at-the-market offering under the Open Market Sale AgreementSM, dated May 15, 2024, which we entered into with Jefferies LLC (the “Prior Agreement”). The Prior Agreement was terminated on August 12, 2024 in connection with our entry into the Sales Agreement.
Contractual Obligations and Commitments
The following table summarizes our contractual obligations and commitments as of September 30, 2025 (in thousands):
| Payments Due by Period | ||||||||||||||
Less than | 1-3 | 3-5 | More than | ||||||||||||
Total |
| 1 Year |
| Years |
| Years |
| 5 Years | |||||||
Operating lease obligations | $ | 2,056 | $ | 843 | $ | 1,213 | $ | — | $ | — | |||||
Debt, principal and interest(1) | 19,589 | 1,444 | 15,279 | 2,866 | — | ||||||||||
Total | $ | 21,645 | $ | 2,287 | $ | 16,492 | $ | 2,866 | $ | — | |||||
| (1) | In November 2024, we entered into the 2024 LSA with Hercules, as amended. The Amended 2024 LSA will mature in November 2028. Refer to Note 14 to the Consolidated Financial Statements for additional information. |
We enter into agreements in the normal course of business with clinical research organizations for work related to clinical trials and with vendors for preclinical studies and other services and products for operating purposes, which are cancelable at any time by us, generally upon 30 days prior written notice. These payments are not included in the above table of contractual obligations and commitments.
Critical Accounting Policies and Estimates
Our financial statements are prepared in accordance with U.S. GAAP. The preparation of the financial statements in conformity with U.S. GAAP requires our management to make a number of estimates and assumptions relating to the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial
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statements and the reported amounts of revenue and expenses during the period. We evaluate our significant estimates on an ongoing basis, including estimates related to the total costs expected to be incurred though the completion of the combined performance obligation of the Terumo Agreement, effective interest expense related to the Royalty Purchase Agreement, research and development prepayments, accruals and related expenses and stock-based compensation. We base our estimates on historical experience and on various other assumptions that we believe to be 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 readily apparent from other sources. Actual results could differ from those estimates.
We believe that the accounting policies described below involve a significant degree of judgment and complexity. Accordingly, we believe these are the most critical to aid in fully understanding and evaluating our financial condition and results of operations. For further information, see Note 2 to the Consolidated Financial Statements – “Summary of Significant Accounting Policies.”
Revenue Recognition
We recognize revenue under the core principle according to ASC 606 to depict the transfer of control to our customers in an amount reflecting the consideration we expect to be entitled to. In order to achieve that core principle, we apply the following five step approach: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when a performance obligation is satisfied.
Our revenues are currently comprised of partnership revenues under the Terumo Agreement related to the development and commercialization of Virtue SAB, and product revenue from the sale of FreeHold’s intracorporeal organ retractors.
Partnership Revenues
To date, our partnership revenues have related to the Terumo Agreement described below. Pursuant to the terms of the Termination and ROFR Agreement, the Terumo Agreement was terminated on October 24, 2025. In future periods, partnership revenues may also include revenues related to the Medtronic Agreement, discussed in Note 4 to the Consolidated Financial Statements.
Orchestra BioMed, Inc. entered into the Terumo Agreement as further described in Note 3 to the Consolidated Financial Statements. We assessed whether the Terumo Agreement fell within the scope of ASC 808 based on whether the arrangement involved joint operating activities and whether both parties have active participation in the arrangement and are exposed to significant risks and rewards. We determined that the Terumo Agreement did not fall within the scope of ASC 808. We then analyzed the arrangement pursuant to the provisions of ASC 606 and determined that the arrangement represents a contract with a customer and is therefore within the scope of ASC 606.
The promised goods or services in the Terumo Agreement include (i) license rights to our intellectual property and (ii) research and development services. We also have optional additional items in the Terumo Agreement, which are considered marketing offers and are accounted for as separate contracts with the customer if such option is elected by the customer, unless the option provides a material right which would not be provided without entering into the contract. Performance obligations are promised goods or services in a contract to transfer a distinct good or service to the customer. Promised goods or services are considered distinct when (i) the customer can benefit from the good or service on its own or together with other readily available resources or (ii) the promised good or service is separately identifiable from other promises in the contract. In assessing whether promised goods or services are distinct in the Terumo Agreement, we considered factors such as the stage of development of the underlying intellectual property, the capabilities of the customer to develop the intellectual property on their own or whether the required expertise is readily available.
We estimate the transaction price for the Terumo Agreement performance obligations based on the amount expected to be received for transferring the promised goods or services pursuant to the Terumo Agreement. The consideration includes both fixed consideration and variable consideration. At the inception of the Terumo Agreement, as well as at each reporting period, we evaluate the amount of potential payment and the likelihood that the payments will be received. We
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utilize either the most likely amount method or expected amount method to estimate the amount expected to be received based on which method better predicts the amount expected to be received. If it is probable that a significant revenue reversal would not occur, the variable consideration is included in the transaction price.
The Terumo Agreement contains development and regulatory milestone payments. At contract inception and at each reporting period, we evaluate whether the milestones are considered probable of being reached and estimate the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. At the end of each subsequent reporting period, we re-evaluate the probability of achievement of such development milestones and any related constraint, and if necessary, adjust our estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect partnership revenues and earnings in the period of adjustment.
The Terumo Agreement also includes sales-based royalties and the license is deemed to be the predominant item to which the royalties relate. Accordingly, we will recognize royalty revenue when the related sales occur. To date, we have not recognized any royalty revenue under the arrangement.
We have determined that intellectual property licensed to Terumo and the research and development services to be provided to support the premarket approval by the FDA for the ISR indication represent a combined performance obligation that is satisfied over time, which is currently estimated to be completed in 2029, and that the appropriate method of measuring progress for purposes of recognizing revenues relates to a proportional performance model that measures the proportional performance based on the costs incurred to date relative to the total costs expected to be incurred through the completion of the performance obligation. We evaluate the measure of progress at each reporting period and, if necessary, adjust the measure of performance and related revenue recognition.
In the nine months ended September 30, 2025, we updated our estimates of the total costs expected to be incurred through the completion of the combined performance obligation. The impact of the changes in estimates resulted in an increase in partnership revenues of $19,000, which resulted in a de minimis effect on net loss per share, basic and diluted. In the nine months ended September 30, 2024, the impact of the changes in estimates resulted in a reduction of partnership revenues of $371,000, which resulted in a $0.01 effect on net loss per share, basic and diluted.
We receive payments from Terumo based on billing schedules established in the contract. Such billings for milestone related events have 10-day terms from the date the milestone is achieved, royalty payments are 20-day terms after the close of each quarter, any optional services are 20 days after receipt of an invoice and sales of SirolimusEFR are within 30 days after receipt of the shipping invoices. Upfront payments are recorded as deferred revenue upon receipt or when due until we perform our obligations under these arrangements. Amounts are recorded as accounts receivable when the right to consideration is unconditional.
In June 2022, Orchestra BioMed, Inc., BackBeat Medical, LLC and Medtronic entered into the Medtronic Agreement for the development and commercialization of AVIM Therapy for the treatment of pacemaker-indicated patients with uncontrolled HTN despite the use of anti-hypertensive medications. We determined that the arrangement is a collaboration within the scope of ASC 808. In addition, we concluded Medtronic is a customer for a good or service that is a distinct unit of account, and therefore the transactions in the Medtronic Agreement should be accounted for under ASC 606. Through September 30, 2025, there have been no amounts recognized as revenue under the Medtronic Agreement.
Product Revenues
Product revenues related to sales of FreeHold’s intracorporeal organ retractors are recognized at a point-in-time upon the shipment of the product to the customer, and there are no significant estimates or judgments related to estimating the transaction price. The product revenues consist of a single performance obligation, and the payment terms are typically 30 days. Product revenues are recognized solely in the United States.
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Research and Development Prepayments, Accruals and Related Expenses
We incur costs of research and development activities conducted by our third-party service providers, which include the conduct of preclinical and clinical studies. We are required to estimate our prepaid and accrued research and development costs at each reporting date. These estimates are made as of the reporting date of the work completed over the life of the individual study in accordance with agreements established with our service providers. We determine the estimates of research and development activities incurred at the end of each reporting period through discussion with internal personnel and outside service providers, as to the progress or stage of completion of trials or services, as of the end of the reporting period, pursuant to contracts with the third parties and the agreed upon fees to be paid for such services. Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are deferred and capitalized. The capitalized amounts are expensed as the related goods are accepted by us or the services are performed. Accruals are recorded for the amounts of services provided that have not yet been invoiced.
Stock-Based Compensation
We account for share-based payments at fair value. The fair value of stock options is measured using the Black-Scholes option-pricing model and the fair value of restricted stock is measured based on the fair value of the Company Common Stock underlying the award as of the grant date, described further below. For share-based awards that vest subject to the satisfaction of a service requirement, the fair value measurement date for stock-based compensation awards is the date of grant and the expense is recognized on a straight-line basis, over the vesting period. We account for forfeitures as they occur.
Prior to the Business Combination, due to the absence of an active market for Orchestra BioMed, Inc.’s common stock, Orchestra BioMed, Inc. utilized methodologies, approaches, and assumptions consistent with the American Institute of Certified Public Accountants’ Audit and Accounting Practice Guide: Valuation of Privately-Held Company Equity Securities Issued as Compensation to estimate the fair value of its common stock. The fair value of Orchestra BioMed, Inc.’s common stock was determined based upon a variety of factors, including valuations of Orchestra BioMed, Inc.’s common stock performed with the assistance of independent third-party valuation specialists; Orchestra BioMed, Inc.’s stage of development and business strategy, including the status of research and development efforts of its product candidates, and the material risks related to its business and industry; Orchestra BioMed, Inc.’s business conditions and projections; Orchestra BioMed, Inc.’s results of operations and financial position, including its levels of available capital resources; the valuation of publicly traded companies in the life sciences and biotechnology sectors, as well as recently completed mergers and acquisitions of peer companies; the lack of marketability of Orchestra BioMed, Inc.’s common stock as a private company; the prices of Orchestra BioMed, Inc.’s convertible preferred stock sold to investors in arm’s length transactions and the rights, preferences and privileges of its convertible preferred stock relative to those of its common stock; the likelihood of achieving a liquidity event for the holders of Orchestra BioMed, Inc.’s common stock, such as an initial public offering or a sale of Orchestra BioMed, Inc. given prevailing market conditions; trends and developments in its industry; the hiring of key personnel and the experience of management; and external market conditions affecting the life sciences and biotechnology industry sectors. Significant changes to the key assumptions underlying the factors used could result in different fair values of Orchestra BioMed, Inc.’s common stock at each valuation date. In determining the exercise prices for options granted and fair value of restricted stock, we have considered the fair value of the common stock as of the grant date.
Prior to the Business Combination, valuation analyses were conducted utilizing a probability weighted expected return method, in which the probability of a public company scenario was considered via either an initial public offering or special purpose acquisition company transaction. Subsequent to the Business Combination, fair value was determined by market prices of the Company Common Stock.
We classify stock-based compensation expense in our condensed consolidated statements of operations and comprehensive loss in the same manner in which the award recipients’ payroll costs are classified or in which the award recipients’ service payments are classified.
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The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option pricing model, which is based on the assumptions discussed below. Each of these inputs is subjective and generally requires significant judgment and estimation by management.
| ● | Expected Term — The expected term represents the period that stock-based awards are expected to be outstanding. Our historical share option exercise information is limited due to a lack of sufficient data points and does not provide a reasonable basis upon which to estimate an expected term. The expected term for option grants is therefore determined using the “simplified” method, as prescribed in the SEC’s Staff Accounting Bulletin (SAB) No. 107. The simplified method deems the expected term to be the midpoint between the vesting date and the contractual life of the stock-based awards. |
| ● | Expected Volatility — We consummated the Business Combination on January 26, 2023 and lack sufficient company-specific historical and implied volatility information. Therefore, we derived expected stock volatility using a weighted average blend of historical volatility of comparable peer public companies and our own historical volatility, over a period equivalent to the expected term of the stock-based awards. |
| ● | Risk-Free Interest Rate — The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the date of grant for zero-coupon U.S. Treasury notes with maturities approximately equal to the stock-based awards’ expected term. |
| ● | Expected Dividend Yield — The expected dividend yield is zero as neither we nor Orchestra BioMed, Inc. has paid, and we do not anticipate paying, any dividends on the Company Common Stock in the foreseeable future. |
| ● | Common Stock Valuation — Prior to the Business Combination, given the absence of a public trading market for Orchestra BioMed, Inc.’s common stock, Orchestra BioMed, Inc.’s board of directors considered numerous subjective and objective factors to determine the best estimate of fair value of Orchestra BioMed, Inc.’s common stock underlying the stock options granted to its employees and non-employees. In determining the grant date fair value of Orchestra BioMed, Inc.’s common stock, Orchestra BioMed, Inc.’s board considered, among other things, contemporaneous valuations of its common stock prepared by an unrelated third-party valuation firm in accordance with the guidance provided by the American Institute of Certified Public Accountants 2013 Practice Aid, Valuation of Privately-Held-Company Equity Securities Issued as Compensation. Following the Business Combination, our board of directors determines the fair value of the Company Common Stock based on the closing price of the Company Common Stock on or around the date of grant. |
During the three months ended September 30, 2025 and 2024, stock-based compensation was $3.0 million and $2.4 million, respectively. During the nine months ended September 30, 2025 and 2024, stock-based compensation was $9.2 million and $7.7 million, respectively. As of September 30, 2025, we had approximately $16.2 million of total unrecognized stock-based compensation, which we expect to recognize over a weighted-average period of approximately 2.3 years.
Recently Issued Accounting Pronouncements
A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2, “Summary of Significant Accounting Policies,” to the Consolidated Financial Statements.
Emerging Growth Company and Smaller Reporting Company Status
We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation
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and stockholder approval of any golden parachute payments not previously approved. Upon losing our status as an emerging growth company, we will be required to hold nonbinding advisory votes on executive compensation and to obtain stockholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. We have elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our Consolidated Financial Statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. Upon losing emerging growth company status, we will no longer be able to use the extended transition period for complying with new or revised financial accounting standards.
We expect to lose emerging growth company status on December 31, 2025. However, we will continue to be a “smaller reporting company” as defined in the Exchange Act after we lose emerging growth company status. As a smaller reporting company, we will continue to not be required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 as long as (a) our annual revenue is less than $100.0 million during the most recently completed fiscal year and (b) the market value of our voting and non-voting Company Common Stock held by non-affiliates is less than $700.0 million measured on the last business day of our second fiscal quarter. We may also take advantage of certain reduced disclosure requirements as a smaller reporting company, including, but not limited to, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. We will be able to take advantage of these scaled disclosures for so long as (i) the market value of our voting and non-voting Company Common Stock held by non-affiliates is less than $250.0 million measured on the last business day of our second fiscal quarter, or (ii)(a) our annual revenue is less than $100.0 million during the most recently completed fiscal year and (b) the market value of our voting and non-voting Company Common Stock held by non-affiliates is less than $700.0 million measured on the last business day of our second fiscal quarter.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not applicable.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures.
We maintain “disclosure controls and procedures” (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), that are designed to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.
Disclosure controls and procedures include, without limitation, controls and procedures designed to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure.
Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2025, the end of the period covered by this Quarterly Report. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of September 30, 2025.
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Changes in Internal Control Over Financial Reporting.
There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the fiscal quarter ended September 30, 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitation on the Effectiveness of Internal Control.
Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures, or our internal controls, will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our Company have been detected.
PART II—OTHER INFORMATION
Item 1. Legal Proceedings.
From time to time, we may become involved in various claims and legal proceedings that arise in the ordinary course of our business. We are not currently a party to any material legal proceedings and are not aware of any pending or threatened legal proceeding against us that we believe would have a material adverse effect on our business, operating results or financial condition.
Item 1A. Risk Factors.
For information regarding factors that could affect our results of operations, financial condition and liquidity, see the risk factors discussed in Part I, Item 1A in the 2024 10-K and in Item 1A in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025 (the “Q1 2025 Form 10-Q”). Except as set forth in the Q1 2025 Form 10-Q, there have been no material changes to the risk factors previously disclosed in Part I, Item 1A in the 2024 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
Rule 10b5-1 Trading Arrangements
During the three months ended September 30, 2025, no director or officer (as defined in Rule 16a-1(f) of the Exchange Act) informed us of the
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Inducement Plan
On November 6, 2025, the Board, upon the recommendation of the Compensation Committee of the Board, approved the adoption of the Orchestra BioMed Holdings, Inc. 2025 New Hire Inducement Plan (the “Inducement Plan”), to be effective immediately, pursuant to which the Company has reserved 950,000 shares of its common stock to be used exclusively for grants of awards to individuals who were not previously employees or directors of the Company (or following a bona fide period of non-employment) as a material inducement to such individuals’ entry into employment with the Company, pursuant to Nasdaq Listing Rule 5635(c)(4) and the related guidance under Nasdaq IM 5635-1 (the “Inducement Award Rules”). In accordance with Inducement Award Rules, the Company did not seek approval of the Inducement Plan by its stockholders.
Complete copies of the Inducement Plan, the Form of Stock Option Grant Notice and Stock Option Agreement for the Inducement Plan and the Form of Restricted Stock Unit Grant Notice and Award Agreement for the Inducement Plan are filed herewith as Exhibits 10.13, 10.14 and 10.15, respectively, and are incorporated herein by reference. The above summary of the terms of the Inducement Plan and the forms of agreements does not purport to be complete and is qualified in its entirety by reference to such exhibits.
Amendment to Certificate of Incorporation; Material Modification to Rights of Security Holders
On November 6, 2025, pursuant to the terms of the Terumo Stock Purchase Agreement, the Company filed a Certificate of Designation of Series A Convertible Preferred Stock with the Secretary of State of the State of Delaware, designating 200,000 shares of the Company’s Series A Convertible Preferred Stock, par value $0.0001 per share, out of the Company’s authorized preferred stock. The Certificate of Designation sets forth the rights, preferences, powers, restrictions, and limitations of the Series A Preferred Stock. For a summary of certain of the provisions of the Certificate of Designation, please see the disclosure under the heading “Recent Developments—Series A Preferred Stock” in Item 2 (Management’s Discussion and Analysis of Financial Condition and Results of Operations) of this Quarterly Report on Form 10-Q, which disclosure is incorporated herein by reference. The disclosure incorporated herein by reference is qualified in its entirety by reference to the Certificate of Designation, which is filed as Exhibit 3.2 to this Quarterly Report on Form 10-Q.
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Item 6. Exhibits.
Exhibit |
| Description |
3.1 | Certificate of Incorporation of Orchestra BioMed Holdings, Inc. (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the SEC on January 31, 2023). | |
3.2+ | Certificate of Designation of Series A Convertible Preferred Stock, dated November 6, 2025 | |
3.3 | Amended and Restated Bylaws of Orchestra BioMed Holdings, Inc. (incorporated by reference to Exhibit 3.2 to the Quarterly Report on Form 10-Q filed with the SEC on August 12, 2024). | |
4.1 | Warrant issued to Ligand Pharmaceuticals Incorporated, dated August 4, 2025 (incorporated by reference to Exhibit 4.1 to the Quarterly Report on Form 10-Q filed with the SEC on August 12, 2025). | |
4.2 | Form of Amendment No. 1 to Warrants between the Company and each of Hercules Capital, Inc., Hercules Capital IV, L.P., and Hercules SBIC V, L.P. (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K filed with the SEC on July 31, 2025). | |
4.3 | Form of Pre-Funded Warrant (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the SEC on August 4, 2025) | |
10.1 | Revenue Participation Right Purchase and Sale Agreement, by and between the Company and Ligand Pharmaceuticals Inc., dated July 31, 2025 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on July 31, 2025). | |
10.2 | Stock Purchase Agreement, by and between the Company and Ligand Pharmaceuticals Incorporated, dated July 31, 2025 (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the SEC on July 31, 2025). | |
10.3 | Loan Agreement, by and among the Company, Orchestra BioMed, Inc, BackBeat Medical, LLC and Medtronic Inc., dated July 31, 2025 (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed with the SEC on July 31, 2025). | |
10.4 | Form of Secured Subordinated Promissory Note by and among the Company, Orchestra BioMed, Inc, BackBeat Medical, LLC and Medtronic Inc. (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed with the SEC on July 31, 2025). | |
10.5 | Stock Purchase Agreement, by and between the Company and Covidien Group S.à.r.l., dated July 31, 2025 (incorporated by reference to Exhibit 10.5 to the Current Report on Form 8-K filed with the SEC on July 31, 2025). | |
10.6 | Amendment No. 1 to Stock Purchase Agreement, by and between the Company and Covidien Group S.à.r.l., dated August 1, 2025 (incorporated by reference to Exhibit 10.6 to the Quarterly Report on Form 10-Q filed with the SEC on August 12, 2025). | |
10.7 | Second Amendment to Loan and Security Agreement, by and among the Company and certain of its subsidiaries, the lenders named therein and Hercules Capital, Inc., dated July 31, 2025 (incorporated by reference to Exhibit 10.6 to the Current Report on Form 8-K filed with the SEC on July 31, 2025). | |
10.8 | Registration Rights Agreement, dated August 4, 2025, by and among the Company, Ligand Pharmaceuticals Incorporated and Covidien Group S.à.r.l. (incorporated by reference to Exhibit 10.8 to the Quarterly Report on Form 10-Q filed with the SEC on August 12, 2025). | |
10.9˄ | Amendment No. 1 to Exclusive License and Collaboration Agreement, dated as of August 1, 2025, by and among the Company, BackBeat Medical, LLC and Medtronic, Inc. (incorporated by reference to Exhibit 10.9 to the Quarterly Report on Form 10-Q filed with the SEC on August 12, 2025). | |
10.10 | Termination and ROFR Agreement, by and between the Orchestra BioMed, Inc., Terumo Corporation and Terumo Medical Corporation, dated October 24, 2025 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on October 28, 2025). | |
10.11 | Stock Purchase Agreement, by and between the Company and Terumo Medical Corporation, dated October 24, 2025 (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the SEC on October 28, 2025). | |
10.12 | Lockup Agreement, by and among the Company, Terumo Corporation and Terumo Medical Corporation, dated October 24, 2025 (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed with the SEC on October 28, 2025). | |
10.13+# | Orchestra BioMed Holdings, Inc. 2025 New Hire Inducement Plan. | |
10.14+# | Form of Stock Option Grant Notice and Stock Option Agreement for the Orchestra BioMed Holdings, Inc. 2025 New Hire Inducement Plan. |
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10.15+# | Form of Restricted Stock Unit Grant Notice and Award Agreement for the Orchestra BioMed Holdings, Inc. 2025 New Hire Inducement Plan. | |
31.1+ | Certification of Chief Executive Officer, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2+ | Certification of Chief Financial Officer, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1* | Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
32.2* | Certification of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
101.INS | Inline XBRL Instance Document. | |
101.SCH | Inline XBRL Taxonomy Extension Schema Document. | |
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. | |
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
+Filed herewith.
# Indicates a management contract or compensatory plan.
* | Furnished herewith. This exhibit shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that Section. Such exhibit shall not be deemed incorporated into any filing under the Securities Act or the Exchange Act. |
˄ | Certain identified information has been omitted pursuant to Item 601(b)(10) of Regulation S-K because such information is both (i) not material and (ii) information that the Registrant treats as private or confidential. The Registrant hereby undertakes to furnish supplemental copies of the unredacted exhibit upon request by the SEC. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
ORCHESTRA BIOMED HOLDINGS, INC. | |
Dated: November 10, 2025 | /s/ Andrew Taylor |
Andrew Taylor | |
Chief Financial Officer | |
(Principal Financial Officer) |
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FAQ
What were Orchestra BioMed (OBIO) Q3 2025 revenues and net loss?
How much cash did OBIO have at quarter end?
What financing did OBIO complete in 2025 year-to-date?
What were key operating expenses for Q3 2025?
What happened to the Terumo agreement?
What is the status of OBIO’s Medtronic collaboration?
How many OBIO shares were outstanding?
