Company: OCEA
Filing Date: 2025-01-13
Form Type: 10-Q
Source: 0001493152-25-001880
Chunk: 78

Company: Ocean Biomedical, Inc.
Filing Date: 2025-01-13
Form: 10-Q
Item: Item 1
Chunk 78
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 expense research and development costs as incurred,
which we expect will primarily include:

    ●
    expenses incurred under
    our licenses and services agreements;

    ●
    Employee-related expenses,
    including salaries and benefits for personnel engaged in research and development functions; and

    ●
    expenses incurred for outside
    services with our CMO relating to the development of certain of our preclinical assets.

We
recognize external development costs based on an evaluation of the progress to completion of specific milestones using information provided
to us by our service providers. This process involves reviewing open contracts and purchase orders, communicating with our personnel
to identify services that have been performed on our behalf and estimating the level of service performed and the associated cost incurred
for the service when we have not yet been invoiced or otherwise notified of actual costs. Such amounts are expensed as the related goods
are delivered or the related services are performed, or until it is no longer expected that the goods will be delivered or the services
rendered.

Our
direct external research and development expenses consist (or are expected to consist) primarily of external costs, such as fees paid
to outside consultants, CROs, CMOs and research laboratories in connection with our preclinical development, process development, manufacturing
and clinical development activities. Our direct research and development expenses also include fees incurred under license agreements.
We have not allocated and do not expect to allocate employee costs, costs associated with our discovery efforts, laboratory supplies,
and facilities, including depreciation or other indirect costs, to specific programs because these costs are or will be deployed across
multiple programs and, as such, are not separately classified. We use internal resources primarily to conduct our research and discovery
as well as for managing our preclinical development, process development, manufacturing and clinical development activities. These employees
work across multiple programs and, therefore, we do not track their costs by program.

Research
and development activities are key 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 trials. As a result, we expect that our research and development expenses will increase substantially over the next several
years, which will include:

    ●
    expenses incurred under
    our licenses and services agreements to conduct the necessary preclinical studies and clinical trials required to obtain regulatory
    approval;

    ●
    expenses incurred under
    agreements with CROs, that are