Company: OCEA
Filing Date: 2025-04-08
Form Type: 10-K
Source: 0001641172-25-003155
Chunk: 2068

Company: Ocean Biomedical, Inc.
Filing Date: 2025-04-08
Form: 10-K
Item: Item 1A
Chunk 2068
---
 both as licensee and as licensor.

As
mentioned previously, we believe our business model may make us the ‘licensee of choice’ for institutions and researchers
because we aim to act with greater speed and to provide better potential upside when compared to the companies or spin-out startups to
whom the institution might also consider licensing. In particular, by housing each program in a subsidiary, we can grant a certain percentage
of that subsidiary’s ownership (targeting 20% in aggregate) to the institution and to the relevant researchers. We believe that
receiving such percentage of economic value, regardless of how it is derived, will be more attractive to the institution than relying
on the fixed milestone payments and single-digit royalties that are customary in other license agreements. Additionally, we believe that
individual researchers will find it more attractive to have a direct stake in a program’s economic value as opposed to receiving
a share (typically one third) of whatever economic value their institution would receive in customary license agreements. Lastly, we
believe institutions and their researchers will prefer our approach over launching a startup because we eliminate the challenge of raising
venture capital and securing a team, and because the percent equity ownership we can offer is likely to be higher than the single-digit
figures that usually result after the typical dilution in startups.

By
offering a percentage ownership in a program’s subsidiary in lieu of the alternative license fees, milestone payments and royalties,
we believe our license agreements (and the associated negotiation) will be greatly simplified while also being more attractive to our
licensors and their individual researchers.

Step
Three: Product Development, and Commercialization

We
are an asset-focused company with an operating model designed for agile, capital efficient, and scalable therapeutic product development.
We have a structure wherein Ocean Biomedical houses each drug development program or therapeutic platform in a subsidiary. Each of these
programs may include multiple product candidates or assets. This structure helps to ensure that we align interests and that we gain access
to the particular program’s scientific expertise and know-how. The results and outcomes of one subsidiary do not directly affect
others, and because our subsidiaries (or assets) are decoupled, success is not dependent on any one particular asset. We can thereby
evaluate each asset’s preclinical, translational and clinical development progress objectively, which we believe enables us to
allocate resources and capital throughout our portfolio based on each asset’s evidence-based progress and continued scientific
and commercial merits. The continued merits of an asset are periodically assessed using