Company: OCEA
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-011080
Chunk: 4

Company: Ocean Biomedical, Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Item 2
Chunk 4
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 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 of (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 primarily engaged in the oversight and conduct of our drug discovery efforts and preclinical studies, clinical trials and CMOs, that are primarily engaged to provide preclinical and clinical product for our research and development candidates;

    ●
    other costs related to acquiring and manufacturing materials in connection with our drug discovery efforts and preclinical studies and clinical trial materials, including manufacturing validation batches, as well as investigative sites and consultants that conduct our clinical trials, preclinical studies and other scientific development services;