Clearside Biomedical: Equity Holders Challenge $2.7M Stalking Horse in Debt-Free Bankruptcy

Clearside Biomedical, Inc., a clinical-stage biopharmaceutical company focused on suprachoroidal drug delivery and the developer of the first FDA-approved therapy for macular edema associated with uveitis, filed for chapter 11 bankruptcy protection on November 23, 2025, in the U.S. Bankruptcy Court for the District of Delaware. The company, which raised approximately $51 million in its 2016 IPO and accumulated over $374 million in losses while developing its SCS Microinjector platform, entered bankruptcy with $3 million in cash and is pursuing a 363 sale with Health Ocean Limited designated as stalking horse bidder at $2.7 million. The Ad Hoc Group of Equity Holders argues that with no funded debt and no trade debt, sale proceeds after administrative expenses should benefit equity holders. The group has challenged the sale process, arguing the company is worth $10.3 million to $20.3 million and alleging management waived a contingent $12.5 million payment from HealthCare Royalty Partners—nearly five times the stalking horse bid. The auction is scheduled for January 20, 2026, with assets including the Phase 3-ready CLS-AX program targeting the $12 billion-plus wet AMD market.

Company Background and Technology Platform

Founding and the SCS Microinjector.

Clearside Biomedical was founded in May 2011 by Daniel White, emerging from more than five years of research collaboration with Emory University and Georgia Tech focused on using microneedles to access the suprachoroidal space in the eye. The company developed its proprietary SCS Microinjector platform—the first and only FDA-approved device to access the suprachoroidal space for drug delivery.

The suprachoroidal space sits between the sclera (the white outer layer of the eye) and the choroid (the vascular layer that supplies blood to the retina). Traditional methods of delivering drugs to the back of the eye—such as intravitreal injections—distribute medication throughout the vitreous cavity, potentially exposing non-diseased tissues to the drug. Clearside's technology enables targeted delivery directly to diseased tissue.

White had previously founded Alimera Sciences, another ophthalmic company that went public, and his various ventures had raised over $475 million before Clearside's bankruptcy. Clearside completed its initial public offering in June 2016, raising approximately $51 million in net proceeds, with shares trading on the Nasdaq Global Market under the ticker symbol CLSD.

XIPERE: First FDA-Approved Suprachoroidal Therapy.

In October 2021, the FDA approved XIPERE (triamcinolone acetonide injectable suspension) for suprachoroidal use. The approval was the first for injection into the suprachoroidal space and the first therapy approved for macular edema associated with uveitis.

Uveitis is inflammation of the uvea—the middle layer of the eye—and affects approximately 285 per 100,000 people in the United States. The condition is responsible for approximately 10% of blindness cases in the U.S., and macular edema develops in 20-30% of uveitis patients, threatening their central vision.

XIPERE delivers corticosteroid via suprachoroidal injection for uveitic macular edema. The delivery route targets the suprachoroidal space rather than the vitreous cavity, which the company stated is designed to reduce exposure to the anterior segment of the eye—where steroid-related adverse events such as cataracts, intraocular pressure elevation, and worsening of glaucoma can occur.

Bausch + Lomb held the exclusive license for commercializing XIPERE in the United States and Canada, launching the product commercially in March 2022. The product was subsequently approved in Canada in July 2025 and by Arctic Vision's partners in Australia and Singapore in January 2025.

CLS-AX: The Phase 3-Ready Wet AMD Program.

CLS-AX, Clearside's most advanced internal program at the time of bankruptcy, delivered axitinib—a tyrosine kinase inhibitor—via suprachoroidal injection to treat wet age-related macular degeneration.

Wet AMD is a leading cause of vision loss in older adults, occurring when abnormal blood vessels grow under the retina and leak fluid or blood. The condition affects millions of patients worldwide and represented a $12.06 billion treatment market in 2024, projected to reach $23.42 billion by 2034.

Current standard-of-care for wet AMD relies primarily on anti-VEGF injections—medications that block vascular endothelial growth factor to slow or stop blood vessel growth. These treatments typically require frequent intravitreal injections, often monthly or every two months.

Clearside designed CLS-AX to extend dosing intervals to every three to six months. In October 2024, Clearside announced positive topline results from its ODYSSEY Phase 2b clinical trial:

In March 2025, Clearside announced a successful End-of-Phase 2 meeting with the FDA and alignment on Phase 3 plans. The proposed Phase 3 program would consist of two concurrent non-inferiority trials comparing CLS-AX to aflibercept, with a primary endpoint of average change in best corrected visual acuity at week 52.

Strategic Partnerships and Licensing Collaborations.

Clearside's business model combined internal development with licensing of its SCS technology across multiple therapeutic areas.

Bausch Health licensed XIPERE in October 2019 for up to $76 million in total consideration—$5 million upfront, up to $15 million in pre-launch milestones, and $56 million in regulatory and sales milestones. Arctic Vision received its license in March 2020, initially for Greater China and South Korea, with the territory later expanded to include Australia, New Zealand, India, and ASEAN countries.

REGENXBIO licensed the SCS Microinjector in 2019 for delivering its gene therapy RGX-314 for wet AMD and diabetic retinopathy. BioCryst entered an exclusive worldwide license in November 2023 for using the SCS Microinjector to deliver avoralstat for diabetic macular edema, paying $5 million upfront with up to $77.5 million in potential milestones.

Path to Bankruptcy

Financial Trajectory and Cash Runway.

As a clinical-stage biopharmaceutical company, Clearside funded research and development with external capital and had limited product revenue.

The company's stock fell 67% to $0.86 in premarket trading on the bankruptcy announcement—after having already declined 97.5% over the prior year. The company had received a Nasdaq non-compliance notice in February 2025 regarding minimum bid price requirements and another in August 2025 regarding minimum market value requirements. A reverse stock split in September 2025 temporarily addressed compliance, but the company ultimately received a delisting notice on November 24, 2025. Trading was suspended from Nasdaq effective December 1, 2025, with shares moving to OTC Pink under symbol CLSDQ.

The HealthCare Royalty Transaction.

In August 2022, Clearside entered a transaction with HealthCare Royalty Partners. The company sold royalty and milestone payment rights for up to $65 million through its subsidiary Clearside Royalty LLC.

The transaction granted HCR royalty and milestone rights related to XIPERE and certain SCS Microinjector license agreements, with Clearside pledging 100% of its equity interest in Clearside Royalty LLC as security. The transaction excluded Clearside internal development programs, including CLS-AX.

In September 2024, the parties amended the royalty agreement, with Clearside Royalty LLC receiving an additional $3 million from HCR in exchange for remaining assets related to SCS Microinjector technology. The aggregate royalty payment cap was reduced from $110.5 million to $106.5 million.

A September 4, 2025 Omnibus Amendment is cited in the equity holder objection. The Ad Hoc Equity Group alleged that through this amendment, the Debtor waived a contingent $12.5 million payment from HCR—a sum nearly five times the ultimate stalking horse bid.

Strategic Review and Workforce Reduction.

The timeline continued in 2025 as the company's cash runway shortened:

On July 17, 2025, Clearside announced plans to explore strategic alternatives, retaining Piper Sandler as investment bank to support the evaluation. The alternatives included sale, license, monetization, divestiture, merger, acquisition, or joint ventures. All employees—including the CEO, CFO, and CMO—transitioned to consulting roles, and the company paused all internal R&D programs. Shares dropped 24.73% to $0.63 following the announcement.

Biotech Funding Crisis Context.

Clearside's filing occurred during a broader downturn in biotech financing. The sector's value dropped more than 70% from its 2021 peak, and venture capital groups raised only $11.70 billion for biotech in 2024 compared to $30.80 billion in 2021. Biotech IPOs dropped 93% in 2022 versus 2021.

The 2024 biotech financing environment described a divide between companies with valuable late-stage assets and those with depressed stock prices. Thirteen biopharma firms went bankrupt in 2024—one fewer than the decade high of 14 in 2023.

Clearside reported accumulated losses, depleted cash, and suspended internal R&D programs before the filing.

Section 363 Sale Process

Stalking Horse Designation.

On December 19, 2025, the Bankruptcy Court entered the Bidding Procedures Order with Health Ocean Limited designated as the stalking horse bidder.

Bid protections are limited to expense reimbursement capped at $100,000—approximately 3.7% of the bid—with no break-up fee.

Assets for Sale.

The sale encompasses substantially all of Clearside's assets:

• SCS Microinjector Platform: The proprietary technology and related intellectual property
• CLS-AX Clinical Program: Phase 3-ready wet AMD candidate with FDA alignment
• XIPERE-Related Rights: Subject to HCR's interest through Clearside Royalty LLC
• Licensing Agreements: Partnerships with Bausch+Lomb, Arctic Vision, REGENXBIO, Aura Biosciences, and BioCryst
• Clearside Royalty LLC: 100% equity interest in the non-debtor subsidiary
• IND-Ready Preclinical Programs: Earlier-stage development candidates
• Net Operating Losses: Estimated $502+ million in federal and state NOLs

Approved Sale Timeline.

The 64-day timeline from petition to sale hearing drew objections from both the U.S. Trustee and the Ad Hoc Equity Group.

Qualified Bid Requirements.

To participate in the auction, competing bidders must satisfy several requirements:

The auction, if necessary, will be held at Cooley LLP's offices at 55 Hudson Yards in New York. The format will be open and transcribed or recorded, with parties in interest permitted to attend upon providing one business day prior written notice.

Equity Holder Controversy

The Ad Hoc Group Valuation Analysis.

An Ad Hoc Group of Equity Holders formed and engaged Dundon Advisers LLC to prepare a valuation analysis. The group is represented by Orrick, Herrington & Sutcliffe LLP and Morris, Nichols, Arsht & Tunnell LLP.

The Ad Hoc Group's analysis concluded that the $2.7 million stalking horse bid represented approximately half of the company's market capitalization just two days before the bid designation. Between the petition date and December 15, 2025, the stock price more than doubled from $0.41 to $1.04, resulting in a market capitalization over $5.4 million—still above the stalking horse amount.

Key Objection Arguments.

On December 17, 2025, the Ad Hoc Equity Group filed a Limited Objection to the proposed bidding procedures, raising several concerns:

Undervaluation. The group argued that the $2.7 million stalking horse bid undervalues assets estimated at $10.3 million to $20.3 million based on their analysis.

No Debt Benefit. Clearside has zero funded debt and zero trade debt. The Ad Hoc Group argued that with no secured or unsecured debt to satisfy, all value after administrative expenses should inure to equity holders.

Waived HCR Payment. The group alleged that through the September 2025 Omnibus Amendment, the Debtor waived a contingent $12.5 million payment from HealthCare Royalty Partners. This sum is nearly five times the stalking horse bid, and the group argued it reduced value available to equity holders.

Holiday Timeline. The expedited sale schedule straddling Thanksgiving, Christmas, and New Year's holidays was criticized for preventing adequate due diligence and potentially chilling competitive bidding.

Management-Led Process. The group characterized the sale as a management-led process lacking adequate due process for equity holders and requested that the Ad Hoc Group be designated as a consultation party with rights to participate in buyer negotiations.

On December 24, 2025, the Ad Hoc Group filed a motion for an Official Equity Committee directing the U.S. Trustee to appoint an Official Committee of Equity Security Holders under 11 U.S.C. § 1102. The motion argued that because the Debtor has no funded debt and may not be hopelessly insolvent, equity holders have an economic stake in the case outcome and require independent representation. The U.S. Trustee had earlier filed its own objection to the bidding procedures, citing the expedited timeline during the holiday season and the potential for chilled bidding. That objection was resolved through revisions to the Bidding Procedures Order.

NOL Preservation

The Debtor filed a NOL Preservation Motion to establish notice and objection procedures for transfers of equity securities to preserve an estimated $502+ million in federal and state Net Operating Losses. An Interim NOL Order was entered on December 19, 2025.

The NOL preservation procedures include:

• Notification Requirements: Substantial equity holders must provide notice of intended transactions
• Trading Restrictions: Limitations on ownership changes that could trigger Section 382 limitations
• Oversight Authority: Court authority to void non-compliant transfers if necessary

The NOL procedures are intended to preserve these tax attributes through the sale process, subject to ownership-change limitations.

First Day Relief

The Debtor filed standard first day motions on November 23, 2025, as described in the First Day Declaration, receiving interim relief on November 25, 2025, and final relief on December 22, 2025.

The first day relief focused on standard motions. Clearside reported no funded debt and no trade debt.

Ophthalmology Market and Strategic Considerations

The assets being sold target ophthalmology markets:

The global ophthalmic drugs market was estimated at $38.20 billion in 2024, projected to reach $62.08 billion by 2030 at an 8.5% compound annual growth rate. Anti-VEGF agents led the market with 32.9% of global revenue in 2024, with aflibercept (Eylea) commanding the largest share at 45% of the anti-VEGF segment.

CLS-AX Phase 3 Status. The FDA aligned on Phase 3 plans following Phase 2b results that met all primary and secondary endpoints. The Phase 3 program would consist of two concurrent non-inferiority trials comparing CLS-AX to aflibercept, with a primary endpoint of average change in best corrected visual acuity at week 52.

SCS Platform Partnerships. The platform is licensed through partnerships with REGENXBIO, Aura Biosciences, BioCryst, Bausch + Lomb, and Arctic Vision.

NOL Asset. The $502+ million in estimated NOLs can offset future taxable income, subject to Section 382 limitations following an ownership change.

Existing Revenue Streams. Partnership agreements with Bausch+Lomb, Arctic Vision, and others provide royalty and milestone income, subject to the HCR interest through Clearside Royalty LLC.

Professional Retentions

Debtor Professionals.

Ad Hoc Equity Group Professionals.

HealthCare Royalty Partners IV, L.P. appeared in the case represented by Young Conaway Stargatt & Taylor, LLP. Emory University and Georgia Tech Research Corporation—the academic institutions whose research spawned the SCS technology—also filed notices of appearance.

Frequently Asked Questions

What is Clearside Biomedical? Clearside Biomedical is a clinical-stage biopharmaceutical company focused on suprachoroidal drug delivery using its SCS Microinjector platform. Founded in 2011, the company developed XIPERE—the first FDA-approved therapy for macular edema associated with uveitis and the first product approved for injection into the suprachoroidal space.

Why did Clearside file for bankruptcy? As a clinical-stage biotech, Clearside accumulated $374 million in losses while developing its platform without generating meaningful product revenue. Cash runway extended only into Q4 2025, and the company was unable to secure financing or a strategic transaction in a biotech funding environment where over 50% of publicly traded biotechs had less than two years of cash runway.

What assets are being sold? The sale includes the SCS Microinjector platform, the Phase 3-ready CLS-AX program for wet AMD, rights related to XIPERE, licensing agreements with five partners (Bausch+Lomb, Arctic Vision, REGENXBIO, Aura Biosciences, BioCryst), intellectual property, 100% of Clearside Royalty LLC, and estimated $502+ million in NOLs.

Why is there an equity holder dispute in this case? Clearside has no funded debt and no trade debt. The Ad Hoc Equity Group argues that all sale proceeds after administrative expenses should benefit equity holders, and that the $2.7 million stalking horse bid undervalues assets worth $10.3-$20.3 million.

What is the significance of the $12.5 million HCR payment allegation? The Ad Hoc Equity Group alleges the Debtor waived a contingent $12.5 million payment from HealthCare Royalty Partners in a September 2025 amendment—nearly five times the stalking horse bid. The group argues this reduced value available to equity holders.

When is the auction and sale hearing? The auction is scheduled for January 20, 2026 at Cooley LLP's New York office. The sale hearing is January 26, 2026 before Judge Horan, with closing expected within three business days after entry of the sale order.

Why are equity holders requesting an Official Committee? The Ad Hoc Group argues that because the Debtor has no funded debt and may not be hopelessly insolvent, equity holders have an economic stake in the outcome and require independent representation through an Official Equity Committee.

What is the value of Clearside's CLS-AX program? CLS-AX achieved positive Phase 2b results and received FDA alignment on Phase 3 plans. It targets the $12+ billion wet AMD market with a potential 3-6 month dosing schedule compared to frequent anti-VEGF injections.

What happened to the company's stock? Shares declined 97.5% over the year before filing and dropped 67% to $0.86 in premarket trading on the bankruptcy announcement. Trading was suspended from Nasdaq on December 1, 2025, with shares moving to OTC Pink under symbol CLSDQ. The stock subsequently rose 154% from $0.41 to $1.04 between the petition date and mid-December.

What are NOLs and why do they matter? Net Operating Losses are cumulative tax losses that can offset future taxable income. Clearside has estimated $502+ million in NOLs, which can offset taxable income for an acquirer subject to ownership-change limitations.

Who is the claims agent for Clearside Biomedical? Epiq Corporate Restructuring, LLC serves as the claims and noticing agent. The firm maintains the official claims register and distributes case notifications to creditors and parties in interest.

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