Ocugen Q3 2023 Earnings Call Transcript

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November 9, 2023

Key Takeaways

  • ARQ-400 gene therapy: Positive Phase II data in retinitis pigmentosa (RP) support a Phase III start in early 2024, with expansion to Leber congenital amaurosis (LCA) patients planned for H2 2024 upon favorable Phase I results.
  • Ocu410 ophthalmic programs: A Phase III trial is enrolling for geographic atrophy secondary to dry AMD, and a similar three-plus-three dose escalation with dose expansion design is planned for Stargardt disease.
  • NeoCART regenerative cell therapy: Construction of the cGMP manufacturing facility is due by year-end 2023, with qualification in H1 2024 and Phase III initiation for knee cartilage repair in H2 2024.
  • Ocu500 mucosal COVID-19 vaccine: Selected for NIAID’s Project NextGen Phase I trial to evaluate inhaled and intranasal delivery in H1 2024, leveraging strong preclinical immunogenicity.
  • Q3 2023 financial update: R&D expenses decreased to $6.3 M, net loss narrowed to $14.2 M ($0.06/share), and cash, cash equivalents and investments stood at $53.5 M as of September 30, 2023.
AI Generated. May Contain Errors.
Earnings Conference Call
Ocugen Q3 2023
00:00 / 00:00

There are 6 speakers on the call.

Operator

Good morning, and welcome to the Ocugen's Third Quarter 2023 Financial Results and Business Update. Please note that this call is being recorded at this time. All participants' lines are in a listen only mode. Following the speakers' commentary, there will be a question and answer session. I will now turn the call over to Tiffany Hamilton, Ocugen's Head of Corporate Communications.

Operator

You may begin.

Speaker 1

Thank you, operator, and good morning, everyone. Joining me on today's call and webcast is Doctor. Shankar Musanuri, Ocugen's Chairman, CEO and Co Founder, We'll provide a business update and an overview of our clinical and operational progress. Michael Breininger, our Corporate Controller is also on the call to provide a financial update for the quarter ended September 30, 2025. Doctor.

Speaker 1

Rune Apadhyay, Chief Scientific Officer, Head of Research, Development and Medical will be available to answer questions following the presentation. This morning, we issued a press release detailing associated business and operational highlights for the Q3 of 2023. We encourage listeners to review the press release, which is available on our website at ocugen.com. This call is being recorded and a replay with the accompanying slide presentation will be available on the Investors section of the Oxygen website for approximately 45 days. This presentation contains forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are subject to risks and uncertainties.

Speaker 1

We may, in some cases, use terms such as predict, believe, potential, propose, continue, estimates, anticipates, expects, plans, intends, may, could, might, will, should or other words that convey uncertainty of future events or comes to identify these forward looking statements. Such statements include, but are not limited to, statements regarding our clinical development activities and related and time lines. Such statements are subject to numerous important factors, risks and uncertainties that may cause actual events or results to differ materially from our and expectations. These and other risks and uncertainties are more fully described in our periodic filings with the Securities and Exchange Commission, SEC, including the risk factors described in the section titled Risk Factors in the quarterly and annual report we file with the SEC. Any forward looking statements that we make in this presentation speak only as of the date of the presentation.

Speaker 1

Except as required by law, we assume no obligation to forward looking statements contained in this presentation whether as a result of new information, future events or otherwise after the date of this presentation. Finally, Ocugen's quarterly report on Form 10 Q covering the Q3 of 2023 has been filed. I will now turn the call to Doctor. Musonuri.

Speaker 2

Thank you, Tiffany, and thank you all for joining us today. As emphasized in the press release we put out this morning, we continue to make significant headway with the development of our pipeline assets, particularly with our 1st in class ophthalmic gene therapy programs, and I'm proud of the momentum we have achieved to date. Following additional positive and encouraging clinical study results from our novel modifier gene therapy based Phase III ARQ400 study In September 2023, we believe we have strong clinical evidence to initiate our Phase 3 clinical trial in retinitis pigmentosa, RP patients in early 2024 based on FDA conference. Utilizing a dual track strategy, we also intend to Expand our ROCU-four hundred Phase 3 trial in the second half of twenty twenty four to include patients with leber congenital amaurosis, LCA contingent upon favorable results from the Phase 1 test study. With enrollment begun For our OcU-four ten and OcU-four ten ST programs, we are diligently working to dose patients this quarter.

Speaker 2

We anticipate clinical updates from our Ocu400, Ocu410 and Ocu410 SD studies in the later part of 2024. Our clinical and regulatory teams continue to work on responses to the FDA regarding our IND submission for OQ-two hundred, The company's ophthalmic biological product candidate and we plan to initiate a Phase 1 clinical study in the first half of twenty twenty four contingent on the lift of the FDA hold and adequate availability of funding. For our regenerative cell therapy candidate for knee cartilage repair, NeoCART, We are on track to complete construction of our state of the art cGMP facility at the end of this year and are planning to complete qualifications of the facility in the first half of twenty twenty four. We plan to initiate the Phase 3 clinical trial in the second half of next year. Last month, we were delighted to be selected for inclusion in a Phase 1 clinical trial funded by National Institute of Allergy and Infectious Disease to investigate the administration of our COVID-nineteen mucosal vaccine candidate, Ocu500.

Speaker 2

Safety and immunogenicity of Ocu500 will be evaluated using inhaled and intranasal routes of delivery during the Phase 1 clinical trial in the first half of twenty twenty four. All these catalysts considered, We can safely reiterate that 2024 will be transformative for Ocugen. Our mission to introduce Critically needed therapies into the market is imminent with the planned initiation of Phase III trials encompassing gene and cell therapies in the near term. Our R and D team's dedication and hard work has yielded significant progress and compelling results For our Tuft in class modifier gene therapy, Ocu400 program for RP and LCA patients. Throughout the Phase III trial, our primary objective has been to observe safety and tolerability of the subretinal administration of OQ400 in subjects as well as immune response and systemic distribution.

Speaker 2

Preliminary signs of efficacy, we focused on a few visual function and functional vision indicators, namely Best Corrected Visual Equity, BCVA Low Luminescence Visual Equity, LLVA and Multi Luminescence Mobility Test, MLMT. More details on our trial design can be found on clinicaltrials.gov with the identifier code listed at the bottom of the slide. Let me provide a situational analysis around the unmet need and under reserved market for RP and LCA patients. An estimated 1,600,000 people globally are affected by RP and LCA combined. In the U.

Speaker 2

S. Alone, we're looking at about 125,000 patients total. RP and LCA are classified as inherited retinal diseases From a group of heterogeneous disorders that affect the retina, these diseases often lead to sight loss and ultimately blindness. That said, the earlier homeostasis can be stabilized in patients With the easier of these diseases, the better. Through relevant medical meetings and continued engagement with advocacy groups, we aim to create awareness for the prevalence Oprytenitis pigmentosa and Leber congenital amaurosis and potential emerging therapies like our novel platform.

Speaker 2

Our ultimate objective is to provide treatment to people suffering from vision impairment and blindness caused by RP and LCA for whom currently no therapeutic options exist. I listed our 3 exploratory endpoints For visualization, stabilization and improvement observed in patients treated with OQ400 on Slide 4, BCVA, LLVA and MLMT and the 12 cumulative subjects that have undergone a minimum of 6 months follow-up post ORQ400 dosing, we observed the following metrics. The spin diagram demonstrates that 8 out of 12 subjects showed either stabilization means no change from baseline, plusminus4 letter change for BCVA and LLVA and 0 lux level change for MLMC Our improvement in all three parameters of BCVA and LLVA, which means 5 or more letters and MLMT greater than or equal to 1 lakh level, demonstrating initial efficacy of ARQ400. Non responders are listed outside the circles for each group. To recap, what we know from our findings to date Is that Ocu400 has a favorable safety and tolerability profile in patients?

Speaker 2

Positive trends are observed in all set Visualization stability and improvement factors, which details that 83% of subjects demonstrated stabilization or improvement In the treated eye, either on BCVA, LLVA or MLNT scores from baseline, 75% of subjects show stabilization or improvement in treated eyes and MLNT scores from baseline. 86% of raw mutation subjects experienced either stabilization or improvement in MLMT scores from baseline, among which 29% demonstrated 3 lux luminescence level improvement, demonstrating the gene agnostic mechanism of action of our AQ-four hundred. The Rho mutation affect more than 10,000 people in the U. S. Alone.

Speaker 2

Based on this data, we are highly enthusiastic about the future of the ARCU-four hundred and the vision saving potential it may provide to RP and LCA patients. The execution of critical elements of the ARQ400 Phase III trial, including the completion of dosing of ARP P and LCA patients set the stage for us to execute a Phase 3 clinical trial for both indications in 2024 upon FDA contracts. OQ410, our modified gene therapy candidate for dry age related macular degeneration, AMD, It's a potential one time curative therapy with a single subretinal injection that targets multiple pathways causing dry AMD, including lipid metabolism, inflammation, oxidative stress and complement activation. Unlike other currently market products targeting a single pathway complement activation, we are currently enrolling patients In the Phase III ARGMARDA study to assess the safety and efficacy of our Q410 for geographic atrophy Secondary to dry AMD, geographic atrophy, an advanced form of dry age related macular degeneration affects approximately 1,000,000 people in the United States alone. From a competitive standpoint, we believe OQ410 is differentiated Among other therapies available and in development for geographic atrophy and dry AMD drives frequency of administration, Onetime versus multiple injections per year, reduced side effects from structural impact, strong safety profile, It's a mechanism for restoring homeostasis and preserving the conditions that promote cell health.

Speaker 2

The slide demonstrates how Ocu410 utilizes an AAV delivery platform for the retinal delivery of RORA G. In preclinical studies, OCuPORTER demonstrated efficacy in regulating multiple pathways involved with the disease, including Lipid metabolism, reducing loose inflammation, regulation of inflammation, suppressing inflammation, oxidative stress, On this slide, we have captured our proposed program design for OXC-four ten in 63 adult subjects, 50 or older, with geographic atrophy secondary to dry AMD, we will observe the treatment effect of our single Unilateral subretinal injection, Ocuvortem, starting with safety and efficacy in patients. We're employing a 3 plus 3 design with a low, medium and high dose in addition to a dose expansion exercise Using a 1 to 1 design, randomizing subjects to either 2 treatment groups per dose levels are 1 Control Group. Using a similar approach, our orphan drug designated Ocuv410st modifier gene therapy platform for Stargardt disease leverages nuclear hormone receptors to modulate Selectivity and utilizes an AAV delivery platform for retinal delivery of the RAR related orphan receptor A. ARQ410 delivery and preclinical studies of Stargardt disease demonstrated a structural and functional improvement.

Speaker 2

In the Ocu410 ST Phase III trial, we intend to treat and investigate 42 subjects, 30 of which are adults and 12 are children with Stargardt disease. The adult inclusion criteria Look at adult patients between 18 to 65 and pediatrics between 6 to 17. We're employing a 3 plus 3 design with a low, medium and high dose cohort in addition to your dose expansion exercise Using a 1 to 1 design, randomizing subjects to either 2 treatment groups per dose levels or 1 control group. Our team's diligence efforts resulted in NIAID selecting OQ400 For inclusion in the Project NextGen Phase 1 clinical trial of our mucosal vaccine candidates for COVID-nineteen likely to be initiated in the first half of twenty twenty four. From our own development efforts, we observed vaccine induced high neutralizing and effector responses during preclinical studies on ARQ500, we believe the inhaled route of administration has a potential to be the holy grail for broad and durable protection from severe diseases and can suppress the transmission rate.

Speaker 2

As a refresher, Project Next Gen, a multi government agency initiative overseen by NIAID, It's a $5,000,000,000 multi government agency initiative to develop the next generation of vaccines and therapeutics to combat the spread of COVID-nineteen. NIAID will execute the clinical trial for Ocu500. Upon completion of the trial, OpRegen will possess full rights of reference to the findings. This initiative is a testament to the fact that COVID-nineteen is still rampant with emergence of new variants and needs more durable vaccines to treat them. In the recent Harris Poll, we favorably found that 66% of Americans would prefer to have more vaccine options.

Speaker 2

The poll also found that 52% of Americans would be more open to getting an intranasal or inhaled versus injectable COVID-nineteen vaccine. In line with MIAD's missions to support innovation and public health, We look forward to potentially expanding the platform for the flu and other respiratory viral diseases and infections. I'd like to bring our pipeline updates to a close by providing a brief update on NeoCART. Ocugen's autologous region retro cell therapy, which uses patients' own cartilage cells, is on track to begin its Phase III clinical trial in the second half of twenty twenty four. A cGMP facility for manufacturing NeoGuard is expected to be completed at the end of 2023 and qualification is expected in the first half of twenty twenty four.

Speaker 2

MASQ-two hundred is an ophthalmic biological product candidate In preclinical development for treating severely site threatening diseases like diabetic macular edema, diabetic retinopathy and wet We are working on responses and continue to interact with the FDA regarding the clinical hold on our ROCE-two hundred IND submission and expect to initiate a Phase 1 clinical study in the first half of twenty twenty four. With that, I will now turn the call over to our Corporate Controller, Michael Berninger to provide an update on our financial results for the Q3 ended September 30, 2023. Michael?

Speaker 3

Thank you, Shankar. Our research and development expense for the quarter ended September 30, 2023 were $6,300,000 compared to $15,600,000 for the Q3 of 2022. General and administrative expenses for the quarter ended September 30, 2023 were $9,100,000 compared to $7,500,000 during the same period in 2022. Net loss was approximately $14,200,000 or $0.06 net loss per share for the quarter ended September 30, 2023, compared to a net loss of approximately $21,900,000 or $0.10 net loss per share for the Q3 of 2022. Net loss was approximately $53,600,000 or $0.22 net loss per share for the 9 months ended September 30, 2023, compared to a net loss of approximately $59,400,000 or $0.28 net loss per share for the 9 months ended September 30, 2022.

Speaker 3

Our cash, cash equivalents and investments totaled $53,500,000 as of September 30, 2023 compared to $90,900,000 as of December 31, 2022. As always, we are constantly exploring strategic and shareholder friendly opportunities to increase our working capital And we'll be focused on seeking out corporate partnerships for gene therapies and non dilutive funding for vaccines. That concludes my update for the quarter.

Speaker 2

Tiffany, back to you.

Speaker 1

Thank you, Mike. We will now open the call for questions. Operator?

Operator

Then the number 1 on your telephone keypad. We'll pause for just a moment to compile the Q and A roster. We have questions come from the line of Arthur Haire, H. C. Wainwright, your line is open.

Speaker 4

Hey, good morning, Shuang and team. Here is RK, Arthur for RK. Congrats on the progress. So I just had a couple On 400, so when could we expect the complete data set from the Phase 2 study as we especially for the LCA patients. That If you can give some color on that, it will be appreciated.

Speaker 2

Yes. The LCA, we just

Speaker 4

dosed. So I think it

Speaker 2

will take until later part of next year.

Speaker 4

How about the other patient left in the RPE Group.

Speaker 2

Yes, the RPE patients will get it in the first half. However, we believe we have adequate information We are working with the regulatory agencies FDA and DMA for Phase 3.

Speaker 4

Okay. So speak of the Phase 3 study. So from what you said in the press release and the call, is the Phase 3 will be a single Phase 3 packet together both RPE patient as well as LCA or it could be 2 separate Phase 3 study.

Speaker 2

We'll start with RP because that's the data we have right now. And then we're going to add LCA arm little later in the clinical trial.

Speaker 4

Okay. So that would be in the single Phase 3 or?

Speaker 2

Yes. Okay.

Speaker 4

Okay. I see. And the last question on the 400 is, One is for regard have you requested a meeting with FDA? And based on your own Proposal, which endpoint going to be your primary endpoint?

Speaker 2

I'll let Doctor. Rupad, they answer that or CSO.

Speaker 5

Go ahead, Arun. Thanks, Shankar. So we are considering a combinatorial approach And we have proposed that to the FDA and we are going to have a meeting with them this quarter And accordingly, once we have alignment with FDA, then we'll update the market.

Speaker 4

Okay. Sounds great. Thanks for taking my question.

Operator

Our next question comes from the line of Robert Lebrier with Noble Capital Markets. Your line is open.

Speaker 3

Good morning and thanks for taking my questions. I just had a follow-up on the Phase 3 for OCU-four hundred. And wondering if you have any information or could disclose How many patients you expect to be in the trial or what the length of follow-up is going to be for the patients?

Speaker 2

Good morning, Robert. I'll let Arun address that.

Speaker 5

Yes. So we are planning in the range of close to 100 subject in Phase 3 in 1 stone randomization and 1 year follow-up. Just to confirm, it is 100, okay.

Speaker 2

It's 100 patients, Robert.

Operator

There are no further questions at this time. I will now turn the call over to Chairman and CEO, Doctor. Shankar Masanuri.

Speaker 2

In closing, I'd like to reiterate our unwavering commitment to groundbreaking science and clinical innovations in order to create effective and positively impactful therapies that are accessible to patients globally. As we continue to execute stated plans, we remain focused on delivering Thank you and have a great

Speaker 1

day. Thanks everyone.

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