Ocugen Q2 2023 Earnings Call Transcript

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August 22, 2023

Key Takeaways

  • Ocugen’s lead OQ-400 modifier gene therapy for retinitis pigmentosa showed positive Phase 1/2 safety and efficacy, with a Phase 3 adult trial planned for end 2023/early 2024 pending FDA discussions.
  • The FDA cleared INDs for OQ-410 (geographic atrophy) and OQ-410 ST (Stargardt disease), with Phase 1/2 trials set to begin by the end of 2023.
  • NeoCART, Ocugen’s autologous regenerative cell therapy, has a GMP manufacturing facility on track for completion by year-end 2023 and aims to start its Phase 3 trial in H2 2024 under RMAT designation.
  • Ocugen is developing an inhaled mucosal vaccine platform (OQ-500 series) targeting COVID-19 and seasonal flu with up to one-year durability, actively pursuing non-dilutive government funding for an IND submission in 2024.
  • In Q2 2023, R&D expenses increased to $14.2 M, net loss was $22.9 M, cash and equivalents totaled $70.6 M, and the company estimates a quarterly cash burn of ~$15.9 M after raising $16.5 M in May’s public offering.
AI Generated. May Contain Errors.
Earnings Conference Call
Ocugen Q2 2023
00:00 / 00:00

There are 8 speakers on the call.

Operator

Good morning, and welcome to Okugen's Second Quarter 2023 Financial Results and Business Update. Please note that this call is being recorded at this time. All participants' lines are in 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. Joining me today are Austin's Chairman, CEO and Co Founder, Doctor. Shankar Musanuri, who will provide a business and financial update and Doctor. Arun Upadhyay, our Financial Scientific Officer, Head of Research, Development and Medical, who is also on the call to answer questions during the Q and A. Yesterday afternoon, we issued a press release detailing business and operational highlights for the Q2 of 2023.

Speaker 1

We encourage listeners to review the press release, which is available on our website at oxygen.com. This call is being recorded and a replay with the accompanying slide presentation will be available on the Investors section of the Ocugen 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. 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 outcomes to identify these forward looking statements. Such statements include, but are not limited to, statements regarding our clinical development activities and related anticipated timelines.

Speaker 1

Such statements are subject to numerous important risk factors, uncertainties and may cause actual events or results to differ materially from our current expectations. These and other risks These uncertainties are more fully described in our periodic filings with the Securities and Exchange Commission, the SEC, including the risk factors described in the section entitled Risk Factors and the quarterly and annual reports that we file with the SEC. Any forward looking statements that we make in this presentation speak only as of the date of this presentation. Except as required by law, we after the date of this presentation. Finally, Ocugen's quarterly report on Form 10 Q covering the Q2 of 2023 has been filed.

Speaker 1

I will now turn the call to Doctor. Musinuri.

Speaker 2

Thank you, Tiffany. Good morning and thank you all for joining us today. The Q2 of 2023 marked a period of continued progress toward our regulatory and clinical milestones, which we are delighted dedicated to advancing through end of the year. With a strategic focus on our novel modifier Gene therapy and biologic based ophthalmic programs, we expect to begin dosing patients across these platforms by the end of this year. We are on track to initiate the OQ400 Phase 3 adult trial near the end of 2023, early 2024, subject to outcome of ongoing Phase onetwo trial and discussions with FDA on proposed Phase 3 trial plan.

Speaker 2

We also anticipate a clinical study results update For OcQ-four hundred this quarter, investigational new drug applications were cleared by FDA for OcQ-four ten and Ocu410 ST for geographic atrophy and Stargardt disease respectively. We plan to initiate Phase onetwo trials by the end of 2023. We're also planning to initiate the Phase 3 clinical trial For our regenerative cell therapy product candidate, NeoCART in the second half of twenty twenty four, this would mean, in gene and cell therapies in 2024. In an effort to conserve our working capital and advance our patient centric agenda To develop a novel inhaled mucosal vaccine platform, we have submitted multiple proposals to obtain non dilutive government funding and are having discussions with pertinent agencies to secure their support for our RQ500 vaccine series. Our 1st in class modifier gene therapy to treat multiple inherited retinal diseases remains unmatched Industry wide, this unique gene agnostic approach has the potential to address retinal diseases caused by mutations In multiple genes with one product, our goal is to build on the innovation of gene therapy and expand its potential to treat a wider population of patients suffering from a host of rare retinal diseases that single gene replacement therapies are unable to address.

Speaker 2

In the Q2, we were honored to present in detail the mechanism of action on scientific basis For our modifier gene therapy platform, 2 preeminent researchers and medical professionals in attendance at the Association For Research in Vision and Ophthalmology and Bio International Conferences. As we advance our clinical agenda, We'll continue to identify and secure opportunities to educate stakeholders on the differentiation and potential benefits of this innovation innovative approach to gene therapy. In April, we announced encouraging and compelling positive preliminary safety and efficacy results from our Ocu400 Phase III multi center open label dose ranging clinical trial in patients afflicted with RP. We believe the preliminary findings from the study support the potential for our modifier gene therapy to be a viable alternative to traditional treatments to the increasing population of patients suffering from these diseases. Enrollment is ongoing for all defined subjects in this study, adults with LCA and children between ages of 6 to 17.

Speaker 2

Pending positive feedback from the FDA, we aim to initiate our Phase 3 adult clinical trial end of this year or early 2024. We continue to execute our comprehensive strategy to develop Ocu 400 and bring it to market by 2026 with the goal of providing desperately needed treatment options for the esteemed 125,000 patients estimated in the U. S. Alone that suffer from RP and LCA. In parallel, we'll continue Progressing our other modified gene therapy programs to address additional optimal conditions.

Speaker 2

We believe that upon successful realization of these goals, Ocugen will have built a vast commercial footprint that may hold significant upside for our shareholders and most importantly, meet a critical medical need for patients. Dry age related macular degeneration It's one of the most prevalent neurodegenerative IDCs affecting approximately 10,000,000 people in the U. S. And nearly 266,000,000 people worldwide. Dry AMD results in irreversible loss of sight among elderly populations, leading to a lack of functional independence that severely impacts quality of life.

Speaker 2

A variety of biotechnology companies, Small and large are working to develop therapies for dry AMD. However, we believe our Ocuvore10 candidate can offer a less burdensome option for our patients. With OQ410, we are again investigating The potential for our novel modifier gene therapy to provide a one time treatment option that targets all 4 hallmark conditions of dry AMD, including lipid metabolism, inflammation, oxidative stress and complement activation. The current stand of care only targets the complement factor, requires multiple injections per year and has reported side effects. We're excited to initiate the Phase onetwo clinical trial this year because of the significant global unmet medical need.

Speaker 2

Moving on to Ocuvore 10 ST, we're extremely pleased to receive orphan drug designation from the FDA to address ABCA4 associated Retinal diseases such as Stargardt disease, RP19 and Kuhn's rot dystrophy for which there are currently no treatment options. Ocu410 ST is a novel modifier gene therapy that leverages nuclear hormone receptors to modulate cell activity and deutylitis An AAV delivery platform for retinal delivery of the RAR related orphan receptor A. Nuclear hormone receptors are master gene regulators that help maintain homeostasis by regulating diverse physiological functions such as photoreceptor development and maintenance, metabolism, phototransduction, inflammation and cell survival networks. We believe that by harnessing the power of nuclear hormone receptors, we can develop one time treatments that can modulate cell activity disrupted by disease causing gene mutations. Now turning to our efforts to develop a series of next generation inhalation vaccines, for which the company intends to submit an IND application in 2024 pending government funding.

Speaker 2

In multiple preclinical trials, Mucosal vaccines have demonstrated vaccine induced high neutralization titer and effector responses. Inhered mucosal vaccines represent a distinct product candidate profile that could help remedy major global health challenges and maximize our opportunity to serve a broader cross section of patients through a less invasive delivery mechanism with The potential for superior durability when compared with the current intramuscular administration, clinical studies using a similar vector Inhered administration have shown mucosal antibodies, systemic antibodies and durable immune response up to 1 year With 1 5th of the dose compared to traditional intramuscular vaccines, greater ease of administration presents the potential for Current COVID-nineteen vaccines are limited by lack of durability and marginal ability to prevent transmission. As a part of our commitment to address barriers to widespread vaccination to protect against COVID-nineteen, we are developing this inhaled vaccine platform that includes That includes Ocu500, a bivalent COVID-nineteen vaccine Ocu510, a seasonal quadrivalent flu inhaled vaccine In OQ-five twenty, a combination quadrivalent seasonal flu and bivalent COVID-nineteen entailed vaccine, the OQ-five hundred vaccine series It's based on a novel chat platform designed to reduce transmission and protect against new variants with potential durability up to 1 year.

Speaker 2

To optimize resources across our diverse at critically needed development programs and maintain shareholder value, Our team has been engaging with public health officials and federal government agencies to pursue non dilutive funding to support the development of our for Ocu-five hundred Vaccine Series. We maintain an ongoing dialogue with respect to agencies and anticipate receiving further information on the status of our funding request later this year. Earlier this year, the FDA notified us that they were putting a hold on our ROCKU-two hundred program and requested additional information related to chemistry, manufacturing and controls. We are working with the FDA To release the hold and expect the Phase 1 trial to be initiated in Q4, 2023. We believe ARK200 works with a distinct mechanism of action compared to existing therapies for the treatment of diabetic macular edema and targets multiple causative pathways such as angiogenesis, oxidation and inflammation has potential to offer better treatment to all patients.

Speaker 2

NeoCART is our Phase 3 ready, region radio cell therapy technology that combines novel advancement in bioengineering and cell processing to enhance the autologous cartilage repair process Manufacturing facility construction for NeoCART is on target to be completed by end of 2023 as planned. The company plans to initiate the Phase 3 trial in subjects with articular cartilage defect in the second half of twenty twenty four. We're highly dedicated to completing our stated objectives with the strategies we believe will enable Ocugen to reach several value enhancing milestones We are planning to file BLAs across all 1st in class platform technologies, gene therapies, cell therapies and vaccines in the next 3 to 5 years. I will now provide an overview of the key financial results for Q2 2023. Our research and development expenses for the quarter ended June 30, 2023 were $14,200,000 compared to $9,000,000 for the Q2 of 2022.

Speaker 2

This included a non recurring non cash expense of $4,400,000 as a result of the impairment of the short term asset for the advance payment for the supply of Covaxin as well as the associated loss on the disposal of related fixed assets. General and administrative expenses for the quarter ended June 30, 2023 were $9,600,000 compared to $10,600,000 for the Q2 of 2022. Net loss was approximately $22,900,000 or 0 $0.10 net loss per share for the quarter ended June 30, 2023, compared to a net loss of approximately $19,500,000 or $0.09 net loss Per share for the Q2 of 2022, our cash, cash equivalents and investments totaled $70,600,000 as of June 30, 2023 compared to $90,900,000 as of December 31, 2022. In May, we closed a public offering of 30,000,000 shares of common stock for gross proceeds of 16,500,000. Net proceeds from the offering are being used for general corporate purposes, capital expenditures, working capital, general and administrative expenses and R and D.

Speaker 2

We're continuously exploring 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. Tiffany, back to

Speaker 1

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

Operator

Our first question comes from the line of Jennifer Kim from Cantor Fitzgerald. Please go ahead.

Speaker 3

Hi, good morning. Thank you for taking my questions. I have 2. The first is, as you're thinking about cash Vern, going forward and you're seeking non dilutive funding opportunities, excluding the one time impairment Expense, is this quarter a good basis as we think about quarterly burn? And then my second question is on the Ocuny-four hundred program.

Speaker 3

Can you remind us what you're looking for in that updated data this quarter as sort of the gono go for the Phase 3 adult trial? Thanks.

Speaker 2

Yes, Jennifer, good morning. Let me address the first question, then Arun is going to take the second one. Yes, there is a one time impairment There's also non cash stock comp charge of $2,600,000 And if you add those 2, the cash Comes out to be $15,900,000 total per quarter. So that could be a good guidance for you for the future. I'll let Arun address the other question on RK400 program.

Speaker 4

Thank you, Sankar. Thanks, Jennifer. So yes, you are right. I think our this quarter update on Occhi 400 clinical Page 1 to data will guide us about our Phase 3 study. Yes, that's the data will be used as a basis for go no go decision for Phase 3.

Speaker 3

Okay. And can you remind us what you're looking for in that data?

Speaker 4

So primarily, we are looking at The functional improvement in the patients treated with HOP-four hundred and the focus is going to be the RP patient.

Speaker 3

Okay. And then in your discussions with the FDA later on for the Phase 3 trial, Is that going to focus on RP patients or are you also considering inclusion of LCA patients? Thank you.

Speaker 4

So to begin with, we'll start with the RP patient. And as we collect the data for LCA patients, then later we include LCA. But to begin with, yes, we are planning to go with adult RP

Operator

Our next question comes from the line of William Ramkhan from H. C. Wainwright. Please go ahead.

Speaker 5

Thank you. This is RK from H. C. Wainwright. So a couple of quick questions on the 400 program And then maybe one on the NeoCard.

Speaker 5

On the 400, So in terms of your discussions with the FDA, is that being planned once you see the data on the Phase onetwo or you have already initiated some initial conversations and started putting together a Phase 3 plan?

Speaker 4

Thanks, RK. So we have not initiated our discussion with FDA yet. So once We complete the data analysis, only then we are going to reach out to FDA. But that is planned for this quarter related to data update and followed by reaching out to FDA.

Speaker 5

Thank you for that. And then on the 4 10 program, In terms of now that you have already been cleared by the FDA, what else needs to get done before you can initiate the Phase onetwo study?

Speaker 4

Yes, we need to get the site ready and initiate the patient screening. And So that's why I think we are planning like to those first subject in this study both No, GA as well as Stargard this year. So it's more like getting ready with the clinical sites.

Speaker 5

Got it. Got it. And then on the NeoCART program, Just trying to understand, if the facility just gets completed by the end of 2023, What else needs to get done in terms of Commissioning the plant and getting the clinical material ready to start your program On the Phase 3 study by second half, is it just that or is it You still have to design the protocol. I'm just trying to understand what else, because we've been talking about this program for almost 1.5 years now.

Speaker 2

Yes. So RTA, the facility construction will be completed. It's a GMP facility. By end of this year, it's on target. And then as you know, this is a GMP facility.

Speaker 2

It takes a few months for Getting the qualification done and then they'll be ready to produce NeoCART in that facility. In the interim, obviously, the team is going to prepare CMC and clinical sections and they'll continue to update those so that they're ready for submission next year before they start the clinical trial. And we do have a RMAT designation, right? I just wanted to remind regenerative medicine advanced therapy designation with FDA. So when we have any questions in the interim, we can always reach out to them and get clarifications.

Speaker 5

Perfect. Thanks. Thanks for taking my questions.

Operator

Our next question comes from the line of Robert Laboye from Noble Capital Markets. Please go ahead.

Speaker 6

Good morning, everyone. My question has to do with the upcoming data presentation. And I was wondering if you could disclose whether The data to be presented will update the previous data on all patients or whether it will just be in new patients that Haven't been reported and wondering if there are any endpoints that you could share with us at this point?

Speaker 4

Thank you. So, yes, definitely, we'll be providing detailed update when we kind of Present this data to the market, but to address your first part of the question, whether it is going to include the percent we presented in our previous Disclosure, yes. So we will include those subjects as well as some new subjects, which has Completed additional follow-up visits. So it will be combination of both. Yes.

Speaker 6

Great. And you had mentioned corporate partnerships for the gene therapy. Can you discuss any type of arrangements whether they're going to be research and development or just marketing or any Objectives to the business development activities?

Speaker 2

I mean, Robert, this is a yes, It's a loaded question. Obviously, we'll be open to when you seek partnerships at this stage as a biotech, big pharma established With the infrastructure and everything else, obviously, your first target is going to be commercial. This is, as you know, complex science is involved in these clinical trials. Obviously, when you're going into Phase 3, once we have the data out, we'll obviously work very hard With any potential partners and obviously as you know, if they are interested in commercial development, they would be interested in Phase 3 program too. So I think we'll keep our options open, whatever can maximize our value for Ocugen as well as make sure we have Ability to provide market access to patients will desperately need this product.

Speaker 6

Okay, great. Thank you very much.

Operator

Our final question comes from the line of Dale Chatelain from Chardan. Please go ahead.

Speaker 7

Hey, good morning guys. Thank you for taking the question. Got a couple. One for OCU for TAMP programs. Just wanted to ask Strategically, how do you see it positioned one term, whether it's view it as a standalone approach or in combination with anything else And the patient population that you'll be targeting?

Speaker 7

And the second question is for the inhaled vaccine series. Can you comment on your interactions to date regarding the funding and particularly if you can comment on the Interest in this program given that there are several other approved options. Thank you.

Speaker 4

Thank you. So I'll take the first question. Yes, we are thinking of taking it as a standalone product. And to begin with, Definitely, we'll be targeting the advanced form of AMD, that is geographic atrophy. But subsequently, based on the outcome, It may be further developed for early and intermediate stage, depending on the clinical benefit coming from the GA trial.

Speaker 4

And regarding like how we see this product against other what we see in the market. So as you all know that AMD is a multifactorial digit and so far we have been seeing in this space that Most of the companies are focused on targeting only one pathway and by like very nature of these digits, being multifactorial in nature, there are Various causes which lead to this disease. So our product has potential to target all those pathways which are linked to DMD pathogenesis. So We believe that this could be a differentiated product and has potential to offer better clinical benefit compared to what we have right now.

Speaker 2

And, Daniel, good morning. The second question related to Government funding, again, we have been working with various agencies and I will provide an update. Obviously, the current products, as you know, The vaccines we have, especially for COVID, they lack a couple of things. One, they're struggling to control the transmission. There's a lot of data available, so right now and also they lack durability.

Speaker 2

So what would be ideal option going into I think there is definitely a need for mucosal vaccines. The scientific community agrees on that. And also that will provide Systemic as well as mucosal immunity. So you can actually potentially prevent the target of viral entry into Mucosal System. The second thing is durability.

Speaker 2

I mean, we believe and scientific community believes that COVID vaccinations In order to gain the compliance with public, you cannot keep on vaccinating every 3 months. That's why people get vaccine fatigue. So you need to move into like annual vaccinations such as flu, so your complaints rate will go up. So that's the intent. I think as we stated, There are ex U.

Speaker 2

S. Trials with inhalation vaccine using a similar technology showed durability up to 1 year. That's really important. So there are 2 things, controlling transmission and durability are very important for next gen vaccines. And we believe Our platform technology inhalation vaccines for COVID and flu, they can provide that.

Operator

This concludes the Q and A portion. I will now turn the call back over to Chairman and CEO, Doctor. Shankar Musanuri.

Speaker 2

Thank you, operator. In closing, I'd like to recognize the entire team for their resilient efforts to advance our patient centric mission. To our shareholders and partners, thank you for your ongoing trust and support. We're already well into the second half of twenty twenty three and steadfast in our commitment to transparency, informed decision making based on sound scientific principles and a tireless work ethic dedicated to excellence in all phases of research, development and clinical testing. We remain confident that we will be able to fulfill our mission of Developing novel therapies with innovative discovery to bring to market effective treatments for patients Suffering from a range of conditions that currently lack treatment options, We look forward to sharing more details on our progress in the coming months.

Speaker 1

Thanks everyone. Have a great day.

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