Ocugen, Inc. (NASDAQ:OCGN) Q1 2024 Earnings Call Transcript

Ocugen, Inc. (NASDAQ:OCGN) Q1 2024 Earnings Call Transcript May 14, 2024

Operator: Good morning, and welcome to Ocugen’s First Quarter 2024 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. You may begin.

Tiffany Hamilton: Thank you, operator, and good morning, everyone. Joining me on today’s call and webcast is Dr. Shankar Musunuri, Ocugen’s Chairman, CEO, and Co-Founder, who will 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 March 31, 2024; Dr. Arun Upadhyay, Chief Scientific Officer, Head of Research and Development; and Dr. Huma Qamar, Chief Medical Officer will be available to answer questions following the presentation. This morning, we issued a press release detailing associated business and operational highlights for the first quarter of 2024. 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 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 predicts, believes, potential, proposed, continue, estimate, anticipate, expect, 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.

Such statements are subject to numerous important factors, risks and uncertainties that may cause actual events or results to differ materially from our current expectations. These and other risks and 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 Annual Report we filed with the SEC. Any forward-looking statements that we make in this presentation speak only as of the date of the presentation. Except as required by law, we assume no obligation to update 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 Form 10-Q covering the first quarter of 2024 has been filed. I will now turn the call to Dr. Musunuri.

Shankar Musunuri: Thank you, Tiffany, and thank you all for joining us today. As detailed in our press release, we are excited to discuss the substantial progress of our game changing modifier gene therapy platform by using nuclear hormone receptors to restore homeostasis in the retina, modifier gene therapy has the potential to address multiple inherited retinal diseases as well as diseases larger multi-factorial diseases such as dry age-related macular degeneration through a gene agnostic approach. Just after the close of the first quarter of this year, we announced that the FDA cleared our IND application for the OCU400 Phase 3 limelight clinical trial and the EMA provided acceptability of the U.S. based trial for submission of a market authorization application.

I will discuss the significance of these milestones and the potential for OCU400 in greater depth later in the presentation. OCU410 and OCU410ST are now in Phase 1/2 clinical trials targeting geographic atrophy secondary to dry age-related macular degeneration and Stargardt disease, respectively with the clinical updates expected in the third quarter of 2024. Our cell therapy platform is poised to advance with the renovations to our existing facility completed earlier this year. This gives Ocugen the capability to support NeoCart autologous cell therapy manufacturing for personalized Phase 3 clinical material contingent upon adequate funding. Finally, OCU500 will soon advance into a Phase 1 clinical trial via the National Institute of Allergy and Infectious Diseases, NIAID sponsored trial comparing the administration of OCU400 via two different mucosal routes, inhalation into the lungs and as a nasal spray.

With three gene therapy candidates to treat blindness diseases in the clinic and the Phase 3 ready cell therapy candidate, we are confident that 2024 will be well weather for Ocugen. We are thrilled to share significant advancements in our leading modified gene therapy candidate OCU400, as it makes remarkable strides in clinical development. The green light from the FDA to begin the Phase 3 clinical trial marks a pivotal milestone as OCU400 becomes the first gene therapy to progress to Phase 3 trials with such a broad retinitis pigmentosa indication. Until now, there has been only one market product to treat one of the 100 gene mutations associated with RP. Now, there is real hope for all RP patients who haven’t had a treatment option. Our completion of enrollment and dosing in Phase 1/2 trial demonstrated promising safety and efficacy across various genetic mutations and dosage levels, paving the way for Phase 3 clinical trial.

OCU400 has already received key regulatory approvals including orphan drug regenerative medicine, advanced therapy and orphan medicinal product designations from both FDA and the European Commission for treating inherited retinal diseases. These endorsements highlight OCU400’s broad therapeutic potential, and we remain on track to meet 2026 BLA and MAA approval targets. We expect to begin dosing patients in the Phase 3 liMeliGhT clinical trial in the second quarter of 2024, which will include 150 subjects across two arms, one with patients affected by raw mutation and one arm that is gene agnostic. Luminance Dependent Navigation Assessment, LDNA, the primary endpoint for the study, focuses on the proportion of responders in treated and untreated control groups, achieving an improvement of at least 2 Lux Levels from baseline in the study acts.

The secondary endpoint will be measured by a change in low luminescence visual equity score of 0.3 LogMAR from the baseline. The effectiveness of the treatment will be compared to an untreated control group for the secondary endpoint as well. Additionally, leveraging a dual track strategy, we plan to expand the Phase 3 trial in the latter half of 2024 to include patients with Leber Congenital Amaurosis, LCA contingent on favorable results from Phase 1/2 study. Let me take a moment to discuss the unmet need and underserved market for RP and LCA patients. An estimated 1.6 million people globally are affected by RP and LCA combined in the U.S. and Europe alone, our initial target markets, there are nearly 300,000 total patients. RP and LCA are classified as inherited retinal diseases from a group of heterogeneous disorders that affect the retina.

These conditions frequently result in vision impairment and ultimately blindness. By establishing homeostasis in patients affected by these diseases, our aim is to preserve our improved vision by actively sharing our insights at pertinent medical conferences and engaging with advocacy groups, we strive to raise awareness of the desperate need to find a solution for RP and LCA patients, as well as potential of modified gene therapy to revolutionize treatment. To better understand the experience of one of our Phase 1/2 clinical trial patients, I encourage you to watch his video in the patient section of our website. Moving on to our development in the treatment of geographic atrophy, secondary to dry age-related macular degeneration dAMD and Stargardt disease with our OCU410 and OCU410ST programs.

These modified gene therapies leverage the nuclear receptor gene RAR Related Orphan Receptor A, RORA aiming to provide a potential one-time therapy for life with a single subretinal injection. OCU410 specifically designed to address multiple pathways implicated in the pathogenesis of dAMD offers a distinct advantage over current treatments that target only one cause of DGA and often require multiple injections per year accompanied by various safety concerns. Our approach with OCU410 is to provide a comprehensive and durable solution, a potential one-time therapy for life. Dry AMD affects about 19 million people in the U.S. and Europe combined, while GA affects about 2 million to 3 million people in the U.S. and Europe a significant market opportunity.

In December 2023, we began the Phase 1/2 ArMaDa clinical trial for OCU410. Considerable progress has been made with the completion of dosing in both the first and second cohort, low and medium doses. Following the successful dosing in this cohort, the Data and Safety Monitoring Board, DSMB will convene later this month to evaluate proceeding with the high dose cohort in the ongoing dose escalation phase of the study. After completion of the third cohort, we’ll transition into Phase 2 clinical trial, the expansion phase. A key upcoming event for this trial is a clinical update, which is anticipated in the third quarter of 2024. This data will provide initial insights into the safety and efficacy of OCU410. OCU410 Phase 1 study is multi-center and open-label focusing on dose ranging, while Phase 2 is randomized, aiming to expand our understanding of drugs efficacy and safety compared to a controlled untreated arm with patients randomized in a 1:1 ratio across two dosage groups and one control group.

Participants must be aged 50 or older, have a best corrected visual equity of approximately 24 letters or more using the ETDRS chart, and have a total geographic atrophy area between 2.5 and 20.5 millimeter square. We now turn to OCU410ST, which received orphan drug designation from FDA for the treatment of ABCA4 associated retinopathies including Stargardt disease. Stargardt affects approximately 100,000 people in the U.S. and EU combined. This modified gene therapy candidate also utilizes the RORA gene in the Phase 1/2 GARDian trial for Stargardt disease is actively enrolling patients. We have completed dosing in the first cohort low dose. In April 2024, the Data Safety and Monitoring Board approved the continuation to the medium dose phase, which we expect will be completed this month.

A clinical trial update for OCU410ST is also anticipated in the third quarter of 2024. The Phase 1/2 trial involves up to 42 participants, 30 adults and 12 children, which exhibit mild to moderate disease symptoms, the study uses a 3 + 3 dose escalation design in Phase 1, segmenting subjects into low, medium, and high dose cohorts. Following the dose escalation phase, the trial will transition into Phase 2, the expansion phase. This expansion phase will use a one to one to one design to randomize subjects into two different treatment groups at a varying dose levels or a control untreated group, allowing for a comprehensive assessment of treatments, efficacy across different dosages. Our work across OCU400, OCU410 and OCU410ST affirm our enduring commitment to the success of these modified gene therapies for the benefit of patients faced with the terrible prospect of losing their sight.

We are encouraged by the progress in these trials and look forward to sharing further updates as we reach critical milestones and get closer to addressing substantial unmet medical needs. With that, I will now turn the call over to our corporate controller to provide an update on our financial results for the first quarter ended March 31, 2024. Mike?

Michael Breininger: Thank you, Shankar. Our research and development expenses for the quarter ended March 31, 2024, were $6.8 million, compared to $10.2 million for the first quarter of 2023. General and administrative expenses for the quarter ended March 31, 2024, were $6.4 million, compared to $8.3 million during the same period in 2023. Net loss was approximately $11.9 million or $0.05 net loss per share for the quarter ended March 31, 2024, compared to a net loss of approximately $17.3 million, or $0.08 net loss per share for the first quarter of 2023. Our cash and cash equivalents totaled $26.4 million as of March 31, 2024, compared to $39.5 million as of December 31, 2023. As always, we are constantly exploring strategic and shareholder friendly opportunities to increase our working capital. That concludes my update for the quarter. Tiffany, back to you.

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

Q&A Session

Operator: Thank you. We will now begin the question-and-answer session. [Operator Instructions]. And your first question comes from the line of Arthur He with H.C. Wainwright. Please go ahead.

Arthur He: Hey, good morning, Shankar and team. Congrats on the progress. So I just had a quick one regarding the 400 history study. For the gene agnostic arm, is there a minimum number of patients for each specific gene mutation to meet the requirement for the BLA application?

Shankar Musunuri: Hey Arthur, good morning. I’ll let Arun take the response.

Arun Upadhyay: No. We have not pre-specified any specific number of patients for each mutation, but our approach is going to be include as many mutations as possible in the gene agnostic count.

Arthur He: Okay. Thanks, thanks. Thanks for the color. And also my second question is regarding the 200. Could you give us more color on the status and what’s your effort to get the clinical holder lifted as soon as possible?

Shankar Musunuri: Arun?

Arun Upadhyay: Yes. So we are working on addressing the CMC question we received from FDA and we are planning to address that ASAP and then continue the development of OCU200 further.

Operator: Your next question comes from Robert LeBoyer with Noble Capital Markets. Please go ahead.

Robert LeBoyer: Good morning and congratulations on all the progress during the quarter. My question has to do with the Phase 3 trial coming up and you had mentioned some milestones to start. Are there any timeframes or any particular milestones that we can look forward to in terms of accrual or projected time for data release?

Shankar Musunuri: Yes, Robert, I let Dr. Qamar answer the question.

Huma Qamar: Hi, thank you for your question. In terms of the milestones, as you’re aware that OCU400 has recently got approval. We’re currently screening patients and we will be continuously updating the market with dosing updates very soon.

Robert LeBoyer: Okay. Is there any projected time for the first data release?

Huma Qamar: For OCU400, Phase 3 or Phase 1/2.

Robert LeBoyer: Either actually?

Huma Qamar: Okay. So Phase 1/2, we have already updated that, continuous updates will be coming in the next quarter as well. And as soon as we receive more data on the LCA patients. For OCU400 Phase 3, it will be, there is no time frame as it will be periodic. And we will be giving periodic updates to the market as soon as it’s available.

Shankar Musunuri: And it’s a — Robert, I think this is a controlled clinical trial for Phase 3. So until the study is done, we cannot reveal any information to the market on the efficacy portion of it.

Robert LeBoyer: Sure. That’s —

Shankar Musunuri: We’ll provide periodic updates, as Dr. Qamar is saying, on recruitment and where the trial is going. And also give markets an update about on track for our target approval for BLA and MAA in 2026.

Robert LeBoyer: Okay. Yes, that’s probably as much as anyone can say for a rare disease like this. So thank you.

Operator: Your next question comes from the line of Daniil Gataulin with Chardan. Please go ahead.

Daniil Gataulin: Yes. Hey, good morning, guys. Thank you for taking the question. Also a question on OCU400 and Phase 3, so you mentioned that as part of deal track strategy, you will be expanding Phase 3 to include patients with LCA pending the Phase 1 LCA data. I just wanted to clarify, this will be added as a new arm in the trial or if it will be a separate standalone trial. And I guess the second part of the question is, what data from LCA Phase 1/2 would you consider favorable that would give you a go ahead decision for these patients. Thank you.

Shankar Musunuri: Arun will take the call.

Arun Upadhyay: Thanks, Shankar. Yes. So based on the Phase 1/2 study outcome, our plan is to have the separate trial for the LCA because it’s different disease. So once we have the data available, we’ll be engaging with agency. And based on the agency recommendation, we will initiate the trial accordingly.

Daniil Gataulin: Okay. Got it. Thank you. And in terms of the Phase 1/2 data threshold, what would you consider favorable to advances into Phase 3?

Arun Upadhyay: Primarily the safety and efficacy.

Operator: This concludes the Q&A portion. I will now turn the call back over to Chairman and CEO, Dr. Shankar Musunuri.

Shankar Musunuri: Thank you, Operator. Our efforts in the first quarter of the year evidence the importance of our gene therapy programs and the need to operate the business to ensure their success. We are opportunistic about Ocugen cell therapy and vaccine platforms, knowing that these technologies have great therapeutic and financial potential, and are pursuing partnerships to support our entire pipeline. We look forward to what this quarter and the rest of the year holds for the company, our people, and the patients we serve. Tiffany?

Tiffany Hamilton: Thanks, everyone. Bye.

Operator: Ladies and gentlemen, that concludes today’s call. Thank you all for joining. You may now disconnect.