Ocugen (OCGN) Q2 2023 Earnings Name Transcript

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Ocugen (OCGN -9.39%)
Q2 2023 Earnings Name
Aug 22, 2023, 8:30 a.m. ET

Contents:

• Ready Remarks
• Questions and Solutions
• Name Contributors

Ready Remarks:

Operator

Good morning and welcome to Ocugen s second-quarter 2023 monetary outcomes and enterprise replace. Please word that this name is being recorded right now. All members’ traces are in listen-only mode. Following the audio system’ commentary, there might be a question-and-answer session.

I’ll now flip the decision over to Tiffany Hamilton, Ocugen’s head of company communications. You could start.

Tiffany Hamilton — Head of Company Communications

Thanks, operator. Becoming a member of me right now are Ocugen’s Chairman, CEO, and Co-Founder Dr. Shankar Musunuri, who will present a enterprise and monetary replace; and Dr. Arun Upadhyay, our monetary scientific officer, head of analysis improvement and medical, who can be on the decision to reply questions throughout the Q&A.

Yesterday afternoon, we issued a press launch detailing enterprise and operational highlights for the second quarter of 2023. We encourage listeners to assessment the press launch, which is offered on our web site at ocugen.com. This name is being recorded and a replay with the accompanying slide presentation might be obtainable on the Traders part of the Ocugen web site for about 45 days. This presentation accommodates forward-looking statements inside the which means of the Non-public Securities Litigation Reform Act of 1995, that are topic to dangers and uncertainties. We could, in some circumstances, use phrases comparable to predicts, believes, potential, proposed, proceed, estimates, anticipates, expects, plans, intends, could, may, may, will, ought to, or different phrases that convey uncertainty of future occasions or outcomes to determine these forward-looking statements. Such statements embody however should not restricted to statements concerning our scientific improvement actions and associated anticipated timelines. Such statements are topic to quite a few necessary threat components, and uncertainties, and will trigger precise occasions or outcomes to vary materially from our present expectations.

These and different dangers and uncertainties are extra absolutely described in our periodic filings with the Securities and Trade Fee, the SEC, together with the danger components described within the part entitled Threat Components and the quarterly and annual stories that we filed with the SEC. Any forward-looking statements that we make on this presentation communicate solely as of the date of this presentation. Besides as required by legislation, we assume no obligation to replace forward-looking statements contained on this presentation whether or not on account of new info, future occasions, or in any other case after the date of this presentation. Lastly, Ocugen’s quarterly report on Kind 10-Q overlaying the second quarter of 2023 has been filed.

I’ll now flip the decision to Dr. Musunuri.

Shankar Musunuri — Co-Founder, Chairman, and Chief Govt Officer

Thanks, Tiffany. Good morning and thanks all for becoming a member of us right now. The second quarter of 2023 marked a interval of continued progress towards our regulatory and scientific milestones, which we’re delight — devoted to advancing via the top of the 12 months. With the strategic deal with our novel modifier gene remedy and biologic-based ophthalmic packages, we anticipate to start dosing sufferers throughout these platforms by the top of this 12 months. We’re on monitor to provoke the OCU400 part 3 grownup trial close to the top of 2023, early 2024, topic to end result of the continuing part 1/2 trial and discussions with FDA on proposed part 3 trial plan.

We additionally anticipate a scientific research outcomes replace for OCU400 this quarter. Investigational new drug functions had been cleared by FDA for OCU410 and OCU410ST for geographic atrophy and Stargardt illness, respectively. We plan to provoke part 1/2 trials by the top of 2023. We’re additionally planning to provoke the part 3 scientific trial for our regenerative cell remedy product candidate, NeoCart, within the second half of 2024. This might imply Ocugen would have late-stage packages in gene and cell therapies in 2024.

In an effort to preserve our working capital and advance our patient-centric agenda to develop a novel inhaled mucosal vaccine platform, we now have submitted a number of proposals to acquire non-dilutive authorities funding and are having discussions with pertinent businesses to safe their assist for our OCU500 vaccine sequence. Our first-in-class modifier gene remedy to deal with a number of inherited retinal illnesses stays unmatched industrywide. This distinctive gene-agnostic strategy has the potential to handle retinal illnesses attributable to mutations in a number of genes with one product. Our objective is to construct on the innovation of gene remedy and increase its potential to deal with a wider inhabitants of sufferers affected by a number of uncommon retinal illnesses that single gene alternative therapies are unable to handle.

Within the second quarter, we had been honored to current intimately the mechanism of motion and scientific foundation for our modified gene remedy platform to preeminent researchers and medical professionals in attendance on the Affiliation for Analysis in Imaginative and prescient and Ophthalmology and BIO Worldwide conferences. As we advance our scientific agenda, we are going to proceed to determine and safe alternatives to teach stakeholders on the differentiation and potential advantages of this innovation — progressive strategy to gene remedy. In April, we introduced encouraging and compelling constructive preliminary security and efficacy outcomes from our OCU400 part 1/2 multicenter, open-label, dose-ranging scientific trial in sufferers bothered with RP. We imagine the preliminary findings from the research assist the potential for our modifier gene remedy to be a viable various to conventional therapies to the growing inhabitants of sufferers affected by these illnesses. Enrollment is ongoing for all outlined topics within the research, adults with LCA and kids between ages of six to 17.

Pending constructive suggestions from the FDA, we purpose to provoke our part 3 grownup scientific trial ultimately of this 12 months or early 2024. We proceed to execute our complete technique to develop OCU400 and convey it to market by 2026 with the objective of offering desperately wanted remedy choices for the estimated 125,000 sufferers estimated within the U.S. alone that endure from RP and LCA. In parallel, we’ll proceed progressing or different modified gene remedy packages to handle extra ophthalmic situations. We imagine that upon profitable realization of those objectives, Ocugen may have constructed an enormous industrial footprint which will maintain important upside for our shareholders and, most significantly, meet a crucial medical want for sufferers.

Dry age-related macular degeneration is among the most prevalent neurodegenerative eye illnesses affecting roughly 10 million folks within the U.S. and almost 266 million folks worldwide. Dry AMD leads to irreversible lack of sight amongst aged populations, resulting in a scarcity of practical independence that severely impacts high quality of life. A wide range of biotechnology corporations, small and enormous, are working to develop therapies for Dry AMD. Nonetheless, we imagine our OCU410 candidate can supply a much less burdensome choice for our sufferers.

With OCU410, we are once more investigating the potential for our novel modifier gene remedy to offer a one-time remedy choice that targets all 4 hallmark situations of Dry AMD, together with lipid metabolism, irritation, oxidative stress, and complement activation. The present customary of care solely targets the complement issue requires a number of injections per 12 months and has reported unintended effects. We’re excited to provoke the part 1/2 scientific trial this 12 months due to the numerous international unmet medical want. Transferring on to OCU410ST. We’re extraordinarily happy to obtain orphan drug designation from the FDA to handle ABCA4-associated retinal illnesses comparable to Stargardt illness, RP19, and cone-rod dystrophy for which there are at the moment no remedy choices.

OCU410ST is a novel modified gene remedy that leverages nuclear hormone receptors to modulate cell exercise and makes use of an AAV supply platform for retinal supply of the RAR-related orphan receptor A. Nuclear hormone receptors are grasp gene regulators that assist preserve homeostasis by regulating various physiological features comparable to photoreceptor improvement and upkeep, metabolism, phototransduction, irritation, and cell survival networks. We imagine that by harnessing the ability of nuclear hormone receptors, we will develop one-time therapies that may modulate cell exercise disrupted by disease-causing gene mutations. Now, turning to our efforts to develop a sequence of next-generation inhalation vaccines for which the corporate intends to submit an IND utility in 2024 pending authorities funding.

In a number of preclinical trials, mucosal vaccines have demonstrated vaccine-induced excessive neutralization titer and effector responses. Inhaled mucosal vaccines symbolize a definite product candidate profile that would assist treatment main international well being challenges and maximize our alternative to serve a broader cross-section of sufferers via a much less invasive supply mechanism with the potential for superior sturdiness in comparison with the present intramuscular administration. Scientific research utilizing the same vector of inhaled administration have proven mucosal antibodies, systemic and antibodies, and sturdy immune response as much as one 12 months, with one-fifth of the dose in comparison with conventional intramuscular vaccines. Larger ease of administration presents the potential for improved vaccination compliance and wider adoption, notably amongst historically underserved populations and all through the creating world. Present COVID-19 vaccines are restricted by a scarcity of sturdiness and marginal capacity to stop transmission.

As a part of our dedication to handle boundaries to widespread vaccination to guard in opposition to COVID-19, we’re creating this inhaled vaccine platform that features OCU500, a bivalent COVID-19 vaccine; OCU510, a seasonal quadrivalent flu inhaled vaccine; and OCU520, a mix of quadrivalent seasonal flu and bivalent COVID-19 inhaled vaccine. The OCU500 vaccine sequence is predicated on a novel ChAd platform designed to cut back transmission and defend in opposition to new variants with potential sturdiness as much as one 12 months. To optimize assets throughout our various and critically wanted improvement packages and preserve shareholder worth, our group has been participating with public well being officers and federal authorities businesses to pursue non-dilutive funding to assist the event of our OCU500 vaccine sequence. We preserve an ongoing dialogue with respective businesses and anticipate receiving additional info on the standing of our funding request later this 12 months. Earlier this 12 months, the FDA notified us that they had been placing a maintain on our OCU200 program and requested extra info associated to chemistry, manufacturing, and controls. We’re working with the FDA to launch the maintain and anticipate the part 1 trial to be initiated in This autumn 2023. We imagine OCU200 works with a definite mechanism of motion in comparison with current therapies for the remedy of diabetic macular edema and targets a number of causative pathways comparable to angiogenesis, oxidation, and irritation as potential to supply higher remedy to all sufferers. NeoCart is our part 3-ready regenerative cell remedy expertise that mixes novel developments in bioengineering and cell processing to boost the autologous cartilage restore course of.

Manufacturing facility development for NeoCart is on track to be accomplished by the top of 2023 as deliberate. The corporate plans to provoke the part 3 trial in topics with articular cartilage defect within the second half of 2024. We’re extremely devoted to finishing our acknowledged aims with the methods we imagine will allow Ocugen to achieve complete value-enhancing milestones and are planning to file BLAs throughout all first-in-class platform applied sciences, gene therapies, cell therapies, and vaccines within the subsequent three to 5 years. I’ll now present an summary of the important thing monetary outcomes for second quarter 2023. Our analysis and improvement bills for the quarter ended June 30, 2023 had been 14.2 million, in comparison with 9 million for the second quarter of 2022.

This included a nonrecurring noncash expense of 4.4 million on account of the impairment of the short-term asset for the superior cost for the provision of Covaxin, in addition to the related loss on the disposal of associated mounted belongings. Common administrative bills for the quarter ended June 30, 2023 had been 9.6 million, in comparison with 10.6 million for the second quarter of 2022. Internet loss was roughly 22.9 million, or 0 level — $0.10 — $0.10 internet loss per share for the quarter ended June 30, 2023, in comparison with a internet lack of roughly 19.5 million or $0.09 internet loss per share for the second quarter of 2022. Our money, money equivalents, and investments totaled 70.6 million as of June 30, 2023, in comparison with 90.9 million as of December 31, 2022. In Could, we closed a public providing of 30 million shares of widespread inventory for gross proceeds of 16.5 million.

Internet proceeds from the providing are getting used for normal company functions, capital expenditures, working capital, normal and administrative bills, and R&D. We’re constantly exploring alternatives to extend our working capital and might be centered on in search of out company partnerships for gene therapies and non-dilutive funding for vaccines. That concludes my replace for the quarter. Tiffany, again to you.

Tiffany Hamilton — Head of Company Communications

Thanks, Shankar. We’ll now open the decision for questions. Operator?

Questions & Solutions:

Operator

The ground is now open to your questions. [Operator instructions] We’ll now take a second to compile our roster. Our first query comes from the road of Jennifer Kim from Cantor Fitzgerald. Please go forward.

Jen Kim — Cantor Fitzgerald — Analyst

Hello, good morning. Thanks for taking my questions. I’ve two. The primary is as you are fascinated with money burn going ahead and also you’re in search of non-dilutive funding alternatives.

Excluding the one-time impairment expense — expense, is that this quarter an excellent foundation as we take into consideration quarterly burn? After which, my second query is on the OCU400 program. Are you able to remind us what you are searching for in that up to date information this quarter as form of the go/no-go for the part 3 grownup trial? Thanks.

Shankar Musunuri — Co-Founder, Chairman, and Chief Govt Officer

Yeah, Jennifer, good morning. Let me handle the primary query, then Arun goes to take the second. Sure, there’s a one-time impairment cost. There’s additionally a noncash inventory comp cost of two.6 million.

And in the event you add these two, the money comes out to be 15.9 million complete for quarter. So, that will be an excellent steerage for you for the long run. I will let Arun handle the opposite query on OCU400 program.

Arun Upadhyay — Chief Scientific Officer

Thanks, Shankar. Thanks, Jennifer. So, yeah, you might be proper, I feel our — this quarter replace on OCU400 scientific phase1/2 information will information us about our part 3 research. Yeah, that is the info might be used as a foundation for our resolution for part 3.

Jen Kim — Cantor Fitzgerald — Analyst

OK, and might you remind us what you are searching for in that information?

Arun Upadhyay — Chief Scientific Officer

So, primarily, we’re trying on the — the practical enchancment within the sufferers handled with OCU400. And the main target goes to be the RP affected person.

Jen Kim — Cantor Fitzgerald — Analyst

OK. After which, in your discussions with the FDA in a while for the part 3 trial, is that going to deal with RP sufferers, or are you additionally contemplating the inclusion of LCA sufferers? Thanks.

Arun Upadhyay — Chief Scientific Officer

So, to start with, we’ll begin with the RP affected person. And as we accumulate the info for LCA sufferers, then — then later, we embody LCA. However to start with, we’re planning to go along with grownup RP affected person.

Jen Kim — Cantor Fitzgerald — Analyst

All proper. Thanks for taking my questions. Bye.

Arun Upadhyay — Chief Scientific Officer

Thanks.

Operator

Our subsequent query comes from the road of William Ramakanth from H.C. Wainwright. Please go forward.

Unknown speaker

Thanks. That is RK from H.C. Wainwright. So, a few fast — fast questions on the 400 program after which possibly one on the NeoCart.

On the 400, so by way of your discussions with the FDA, is that being deliberate when you see the info on the part 1/2, or you will have already initiated, you already know, some preliminary conversations and began placing collectively a part 3 plan?

Arun Upadhyay — Chief Scientific Officer

Thanks, RK. So, we now have not initiated our dialogue with FDA but. So, as soon as we — we, you already know, full the info evaluation, solely then we’re going to attain out to FDA. However that’s deliberate for this quarter, you already know, associated to information replace and adopted by reaching out to FDA.

Unknown speaker

Thanks for that. After which, on the 410 program, you already know, by way of now that you have already been cleared by the FDA, what else must get finished earlier than you’ll be able to provoke the part 1/2 research?

Arun Upadhyay — Chief Scientific Officer

Simply we have to get the location prepared and, you already know, provoke the affected person screening. And so — so, that is why I feel we’re planning like, you already know, to lodge — lodge, you already know, first topic on this research each, you already know, GA in addition to Stargardt this 12 months. So, it’s extra like preparing with, you already know, with the scientific, you already know, websites.

Unknown speaker

Obtained it. Obtained it. Then on the — on the NeoCart program, if — simply attempting to know if the ability does — will get accomplished by the top of ’23, you already know, what else must get finished, you already know, by way of commissioning the plant and getting the scientific materials prepared to start out your program on the — on the part 3 research by second half? , is it simply that, or is it, you already know, you continue to need to design the protocol? I am simply attempting to know what all as a result of we have been speaking about this program for nearly a 12 months and a half now.

Shankar Musunuri — Co-Founder, Chairman, and Chief Govt Officer

Yeah, no, so, RK, the ability development might be accomplished — it is a GMP facility — by the top of this 12 months. It is on track. After which, as you already know, as a GMP facility, it takes a couple of months for getting the qualification finished, after which they’re going to be prepared to provide NeoCart in that facility. Within the interim, clearly, the group goes to organize, you already know, CMC and scientific sections.

They usually’ll proceed to, you already know, replace these so that they are prepared for submission subsequent 12 months earlier than they begin the scientific trial. And we do have RMAT designation, proper, I simply needed to remind, Regenerative Drugs Superior Remedy designation with FDA. So, when we now have any questions within the interim, we will at all times attain out to them and get clarifications.

Unknown speaker

Good. Thanks. Thanks for taking the questions.

Operator

Our subsequent query comes from the road of Robert LeBoyer from Noble Capital Markets. Please go forward.

Robert LeBoyer — Noble Capital Markets — Analyst

Good morning, everybody. My query has to do with the upcoming information presentation. And I used to be questioning in the event you may disclose whether or not the info to be offered will replace the earlier information on all sufferers or whether or not it should simply be in new sufferers that have not been reported. And questioning if there are any endpoints that you may share with us at this level.

Arun Upadhyay — Chief Scientific Officer

Thanks. So, yeah, positively, we’ll be offering detailed, you already know, replace once we sort, of you already know, current this information to the market. However to handle your first a part of the query whether or not it’s going to embody the p.c we offered in our earlier, you already know disclosure, sure. So, we are going to embody these topics in addition to some new topics which has, you already know, accomplished extra follow-up visits.

So, it is going to be a mix of each, yeah.

Robert LeBoyer — Noble Capital Markets — Analyst

OK. Nice. And also you had talked about company partnerships for the gene remedy. Are you able to focus on any kind of preparations whether or not they’ll be analysis and improvement, or simply advertising, or any aims to the enterprise improvement actions?

Shankar Musunuri — Co-Founder, Chairman, and Chief Govt Officer

I imply, Robert, it is a — yeah, it is a loaded query. Clearly, we’ll be open to — if you search partnerships at this stage as a biotech, you already know, large pharma established with a infrastructure and every thing else, clearly, your first goal goes to be industrial. This has, as you already know, complicated sciences concerned in these scientific trials. Clearly, if you’re going into part 3, as soon as we now have the info out, we’ll clearly work very arduous with any potential companions. And clearly, as you already know, if they’re fascinated with industrial improvement, they might be fascinated with part 3 program too.

So, I feel we’ll hold our choices open no matter can maximize our price for Ocugen in addition to, you already know, be sure that we now have capacity to offer market entry to sufferers who desperately want this product.

Robert LeBoyer — Noble Capital Markets — Analyst

OK, nice. Thanks very a lot.

Operator

Our ultimate query comes from the road of Daniil Gataulin from Chardan. Please go forward.

Daniil Gataulin — Chardan Capital Markets — Analyst

Hey, good morning, guys. Thanks for taking that query. Obtained a pair. One for — for OCU410 program.

Simply needed to ask, strategically, how do you see it positioned, long-term view, as a stand-alone strategy or together with the rest and the affected person inhabitants that you’re going to be concentrating on? And the second query is for the inhaled vaccine sequence. , are you able to remark in your interactions up to now concerning the funding and, notably, in the event you can touch upon the curiosity on this program on condition that there are a number of different authorised choices? Thanks.

Arun Upadhyay — Chief Scientific Officer

Thanks. So, I will take the primary query. So, yeah, we’re pondering of, you already know, taking it simply stand-alone product. And to start with, positively, we’ll be concentrating on the superior type of AMD, that’s geographic atrophy.

However subsequently, you already know, based mostly on the end result, it — it could be additional developed for, you already know, early and intermediate stage relying on the scientific profit coming from the GA trial. And concerning, like, how we — how we see this product, you already know, in opposition to different what we see out there, in order you all know that AMD is a multifactorial illness. And so, far we now have been, you already know, seeing on this area that many of the corporations are centered on concentrating on just one pathway. And by, like, very nature of this illness, you already know, being multifactorial in nature, there are numerous causes which result in this illness. So, our product has potential to focus on all these — these pathways that are linked to the AMD pathogenesis. So, we imagine that this may very well be a differentiated product and — and has potential to — to supply a greater, you already know, scientific profit in comparison with what — what we now have proper now.

Shankar Musunuri — Co-Founder, Chairman, and Chief Govt Officer

And, Daniil, good morning. The second query associated to authorities funding, once more, we now have been working with, you already know, varied businesses and can present an replace. Clearly, the present merchandise, as you already know, the vaccines we now have, particularly for COVID, they lack a few issues. One, they’re struggling to manage the transmission. There’s quite a lot of information obtainable so — proper now.

And in addition, they lack sturdiness. So, what can be preferrred choice going into the long run? I feel there’s positively a necessity for mucosal vaccines. The scientific neighborhood agrees on that. And in addition, that may present systemic in addition to mucosal immunity.

So, you’ll be able to really doubtlessly stop on the goal of viral entry into mucosal system. The second factor is sturdiness. I imply, we imagine, and the scientific neighborhood believes, that COVID vaccinations, to be able to acquire the compliance with public, you can’t carry on vaccinating each three months. That is why, you already know, folks get vaccine fatigue. So, it’s worthwhile to transfer into like annual vaccinations comparable to flu so compliance price will go up.

So, that is the intent. I feel as, you already know, we acknowledged, there are ex-U.S. trials with inhalation vaccine utilizing the same expertise confirmed sturdiness as much as one 12 months. That is actually necessary.

So, there are two issues: controlling transmission and sturdiness are crucial for next-gen vaccines. And we imagine our platform-technology inhalation vaccines for COVID and flu, they’ll present that.

Daniil Gataulin — Chardan Capital Markets — Analyst

Thanks a lot.

Operator

This concludes the Q&A portion. I’ll now flip the decision again over to chairman and CEO, Dr. Shankar Musunuri.

Shankar Musunuri — Co-Founder, Chairman, and Chief Govt Officer

Thanks, operator. In closing, I would like to acknowledge the whole group for his or her resilient efforts to advance our patient-centric mission. To our shareholders and companions, thanks to your ongoing belief and assist. We’re already effectively into the second half of 2023 and are steadfast in our dedication to transparency, knowledgeable decision-making based mostly on sound scientific ideas, and a tireless work ethic devoted to excellence in all phases of analysis, improvement, and scientific testing. We stay assured that we can fulfill our mission of creating novel therapies with progressive discovery to deliver to market efficient therapies for sufferers affected by a spread of situations that at the moment lack remedy choices.

We sit up for sharing extra particulars on our progress within the coming months.

Tiffany Hamilton — Head of Company Communications

Thanks, everybody. Have an ideal day.

Period: 0 minutes

Name members:

Tiffany Hamilton — Head of Company Communications

Shankar Musunuri — Co-Founder, Chairman, and Chief Govt Officer

Jen Kim — Cantor Fitzgerald — Analyst

Arun Upadhyay — Chief Scientific Officer

Unknown speaker

Robert LeBoyer — Noble Capital Markets — Analyst

Daniil Gataulin — Chardan Capital Markets — Analyst

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