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Ocugen (OCGN) Q4 2023 Earnings Call Transcript

In Business
April 03, 2024
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Q4 2023 Earnings Call
Apr 02, 2024, 8:30 a.m. ET


  • Prepared Remarks

  • Questions and Answers

  • Call Participants

Prepared Remarks:


Good morning and welcome to Ocugen’s business update with certain financial for the year ending 2023. Please note that this call is being recorded at this time. All participant 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 communications. You may begin.

Tiffany HamiltonHead of Corporate Communications

Thank you, operator. Joining me today is Ocugen’s chairman, CEO, and co-founder, Dr. Shankar Musunuri, who’ll provide a business update. Michael Breininger, corporate controller, is also on the call and will provide certain financials for the year ending 2023.

Finally, Dr. Huma Qamar, chief medical officer, will be available to answer questions during the Q&A. This morning, we issued a press release detailing business and operational highlights for the year ending 2023. We encourage listeners to review the press release, which is available on our website at ocugen.com.

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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, 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.

Such statements are subject to numerous important factors, risks, and uncertainties and 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, SEC, including the risk factors described in the section entitled Risk Factors in any quarterly and annual reports that we filed 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 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, our annual report on Form 10-K is expected to be filed no later than April 16, 2024. I will now turn the call over to Dr. Musunuri.

Shankar MusunuriCo-Founder, Chairman, and Chief Executive Officer

Thank you, Tiffany. Good morning and thank you all for joining us today. Looking back at 2023, our team’s unwavering dedication has set the stage for a transformative 2024 in our modified gene therapy programs for blindness diseases. The strides we have made are not just in science.

They are profoundly personal, evidenced by the significant benefit of our therapies can potentially offer to patients. Allow me to briefly share an inspiring account that justifies the core of our motto, courageous innovation, from a patient in the OCU400 phase 1/2 trial for retinitis pigmentosa, a rare genetic disorder that degrades retinal cells and affects approximately 100,000 people in the U.S. and 1.6 million people worldwide. The 60-year-old patient began experiencing the onset of RP in his 40s.

As the disease progressed and his vision worsened, it increasingly threatened his livelihood and his ability to function independently. Before joining our trial, he faced a future dominated by visual impairment with no available treatment options. This trial has proven to be a life-altering experience, not just for him but also for his family. A year following his treatment with OCU400, he reports a gradual restoration of sight in his treated eye.

As a matter of fact, he shared that his dosed eye was worse of the two; and now, it is better than the untreated eye. It’s getting to know patients like this and hearing their real-world stories that fortify our resolve for bold innovation to deliver safe and effective therapies for significantly underserved diseases. For reference, we have also posted this patient video in the patient section of our corporate website. As we review our 2023 milestones, we are proud of having achieved recognition from the FDA and other agencies in several areas.

First, I will touch upon our vaccines and cell therapy platforms. On the vaccine development front, our team’s diligent pursuit of nondilutive funding avenues has culminated in a collaboration with the NIAID, part of NIH, to include OCU500 in the Project NextGen initiative to test the therapeutic potential of several early stage vaccine candidates in combating COVID-19. The initiative’s commitment to cover costs for early stage vaccine candidates is a strategic leap forward, allowing us to address this public health imperative with a minimal financial impact on our shareholders. In addition, our state-of-the-art cGMP facility renovations were completed last year, paving the way for the production of NeoCart, our phase 3-ready 3D regenerative cell therapy platform.

Acquiring this asset from our predecessor presented us with an invaluable opportunity. After thoroughly evaluating its compatibility with Ocugen’s existing pipeline and R&D expertise, we acknowledge our responsibility to future patients eagerly waiting — awaiting it. With the cell therapy market poised to reach around 8 billion by 2028 and an encouraging regulatory landscape, we are now strategically evaluating alternatives to ensure NeoCart’s development stays on track to maximize value for patients and shareholders. Before I get into the modified gene therapy update, I would like to take a moment to discuss the broader landscape of the gene therapy market and Ocugen’s position within it.

We believe that gene therapy market is on the cusp of a significant transformation. Current market economics indicate a growing interest in genetic and cell therapies, fueled by technological advancement, increased investment and clinical activity, and a supportive regulatory environment. M&A transactions within the past year symbolized appeal and need for gene therapies. Industry analysts project that the global gene therapy market is expected to surpass $30 billion by the end of the decade.

This immense growth prediction is driven by unmet medical needs of growing pool of millions of patients globally suffering from diseases that, until recently, were untreatable. Last year, we achieved alignment from the FDA on the design aspects of our OCU400 phase 3 study. As we prepare to initiate our pivotal OCU400 phase 3 clinical trial, I’d like to emphasize that we will be the only gene therapy in phase 3 trial with a broad RP designation. The FDA’s alignment on our phase 3 trial design for OCU400 is rooted in compelling positive preliminary safety and efficacy results demonstrated in the phase 1/2 trial last year.

Multi-luminescence mobility testing, MLMT; low luminescence visual acuity, LLVA; and best-corrected visual acuity, BCBA, were the efficacy measurements for patients receiving the treatment. In each category of these measurements, results indicated improvement or preservation in eyes treated with OCU400. The results affirm our understanding of the gene-agnostic mechanism of action. In the design of the proposed phase 3 study for RP patients, the FDA has included luminescence-dependent navigation assessment, LDNA, a measure of functional vision changes in patients with inherited retinal diseases, as the primary endpoint.

The upcoming multicenter, randomized, 150-patient phase 3 study will feature two arms, RHO and gene-agnostic, with up to 75 patients in each arm. In each arm, the 75 participants will be randomized 2-to-1 to the treatment group and untreated control group. Upon receiving approval from the FDA, we anticipate initiating the phase 3 trial for patients with RP. Our collaborative and iterative conversations with the FDA to advance OCU400 to phase 3 affirm the acute need for a therapy for RP patients and our clinical data’s potential to foster a transformative impact.

Now, onto OCU410 and OCU410ST. The current treatment landscape for both geographic atrophy, GA; and Stargardt Disease is extremely limited. The estimated 1 million patient GA market in the U.S. saw some momentum with recent drug approvals.

However, these treatment options have significant limitations as they require multiple injections per year, impacting patient compliance, and only target one pathway contributing to GA. OCU410 regulates multiple pathways involved with the disease, including lipid metabolism, inflammation, oxidative stress, and membrane attack complex complement, and has the potential to provide one-time treatment for life. Presently, there is no approved treatment for people living with Stargardt Disease, an orphan blindness disease that affects approximately 40,000 people in the U.S. alone.

In the first quarter of 2024, we have completed dosing of Cohort 1 in both the OCU410 ArMaDA and OCU410ST GARDian phase 1/2 clinical trials. The Data and Safety Monitoring Board for the OCU410ST clinical trial determined that the safety and tolerability profile for OCU410ST is favorable and approved to proceed to dosing with the medium dose of OCU410ST in the dose escalation phase of the study. The FDA’s orphan drug designation for OCU410ST last year further underscores our commitment to blindness conditions that require ongoing treatment with high unmet medical need. Collaborations with a premier retinal surgery center across the U.S.

have been pivotal in bolstering our patient recruitment efforts and deepening our understanding. With the maturing pipeline of clinical progress, Ocugen is positioned at the forefront of this burgeoning gene therapy market. The FDA RMAT and orphan drug designations granted to our gene therapy programs demonstrate our potential to lead in this area. Based on the patient testimony from our OCU400 clinical trial, we are not only making headway but already making a meaningful difference.

Our ultimate goal at Ocugen is to develop and deliver safe and effective therapies to patients battling conditions that impact quality of life and functional independence. At our February 2024 clinical showcase, we shared our expected pathway for the market approval of OCU400. To help us navigate this critical phase and ensure we deliver on our long-term strategy, we recently announced the appointment of Dr. Huma Qamar as our chief medical officer.

Dr. Qamar’s extensive experience and contributions to date in her previous role as our head of clinical development and clinical operations are pivotal to our team. Her expertise and foundational knowledge of Ocugen’s modified gene therapy platform will be instrumental to the success of our clinical programs. I will now turn the call over to Michael Breininger, our corporate controller, to provide financials.


Michael BreiningerCorporate Controller

Thank you, Shankar. In our press release this morning, we noted that we will restate our consolidated financial statements as of and for the year ended December 31, 2022 in connection with the filing of our 2023 Form 10-K. Similarly, the company will include restated unaudited financial information for the first three quarters of 2023 and 2022. The identified errors in each of the restated periods relate to the company’s noncash accounting for the estimated costs in one of its collaboration arrangements.

However, the company does not expect the errors to result in any impact on its cash position, cash runway, or financial projections. Ocugen’s cash, cash equivalents, and investments totaled 39.5 million as of December 31, 2023, compared to 90.9 million as of December 31, 2022. We expect our current cash, cash equivalents, and investments will enable us to fund operations in the fourth quarter — into the fourth quarter of 2024. I will now turn the call over to the operator for questions.

Questions & Answers:


Thank you. The floor is now open for your questions. [Operator instructions] Your first question comes from the line of Swayampakula Ramakanth with H.C. Wainwright.

Your line is open.

RK SwayampakulaH.C. Wainwright and Company — Analyst

Thank you. Good morning, Shankar. So, on the OCU400 program, you know, when should we expect to hear the next clinical update? And also, what else needs to be completed before you can get the phase 3 program started?

Shankar MusunuriCo-Founder, Chairman, and Chief Executive Officer

RK, good morning. I will let Dr. Qamar answer the question. Go ahead.

Huma QamarChief Medical Officer

Thank you, Shankar, and thank you for the question. So, for OCU400 phase 1/2 study, we have completed the enrollment for our retinitis pigmentosa patients and the LCA as well. We will be periodically providing the updates as they come, but we have completed the enrollment for our retinitis pigmentosa and LCA portion of the study.

RK SwayampakulaH.C. Wainwright and Company — Analyst


Shankar MusunuriCo-Founder, Chairman, and Chief Executive Officer

RK, are you expecting us to — are you talking about phase 3?

RK SwayampakulaH.C. Wainwright and Company — Analyst

Yeah. What else needs to get done for that?

Huma QamarChief Medical Officer

OK. For our phase 3, we are actively working with the FDA. We are anticipating — we have been working very closely with the FDA, and we are grateful for their support on the FDA alignment of our clinical protocol. So, if all goes well, we will be commencing our study in April, which is this month.

RK SwayampakulaH.C. Wainwright and Company — Analyst

Good. And then regarding the Data and Safety Monitoring Board approving you to move to the next dose level in 410ST, so at this point, how many patients would be entering into the next phase of that dose evaluation? And also, when — would you be releasing any of the data from the initial cohorts, or would you do this at a time when you have enough data from multiple cohorts?

Huma QamarChief Medical Officer

So, that’s a good question. So, we are moving toward the medium dose, which is Cohort 2. The phase 1 portion of the study is a 3+3 design, which is the dose escalation portion. So, we will be enrolling three patients in there, as well as when it — after that, there will be a high dose cohort with the three as well.

And from there, we are planning to update periodically on the safety updates — preliminary safety updates pretty soon once we have the DSMB go from the high dose cohort, and we look toward the dose escalation portion of the study.

RK SwayampakulaH.C. Wainwright and Company — Analyst

Thank you very much. One last question from me is on the NeoCart. So, based on your comment, it looks like you are ready in terms of manufacturing part of — manufacturing the product needed for this study. What else is needed to get started? And in your conversations with potential collaborators, what are they looking for so that, you know, you can move the conversation to the next level?

Shankar MusunuriCo-Founder, Chairman, and Chief Executive Officer

That’s a great question. Yeah, the facilities are ready, and we have alignment from FDA to move into phase 3 with RMAT designation. Everything is set. I mean, obviously, this is a phase 3, it’s a two-year study, and takes some recruitment time.

So, there is a capital commitment needed. So, that’s exactly what we are working with the potential partners to make sure we got the funding lined up to continue the clinical trial. Because once we start it, we need to make sure we have adequate funding support so we can finish it.

RK SwayampakulaH.C. Wainwright and Company — Analyst

Very good. Thank you very much for taking all my questions.


Our next question comes from the line of Daniil Gataulin with Chardan Capital Markets. Your line is open.

Daniil GataulinChardan Capital Markets — Analyst

Hey. Good morning, guys. Thank you for taking the question and congrats on the progress. I have one on the phase 3 OCU400 trial.

Is there a minimum number of mutations that you will need to be looking at or that you will need to include to gain a broad mutation-agnostic label?

Huma QamarChief Medical Officer

So, I will take that question, and the answer is no. We are excluding rhodopsin in one arm and then the other gene-agnostic arm, where we will have 75 patients — 75 patients in rhodopsin arm, 75 in the gene-agnostic approach, 50 being in the active arm and 25 in the control.

Daniil GataulinChardan Capital Markets — Analyst

OK. And internally, do you — are you guiding on how many gene-agnostic RP — genetic-agnostic patients you will be looking at that are different?

Huma QamarChief Medical Officer

No, we are not. That’s exactly what we have, the broader RP indication for our product. So, that is — we are addressing the patient’s unmet medical needs here, and we are opening this phase 3 trial to actually validate our novel modified gene therapy platform.

Daniil GataulinChardan Capital Markets — Analyst

Done. All right. Thank you.


This concludes the Q&A portion. I will now turn the call back over to Dr. Shankar Musunuri.

Shankar MusunuriCo-Founder, Chairman, and Chief Executive Officer

Thank you. As we close today’s session, I want to highlight our 2023 journey and our 2024 strategy. Our focus on patients has manifested in numerous regulatory milestones and advancements in our gene therapy pipeline. With our OCU400 program on the cusp of its phase 3 trial, in line with the 2026 BLA approval target timeline, and the completion of first cohort dosing in our OCU410 and 410ST trials, we stand at an exciting juncture of clinical progress and potential.

The gene therapy market’s dynamic growth and our strategic position within it signal a future ripe with opportunity. And while we continue to advance the pipeline, we also continue to pursue partnership opportunities for OCU400. I want to thank all our stakeholders for your continued trust and support. We entered this year with great momentum and clear objectives, driven by our mission to bring game-changing gene and cell therapies and vaccines to market and working even harder to provide access to patients globally.

Thanks again, everyone. Have a great day.


[Operator signoff]

Duration: 0 minutes

Call participants:

Tiffany HamiltonHead of Corporate Communications

Shankar MusunuriCo-Founder, Chairman, and Chief Executive Officer

Michael BreiningerCorporate Controller

RK SwayampakulaH.C. Wainwright and Company — Analyst

Huma QamarChief Medical Officer

Daniil GataulinChardan Capital Markets — Analyst

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