Ocugen Q2 2024 Earnings Call Transcript

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August 8, 2024

There are 7 speakers on the call.

Operator

Good morning, and welcome to Ocugen Second Quarter 20 24 Financial Results and Business Update. Please note that this call is being recorded at this time. All participant lines are in a listen only mode. Following the speaker 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, 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 June 30, 2024. Doctor.

Speaker 1

Hoomakumar, 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 Q2 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.

Speaker 1

We may in some cases use terms such as predict, believes, potential, proposed, continue, estimates, anticipates, expects, plans, intends, may, could, might, will, should or other words that can say 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 risk factors 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, SEC, including the risk factors described in the section entitled Risk Factors in 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 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.

Speaker 1

Finally, Optuson's quarterly report on Form 10 Q covering the Q2 of 2024 has been filed. I will now turn the call over to Doctor. Musonore.

Speaker 2

Thank you, Tiffany, and thank you all for joining us today. We're excited to discuss the substantial progress of our modified gene therapy platform across all three clinical programs. And to continue driving these programs, we recently completed a successful fundraising effort with net proceeds of $32,600,000 extending our runway into the Q3 of 2025. Our scientific advances and the strategic growth of company were further acknowledged by our inclusion in the Russell Index in June. This ranking demonstrates the value of our pipeline and supports Octogen's dedication to creating long term shareholder value.

Speaker 2

Additionally, the recent offering was led by a premium mutual fund along with the participation from leading life sciences investors, which further strengthens our shareholder base. We're actively recruiting patients in our OcQ-four hundred Phase 3 Limelight clinical trial for the treatment of retinitis pigmentosa, RP. And just this week, we announced FDA approval for an expanded access program, EAP, for the treatment of adult patients aged 18 and older with RP with ARQ400. It is the first ever gene therapy candidate to treat patients with RP regardless of mutation approved for EAP. We also progressed into the Ocu410 Phase II ARMADA clinical trial for the treatment of geographic atrophy, an advanced stage of triagulated macular degeneration.

Speaker 2

Following completion of dosing in Phase 1, I will discuss these pivotal milestones in greater depth later in the presentation. Additionally, we're about to conclude Phase 1 of the ARQ410 ST Phase onetwo CARDIAN clinical trial for the treatment of Stargardt disease. AKI-four hundred is making remarkable strides in clinical development, and we are actively dosing patients in the Phase 3 Limelight clinical trial. As announced earlier, ARQ400 has received key regulatory approvals, including expanded orphan drug designations, or RP, from the FDA and the European Medicines Agency, as well as Regenerative Medicine Advanced Therapy, RMAT designation from the FDA. Its Phase 3 dosing, Ocu400 remains on track to meet the 2026 approval targets for a biological licensing application, BLA, from the FDA and for a market authorization application, MAA, from the European Medicines Agency.

Speaker 2

We are very encouraged that more than 60% of the intent to treat patients from the Phase onetwo clinical trial, including patients with Rho mutation, meet the responder criteria established for Phase 3. The Phase 3 mobility test responder rate for the only FDA approved product to treat 1 mutation in RP was 52%. The Phase 3 study is powered greater than 95 percent, assuming 50% responder rate. The Occhio-four hundred Phase 3 study includes pediatric patients, 8 years of age or older and adults with early intermediate to advanced stages of RP. The study has a sample size of 150 participants.

Speaker 2

One arm has 75 participants with the row gene mutations and the other arm has 75 participants with the mutations in any of several other genes, randomized 2:1. A mobility test, the luminance dependent navigation assessment, lDNA, is the primary endpoint of the study. In this assessment, a participant navigates an obstacle course that constitutes a more sensitive and specific measurement of visual function and the mobility measurement used in previous Phase III clinical trials. The Phase III LIMELITE study will focus on the proportion of responders in treated and untreated groups who achieved an improvement of at least 2 lux levels from baseline. Let me take a moment to discuss the unmet need and underserved market for RP patients.

Speaker 2

There are approximately 300,000 patients in the U. S. And EU that are affected by the disease, which is caused by mutations in any of approximately 100 different genes. The only other treatment currently on the market addresses mutations in one gene associated with RP. ARQ400 has the potential to treat multiple gene mutations because of its gene agnostic mechanism of action and in this way it will fulfill a significant unmet medical need.

Speaker 2

We continue our extensive campaign to educate the ophthalmology community about the concept of modified gene therapy. And we recently presented supporting data at a variety of conferences such as Annual Meeting of the American Society of Retina Specialists, which convened in Stockholm, Sweden last month. At the conference, Doctor. Benjamin Prakal, who serves as the Director of Clinical Research at Associated Retina Consultant and as Clinical Assistant Professor at the University of Arizona's College of Medicine in Phoenix presented Phase III data on Ocu400. With the initiation of our EAP for Ocu400, RP patients with early intermediate to advanced Rp with at least minimal retinal preservation and who may benefit from the mechanism of action of OQ-four hundred may be eligible to receive treatment prior to approval of the BLA.

Speaker 2

The decision by the FDA to endorse the use of ARQ400 in any patients with RP reflects the agency's position on the safety, tolerability and benefit profile of OQ-four hundred for any mutations relative to any risk of treatment. The approval of an expanded access program for OQ-four hundred further supports the gene agnostic mechanism of action for this novel modifier gene therapy. We look forward to working with clinicians, patients and RP community to provide access to Opdivo 400 for eligible patients through our EAP. Now let's move on to our developments in Occhi410 Ocuphoten and Ocuphoten ST, which aim to treat geographic atrophy secondary to DAMD and Stargardt disease, respectively. These modifier gene therapies leverage a nuclear receptor gene called RORA, which stands for RAR Related Orphan receptor A as a potential one time therapy for life with a single subarachnoid injection.

Speaker 2

RQ410 is physically designed to address multiple pathways implicated in the pathogenesis of DAMD, offers a distinct advantage for current treatment options that target only one pathway, the complement system, and require frequent intravitreal injection, about 6 to 12 doses per year, accompanied by various safety concerns, such as roughly 12% of patients developed at AMD. ARPU-four ten has a potential to regulate all four pathways related to disease progression, lipid metabolism, inflammation, oxidative stress and the complement system, thereby addressing the underlying causes of the disease with a single abritinal injection. An ARMADA clinical trial update providing further insights into the safety and efficacy of OQ410 is anticipated later this year. Our approach with OQ410 is to provide a comprehensive and durable solution with a potential onetime treatment. There are 2000000 to 3000000 geographic atrophy patients among the 19000000 people affected by DAMD in the U.

Speaker 2

S. And Europe, demonstrating a considerable market opportunity. In July, we announced the completion of dosing in the 3rd cohort of the Ocu410 Phase III ARMADA clinical trial for the treatment of geographic atrophy. Today, 9 patients with geographic atrophy have been treated with the low, medium and high doses. The Phase 2 dose expansion, SSR blinded clinical trial has been initiated and will assess the safety and efficacy of our Q410 in a larger group of patients who will be randomized into 1 of 3 groups, a medium dose treatment group, a high dose treatment group or a control group.

Speaker 2

Participants must be aged 50 or older, be able to identify 24 letters or more on the BCVA, which is like those charts you read at the optometrist office and have a total geographic atrophy area between 2.520.5 Square Millimeters. Turning now to OQ410 ST, which has received an orphan drug designation from the FDA for the treatment of ABCA4 associated retinopathies, including Stargardt disease. The Phase III Guardian clinical trial for the treatment of Stargardt disease is actively enrolling patients in the high dose cohort and the dose escalation portion of the study. Stargardt affects approximately 100,000 people in the U. S.

Speaker 2

And Europe, and there is no approved therapies available. These efforts represent our commitment to advancing treatments for blindness, focusing on innovative gene therapy solutions that aim to provide lasting benefits to patients. We look forward to sharing further updates as we continue to advance these promising therapies through clinical development. With that, I will now turn the call over to our Corporate Controller, Michael Brininger, to provide an update on our financial results for the Q2 ended June 30, 2024. Michael?

Speaker 2

Thank you, Shankar.

Speaker 3

The company's cash, cash equivalents and restricted cash totaled $16,000,000 as of June 30, 2024 compared to $39,500,000 as of December 31, 2023. The company had 257,400,000 shares of common stock outstanding as of June 30, 2024. Total operating expenses for the 3 months ended June 30, 2024 were $16,600,000 and included research and development expenses of 8 $900,000 and general and administrative expenses of $7,700,000 This compares to total operating expenses for the 3 months ended June 30, 2023 of $24,000,000 that included research and development expenses of $14,500,000 and general and administrative expenses of $9,500,000 As stated earlier, we recently completed a successful fundraising effort with net proceeds $32,600,000 extending our runway into the Q3 of 2025. As always, we are constantly exploring strategic and shareholder friendly opportunities to increase our working capital and continue to pursue strategic partnerships that will drive long term strategy. That concludes my update for the quarter.

Speaker 3

Tiffany, back to you.

Speaker 1

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

Operator

Our first question comes from the line of Chan Lee. Please go ahead.

Speaker 4

Hi, good morning. This is Sean from H. C. Wainwright standing in for RK. How are you?

Speaker 2

Good morning, Sean.

Speaker 4

Thanks for taking my questions. My first one is on the OQ400 extended taxes program. So I was wondering what is the EAP primarily targeted towards since I'm sure you are still actively recruiting a lot of patients into the Phase 3 study?

Speaker 5

Uma? Yes. Thank you for the question. So the expanded access program is targeting the population that do not meet the inclusion exclusion criteria of our Phase 3 or they would have to have an option meeting a little bit more flexibility based on what we have not offered in our Phase 3 because that is mandated by FDA regulatory process. So in this trial, our inclusion criteria would be 18 years of age, anyone that has a clear certified genetic diagnosis of RP and those who have photoreceptors left.

Speaker 5

And also discretionary by the treating physician, this is the decision that individually will be taken by the treating physician and the patient.

Speaker 4

I see. Thanks for that. On to the Ocu400 Phase 3, I was wondering, have you disclosed what's the expected difference between the treatment and untreated arms and what how is the study powered to detect it?

Speaker 2

Yes. So the treated and untreated, untreated is not truly untreated because it's SSR blinded study. It's a sub retinal surgery. So that's the way you actually plan to study. So the second so the study is powered at 2:one ratio.

Speaker 2

That means out of 150 patients, 50 patients are going to be in the untreated group. And study is powered at greater than 95%, assuming there is a 50% response rate. So responders are defined as who can reach either 2 levels or higher on the mobility test, which is our mobility test is proprietary LDNA.

Speaker 4

Okay, understood. So 95% to detect a 50% difference? Got it. And then finally for the ARPU-four ten study update expected later this year, could you elaborate a little more on what can we expect at the update? What will you provide?

Speaker 4

What kind of data will you provide?

Speaker 5

So yes, for the 410 geographic atropyl secondary to dry age related macular degeneration study, We are hoping to provide preliminary safety and efficacy updates later this year.

Speaker 4

So we can expect both safety and some efficacy results then?

Speaker 1

Yes.

Speaker 4

Great. Thanks. That's all the questions I have. Thanks again for taking my questions.

Speaker 2

Thank you,

Operator

Sean. Our next question comes from the line of Robert LeBoer with NOBLE Capital Markets. Please go ahead.

Speaker 3

Good morning. My question has to do with OCU-four hundred. And you'd mentioned that you're on track for the 2026 BLA. So I was wondering if you could give any details on upcoming milestones or data presentations

Speaker 2

for the trial? Robert, good morning, Robert. Since it's SSL blinded study, updates will be providing on the recruitment rates, how we are meeting the BLA timeline. Since we do have RMAT designation, as well as orphan designations in U. S.

Speaker 2

And EU, that will allow us to do a ruling submission for BLA and MAA. So that's the process potentially we're going to take starting from late next year. And when the clinical recruitment is done early next year, that will take 1 year for us to complete the last patient, which is a duration of the trial. And when the data comes out, we'll close the clinical sections and then that will trigger the accelerated path of 6 months in 2026. So that will allow us to potentially get approvals in both U.

Speaker 2

S. And EU late 2026.

Speaker 3

Okay, great. Thank you very much. Thank you, Robert.

Operator

Our next question comes from the line of Daniel Gatzulian with Chardan Capital Markets. Please go ahead.

Speaker 6

Hi. This is Janani on behalf of Daniel. So my first question is on Ocu200. Can you tell us where you are in the process for getting the clinical hold lifted for ORQ200? And once the hold is lifted, will you be launching the trial right away?

Speaker 6

Or are you focusing on the gene therapy programs at this point? Thank you.

Speaker 2

We're still working with FDA to get the submit the information they requested and try to get the clinical hold lifted. And we designed a very simple Phase 1 study. And after FDA activation lifting the clinical hold, we will define the path forward for the program.

Speaker 6

Okay. And for And I

Speaker 2

mean, again, as I just want to reiterate, our focus has been primarily gene therapies, but the 200 is a good program. As soon as FDA lift the clinical hold, we'll provide a direction on that program.

Speaker 6

Okay. Thank you. So I have another question on Ocu-four hundred. So are there meaningful differences in achieving responder criteria with the LDNA compared to the mobility assessments used in previous Phase 3 trials?

Speaker 2

Yes. As we stated and showed today, intent to treat population data we analyzed from the Phase onetwo. That means patients who will qualify for Phase 3 based on our criteria, and we clearly showed 62% response rate based on people who can reach two levels or more. And in the approved product, they are 52% response rate. And I think one of the questions earlier we addressed, we powered the study at 50% response rate.

Speaker 2

That means we actually powered it lower than what we achieved in Phase

Operator

This concludes the question and answer portion. I will now turn the call back over to Chairman's CEO and Co Founder, Doctor. Shankar Maldonore. Please go ahead.

Speaker 2

Thank you, operator. Thank you everyone for joining us today. We appreciate your continued support as we move forward with our groundbreaking scientific and clinical initiatives. We look forward to the second half of twenty twenty four as we continue to solidify Ocugen's position as a biotechnology leader. Thank you.

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