Saturday, 9 November 2024
by BD Banks
Image source: The Motley Fool.
Ocugen (NASDAQ: OCGN)
Q3 2024 Earnings Call
Nov 08, 2024, 8:30 a.m. ET
Operator
Good morning and welcome to Ocugen’s third quarter 2024 financial results and business update. [Operator instructions] I will now turn the call over to Tiffany Hamilton, Ocugen’s, head of corporate communications. You may begin.
Tiffany Hamilton — Head of Corporate Communications
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. Ramesh Ramachandran, our chief accounting officer, who is transitioning from Mike Breininger, interim chief accounting officer is also on the call to provide a financial update for the quarter ended September 30th, 2024.
Dr. Huma Qamar, chief medical officer; and Dr. Arun Upadhyay, chief scientific 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 third quarter of 2024.
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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, 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 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 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 the presentation. Finally, Ocugen’s quarterly report Form 10-Q covering the third quarter of 2024 will be filed next week. I will now turn the call over to Dr. Musunuri.
Shankar Musunuri — Co-Founder, Chairman, and Chief Executive Officer
Thank you, Tiffany and thank you all for joining us today. We are excited to share the ongoing progress of our novel modifier gene therapy platform across all three clinical programs, as well as recent announcement regarding our OCU200 biologic candidate, which I will highlight later in the presentation. During the third quarter, we accomplished notable clinical and regulatory milestones including approval from Health Canada to initiate the OCU400 phase three limelight clinical trial in Canada and approval from the US FDA for an expanded access program or EAP for the treatment of adult patients aged 18 and older with retinitis pigmentosa, RP, using a OCU400. These accomplishments and consistent trial enrollment are bringing the company even closer to providing a potential one-time treatment for life to patients living with RP.
Our modifier gene therapy programs leveraging the Aurora gene, OCU410 and OCU410ST are advancing through their respective clinical trials as planned. We are currently dosing patients in OCU410 Phase 2 ArMaDa clinical trial for the treatment of geographic atrophy, GA. An advanced stage of dry age-related macular degeneration, dAMD. We completed the Phase 1 dosing in the Phase 1/2 OCU410ST GARDian clinical trial with a favorable safety and tolerability profile.
The Data Safety Monitoring Board, DSMB approved enrollment for the second phase of the Phase 1/2 clinical trial. Stargardt disease is the most common inherited retinal disease and there remains a large unmet medical need with no currently approved FDA treatments. I am encouraged by these achievements and confident in our path forward to achieving our near-term inflection points. This week we announced the closing of a debt financing that secured $30 million from Avenue Capital Group.
This funding is expected to extend our runway into the first quarter of 2026. Dosing is well underway and the pivotal Phase 3 liMeliGhT clinical trial for OCU400, our lead gene therapy candidate that utilizes and not to its regene. As previously mentioned, we received Health Canada’s approval to initiate the Phase 3 clinical trial for OCU400 in Canada. Expanding the clinical trial to Canada is a significant opportunity for Ocugen as it will allow us to reach a broader patient population encompassing numerous gene mutations associated with RP.
We plan to enroll subjects across a maximum of five sites, expediting recruitment and broadening the commercialization potential of these gene agnostic treatments in the United States and Europe. OCU400 also received FDA approval for an EAP for the treatment of adult patients with RP aged 18 and older. The EAP is a meaningful step forward as it makes OCU400 available to qualifying patients beyond our Phase 3 clinical trial offering hope and optimism for a wider population of patients desperate for a therapeutic option. This approval also serves to validate the positive safety data generated in the previous Phase 1/2 OCU400 clinical trial.
Furthermore, this is the first Phase 3 gene therapy candidate to treat patients with RP regardless of mutation. The Phase 3 clinical trial is on track to complete enrollment in the first half of 2025, filed the Biologics License Application, BLA and Market Authorization Application, MAA, in Europe in the first half of 2026 and pursue commercialization in 2027. Let me take a moment to highlight the unmet need and underserved market for RP patients. There are approximately 300,000 patients in the US, Europe and Canada that are affected by the disease which is caused by mutations in roughly 100 different genes.
The only approved gene therapy on the market and one currently in development each address one mutation associated with the disease. Other candidates in development, including optogenetics, are intended only for a very small patient population. OCU400 has showcased its potential to provide a totally new category of treatment using its gene agnostic approach rather than one to one approach modifier gene therapy targets. Many genes associated with this underserved disease through the use of master gene regulators, resetting the functional network of the retina and restoring overall health.
We continue our extensive campaign to educate key stakeholders about the differentiated mechanism of action of our modifier gene therapy platform and its advantages over current therapies. During the third quarter, we had the opportunity to provide updates on our three clinical stage modifier gene therapies to significant investor audiences, as well as industry decision makers during meetings like the Cell & Gene meeting on the Mesa hosted by the Alliance for Regenerative Medicine. Now, let’s move on to our development in OCU410 and OCU410ST, which aim to treat GA secondary to dAMD and Stargardt disease respectively with a single subretinal injection that could be a onetime treatment for life for patients living with these debilitating blindness diseases. OCU410 is specifically designed to address multiple pathways implicated in the pathogenesis of dAMD and offer a distinct advantages over current treatment options that target only one pathway, the complement system.
Currently approved treatment options require frequent intravitreal injections about six to 12 doses per year and are accompanied by various safety concerns. For example, roughly 12% of patients develop wet AMD following treatment. OCU410 has the 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 approximately 2 to 3 million GA patients in the US and Europe combined OCU410 represents a considerable market that is primed for new entrants given the shortcomings with current therapies.
Additionally, there is no approved product for GA in Europe. We are currently in Phase 2 of the Phase 1/2 ArMaDa clinical trial and plan to complete dosing in early 2025. A preliminary safety and efficacy update on the OCU410 Phase 1/2 ArMaDa clinical trial will be shared at the upcoming clinical showcase next week. To date, nine patients with GA have been treated with a low, medium and high dosage in the OCU410 Phase 1 study and 410 demonstrated a favorable safety and tolerability profile.
To date, no serious events SAEs related to OCU410 have been reported. The Phase 2 dose expansion assessor blinded clinical trial is recruiting patients and will assess the safety and efficacy of OCU410 in a larger group of patients who will be randomized into one of three groups, a medium dose treatment group, a high dose treatment group or an untreated control group. Participants must be aged 50 or older, be able to identify 24 letters or more on a BCVA, which is like the charts you read at Optometrist’s office, and have a total geographic atrophy area between 2.5 and 20.5 square millimeters. Turning onto OCU410ST, which has received orphan drug designation from the FDA for the treatment of ABCA4 associated retinopathies including Stargardt disease.
Phase 1 dosing of the Phase 1/2 GARDian clinical trial has been completed and OCU410ST demonstrated a favorable safety and tolerability profile. To date, no SAEs related to OCU410ST have been reported. The Data and Safety Monitoring Board has approved proceeding to Phase 2 of the clinical trial. Stargardt disease affects approximately 100,000 people in the US and Europe and no approved therapy is available.
This condition is the most common form of inherited macular dystrophy with symptoms of bilateral central vision loss typically forming during childhood and gradually worsening over a person’s lifetime. A preliminary safety and efficacy update on the OCU410ST Phase 1/2 GARDian clinical trial will also be featured at the upcoming clinical showcase. Lastly, I would like to call attention to our biologic platform, OCU200, which possesses unique features to treat vascular complications of diabetic macular edema, DME. In recent news, we announced that the FDA cleared the Investigational Drug Application for the Phase 1 clinical trial evaluating OCU200, a recombinant fusion protein consisting of tumstatin and transferrin for treatment of DME.
DME causes blurriness in vision and progressive vision loss as the disease advances. Approximately 746,000 patients in the United States are affected with DME. The condition is becoming more prevalent as the number of people with diabetes in the US rises making it more imperative to address. Approximately 30 to 40% of DME patients are refractory to current anti-VEGF therapies.
And we believe that OCU200 has the potential to provide a new treatment option for the significant percentage of people living with DME, including non-responders to the current standard of care. We plan to initiate Phase 1 clinical trial of OCU200 this quarter. Our efforts across platforms represent our commitment to treating blindness diseases, focusing on innovative solutions that aim to provide lasting patient benefits. We look forward to sharing further updates as we advance these therapies through clinical development.
I will now turn the call over to Ramesh Ramachandran to provide an update on our financial results for the quarter ended September 30th, 2024. Ramesh?
Ramesh Ramachandran — Chief Accounting Officer
Thank you, Shankar. The company’s cash and restricted cash totaled $39 million as of September 30th, 2024 compared to $39.5 million as of December 31st, 2023. Total operating expenses for the three months ended September 30th, 2024 were $14.4 million and included research and development expenses of $8.1 million and general and administrative expenses of $6.3 million. This compares to total operating expenses for the three months ended September 30th, 2023 of 16.1 million that included research and development expenses of $7 million and general and administrative expenses of 9.11million.
As stated earlier, we recently completed a successful debt financing of 30 million extending our runway into the first quarter of 2026. As always, we are proactively exploring shareholder friendly opportunities to increase our working capital including partnerships that will drive long term strategy for our scientific platforms. That concludes my update for the quarter. Tiffany, back to you.
Tiffany Hamilton — Head of Corporate Communications
Thank you, Ramesh. We will now open the call for questions. Operator?
Operator
Thank you. [Operator instructions] Our first question comes from the line of Jason McCarthy with Maxim Group. Your line is open.
Jason McCarthy — Analyst
Hi, guys. Thanks for taking the question and congrats on the quarter. So at the upcoming clinical showcase, we’re expecting some of the initial data in GA. Could you just help us understand what we can be looking for from that, the bar for success? And then, in particular for gene agnosticism?
Shankar Musunuri — Co-Founder, Chairman, and Chief Executive Officer
Huma?
Huma Qamar — Chief Medical Officer
So thanks for the question. So in the upcoming clinical showcase, we will be presenting the geographic atrophy and our other gene therapy trials, preliminary safety and efficacy, particularly for the GA. We have established the safety at this point and what we will be showcasing the efficacy endpoints like geographic atrophy, lesion and other parameters which would be functional, as well as structural. So we will be presenting that data in the upcoming clinical showcase on November 12th at Nasdaq.
Jason McCarthy — Analyst
OK. Great. Thanks. And then, for the Stargardt study, when could we expect to see data? And then, also as a follow up with a couple small molecule drugs in Stargardt and late-stage development, how do you sort of see those fitting in with OCU410ST if they are approved?
Huma Qamar — Chief Medical Officer
OK, that’s — that’s a great question. Currently just to address that there are no approved therapeutic or any treatment approved for Stargardt, so there is significant unmet medical need out there. In our upcoming clinical showcase, we will also be presenting the safety as we have already apprized the market through our DSMB press releases. But for efficacy, we will also be presenting that in our upcoming clinical showcase.
So stay tuned for all the updates.
Shankar Musunuri — Co-Founder, Chairman, and Chief Executive Officer
So Jason, I know there are some couple of products in the development, however, you know we are planning for a treatment option, only treatment option, with our therapy. At this time, we’re not thinking about any co-therapies.
Jason McCarthy — Analyst
Got it. And then, I just thought I’d bring up since it’s topical, if you could just — you know, given the recent issues with you know, existing gene therapies, Pfizer dropping out, you know, Bluebird coming under fire for safety. Can you just talk a bit about how modifier gene therapies avoid some of those pitfalls impacting the — the space at large?
Shankar Musunuri — Co-Founder, Chairman, and Chief Executive Officer
Good question, Jason. Two things we need to consider when you’re doing any gene therapies. First and foremost, product quality is extremely important and during, you know, the course of the last few years with the three parallel clinical trials going on in ophthalmology space, probably we have the biggest ophthalmology clinical trials in gene therapy space. We have not seen any adverse events SAEs related to our product.
The product seems to be safe and effective. Therefore, that’s No. 1. Quality of the product is very important.
We believe we are consistently making high quality product. No. 2, we target subretinal surgeries to get these gene therapy into retina. And so, we do have highly skilled experienced retinal surgeons in our network and we formed a very good network of the surgeons for all our clinical trials.
So that’s very important. The procedure is important. So those are the two things we’re focusing on and obviously there are also differences. I just wanted to point out for listeners.
Systemic gene therapy versus, you know, ophthalmology gene therapy. Our target dose typically in ophthalmology space because we directly go into the target you know goes from 10 to the 10 to the 10 to the 11 gene copies. Systemic gene therapy is going to 10 to the 14 and higher and so there is a significant difference almost like 1,000-fold or 10,000-fold increase. And so, there are other things come up when you go to systemic gene therapies.
Jason McCarthy — Analyst
OK. Thanks. That was helpful.
Operator
Our next question comes from the line of Daniil Gataulin with Chardan. Your line is open.
Daniil Gataulin — Chardan Capital Markets — Analyst
Good morning, guys. Thank you for taking the question and congrats on the progress. I have one question on geographic atrophy program. So given there are no — still no approved options for it in Europe, how are you thinking of taking advantage of that opportunity? And have you had any interactions with EU regulators regarding your program? Thank you.
Shankar Musunuri — Co-Founder, Chairman, and Chief Executive Officer
Great question Daniil. Yes, we will start interactions this year, I mean, the next few quarters with the EU. Obviously, the Phase two is limited to us. What EU regulators are looking for is some functional improvement or stabilization for geographic atrophy patients.
The current therapies which are on the market in the US, they used structural endpoints to get approvals. So we’ll be definitely looking for functional endpoints and some of the data will be shared next week in our showcase.
Daniil Gataulin — Chardan Capital Markets — Analyst
Got it. And a quick follow up on for 410ST program, do you see — given it’s a rare disease, do you see any potential of modifying your Phase 2 trial or Phase 2 portion of the trial to make it a pivotal?
Shankar Musunuri — Co-Founder, Chairman, and Chief Executive Officer
That’s a great question. That’s why after phase one clinical trial we are taking a pause even though DSMB gave approval to move forward with the Phase 2. With the previously designed study approved by FDA, we’re going to take a pause. We’re going to spend a few months for discussions with FDA because there are some new guidance.
There is an opportunity for orphan diseases with gene therapies to convert Phase 2 into a pivotal trial for registration trial. So we’re going to closely work with agency and seek their advice and guidance before we move forward to Phase 2/confirmatory trial.
Daniil Gataulin — Chardan Capital Markets — Analyst
Got it. Thank you. And again, congrats on the progress.
Shankar Musunuri — Co-Founder, Chairman, and Chief Executive Officer
Thank you.
Operator
This concludes the Q&A portion. I will now turn the call back over to chairman, CEO and co-founder, Dr. Shankar Musunuri.
Shankar Musunuri — Co-Founder, Chairman, and Chief Executive Officer
Thank you, operator. We appreciate the continued interest and involvement of our key stakeholders as we move forward with our transformative initiatives. We look forward to closing a successful fourth quarter of 2024 as we continue to solidify Ocugen’s position as a biotechnology leader in ophthalmology. Have a great day.
Operator
[Operator signoff]
Duration: 0 minutes
Tiffany Hamilton — Head of Corporate Communications
Shankar Musunuri — Co-Founder, Chairman, and Chief Executive Officer
Ramesh Ramachandran — Chief Accounting Officer
Jason McCarthy — Analyst
Huma Qamar — Chief Medical Officer
Daniil Gataulin — Chardan Capital Markets — Analyst
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