Ocugen, Inc. (NASDAQ:OCGN) Q4 2022 Earnings Call Transcript

Ocugen, Inc. (NASDAQ:OCGN) Q4 2022 Earnings Call Transcript February 28, 2023

Operator: Good morning and welcome to Ocugen's Fourth Quarter and Full Year 2022 Financial Results and Business Update Call. Please note that this call is being recorded at this time. Following the speaker's 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. Joining me today are Ocugen's Chairman, CEO and Co-Founder, Dr. Shankar Musunuri who will provide a business update and our Chief Accounting Officer and Senior Vice President of Finance, Jessica Crespo, who will provide more detail on our financial results. Earlier this morning, we issued a press release detailing business and operational highlights for the fourth quarter and full year of 2022. We encourage listeners to review the press release, which is available on our website at oxygen.com. This call is being recorded, and a replay of 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 predict, believe, potential, propose continue, estimate, anticipate, expect, plan, intend, may, could, might, will, should or other words that convey uncertainties of future events or outcomes to identify these forward-looking statements. 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. Investors should familiarize themselves with the company's filings for complete details. 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 10-K covering 2022 will be filed soon after today's call. I will now turn the call to Dr. Musunuri.

Shankar Musunuri: Thank you, Tiffany. Good morning, and thank you all for joining us today. I'm excited to share with you the significant progress Ocugen made in 2022 and during the first months of 2023 to further advance our diversified pipeline while continuously focusing on patients and pursuing courageous innovation, fueled by our team's passion, dedication and visionary mindset, we witnessed progress across all our clinical programs. I will also provide more on our objectives for 2023, leading into 2024. We -- let me commence with an update on our gene therapy program. In December 2022, we announced that Q400, our investigational drug candidate for the treatment of retinitis pigmentosa and Leber congenital amaurosis was granted expanded orphan drug designations by the U.S. FDA, which supports the therapeutic potential of our Q400 to treat multiple inherited retinal diseases, the single product.

AC400 is symbolic of Ocugen's gene modifier approach that is based on nuclear hormone receptors that regulate diverse physiological functions in the retina, such as development, metabolism, cellular functions and thereby establishes homeostasis to potentially restore retinal health and function. In the U.S., RP and LCA effect 110,000 and 15,000 people, respectively. And globally, these conditions affect approximately 1.6 million people. And at despite its prevalence, RP and LCA patients have limited treatment options. As current approved or in development gene therapies focus on individual genes, RQ400 addresses shortcomings of current gene therapy approaches as a broad spectrum gene agnostic approach to genetically diverse inherited retinal diseases.

We have completed enrollment of RP patients in the Phase I/II trial for protocol and continue to enroll patients with LCA. We also established the high dose to be the maximum tolerable dose. We plan to start the Phase III clinical trial near the end of 2023. ARQ 200, our biologic product candidate is a recombinant fusion protein consists of 2 human proteins, some statin and transferring and is designed to treat severely sight-threatening diseases like diabetes, macular edema, diabetic retinopathy and wet AMD. Millions of patients worldwide are affected by these conditions. However, current therapies target only 1 pathway, either angiogenesis or information and up to 50% of patient populations experience limited or no response to current treatments.

AKU200 works with a distinct mechanism of action compared to existing therapies and targets multiple caset pathways such as angiogenesis, oxidation and inflammation and has the potential to offer better treatment to all patients. Yesterday, we submitted an investigation of new drug application, IND with the U.S. Food and Drug Administration to initiate a Phase I clinical trial of OCC 200 for treating diabetic macular edema, DME. This regulatory milestone fulfills the company's commitment to file the IND, Barke200 within the first quarter of 2023. We have proud to further advance ART200, one of Ocugen's founding ophthalmic programs. Another major highlight in 2022, that I'd like to note is the expansion of our pipeline into cell therapy with Neocare.

A Phase III ready, region-reg cell therapy technology that combines the evolutionary advancement in bioengineering and cell processing to enhance the autologous cartilage repair process. We are developing NeoCart specifically for the treatment of articular cartilage defects in the knee, current therapies to treat cartilage damage in the knee are suboptimal with various outcomes due to variable cellular responses. The current standard of care suffers from factors such as pain, reduced knee function, failure to address cartilage damage, donor tissue availability and open surgery. In addition to receiving a region rate medicine advanced therapy designation from the FDA, we received concurrence from the FDA on the confirmatory Phase III clinical trial design.

We have already begun renovating our facility to accommodate cGMP manufacturing for clinical trials, and we are planning to initiate Phase III randomized controlled study in subjects with articular cartilage defects in the first half of 2024. Now, turning to our vaccines portfolio and continued efforts to significantly mitigate the spread of COVID-19. From a public health perspective, we actively monitor the medical need for a more durable vaccine as more than 1 million cases of COVID-19 were diagnosed in the U.S. over the last 30 days, the International Health Regulations Emergency Committee of the World Health Organization recently held a meeting in January this year to discuss the state of the COVID-19 endemic, which revealed the global risk of 319 and its ongoing transmission as high.

This assessment was based on factors regarding circulating SARS-CoV-2 variants of concern, status of global vaccination and hybrid immunity and the unexpected and relatively early seasonal return of the flu, which further encumbers already constrained health care systems. The data backs this up. More than 5 million cases were diagnosed and nearly 40,000 people die worldwide in the last 28 days. Current COVID-19 vaccines are limited by a lack of durability and inability to stop transmission. As part of our commitment to address current gaps and the fighting in iSco19, we are developing a novel mucosal vaccine platform that includes Q5000, a violent COVID-19 inhaled vaccine, our Q10 a seasonal co-driven flu inhaled vaccine and AQ2 a combination co-driven seasonal flu and bivalent COD19-inhaled vaccine.

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The 500 cities is based on a novel chat platform designed to reduce transmission and protect against new variants. The Ocu500 cities is designed for annual boosters. For the 2022 to '23 flu season over 50% of the U.S. population, about 6 months of age, received a seasonal flu shot, representing a market size of more than 170 million doses. The Q400 series of vaccines and the development brands distinct product candidate profile status that could significantly impact major global health obstacles and maximize our opportunity to serve broader patient markets. Regarding our injectable COVID-19 vaccine already in development, co-vaccine, we successfully completed enrollment for our COVAXIN Phase II/III immune-bridging and broadening clinical trial in December 2022 and reported top line data in January 2023.

This data showed that COVAXIN was well tolerated and demonstrated immunogenicity. We plan to present final data and analysis at midyear -- at the beginning of November 2022, we held Ocugen's first R&D day since the company's inception to showcase our dynamic pipeline and world-class team to investors, analysts, else and other key stakeholders of the company. During that meeting, we shared the long-term outlook for the company. On this call, I would like to spend some more time recapping our key priorities over the next 12 to 18 months. First, our gene therapy programs. We're anticipating ARK400 preliminary efficacy data midyear and plan to start the Phase III clinical trial near the end of the year. For Q4 10, we are on track to submit INDs to the FDA in the second quarter of 2023 to initiate Phase I/II trials for disease.

With ARQ 410, we believe we have a potential onetime curative therapy with a single injection. Dry AMD FX vision and 10 million people in the U.S. and over 266 million people worldwide. Also targeting severe IDCs, we look forward to the initiation of our ARK200 Phase I clinical trial with the preliminary data anticipated in the fourth quarter of this year. We plan to complete the CGMP facility construction or the manufacturing of NeoCart in the fourth quarter in support of initiating a Phase III clinical trial in the first half of 2024. For our interior vaccine cities, we are planning to file an IND to initiate clinical trials in the fourth quarter of 2024. One overarching and imminent objective for Ocugen is to identify synergies and partnership with organizations that can help drive the development of our comprehensive pipeline.

With that, I'm thrilled about the recent appointment of a new Chief Business Officer, Kuan Wu, who is a seasoned health care business executive with more than 2 decades of experience in business development, strategy and finance. We look forward to benefiting from the prospects of Quant's leadership and together, further evolve as a fully integrated patient-centric biotech company. Our strategic initiative to identify partnership for our programs is also critical for our operational objective to Kanso Capital and extend runway as appropriate. With that, I will now turn the call over to our Chief Accounting Officer, Senior Vice President of Finance, Jessica, to review our Q4 and 2022 financial metrics.

Jessica Crespo: Thank you, Shankar, and good morning, everyone. I will now provide a brief overview of our key financial results for the fourth quarter and full year 2022. Our research and development expenses for the quarter ended December 31, 2022, were $17.2 million compared to $7.1 million for the fourth quarter of 2021. For the full year ended December 31, 2022, research and development expense was $49.8 million compared to $35.1 million for the year ended December 31, 2021, with the increase primarily driven by the advancement of our product candidates into clinical trials. General and administrative expenses for the fourth quarter ended December 31, 2022, were $6.9 million compared to $7.5 million for the fourth quarter of 2021.

General and administrative expenses for the full year 2022 were $35.1 million compared to $22.9 million for the year ended December 31, 2021. Net loss was approximately $21.9 million or $0.10 net loss per common share for the quarter ended 2022 Q4 compared to a net loss of approximately $14.6 million or $0.07 net loss per share for the fourth quarter of 2021. Full year net loss was $81.4 million or $0.38 net loss per share compared to a net loss of $58.4 million for the full year of 2021 or $0.30 net loss per share. Our cash, cash equivalents and investments totaled $90.9 million as of December 31, 2022, compared to $95.1 million as of the year ended December 31, 2021. We expect that our cash, cash equivalents and investment balance will enable us to fund operations into the first quarter of 2024.

We're continuously exploring opportunities to increase our working capital, and we'll be focused on seeking out partnerships and nondilutive funding, as Shankar mentioned during his prepared remarks. That concludes my update for the quarter. Tiffany, back to you.

Tiffany Hamilton: Thanks, Jeff. We'll now open the call for questions. Operator?

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