Ocugen Inc. Q1 2023 Earnings Call
Good morning, and welcome to the oxygen first quarter 2023 financial results and business update call. Please note that this call's being recorded at this time Altra spent lines are in a listen only mode.
Following the Speakers' commentary there will be a question answer session I will now turn the call over to Sharon Joe Aki Jin head of Investor Relations you may begin.
Thank you Monte joining me today are occupants, chairman and CEO and co founder Dr. Shenker, NUCYNTA re who will provide a business update and our chief financial Officer, and Chief business Officer, who will provide a financial update.
Earlier. This morning, we issued a press release detailing business and operational highlights for the first quarter of 2023 we encourage listeners to review the press release, which is available on our website at www dot oxygen Dot com. This call is being recorded.
And a replay with the accompanying slide presentation will be available on the investors section of the Yaqui Gen 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 proposed continue estimate and <unk>.
Dissipate expects plans intends may could Mike will should or other words that convey uncertainty of future events or outcomes to identify these forward looking statements.
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.
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, <unk> quarterly report on Form 10-Q, covering the first quarter of 2023 will be filed soon after todays call I will now turn the call over to Doctor you scenario.
Thank you Sharon good morning, and thank you all for joining us today.
Looking at what do we have achieved.
Since we reported our 2022 fourth quarter and full year results I'm kicking off today's call with a high sense of accomplishment and optimism for the future of sponsorship.
The top of our list of highlights is the recent announcement of positive preliminary safety and efficacy results from the phase one two trial off of our Q4 hundred program.
And the abuse orphan drug designation for our Q4 to a steep program to potentially treat a btu for associated if not please let's just talk about disease.
We also forged ahead in our pursuit of non dilutive government funding.
About one inhaled vaccines pipeline and submitted multiple proposals to various federal agencies, and we will begin seeking corporate partnerships, but all gene therapies and also share updates on our Arctic 200, Neocart programs later in my commentary.
What are your twenty-three.
He is off to a strong start and you can see we remain on track.
The significant milestone.
The ear definitely first shared with you during the last business update webcast.
Our modified gene therapy approach continues to be the leading differentiator for oxygen. Unlike single gene replacement therapies, which only target one genetic mutation we believe that our modify your gene therapy platform grew its use of nuclear hormone receptors represents a novel approach.
That has the potential to both address multiple retinal diseases caused by mutations in multiple genes with one product.
And to address complex diseases.
Potentially caused by imbalances in multiple gene networks.
Currently <unk> has three modify your gene therapy programs.
Our Q4 hundred retinitis Pigmentosa leber, congenital amaurosis, which affects approximately 125000 patients in the U S living with any.
More than 125 associated with <unk>.
Our Q4 10 for dry age related macular degeneration disease affecting approximately 10 million people in the U S alone.
And our Q4 F C.
Treatment of ABC is for associated.
Not with these including Star Guard denied Pigmentosa 90, RP 19th.
And cool rock dystrophy, three car T.
We see this affecting 44000 Americans.
We recently announced positive preliminary safety and efficacy results from the fish one two trial of our Q4 hundred for the tree.
<unk> noticed pigmentosa leber congenital amaurosis.
These preliminary positive results serve as the first clinical validation of the platform, we have patient responses across various genetic mutations support that our Q4 hundred has the potential to transform the lives of many patients struggling with debilitating blindness diseases.
This phase one two trial is a multi center open label dose ranging study we have enrolled a total of 18 RP patients in this study with 10 subjects in the dose escalation and eight subjects in the expansion phase.
AGL subjects enrolled to date ranges from 18 to 77 years across adoption and multi gene mutations. We further expanded its reach one two trials to enroll in CF patients with respect to 90 gene mutation in pediatric patients.
Drew and Scepter 90 mutations.
In cohort, one which is low dose in cohort two which is medium dose a total of 700 subjects with moderate advanced vision impairment due to RP associated.
With ROE and how to easily gene mutations received a unilateral some britnell injection of either a low dose, which is 166 times 10 to the term we use for milk in cohort one our medium dose, which is 3.33 times 10 to the 10, we used per mill.
Our Q4 hundred in cohort two respectively.
And the preliminary data analysis nine month follow up data for three subjects in cohort one and six month follow up data for one subjects from cohort one and three subjects from cohort two were assessed overall.
Overall preliminary results showed a favorable safety and tolerability profile for <unk> hundred.
Regarding efficacy, we looked at multi luminescence mobility test LMT, a primary efficacy endpoint.
<unk> clinical trials for an FDA approved products in this disease area.
In best corrected visual equity <unk>.
Efficacy outcomes from 700 subjects demonstrated four key points.
Percent of treated eyes shown as stable or improved M D score trends.
71% of our Q4 hundred gig <unk> demonstrated it.
Our more flex level improvement and MLM D score compared to 29% of untreated eyes.
87% of our Q4 hundred creature dies in cohort one with the nine month follow up demand due to the two are more let's level improvement and I'm LMT score compared to none of the country device.
And 43% of <unk> hundred three size demonstrative 811 letters of improvement in <unk> score compared to none of the untreated eyes.
The early results from patients treated in the phase one two trial are encouraging and support the paradigm changing potential of our modified gene therapy technologies to address unmet medical needs for patients with RP and NCAA with its favorable safety profile and positive trend in efficacy signals.
He got to see longer term data and potentially initiate phase III clinical trials in the U S and EU.
As I mentioned earlier, we received exciting news last week that the FDA.
Granted orphan drug designation for our Q4 as steep.
AAV five.
Bruno for the treatment of ABC, a four associated with these including solid guard RP 19 and card three diseases.
As a refresher orphan drug designation is granted by the FDA to certain products that show promise in the treatment prevention diagnosis of rare and serious diseases affecting fewer than 200000 people in the United States.
Additionally, the orphan drug designation.
Status allows for a potential.
78 market exclusivity, specifically to the designated orphan us following FDA approval.
Other development incentives include the clinical protocols.
Zane assistance and potentially accelerated review times.
This designation represents a noteworthy milestone in our effort to develop innovative treatments for inherited retinal diseases.
And while occupancy, Tennessee is intended to treat rare diseases Aki for Tim also targeting the Roger network is aimed at treating dry age related macular degeneration.
Hundreds of millions of people across the globe.
Using our modified gene therapy, we believe our Q4 and potentially addresses shortcomings of current treatments for geographic atrophy affects about 1 million people in the U S. Because it is a broad spectrum approach that has potential as a onetime curative therapy with a single sub retinal.
<unk>.
Now turning to vaccines.
The occupy 100 cities of vaccines in development grants oxygen a distinct product candidate profile status that could significantly impact major global health obstacles and maximize our opportunity to serve a broader patient markets.
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 in the fight against COVID-19, we're developing a novel emulation vaccine platform that includes occupy 100, the bivalent COVID-19 inhaled vaccine.
<unk> five turn a seasonal quadrivalent flu influenza vaccine.
And <unk>, a combination quadrivalent seasonal flu and viral and COVID-19.
Vaccine. The <unk> 500 vaccine series is based on a novel chat platform designed to reduce transformation and protect against new variants with the potential durability up to one year.
We decided to develop the flu vaccine. In addition to addressing COVID-19, because flu will always be a health concern.
There is also a longer term business potential as Americans continue to be literally vaccinated against the flu.
One of the 2022 to 2023 flu season, or 50% of the U S population at about six months of each received a seasonal flu shot representing a market size of more than 170 million doses.
To optimize resources across our diverse at critically needed development programs and maintain shareholder value. Our team has been busy in D. C.
Taking with the government agencies to pursue non dilutive funding opportunities, but I would argue for 100 vaccine series, we have submitted multiple comprehensive proposals for review and consideration and maintain an ongoing dialog with the respective agencies regarding the development of the inhaled vaccines Blackstone.
We look forward to updating you as we hear more.
Last quarter, we submitted an investigational new drug application.
With the U S food and drug administration to initiate a phase one trial of <unk> 200 for treating diabetic macular edema.
The IMD was placed on clinical hold by the FDA as part of its request for additional information related to chemistry manufacturing and controls prior to initiating the phase one trials.
The company plans to respond to the FDA promptly to get FDA clearance to initiate the phase one clinical trial.
We believe our Q2 hundred works with a distinct mechanism of action compared to existing therapies and targets multiple cognitive pathways, such as angiogenesis oxidation and inflammation and has the potential to offer a better treatment all patients.
Neocart is our phase III really reasonably to cell therapy technology.
Small advancement and bioengineering and cell processing to enhance the tallest cartilage repair process.
We are in the process of renovating our facility to accommodate cgmp manufacturing for Neocart and plan to complete construction in the fourth quarter of 2023 with a phase III randomized control study in subjects with articulate cartilage defects commencing in 2024.
As you can see that are highly dedicated to completing our stated objective.
With sound strategies that we believe will enable oxygen to reach several value enhancing milestones.
Over the course of 2023 and beyond.
With that I will now turn the call over to our Chief Financial Officer, and Chief Business Officer, Luke to review, our first quarter financial update.
Thank you. Thank you <unk> and good morning, everyone. I will now provide an overview of the key financial results for the first quarter of 2023.
Our research and development expenses for the quarter ended March 31, 2023 were $9 6 million compared to $7 9 million for the first quarter of 2022.
General and administrative expenses for the quarter ended March 31, 2023 were $8 2 million compared to $10 1 million for the first quarter of 2022.
Net loss was approximately $16 5 million or seven net loss per share, but the first quarter ended March 31, 2023 compared to a net loss of approximately $18 million nine net loss per share for the first quarter of 2022.
Our cash cash equivalents and investments totaled $76 7 million as of March 31, 2023.
<unk> to $90 9 million as of December 31, 2022.
We expect that our cash cash equivalents and investments balance will enable us to fund operations into the first quarter of 2024.
We are continuously exploring opportunities to increase our working capital and we'll be focused on seeking out corporate partnerships with gene therapy, and non dilutive funding for vaccines as Sean mentioned earlier.
That concludes my update for the quarter Sharon back to you.
Thanks, Juan we will now open the call for question Monday.
The floor is now open for your questions to ask a question at this time. Please press star one on your telephone keypad, if any point you'd like to withdraw from the queue. Please press star one again, you'll be provides the opportunity to ask one question and one further follow up questions I'll now take a moment to compile.
<unk> roster.
Our first question comes from the line of Jennifer Kim from Cantor Fitzgerald. Please proceed.
Hey, good morning, Thanks for taking my questions I have a.
A couple of here here. The first is you spoke about seeking potential partnerships with <unk>.
We're a gene therapy programs I'm wondering.
Are you thinking of this on the basis of your lead program or the underlying platform technology or what type of structure you are looking for.
In terms of timing is that something that you would seek post updated interim data before initiating the phase III program.
And then my second question is on the inhaled vaccine.
I know, it's hard to sort of asking a crystal ball, but do you know potentially when you might have some better visibility there.
Yes, Jennifer good morning, I'll, let Dr. Kwan answer the first question and I'll get to the second one, but Ah hi, Jennifer So the answer to the first question is seeking partnerships is going to be related to the Q4 hundred specifically.
As we continue to do all up and see further data that serves as.
Further justification and providing more credence to the platform itself so that in the future, we'll definitely be on <unk>.
Evaluated process of how the platform itself can be capitalized.
With respect to data we are initiating conversations now because as you I'm sure you're well aware business development takes time and so in the process wed like to establish those relationships engage in discussion and as more data comes out we will continue the share of that and that will.
Facilitate and if not expedite the entire business development process.
And Jennifer can you repeat your second question related to COVID-19.
Yes.
Yes, so the inhaled vaccine platform.
Do you have I know you submitted some proposals have you gotten any feedback in terms of win.
You might get more visibility on that end.
Not yet and we are actively working with them when we know.
Get more information with lithium.
Okay, and then maybe if I could sneak one more the R&D burn for this quarter is that a good basis, when we're thinking about.
I guess your go forward burn.
Yes. It is.
Alright, thanks, guys.
Okay.
Our next question comes from the line of Jonathan Aschoff from Roth Capital. Please proceed.
Thanks, guys I was wondering if you could.
Lab rate on your key focus being gene therapy, I kind of noticed that the word biologics was removed from your company description.
Yeah I mean.
We are and our oxygen we are really focused on modified gene therapy platform and.
With the recent.
<unk> from the results released rocket 400.
In a way it validates the platform and so we're re et cetera about it obviously will continue to move that program as we stated before and work.
Work with the regulatory agencies and the lineup of potentially phase three clinical trials sooner than later and Thats, our focus and obviously the two other programs in the pipeline are coming through occupancy 10 targeting geographic atrophy.
Subset of dry AMD population and Aki for Dennis D, but stronger disease.
And these are going to be filed this quarter.
No.
Once again the company is going to focus our major effort on gene therapies, because there is a lot of promise so much of unmet medical need.
Okay can we have any other color on our Q2 hundred the clinical hold or is there just really nothing to say other than what's in the press release.
Yeah. This is nothing to say it's related to CMC questions and.
Company's going to respond promptly.
Okay and can you help us.
I'm, sorry, I didn't mean to cut you off there.
That's it.
But can you help us understand the drop in R&D is that.
That's what it is that.
Yes, so a lot of the wind down now is obviously related to copaxone.
And so as we begin to look at the various aspects of the company, which comes back to what Shanghai just alluded to you earlier.
The heavy focus now will be on the development of the gene therapy platform and so to that extent.
R&D expenses will be extraordinarily focus as well as the entire organization and so the winding down of Colfax is one of the major factors that are causing.
Okay, because if you do that.
Thanks.
You kind of have cash well well well into the first quarter of 'twenty. Four so is that just an overly conservative statement from lawyers.
[laughter].
Can't comment on the risk of assessments placed by lawyers and how they they draft B V.
Various things, Jonathan but yeah for the.
The most pause we believe firmly that that is going to be the case. We believe that is a realistic estimate perhaps could be conservative, but I think the thing that to take what was the key takeaway here is that.
The organization using the examining operational efficiencies as with all companies moving forward in the biotech biotech sector as I'm sure, you're well aware and given the challenging capital markets, we want to be extremely focused and cost conscious in order to for us to achieve.
Our goals and so you can imagine that the longer an extended cash runway the better it is for all stakeholders involved.
Got it thank you very much.
Our next question comes from the line of Louis ear from Mizuho. Please proceed.
Hey, guys. Thanks for taking my question I guess.
The.
First question I have is.
Looks like the timeline for Neocart.
It has sort of shifted to at least the cgmp manufacturing facility completion to <unk> from first half and there it is.
Didn't seem to be a date as well, but when you start the trial and so just wondering if you can elaborate on that and as well as where the Neocart now sits I guess in terms of priority given what you just said about.
Challenging capital markets et cetera.
Thanks.
Good morning.
Just wanted to clarify we always stated cgmp facility is going to be ready sometime later part of this year. So thats very consistent there is no change to that we are planning to finish the facility.
Construction and everything else by the end of this year.
As far as the clinical trial is concerned yes, we are still targeting next year, obviously, our priority is going to be.
Focused on Martha gene therapy platform getting the other two clinical trials get started as well as phase II started for a first program Aki 400.
So the Neocart, obviously will take.
Second on preference compared to that priority wise and don't really still still initiate that phase II clinical trial in 2024.
Okay, Thanks and.
Second question I guess is when should we sort of expect to see more data from <unk> 400.
I noticed that in the slide presentation.
It's just only has initiation of phase III in the fourth quarter.
Just curious thanks.
So we're going to continue to monitor as we see patients on a three months basis.
Obviously, we will have another update data, we're expecting sometime in third quarter of this year.
Before okay.
Thank you.
Our next question comes from the line of Robert Leboyer from Noble capital markets. Please proceed.
Good morning.
<unk> only remaining question is on the <unk>.
Osha U 200 clinical hold.
Any timeframe on one that may be resolved.
I mean, we are trying to respond to the FDA continues to work with them.
I mean, Amit.
Sooner than later of course.
And this is the this is we didn't do and start the clinical trial. This is a novel biologic fusion protein, sometimes it's a typical agency has more questions.
This one is related to CMC.
I think related to toxicity or anything else just wanted to clarify.
So it will be responding promptly.
As we get clearance we note for the market.
Okay. Thank you very much.
Our next question comes from the line of Suede pump cooler Rama comps from Wainwright. Please proceed.
Thank you Mr <unk>.
Yes.
Good morning <unk>.
One question for each of you.
Shankar.
Our Q4 hundred.
<unk>.
Alright.
Have you kind of conversations with the MAA.
Start thinking beyond the current study.
Im trying to get into pivotal studies.
Yes, good morning, RK, we are planning to initiate those conversations.
Later this year, obviously our goal is to.
In line.
Various regulatory agencies before we get into phase III.
Thank you for that and then.
On the.
On the BD activities side of things.
Have you have you have you had any conversations at all.
Right.
With potential collaborators.
Syed.
So I'll start with the government agencies for the inhalation vaccines, especially in it some update.
Slow vaccine players.
Yes, so the focus on the Q4 hundred programs in development.
Initial stages.
We have had some initial conversations even before my time here and kind of set the landscape.
And then I think ultimately I will I am beginning to do a.
Second reached out but are you talking about just inhalation itself with respect to the 500 are now or do you want to focus on the yes, yes, yes, because just because.
All of this.
Last one area have been hearing that folks are looking for government funds.
All right.
Okay. So what they have trouble with the government.
Anything they don't bet limit so if there's a problem.
That would push more forward with at all.
Yes, absolutely.
Looking for corporate partners.
Yes, absolutely and so the idea behind all data center part of our very focused play here is that we.
We do indeed have the inhalation technology.
However.
As this most of the centralized around public health crisis.
We're looking for that government support as I'm sure, you're well aware arcade that.
With all these types of programs government support is critical not only from a funding perspective, but also from.
In a way.
The politics work for lack of a better word.
Of course, these very program and so without that.
These programs can get extraordinarily expensive and we don't intend to spend a lot more than we are our idea is to have enough development data in order to be able to apply for these funding to be able to advance further.
Without that support it would be very challenging for small companies such as ourselves to do that.
And once we get there the opportunities exist for our corporate partnerships, we're looking to them.
And also John .
And pointed out.
Biologics.
Chuck on your corporate mandate does that May not care 200 is also.
Subject for BD activities.
I think 200.
Typically with the phase one we do anticipate signal.
Even though its a dose escalation study and if you do get a pause to signal an efficacy obviously.
We will definitely evaluate that next year.
To add onto that Arkady I mean, obviously a lot of.
Activity program.
As a lot of companies to look for for much Derisked program.
So these are relatively early and as we advance them, we will have a bit more clarity, it's very challenging to go out and have conversations with those areas.
Players in the market without pivotal data from our most important but that does not preclude us for example.
From always establishing these relationships early in exploring the level of interest going forward.
Fantastic. Thank you. Thank you gentlemen.
Our final question comes from the line of Daniel Gatlin from Chardan. Please proceed.
Okay.
Hi, Good morning, guys. Thank you for taking the questions.
So I have a couple of them Ocu 400, just wanted to ask if all your next readout in first quarter is going to include any patient level data.
And in terms of I guess, the timing for phase three it looks like Youre planning on initiating that but at the end of this year.
But your one year data from the phase one two its not going to come until the first quarter of 2020 core just just wanted to ask about your strategy there.
Yes Hello.
We're up to.
Yeah.
We are planning to release data in the third quarter and update obviously.
At this stage, we haven't decided.
Released patient level data.
We'll also be working with regulatory agencies, and we have to raise those factors.
And the second thing is.
The 12 month duration for phase one two even though there is an expansion phase after the durability.
Youre right. It will be completed no first quarter next year. However, what we're looking for.
<unk> is at least a certain population in this clinical trial pricing 12 months and collecting illiquid safety.
And the second thing, we'll be looking for to discuss with regulatory agencies.
Tuning in and finalizing our primary efficacy endpoint.
And as we stated in our results.
Continue to.
Look at the functional endpoint that's in an approved product already it makes it easier with regulatory agencies and three come from that and that's what is the endpoint as a primary efficacy endpoint going forward. It makes it easier.
So we believe.
Having adequate safety some level at least announced certain patient population crossing 12 months, which will have this year.
Sure.
And also are confirming it.
With mutations.
Focusing on efficacy essentially primary endpoint will help us because we are going after gene agnostic RP and LCA indication.
One efficacy endpoint will make it easier for phase II design.
Got it got it that makes sense. Thank you.
And another quick follow up for pediatric phase two of your 400, how many pediatric patients do you plan on enrolling them reach doses.
We're planning to handle three.
Get some baseline safety data on these patients so that at least in our in phase III. We can include pediatric population.
Alright, Thank you very much.
Thank you.
This concludes the Q&A portion.
We will now turn the call back over to chairman and CEO , Dr Shankar New synergies.
Thank you operator in closing I would like to thank the entire team for their hard work and resilience efforts to advance our patient centric mission.
<unk> shareholders and partners. Thank you for your ongoing trust and support we look forward to sharing more details of our progress in the coming quarters.
Thanks again, everyone happened lately then.
[music].