Ocugen, Inc.

Good morning and welcome to Ocugen's third quarter 2024 financial results and business update. Please note that this call is being recorded at this time. All participant lines are in listen-only mode. 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.

Thank you, Operator, and good morning, everyone. Joining me on today's call and webcast is Dr. Shankar Musunuri, OccuGen'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 30, 2024. Dr. Huma Kumar, 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. 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 filing 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 it's 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.

Thank you, Tiffany, and thank you all for joining us today. We're excited to share the ongoing progress of our novel modifier gene therapy platform across all three clinical programs, as well as the 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 RQ400 Phase III Limelight clinical trial in Canada and approval from the US FDA for an expanded access program, REAP, for the treatment of adult patients aged 18 and older with retinitis pigmentosa, RP, using RQ400. 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 RORA gene, OCU410 and OCU410ST, are advancing through their respective clinical trials as planned. We are currently dosing patients in OCU410 Phase II Armada clinical trial for the treatment of geographic atrophy, GA, an advanced stage of dry age-related macular degeneration, TAMD. We completed the Phase I dosing in the Phase I-II Ocu410SD Guardian clinical trial with a favorable safety and tolerability profile. The Data Safety Monitoring Board, DSMB, approved enrollment for the second phase of the Phase I-II clinical trial. Stargardt disease is the most common inherited retinal disease, and there remains a large unmet medical need with no currently approved FDA treatment. I'm 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 in the pivotal phase three limelight clinical trial for Ocu400, our lead gene therapy candidate that utilizes NR2A3 gene. As previously mentioned, we received Health Canada's approval to initiate the phase three 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 this gene agnostic treatment in the United States and Europe. RQ400 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 III 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 I-II OCU400 clinical trial. Furthermore, this is the first Phase III gene therapy candidate to treat patients with RP, regardless of mutation. The phase three clinical trial is on track to complete enrollment in the first half of 2025, file 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 under-deserved market for RP patients. There are approximately 300,000 patients in the U.S., 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. AHQI 400 has showcased its potential to provide a totally new category of treatment using its gene agnostic approach. Rather than one-to-one approach, modified 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 oral 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 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 and gene meeting on the MESA hosted by the Alliance for Regenerative Medicine. Now let's move on our development in Ocu410 and Ocu410-ST, which aim to treat GA, secondary to D-AMD, and Stargardt disease, respectively, with a single subretinal injection that could be a one-time 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 distinct advantages over current treatment options that target only one pathway, the complement system. Currently approved treatment options require frequent intravitreal injections, about 6 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 low, medium, and high doses 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, SSR-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 Ocu410-ST, which has received orphan drug designation from the FDA for the treatment of ABCA4-associated retinopathies, including Stargardt disease. Phase I dosing of the Phase I-II Guardian clinical trial has been completed, and Ocu410-ST demonstrated a favorable safety and tolerability profile. To date, no assays related to Ocufort NST have been reported. The Data and Safety Monitoring Board has approved proceeding to phase two of the clinical trial. Saurga disease affects approximately 100,000 people in the U.S. 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 Guardian 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 I clinical trial evaluating OQ200, a recombinant fusion protein consisting of thumb statin 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 U.S. rises, making it more imperative to address. Approximately 30 to 40% DME patients are refractive to current anti-VEGF therapies, and we believe that ORCID-200 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 one clinical trial of RQ200 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 30, 2024. Ramesh.

Thank you, Shankar. The company's cash and restricted cash total 39 million as of September 30, 2024 compared to 39.5 million as of December 31, 2023. Total operating expenses for the three months ended September 30, 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 30, 2023 of $16.1 million. That included research and development expenses of $7 million and general and administrative expenses of $9.1 million. 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.

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

Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to redraw your question, simply press star 1 again. If you are called upon to ask your question and are listening via speakerphone on your device, please pick up your handset to ensure that your phone is not on mute when asking your question. Again, press star 1 to join the queue. Our first question comes from the line of Jason McCarthy with Maxim Group. Your line is open.

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?

So thanks for the question. So in the upcoming clinical showcase, we will be presenting the geographic atrophy and 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 would be functional as well as structural. So we will be presenting that data in the upcoming clinical showcase on November 12th at NASDAQ.

Okay, 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 in late stage development, How do you sort of see those fitting in with the OCU410ST if they are approved?

Okay, 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 apprised 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.

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-therapy.

Got it. Got it, yeah. 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 space at large?

Yeah. I mean, good question, Jason. I think two things I think 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 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 seem to be safe and effective. Therefore, that's number one. Quality of the product is very important. We believe we are consistently making high-quality products. Number two, we target subretinal surgeries to get this gene therapy into retina. And so we do have highly 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. And 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's a significant difference, almost like a 1,000-fold to 10,000-fold increase. And so there are other things come up when you go to systemic gene therapies.

Okay, thanks. That was helpful.

Our next question comes from the line of Danil Gataulin with Chardon. Your line is open.

Good morning, guys. Thank you for taking the question, and congrats on the progress. I have one question on geographic atrophy programs. Given there are still no approved options for it in Europe, how are you thinking of taking advantage of the opportunity, and have you had any interactions with the EU regulators regarding your program? Thank you.

Great question, Dennis. 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 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.

Got it. And a quick follow-up on 410ST program. Do you see, given it's a rare disease, do you see any potential of modifying your Phase II trial or Phase II portion of the trial to make it a pivotal?

Yeah, that's a great question. That's why after Phase I clinical trial, we are taking a pause, even though DSMB, gave approval to move forward with the phase two 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 two into a pivotal trial for a registration trial. So we're going to closely work with agency and seek their advice and guidance before we move forward to phase 2 slash confirmatory trial.

Thank you, and again, congrats on the progress. Thank you.

This concludes the Q&A portion. I will now turn the call back over to Chairman, CEO, and co-founder, Dr. Shankar Masunuri.

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 oxygen's position as a biotechnology leader in ophthalmology. Have a great day.

Ladies and gentlemen, this concludes today's conference call. You may now disconnect.