Ocugen Inc (OCGN) 2021 Q3 法說會逐字稿

Good morning, and welcome to the Ocugen Conference Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the presentation.

(Operator instructions). Please note this conference is being recorded.

I will now turn the conference over to Ken Inchausti, Head of Investor Relations and Communications for Ocugen. You may begin.

Thank you, operator. I'd like to welcome you to our conference call. With me today are Ocugen's Chairman, CEO, and Co-Founder, Dr. Shankar Musunuri, who will provide a business update and our Chief Financial Officer, and Head of Corporate Development, Sanjay Subramanian, who will provide a financial update.

Earlier this morning, we issued a press release including a business update and third quarter 2021 financial results. We encourage listeners to review the press release which is available on our website at www.ocugen.com. This call is also being recorded and a replay along with accompanying slide presentation will be available on the investor section of Ocugen's website for approximately 45 days.

As always, we need to advise you that this call will contain forward-looking statements. Such forward-looking statements are subject to risks and uncertainties that could cause actual events or actual results to deliver -- differ materially from expectations.

Including among other things, the uncertainties inherent in the research and development of our product candidates, risks to our business related to the ongoing COVID-19 pandemic, uncertainty regarding whether the FDA will grant us emergency use authorization for Covaxin in ages 2 to 18, and when we will be able to submit a biologics license application for Covaxin to the FDA, and whether and when we will receive regulatory approvals for authorizations for Covaxin in the U.S. or Canada.

These and other risks and uncertainties are most fully described in our periodic filings with the Securities and Exchange Commission including the risk factors described in the section entitled Risk Factors in the quarterly and annual reports that we filed with the SEC.

You should read carefully the risks and uncertainties described in today's press release and accompanying slide presentation as well as the risk factors included in our filings with the SEC. Note that we intend to file our Form 10-Q with the SEC today.

I will now turn the call over to Ocugen's Chairman and CEO, Dr. Shankar Musunuri.

Thank you, Ken. Good morning, everyone and thank you for joining. We hope you and your families are safe and well. Today, we're here to review a rapid succession of milestones from this company I feel privileged to lead. It reminds me of the famous Margaret Mead quote, Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it's the only thing that ever has.

These words remind me not just one year ago Ocugen was less than 20 individuals. We all had the vision to bring new therapies that could tackle serious diseases and bring new options for people wanting a choice. We have completed three quarters of 2021 and our Ocugen family has grown significantly, committed to bringing Covaxin BBV152, our COVID-19 vaccine candidate to the United States and Canada, along with our lead candidate for blindness diseases OCU400, which is a part of or modifier gene therapy platform.

Today's update is a result of their hard work, along with the efforts of our global partners, Bharat Biotech and CanSinoBIO. Thank you all for your contributions. This slide outlines the major events that transpired over the recent months including the third quarter of 2021.

First, we want to congratulate our partners at Bharat Biotech for securing an emergency use listing for Covaxin by the World Health Organization. This is exciting news. That's a tremendous accomplishment and a critical validator for broadening the global portfolio of COVID-19 vaccines and is noticed by the regulatory authorities around the world. Closer to home, Ocugen took significant steps to progress the Covaxin BBV152 to the U.S. Food and Drug Administration.

Last week, we submitted the Covaxin for emergency use authorization to the FDA for use among those age 2 to 18 years. We believe there is a significant unmet need within this age group knowing that there is a lack of choice for different vaccines within the U.S. market, particularly in ages 2 to 5, there is currently no approved option.

We believe the data, as we top line on our Friday call November 5th press release, make it compelling efficacy and safety case to the agency and we look forward to furthering our discussions with them. And in late October, we filed Investigational New Drug Application to support the initiation of Phase 3 immuno-bridging study between the U.S. population and the results of Bharat Biotech's Phase 3 clinical trials, involving nearly 25,800 participants.

This Phase 3 bridging trial is being conducted in support of an upcoming BLA. Our trial had designation OCU-002 and will involve a few hundred subjects. The primary objective due will be to compare neutralizing titers between the U.S.-based participants who get two doses of Covaxin to those who got two doses in the Phase 3 efficacy trial in India.

Secondary objectives include measuring the immunogenicity of two doses of Covaxin over time in those who are off age between 18 and 65 and those over the age of 65 as well as determining its immuno broadening effect, including those who previously received mRNA vaccine. Such a broadening effect could include antibody responses against multiple antigens such as spike and nucleic acid proteins. We are also preparing for the possibility of conducting a safety bridging trial, if required.

Finally, we are hearing from many people about their interest in participating in this clinical trial, if approved. We are very appreciative of their passion and after this, stay tuned for further developments. To the north, our engagement with Health Canada continues and responses to deficiencies noted are being prepared. As a reminder, we applied for approval under the interim order and our application was automatically transported to a new drug submission process.

I now want to update you on our progress with our modifier gene therapy program. I'm pleased to announce that yesterday Ocugen filed an Investigational New Drug Application for OCU400. Our lead candidate in the modifier gene therapy platform for the treatment of retinitis pigmentosa resulting from genetic mutations NR2E3 and rhodopsin.

This is a proposed safety and dose finding Phase 1, 2 clinical trial involving a small number of patients. We have already successfully completed manufacturing at commercial scale at a 200-liter scale to support clinical studies. As part of the clinical trial, patients will be observed closed doors for at least 12 months.

From there, OCU400 could move into a Phase 3 clinical trial evaluating its ability to address multiple inherited retinal disease mutations. This is the beginning of a new journey, one started by our partner Dr. Neena Haider from Harvard Medical School. And we look forward to sharing the progress of our trial, if approved, throughout 2022.

Following close behind OCU400 is our next candidate OCU410. IND-enabling preclinical studies have started to support a future Phase 1, 2 clinical trial. OCU410 is designed to address dry age-related macular degeneration. It's the most prevalent chronic form of AMD accounting for approximately 90% of total AMD cases and is characterized by slow progress to dysfunction of the retinal pigment epithelium, photoreceptor loss, and retinal degeneration.

With about 150 million people suffering from dry AMD around the world and no treatment options available, there is a significant unmet medical need. Preclinical data recently presented at the Dry-AMD Therapeutics Conference in October suggest that OCU410 plays a role in the genes associated with how dry AMD develops over time and we will continue to explore this area throughout 2022.

We are pleased to share that in order to support the manufacturing of OCU410, we have expanded our arrangement with CanSinoBio to be our partner responsible for chemistry, manufacturing, and control development and manufacturing. They will now support the CMC development and manufacturing for both the OCU400 and OCU410 programs.

Our agreement with CanSinoBio was amended in September to add this program. Rounding up, our ocular portfolio OCU200, our transferrin-tumstatin fusion protein is still progressing well. We are on track with our preclinical activities to explore further how it can help those with diabetic macular edema, diabetic retinopathy, and wet age-related macular degeneration.

With OCU400 moving into the clinic and OCU410 and 200 continuing their IND-enabling studies, our focus on ocular therapies remains very strong. This indeed has been a busy quarter. That much going on to advance Covaxin and our ocular portfolio and there is much more ahead.

I will now turn the call over to Sanjay to provide our third quarter 2021 financial update. Sanjay?

Thank you, Shankar, and good morning everyone. I will now provide an overview of key results for the third quarter of this year. Our research and development expenses for the quarter ended September 30, 2021 was $6.3 million, compared to $1.5 million for the third quarter ended September 30, 2020. The increase is primarily driven by Covaxin development and regulatory activities, OCU400 preclinical activities, as well as employee-related expenses due to an increase in R&D headcount.

General and administrative expenses for the quarter ended September 30, 2021 was $4.5 million, compared to $1.7 million for the third quarter ended September 30, 2020. Our increase in general and administrative expenses relates to increased infrastructure costs to support the growth of the organization.

Net loss was $10.8 million or $0.5 net loss per share for the quarter ended September 30, 2021, compared to a net loss of $10.5 million or $0.7 net loss per share for the previous year quarter ended September 30, 2020, which included a $7 million write-off of an asset held for sale. We ended the quarter with cash, cash equivalents, and restricted cash totaling $107.5 million as of September 30, 2021, compared to $24.2 million as of December 31, 2020.

That concludes my update. Back to you, Ken.

Thank you, Sanjay. And with that, we will open the call for questions. Operator?

(Operator instructions). Your first question comes from the line of Keay Nakae with Chardan.

Good morning. Four questions for you, Shankar.

Good morning, Keay.

Yes. The first question relates to timing for the adult population in the U.S. So, as you commenced the bridging study and hopefully that will set you up to file maybe the middle of next year so, should we think about possible approval in Q1 of '23? Is that kind of an appropriate way to look at the timing?

Yes. If you will follow the path of the regulatory path today other companies have followed, we believe agency will also consider a fast track for us. We were planning to initiate that at the right timing and so based on that we're planning to file the BLA in the second half of next year. So, sometime in 2023, yes, first half, if we do get to fast track designation, that seems to be reasonable.

Okay, great. And then under your agreement with Bharat under a scenario where the U.S. would like to purchase your vaccine to help distribute OUS, again because of its many attractive characteristics. Is Bharat precluded from selling the vaccine to the U.S. for that purpose and you, exclusively have the right to sell the vaccine to the U.S. government for any purposes?

Yes, we have rights in the U.S. and Canada and any procurement from the U.S. government. Yes, they have to go through Ocugen.

Okay, great. And then, for the most recent EUA filing for the pediatric, given that you're running the bridging study for adults, how do we think about whether you'll need to run a bridging study for pediatrics as well before you could get any type of approval?

This is, again, we have filed emergency use authorization. As we outlined in the 2 to 5 age group, currently there are no authorized vaccines are approved vaccines and there is a significant unmet medical need. And those things will be considered when you apply for emergency use authorization.

So that's the reason, based on compelling data we have in the pediatric population. We decided that the American kids do need a choice and we thought in the 2 to 18 age group that's the data we have from our pediatric population from our partners, we file EUA. It is purely based on unmet medical needs.

Okay, and then, just two more questions. One for Canada, how should we think about the potential timing there to get a potential approval? Having filed in Q3, was there full -- well at least anticipating a full review again as first half '23 or '22, I'm sorry or maybe mid '22, the appropriate timing for that potential approval?

Okay, you -- I think the process for Canada, again it -- as we stated, there is no -- deployment of emergency use authorization that's called [intra-monitor], it expired. And the file got into NDS, which is a new drug submission process. And typically, it does take some time and I cannot comment on the actual regulatory time, exact date. However, we are closely working with the Health Canada review process and addressing any questions that come up on the way.

Okay, and then congrats on the filing for OCU400. Nice to see those programs will be entering the clinic around the end of the year, so that's great. So, that's all I have.

Thank you, Keay.

Your next question is from Zegbeh Jallah with Roth Capital.

Good morning. Thanks for taking my question and congrats on all the regulatory updates. I think a couple of quick questions for me. The first is just on the pediatric EUA. I was just curious if you're going to hear any kind of update on an acceptance of the EUA before a decision is made or your next feedback from the FDA will be about whether or not it is approved, or should you expect something within a week or two from now?

So, good morning, Zegbeh. Again, the review process, they [accept us] for review, so the process is ongoing. So when we get updates, we'll provide updates to the market. At this time, I can't comment anymore.

Okay. So, you're not expecting to get a letter about an acceptance or anything like that prior to an update on whether or not the EUA is approved?

No, typically the EUA goes through the process that -- based on the process other three companies have done. Typically, it goes to the outcome before it gets any [market]. And so that's a typical process, so we're working with the agency on that.

And then, the next one here. I know you said for Health Canada, you can't really comment on the timing or anything but I think you also said that you haven't gotten any questions or comments from them, is that correct?

Can you repeat the questions, Zegbeh? Sorry.

Okay. For Health Canada, I was just saying that, so far after your submissions you haven't gotten back any questions or follow up, or you haven't had to submit additional information or anything like that? You are that just waiting to hear back from them.

Zegbeh, this is the normal course of the business review process. Any NDS or any submissions you did in regulatory agencies and the companies and are -- as a part of the actual process we respond back-and-forth, and so that's again the normal course of business. That's what we are dealing with Canada too.

Thanks, Okay. So, you have had some back-and-forth with them. And then the next one here is just about the potential to expand your agreement with Bharat. I know, I think you have the opportunity to do so for more territories but I was just wondering, what it is that you need to see before you make the decision to do so?

Yes, Zegbeh, so just to make sure I understood your question correctly. You're asking about our opportunity to expand our territories with Bharat for other regions and what would be the catalyst for that, is that correct?

Okay.

Zegbeh, again, those options are always open. And again, we're really focusing on the U.S. and Canada at this stage. And again, we keep those options open with our partners.

Okay. And then, moving on to OCU400, really excited to see that IND gets submitted. I was just curious as to any updates about the study design or what we might see any kind of clinical updates or anything from that program.

Yes, once IND gets accepted and goes through the process, Zegbeh, we will be launching the information into clinical trials start out and I mean that will help all the stakeholders and potential patients and everybody else. And again, this is going to be a small trial just as other orphan designation trials to the retinal space.

Okay. And I know you expanded the CanSino agreement to include 410. I was just wondering where you are in terms of the development? Is CanSino doing anything right now for 410? Are you doing IND-enabling studies, where in the process are you?

Yes. The CanSino has started working on the development, just as the need for 400. And so we do have a roadmap from the FDA on OCU410 and currently, the team is in the process of executing those plans.

Okay, thanks. Thanks for the update.

Thank you, Zegbeh.

Your next question is from Robert LeBoyer with Noble Capital.

Good morning.

Good morning.

Hi. Congratulations on the results and all the progress you've made in the last quarter.

Thank you, Robert.

My question has to do with the booster shots and the durability of Covaxin and whether there is data that might show any need or lack of need to have a booster shot six months or 12 months after vaccination. And I also was wondering if there was any data to show or any discussion of the idea of using Covaxin and following one of the messenger RNA vaccines to give broader protection or any benefits that one might have there?

So, Robert, the first question is about the longevity effect. Again, partners are generating some data. When the data is available, it will be published but however, the data-to-date clearly showed one thing scientifically people have to discuss more about cellular responses, the T-cell response, which creates a memory and that's why you get the long protection with any vaccine.

And our partners have shown in the published articles in the clinical journals, medical journals, that Covaxin elicits very strong cellular responses. That means potential memory and you should get long protection. Again, when they generate more data, we're going to continue to share that with the markets.

The second question is, people who have been vaccinated with mRNA vaccines, are we going to generate the data? The answer is yes. Our clinical trial, which we did file the IND, the immuno-bridging trial doesn't exclude anybody who took mRNA vaccines.

In fact, it does include people who have taken mRNA vaccines with the caveat that it has to be at least six months or earlier. So, those people will be included in our clinical trial and we are going to generate the data in those subjects.

Great. Thank you very much.

Thank you, Robert.

Your next, I'm sorry, your next question is from Sean Lee with H.C. Wainwright.

Good morning, guys, and thanks for taking my questions.

Good morning.

My first one is on the supply agreement with Bharat. So does that cover a potential commercial supply, if your EUA for the pediatric population is approved? How much supply would you have access to and also in terms of the tech transfer to Jubilant, What's the progress on and the expected timeline on that?

Yes, upon EUA, our supply agreement does include adequate doses, Sean, and our partners have significantly increased their capacity this year. And also -- so they don't have many restrictions for export, so we will be -- we'll get adequate supply whatever is needed post EUA in the U.S.

And as far as technology transfer is concerned at Jubilant HollisterStier, the program is going well and we are anticipating completion of establishing that including process validations in the first half of next year, so that we can switch the supply. And so the initial part of the supply does include -- even we did see a product from biotech, our partners, it will include U.S. packaging and the testing from the U.S. release site, which have been established.

Once the tech transfer is completed next year, would you need additional CMC validation from the FDA to show that the clinical batch and the commercial batch are the same?

Yes. That's a normal part of the process when you add an additional site, you always have to show the compatibility and that would be the product process.

All right. And my next question is on the OCU410. So, you showed some pretty good preclinical results from that program back in October. I was wondering what's the development timeline on that and when can we expect that to go into the clinic?

Is it related to 410?

410, yes.

Yes -- no, 410, yes, that one again we have a roadmap from FDA. We have to follow the typical process as other gene therapeutic product like we did for 400. So, the two steps, which are really important to get to file the IND for that, one is developing and manufacturing the product and the second part is the preclinical toxicology studies as we agreed with the FDA.

And again, this is a big program. It goes to large populations unlike 400 which targets rare diseases. Therefore, the workload or [foundation] is little -- it'll take a little longer or from a preclinical tox perspective, everything else and therefore we're simply working on it. And again, I mean, I would -- at least we have a roadmap from FDA and we're going to execute it. And our goal is to put that in the clinic in the next 12 to 18 months.

Great, that's all I have. Thanks for the additional clarity.

Thank you, Sean.

At this time, there are no additional questions. I would like to turn it back over to Ken for closing remarks.

All right. Thank you very much and thanks everybody for taking the time to join this call this morning. We look forward to providing further updates in the coming months, and we thank you for your time.

Thank you, ladies and gentlemen. This concludes today's conference call. You may now disconnect your lines at this time. Thank you for your participation and have a wonderful day.