Incannex Healthcare stock tumbles after filing $100M offering
Ocugen, Inc. (NASDAQ:OCGN) reported its Q3 2024 earnings, showcasing notable advancements in its clinical programs. Despite a drop in its stock price during regular trading hours, the aftermarket saw a slight recovery, reflecting mixed investor sentiment. The company continues to focus on its gene therapy initiatives, aiming to address unmet needs in ophthalmology.
Key Takeaways
- Ocugen is advancing its Phase III trial for retinitis pigmentosa, a significant milestone in gene therapy.
- The company is expanding its clinical trials into Canada, enhancing its market potential.
- Despite high operating expenses, no serious adverse events were reported in trials.
Company Performance
Ocugen's overall performance in Q3 2024 was marked by strategic advancements in its clinical pipeline. The company remains focused on developing gene therapies for various eye diseases, positioning itself as a pioneer in the field. However, the financial burden of ongoing research and development continues to impact its bottom line.
Financial Highlights
- Cash and restricted cash: $39 million as of September 30, 2024
- Total (EPA:TTEF) operating expenses: $14.4 million
- Research and Development: $8.1 million
- General and Administrative: $6.3 million
- Completed $30 million debt financing, extending runway to Q1 2026
Market Reaction
Ocugen's stock experienced a 2.22% decline during regular trading, closing at $0.876. However, in aftermarket trading, the stock rebounded slightly by 0.55% to $0.881. This movement indicates mixed reactions from investors, with positive clinical updates being tempered by financial concerns.
Outlook & Guidance
Looking ahead, Ocugen plans to complete enrollment for its OcQ400 Phase III trial in the first half of 2025. The company aims to file for regulatory approvals in 2026 and pursue commercialization by 2027. Additionally, the initiation of the ORQ200 Phase 1 clinical trial is scheduled for Q4 2024.
Executive Commentary
Dr. Shankar Musanuri, CEO, emphasized the safety and potential of Ocugen's gene therapy products, stating, "We have not seen any adverse events, SAEs related to our product. The product seems to be safe and effective." This reassurance is crucial as the company progresses through clinical trials.
Q&A
During the earnings call, analysts inquired about the safety of Ocugen's gene therapies and the potential to convert the Phase 2 trial for Stargardt disease into a pivotal trial. The company also discussed its plans for regulatory interactions in Europe for its geographic atrophy program.
Risks and Challenges
- High operating expenses could strain financial resources if not managed effectively.
- The competitive landscape in gene therapy and ophthalmology poses a risk to market share.
- Regulatory hurdles and the timing of approvals could impact commercialization plans.
- The company's stock remains volatile, reflecting broader market uncertainties.
Full transcript - Ocugen, Inc (OCGN) Q3 2024:
Conference Operator: Good morning, and welcome to Ocugen's Third Quarter 20 24 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 speakers' 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, Head of Corporate Communications, Ocugen: Thank you, operator, and good morning, everyone. Joining me on today's call and webcast is Doctor. Shankar Musanuri, Oxygen'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. Doctor. Huma Kumar, Chief Medical (TASE:PMCN) Officer and Doctor.
Arun Ophadhyay, 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 Q3 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 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 Q3 of 2024 will be filed next week. I will now turn the call over to Doctor. Musonore.
Dr. Shankar Musanuri, Chairman, CEO and Co-Founder, Ocugen: 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 recent announcement regarding our ORQ200 biologic candidate, which I will highlight later in the presentation. During the Q3, we accomplished notable clinical and regulatory milestones, including approval from Health Canada to initiate the ARQ400 Phase III Limelight clinical trial in Canada and approval from the U. S. FDA for an expanded access program, or EAP, for the treatment of adult patients aged 18 and older with retinitis pigmentosa, RP, using ARQ400.
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 modified gene therapy programs leveraging the RORA gene, OcQ410 and OcQ410ST are advancing through their respective clinical trials as planned. We are currently dosing patients in OcQ410 Phase 2 ARMADA clinical trial for the treatment of geographic atrophy, GA, an advanced stage of dry age related macular degeneration, T AMD (NASDAQ:AMD). We completed the Phase 1 dosing in the Phase onetwo OQ410 SD, Guardian clinical trial with a favorable safety and tolerability profile. The Data Safety Monitoring Board, DSMB approved enrollment for the 2nd phase of the Phase III 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 $30,000,000 from Avenue Capital Group. This funding is expected to extend our runway into the Q1 of 2026. Dosing is well underway in the pivotal Phase III Limelight clinical trial for OcQ400, our lead gene therapy candidate that utilizes NR2 E3 gene.
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 5 sites, expediting recruitment and broadening the commercialization potential of this gene agnostic treatment in the United States and Europe. RQ-four hundred 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 ARQ400 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 III OQ400 clinical trial. Furthermore, this is the 1st Phase III gene therapy candidate to treat patients with RP regardless of mutation. The Phase III clinical trial is on track to complete enrollment in the first half of twenty twenty five, file the Biologics License Application, BLA, and Market Authorization Application, MAA, in Europe in the first half of twenty twenty six and pursue commercialization in 2027. Let me take a moment to highlight the unmet need and under desert 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. OQ400 has showcased its potential to provide a totally new category of treatment using its gene agnostic approach. Rather than 1 to 1 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 for action of our modifier gene therapy platform and its advantages over current therapies. During Q3, we had the opportunity to provide updates on our 3 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 DAMD 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. ARQ410 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 6 to 12 doses per year and are accompanied by various safety concerns.
For example, roughly 12% of patients develop with AMD following treatment. ARQ410 has the potential to regulate all 4 pathways related to disease progression, lipid metabolism, inflammation, oxidative stress and the complement system, thereby addressing the underlying causes of the disease. With approximately 2000000 to 3000000 GA patients in the U. S. And Europe combined, ocuvore10 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 III ARMADA clinical trial and plan to complete dosing in early 2025. A preliminary safety and efficacy update on the Ocu410 Phase III ARMADA clinical trial will be shared at the upcoming clinical showcase next week. To date, 9 patients with GA have been treated with the 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, SSF blinded clinical trial is recruiting patients and will assess the safety and efficacy of Ocuvore10 in a larger group of patients who will be randomized into 1 of 3 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 2.520.5 Square Millimeters. Turning on to OQI-four ten ST, 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 onetwo CARDIAN clinical trial has been completed and Ocuvoton ST demonstrated a favorable safety and tolerability profile. To date, no SAEs related to Ocuvoton ST 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 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 OcU-four ten ST Phase III Guardian clinical trial will also be featured at the upcoming clinical showcase. Lastly, I would like to call attention to our biologic platform, ORQ200, 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 ORQ-two hundred, the recombinant fusion protein consisting of thumbstatin and transferrin for treatment of BME. BME causes blurriness in vision and progressive vision loss as the disease advances. Approximately 746,000 patients in the United States are affected with the DME.
The condition is becoming more prevalent as the number of people with the 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 ORKID200 has a 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 ARQI200 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?
Ramesh Ramachandran, Chief Accounting Officer, Ocugen: Thank you, Shankar. The company's cash and restricted cash totaled $39,000,000 as of September 30, 2024, compared to $39,500,000 as of December 31, 2023. Total operating expenses for the 3 months ended September 30, 2024 were $14,400,000 and included research and development expenses of $8,100,000 and general and administrative expenses of $6,300,000 This compares to total operating expenses for the 3 months ended September 30, 2023 of 16,100,000 that included research and development expenses of $7,000,000 and general and administrative expenses of $9,100,000 As stated earlier, we recently completed a successful debt financing of $30,000,000 dollars extending our runway into the Q1 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, Ocugen: Thank you, Ramesh. We will now open the call for questions.
: Operator? Thank
Conference Operator: you. We will now begin the question and answer session. Our first question comes from the line of Jason McCarthy with Maxim Group. Your line is open.
Jason McCarthy, Analyst, Maxim Group: 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?
Unidentified Executive, Ocugen: So thanks for the question. So in the upcoming clinical showcase, we will be presenting the geographic atrophin or 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 atypical 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 12 at NASDAQ.
Jason McCarthy, Analyst, Maxim Group: 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 of small molecule drugs in Stargardt in late stage development, how do you sort of see those fitting in with the Ocu-four ten ST, if they are approved?
Unidentified Executive, Ocugen: 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.
Dr. Shankar Musanuri, Chairman, CEO and Co-Founder, Ocugen: So Jason, I know there are some couple of products in the development. However, we are planning for a treatment option, only treatment option with our therapy. At this time, we're not thinking about any co therapies. Got it.
Jason McCarthy, Analyst, Maxim Group: Got it. Got it. Yes. And then I just thought I'd bring up, since it's topical, if you could just given the recent issues with existing gene therapies, Pfizer (NYSE:PFE) dropping out, 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?
Dr. Shankar Musanuri, Chairman, CEO and Co-Founder, Ocugen: Yes. I mean, good question, Jason. I think 2 things I think we need to consider when you're doing any gene therapies. 1st and foremost, product quality is extremely important. And during the course of last few years, with the 3 parallel clinical trials going on, in ophthalmology space, probably we have the biggest ophthalmology clinical trials and 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 1. Quality of the product is very important. We believe we are consistently making high quality product.
Number 2, we target subretinal surgeries to get this 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 these surgeons for all our clinical trials. So that's very important. The procedure is important. So those are the 2 things we're focusing on.
And obviously, there are also differences, I just wanted to point out for listeners, systemic gene therapy versus ophthalmology gene therapy. And our target dose typically in ophthalmology space because we directly go into the target and now goes from 10 to the 10 to the 10 to the 11 gene copies. Systemic gene therapies go into 10 to the 14 and higher. And so there's a significant difference almost like a 1000 fold to 10,000 fold increase. And so there are other things come up when you go to systemic gene therapies.
Jason McCarthy, Analyst, Maxim Group: Okay, thanks. That was helpful.
Conference Operator: Our next question comes from the line of Daneil Gautaulin with Chardan. Your line is open.
: Hey, 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 the opportunity? And have you had any interactions with the regulators regarding your program?
Thank you.
Dr. Shankar Musanuri, Chairman, CEO and Co-Founder, Ocugen: Great question, Dennis. Yes, we will start interactions this year, I mean the next few quarters with the EU. Obviously, the Phase 2 is limited to U. S. What EU regulators are looking for is some functional improvement or stabilization for geographic atrophy patients.
The current therapies which are in the market in U. S, 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 our 410 ST 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?
Dr. Shankar Musanuri, Chairman, CEO and Co-Founder, Ocugen: Yes, that's a great question. That's why after Phase 1 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 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 2confirmatory trial.
: Got it. Thank you. And again, congrats on the progress.
Dr. Shankar Musanuri, Chairman, CEO and Co-Founder, Ocugen: Thank you.
Conference Operator: This concludes the Q and A portion. I will now turn the call back over to Chairman, CEO and Co Founder, Doctor. Shankar Mazzanuri.
Dr. Shankar Musanuri, Chairman, CEO and Co-Founder, Ocugen: 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 Q4 of 2024 as we continue to solidify Ocugen's position as a biotechnology leader in ophthalmology. Have a great day.
Conference Operator: Ladies and gentlemen, this concludes today's conference call. You may now disconnect.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.