Ocugen, Inc. (OCGN) Earnings Call Transcript & Summary

Good morning, everyone, and welcome to Ocugen's Corporate Presentation. Ocugen is a biopharmaceutical company, and our mission is to develop gene therapies to cure blindness diseases. Just quickly, the forward-looking statements, and I'll proceed in -- to go into more details about the company, our product pipeline and our near-term milestones. So very quickly, Ocugen is developing transformative therapies in both the gene therapy space as well as having a novel biologic in its product pipeline. On the gene therapy space, we have a very breakthrough modifier gene therapy platform, very unique in its kind in the ophthalmology space. We licensed technology from Harvard Medical School, under Dr. Haider's lab, and we are very happy to say that we have actually published our preclinical data for one of our product candidates in Nature, and I'll talk more about it. But with 2 product candidates under the gene therapy platform, which is OCU400, which is going after diseases -- inherited retinal diseases under the retinitis pigmentosa. There are about 150 gene mutations. And we hope to be in the clinic by middle of next year. OCU410, our second program, is going to go after a huge disease called dry age-related macular degeneration, and that we plan to be in the clinic in 2022. Again, I'll give you highlights of how our therapy has a lot of promise. Also we'll talk briefly about our strategic partnership with CanSino Biologics under gene therapy manufacturing. On the novel biologic side, we have OCU200, which is going after some major diseases in the retinal space, diabetic macular edema, diabetic retinopathy and wet age-related macular degeneration. We expect to be in the clinic in 2022. It's a very unique mechanism of action. I'll talk a little bit about that. And we're going up for a patient population that currently don't have any success with the current therapies in the marketplace. So a lot of near- and mid- term milestones for the company. We are very excited about the work that's being done. We have a phenomenal team that's supporting all this development, both on the management leadership side as well as our Scientific Advisory Board. I'd like to highlight a couple of people. Dr. Shankar Musunuri is our CEO, founder of the company as well. He's got a huge -- a fantastic background working in Pfizer, where he led the Prevnar 13 vaccines development and manufacturing and sale, a serial entrepreneur since he left Pfizer, and it's always tremendous amount in terms of execution. Very strong, rest of the team as well, both from the scientific and regulatory side. And then I would like to highlight Dr. Genead, who's our acting Chief Medical Officer as well as Chair of our Scientific Advisory Board. He's a retinal surgeon and one of the pioneers in gene therapies, has been involved in a lot of the work that's been done in this space. He's worked at GenSight, Biogen and Allergan, brings tremendous amount of experience, and we're very happy to have him as part of the team, leading this development and clinical trials for us in the gene therapy space. And as you can see, a very solid Scientific Advisory Board, who have been instrumental in a lot of different work that we've been doing. Very quickly, I want to go into our pipeline. As I mentioned earlier, OCU400 is our lead product, which is further along, which is currently IND-enabling, and we expect to be in the clinic middle of next year. As a reminder, it's going after, right now, 4 different indications, a single product going after 4 indications that's listed here, but eventually we'll expand it into broader RP, and I'll talk about our regulatory strategy. But we are very unique in the -- on the ocular space where we have received 4 orphan designations for these inherited retinal diseases for the same product. And that's pretty distinct in the ophthalmology space. And some of these diseases are pretty -- even though they're orphan, you see rhodopsin is about 12,000 patients in the U.S. So you can do the math in terms of the potential that it has to reach patients and then benefit our broader community, stakeholders and shareholders. OCU410 is a much bigger disease. It's about 9 million to 10 million patients. We are currently in the proof-of-concept studies. And currently, there are no approved therapies out there. And OCU200, as I mentioned before, is going after a huge disease populations as well. A little bit more deep dive into our gene therapy platform. I want to talk about how it can -- how one product can go after multiple diseases and how it's different from the traditional gene therapy. So if you can see the Slide #6, on the left-hand side, is the traditional gene therapy, where you have a nonfunctioning gene in the body and you administer a normal gene, which will basically express the function of this normal gene and produce the -- it'll add proteins to give the function for the body and help cure the disease. And it's very one to one. So if there is a defect in another gene, you'll have to design and develop, and manufacture and test and put that out in the market for the second gene, and we have to do one after the other. And while this gene therapy works, and it's proved by the one of the products that are there in the market, Luxturna, it is not a very scalable model in terms of addressing the patients, especially who are suffering from RP. There are about 150 mutations. And in 40% of these patients, you can't have diagnose what is the specific mutation that causes it. So they're all not left with much hope until we have something like the modified gene therapy platform that we have. And this is unique. If you look at the right-hand side, the approach here is that there are some very unique genes in the body. It's specifically in the eye that we are looking at, called the modifier genes, or these are nuclear hormone receptor genes that have the capability to not just express that -- function of that gene, but also influence the expression of gene networks -- different gene networks and also restore the homeostasis within a cell, which is really the basic biological function of the retina. So it's -- in some sense, it's like a master gene that helps to fix the overall health of the retina and also go after the gene expression of different networks. In this approach, our 1 product, OCU400 uses the NR2E3 gene, will go after 3 mutations in the beginning, 3 to 4, and then we'll go -- expand it beyond that to go for a broader RP spectrum therapy in the future. So what are these nuclear hormone receptor genes? There are 3 of them that we have in our portfolios licensed, the NR2E3, the NR1D1 and RORA or, also known as, RORA. These are like master genes, as I mentioned to you, which have this unique capability of influencing multiple gene networks. Now the concept of modified genes is not unique -- is not novel. I mean it's already been used effectively in cystic fibrosis and spinal muscular atrophy. But in the ocular space, we are the pioneers. We are the ones, who are developing this for treating diseases in the eye. Now I'm very proud to share that earlier this year, our preclinical data for OCU400 was published in Nature. And as you can imagine, it's a coveted journal, which is very hard to publish in terms of the standards that are required. And back in March, our preclinical data was published there. The results were essentially about the work that was done in collaboration with Dr. Haider in Harvard Medical School, where we licensed technology from, in 5 unique mouse models, where 1 product went after 5 different diseases, and we looked at the efficacy and the safety of this. And that -- those results have been published in Nature. And it's very promising in terms of what it can do for human patients. And I'd like to go to highlight a few of those pieces from this article, just to give you a sense of the efficacy and the safety of this product. So on this slide, I would just want to highlight how the product works, both on the early stage of the disease as well as the advanced stage of disease. And that's important because patients are -- is in a different time in their lives as far as how the disease has progressed. And so what we have noticed in the mouse models is that, on the left-hand side, where on the untreated eye, there is a dramatic reduction in the outer nuclear layer, the ONL, which is basically how much is the layers within the eye, which helps for their vision. And so for the untreated eye, there's a dramatic reduction and essentially loss of vision, whereas for the treated eye, for all of these different diseases, you can see a huge rescue of the outer nuclear layer. And even if you have 3, you can have sufficient vision. So that's kind of demonstrated here. On the last mutation there, while the outer nuclear layer is still there, the underlying morphology is actually not good for the untreated eye. But for the treated eye, it is much better, as shown in the fundus image in the bottom. But in the top row of the funded images, is all the untreated eye. We see a lot of the spotting; and as the treated eye, you see the less number of spotting, which gives you indication that for the treated eyes, there's a huge benefit and a rescue of vision. The graph on the right-hand side is a similar concept, just more on the advanced stage of the disease. And as you can see for the untreated eye, basically, they have lost all their outer nuclear layers. And whereas the treated eyes give rescues for these and hope for patients. Moving on, I wanted to also highlight there is another way of looking at vision and which is called the electroretinogram, which looks at the response levels under both, like dim-lit conditions, which is called scotopic as well as bright-lit conditions, which is photopic. And in both these instances, as you can see from the 2 graphs and using the electroretinogram as the measurement, that for the treated eye, is much better risk relative to the untreated eye. And this benefit on both the dim lit as well as the well lit is a huge benefit and -- because both on the color vision as well as for the monochromatic vision on the different intensity of light helps with the overall vision for an individual. The question that always gets asked and is an important one is the safety. And in our publication, we also showed the tremendous amount of work done in the safety of the product and looked at it both from the fundus imaging, from morphology and all the different opsin levels and the electroretinogram. And everything indicates, basically, the product is very, very safe in these mice models. And as I mentioned earlier, we are well on way to go into the clinic next year. We are currently doing additional toxicology studies in animals, which will then proceed to an IND filing and going into the clinic. I want to quickly highlight our broad regulatory strategy. As I mentioned, we'll be in the clinic next year, middle of next year with 2 indications, NR2E3 and rhodopsin. And rhodopsin is a very fast degenerating disease, so we should be potentially getting some initial indications of how the drug is performing. And once we complete the Phase I/IIa trials, we will expand it to 3 indications. Again, as a reminder, it's the same product going after multiple indications. And once we're able to prove it in multiple indications, we will go after a broad indication label with the FDA, and we would be -- we're, kind of, setting the path for one product going after multiple disease in the inherited retinal spaces. So we're pretty excited about that. From a competitive landscape standpoint, I wanted to just highlight that this is going up to multiple disease. Proof-of-concept is already approved. There's nothing else out there like this. You can address a large patient population and a huge economies of scale from a development cost standpoint. Traditional gene therapy has a -- is a proven technology, and obviously, which is kind of what we're leveraging. But it doesn't go after -- 1 product doesn't go after multiple diseases. Costs are pretty high and so is the -- essentially because of that, the time to get to the patients. There are some cell therapies out there, which are trying to go after many diseases using a single product, but it's still limited based on the types of cells, but the technology is not proven yet as well. So we feel we are very uniquely positioned the company to have this breakthrough technology provided as a potential hope for patients. I want to quickly touch upon OCU410, which is right now in the preclinical stage. We're doing proof-of-concept studies. And this is a big disease. Dry AMD is in many, many, many patients -- millions of patients. And a lot of therapies have been tried out there, but they don't work. And because they are -- if you ask the experts, like our CMO, Dr. Genead, who is the retinal surgeon, and any of the other experts in the field, there are multiple factors that cause dry AMD. And so going after any particular one, it doesn't really get good benefit to patients. It's a severe polygenic disease. And so it's important to look at some higher pathways within -- addressed at a higher regulatory pathway. And RORA gene, which is a nuclear hormone receptor gene, has the potential to do that because it addresses the oxidative stress, inflammation, lipid, metabolic and all of that at the same time. And so effectively, can be a good cure for this disease and we're going through proof-of-concept studies, and hope to be in the clinic in 2022. Quickly to want to talk about the partnership with CanSino Biologics. You can talk to any company out there in gene therapy, and they'll say manufacturing is absolutely critical. The FDA package, 80% of it, is all the CMC manufacturing and that work is absolutely important to have the right product. We are fortunate and very happy to have a partnership with CanSino Biologics, a very large biotech company, which is in the news recently because of their work -- exceptional work in the COVID vaccine as well. But they love our gene therapy platform. They love our product. They've been working on this one relentlessly. We are doing well, progressing well on that front. It's a very win-win partnership. They're taking up all the CMC development and manufacturing costs. We give them rights to the China market, but we get royalties for the sales there. They get royalties for rest of the world from where we sell. But that's a win-win partnership. So we are both committed to getting this product into the market soon. But more importantly, the people who are there are the leaders of the space, they land the biotech for AstraZeneca. This partnership was put in place based on the relationship that our CEO had with their Chief Operating Officer. So this is a very win-win partnership we are excited about and is progressing well. Just want to briefly touch upon OCU200 in the time we have here. OCU200 is a novel biologic, which is -- which has the potential to kind of reach a huge patient population. And the key thing I want to highlight here is, for these diseases right now, there is current standard of care, which is the anti-VEGF approach and some corticosteroid therapies. But the reality is 50% of the patients and 5-0, that's a huge percentage of patients, are nonresponders to this current therapy. Essentially, the 50%, which is still in millions, do not have any standard of care or treatment out there. Now we are looking at it using this biologic, which is a large molecule, called tumstatin-transferrin, and -- where the transferrin basically is like a delivery mechanism, and tumstatin is an integrin-targeting approach. The approach itself is well documented and has shown great promise. And the transferrin, which is the delivery mechanism, helps to get to the specific sales that have issue, and this creates this unique MOA, which distinguishes us from all the other players who are trying to work in this space. We have a great potential for this product. We are very optimistic about it. A lot of the initial studies, as kind of demonstrated in Slide 18, and I won't go into too much detail here, suggest that we are doing really well compared to some of the other products. We are starting the cell banking of this one and then we will be in the clinic in 2022. From a competitive landscape standpoint, I think we are positioned really well. As I mentioned to you, we go after patients, who don't have any standard of care using the current anti-VEGF therapies. And as far as integrin-targeting approach companies are concerned, with our delivery mechanism on transferrin, we can distinguish ourselves significantly. Want to briefly talk about the milestones upcoming and in the midterm. As I mentioned earlier this year, we published in Nature, a huge accomplishment. We started the toxicology study, and we plan to be filing our IND and start the clinical trials in mid of next year. But meanwhile, we received 2 orphan drug designations earlier this quarter. And we expect to apply for and get in Europe as well in the next year. And we feel like once we start the clinical trials, we should be getting some signals and hope potentially the top line results by end of 2022. So a lot is going on in OCU400, and a lot is going to be happening over the next few quarters and years. OCU200. As I mentioned, cell Banking has started. We plan to have an FDA pre-IND meeting soon. We'll start the toxicology studies and then go into the clinic. And OCU410 is in a similar path. As I mentioned, the proof-of-concept studies have started. And we were working towards getting into the clinic in 2022. A lot of work is being done. The team has been working relentlessly despite all the challenges that -- just from a personal standpoint, from a COVID situation, where we're -- our R&D teams come regularly and worked in the labs. And the team is committed to making these products into the clinic and bring it to the patients as soon as we can. Very briefly, capital structure is very clean. We have $15 million of cash as of the end of the quarter, second quarter. We have 135 million shares outstanding. Very few warrants and options, which are all like pretty, primarily, employee and director options. And we feel it's a very clean capital structure for future investments as well as existing shareholders. With that, I will open up to questions. I do see a few questions out there, and I'd like to address some of these questions.

So the one thing that I do want to mention because there was a question out there in terms of our NASDAQ compliance. And so NASDAQ has the option where you could apply for an extension for another 180 days. We intend to do that. We meet all the other listing criteria for the listing, except for the bid price of $1. And we will be seeking for that extension, for a 180-day extension. We should hear back from NASDAQ, hopefully, in a week or so. But as soon as we have that, we will go share that with the marketplace. So we're pretty confident that, that's going to come through. Just going through some of the other questions. There's a question about Histogenics. As a reminder, our company was formed in September 27 from a stock market perspective, September 27 of last year. So any historical stock price you see before that, is not relevant. That was the previous company we merged with Histogenics. And I've also seen questions come through that in 2024, stock price was significantly higher. I think that is not in full comparison at all because we have been listed only for a year. Histogenics, we've essentially merged with them. It essentially was a shell company, and we went public in that process. So we don't want to be measured by the previous historical stock prices. There's -- we are very confident in our execution. And so we feel like we are -- we have proven ourselves from an execution perspective. We continue to do that. We have a lot of work ahead of us. And the teams are working very diligently towards that. And we're very confident we will we will get into the clinic and deliver all the different from a time line perspective. And hopefully, the results will be positive for us to get to the patients.

That's all the time we have for questions today. Thank you for a great presentation. This concludes today's event.