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

Good morning and welcome to Oxygen's second quarter 2036 financial results and business update. All participants 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 Chris Clark, Oxygen's Head of Communications. You may begin.

thank you operator and good morning everyone joining me on today's call and webcast is dr shankar musanari occijun's chairman ceo and co-founder who will provide a business update and an overview of our clinical and operational progress rita johnson green our chief financial officer is also on the call to provide a financial update for the quarter ended june 30th twenty Abhi Gupta, Executive Vice President of Commercial and Business Development, and Dr. Mohammed Janeed, who joined Ocugen as Chief Medical Officer in June, will be available to answer questions following the presentation. This morning we issued a press release covering our business and operational highlights for the second quarter of 2026. encourage listeners to review the press release, which is available on our website at ocugen.com. A replay of this call, along with the accompanying slide presentation, will be available on the Investors section of the Ockogen website. Please note that certain statements made during today's discussion may be forward-looking in nature, including those related to our clinical development pipeline, regulatory timelines, commercialization strategy, and financial information, and our anticipated cash runway. These statements reflect management's current expectations and are inherently subject to risk, uncertainties, and assumptions that may cause actual results to differ materially from those expressed or implied. We encourage you to review our filings with the Securities and Exchange Commission, including the risk factors detailed therein, for a more comprehensive understanding of these potential risks. Finally, OxyGEN's quarterly report on Form 10-Q covering the second quarter of 2026 will be filed today. I will now turn the call over to Dr. Mussonari. Thank you, Chris, and good morning, everyone. The second quarter was a defining one for OxyGEN. The FDA cleared our phase three trial for Occio410 to initiate dosing in geographic atrophy patients and granted RMAP designation for the program, It signed a binding term sheet with Roots Pharmaceutical to negotiate an exclusive license for Occy 400 and retinitis pigmentosa across the Middle East and North Africa, MENA region. And from the closing of 130 million convertible notes financing, we extended our cash runway into 2028, now able to support all three of our late-stage programs. Before I walk through the quarter, I want to step back, because OccuGEN's potential is worth putting into context. For more than a decade, gene therapy in ophthalmology has been confined to a single gene, a single mutation, and a single small patient population. Our modified gene therapy platform takes a fundamentally different approach. Rather than targeting individual mutations, it is designed to address the root cause of complex complex retinal diseases by modulating master regulators, nuclear hormone receptors that govern multiple gene networks. The platform is gene agnostic, inherently multifactorial, and designed to deliver a durable benefit from a single, one-time subretinal injection. What this means in practice is that Occijn is not building three separate drugs. We're advancing one platform across three late stage programs, each targeting a major cause of blindness for which patients today have either no approved treatment whatsoever or therapies that demand chronic injections and carry meaningful safety burdens. Retinitis pigmentosa, RRP, Stargardt disease, and Geogarth's Atrophy, or GA, together affect approximately 3 million people across the United States and Europe, a combined patient population, and a commercial opportunity for larger than anything currently served by approved gene therapies and ophthalmology. Across our pipeline, spanning phase one through phase three, we have treated more than 325 patients, including EAP, through multiple doses and indications, and we have not observed a drug-related serious adverse event. We remain on track to file three BLAs by 2028. This positions the first half of 2027 as a catalyst-rich window for OcciGen with the top line data for OCCI 400 and OCCI 410ST and our planned BLA submissions following over a short period. Let me walk you through how each program is advancing. Then I will hand over the call to Rita financials. Starting with Ocu410 for GA, a secondary to dry age-related macular degeneration or dry AMD, GA represents our largest commercial opportunity with approximately 2 to 3 million patients in the US and Europe combined. There are currently no approved treatments for GA Current approved therapies in the U.S. target only one complement pathway and require frequent intravitreal injections, which has been associated with treatment discontinuation in clinical practice. PA is a multifactorial disease driven by four distinct pathways that contribute to the progressive degeneration of the macula, drusen, inflammation, oxidative stress, and complement activation. The currently approved therapies in the U.S. address only one of these four pathways, the complement system, which is partly why they have been unable to demonstrate meaningful functional outcomes for patients. Ocu410 operates differently. By delivering RORA, a nuclear hormone receptor that acts as a master regulator of retinal homeostasis. Ocufortin is designed to address all four disease pathways simultaneously with a single subretinal injection, has the potential to redefine the standard of care in this indication. recently received FDA clearance for RQ410 phase three registration trial for GA. The trial, Armada 3, is planned to be a global study of approximately 237 subjects, using an adaptive design powered at 95% for the primary endpoint, with the BLA and market authorization application filings targeted for 2028. We plan to initiate phase three by September 2026. This design is anchored by positive 12-month data from our Phase II Armada trial. At the optimal dose, OQ410 delivered a statistically significant 31% reduction in GA lesion growth within the patient population of lesion size 2.5 mm2 and 17.5 mm2. The criteria to be used in our Phase III Pertil trials were control, approximately twice the benefit of approved complement inhibitors and from a single injection. We also saw a 27% preservation of the ellipsoid zone with a in the same patient population in no drug-related serious adverse events reported to date. Importantly, these phase two data help support the FDA's decision to grant or mat designation for OCU410. Turning to Ocu410ST for Stargardt disease. Stargardt is a pediatric onset retinal disorder affecting approximately 100,000 patients in the US and Europe, and roughly 1 million people globally. There are no approved therapies available for these patients today. Ocu410ST is designed to address about 1200 pathogenic mutations in the ABCA4 gene with a single onetime treatment. On April 1st, we announced the completion of enrollment and dosing in our phase two, three, Guardian three total confirmatory trial, enrolling 63 participants. We expect the interim outcome decision for the first 50% of subjects at eight months in the third quarter of 2026 and top line phase two, three, data in the second quarter of 2027 with our BLS submission follow mid-2027. Moving to Octave 400 for RP, the Phase III Limelight Trial is the first and largest genetic medicine registration trial for broad RP, spanning more than 30 genetic mutations. Approximately 300,000 people in the U.S. and Europe are living with RP, which is caused by mutations in the blood. and more than 100 genes. The only approved gene therapy for RP today targets a single gene, RPE65, which accounts for less than 2% of all RP cases. RQ400 is designed to provide a therapeutic option for all RP patients and that is a fundamentally different commercial opportunity. Enrollment in the limelight is complete with 140 patients randomized 2 to 1 treated versus control across the row. and gene agnostic columns spanning more than 30 genetic mutations associated with early to late stage RP, including pediatrics. The breadth of the population intended to validate the gene agnostic mechanism of action of our novel modified gene therapy platform. The primary endpoint is 12-month change in visual function assessed by luminance dependent navigation assessment or LDNA. Subjects are followed for one year post-dosing for the primary endpoint analysis. Top line phase three data is expected in the first quarter of 2027, advancing ARCHIV 400 to a potential approval in the fourth quarter of 2027. FDA feedback confirmed that the path to rolling BLA submission remains tied top line data expected in the first quarter of 2027. On the manufacturing side, our process performance qualification, PPQs, badges are complete, supporting BLA and commercial launch supplies. Brand planning and marketing initiatives led by Abhigapta, our EVP of commercial and business development, continue to scale in preparation for launch. We also advanced our global commercialization strategy for OCCI 400 during the quarter. In July, we signed a binding term sheet with Root Pharmaceutical and its strategic partner, Al Dhow International Holdings, for exclusive rights to OCCI 400 in the Middle East and North Africa. We are active on the BD front to find other global partners for regional commercialization partnerships where RPE is most prevalent. Here is a snapshot of the market opportunity across all three late stage development programs. While OCCU 410 for GA represents our largest commercial opportunity, we believe all three programs have the potential to generate significant revenue while addressing areas of substantial unmet medical need. As we continue advancing our pipeline, we're also building the foundational commercial capabilities to support future global access. Our efforts are focused on five key areas. First, we're in discussions with CMS and peers to establish early market access and reimbursement strategies. Second, we continue to identify and evaluate specialized centers of excellence with expertise in subretinal surgical procedures that could support future treatment delivery. Third, we are mapping the patient journey from diagnosis through treatment and long-term follow-up with the goal of facilitating a seamless experience for patients, caregivers, and healthcare providers. Fourth, we are assessing manufacturing, supply chain, and distribution requirements to help ensure operational readiness. Finally, we are beginning to build out our commercial infrastructure, including our marketing and sales capabilities as we ramp up for launch. With that, I'll turn the call over to Rick,.

Rita for the financial update. Rita? Thank you, Shankar. Good morning, everyone. The total operating expenses for the three months ended June 30, 2026, for $17.9 million, and included research and development expenses of $10.7 million, and general and administrative expenses of $7.2 million. This compares to total operating expenses for the Three months ended June 30th, 2025 of $15.2 million, which included research and development expenses of $8.4 million and general and administrative expenses of $6.8 million. Total operating expenses for the six months ended June 30th, 2026. were $37.3 million and included research and development expenses of $21.9 million and general and administrative expenses of $15.4 million. This compares to the total operating expenses for the six months ended June 30, 2025, Of 31.2M dollars, which included research and development expenses of 17.9M dollars. And general and administrative expenses of 13.2M dollars. Occupied reported a 7 cent net loss per common share for the 3 months ended June 30th, 2026. compared to a $0.05 net loss per common share for the three months ended June 30, 2025. In our capital position, following the closing of the $130 million convertible notes financing, the company's cash, cash equivalents, and restricted cash totaled $100.4 million as of June 30, 2026, extending our cash runway into 2028. The company has 339 million shares of common stock outstanding as of June 30th, 2026. That concludes my financial update. Shankar, back to you.

Thank you, Rita. The second quarter was a quarter of execution. The remainder of 2026 is poised to be impactful. We expect the ARC-IV-10-ST interim outcome decision in the third quarter, and we expect to initiate the ARC-IV-10 phase III trial in this quarter. Looking to 2027, we expect top line data from both RQ400 and RQ410ST in the first half of the year, followed by our planned BLA submissions. Each of these milestones brings us a step closer to delivering on our commitment to three BLAs by 2028, offering and potentially life altering improvement to patients coping with blindness causing diseases. I want to thank our investigators and patients who have trusted us with their participation and our shareholders for their continued belief in our mission to advance cures for blindness.

We'll now open the call for questions. Operator? Thank you. Ladies and gentlemen, we will now begin the question and answer session. And at this time, I would like to remind everyone, in order to ask a question, please press star followed by the number one on your telephone keypad. And if you would like to withdraw your questions, simply press star one again. Again, if you would like to ask a question, press star 1 on your telephone keypad. Our first question comes from the line of Michael Ockenwich with Maxim Group. Please go ahead.

Hey there, thank you so much for taking my questions and congrats on all the great progress. Good. Thank you, Michael. So, I wanted to ask, you now have a handful of international partnerships, which makes OCU 400 a truly international program at this point. So I just wanted to see if you could share the regulatory plans in particular for ex-US jurisdictions, what's required there, and how those timelines could vary versus your BLA path.

Michael, what we have with RQ400, we got alignment from EMA in addition to FDA with the same that single trial we're doing in the US is good for approvals. And across the globe, for orphan gene therapies, typically they get approval based on U.S. approval. So everything will be linked to our U.S. FDA approval in MENA and other regions.

All right, thank you. And then I wanted to see also if you could just highlight some of the key differences in the trial design between our MODIC-3 and the Phase II armada trial. I let our CMO, Dr. Zinni, answer that.

Thank you, Michael. Regarding Armada 3, which is our global phase 3 trial for GA, which we just got the approval from FDA, you know, just recently to be initiated this quarter, the phase 3 trial designed for Armada 3 will be one treatment arm with OCU410 versus a control will be two to one randomization allocation and that day to follow each subject up to 12 months. And this is where we're going to be looking at the primary efficacy endpoint plus other key functional endpoint. The RMATA one, the earlier phase one to GH, trials was similar on the efficacy. So we should expect similar outcome here. We're going to look, the numbers obviously is different. We're going to be enrolling in our Model 3 close to 237 subjects into one allocation. It's going to be global. We're going to go ex-US, we're going to go to Europe and other territorial part in the world. But the primary endpoint will be very similar, so we should expect to see similar trend what we saw from Armada 1, the phase 1, 2 AJA trial.

All right, thank you. And then just one last one from you before I hop back into the queue. So it looks like in Stargardt, there is a chance that we'll have an approved therapy sometime around when you'll be completing your own BLA filing. So it'd be a chronic therapy versus a one time, but to ask if how important the pricing on other therapies, since we don't have any pricing comps, would be to inform your own pricing strategy and if there's any way that we can think about how to translate pricing between a chronic ongoing therapy and a one-time therapy. Okay.

Yes, good question Michael. I think the way you look at it is our treatments are one and done treatments potentially. So that will have a different pricing structure than ongoing chronic therapies. Number two, everything will be dictated by data. And if you have a safe one-time treatment, I think our gene therapies, once again, we're still collecting data. As you can see in some of the patients in RP, and as they approach like second year, third year, they're improving further. So the current therapies, if the oral therapy comes to the market, what patients need to do patients, providers are going to look for? Is the therapy just reducing the the degeneration of the disease, or in some patients, is it stalling it? Is it has potential to reverse it in some patients? At least, you know, with our modified gene therapy in some of the patients who are seeing all those trends. So that could be a big differentiating factor. And also as you know, Stargardt impacts a lot of pediatric patients. And the current clinical trial they're conducting focuses on 12 plus. And our clinical trial focuses on three plus. So there are a lot of differentiators. So whenever we come for pricing, because of the differentiated disruptive technology platform we have, and obviously everybody will focus on safety, efficacy, and one and done treatment, there'll be more compliant for anyone. So I think all those factors will be rolled in. So I don't think we'll be truly comparing praising what the other chronic therapies are doing. If you have a me too product, the answer is yes. But if you have truly a definitively disruptive technology, which is completely different, it'll come, we can praise it on its own merits.

Alright, thank you. I appreciate the additional call. Our next question comes from the line of the IHM Mechanical Genuity. Please go ahead.

Hey, guys, my congrats on all the progress as well. Just to keep going on the Stargardt discussion, Shankar, since you mentioned it, can you talk about a little bit more, I guess, around the TPP here and the potential to show kind of reversal of disease and improvement in visual acuity? Is that something that is reasonable to expect given the duration of follow-up in the ongoing Phase 2-3 study? And I guess if so, is there anything that was done in terms of entry criteria to maybe enrich for that outcome as far as patient baseline characteristics?.

I will ask Dr. Ghani to talk a little bit about baseline characteristics, then I'll answer the other question. Go ahead. Thank you, Shankar. Hi, Whitney. Yes, happy to answer. So our population was definitely broader than other competitors. Just to highlight, first, we included patients from early to late stage target disease. That's number one. As Shankar just mentioned, too, we include subjects, you know, are younger than, you know, young adults. We included, you know, subject, you know, three plus years of age, so that's a very broad population. As you know, for Stargardt, the earlier the better, especially if it's a progressive retina generation disease. The lesion size, also included in our trial, the phase 2, 3 guardian trial, was more broader than what we saw with others. And our lesion size can include smaller lesion, also larger lesion. So we have a broad spectrum, and that's also going to be aligned with our early, late stage strategy for the disease. We already included some of the other the subject in our phase 2-3 trials. So we will be excited to see the data. In addition to the gene mutation, specifically, we include all the variants and all the other specific mutations included in the ABCA4-related retinopathy. So it includes SORGET and others as well. So this is also on the disease indicator. it's overall. Based on your point about the functional, I think this is going to be a critical. So we saw from our phase one data that we just published at the iNature early in the year, we saw a very clear structure, slowing in the structure progression in the in those patients, and also we saw functional benefit in those patients. And as you remember, as you know, in Stargate disease, the first target is to hold that progression, to stop losing more retinal structure and function, which we achieved in our prior trial. The second goal, which will be the upside here, the ultimate goal to reverse that tide, try to improve on the disease outcome. And we saw that in our phase 1, 2. We saw some of the patients did improve in visual function. The gain was fixed letters close to one line between the three untreated eyes. So we felt also very excited about the functional gain in the patient population. So that's kind of where we think, you know, the big differentiation, the broader application of our molecule. Whitney, just to clarify, the primary endpoint, because it's a one-year trial, it's not a two-year trial, it's still a lesion. Then there are some.