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Ocugen, Inc. (OCGN) Q3 2021 Earnings Call Transcript

By Motley Fool Transcribing – Nov 9, 2021 at 5:30PM

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OCGN earnings call for the period ending September 30, 2021.

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Ocugen, Inc. (OCGN 5.83%)
Q3 2021 Earnings Call
Nov 09, 2021, 8:30 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:


Operator

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] I will now turn the conference over to Ken Inchausti, head of investor relations, and communications for Ocugen.

You may begin.

Ken Inchausti -- Head of Investor Relations and Communications

Thank you, operator. I'd like to welcome you to our conference call. With me today, our 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 an 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.

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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 two 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 US 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 a Form 10-Q with the SEC today. I will now turn the call over to Ocugen 's chairman and CEO, Dr. Shankar Musunuri.

Shankar Musunuri -- Chairman and Chief Executive Officer

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 our 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 Covaxine 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 our 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 CanSino Bio. 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 [Inaudible] 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 US Food and Drug Administration. Last week, we submitted the Covaxin for emergency use authorization to the FDA for use among those aged two 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 US market particularly in ages two to five. 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 III immuno-bridging study between the US population and the results of Bharat Biotech's Phase III clinical trials, involving nearly 25,800 participants. This Phase III 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 US-based participants who get two doses of Covaxin to those who got two doses in the Phase III 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 in 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 please be tuned for further developments. To the market, 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 [Inaudible].

This is a proposed safety and those finding Phase I, II clinical trial involving a small number of patients. We have already successfully completed manufacturing at a 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 III 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 I, II 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 bacterium, 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 played 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 CanSino Bio 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 CanSino Bio was amended in September to add this program.

Rounding up, our ocular portfolio OCU200, our transfer of some stack infusion 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? 

Sanjay Subramanian -- Chief Financial Officer and Head of Corporate Development

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, with $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, with $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.

Ken Inchausti -- Head of Investor Relations and Communications

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

Questions & Answers:


Operator

[Operator instructions] Your first question comes from the line of Keay Nakae with Chardan.

Keay Nakae -- Chardan Capital Markets -- Analyst

Good morning. Four questions for you, Shankar. 

Shankar Musunuri -- Chairman and Chief Executive Officer

Good morning, Keay.

Keay Nakae -- Chardan Capital Markets -- Analyst

Yeah. The first question relates to timing for the adult population in the US. So, as you convinced 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?

Shankar Musunuri -- Chairman and Chief Executive Officer

Yeah. If you follow the path of the regulatory path where other companies have followed. We believe the agency will also consider a fast track for us. We were planning to initiate that at the right timing and so based on that they're planning to file the BLA in the second half of next year.

So sometime in 2023. Yeah, in the first half, if we do get to fast track designation that seems to be reasonable.

Keay Nakae -- Chardan Capital Markets -- Analyst

OK. Great. And then under your agreement with Bharat under a scenario where the US 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 US for that purpose and you, exclusively have the right to sell the vaccine to the US government for any purposes?

Shankar Musunuri -- Chairman and Chief Executive Officer

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

Keay Nakae -- Chardan Capital Markets -- Analyst

OK. 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 adults, how do we think about whether you will need to go on a bridging study for pediatrics as well before you could give any type of approval?

Shankar Musunuri -- Chairman and Chief Executive Officer

This is again, we have filed emergency use authorization. As we outlined in the two to five 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 two 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.

Keay Nakae -- Chardan Capital Markets -- Analyst

OK, 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, what they're full -- 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.

Shankar Musunuri -- Chairman and Chief Executive Officer

OK, you -- I think the process for Canada, again, as we stated, there is no -- deployment of emergency user authorization that's called intramotor, 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.

Keay Nakae -- Chardan Capital Markets -- Analyst

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

Shankar Musunuri -- Chairman and Chief Executive Officer

Thank you, Keay.

Operator

Your next question is from Zegbeh Jallah with Roth Capital.

Zegbeh Jallah -- ROTH Capital Partners -- Analyst

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?

Shankar Musunuri -- Chairman and Chief Executive Officer

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.

Zegbeh Jallah -- ROTH Capital Partners -- Analyst

So you'd not expect to get a letter about an acceptance or anything like that prior to an update on whether or not the EUA is approved?

Shankar Musunuri -- Chairman and Chief Executive Officer

No, they -- typically the EUA goes through the process that is 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.

Zegbeh Jallah -- ROTH Capital Partners -- Analyst

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 got any questions or comments from them, is that correct?

Shankar Musunuri -- Chairman and Chief Executive Officer

Can you repeat the questions, Zegbeh? Sorry.

Zegbeh Jallah -- ROTH Capital Partners -- Analyst

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.

Shankar Musunuri -- Chairman and Chief Executive Officer

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

Zegbeh Jallah -- ROTH Capital Partners -- Analyst

Thanks, OK. 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?

Shankar Musunuri -- Chairman and Chief Executive Officer

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 then what would be the catalyst for that? Is that correct? Yeah. Zegbeh, again, those options are always open.

And again, we're really focusing on the US and Canada at this stage. And again, we keep those options open with our partners.

Zegbeh Jallah -- ROTH Capital Partners -- Analyst

Ok, 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.

Shankar Musunuri -- Chairman and Chief Executive Officer

Yeah. 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 offline designation trials to the retinal space.

Zegbeh Jallah -- ROTH Capital Partners -- Analyst

OK. 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? We're in the process, are you?

Shankar Musunuri -- Chairman and Chief Executive Officer

Yes. And CanSino 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.

Zegbeh Jallah -- ROTH Capital Partners -- Analyst

OK. Thanks for the update. 

Shankar Musunuri -- Chairman and Chief Executive Officer

Thank you, Zegbeh.

Operator

Your next question is from Robert LeBoyer with Noble Capital.

Robert LeBoyer -- NOBLE Capital Markets -- Analyst

Good morning.

Shankar Musunuri -- Chairman and Chief Executive Officer

Good morning.

Robert LeBoyer -- NOBLE Capital Markets -- Analyst

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

Shankar Musunuri -- Chairman and Chief Executive Officer

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 should 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 that the new vaccine and our partners have shown in the published articles in the clinical journals, medical journals, that Covaxin elicits these strong cellular responses. That means potential memory and you should get lung 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, in which we did file the IND for 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.

Robert LeBoyer -- NOBLE Capital Markets -- Analyst

Great. Thank you very much.

Shankar Musunuri -- Chairman and Chief Executive Officer

Thank you, Robert.

Operator

Your next -- I'm sorry. Your next question is from Sean Lee with HC Wainwright.

Sean Lee -- Citi -- Analyst

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

Shankar Musunuri -- Chairman and Chief Executive Officer

Good morning.

Sean Lee -- Citi -- Analyst

My first one is on the supply agreement with Bharat. So does that cover a potential commercial supply, if you're 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?

Shankar Musunuri -- Chairman and Chief Executive Officer

Yes, upon EUA, our supply agreement does include adequate doses, Sean, and our partners have significantly increased that capacity this year. And also so that they don't how many restrictions for export. So we will be -- we'll get adequate supply whatever is needed post EUA in the US. And as for 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 US packaging and the testing from the US release site, which have been established.

Sean Lee -- Citi -- Analyst

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 of the same?

Shankar Musunuri -- Chairman and Chief Executive Officer

Yeah. 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.

Sean Lee -- Citi -- Analyst

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 time like on that and when can we expect that to go into the clinic?

Shankar Musunuri -- Chairman and Chief Executive Officer

Is it related to 410? 

Sean Lee -- Citi -- Analyst

410, yes.

Shankar Musunuri -- Chairman and Chief Executive Officer

Yeah. No. 410, yes, that one again. We have a roadmap from FDA.

We have to follow the typical process as other genetic products as we did for 400. So the two steps, which are very 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 of this is little -- it'll take a little longer or from a preclinical toxicology 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 for the next 12 to 18 months.

Sean Lee -- Citi -- Analyst

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

Shankar Musunuri -- Chairman and Chief Executive Officer

Thank you, Sean.

Operator

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

Ken Inchausti -- Head of Investor Relations and Communications

All right. Thank you very much and thanks to 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.

Operator

[Operator signoff]

Duration: 30 minutes

Call participants:

Ken Inchausti -- Head of Investor Relations and Communications

Shankar Musunuri -- Chairman and Chief Executive Officer

Sanjay Subramanian -- Chief Financial Officer and Head of Corporate Development

Keay Nakae -- Chardan Capital Markets -- Analyst

Zegbeh Jallah -- ROTH Capital Partners -- Analyst

Robert LeBoyer -- NOBLE Capital Markets -- Analyst

Sean Lee -- Citi -- Analyst

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