Ocugen, Inc.
Q1 2021 Earnings Call Transcript

Published: 7 May 2021

[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. I will now turn the conference over to Lisa DeScenza, Vice President of Integrated Communications at the LaVoie Health Science to introduce the Ocugen team. You may begin.

[Lisa DeScenza:]

Thank you, operator. I'd like to welcome you to our conference call. With me today are Ocugen's Chairman and CEO, Dr. Shankar Musunuri; and our CFO and Head of Corporate Development, Sanjay Subramanian.

[Shankar Musunuri:]

Thank you, Lisa. Good morning, everyone. And thank you for joining. There is not a day that goes by without us witnessing the devastation caused by the Coronavirus pandemic. As you all know, India is currently experiencing one of the worst spikes seen by any country since the pandemic began. Over the last two weeks, COVID-19 has claimed about 120 lives, every hour an average in India, the second view of devastating COVID-19 infections. Our hearts go to the people of India and those working on frontlines to bring this terrible outbreak under control. We also sincerely appreciate the work done by caregivers, NGOs, governments, including the U.S. Government and everyone who is helping. Our co-development partner for COVAXIN, Bharat Biotech, has been ramping up production to meet the demand for the vaccines in India. They are navigating these extreme conditions to scale up production and increase supply. It is encouraging to note as Dr. Anthony Fauci, Director of NIAID and the Chief Medical Advisor to the President, mentioned last week, studies off convalescent sera of COVAXIN recipients have found that COVAXIN effectively neutralizes the B1617 variant or Indian double mutant strain of the Coronavirus. However, it is concerning that according to the World Health Organization, the variant has been detected in 17 countries, including the U.S. We continue to strongly believe that it is critical to add vaccine to our national arsenal to fight this pandemic. We are encouraged by our announcement earlier this week that COVAXIN demonstrated potential effectiveness against three key variants of SARS-CoV-2, the UK variant, which is B.1.1.7, the Indian double variant, B.1.617, and Brazilian P.2 variant B.1.1.282. By addressing the whole COVID-19 virus based on multi antigens, including the spike and nuclear capsid proteins, COVAXIN’s potential effectiveness against multiple variants reduces the possibility of mutant virus escape. This is an important differentiator from currently available in vaccines in the U.S., which only address the spike protein.

[Sanjay Subramanian:]

Thank you, Shankar, and good morning, everyone. We have made significant strides in the first quarter of this year, particularly in working to bring COVAXIN to the U.S. market with the submission of our comprehensive drug Master File with the FDA. I will now provide an overview of key financial results for the first quarter of this year. We ended the quarter with cash, cash equivalents and restricted cash totaling $44.9 million as of March 31, 2021, compared to $24.2 million as of December 31, 2020. In April, 2021, we raised an additional $100 million in gross proceeds with our registered direct offering. Our research and development expenses for the quarter ended March 31, 2021 were $2.9 million, compared to $1.7 million for the three months ended March 31 2020. The increase was primarily related to the toxicology studies for our OCU400 program and the development activities for COVAXIN.

[Operator:]

Your first question comes from the line of Keay Nakae with Chardan.

[Keay Nakae:]

Good morning. So a couple of questions about the vaccine. Shankar, you mentioned...

[Shankar Musunuri:]

Yes, go ahead, Keay. Good morning. Keay, can you hear us? We can't hear you, Keay.

[Operator:]

Keay, please press star one.

[Shankar Musunuri:]

Operator, we think Keay got disconnected. We will go to the next question. We can come back to Keay.

[Operator:]

Keay, your line is open.

[Keay Nakae:]

Hello?

[Shankar Musunuri:]

Hello. Hey, Keay. You back.

[Keay Nakae:]

I can hear you. Can you hear me?

[Shankar Musunuri:]

Yes. Yes. Yes. Now, we can hear you. Thanks, Keay. Go ahead.

[Keay Nakae:]

Good morning. Okay. Yes, I don't know what happened there, but thanks. Couple of questions about the vaccine, Shankar, you mentioned some delays due to the activity that's happening in India. Do you have a sense of when you might be able to complete the EUA filing application?

[Shankar Musunuri:]

Yes. Keay as we stated, we're working very hard with our partners at Bharat Biotech and they'd taken longer than anticipated. We're planning to still complete the EUA application in the upcoming weeks.

[Keay Nakae:]

Okay. And in your initial discussions with the FDA, what have they said, if anything about wanting to see vaccine data for U.S. patients before allowing that to move forward?

[Shankar Musunuri:]

Not to date.

[Keay Nakae:]

Okay. All right. Very good. That's all I have. Let me get back in queue. Thanks.

[Shankar Musunuri:]

Thank you, Keay.

[Sanjay Subramanian:]

Thank you.

[Operator:]

Your next question comes from the line of Zegbeh Jallah with ROTH Capital.

[Zegbeh Jallah:]

Good morning, guys. Thanks for the update. Just have a couple quick ones for you. I think the first one is just additional info on what's really needed from the folks in India to kind of finalize the EUA application. Like what data sets are you missing? What information are you missing and you're waiting for?

[Shankar Musunuri:]

Zegbeh, as you know, this is a very large clinical trial. And at the conclusion of the interim Phase 2, I mean the second interim results from the Phase 3 clinical trial. You have to put all the data together. It's an enormous amount of effort. And in the middle of the pandemic obviously this crisis in India has caused some delays. Also just as you know, everybody has submitted, there is large amount of safety database you have to pull together along with efficacy. That's what they're working on.

[Zegbeh Jallah:]

Okay. So you do need some safety and then some efficacy data that you're waiting on. And then the follow-up question is regarding the Master File. I know you've submitted it, but I was just wondering when you anticipate getting some feedback from the FDA and when you do get that feedback, are you going to communicate it publicly?

[Shankar Musunuri:]

Again, it's – again, it’s the normal course of business and FDA communications depending on if it's a feedback concerning, there are some anticipatory questions or clarifications needed. That's the reason we are collaboratively working with FDA so we can incorporate anything else, any information, additional information in the EUA, that's the plan. And obviously we may not be going into all the details.

[Zegbeh Jallah:]

Understood. And then just the last one, really impressed with the continued execution on the ophthalmology pipeline. And so I was just wondering if you can provide just a little bit more granularity as to what needs to be completed, because it's nice that you do have capital to kind of support some of those efforts, but just any detail as to, what's needed for the next steps for OCU400 and OCU200, sorry about that?

[Shankar Musunuri:]

Yes. So OCU400, as I stated we have successfully completed manufacturing, it’s a 200-liter scale, potentially commercial scale. And so the next step is for the preclinical toxicology studies are in progress. As soon as we complete those studies, we get the reports, we'll be ready to file the IND, which is – and we are anticipating to file that later part of this year.

[Zegbeh Jallah:]

Perfect. Thanks, Shankar, and congrats again on all the progress.

[Shankar Musunuri:]

Thank you. Thank you, Zegbeh. Thanks for the questions.

[Operator:]

Your next question comes from the line of Robert LeBoyer with Noble Capital.

[Robert LeBoyer:]

Good morning. I was…

[Shankar Musunuri:]

Good morning. How are you doing?

[Robert LeBoyer:]

I'm doing well. Thanks. My question has to do with the emergency use application. And when you expect to hear an answer back from the FDA, if positive, what would that mean in terms of rollout and how would it fit with the current vaccination programs?

[Shankar Musunuri:]

Yes, again, it'll be – we're anticipating it's going to be a similar process to other companies. After we filed the emergency use authorization application, typically agency takes three to four weeks to make a decision and have a meeting with the ACIP. And after that, we'd be ready to roll out the vaccine just as other companies are prepared.

[Robert LeBoyer:]

Okay, great. Thank you very much.

[Shankar Musunuri:]

Thank you.

[Operator:]

Your next question comes from the line of Swayampakula Ramakanth with H.C. Wainwright.

[Swayampakula Ramakanth:]

Thank you. This is RK from H.C. Wainwright.

[Shankar Musunuri:]

Hi, RK.

[Swayampakula Ramakanth:]

Good morning, Shankar and Sanjay.

[Shankar Musunuri:]

Good morning.

[Swayampakula Ramakanth:]

Just for modification, if you could please help us try to distinguish between the filing of the Master File and what you'll need to do in terms of the emergency use application. What are the differences there, in terms of like data in terms of, what else you need to be providing?

[Shankar Musunuri:]

Yes. So we are following FDA guidance on EUA for include vaccines. So based on the guidance, Master File is a first step to include all preclinical manufacturing and any other data prior to Phase 3. So that gives an opportunity for FDA to review and provide suggestions, comments prior to filing a EUA. So that's the process we have completed, and our file was quite extensive. And the second step is filing the emergency use authorization application just as other companies have done. So those are the two things. So that application will have primarily the second interim analysis up to that point, 127 patients, what we have announced before, safety, efficacy, including the new variant data, which is coming out, which will be part of that application.

[Swayampakula Ramakanth:]

Good, very good. So obviously going into the EUA, FDA has already reviewed quite a bit of your data. So do you still have to sit down with the FDA for a pre-EUA discussion and is that – and that discussion will happen before you also have another discussion with the BARDA these two are separate discussions and how should we think about timing of all this in the course of getting COVAXIN into the hands of BARDA.

[Shankar Musunuri:]

Yes, the FDA process it's a similar process to other companies. We are collaboratively working with them we're continuously communicating with them. And so obviously we will be notifying them in communications when we are filing the UA. And that conversation, that communications, those are different from BARDA. BARDA is independent, and obviously we’re working with the BARDA administration. So those discussions are ongoing. So they are like in parallel, obviously they are not linked.

[Swayampakula Ramakanth:]

Okay. And last question from me with all the energies that are being spent on COVAXIN and trying to get COVAXIN across the finish line, how are you on your resources to not only get COVAXIN through, but also for Phase 1/2 clinical trials get started on OCU400 early next year?

[Shankar Musunuri:]

Yes, so we are actually – we also announced we are also increasing our internal resources. We got also a good size external team of team of solid experts supporting COVAXIN development, including future clinical trial plans and everything else. In addition to that, internally, we're beefing up the team recently announced – we hired a Senior Vice President of Manufacturing and Supply Chain. There's tremendous experience from vaccines and gene therapy expertise, and a very highly regarded person in the industry. So, we are building a very strong manufacturing team under him. And similarly, we're going to beef up other functional areas in the organization as we continue to grow this year. And that's going to support, as you stated, starting with our OCU400 genes therapy program, which we are trying to file the IND latter part of the year and initiate clinical trials, plus all other ophthalmology programs, we are planning to initiate as you stated four Phase 1/2 clinical trials and composing OCU410 gene therapy, as well as OCU200. And we'll be supporting them. We are beefing up the resources every day.

[Swayampakula Ramakanth:]

Thank you Shankar and Sanjay I’ll talk to soon.

[Shankar Musunuri:]

Thank you.

[Sanjay Subramanian:]

Thank you RK.

[Operator:]

Our next question comes from the line of Kristen Kluska with Cantor Fitzgerald.

[Kristen Kluska:]

Good morning, every good morning. Thanks for taking the question. The first one I have is in regards to the potential usage of COVAXIN as a booster, have you considered what work or understanding would need to go into this to determine when somebody should receive this and the number of doses? And then how are you and your partners thinking about tracking the long-term durability of COVAXIN as all of the companies, generally speaking, are trying to determine how often these boosters will be needed?

[Shankar Musunuri:]

Okay, so I’ll separate the two questions. The booster studies again we are still preparing the protocols. Typically, you have to wait for any booster for the required. In the COVAXIN case, we're getting the booster after 28 days after the hostels. Similarly, if you want to space them out for other vaccinations at least a month or more and that could be yet to be determined. Our clinical team headed by, Dr. Bruce Forrest, an expert in this field and we’re going to make those additions in the coming months before we file the protocol with FDA. And the second part is, are you going to monitor long-term durability? I think our partners have already published extensive data, I think in Lancet and others and they're continuing to monitor the long-term durability of this vaccine. And typically, what is important is, I think, the missing piece people have to understand it's not just the safety and efficacy, efficacy is at one time you're measuring as a part of the Phase 3 clinical trial, and it's really important to measure the responses, cellular responses and T cell responses. And that's what you're going to get durability on.

[Kristen Kluska:]

Thank you. And then just to go off of RK’s question, how should we be thinking about the near-term spending projections, including your comments about expanding the headcount, as well as planning a pediatric study and evaluating some of these booster dose studies?

[Shankar Musunuri:]

Sanjay?

[Sanjay Subramanian:]

Yes, thank you, Shankar. So, Kristen, good question. So, we obviously raised some capital that we essentially both in first quarter, as well as end of last month with the $100 million RDO, so with that we have a very strong balance sheet. We have been hiring many people over the last few months and we have bolstered our team quite a bit, both on the vaccine side, as well as on the ophthalmology side. So, the activities are progressing well on that front. And with all of this capital that it's raised, it's more than sufficient for us to do kind of put in place any of the clinical plans for pediatric study, as well as continuing on with our original plans on the ocular program. So we feel this is, at this point in time, very confident that it is sufficient for all our program plans as well as hiring plans.

[Kristen Kluska:]

Thank you so much. And then my last question is whether you anticipate any issues related to the current travel ban to India as it relates to manufacturing, inspection or anything else regarding that partnership.

[Sanjay Subramanian:]

Yes, the travel ban, again, Kristen we're closely monitoring just as any other country, these breakouts are going to come up across the globe. And again, we cannot anticipate how long it's going to last. And as far as any potential inspections and all agencies are conducting these days digital inspections. So, they have some flexibility on that.

[Kristen Kluska:]

Great. Thanks so much, everybody.

[Sanjay Subramanian:]

Thank you.

[Operator:]

You do have a follow-up question from the line of Zegbeh Jallah with ROTH Capital.

[Zegbeh Jallah:]

Hey guys just wanted to do a quick follow-up on something that I was triggered by Kristen’s question. I was just wondering for the doses that are going to be coming over the initial doses, particularly from BARDA is that still the plan or are you now considering having the initial doses this come from the U.S. manufacture?

[Shankar Musunuri:]

That is still the plan Zegbeh. While we are in parallel working with the U.S. contract manufacturing.

[Operator:]

This concludes the question session for today. I would now like to turn the conference back to Lisa for any additional or closing remarks,

[Lisa DeScenza:]

Thanks to everyone for taking the time to join this call this morning. We are dedicated to help save lives from COVID-19 by bringing COVAXIN the U.S. market and develop gene therapies to cure blindness diseases. We look forward to providing further updates in the coming months. Thank you.

[Operator:]

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