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    Ocular Therapeutix Reports Third Quarter 2016 Financial Results and Provides Corporate Update

    Chelsea Pratt
    Nov. 09, 2016 04:52AM PST
    Biotech Investing

    Ocular Therapeutix, a biopharmaceutical company focused on the development and commercialization of innovative therapies for diseases and conditions of the eye, today announced financial results for the third quarter ended September 30, 2016 and provided a general business update.

    Ocular Therapeutix, Inc. (NASDAQ:OCUL), a biopharmaceutical company focused on the development and commercialization of innovative therapies for diseases and conditions of the eye, today announced financial
    results for the third quarter ended September 30, 2016 and provided a general business update.
    “Following productive discussions with the FDA, we are preparing for the
    resubmission of our NDA for DEXTENZA™ for post-surgical ocular pain by
    the end of the year,” said Amar Sawhney, Ph.D., President, Chief
    Executive Officer and Chairman. “We are also pleased to have commenced
    patient enrollment in our first Phase 3 clinical trial with OTX-TP for
    the treatment of glaucoma and ocular hypertension. We believe that this
    is the first Phase 3 clinical trial to be conducted with a non-invasive,
    sustained release drug candidate for the treatment of glaucoma, and our
    goal is to address the major issue of low patient compliance rates
    associated with currently approved topical therapies. Further, we are
    excited to have entered into a strategic collaboration with Regeneron to
    develop a potential first-in-class sustained release protein-based
    anti-VEGF hydrogel injection for the treatment of wet AMD and other
    serious retinal diseases.”
    Recent Highlights and Anticipated Near-Term
    Milestones for Key Development Programs

    DEXTENZA for the treatment of post-surgical ocular inflammation
    and pain

    • Ocular Therapeutix expects to resubmit its New Drug Application (NDA)
      for DEXTENZA (dexamethasone insert) 0.4 mg, for intracanalicular use
      in the treatment of ocular pain occurring after ophthalmic surgery by
      the end of 2016.
      • Ocular Therapeutix continues to build its commercial organization
        and infrastructure in preparation for the earliest possible launch
        of DEXTENZA.
      • The Company recently appointed Andy Hurley to the newly created
        position of chief commercial officer. Mr. Hurley has over two
        decades of sales, marketing, market access and commercial
        operations experience across the pharmaceutical industry and will
        be responsible for leading Ocular’s commercial organization,
        focusing on effective execution of the DEXTENZA launch and
        potential future product launches.
    • Ocular Therapeutix expects topline results from its third Phase 3
      clinical trial for DEXTENZA for post-surgical ocular inflammation and
      pain to be available in the fourth quarter of 2016.
      • If the Company obtains favorable results from this third Phase 3
        trial and subject to approval of the NDA for post-surgical ocular
        pain by the FDA, the Company intends to submit an NDA supplement
        for DEXTENZA to broaden the label to include a post-surgical
        inflammation indication.
    • At the recent Ocular Surgery News (OSN) 2016 annual meeting in New
      York City, Ocular Therapeutix reported positive results from a
      patient-reported outcomes survey of patients who were administered
      DEXTENZA. The survey population consists of patients from the first
      two Phase 3 trials with DEXTENZA for the treatment of post-surgical
      ocular inflammation and pain. In the trial, the majority of
      participants preferred DEXTENZA over eye drops:
      • 100% of participants stated the DEXTENZA insert was comfortable;
      • 96% rated their overall experience with DEXTENZA as convenient or
        very convenient;
      • 88% of participants stated that if they were to undergo cataract
        surgery again, they would request DEXTENZA; and
      • 84% of participants stated they were willing to pay more for
        DEXTENZA than eye drops.

    DEXTENZA for the treatment of allergic conjunctivitis

    • The Company plans to conduct a non-significant risk (NSR) study to
      confirm the effect on efficacy of the placebo insert used in previous
      studies compared with a rapidly absorbing placebo insert. Pending
      favorable results from this study, the Company plans to conduct an
      additional Phase 3 clinical trial to further evaluate DEXTENZA for the
      treatment of allergic conjunctivitis.

    OTX-TP (sustained release travoprost) for the treatment of
    glaucoma and ocular hypertension

    • Ocular Therapeutix has commenced enrollment in the first of two
      planned Phase 3 clinical trials for OTX-TP (sustained release
      travoprost) for the treatment of glaucoma and ocular hypertension.
      • The U.S.-based, prospective, multicenter, randomized,
        parallel-arm, placebo-controlled study is expected to enroll
        approximately 550 patients with open angle glaucoma or ocular
        hypertension at 50 clinical sites.
      • Importantly, the Phase 3 study design does not include a timolol
        comparator or validation arm, and does not have active or placebo
        eye drops administered in either arm. The comparator arm utilizes
        a non-drug eluting hydrogel-based intracanalicular insert.
      • The primary efficacy endpoint is statistically superior reduction
        of intraocular pressure (IOP) from baseline with OTX-TP compared
        to placebo at three diurnal time points (8am, 10am, 4pm) at 2, 6
        and 12 weeks following insertion.
    • The Company’s most recent results from ongoing NSR investigational
      device exemption (IDE) human clinical studies using the non-drug
      eluting version of the OTX-TP insert demonstrate significantly
      improved retention rates.

    Sustained release intravitreal depots for the treatment of serious
    retinal diseases

    • The Company entered into a strategic collaboration, option and license
      agreement with Regeneron Pharmaceuticals for the development of a
      sustained release formulation of aflibercept, the vascular endothelial
      growth factor (VEGF) trap for the treatment of wet age-related macular
      degeneration (wet AMD) and other serious retinal diseases.
      • Regeneron’s market share leading aflibercept is currently approved
        by the FDA for certain indications under the brand name EYLEA®.
      • Under the terms of the agreement, Regeneron has the option to
        obtain an exclusive license to use Ocular Therapeutix’s
        hydrogel-based technology for the development and
        commercialization of a sustained release formulation of
        aflibercept and other biologics targeting VEGF for ophthalmic
        indications.
      • Upon the exercise of the option, Ocular Therapeutix would receive
        a payment of $10 million from Regeneron and would be eligible to
        receive up to a total of $305 million in milestone payments,
        including the option exercise payment, for a sustained release
        version of aflibercept as well as tiered high single-digit to
        low-to-mid teen-digit royalties on potential future net sales.
    • The Company has demonstrated up to 6 months of sustained release of a
      few different anti-VEGF drugs using its hydrogel-based drug delivery
      technology with a good safety profile in preclinical studies completed
      to date.
    • Ocular Therapeutix retains all rights to develop its sustained-release
      hydrogel-based drug delivery platform with all other non-VEGF
      targeting compounds as well as with small molecule pharmaceuticals,
      including tyrosine-kinase inhibitors (TKIs), for other retinal
      diseases.
    • The Company also demonstrated minimal inflammatory response in vivo
      through 26 weeks with both its anti-VEGF protein and TKI depots
      currently in development.

    Third Quarter 2016 Financial Results

    • As of September 30, 2016, cash, cash equivalents and marketable
      securities totaled $75.7 million excluding $1.7 million in restricted
      cash. Cash used in operating activities was $7.3 million in the third
      quarter of 2016, compared to $9.7 million for the third quarter of
      2015. The decrease in cash position in the third quarter of 2016 was
      $8.1 million. There was $15.6 million in outstanding debt as of
      September 30, 2016 and principal payments are due starting January
      2017 over a 36-month period. The Company expects that cash, cash
      equivalents and marketable securities will be sufficient to fund
      operating expenses, debt service obligations and capital expenditures
      into the fourth quarter of 2017.
    • Ocular Therapeutix reported a net loss of approximately $9.6 million,
      or $(0.39) per share, for the quarter ended September 30, 2016,
      compared to a net loss of $11.5 million, or $(0.47) per share, for the
      quarter ended September 30, 2015. The third quarter 2016 results
      include $1.4 million in non-cash charges for stock-based compensation
      compared to $1.2 million in such non-cash charges in the third quarter
      of 2015.
    • Total costs and operating expenses for the quarter ended September 30,
      2016 were $9.7 million, as compared to $11.6 million for the quarter
      ended September 30, 2015. Research and development (R&D) expenses for
      the quarter ended September 30, 2016 were $5.7 million, compared to
      $8.3 million for the quarter ended September 30, 2015. The decrease in
      R&D expenses is primarily due to lower clinical trial costs. The
      patient enrollment phase of the third Phase 3 trial of DEXTENZA for
      the treatment of ocular inflammation and pain following ophthalmic
      surgery was completed in the second quarter of 2016 and the first of
      two planned Phase 3 trials of OTX-TP for the treatment of glaucoma and
      ocular hypertension was initiated late in the third quarter of 2016
      with the majority of costs expected to be incurred in future quarters.
      The decrease in R&D expenses was partially offset by an increase in
      sales and marketing expenses as we prepare for the potential launch of
      DEXTENZA for ocular pain indication subject to FDA approval of our NDA.
    • As of September 30, 2016, there were approximately 24.9 million shares
      issued and outstanding.

    Conference Call & Webcast Information
    Members of the Ocular Therapeutix management team will host a live
    conference call and webcast today at 8:30 am Eastern Time to discuss the
    Company’s financial results and provide a general business update.
    The live webcast can be accessed by visiting the investor section of the
    Company’s website at investors.ocutx.com. Please connect at least 15
    minutes prior to the live webcast to ensure adequate time for any
    software download that may be needed to access the webcast.
    Alternatively, please call 844-464-3934 (U.S.) or 765-507-2620
    (International) to listen to the conference call. The conference ID
    number for the live call will be 8389302. An archive of the webcast will
    be available until November 23, 2016 on the Company’s website.
    About Ocular Therapeutix, Inc.
    Ocular Therapeutix, Inc. (NASDAQ: OCUL) is a biopharmaceutical company
    focused on the development and commercialization of innovative therapies
    for diseases and conditions of the eye using its proprietary hydrogel
    platform technology. Ocular Therapeutix has submitted an NDA for
    post-surgical pain for its lead product candidate, DEXTENZA™
    (dexamethasone insert), which is in Phase 3 clinical development for
    post-surgical ocular inflammation and pain and allergic conjunctivitis.
    OTX-TP (travoprost insert) is in Phase 3 clinical development for
    glaucoma and ocular hypertension. Ocular Therapeutix is also evaluating
    injectable drug delivery depots for back-of-the-eye diseases. Ocular
    Therapeutix’s first product, ReSure® Sealant, is FDA-approved
    to seal corneal incisions following cataract surgery. For additional
    information about the Company, please visit www.ocutx.com.
    Forward Looking Statements
    Any statements in this press release about future expectations, plans
    and prospects for the Company including the development and regulatory
    status of the Company’s product candidates, such as the Company’s
    expectations and plans regarding regulatory submissions for and the
    timing and conduct of clinical trials of DEXTENZA™ for the treatment of
    post-surgical ocular inflammation and pain, including our expectations
    regarding the NDA filed with the FDA and the resubmission of the NDA,
    DEXTENZA for the treatment of allergic conjunctivitis, DEXTENZA for the
    treatment of inflammatory dry eye disease and OTX-TP for the treatment
    of glaucoma and ocular hypertension, the ongoing development of the
    Company’s sustained release hydrogel depot technology, the potential
    utility of any of the Company’s product candidates, potential
    commercialization of the Company’s product candidates, the potential
    benefits and future operation of the collaboration with Regeneron,
    including any potential future payments thereunder, the sufficiency of
    the Company’s cash resources and other statements containing the words
    “anticipate,” “believe,” “estimate,” “expect,” “intend”, “goal,” “may”,
    “might,” “plan,” “predict,” “project,” “target,” “potential,” “will,”
    “would,” “could,” “should,” “continue,” and similar expressions,
    constitute forward-looking statements within the meaning of The Private
    Securities Litigation Reform Act of 1995. Actual results may differ
    materially from those indicated by such forward-looking statements as a
    result of various important factors. Such forward-looking statements
    involve substantial risks and uncertainties that could cause the
    Company’s clinical development programs, future results, performance or
    achievements to differ significantly from those expressed or implied by
    the forward-looking statements. Such risks and uncertainties include,
    among others, those related to the timing and costs involved in
    commercializing ReSure® Sealant or any product candidate that
    receives regulatory approval, the initiation and conduct of clinical
    trials, availability of data from clinical trials and expectations for
    regulatory submissions and approvals, the Company’s scientific approach
    and general development progress, the availability or commercial
    potential of the Company’s product candidates, the sufficiency of cash
    resources and need for additional financing or other actions and other
    factors discussed in the “Risk Factors” section contained in the
    Company’s quarterly and annual reports on file with the Securities and
    Exchange Commission. In addition, the forward-looking statements
    included in this press release represent the Company’s views as of the
    date of this release. The Company anticipates that subsequent events and
    developments will cause the Company’s views to change. However, while
    the Company may elect to update these forward-looking statements at some
    point in the future, the Company specifically disclaims any obligation
    to do so. These forward-looking statements should not be relied upon as
    representing the Company’s views as of any date subsequent to the date
    of this release.

    Ocular Therapeutix, Inc.

    Statements of Operations and Comprehensive Loss

    (In thousands, except share and per share data)

    (Unaudited)

    Three Months Ended

    Nine Months Ended

    September 30,

    September 30,

    2016201520162015
    Revenue:
    Product revenue$477$388$1,334$960
    Collaboration revenue—4142354
    Total revenue:4774291,3761,314
    Costs and operating expenses:
    Cost of product revenue11291316227
    Research and development5,6868,26319,73719,725
    Selling and marketing1,2947984,1752,709
    General and administrative2,6232,4518,0026,575

    Total costs and operating expenses

    9,71511,60332,23029,236
    Loss from operations(9,238)(11,174)(30,854)(27,922)
    Other income (expense):
    Interest income6953236121
    Interest expense(426)(406)(1,262)(1,316)
    Other income (expense), net(1)3(1)6

    Total other expense, net

    (358)(350)(1,027)(1,189)
    Net loss(9,596)(11,524)(31,881)(29,111)
    Net loss per share, basic and diluted$(0.39)$(0.47)$(1.29)$(1.28)
    Weighted average common shares outstanding, basic and diluted24,853,88024,713,59724,792,08722,757,646
    Comprehensive loss:
    Net loss$(9,596)$(11,524)$(31,881)$(29,111)
    Other comprehensive income (loss):
    Unrealized gain (loss) on marketable securities(5)(8)73(16)
    Total other comprehensive income (loss)(5)(8)73(16)
    Total comprehensive loss$(9,601)$(11,532)$(31,808)$(29,127)

    Ocular Therapeutix, Inc.

    Balance Sheets

    (In thousands, except share and per share data)

    (Unaudited)

    September 30,

    December 31,

    2016

    2015

    Assets
    Current assets:
    Cash and cash equivalents$ 52,234$ 30,784
    Marketable securities23,51374,280
    Accounts receivable243193
    Inventory126134
    Prepaid expenses and other current assets7081,592
    Total current assets76,824106,983
    Property and equipment, net3,7953,095
    Restricted cash1,728228
    Total assets$ 82,347$ 110,306
    Liabilities and Stockholders’ Equity
    Current liabilities:
    Accounts payable$ 1,680$ 1,957
    Accrued expenses and deferred rent2,7913,379
    Deferred revenue—42
    Notes payable, net of discount, current3,772—
    Total current liabilities8,2435,378
    Deferred rent, long-term3268
    Notes payable, net of discount, long-term11,77815,272
    Total liabilities20,05320,718
    Commitments and contingencies (Note 11)
    Stockholders’ equity:

    Preferred stock, $0.0001 par value; 5,000,000 shares authorized at
    September 30, 2016 and

    December 31, 2015, no shares issued or outstanding at September
    30, 2016 and December 31, 2015

    ——

    Common stock, $0.0001 par value; 100,000,000 shares authorized at
    September 30, 2016 and

    December 31, 2015, 24,879,887 and 24,750,281 shares issued and
    outstanding at

    September 30, 2016 and December 31, 2015, respectively

    22
    Additional paid-in capital223,344218,830
    Accumulated deficit

    (161,057

    )

    (129,176

    )

    Accumulated other comprehensive income (loss)5

    (68

    )

    Total stockholders’ equity62,29489,588
    Total liabilities and stockholders’ equity$ 82,347$ 110,306
    drug candidateclinical studiesallergic conjunctivitisconference callclinical trialsdrug delivery technology
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