Ocugen Inc

Previous wording

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q and with our audited financial statements for the year ended December 31, 2023, included in our 2023 Annual Report. Some of the information contained in this discussion and analysis, including information with respect to our plans and strategy for our business and related financing, include forward-looking statements that involve risks, uncertainties, and assumptions. These statements are based on our beliefs and expectations about future outcomes and are subject to risks and uncertainties that could cause our actual results to differ materially from anticipated results. Except as required by law, we undertake no obligation to publicly update these forward-looking statements, whether as a result of new information, future events, or otherwise. You should read the "Risk Factors" section included in our 2023 Annual Report and First Quarter 10-Q, the "Risk Factors" and "Disclosure Regarding Forward-Looking Statements" sections of this Quarterly Report on Form 10-Q for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Current wording

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q and with our audited financial statements for the year ended December 31, 2023, included in our 2023 Annual Report. Some of the information contained in this discussion and analysis, including information with respect to our plans and strategy for our business and related financing, include forward-looking statements that involve risks, uncertainties, and assumptions. These statements are based on our beliefs and expectations about future outcomes and are subject to risks and uncertainties that could cause our actual results to differ materially from anticipated results. Except as required by law, we undertake no obligation to publicly update these forward-looking statements, whether as a result of new information, future events, or otherwise. You should read the "Risk Factors" section included in our 2023 Annual Report, 2024 Quarterly Reports, and the "Risk Factors" and "Disclosure Regarding Forward-Looking Statements" sections of this Quarterly Report on Form 10-Q for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Previous wording

•Modifier Gene Therapy Platform— Based on the use of nuclear hormone receptors ("NHRs"), we believe our modifier gene therapy platform has the potential to address many retinal diseases, including rare genetic diseases such as retinitis pigmentosa ("RP") (OCU400) and Leber congenital amaurosis ("LCA") (OCU400), with a gene-agnostic approach. We also believe our modifier gene therapy platform has the potential to address multifactorial retinal diseases including dry age-related macular degeneration ("dAMD") using OCU410, which affects millions of patients in the United States alone, and Stargardt disease (OCU410ST), which is also a rare genetic disease. We received clearance from FDA to initiate a Phase 3 trial for OCU400 for the treatment of RP and dosed our first patient in June 2024. After completion of Phase 1/2 for OCU400 for the treatment of LCA, we will discuss alignment for Phase 3 strategy with the FDA. Currently both OCU410, for the treatment of geographic atrophy ("GA"), an advanced form of dAMD, and OCU410ST, for the treatment of Stargardt disease, are in Phase 1/2 clinical development, with OCU410 initiating Phase 2 dosing. In OCU410 GA study, low, medium, and high dose cohorts were completed to date. In OCU410ST Stargardt study, low and medium dose cohorts were completed to date, and we are proceeding to dose with the high dose in the dose-escalation phase of the trial.

Current wording

•Modifier Gene Therapy Platform— Based on the use of nuclear hormone receptors ("NHRs"), we believe our modifier gene therapy platform has the potential to address many retinal diseases, including rare genetic diseases such as retinitis pigmentosa ("RP") (OCU400) and Leber congenital amaurosis ("LCA") (OCU400), with a gene-agnostic approach. We also believe our modifier gene therapy platform has the potential to address multifactorial retinal diseases including dry age-related macular degeneration ("dAMD") using OCU410, which affects millions of patients in the United States alone, and Stargardt disease (OCU410ST), which is a rare genetic disease. We are actively dosing patients in the U.S. in a Phase 3 liMeliGhT clinical trial for OCU400 for the treatment of RP. We also received approval from Health Canada to initiate a Phase 3 trial for OCU400 for the treatment of RP. In August 2024, we received approval from the FDA to begin our expanded access program (EAP) for the treatment of adult patients, aged 18 or older, with RP. After completion of a Phase 1/2 trial for OCU400 for the treatment of LCA, we will discuss alignment for Phase 3 strategy with the FDA. OCU410 is currently dosing in Phase 2 of the ArMaDa Phase 1/2 clinical trial for the treatment of geographic atrophy ("GA"), an advanced form of dAMD. Additionally, OCU410ST, has completed Phase 1 of the GARDian Phase 1/2 clinical trial for the treatment of Stargardt disease. Both OCU410 and OCU410ST studies have completed the low, medium, and high dose cohorts in the Phase 1 part of the Phase 1/2 trials to date.

Previous wording

•Novel Biologic Therapy for Retinal Diseases— OCU200 is a novel fusion protein consisting of two human proteins, tumstatin and transferrin. OCU200 possesses unique features which potentially enable it to treat vascular complications of diabetic macular edema ("DME"), diabetic retinopathy ("DR"), and wet AMD. Tumstatin is the active component of OCU200 and binds to integrin receptors, which play a crucial role in disease pathogenesis. Transferrin is expected to facilitate the targeted delivery of tumstatin into the retina and choroid and potentially help increase the interaction between tumstatin and integrin receptors. We continue to work with the FDA to address comments to lift the clinical hold on our IND application for OCU200.

Current wording

•Novel Biologic Therapy for Retinal Diseases— OCU200 is a novel fusion protein consisting of two human proteins, tumstatin and transferrin. OCU200 possesses unique features which potentially enable it to treat vascular complications of diabetic macular edema ("DME"), diabetic retinopathy ("DR"), and wet age related macular degeneration ("AMD"). Tumstatin is the active component of OCU200 and binds to integrin receptors, which play a crucial role in disease pathogenesis. Transferrin is expected to facilitate the targeted delivery of tumstatin into the retina and choroid and potentially help increase the interaction between tumstatin and integrin receptors. In October 2024, we announced that the FDA cleared the investigational new drug application for the Phase 1 clinical trial for OCU200. We expect initiation of the OCU200 clinical trial in the fourth quarter of 2024.

Previous wording

•Regenerative Cell Therapy Platform— Our Phase 3-ready regenerative cell therapy platform technology, which includes NeoCart (autologous chondrocyte-derived neocartilage), is being developed for the repair of knee cartilage injuries in adults. We received concurrence from the FDA on the confirmatory Phase 3 trial design and have completed renovating an existing facility into a current Good Manufacturing Practice ("GMP") facility to support clinical study and initial commercial launch. This facility is needed to generate patient-specific NeoCart implant from chondrocytes derived from knee biopsy.

Current wording

•Regenerative Cell Therapy Platform— Our Phase 3-ready regenerative cell therapy platform technology, which includes NeoCart (autologous chondrocyte-derived neocartilage), is being developed for the repair of knee cartilage injuries in adults. We received concurrence from the FDA on the confirmatory Phase 3 trial design and have completed renovating an existing facility into a current Good Manufacturing Practice ("cGMP") facility to support clinical study and initial commercial launch. This facility is needed to generate patient-specific NeoCart implant from chondrocytes derived from knee biopsy. We intend to initiate the Phase 3 trial contingent on adequate availability of funding.

Previous wording

•Inhaled Mucosal Vaccine Platform — Our next-generation, inhaled mucosal vaccine platform includes OCU500, a COVID-19 vaccine; OCU510, a seasonal quadrivalent flu vaccine; and OCU520, a combination quadrivalent seasonal flu and COVID-19 vaccine. We have completed IND-enabling studies and GMP manufacturing of clinical trial material for OCU500. We are currently collaborating with the National Institute of Allergy and Infectious Diseases ("NIAID") for early clinical studies for OCU500. NIAID plans to submit an IND to initiate a Phase 1 clinical trial in 2024. We are continuing discussions with relevant government agencies as well as strategic partners regarding developmental funding for our OCU510 and OCU520 platforms.

Current wording

•Inhaled Mucosal Vaccine Platform — Our next-generation, inhaled mucosal vaccine platform includes OCU500, a COVID-19 vaccine; OCU510, a seasonal quadrivalent flu vaccine; and OCU520, a combination quadrivalent seasonal flu and COVID-19 vaccine. We have completed IND-enabling studies and GMP manufacturing of clinical trial material for OCU500. We are currently collaborating with the National Institute of Allergy and Infectious Diseases ("NIAID") for early clinical studies for OCU500. NIAID intends to initiate a Phase 1 clinical trial after IND clearance. We are continuing discussions with relevant government agencies as well as strategic partners regarding developmental funding for our OCU510 and OCU520 platforms.

Previous wording

We are developing a modifier gene therapy platform designed to fulfill unmet medical needs related to retinal diseases, including inherited retinal diseases ("IRDs"), such as RP, LCA, Stargardt disease; and multifactorial diseases such as dAMD. Our modifier gene therapy platform is based on the use of NHRs, which have the potential to achieve homeostasis — the basic biological processes in the retina to restore a healthy state from a diseased state. Unlike single gene replacement therapies, which only target one genetic mutation, our modifier gene therapy platform, through its use of NHRs, represents a unique, gene-agnostic approach to address not just the mutated gene but provide a molecular "reset" of health and survival of gene networks. OCU400, our first product candidate in our modifier gene therapy platform, has received Orphan Drug Designation ("ODD") from the FDA for RP and LCA, a regenerative medicine advanced therapy ("RMAT") designation for the treatment of RP associated with NR2E3 and rhodopsin ("RHO") mutations from the FDA, and Orphan Medicinal Product Designation ("OMPD") from the European Commission ("EC"), based on the recommendation of the European Medicines Agency ("EMA"), for RP and LCA. These broad ODD, RMAT, and OMPD designations further support the broad (gene-agnostic) therapeutic potential of OCU400 to treat multiple IRDs such as RP and LCA associated with mutations in multiple genes.

Current wording

We are developing a modifier gene therapy platform designed to fulfill unmet medical needs related to retinal diseases, including inherited retinal diseases ("IRDs"), such as RP, LCA, Stargardt disease; and multifactorial diseases such as dAMD. Our modifier gene therapy platform is based on the use of NHRs, which have the potential to achieve homeostasis — the basic biological processes in the retina to restore a healthy state from a diseased state. Unlike single gene replacement therapies, which only target one genetic mutation, our modifier gene therapy platform, through its use of NHRs, represents a unique, gene-agnostic approach to address not just the mutated gene but provide a molecular "reset" of health and survival of gene networks. OCU400, our lead product candidate in our modifier gene therapy platform, has received Orphan Drug Designation ("ODD") from the FDA for RP and LCA, a regenerative medicine advanced therapy ("RMAT") designation for the treatment of RP associated with NR2E3 and rhodopsin ("RHO") mutations from the FDA, and Orphan Medicinal Product Designation ("OMPD") from the European Commission ("EC"), based on the recommendation of the European Medicines Agency ("EMA"), for RP and LCA. These broad ODD, RMAT, and OMPD designations further support the broad (gene-agnostic) therapeutic potential of OCU400 to treat multiple IRDs such as RP and LCA associated with mutations in multiple genes.

Previous wording

In April 2024, the FDA cleared our IND amendment to initiate a Phase 3 trial of OCU400 for RP. OCU400 is the first gene therapy program to enter Phase 3 with a broad RP indication. This Phase 3 trial will enroll 150 subjects, distributed 1:1 into two separate arms (RHO: N=75, and Gene Agnostic: N=75). In each arm subjects will be further randomized into 2:1 ratio to treated and untreated control groups. Subjects will be followed for a year after dosing for primary end point analyses. In the Phase 1/2 OCU400 clinical trial a MLMT scale was the primary functional endpoint. For the Phase 3 OCU400 clinical trial, an updated mobility course will be used, Luminance Dependent Navigation Assessment ("LDNA") that includes a wider range of light intensity (0.04-500 Lux) and Lux Levels (0-9) with a uniform correlation between Lux level and Lux intensity.

Current wording

In April 2024, the FDA cleared our IND amendment to initiate a Phase 3 liMeliGhT clinical trial of OCU400 for RP. OCU400 is the first gene therapy program to enter Phase 3 with a broad RP indication. This Phase 3 trial will enroll 150 subjects, distributed 1:1 into two separate arms (RHO: N=75, and Gene Agnostic: N=75). In each arm subjects will be further randomized into 2:1 ratio to treated and untreated control groups. Subjects will be followed for a year after dosing for primary end point analyses. In the Phase 1/2 OCU400 clinical trial a MLMT scale was the primary functional endpoint. For the Phase 3 OCU400 clinical trial, an updated mobility course will be used, Luminance Dependent Navigation Assessment ("LDNA") that includes a wider range of light intensity (0.04-500 Lux) and Lux Levels (0-9) with a uniform correlation between Lux level and Lux intensity. More than 60% of intent-to-treat (ITT) patients from the Phase 1/2 clinical trial (RHO and NR2E3) meet the responder criteria (Responder ≥ 2 Lux level improvement) for Phase 3.

Previous wording

In April 2024, the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) reviewed the study design, endpoints and planned statistical analysis of the pivotal OCU400 Phase 3 liMeliGhT clinical trial for retinitis pigmentosa (RP) and provided acceptability of the U.S.-based trial for submission of a Marketing Authorization Application (MAA). The EMA provided this opinion based on safety, tolerability, and efficacy of OCU400 demonstrated in the Phase 1/2 study.

Current wording

In April 2024, the Committee for Medicinal Products for Human Use (CHMP) of the EMA reviewed the study design, endpoints and planned statistical analysis of the pivotal OCU400 Phase 3 liMeliGhT clinical trial for RP and provided acceptability of the U.S.-based trial for submission of a Marketing Authorization Application (MAA). The EMA provided this opinion based on safety, tolerability, and efficacy of OCU400 demonstrated in the Phase 1/2 study.

Previous wording

In June 2024, the first patient was dosed in the Phase 3 trial for OCU400 for the treatment of RP. With the first dosing of the Phase 3 trial, OCU400 remains on track for the 2026 BLA and MAA approval targets. After completion of Phase 1/2 for OCU400 for the treatment of LCA, we will discuss alignment for Phase 3 strategy with the FDA.

Current wording

In June 2024, the first patient was dosed in the Phase 3 clinical trial for OCU400 for the treatment of RP. The Phase 3 clinical trial is on track to complete enrollment in the first half of 2025, file the Biologics License Application ("BLA") and MAA in the first half of 2026, and pursue commercialization in 2027. After completion of Phase 1/2 for OCU400 for the treatment of LCA, we will discuss alignment for Phase 3 strategy with the FDA.

Previous wording

In August 2024, we received notification from FDA to begin our expanded access program ("EAP") for the treatment of adult patients with RP with OCU400. This program is available for patients with early, intermediate to advanced RP with at least minimal retinal preservation who may benefit from the mechanism of action of OCU400 prior to approval of the BLA.

Current wording

In August 2024, we received notification from the FDA to begin our EAP for the treatment of adult patients with RP with OCU400. This program is available for patients with early, intermediate to advanced RP with at least minimal retinal preservation who may benefit from the mechanism of action of OCU400 prior to approval of the BLA.

Previous wording

We are also developing OCU410 and OCU410ST, utilizing the nuclear receptor gene RAR-related orphan receptor A ("RORA"), for the treatment of GA secondary to dAMD and Stargardt disease, respectively. OCU410 is a potential one-time, curative therapy with a single sub-retinal injection. OCU410 targets multiple pathways associated with AMD pathogenesis, in contrast to products currently approved or under development that treat only one cause of GA, require multiple injections per year, and have safety considerations. OCU410ST has received ODD from the FDA for the treatment of ABCA4-associated retinopathies, including Stargardt disease.

Current wording

OCU410 and OCU410ST are being developed utilizing the nuclear receptor gene RAR-related orphan receptor A ("RORA"), for the treatment of GA secondary to dAMD and Stargardt disease, respectively. OCU410 is a potential one-time, curative therapy with a single sub-retinal injection. OCU410 targets multiple pathways associated with AMD pathogenesis, in contrast to products currently approved or under development that treat only one cause of GA, require multiple injections per year, and have safety considerations. OCU410ST has received ODD from the FDA for the treatment of ABCA4-associated retinopathies, including Stargardt disease.

Previous wording

In December 2023, the first patient was dosed in the Phase 1/2 trial to assess the safety and efficacy of OCU410 for geographic atrophy ("GA") secondary to dAMD. Phase 1 is a multicenter, open-label, dose-ranging study. Phase 2 is a randomized expansion phase in which subjects will be randomized in a 1:1:1 ratio to either one of two OCU410 dose groups or to an untreated control group. In May 2024, we announced that the Data Safety and Monitoring Board ("DSMB") approved to proceed dosing with the high dose of OCU410 in the dose-escalation phase of the study and concurrently initiate Phase 2 dosing. In July 2024, we announced the high dose was complete in the third cohort of Phase 1/2 study. Nine patients with GA have been dosed in the Phase 1/2 trial to date (low, medium and high dose).

Current wording

Phase 2 of the OCU410 ArMaDa clinical trial is a randomized expansion phase in which subjects will be randomized in a 1:1:1 ratio to either one of two OCU410 dose groups or to an untreated control group. We plan to complete dosing in the Phase 1/2 ArMaDa clinical trial by early 2025.

Previous wording

In November 2023, the first patient was dosed in the Phase 1/2 trial to assess the safety and efficacy of OCU410ST for Stargardt disease. Phase 1 is a multicenter, open-label, dose ranging study. Phase 2 will be a randomized, outcome accessor-blinded, dose-expansion study in which adult and pediatric subjects will be randomized in a 1:1:1 ratio to either one of two OCU410ST dose groups or to an untreated control group. In June 2024, we announced that the Data Safety and Monitoring Board ("DSMB") approved to proceed dosing with the high dose of OCU410ST, and we initiated dosing in the high dose cohort.

Current wording

In November 2023, the first patient was dosed in the Phase 1/2 trial to assess the safety and efficacy of OCU410ST for Stargardt disease. Phase 1 is a multicenter, open-label, dose ranging study. Phase 2 will be a randomized, outcome accessor-blinded, dose-expansion study in which adult and pediatric subjects will be randomized in a 1:1:1 ratio to either one of two OCU410ST dose groups or to an untreated control group. In August 2024, we announced the high dose was complete in the third cohort of Phase 1/2 study. In October 2024, we announced that the DSMB approved proceeding to Phase 2 using high and medium doses.

Previous wording

We are developing OCU200, which is a novel fusion protein containing parts of human transferrin and tumstatin. OCU200 is designed to treat DME, DR, and Wet AMD. We have completed the technology transfer of manufacturing processes to our contract development and manufacturing organization ("CDMO") and have produced trial materials to initiate a Phase 1 trial. In April 2023, the FDA placed our IND application to initiate a Phase 1 trial targeting DME on clinical hold, as part of the FDA's request for additional information related to CMC. We have submitted a response to the FDA with additional information. We continue to work with the FDA to address comments to lift the clinical hold.

Current wording

We are developing OCU200, which is a novel fusion protein containing parts of human transferrin and tumstatin. OCU200 is designed to treat DME, DR, and wet AMD. We have completed the technology transfer of manufacturing processes to our contract development and manufacturing organization ("CDMO") and have produced trial materials to initiate a Phase 1 trial. In April 2023, the FDA placed our IND application to initiate a Phase 1 trial targeting DME on clinical hold, as part of the FDA's request for additional information related to CMC. In October 2024, we announced that the FDA lifted the clinical hold on our IND application for the Phase 1 clinical trial for OCU200. We expect initiation of the OCU200 clinical trial in the fourth quarter of 2024.

Previous wording

NeoCart is a Phase 3-ready, regenerative cell therapy technology that combines breakthroughs in bioengineering and cell processing to enhance the autologous cartilage repair process. NeoCart is a three-dimensional tissue-engineered disc of new cartilage that is manufactured by growing the patient's own chondrocytes, the cells responsible for maintaining cartilage health. Current surgical and nonsurgical treatment options are limited in their efficacy and durability. In prior clinical studies, Phase 2 and Phase 3, NeoCart has shown potential to accelerate healing, reduce pain, and provide regenerative native-like cartilage strength with durable benefits post transplantation. NeoCart was shown to be generally well-tolerated and demonstrated greater clinical efficacy than microfracture surgery at two years after treatment. Based on this clinical benefit, the FDA granted a RMAT designation to NeoCart for the repair of full-thickness lesions of knee cartilage injuries in adults. Additionally, we received concurrence from the FDA on the confirmatory Phase 3 trial design where chondroplasty will be used as a control group. We have completed renovating an existing facility into a current Good Manufacturing Practice ("GMP") facility in accordance with the FDA's regulations in support of NeoCart manufacturing for personalized Phase 3 trial material. We intend to initiate the Phase 3 trial contingent on adequate availability of funding.

Current wording

NeoCart is a Phase 3-ready, regenerative cell therapy technology that combines breakthroughs in bioengineering and cell processing to enhance the autologous cartilage repair process. NeoCart is a three-dimensional tissue-engineered disc of new cartilage that is manufactured by growing the patient's own chondrocytes, the cells responsible for maintaining cartilage health. Current surgical and nonsurgical treatment options for knee cartilage injuries in adults are limited in their efficacy and durability. In prior clinical studies, Phase 2 and Phase 3, NeoCart has shown potential to accelerate healing, reduce pain, and provide regenerative native-like cartilage strength with durable benefits post transplantation. NeoCart was shown to be generally well-tolerated and demonstrated greater clinical efficacy than microfracture surgery at two years after treatment. Based on this clinical benefit, the FDA granted a RMAT designation to NeoCart for the repair of full-thickness lesions of knee cartilage injuries in adults. Additionally, we received concurrence from the FDA on the confirmatory Phase 3 trial design where chondroplasty will be used as a control group. We have completed renovating an existing facility into a cGMP facility in accordance with the FDA's regulations in support of NeoCart manufacturing for personalized Phase 3 trial material. We intend to initiate the Phase 3 trial contingent on adequate availability of funding.

Previous wording

We are party to an exclusive license agreement (as amended, "WU License Agreement") with The Washington University in St. Louis ("Washington University"), pursuant to which we licensed the rights to develop, manufacture, and commercialize an inhaled mucosal COVID-19 vaccine for the prevention of COVID-19 in the United States, Europe, Japan, South Korea, Australia, China, and Hong Kong (the "Mucosal Vaccine Territory"). In addition, we internally developed technology related to the flu and COVID-19's vaccine design and filed intellectual property. We are developing a next-generation, inhalation-based mucosal vaccine platform based on a novel ChAd vector, which includes OCU500, a COVID-19 vaccine; OCU510, a seasonal quadrivalent flu vaccine; and OCU520, a combination quadrivalent seasonal flu and COVID-19 vaccine. Our inhaled mucosal vaccine platform is driven by our conviction to serve a major public health concern, which requires the endorsement and support of government funding in order to develop and ultimately commercialize our vaccine candidates. As these vaccine candidates are being developed to be administered via inhalation, we believe they have the potential to generate rapid local immune response in the upper airways and lungs, where viruses enter and infect the body. We believe this novel delivery route may help reduce or prevent infection and transmission as well as provide protection against new virus variants. In October 2023, OCU500 was selected by the NIAID Project NextGen for inclusion in clinical trials. OCU500 will be tested via two different mucosal routes, inhalation and intranasal delivery. NIAID plans to submit an IND to initiate a Phase 1 clinical trial in 2024. We are continuing discussions with relevant government agencies as well as strategic partners regarding developmental funding for our OCU510 and OCU520 platforms.

Current wording

We are party to an exclusive license agreement (as amended, "WU License Agreement") with The Washington University in St. Louis ("Washington University"), pursuant to which we licensed the rights to develop, manufacture, and commercialize an inhaled mucosal COVID-19 vaccine for the prevention of COVID-19 in the United States, Europe, Japan, South Korea, Australia, China, and Hong Kong (the "Mucosal Vaccine Territory"). In addition, we internally developed technology related to the flu and COVID-19's vaccine design and filed intellectual property. We are developing a next-generation, inhalation-based mucosal vaccine platform based on a novel ChAd vector, which includes OCU500, a COVID-19 vaccine; OCU510, a seasonal quadrivalent flu vaccine; and OCU520, a combination quadrivalent seasonal flu and COVID-19 vaccine. Our inhaled mucosal vaccine platform is driven by our conviction to serve a major public health concern, which requires the endorsement and support of government funding in order to develop and ultimately commercialize our vaccine candidates. As these vaccine candidates are being developed to be administered via inhalation, we believe they have the potential to generate rapid local immune response in the upper airways and lungs, where viruses enter and infect the body. We believe this novel delivery route may help reduce or prevent infection and transmission as well as provide protection against new virus variants. In October 2023, OCU500 was selected by the NIAID Project NextGen for inclusion in clinical trials. OCU500 will be tested via two different mucosal routes, inhalation and intranasal delivery. NIAID intends to initiate a Phase 1 clinical trial after IND clearance. We are continuing discussions with relevant government agencies as well as strategic partners regarding developmental funding for our OCU510 and OCU520 platforms.

Previous wording

Collaborative arrangement revenue increased by $0.7 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. The increase was due to our quarterly reassessment of the amount of co-development services provided by us to the business partner in the collaboration agreement.

Current wording

Collaborative arrangement revenue decreased by $2.6 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The decrease was due to our quarterly reassessment of the amount of co-development services provided by us to the business partner in the collaboration agreement.

Previous wording

Research and development expense decreased by $5.7 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. The decrease was primarily due to $6.4 million related to the termination of the COVAXIN program. The decrease was partially offset by an increase of$0.8 million related to OCU500, which is driven by an increase in preclinical activities and GMP manufacturing of Phase 1 clinical trial material.

Current wording

Research and development expense increased by $1.1 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The increase was primarily due to $0.6 million related to OCU500, which is driven by an increase in preclinical activities and GMP manufacturing of Phase 1 clinical trial material;$0.5 millionin employee-related expenses; $0.5 million primarily driven by an increase in depreciation expense. These increases were partially offset by a decrease of $0.5 million related to the termination of the COVAXIN program; $0.2 million related to OCU200, which is driven by a decrease in preclinical activities.

Previous wording

General and administrative expense decreased by $1.8 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. The decrease was primarily due to $1.0 million in professional services fees and $0.8 million related to reduced headcount.

Current wording

General and administrative expense decreased by $2.8 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The decrease was primarily due to $2.2 million in professional services fees and $0.6 million related to reduced headcount.

Previous wording

Other income (expense), net decreased by $0.3 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. The decrease was primarily due to $0.3 million in interest earned on our cash, cash equivalents, and restricted cash as well as our investment balance.

Current wording

Other income (expense), net decreased by $0.4 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The decrease was primarily due to $0.4 million in interest earned on our cash and restricted cash, which had a lower average balance compared to prior year.

Previous wording

The following table summarizes the results of our operations for the six months ended June 30, 2024 and 2023 (in thousands):

Current wording

The following table summarizes the results of our operations for the nine months ended September 30, 2024 and 2023 (in thousands):

Previous wording

We believe the following table provides more transparency as to the type of research and development expenses incurred. The following table summarizes our research and development expenses by product candidate for the six months ended June 30, 2024 and 2023 (in thousands):

Current wording

We believe the following table provides more transparency as to the type of research and development expenses incurred. The following table summarizes our research and development expenses by product candidate for the nine months ended September 30, 2024 and 2023 (in thousands):

Previous wording

Collaborative arrangement revenue increased by $1.2 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The increase was due to our quarterly reassessment of the amount of co-development services provided by us to the business partner in the collaboration agreement.

Current wording

Collaborative arrangement revenue decreased by $1.3 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The decrease was due to our quarterly reassessment of the amount of co-development services provided by us to the business partner in the collaboration agreement.

Previous wording

Research and development expense decreased by $9.0 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The decrease was primarily due to $8.2 million related to the termination of the COVAXIN program and $2.5 million related to reduced headcount. These decreases were partially offset by an increase of$1.1 million related to OCU400, whichis driven by an increase in co-development services provided by our collaboration arrangements business partner and$0.9 million related to OCU500, which is driven by an increase in preclinical activities and GMP manufacturing of Phase 1 clinical trial material.

Current wording

Research and development expense decreased by $8.0 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The decrease was primarily due to $8.7 million related to the termination of the COVAXIN program and $2.0 million related to reduced headcount. These decreases were partially offset by an increase of$1.6 million related to OCU500, which is driven by an increase in preclinical activities and GMP manufacturing of Phase 1 clinical trial material and$1.2 million related to OCU400, whichis driven by an increase in non-cash co-development services provided by our collaboration arrangements business partner.

Previous wording

General and administrative expense decreased by $3.7 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The decrease was primarily due to $0.9 million in professional services fees, $2.4 million related to reduced headcount, and $0.3 millionin insurance expense.

Current wording

General and administrative expense decreased by $6.5 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The decrease was primarily due to $3.1 million in professional service fees and $3.1 million related to reduced headcount.

Previous wording

Other income (expense), net decreased by $0.7 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The decrease was primarily due to $0.7 million in interest earned on our cash, cash equivalents, and restricted cash as well as our investment balance.

Current wording

Other income (expense), net decreased by $1.2 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The decrease was primarily due to $1.1 million in interest earned on our cash and restricted cash, which had a lower average balance compared to prior year.

Previous wording

As of June 30, 2024, we had $16.0 million in cash, cash equivalents, and restricted cash. We have not generated revenue from our product candidates to date, and have primarily funded our operations through the sale of common stock, warrants to purchase common stock, the issuance of convertible notes and debt, and grant proceeds. Since our inception and through June 30, 2024, we have raised an aggregate of $301.2 million to fund our operations, of which $287.4 million was from gross proceeds from the sale of our common stock and warrants, $10.3 million was from the issuance of convertible notes, $3.3 million was from the issuance of debt, and $0.2 million was from grant proceeds.

Current wording

As of September 30, 2024, we had $38.7 million in cash. We have not generated revenue from our product candidates to date, and have primarily funded our operations through the sale of common stock, warrants to purchase common stock, the issuance of convertible notes and debt, and grant proceeds. Since our inception and through September 30, 2024, we have raised a gross aggregate of $338.9 million to fund our operations, of which $325.1 million was from gross proceeds from the sale of our common stock and warrants, $10.3 million was from the issuance of convertible notes, $3.3 million was from the issuance of debt, and $0.2 million was from grant proceeds.

Previous wording

Since our inception, we have devoted substantial resources to research and development and have incurred significant net losses and may continue to incur net losses in the future. We incurred net losses of approximately $27.2 million and $40.4 million for the six months ended June 30, 2024 and 2023, respectively. As of June 30, 2024, we had an accumulated deficit of $313.4 million. In addition, we had accounts payable and accrued expenses and other current liabilities of $16.2 and indebtedness of $2.9 million.

Current wording

Since our inception, we have devoted substantial resources to research and development and have incurred significant net losses and may continue to incur net losses in the future. We incurred net losses of approximately $40.2 million and $52.1 million for the nine months ended September 30, 2024 and 2023, respectively. As of September 30, 2024, we had an accumulated deficit of $326.3 million. In addition, we had accounts payable and accrued expenses and other current liabilities of $14.0 million and indebtedness of $2.9 million.

Previous wording

The following table provides a summary of our cash flows for the six months ended June 30, 2024 and 2023 (in thousands):

Current wording

The following table provides a summary of our cash flows for the nine months ended September 30, 2024 and 2023 (in thousands):

Previous wording

Cash used in operating activities was $20.5 million for the six months ended June 30, 2024, and primarily consisted of a net loss of $27.2 million adjusted for non-cash items including stock-based compensation of $3.7 million, depreciation and amortization of $0.8 million, non-cash lease expense of $0.2 million, other non-cash items of $1.8 million, and a change in net working capital of $0.2 million.

Current wording

Cash used in operating activities was $31.8 million for the nine months ended September 30, 2024, and primarily consisted of a net loss of $40.2 million adjusted for non-cash items including stock-based compensation of $5.6 million, depreciation and amortization of $1.4 million, non-cash lease expense of $0.6 million, non-cash expense from collaborative arrangements, net of $2.4 million, other non-cash items of $0.1 million, and a change in net working capital of $3.1 million.

Previous wording

Cash used in operating activities was $37.0 million for the six months ended June 30, 2023, and primarily consisted of a net loss of $40.4 million adjusted for non-cash items including $4.4 million in expenses related to COVAXIN, due to the impairment of the advanced payment for the supply of COVAXIN as well as the associated loss on the disposal of related fixed assets, stock-based compensation of $5.3 million, non-cash expense from collaborative arrangements, net of $1.4 million, non-cash lease expense of $0.3 million, depreciation and amortization of $0.4 million, other non-cash items of $0.3 million, and a change in net working capital of $8.7 million.

Current wording

Cash used in operating activities was $50.8 million for the nine months ended September 30, 2023, and primarily consisted of a net loss of $52.1 million adjusted for non-cash items including $4.4 million in expenses related to COVAXIN, due to the impairment of the advanced payment for the supply of COVAXIN as well as the associated loss on the disposal of related fixed assets, stock-based compensation of $7.5 million, non-cash expense from collaborative arrangements, net of $1.1 million, non-cash lease expense of $0.4 million, depreciation and amortization of $0.5 million, other non-cash items of $0.3 million, and a change in net working capital of $10.7 million.

Previous wording

Cash used in investing activities was $2.9 million for the six months ended June 30, 2024 , and primarily consisted of payments related to the purchases of property and equipment. Cash provided by investing activities was $9.2 million for the six months ended June 30, 2023, and primarily consisted of gross proceeds of $17.5 million from the maturities of marketable securities, classified as available-for-sale, during the six months ended June 30, 2023, which was partially offset by purchases of $3.9 million of marketable securities, classified as available-for-sale, during the six months ended June 30, 2023 as well as purchases of $4.4 million of property and equipment during the six months ended June 30, 2023.

Current wording

Cash used in investing activities was $3.4 million for the nine months ended September 30, 2024, and primarily consisted of payments related to the purchases of property and equipment. Cash provided by investing activities was $5.8 million for the nine months ended September 30, 2023, and primarily consisted of gross proceeds of $17.5 million from the maturities of marketable securities, classified as available-for-sale, during the nine months ended September 30, 2023, which was partially offset by purchases of $3.9 million of marketable securities, classified as available-for-sale, during the nine months ended September 30, 2023 as well as purchases of $7.8 million of property and equipment during the nine months ended September 30, 2023.

Previous wording

Cash used in financing activities was $0.1 million for the six months ended June 30, 2024 compared to cash provided by financing activities of $20.9 million for the six months ended June 30, 2023. During the six months ended June 30, 2024, cash used by financing activities primarily consisted of gross proceeds and tax payments of a combined $0.1 million from issuance of common stock. During the six months ended June 30, 2023, cash provided financing activities primarily consisted of gross proceeds of $20.7 million received from the May 2023 Public Offering and pursuant to the Sales Agreement.

Current wording

Cash provided by financing activities was $34.7 million for the nine months ended September 30, 2024 compared to cash provided by financing activities of $20.9 million for the nine months ended September 30, 2023. During the nine months ended September 30, 2024, cash provided by financing activities primarily consisted of gross proceeds of $37.6 million received from the July 2024 Public Offering before deducting equity issuance costs of $2.9 million. During the nine months ended September 30, 2023, cash provided financing activities primarily consisted of gross proceeds of $20.8 million received from the May 2023 Public Offering and pursuant to the Sales Agreement.

Previous wording

As of June 30, 2024, we had cash, cash equivalents, and restricted cash of approximately $16.0 million. This amount plus the amounts raised subsequent to June 30, 2024, as discussed in Note 14, will not meet our capital requirements over the next 12 months. We believe that our cash and cash equivalents as of June 30, 2024, as well as the amount raised subsequent to June 30, 2024, are expected to enable us to fund our operations into the third quarter of 2025. Due to the inherent uncertainty involved in making estimates and the risks associated with the research, development, and commercialization of biotechnology products, we may have based this estimate on assumptions that may prove to be wrong, and our operating plan may change as a result of many factors currently unknown to us. We will need to raise significant additional capital in order to fund our operations until we recognize significant revenue from product sales. Our management is currently evaluating different strategies to obtain the funding required for our future operations. These strategies may include, but are not limited to: public and private placements of equity and/or debt, payments from potential strategic research and development arrangements, sales of assets, licensing and/or collaboration arrangements with pharmaceutical companies or other institutions, funding from the government, particularly for the development of our novel inhaled mucosal vaccine platform, or funding from other third parties. Our ability to secure funding is subject to numerous risks and uncertainties, including, but not limited to the impact of the geopolitical turmoil, macroeconomic conditions, and the impact of inflation and as a result, there can be no assurance that these funding efforts will be successful. If we cannot obtain the necessary funding, we will need to delay, scale back, or eliminate some or all of our research and development programs and commercialization efforts; consider other various strategic alternatives, including a merger or sale; or cease operations. If we cannot expand our operations or otherwise capitalize on our business opportunities because we lack sufficient capital, our business, financial condition, and results of operations could be materially adversely affected.

Current wording

As of September 30, 2024, we had cash of approximately $38.7 million. This amount will not be sufficient to fund our operations over the next 12 months. Due to the inherent uncertainty involved in making estimates and the risks associated with the research, development, and commercialization of biotechnology products, we may have based this estimate on assumptions that may prove to be wrong, and our operating plan may change as a result of many factors currently unknown to us. Given this uncertainty, and despite the additional funding from the debt transaction with Avenue Capital, we will need to raise significant additional capital in order to fund our operations until we recognize significant revenue from product sales. Our management continues to evaluate different strategies to obtain the funding required for our future operations. These strategies may include, but are not limited to: public and private placements of equity and/or debt, payments from potential strategic research and development arrangements, sales of assets, licensing and/or collaboration arrangements with pharmaceutical companies or other institutions, funding from the government, particularly for the development of our novel inhaled mucosal vaccine platform, or funding from other third parties. Our ability to secure funding is subject to numerous risks and uncertainties, including, but not limited to the impact of the geopolitical turmoil, macroeconomic conditions, and the impact of inflation and as a result, there can be no assurance that these funding efforts will be successful. If we cannot obtain the necessary funding, we will need to delay, scale back, or eliminate some or all of our research and development programs and commercialization efforts; consider other various strategic alternatives, including a merger or sale; or cease operations. If we cannot expand our operations or otherwise capitalize on our business opportunities because we lack sufficient capital, our business, financial condition, and results of operations could be materially adversely affected.