Nature of Business

9 Months Ended

Sep. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of Business

Nature of Business

Ocugen, Inc., together with its wholly owned subsidiaries ("Ocugen" or the "Company"), is a biotechnology company focused on discovering, developing, and commercializing novel gene and cell therapies, biologics, and vaccines that improve health and offer hope for patients across the globe. The Company is headquartered in Malvern, Pennsylvania, and manages its business as one operating segment.

Modifier Gene Therapy Platform

The Company is developing a modifier gene therapy platform designed to fulfill unmet medical needs related to retinal diseases, including inherited retinal diseases ("IRDs"), such as retinitis pigmentosa ("RP"), Leber congenital amaurosis ("LCA"), and Stargardt disease, as well as dry age-related macular degeneration ("AMD") with a gene-agnostic therapy. The Company's modifier gene therapy platform is based on the use of nuclear hormone receptors ("NHRs"), which have the potential to restore homeostasis—the basic biological processes in the retina. Unlike single-gene replacement therapies, which only target one genetic mutation, the Company believes that its modifier gene therapy platform, through its use of NHRs, represents a novel approach that has the potential both to address multiple retinal diseases caused by mutations in multiple genes with a gene-agnostic therapy and to address complex diseases that are potentially caused by imbalances in multiple gene networks.

The Company believes that OCU400 has the potential to be broadly effective in restoring retinal integrity and function across a range of genetically diverse IRDs, including RP and LCA. OCU400 has received Orphan Drug Designation ("ODD") from the United States Food and Drug Administration ("FDA") and Orphan Medicinal Product Designation ("OMPD") from the European Commission ("EC") for the treatment of RP and LCA.

The Company is conducting a Phase 1/2 trial to assess the safety and efficacy of unilateral subretinal administration of OCU400 in patients with nuclear receptor subfamily 2 group E member 3 ("NR2E3") and rhodopsin ("RHO")-related RP and centrosomal protein 290 ("CEP290")-related LCA in the United States. The Company has completed dosing adult RP patients as well as completed dosing three LCA patients including a pediatric patient in the Phase 1/2 study. In April 2023, the Company announced positive preliminary data among adult RP patients treated in the first two cohorts of the Phase 1/2 trial. In Cohorts 1 and 2 of the trial, seven participants with severe vision impairment due to RP associated with the RHO and NR2E3 gene mutations received a unilateral subretinal injection of either a low dose or a medium dose of OCU400, respectively. The preliminary results showed a favorable safety profile and visual improvements after treatment with OCU400 as measured by multi-luminance mobility testing ("MLMT") and best corrected visual acuity assessment ("BCVA").

In September 2023, the Company announced a positive trial update for 12 subjects who had completed a minimum follow up of six months. The trial update was an extension of the positive preliminary data mentioned above. The positive trial update demonstrated that OCU400 continued to be generally safe and well-tolerated in subjects across different mutations and dose levels as measured by MLMT, BCVA, and Low-Luminance Visual Acuity ("LLVA"). 83%, 83%, and 75% of participants demonstrated stabilization or improvements in OCU400 treated eyes on BCVA, LLVA, and MLMT scores, respectively from baseline. 86% of participants with the RHO gene mutation experienced either stabilization of or increase in MLMT scores from baseline, including a subset of 29% that demonstrated a three Lux luminance level improvement. The treatment effect on RHO-patients supports gene-agnostic mechanism of action for OCU400. The Company also intends to initiate a Phase 3 trial for OCU400 for the treatment of RP in early 2024, subject to the outcome of the ongoing Phase 1/2 trial and discussions with the FDA on the proposed Phase 3 trial design and timeline. Subsequently, the Company is expecting to expand OCU400 Phase 3 study for LCA patients in the second half of 2024 based on Phase 1/2 study results in LCA patients and alignment with the FDA.

The Company is also developing OCU410 and OCU410ST, utilizing the nuclear receptor genes RAR-related orphan receptor A ("RORA"), for the treatment of dry AMD and Stargardt disease, respectively. OCU410 is a potential one-time, curative therapy with a single sub-retinal injection. OCU410ST has received ODD from the FDA for the treatment of ABCA4-associated retinopathies, including Stargardt disease. The Company submitted Investigational New Drug ("IND") applications to the FDA for both OCU410 and OCU410ST in the second quarter of 2023. The FDA cleared the Company's IND applications, and the Company intends to dose patients in the Phase 1/2 trials by the end of 2023.

Regenerative Medicine Cell Therapy Platform

NeoCart is a Phase 3-ready, regenerative medicine 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 chondrocytes, the cells responsible for maintaining cartilage health. The chondrocytes are derived from the patient on a unique scaffold. In this therapy, healthy cartilage tissue is grown and implanted in the patient. Cartilage defects often lead to osteoarthritis if left untreated. Current surgical and nonsurgical treatment options are limited in their efficacy and durability. NeoCart has the potential to accelerate healing, reduce pain, and provide regenerative native-like cartilage strength with durable benefits post transplantation. In the Phase 2 clinical trial, NeoCart was shown to be generally well-tolerated and demonstrated greater clinical efficacy than microfracture surgery at two years after treatment. In a Phase 3 trial, NeoCart did not meet the primary endpoint of a statistically significant improvement in pain and function in a dual threshold responder analysis one year after treatment as compared to microfracture. However, in the modified Intent to Treat (mITT) population (which excludes those patients who were randomized but not treated with NeoCart), 74.2% of the NeoCart patients exhibited clinically meaningful improvements in pain and function compared to 62.0% of microfracture patients at one year (p=0.071). In this mITT population, patients treated with NeoCart achieved a statistically significant improvement in pain and function (p=0.018) six months after treatment as compared to patients treated with microfracture. Both NeoCart and microfracture were generally well tolerated and exhibited preliminary strong safety profiles. Based on this clinical benefit, the FDA granted a regenerative medicine advanced therapy ("RMAT") designation to NeoCart for the repair of full-thickness lesions of knee cartilage injuries in adults. Additionally, the Company received concurrence from the FDA on the confirmatory Phase 3 trial design. The Company is 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. The Company intends to initiate the Phase 3 trial in the second half of 2024.

Inhaled Mucosal Vaccine Platform

The Company is 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. The Company's inhaled mucosal vaccine platform is driven by its conviction to serve a public health concern, which requires the endorsement and support of government funding in order to develop and ultimately commercialize its vaccine candidates. As these vaccine candidates are being developed to be administered via inhalation, the Company believes they have the potential to generate rapid local immune response in the upper airways and lungs, where viruses enter and infect the body. The Company believes this unique delivery method 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 National Institute of Allergy and Infectious Diseases' ("NIAID") Project NextGen for inclusion in clinical trials. OCU500 will be tested via two different mucosal routes, inhalation into the lungs and as a nasal spray. The clinical trials are expected to begin in early 2024. The Company is continuing the internal development of its OCU510 and OCU520 platforms to achieve IND readiness and may submit an IND application in 2024, provided it receives government funding. The Company has submitted multiple proposals to obtain government funding and is continuing discussions with relevant government agencies regarding developmental funding for its OCU510 and OCU520 platforms.

Novel Biologic Therapy for Retinal Diseases

The Company is developing OCU200, which is a novel fusion protein containing parts of human transferrin and tumstatin. OCU200 is designed to treat diabetic macular edema ("DME"), diabetic retinopathy ("DR"), and wet AMD. The Company has completed the technology transfer of manufacturing processes to its contract development and manufacturing organization ("CDMO") and has produced trial materials to initiate a Phase 1 trial. In April 2023, the FDA placed the Company's 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. The Company is working to provide the FDA with the requested information as promptly as possible. The Company expects initiation of the OCU200 clinical trial in the first half of 2024, contingent on the lift of the FDA hold and adequate availability of funding.

Going Concern

The Company has incurred recurring net losses since inception and has funded its operations to date through the sale of common stock, warrants to purchase common stock, the issuance of convertible notes and debt, and grant proceeds. The Company incurred net losses of approximately $53.6 million and $59.4 million for the nine months ended September 30, 2023 and 2022, respectively. As of September 30, 2023, the Company had an accumulated deficit of $266.6 million and cash and cash equivalents totaling $53.5 million. This amount will not meet the Company's capital requirements for the next 12 months after the date that the condensed consolidated financial statements are issued. Due to the inherent uncertainty involved in

making estimates and the risks associated with the research, development, and commercialization of biotechnology products, the Company may have based this estimate on assumptions that may prove to be wrong, and the Company's operating plan may change as a result of many factors currently unknown to the Company.

The Company is subject to risks, expenses, and uncertainties frequently encountered by companies in its industry. The Company intends to continue its research, development, and commercialization efforts for its product candidates, which will require significant additional funding. If the Company is unable to obtain additional funding in the future and/or its research, development, and commercialization efforts require higher than anticipated capital, there may be a negative impact on the financial viability of the Company. The Company is currently exploring options to fund its operations through 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 the Company's novel inhaled mucosal vaccine platform, or funding from other third parties. Such financing and funding may not be available at all, or on terms that are favorable to the Company. While Company management believes that it has a plan to fund operations, its plan may not be successfully implemented. Failure to generate sufficient cash flows from operations, raise additional capital, or appropriately manage certain discretionary spending, could have a material adverse effect on the Company's ability to achieve its intended business objectives.

As a result of these factors, together with the anticipated continued spending that will be necessary to continue to research, develop, and commercialize the Company's product candidates, there is substantial doubt about the Company's ability to continue as a going concern within one year after the date that these condensed consolidated financial statements are issued. The condensed consolidated financial statements do not contain any adjustments that might result from the resolution of any of the above uncertainties.