PART I [Item 1. Business](index=10&type=section&id=Item%201.%20Business) Ocular Therapeutix, Inc. is a biopharmaceutical company focused on ophthalmic therapies, leveraging its bioresorbable hydrogel technology for commercial products like DEXTENZA and a pipeline including OTX-TKI and OTX-TIC - The company's core focus is on developing and commercializing innovative eye therapies using its proprietary bioresorbable hydrogel-based formulation technology[25](index=25&type=chunk) Product & Pipeline Overview | PROGRAM | THERAPEUTIC FOCUS | STAGE | NEXT MILESTONES | | :--- | :--- | :--- | :--- | | **DEXTENZA®** | Post-surgical inflammation & pain; Allergic conjunctivitis | FDA Approved | Continue commercialization | | **OTX-TKI** | Wet AMD | Pivotal Trial Prep | Initiate pivotal trial as early as Q3 2023 | | **OTX-TKI** | Diabetic Retinopathy | Phase 1 | Initiate pivotal trial as early as Q1 2024 | | **OTX-TIC** | Glaucoma & ocular hypertension | Phase 2 | Topline data in Q4 2023 | | **OTX-DED** | Episodic dry eye disease | Phase 2 | Initiate trial for placebo comparator in Q2 2023 | | **OTX-CSI** | Dry eye disease | Phase 2 | Initiate trial for placebo comparator in Q2 2023 | - The company's strategy includes growing DEXTENZA revenues, advancing its clinical pipeline with a focus on OTX-TKI and OTX-TIC, and leveraging its commercial infrastructure for future ophthalmology products[32](index=32&type=chunk) [Clinical Portfolio](index=19&type=section&id=Clinical%20Portfolio) The clinical portfolio focuses on major ophthalmology markets, with OTX-TKI for retinal diseases, OTX-TIC for glaucoma, and OTX-DED/OTX-CSI for dry eye disease, all in various stages of clinical development - OTX-TKI (axitinib intravitreal implant) is being developed for wet AMD and diabetic retinopathy; for wet AMD, the company aims to initiate a pivotal trial in Q3 2023, subject to FDA discussions and financing, with interim 10-month data from the U.S. Phase 1 trial showing stable vision and a **92% reduction in treatment burden**[61](index=61&type=chunk)[74](index=74&type=chunk)[77](index=77&type=chunk) - OTX-TIC (travoprost intracameral implant) is being developed for glaucoma, with a U.S.-based Phase 2 trial ongoing, comparing OTX-TIC 26 µg to DURYSTA, and topline data expected in **Q4 2023**[87](index=87&type=chunk)[91](index=91&type=chunk)[93](index=93&type=chunk) - The dry eye program includes OTX-DED and OTX-CSI; following Phase 2 trials where the vehicle hydrogel placebo performed more like an active comparator, the company plans to initiate a small trial in **H1 2023** to identify a more appropriate placebo (e.g., collagen plugs) for future pivotal studies[115](index=115&type=chunk) [Commercial Portfolio and Collaborations](index=39&type=section&id=Commercial%20Portfolio%20and%20Collaborations) The commercial portfolio is led by DEXTENZA, an FDA-approved intracanalicular insert for ocular inflammation/pain and allergic conjunctivitis, complemented by a strategic collaboration with AffaMed Therapeutics for Asian markets - DEXTENZA is the first FDA-approved intracanalicular insert delivering dexamethasone for up to **30 days** to treat post-surgical ocular inflammation and pain, and ocular itching associated with allergic conjunctivitis[133](index=133&type=chunk)[143](index=143&type=chunk) - Production of ReSure Sealant was suspended in **Q4 2021** to prioritize manufacturing resources for DEXTENZA, and the product is not currently commercially available in the U.S.[149](index=149&type=chunk) - The company has a license and collaboration agreement with AffaMed Therapeutics for the development and commercialization of DEXTENZA and OTX-TIC in key Asian markets, including an upfront payment of **$12 million**, up to **$91 million** in potential milestones, and tiered royalties[150](index=150&type=chunk) [Manufacturing, Intellectual Property, and Competition](index=45&type=section&id=Manufacturing%2C%20Intellectual%20Property%2C%20and%20Competition) The company manages its manufacturing in-house, protects its innovations through owned and licensed patents, and navigates a competitive landscape with established pharmaceutical companies and generic alternatives - The company manufactures its products and clinical trial materials at its cGMP facility in Bedford, Massachusetts, which it believes provides flexibility and control over the manufacturing process[157](index=157&type=chunk)[159](index=159&type=chunk) - The intellectual property portfolio consists of owned and licensed patents, with key patents for OTX-TKI expiring in **2041**, and DEXTENZA, OTX-TIC, OTX-CSI, and OTX-DED patents expiring between **2030** and **2041**[164](index=164&type=chunk)[165](index=165&type=chunk)[166](index=166&type=chunk)[167](index=167&type=chunk)[168](index=168&type=chunk) - A significant portion of the core hydrogel technology and patent rights for DEXTENZA, ReSure Sealant, and product candidates are exclusively licensed from Incept, LLC[176](index=176&type=chunk) - The company faces competition from established anti-VEGF drugs for OTX-TKI, approved glaucoma treatments like DURYSTA for OTX-TIC, and numerous therapies for dry eye for OTX-CSI and OTX-DED[197](index=197&type=chunk)[199](index=199&type=chunk)[200](index=200&type=chunk) [Government Regulation](index=59&type=section&id=Government%20Regulation) The company's products and operations are subject to extensive regulation by the FDA and international authorities, covering all stages from development and manufacturing to marketing, pricing, and data privacy - The company's products are subject to extensive regulation by the FDA in the U.S. and other global authorities, covering all stages from preclinical studies to post-market surveillance[204](index=204&type=chunk)[205](index=205&type=chunk) - The company plans to submit New Drug Applications (NDAs) for its product candidates under the Section 505(b)(2) pathway, which allows reliance on existing FDA data for previously approved drugs, potentially streamlining the approval process[239](index=239&type=chunk)[240](index=240&type=chunk) - Sales and marketing activities are subject to strict healthcare laws, including the federal Anti-Kickback Statute and False Claims Act, which regulate relationships with healthcare providers and payors[566](index=566&type=chunk)[568](index=568&type=chunk) - The business is impacted by healthcare reform and drug pricing legislation, such as the Inflation Reduction Act (IRA), which could affect reimbursement rates and impose new pricing pressures on pharmaceutical products[577](index=577&type=chunk)[581](index=581&type=chunk) [Item 1A. Risk Factors](index=119&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including a history of net losses, the need for substantial additional funding, dependence on DEXTENZA and pipeline success, single-site manufacturing vulnerability, and exposure to unfavorable pricing regulations and intense competition - The company has a history of significant losses, with a net loss of **$71.0 million** for the year ended December 31, 2022, and an accumulated deficit of **$616.8 million**, expecting to incur operating losses for the next several years[394](index=394&type=chunk) - Substantial additional funding is required to advance research, development, and commercialization efforts, without which the company may be forced to delay, reduce, or eliminate programs[404](index=404&type=chunk) - The company's success is heavily dependent on the commercial success of DEXTENZA and the successful development and approval of its pipeline candidates, particularly OTX-TKI and OTX-TIC[452](index=452&type=chunk) - Operations rely on a single-site manufacturing facility, making the company vulnerable to disruptions that could impact clinical trial supply and commercial inventory[492](index=492&type=chunk) - The company faces risks related to unfavorable pricing regulations, third-party reimbursement practices, and healthcare reform, which could harm the commercial viability of its products[479](index=479&type=chunk) [Item 2. Properties](index=195&type=section&id=Item%202.%20Properties) The company leases approximately 121,000 square feet of office, laboratory, and manufacturing space in Bedford, Massachusetts, with leases expiring between 2024 and 2028 - The company's facilities consist of approximately **121,000 square feet** of leased office, lab, and manufacturing space in Bedford, MA, with lease expirations in July **2027**, March **2024**, and an extended lease through July **2028**[630](index=630&type=chunk) [Item 3. Legal Proceedings](index=195&type=section&id=Item%203.%20Legal%20Proceedings) As of the filing date, the company is not a party to any material legal proceedings, nor is management aware of any material legal proceedings threatened against it - The company is not currently a party to any material legal proceedings[631](index=631&type=chunk) PART II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=197&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on Nasdaq under 'OCUL', has approximately 12 record holders, has never paid cash dividends, and did not sell unregistered securities or repurchase equity in 2022 - The company's common stock is traded on the Nasdaq Global Market under the symbol **"OCUL"**[636](index=636&type=chunk) - The company has never declared or paid cash dividends and does not anticipate doing so in the foreseeable future[638](index=638&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=198&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) For FY2022, total net revenue increased to $51.5 million, but the net loss widened to $71.0 million due to a smaller derivative liability gain, with operating expenses rising to $130.1 million, and cash of $102.3 million expected to fund operations into mid-2024 Results of Operations (2022 vs. 2021) | Metric | 2022 (in thousands) | 2021 (in thousands) | Change (in thousands) | | :--- | :--- | :--- | :--- | | **Total revenue, net** | **$51,494** | **$43,522** | **$7,972** | | Cost of product revenue | $4,540 | $4,406 | $134 | | Research and development | $53,462 | $50,083 | $3,379 | | Selling and marketing | $39,922 | $35,190 | $4,732 | | General and administrative | $32,224 | $31,880 | $344 | | **Total costs and operating expenses** | **$130,148** | **$121,559** | **$8,589** | | **Loss from operations** | **($78,654)** | **($78,037)** | **($617)** | | Change in fair value of derivative liability | $13,841 | $78,121 | ($64,280) | | **Net loss** | **($71,038)** | **($6,553)** | **($64,485)** | - As of December 31, 2022, the company had **$102.3 million** in cash and cash equivalents, projected to fund planned operations into the middle of **2024**, excluding the costs of planned pivotal trials for OTX-TKI[659](index=659&type=chunk)[721](index=721&type=chunk) - Net cash used in operating activities was **$59.6 million** for the year ended December 31, 2022, compared to **$65.6 million** in 2021[722](index=722&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=229&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate sensitivity on its $102.3 million cash equivalents and $25.0 million variable-rate debt, though a 100 basis point rate change is not expected to be material - The company's primary market risk is interest rate sensitivity on its cash equivalents (**$102.3 million**) and variable-rate debt (**$25.0 million**)[758](index=758&type=chunk)[761](index=761&type=chunk) - Management concluded that an immediate **100 basis point (1%)** change in interest rates would not materially affect the fair market value of its investment portfolio or cash outflows from its debt[759](index=759&type=chunk)[761](index=761&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=231&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the consolidated financial statements and the independent auditor's report, which highlights the valuation of derivative liability as a critical audit matter and emphasizes the need for additional financing - The report from the independent auditor, PricewaterhouseCoopers LLP, highlights the valuation of the derivative liability related to the 2026 convertible notes as a Critical Audit Matter, noting the significant judgment required by management in its fair value estimation[812](index=812&type=chunk)[813](index=813&type=chunk)[816](index=816&type=chunk) - The auditor's report also includes an "Emphasis of Matter" paragraph, drawing attention to the company's need to secure additional financing to fund future operations[808](index=808&type=chunk) [Item 9A. Controls and Procedures](index=231&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and internal control over financial reporting were effective as of December 31, 2022, with no material changes reported in Q4 2022 - Based on their evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of December 31, 2022[764](index=764&type=chunk) - Management assessed the effectiveness of internal control over financial reporting using the COSO framework and concluded that it was effective as of December 31, 2022[768](index=768&type=chunk) PART III [Item 10. Directors, Executive Officers and Corporate Governance](index=234&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, corporate governance, and the audit committee is incorporated by reference from the 2023 Proxy Statement, noting the adoption of a code of conduct and the identification of an audit committee financial expert - Information required for this item is incorporated by reference from the company's 2023 Proxy Statement[774](index=774&type=chunk) - The company has adopted a code of business conduct and ethics applicable to all directors, officers, and employees[776](index=776&type=chunk) [Item 11. Executive Compensation](index=234&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the company's definitive Proxy Statement for the 2023 Annual Meeting of Stockholders - Information required for this item is incorporated by reference from the company's 2023 Proxy Statement[780](index=780&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=234&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information regarding security ownership of certain beneficial owners, management, and related stockholder matters is incorporated by reference from the company's definitive Proxy Statement for the 2023 Annual Meeting of Stockholders - Information required for this item is incorporated by reference from the company's 2023 Proxy Statement[781](index=781&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=236&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information regarding certain relationships, related transactions, and director independence is incorporated by reference from the company's definitive Proxy Statement for the 2023 Annual Meeting of Stockholders - Information required for this item is incorporated by reference from the company's 2023 Proxy Statement[782](index=782&type=chunk) [Item 14. Principal Accounting Fees and Services](index=236&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information regarding principal accounting fees and services is incorporated by reference from the company's definitive Proxy Statement for the 2023 Annual Meeting of Stockholders - Information required for this item is incorporated by reference from the company's 2023 Proxy Statement[783](index=783&type=chunk) PART IV [Item 15. Exhibits, Financial Statement Schedules](index=237&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists the financial statements and exhibits filed as part of the Annual Report on Form 10-K, with financial statement schedules omitted as not applicable or required - This section lists the financial statements and exhibits filed with the 10-K report[786](index=786&type=chunk)[787](index=787&type=chunk)

Financial Data and Key Metrics Changes - Net revenue for Q3 2022 was $12 million, representing a 2% decrease compared to the same period in 2021 [51] - DEXTENZA net product revenue was $11.9 million, flat year-over-year and down approximately 2% sequentially [52] - The company recorded a net loss of $24.2 million or a loss of $0.31 per share, compared to a net income of $2.6 million or $0.03 per share in the same period in 2021 [54] Business Line Data and Key Metrics Changes - DEXTENZA sales were essentially flat year-over-year, which was considered disappointing by management [17] - Research and development expenses increased to $13.7 million from $12.7 million in the comparable period of 2021, driven by higher personnel and preclinical development activity [53] - Selling and marketing expenses rose to $10.2 million from $9.6 million in the same period of 2021, reflecting an increase in field force personnel [53] Market Data and Key Metrics Changes - The company noted that ambulatory surgical centers (ASCs) and hospital outpatient departments (HOPDs) are facing staffing shortages, impacting DEXTENZA's performance [18][20] - Changes in the reimbursement landscape for the procedure code CPT 68841 have also affected volume due to reduced physician payment [21] Company Strategy and Development Direction - The company aims to establish itself as a leader in ophthalmology, focusing on both front and back of the eye treatments [10] - Plans to initiate a Phase 2/3 trial for OTX-TKI in wet AMD in Q3 2023 and a Phase 1 trial for diabetic retinopathy in Q1 2023 [16][49] - The company is working on improving the value proposition for DEXTENZA and addressing reimbursement issues to reignite growth [22][24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the potential for OTX-TKI to become a differentiated product in the treatment of wet AMD and diabetic retinopathy [32] - The company adjusted its full-year net revenue guidance to between $48 million and $52 million, reflecting a growth of 10% to 20% over the prior year [26] - Management highlighted a strong start to Q4 2022, with record monthly sales for DEXTENZA in October [25][59] Other Important Information - The company had $121 million in cash and cash equivalents as of September 30, 2022, sufficient to fund operations through 2023 [56] - Non-cash charges through stock-based compensation and depreciation were $4.7 million in Q3 2022, compared to $4.4 million in the same quarter of 2021 [54] Q&A Session Summary Question: Why is the diabetic retinopathy study moving forward under an exploratory IND? - Management explained that using an exploratory IND allows for a sufficient number of patients while moving forward with the current formulation [63] Question: What is the priority for DEXTENZA in office or ambulatory surgical centers? - The focus is on reigniting growth in the surgical setting, which is the company's primary business area [69] Question: Can you elaborate on the cause of staffing shortages? - Staffing shortages are attributed to post-pandemic issues affecting various industries, including ASCs and hospitals [78] Question: What kind of sales boost for DEXTENZA is expected in 2023? - Management expects to capture some volume from DEXYCU as it loses its pass-through status, but specific guidance will be provided later [81] Question: Can you comment on the diabetic retinopathy patient journey? - Management noted that many patients with diabetic retinopathy do not realize they have the condition until vision changes occur, making treatment challenging [86] Question: What is the timeline for seeing results from the Phase 2/3 trial? - Management indicated that they expect to collapse the Phase 2 and Phase 3 trials, aiming for efficient data collection and NDA filing [95]

[Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) - The company's forward-looking statements cover ongoing and planned clinical trials (OTX-TKI for wet AMD, diabetic retinopathy; OTX-TIC for glaucoma; DEXTENZA in pediatric subjects), preclinical development (gene therapy, complement inhibitor for dry AMD), DEXTENZA commercialization, regulatory approvals, future revenue/expenses, and financing plans[9](index=9&type=chunk) - Actual results may differ materially from forward-looking statements due to substantial risks and uncertainties, as detailed in the 'Risk Factors' section[12](index=12&type=chunk) [PART I – FINANCIAL INFORMATION](index=7&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (unaudited)](index=7&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) Presents unaudited condensed consolidated financial statements and related notes, highlighting accounting policies, financial instruments, ongoing losses, and financing needs [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) | Metric (in thousands) | Sep 30, **2022** | Dec 31, **2021** | Change | | :-------------------- | :----------- | :----------- | :----- | | Cash and cash equivalents | **$120,950** | **$164,164** | **$(43,214)** | | Total current assets | **$145,615** | **$191,300** | **$(45,685)** | | Total assets | **$158,579** | **$204,887** | **$(46,308)** | | Total current liabilities | **$29,269** | **$26,337** | **$2,932** | | Total liabilities | **$112,350** | **$116,888** | **$(4,538)** | | Total stockholders' equity | **$46,229** | **$87,999** | **$(41,770)** | | Accumulated deficit | **$(601,300)** | **$(545,804)** | **$(55,496)** | [Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)) | Metric (in thousands) | 3 Months Ended Sep 30, **2022** | 3 Months Ended Sep 30, **2021** | 9 Months Ended Sep 30, **2022** | 9 Months Ended Sep 30, **2021** | | :-------------------- | :---------------------------- | :---------------------------- | :---------------------------- | :---------------------------- | | Product revenue, net | **$11,913** | **$12,153** | **$36,555** | **$31,214** | | Collaboration revenue | **$52** | **$—** | **$864** | **$—** | | Total revenue, net | **$11,965** | **$12,153** | **$37,419** | **$31,214** | | Total costs and operating expenses | **$33,509** | **$31,682** | **$96,712** | **$91,202** | | Loss from operations | **$(21,544)** | **$(19,529)** | **$(59,293)** | **$(59,988)** | | Change in fair value of derivative liability | **$(1,133)** | **$23,837** | **$8,598** | **$62,249** | | Net (loss) income | **$(24,188)** | **$2,657** | **$(55,496)** | **$(2,703)** | | Net (loss) income per share, basic | **$(0.31)** | **$0.03** | **$(0.72)** | **$(0.04)** | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) | Metric (in thousands) | 9 Months Ended Sep 30, **2022** | 9 Months Ended Sep 30, **2021** | | :-------------------- | :---------------------------- | :---------------------------- | | Net loss | **$(55,496)** | **$(2,703)** | | Net cash used in operating activities | **$(42,645)** | **$(50,397)** | | Net cash used in investing activities | **$(1,565)** | **$(563)** | | Net cash provided by financing activities | **$996** | **$2,184** | | Net decrease in cash, cash equivalents and restricted cash | **$(43,214)** | **$(48,776)** | | Cash, cash equivalents and restricted cash at end of period | **$122,714** | **$181,045** | [Condensed Consolidated Statements of Stockholders' Equity](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) | Metric (in thousands) | Dec 31, **2021** | Sep 30, **2022** | | :-------------------- | :----------- | :----------- | | Total Stockholders' Equity | **$87,999** | **$46,229** | | Accumulated Deficit | **$(545,804)** | **$(601,300)** | | Additional Paid-in Capital | **$633,795** | **$647,521** | - Common stock shares outstanding increased from **76,731,940** at December 31, **2021**, to **77,010,385** at September 30, **2022**, due to stock option exercises and employee stock purchase plan issuances[25](index=25&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) - The company is a biopharmaceutical company focused on ophthalmic therapies using a proprietary bioresorbable hydrogel platform, with DEXTENZA and ReSure Sealant as FDA-approved products[29](index=29&type=chunk)[31](index=31&type=chunk) - As of September 30, **2022**, the company had an accumulated deficit of **$601.3 million** and expects to continue generating operating losses and negative cash flows, requiring additional capital beyond **2023**[32](index=32&type=chunk)[33](index=33&type=chunk) - The COVID-19 pandemic has adversely affected DEXTENZA sales due to recruitment and retention challenges at surgical centers and within the company's sales force[37](index=37&type=chunk) | Accrued Expenses (in thousands) | Sep 30, **2022** | Dec 31, **2021** | | :------------------------------ | :----------- | :----------- | | Accrued payroll and related expenses | **$6,700** | **$6,597** | | Accrued rebates and programs | **$2,666** | **$3,615** | | Accrued professional fees | **$1,306** | **$1,227** | | Accrued research and development expenses | **$1,565** | **$1,102** | | Accrued interest payable on **2026** convertible notes | **$8,181** | **$6,475** | | Accrued other | **$1,196** | **$1,105** | | Total | **$21,614** | **$20,121** | - The **2026** Convertible Notes have an embedded conversion option accounted for as a derivative liability, which was valued at **$11.6 million** as of September 30, **2022**, down from **$20.2 million** at December 31, **2021**, primarily due to a decrease in the common stock price[54](index=54&type=chunk)[55](index=55&type=chunk) - Collaboration revenue of **$52 thousand** (**Q3 2022**) and **$864 thousand** (YTD **Q3 2022**) was recognized from the AffaMed license agreement for the OTX-TIC Phase 2 clinical trial[74](index=74&type=chunk) - Unrecognized stock-based compensation cost totaled **$22.546 million** as of September 30, **2022**, to be recognized over a weighted average period of **2.6 years**[92](index=92&type=chunk) - The company extended its manufacturing space lease until July 31, **2028**, with rent to be determined based on fair market value[96](index=96&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=32&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Analyzes financial condition, results of operations, and future outlook, covering product commercialization, pipeline, collaborations, COVID-19 impact, liquidity, and funding needs [Overview](index=32&type=section&id=Overview) - The company focuses on bioresorbable hydrogel-based therapies for eye diseases, aiming to build commercial experience and develop a clinical pipeline for unmet needs[99](index=99&type=chunk) - Current FDA-approved products include DEXTENZA (post-surgical ocular inflammation/pain, allergic conjunctivitis) and ReSure Sealant (wound leaks, not currently manufactured)[100](index=100&type=chunk) - The clinical pipeline includes OTX-TKI (wet AMD, diabetic retinopathy), OTX-TIC (glaucoma/ocular hypertension), OTX-DED (dry eye disease, short-term), and OTX-CSI (dry eye disease, chronic)[102](index=102&type=chunk) [Commercial Portfolio](index=34&type=section&id=Commercial%20Portfolio) - DEXTENZA is an FDA-approved intracanalicular insert for post-surgical ocular inflammation/pain (launched July **2019**) and ocular itching associated with allergic conjunctivitis (launched **Q1 2022**)[104](index=104&type=chunk)[105](index=105&type=chunk) - DEXTENZA is separately payable in ASCs through **2023** and has a Category 1 physician reimbursement code[106](index=106&type=chunk) - A Phase 3 clinical trial for DEXTENZA in pediatric subjects following cataract surgery is ongoing as an FDA post-approval requirement[107](index=107&type=chunk) - ReSure Sealant, approved for preventing wound leaks after cataract surgery, has generated limited revenue and its production was suspended in **Q4 2021** to focus on DEXTENZA[109](index=109&type=chunk)[110](index=110&type=chunk) [Clinical Portfolio](index=36&type=section&id=Clinical%20Portfolio) - OTX-TKI (axitinib intravitreal implant) is in Phase 1 trials for wet AMD in Australia and the US, showing general tolerability and a preliminary signal of biological activity with extended duration (**6+ months** for >**60%** subjects)[111](index=111&type=chunk)[113](index=113&type=chunk)[115](index=115&type=chunk) - Interim **7-month** data from the US Phase 1 OTX-TKI trial showed stable BCVA and CSFT, with **80%** of subjects rescue-free up to **six months** and **73%** up to **seven months**[118](index=118&type=chunk) - Plans include a Phase 2/3 U.S.-based clinical trial for OTX-TKI (wet AMD) in **Q3 2023** and a Phase 1 U.S.-based clinical trial for OTX-TKI (diabetic retinopathy) in **Q1 2023**[120](index=120&type=chunk)[121](index=121&type=chunk) - OTX-TIC (travoprost intracameral implant) Phase 1 data showed a clinically meaningful decrease in IOP for **six months** or longer in glaucoma/ocular hypertension patients, with a favorable safety profile, supporting potential chronic dosing[124](index=124&type=chunk) - A Phase 2 clinical trial for OTX-TIC is ongoing, with topline data expected in **Q4 2023**[123](index=123&type=chunk) - OTX-DED (dexamethasone intracanalicular insert) Phase 2 trial for dry eye disease achieved its primary endpoint (bulbar conjunctival hyperemia reduction) but was not powered for statistical significance. Further trials are planned to develop an appropriate placebo comparator[127](index=127&type=chunk)[128](index=128&type=chunk) - OTX-CSI (cyclosporine intracanalicular insert) Phase 2 trial for chronic dry eye disease did not show separation from placebo for the primary endpoint, and durability was shorter than expected. Formulation work is ongoing[130](index=130&type=chunk)[131](index=131&type=chunk) [Collaboration Agreements](index=40&type=section&id=Collaboration%20Agreements) - The AffaMed License Agreement grants exclusive rights for DEXTENZA and OTX-TIC development/commercialization in mainland China, Taiwan, Hong Kong, Macau, South Korea, and ASEAN countries[132](index=132&type=chunk)[134](index=134&type=chunk) - Under the AffaMed agreement, the company received an upfront payment of **$12 million** and is eligible for up to **$91 million** in development, regulatory, and commercial milestone payments, plus tiered royalties[133](index=133&type=chunk)[134](index=134&type=chunk) - AffaMed initiated a real-world study of DEXTENZA in China and received approval for DEXTENZA in Macau for post-cataract surgery inflammation/pain[135](index=135&type=chunk)[136](index=136&type=chunk) - Collaboration with Mosaic Biosciences focuses on identifying new targets and discovering novel therapeutic agents for dry AMD, yielding lead compounds for a preclinical complement inhibitor program[137](index=137&type=chunk) [Business Update Regarding COVID-19](index=42&type=section&id=Business%20Update%20Regarding%20COVID-19) - COVID-19 has slowed cataract procedures and created employee recruitment/retention challenges for ASCs and HOPDs, reducing opportunities for DEXTENZA use[138](index=138&type=chunk) - The company's own sales force has faced recruitment and retention challenges, adversely affecting DEXTENZA marketing efforts[138](index=138&type=chunk) [Financial Position](index=43&type=section&id=Financial%20Position) | Metric (in millions) | 3 Months Ended Sep 30, **2022** | 9 Months Ended Sep 30, **2022** | Accumulated Deficit (Sep 30, **2022**) | | :------------------- | :---------------------------- | :---------------------------- | :--------------------------------- | | Net (loss) income | **$(24.2)** | **$(55.5)** | **$(601.3)** | | Total costs and operating expenses | **$33.5** | **$96.7** | N/A | - The company expects to incur substantial sales, marketing, and R&D expenses as it commercializes DEXTENZA and develops its product candidates[141](index=141&type=chunk) - As of September 30, **2022**, cash and cash equivalents of **$121.0 million** are expected to fund operations through **2023**, but additional financing will be needed for continued operations[147](index=147&type=chunk) - The company has financed operations through product sales, equity offerings, convertible notes, and credit facilities, raising **$641.4 million** in net proceeds through September 30, **2022**[143](index=143&type=chunk) - DEXTENZA in-market unit sales for July, August, and September **2022** were **8,348 units**, **9,410 units**, and **8,649 units**, respectively, with October **2022** sales at approximately **11,500 units**[145](index=145&type=chunk) [Financial Operations Overview](index=46&type=section&id=Financial%20Operations%20Overview) - DEXTENZA is the primary source of net product revenue, with sales for ocular itching associated with allergic conjunctivitis launched in **Q1 2022**. ReSure Sealant production was suspended in **Q4 2021**[148](index=148&type=chunk) - Three specialty distributors accounted for significant portions of gross product revenue and accounts receivable for both the three and nine months ended September 30, **2022** and **2021**, indicating customer concentration[149](index=149&type=chunk)[150](index=150&type=chunk) - Research and development expenses are expensed as incurred and are expected to increase with ongoing clinical trials for OTX-TKI, OTX-TIC, and DEXTENZA, and planned trials for OTX-DED/OTX-CSI[155](index=155&type=chunk)[161](index=161&type=chunk) - Selling and marketing expenses are increasing due to the expansion of the commercial workforce to support DEXTENZA commercialization[164](index=164&type=chunk) - The company's **2026** Convertible Notes include an embedded derivative liability, which is measured at fair value each reporting period, with changes recorded in the statement of operations[167](index=167&type=chunk) [Critical Accounting Policies and Significant Judgments and Estimates](index=50&type=section&id=Critical%20Accounting%20Policies%20and%20Significant%20Judgments%20and%20Estimates) - Preparation of financial statements requires significant estimates and assumptions, including revenue recognition and fair value of derivatives[168](index=168&type=chunk)[169](index=169&type=chunk) - No significant changes to critical accounting policies have occurred since the beginning of the fiscal year[170](index=170&type=chunk) [Results of Operations](index=52&type=section&id=Results%20of%20Operations) | Metric (in thousands) | Sep 30, **2022** | Sep 30, **2021** | Increase (Decrease) | | :-------------------- | :----------- | :----------- | :------------------ | | Total revenue, net | **$11,965** | **$12,153** | **$(188)** | | Cost of product revenue | **$1,073** | **$1,310** | **$(237)** | | Research and development | **$13,719** | **$12,719** | **$1,000** | | Selling and marketing | **$10,186** | **$9,576** | **$610** | | General and administrative | **$8,531** | **$8,077** | **$454** | | Loss from operations | **$(21,544)** | **$(19,529)** | **$(2,015)** | | Change in fair value of derivative liability | **$(1,133)** | **$23,837** | **$(24,970)** | | Net (loss) income | **$(24,188)** | **$2,657** | **$(26,845)** | - Net product revenue decreased slightly due to DEXTENZA sales being adversely affected by recruitment/retention challenges at ASCs/HOPDs and within the sales force, and a reduction in physician payment for DEXTENZA insertion[173](index=173&type=chunk) - The significant change in net income/loss for the three months was primarily driven by a **$25.0 million** negative change in the fair value of the derivative liability, linked to a decrease in common stock price[180](index=180&type=chunk) | Metric (in thousands) | Sep 30, **2022** | Sep 30, **2021** | Increase (Decrease) | | :-------------------- | :----------- | :----------- | :------------------ | | Total revenue, net | **$37,419** | **$31,214** | **$6,205** | | Cost of product revenue | **$3,528** | **$3,298** | **$230** | | Research and development | **$39,919** | **$37,505** | **$2,414** | | Selling and marketing | **$29,390** | **$26,054** | **$3,336** | | General and administrative | **$23,875** | **$24,345** | **$(470)** | | Loss from operations | **$(59,293)** | **$(59,988)** | **$695** | | Change in fair value of derivative liability | **$8,598** | **$62,249** | **$(53,651)** | | Net loss | **$(55,496)** | **$(2,703)** | **$(52,793)** | - Net product revenue for the nine months increased by **$5.3 million**, primarily from DEXTENZA sales due to increased market acceptance and commercialization efforts[183](index=183&type=chunk) - The significant increase in net loss for the nine months was primarily due to a **$53.7 million** decrease in the positive change in fair value of the derivative liability[190](index=190&type=chunk) [Liquidity and Capital Resources](index=60&type=section&id=Liquidity%20and%20Capital%20Resources) - The company has a history of significant operating losses, with a net loss of **$55.5 million** for the nine months ended September 30, **2022**, and an accumulated deficit of **$601.3 million**[191](index=191&type=chunk) - As of September 30, **2022**, cash and cash equivalents were **$121.0 million**, expected to fund operations through **2023**, but substantial additional funding will be needed thereafter[198](index=198&type=chunk)[199](index=199&type=chunk)[211](index=211&type=chunk) - The company's Credit Facility has a total borrowing capacity of **$25.0 million**, fully drawn, with an interest rate of **9.31%** as of September 30, **2022**[193](index=193&type=chunk)[194](index=194&type=chunk) - The **2026** Convertible Notes have an aggregate principal of **$37.5 million**, accruing **6%** annual interest, convertible into common stock at **$6.50 per share**[196](index=196&type=chunk) | Cash Flow Summary (in thousands) | 9 Months Ended Sep 30, **2022** | 9 Months Ended Sep 30, **2021** | | :------------------------------- | :---------------------------- | :---------------------------- | | Cash used in operating activities | **$(42,645)** | **$(50,397)** | | Cash used in investing activities | **$(1,565)** | **$(563)** | | Cash provided by financing activities | **$996** | **$2,184** | | Net decrease in cash and cash equivalents | **$(43,214)** | **$(48,776)** | - Future capital requirements depend on DEXTENZA sales, commercialization costs, R&D progress for pipeline candidates (OTX-TKI, OTX-TIC, OTX-DED, OTX-CSI), regulatory approvals, manufacturing scale-up, and intellectual property protection[207](index=207&type=chunk)[208](index=208&type=chunk)[209](index=209&type=chunk)[212](index=212&type=chunk)[213](index=213&type=chunk) - The company expects to finance cash needs through equity/debt offerings, collaborations, and licensing, noting that existing debt covenants limit additional debt financing[216](index=216&type=chunk) [Contractual Obligations and Commitments](index=68&type=section&id=Contractual%20Obligations%20and%20Commitments) - Most contracts are cancelable on notice and not considered long-term contractual obligations[217](index=217&type=chunk) - The company exercised an option to extend its manufacturing space lease until July 31, **2028**, with rent to be determined[219](index=219&type=chunk)[220](index=220&type=chunk) [Off-Balance Sheet Arrangements](index=70&type=section&id=Off-Balance%20Sheet%20Arrangements) - The company has no off-balance sheet arrangements[221](index=221&type=chunk) [Recently Issued Accounting Pronouncements](index=70&type=section&id=Recently%20Issued%20Accounting%20Pronouncements) - Refer to Note 2 for details on recently issued accounting pronouncements[222](index=222&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=70&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risk from interest rate changes affecting cash equivalents and variable debt, but a **100 basis point** shift would not materially impact its portfolio or cash outflows - The company's primary market risk exposure is interest rate sensitivity, affecting cash equivalents (money market funds) and variable interest rate debt[223](index=223&type=chunk)[226](index=226&type=chunk) - A **100 basis point** change in interest rates would not materially affect the fair market value of the investment portfolio or anticipated cash outflows from variable interest rate debt[223](index=223&type=chunk)[226](index=226&type=chunk) - The derivative liability associated with **2026** Convertible Notes was valued at **$11.6 million** as of September 30, **2022**, and a **10%** change in valuation model inputs would not have a material effect on its fair value[225](index=225&type=chunk) [Item 4. Controls and Procedures](index=70&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of September 30, **2022**, with no material changes in internal control over financial reporting during the quarter - Disclosure controls and procedures were evaluated and deemed effective at a reasonable assurance level as of September 30, **2022**[227](index=227&type=chunk)[229](index=229&type=chunk) - No material changes in internal control over financial reporting occurred during the three months ended September 30, **2022**[230](index=230&type=chunk) [PART II – OTHER INFORMATION](index=73&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=73&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any material legal proceedings, nor is management aware of any threatened actions - The company is not currently involved in any material legal proceedings[232](index=232&type=chunk) [Item 1A. Risk Factors](index=73&type=section&id=Item%201A.%20Risk%20Factors) Readers are directed to the Annual Report on Form 10-K for a comprehensive discussion of risk factors that could materially affect the business - Readers are directed to the Annual Report on Form 10-K for a detailed discussion of risk factors[233](index=233&type=chunk) [Item 6. Exhibits](index=73&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Quarterly Report on Form 10-Q, including executive officer certifications and XBRL documents - The report includes certifications from the Principal Executive Officer and Principal Financial Officer (Exhibits 31.1, 31.2, 32.1, 32.2)[237](index=237&type=chunk) - Inline XBRL documents are filed as exhibits (Exhibits 101.INS, 101.SCH, 101.CAL, 101.LAB, 101.PRE, 101.DEF, 104)[237](index=237&type=chunk)[238](index=238&type=chunk) [SIGNATURES](index=76&type=section&id=SIGNATURES) - The report was signed by Donald Notman, Chief Financial Officer, on November 7, **2022**[241](index=241&type=chunk)

Ocular Therapeutix, Inc. (NASDAQ:OCUL) Q2 2022 Earnings Conference Call August 8, 2022 4:30 PM ET Company Participants Donald Notman - CFO Antony Mattessich - President, CEO & Director Rabia Ozden - Chief Medical Officer Conference Call Participants Jonathan Wolleben - JMP Securities Stacy Ku - Cowen and Company Yi Chen - H.C. Wainwright & Co. Joseph Catanzaro - Piper Sandler & Co. Operator Good afternoon, ladies and gentlemen. Thank you for standing by, and welcome to the Ocular Therapeutix Second Quarter ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-36554 Ocular Therapeutix, Inc. (Exact name of registrant as specified in its charter) (State or other jurisdic ...

Ocular Therapeutix, Inc. (NASDAQ:OCUL) Q1 2022 Earnings Conference Call May 9, 2022 4:30 PM ET Company Participants Donald Notman – Chief Financial Officer Antony Mattessich – President & Chief Executive Officer Michael Goldstein – Chief Medical Officer Conference Call Participants Joe Catanzaro – Piper Sandler Dane Leone – Raymond James Jon Wollenben – JMP Securities Yi Chen – H.C. Wainwright Anita Dushyanth – Berenberg Capital Operator Good afternoon, ladies and gentlemen, thank you for standing by. And w ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-36554 Ocular Therapeutix, Inc. (Exact name of registrant as specified in its charter) (State or other jurisdi ...

Ocular Therapeutix, Inc. (NASDAQ:OCUL) Q4 2021 Earnings Conference Call February 28, 2022 4:30 PM ET Company Participants Donald Notman - Chief Financial Officer Antony Mattessich - President & Chief Executive Officer Michael Goldstein - Chief Medical Officer Conference Call Participants Joe Catanzaro - Piper Sandler Jon Wolleben - JMP Securities Dane Leone - Raymond James Yi Chen - H.C. Wainwright Anita Dushyanth - Berenberg Capital Operator Good afternoon, ladies and gentlemen. Thank you for standing by a ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-36554 Ocular Therapeutix, Inc. (Exact name of registrant as specified in its charter) Delaware 20-5560161 (State or ...

Ocular Therapeutix, Inc. (NASDAQ:OCUL) Q3 2021 Earnings Conference Call November 9, 2021 4:30 PM ET Company Participants Antony Mattessich – CEO Donald Notman – CFO Dr. Michael Goldstein – Chief Medical Officer Scott Corning – Senior Vice President Commercial Chris White – Chief Business Officer Conference Call Participants Jon Wolleben – Participants Dane Leone – Raymond James Joe Catanzaro – Piper Sandler David Steinberg – Jefferies Anita Dushyanth – Berenberg Capital Georgi Yordanov – Cowen and Company Y ...