Ocular Therapeutix(OCUL) - 2024 Q4 - Annual Report

Clinical Trials and Product Development - AXPAXLI is currently in two Phase 3 clinical trials for wet AMD, with over 300 subjects randomized in the SOL-1 trial and 311 subjects enrolled in the SOL-R trial as of January 10, 2025[680][683]. - The SOL-1 trial's topline results are now expected in Q1 2026, with a potential for a 6-12 month dosing label for AXPAXLI[684]. - The company plans to meet with the FDA in the first half of 2025 to discuss a potential registrational clinical program for AXPAXLI targeting NPDR and DME[686]. - The company anticipates significant increases in direct research and development expenses for 2025 as it progresses with ongoing clinical trials[719]. - The company expects to continue incurring losses as it advances clinical trials for product candidates, including AXPAXLI, and increases sales and marketing resources for DEXTENZA[739]. - The company anticipates substantial expenses related to ongoing clinical trials, scaling up manufacturing processes, and expanding sales and marketing capabilities[740]. Financial Performance - Net product revenue for DEXTENZA was $63.5 million for the year ended December 31, 2024, reflecting a 9.7% increase from$ 57.9 million in 2023[687]. - Total revenue for 2024 was $63.7 million, reflecting a year-over-year increase of$ 5.3 million (9.0%) from $58.4 million in 2023[711]. - Product revenue, net for the year ended December 31, 2024 was$ 63.5 million, an increase of $5.6 million (9.7%) from$ 57.9 million in 2023, all attributable to DEXTENZA sales[711]. - Collaboration revenue decreased to $0.3 million in 2024 from$ 0.6 million in 2023, reflecting a decline in performance obligations under the license agreement with AffaMed[714]. - The company incurred net losses of $193.5 million,$ 80.7 million, and $71.0 million for the years ended December 31, 2024, 2023, and 2022, respectively[738]. Expenses and Cost Management - Research and development expenses increased significantly to$ 127.6 million in 2024, up $66.6 million (109.1%) from$ 61.1 million in 2023[716]. - Selling and marketing expenses rose to $41.6 million in 2024, an increase of$ 1.0 million (2.6%) compared to $40.5 million in 2023[720]. - General and administrative expenses increased to$ 60.7 million in 2024, reflecting a rise of $26.7 million (78.6%) from$ 33.9 million in 2023[722]. - Interest expense increased to $13.6 million in 2024, up$ 2.2 million (19.5%) from $11.3 million in 2023, driven by higher debt balances[727]. Cash Flow and Financing Activities - The company raised approximately$ 316.4 million in a private placement by selling 32,413,560 shares at $7.52 per share in February 2024[692]. - Net cash provided by financing activities was$ 332.1 million for the year ended December 31, 2024, compared to $169.8 million for 2023[750]. - Net cash provided by financing activities for the year ended December 31, 2024, was$ 332.1 million, an increase from $169.8 million in 2023, representing a growth of 95.5%[756][757]. - The financing activities in 2024 included proceeds from the issuance of common stock and pre-funded warrants of approximately$ 316.4 million, and proceeds from the exercise of stock options of $14.7 million[756]. - As of December 31, 2024, the company had cash and cash equivalents of$ 392.1 million and outstanding notes payable of $82.5 million under the Barings Credit Facility[732]. Market Position and Growth Potential - DEXTENZA is currently used in less than 5% of cataract procedures, indicating significant growth potential in sales to ASCs[689]. - The Medicare Statute allows for continued separate payment of DEXTENZA in the ASC setting for 2025, which may enhance its market position[688]. - The gross-to-net provisions for DEXTENZA product sales were 38.5% in 2024, up from 30.1% in 2023, indicating a shift in pricing strategy[712]. Debt and Obligations - The company has a total borrowing capacity of$ 82.5 million under the Barings Credit Facility, which has been fully drawn down[749]. - Total contractual obligations and commitments as of December 31, 2024, amounted to $91.2 million, with$ 2.7 million due within one year and $83.2 million due in 3 to 5 years[760]. - Operating lease commitments total$ 8.7 million, with $2.7 million due within one year and$ 5.3 million due in 1 to 3 years[759]. Financial Instruments and Risk Management - The company does not enter into financial instruments for trading or speculative purposes[787]. - An immediate 100 basis point change in U.S. interest rates would not materially affect the fair market value of the company's investment portfolio due to its short-term duration and low risk profile[786]. - A 10% increase or decrease in the interest rate used in the valuation model of the Royalty Fee Derivative Liability would not have a material effect on its fair value[790]. - Expected cash outflows from the secured term loan facility fluctuate based on changes in the Secured Overnight Financing Rate (SOFR)[788]. - An immediate 100 basis point increase or decrease in SOFR would not have a material effect on anticipated cash outflows from the secured term loan facility[789].