BEDFORD, Mass., May 06, 2024 (GLOBE NEWSWIRE) -- Ocular Therapeutix, Inc. (NASDAQ:OCUL) ("Ocular"), a biopharmaceutical company committed to enhancing people's vision and quality of life through the development and commercialization of innovative therapies for wet age-related macular degeneration (wet AMD), diabetic retinopathy, and other diseases and conditions of the eye, today announced that it has agreed to grant inducement awards to (i) its newly appointed Vice President, Head of Programming & Data Ope ...

BEDFORD, Mass., May 06, 2024 (GLOBE NEWSWIRE) -- Ocular Therapeutix, Inc. (NASDAQ:OCUL, "Ocular", the "Company"))), a biopharmaceutical company committed to enhancing people's vision and quality of life through the development and commercialization of innovative therapies for wet age-related macular degeneration (wet AMD), diabetic retinopathy, and other diseases and conditions of the eye, today announced that it will participate at two investor conferences in May: Citizens JMP Life Sciences Conference Fire ...

PART I – FINANCIAL INFORMATION [Item 1. Financial Statements (unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents Ocular Therapeutix, Inc.'s unaudited condensed consolidated financial statements for Q1 2023 and prior periods [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to $128.6 million, liabilities increased, and equity significantly declined to $9.7 million by Q1 2023 Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $79,026 | $102,300 | | Total current assets | $107,162 | $129,627 | | Total assets | $128,573 | $149,289 | | **Liabilities & Equity** | | | | Total current liabilities | $29,715 | $31,395 | | Derivative liability | $12,914 | $6,351 | | Total liabilities | $118,862 | $113,910 | | Total stockholders' equity | $9,711 | $35,379 | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Net loss surged to $30.3 million in Q1 2023, primarily due to derivative liability changes and increased operating expenses Statement of Operations Summary (in thousands, except per share data) | Metric | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Product revenue, net | $13,214 | $12,498 | | Total revenue, net | $13,374 | $13,187 | | Total costs and operating expenses | $35,923 | $31,020 | | Loss from operations | $(22,549) | $(17,833) | | Change in fair value of derivative liability | $(6,563) | $6,958 | | Net loss | $(30,318) | $(12,542) | | Net loss per share, basic & diluted | $(0.39) | $(0.16) / $(0.22) | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities was $20.0 million in Q1 2023, leading to a total cash decrease of $23.3 million Cash Flow Summary (in thousands) | Activity | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | $(19,973) | $(18,600) | | Net cash used in investing activities | $(3,379) | $(276) | | Net cash provided by financing activities | $78 | $129 | | **Net decrease in cash, cash equivalents and restricted cash** | **$(23,274)** | **$(18,747)** | [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail the company's business, accounting policies, and financial condition, highlighting an accumulated deficit and future capital needs - The company is a biopharmaceutical firm focused on eye therapies using its proprietary ELUTYX hydrogel technology, commercializing DEXTENZA and developing product candidates like OTX-TKI and OTX-TIC[28](index=28&type=chunk)[30](index=30&type=chunk) - As of March 31, 2023, the company had an accumulated deficit of **$647.2 million** and expects continued operating losses, with existing cash of **$79.0 million** funding operations into mid-2024, excluding planned pivotal trials for OTX-TKI which require additional funding[31](index=31&type=chunk) - For Q1 2023, three specialty distributor customers accounted for **52%**, **25%**, and **13%** of gross product revenue, indicating significant customer concentration[60](index=60&type=chunk) - The fair value of the derivative liability associated with the 2026 Convertible Notes increased from **$6.4 million** at year-end 2022 to **$12.9 million** at March 31, 2023, primarily due to an increase in the company's stock price[65](index=65&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, business overview, and strategic direction, covering DEXTENZA, pipeline progress, and liquidity [Overview and Portfolio](index=27&type=section&id=Overview%20and%20Portfolio) The company develops ophthalmic therapies using ELUTYX hydrogel technology, commercializing DEXTENZA and advancing its OTX-TKI and OTX-TIC pipeline - The company's core is its ELUTYX hydrogel technology, which allows for local, programmed drug release in the eye[81](index=81&type=chunk)[82](index=82&type=chunk) - Key clinical programs include OTX-TKI (wet AMD/DR), OTX-TIC (glaucoma), OTX-DED (short-term dry eye), and OTX-CSI (chronic dry eye)[83](index=83&type=chunk)[84](index=84&type=chunk) - Interim 10-month data for the OTX-TKI Phase 1 trial in wet AMD showed the implant was well-tolerated, with **73%** of subjects remaining rescue-free and a **92%** reduction in treatment burden[88](index=88&type=chunk)[89](index=89&type=chunk) - The company plans to initiate the first of two pivotal trials for OTX-TKI in wet AMD as early as Q3 2023, contingent on securing necessary financing[94](index=94&type=chunk) - The Phase 2 trial for OTX-TIC (glaucoma) is ongoing with the 26 µg dose arm after the 5 µg arm was terminated, with topline data expected in Q4 2023[101](index=101&type=chunk) [Results of Operations](index=45&type=section&id=Results%20of%20Operations) Total net revenue was flat at $13.4 million in Q1 2023, but net loss surged to $30.3 million due to higher expenses and derivative liability impact Results of Operations Comparison (in thousands) | Metric | Q1 2023 | Q1 2022 | Change | | :--- | :--- | :--- | :--- | | Total revenue, net | $13,374 | $13,187 | $187 | | Research and development | $14,747 | $13,100 | $1,647 | | Selling and marketing | $10,835 | $9,063 | $1,772 | | General and administrative | $9,127 | $7,557 | $1,570 | | Loss from operations | $(22,549) | $(17,833) | $(4,716) | | Net loss | $(30,318) | $(12,542) | $(17,776) | - Net product revenue from DEXTENZA increased to **$13.2 million** in Q1 2023 from **$12.5 million** in Q1 2022[147](index=147&type=chunk) - Gross-to-net deductions for DEXTENZA increased to **28.1%** of gross sales in Q1 2023, up from **21.9%** in Q1 2022[146](index=146&type=chunk) - The increase in R&D expenses was primarily due to a **$2.0 million** increase in clinical and preclinical program costs, particularly for OTX-TKI[149](index=149&type=chunk) - The **$13.1 million** negative change in 'Other Income (Expense), Net' was primarily due to a **$13.5 million** unfavorable change in the fair value of the derivative liability, reflecting an increase in the company's stock price[154](index=154&type=chunk) [Liquidity and Capital Resources](index=49&type=section&id=Liquidity%20and%20Capital%20Resources) The company ended Q1 2023 with $79.0 million in cash, projecting funds into mid-2024, but additional capital is needed for pivotal trials - As of March 31, 2023, the company had **$79.0 million** in cash and cash equivalents[158](index=158&type=chunk) - Existing cash is projected to fund planned operations, debt service, and capital expenditures into the middle of 2024, explicitly excluding expenses for planned pivotal clinical trials for OTX-TKI[159](index=159&type=chunk)[168](index=168&type=chunk) - Net cash used in operating activities was **$20.0 million** in Q1 2023, driven by a net loss of **$30.3 million**, partially offset by non-cash charges like a **$6.6 million** change in derivative liability value and **$4.6 million** in stock-based compensation[160](index=160&type=chunk) - The company has an Open Market Sale Agreement with Jefferies to sell up to **$100.0 million** in common stock, with no shares sold as of May 4, 2023[119](index=119&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=57&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Primary market risk is interest rate sensitivity on cash and variable-rate debt, with management concluding no material effect from rate changes - The company's primary market risk is interest rate sensitivity on its **$79.0 million** in cash and cash equivalents and its **$25.0 million** variable interest rate note payable[177](index=177&type=chunk)[181](index=181&type=chunk) - Management concludes that an immediate **100 basis point** change in interest rates would not materially affect the fair market value of its portfolio or cash outflows from its debt[177](index=177&type=chunk)[181](index=181&type=chunk) - The fair value of the derivative liability (**$12.9 million** as of March 31, 2023) is subject to market inputs, but a **10%** change in these inputs is not expected to have a material effect[179](index=179&type=chunk) [Item 4. Controls and Procedures](index=59&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of March 31, 2023, with no material changes to internal control over financial reporting - Based on an evaluation as of March 31, 2023, the CEO and CFO concluded that the company's disclosure controls and procedures were effective[182](index=182&type=chunk) - No changes occurred during Q1 2023 that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[183](index=183&type=chunk) PART II – OTHER INFORMATION [Item 1. Legal Proceedings](index=60&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any material legal proceedings, nor is management aware of any threatened proceedings - The company is not presently a party to any material legal proceedings[186](index=186&type=chunk) [Item 1A. Risk Factors](index=60&type=section&id=Item%201A.%20Risk%20Factors) Risk factors highlight the risk of holding cash exceeding FDIC insurance limits, citing the SVB failure as a key example - A key risk is the concentration of cash in deposit accounts at a small number of financial institutions, with balances that exceed FDIC insurance limits[188](index=188&type=chunk)[191](index=191&type=chunk) - The failure of Silicon Valley Bank (SVB) in March 2023 is cited as a direct example of this risk, as the company maintained a significant portion of its cash at SVB at the time[189](index=189&type=chunk) - While the company amended its credit agreement to allow holding up to **50%** of its cash elsewhere, the risk of concentration remains, with no assurance of government protection for uninsured deposits in future bank failures[191](index=191&type=chunk)[192](index=192&type=chunk) [Item 5. Other Information](index=62&type=section&id=Item%205.%20Other%20Information) On May 4, 2023, the company amended its Credit and Security Agreement to permit holding up to 50% of cash outside Silicon Valley Bank - On May 4, 2023, the company amended its credit agreement to allow diversification of its cash holdings, permitting up to **50%** to be held at institutions other than Silicon Valley Bank[195](index=195&type=chunk) [Item 6. Exhibits](index=62&type=section&id=Item%206.%20Exhibits) This section provides an index of exhibits filed as part of the Quarterly Report on Form 10-Q, including certifications and XBRL documents - Lists exhibits filed with the report, including Amendment No. 1 to the Credit and Security Agreement, CEO/CFO certifications (Rules 302 and 906), and XBRL data files[200](index=200&type=chunk)

[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) 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 ...

Ocular Therapeutix, Inc. (NASDAQ:OCUL) Q2 2021 Results Conference Call August 9, 2021 4:30 PM ET Company Participants Donald Notman - Chief Financial Officer Antony Mattessich - President and Chief Executive Officer Dr. Michael Goldstein - President-Ophthalmology and Chief Medical Officer Scott Corning - Senior Vice President, Commercial Chris White - Senior Vice President, Business and Corporate Development Conference Call Participants Jon Wolleben - JMP Securities Joe Catanzaro - Piper Sandler Georgi Yord ...

(NASDAQ: OCUL) TRANSFORMING DRUG DELIVERY LEVERAGING A NOVEL TECHNOLOGY PLATFORM ANTONY MATTESSICH, CHIEF EXECUTIVE OFFICER September 2020 FORWARD LOOKING STATEMENTS Any statements in this presentation about future expectations, plans, and prospects for the Company, including the commercialization of DEXTENZA®, ReSure® Sealant, or any of the Company's product candidates; the commercial launch of, and effectiveness of reimbursement codes for, DEXTENZA; the development and regulatory status of the Company's p ...