yucelyilmaz
I’ve lined Ocular Therapeutix, Inc. (NASDAQ:OCUL) twice within the final couple of years, and whereas the inventory is up 67% from my December 2022 article, it’s down 30% from my March 2023 one. In each articles, I used to be hovering between impartial to damaging, and my main situation with OCUL was: the place’s the necessity for one more TKI, at the same time as an implantable product?
OCUL develops OTX-TKI for neovascular or moist AMD. OTX-TKI is 600µg of the tyrosine kinase inhibitor Axitinib delivered as a proprietary implant within the eye. The important thing USP of this asset is the length of the therapy impact, which, even within the part 1 stage, was seen for 10 months within the 400μg Cohort 2. I additionally famous how:
“a big proportion of sufferers didn’t want rescue medicines at durations for much longer than these obtained with at present out there anti-VEGF injection therapies.”
OTX-TKI is made potential utilizing Ocular’s hydrogel drug supply platform. The platform develops sustained-release variations of beforehand authorized therapies, permitting managed drug launch for prolonged intervals, starting from days to months. The product boasts biocompatibility, lacks preservatives, and is each biodegradable and dissolvable after drug supply. The hydrogel, constructed as a biodegradable polyethylene glycol (PEG) community, accommodates the trapping and supply of small molecules and enormous proteins in varied dosages. The corporate holds quite a few patents safeguarding this versatile know-how.
Nevertheless, the know-how doesn’t all the time work. Working example: OCUL’s research of Travoprost in treating glaucoma, the place the prostaglandin, extensively used to deal with intraocular strain (IOP) in open-angle glaucoma, did not ship constructive outcomes. That would have been as a result of Travoprost typically requires to be mixed with Timolol when monotherapy doesn’t work. The OCUL product used Travoprost as a single agent and failed in part 3 trials. Extra critically, considerations have been raised in regards to the sustained supply strategy, as “OTX-TP’s impact appeared to wane over time,” signifying a persistent situation past a singular trial.
In an earlier article, I mentioned some early knowledge from OTX-TKI:
…the trial, which in contrast OTX-TKI plus a 2mg dose of Eylea at one month, versus 2mg Eylea dosed each eight weeks, the present customary routine, confirmed quite a few non-inferiorities and at the very least some suspect superiority over Eylea. Whereas BCVA or finest corrected visible acuity regarded related, on two different measures – central subfield thickness and length – OTX-TKI appears to have bettered Eylea. Particularly in length, the implant noticed a 100% rescue-free affected person set at 3 months, dropping right down to 73% at 6 months, which compares favorably to excessive dose Eylea.
Extra part 1 knowledge, as I mentioned in my Could protection, confirmed larger profit and longer therapy length and was similar to Eylea, which was the lively comparator within the trial. In trials, therapy length that was 2-3 months longer than Eylea was noticed. Right here was my principal situation with the OTX-TKI program; as I had famous:
…on the one hand, Regeneron Prescribed drugs, Inc. (REGN) itself is creating a longer-dose model of Eylea, which was very profitable in a trial final yr; and, alternatively, if a further two months of drug exercise can dethrone an entrenched participant like Eylea, then gene therapies ought to have the primary benefit.
Gene therapies are aiming to be one-off therapies, or on the minimal, ought to final 3-5 years. They are going to be rather more costly than these implantable or in any other case longer length anti-VEGF therapies, nevertheless, because the economics reveals, if they will final for as much as 8 years or so, they’ll have economics on their aspect, in addition to the apparent medical effectivity of getting to take only one injection in a few years of life.
As I additionally mentioned in that earlier article, there are numerous therapies being developed, and their variations could be counted in numerous months. No less than 3 therapies have 6 months or longer as their goal length, whereas entrenched gamers like Eylea traditionally lasted for 12 to 16 weeks. On this house, gene therapies are coming with the promise of being one-time therapies, which in plain language implies possibly 5-8 years. Like I stated, I don’t see how OTX-TKI differentiates itself on this crowded discipline.
In June final yr, for the primary time in 12 months, 4 sufferers wanted rescue remedy within the OTX-TKI arm. Which means, 12 months is essentially the most you may count on for the therapy impact to final earlier than rescue remedy is required. That’s nonetheless so much longer than Eylea, however the market should have disagreed as a result of the inventory fell spectacularly on this knowledge.
In November, the FDA agreed to a Particular Protocol Evaluation requested by Ocular for his or her part 3 trial, and the corporate stated that dosing ought to [have begun] by year-end. Nevertheless, no reference to such a trial could be discovered on the registry. The corporate did point out a number of occasions that the pivotal trial will want a partnership.
Financials
OCUL has a market cap of $484mn and a money stability of $110mn. In December, the corporate, in all probability not capable of finding an acceptable associate for OTX-TKI and deciding to go it alone, raised $100mn in a secondary providing. As the corporate famous, it intends to make use of this providing to fund the Part 3 medical improvement of AXPAXLI for the therapy of moist AMD. Additionally they made $15 million in income from DEXTENZA, their legacy product. Analysis and improvement bills for the third quarter of 2023 have been $15.0 million, promoting and advertising bills have been $9.3 million, and normal and administrative bills have been $8.6 million. At that fee, they’ve a money runway of 5-6 quarters if you happen to embrace the additional money.
Backside Line
In case you take gene remedy out of the image – and admittedly, gene therapies have their very own set of issues – then OTX-TKI has a spot within the moist AMD therapy remedy house. The corporate has different applications ongoing, like diabetic retinopathy, however I’ve ignored that on this evaluation. So anyway, Ocular Therapeutix, Inc. does have a distinct segment within the absence of gene remedy, which can take years to develop. However OTX-TKI may even take between 2 and three years to get approval, and in the meantime, entrenched gamers like Eylea aren’t sitting idle. They’re additionally making an attempt to enhance their therapy length. Furthermore, whereas fewer injections make it straightforward for sufferers, eradicating an entrenched participant isn’t equally straightforward. Contemplating all that, and being a cautious investor, I’ll watch Ocular Therapeutix, Inc. from the sidelines.