Edited Transcript of OCUL earnings conference call or presentation 7-Mar-19 9:30pm GMT

I will now grow the growl can ought Antony.

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Antony Mattessich, Ocular Therapeutix, Inc. - President, CEO & Director [3]

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Thanks, Donald. 2018 was a transformational year although Ocular. And we're thrilled with early momentum we are seeing although we enter 2019, having recently submitted our sNDA ought enlarge the label although DEXTENZA, begin dosing can our OTX-TKI trial, and closed the $37.5 million convertible debt financing, which strengthens our cash post and extends our runway into early can 2020.

2018 was, obviously, highlighted by the FDA's approval of DEXTENZA, our dexamethasone intracanalicular insert although the treatment of postsurgical ocular pain. This accomplishment brings us one step closer ought realizing the important latent of our hydrogel drug-delivery platform. We are can a critical moment can the company's history although we are can the cusp of becoming a fully integrated, commercial-stage biopharmaceutical company. We linger can explore ought dine DEXTENZA available although sampling can May, with a formal commercial launch lay ought initiate upon confirmation of our pass-through payments nation expected can July of this year.

DEXTENZA is no only Ocular's first drug approval besides during is too the first produce approved can an entirely story dosage form.

Drug alluding intracanalicular inserts are minimally invasive, easily deployable route-of-administration that can forward drugs ought the surface of the eye without the challenges associated with eye drops. cottage we intend ought use impartial enlarge products treating many various diseases using this story dosage form, we trust DEXTENZA can exist transformative although both patients and physicians. although patients, DEXTENZA will present the kinase of full lesson of steroid treatment can a only preservative-free intracanalicular insert. This story manner of delivery can substitute a sophisticated eye drop regimen that, below the modern standard of care, can ask up ought 70 ocular steroid drops delivered can a full month, and ask a weekly convert can pathology.

For physicians, DEXTENZA puts direct assistance can their hands by ensuring patient compliance.

We trust that DEXTENZA is simply a improve method of delivering a steroid ought the eye and fully desire that it could at final contest although crude of the 9 million prescriptions although Ocular steroids each year can the U.S.

While the long-term plan although DEXTENZA is broad, our initial commercial efforts will exist laser-focused can the 2 million cataract procedures performed annually below Medicare divide B, where we desire ought dine full reimbursement can full wage from the moment we receive pass-through payment status, anticipated ought exist effective can the July timeframe.

Given the concentration, the dynamics of this initial entire market, we trust commercializing DEXTENZA can the U.S. by ourselves with a specialized sphere energy provides the best occur ought maximize shareholder value. can preparation although a successful commercial launch, we are difficult can profession can house the healthful infrastructure, ensuring commercial supply, and most importantly, securing immediate and long-term reimbursement.

We are pleased that although of today, crude 3 of these areas are progressing although expected. And we linger can explore ought dine commercial produce available although sampling can May, with a formal national launch plan although July.

Since approval, we dine been fully engaged can the build-out of our commercial organization, which Scott will affect can into shortly. It is significant ought note, though, that Ocular has been preparing ought exist a commercial entity from the moment I became CEO. cottage I dine had responsibility throughout my trade although crude paths of the biopharma business, my control background is can the commercial space, with can a 29-year career, I've got a multiple -- a multitude of produce launches across many therapeutic areas and can almost each chief pharmaceutical just can the world.

While DEXTENZA will exist Ocular's first drug produce launch, it will advantage from a team that has deep commercial experience, including selling buy-and-go products can the ophthalmology space. interval assured, we dine a well commercial tactic and are can the process of executing against it.

Regarding reimbursement, we fully understand a successful commercial launch of DEXTENZA will exist dependent upon having reimbursement firmly can place. although we dine said, our aim is ought attain eternal divide payment nation although the drug with well-understood procedure coding attached ought its deployment. although of today, we are pleased ought explain that we dine pending applications can the middle although Medicare and Medicaid Services that are being reviewed although both C and eternal J codes.

Beyond DEXTENZA, we dine a highly productive year planned with our pipeline, which continues ought affect can too although additions ought that pipeline. Dr. Michael Goldstein will classification more almost this later. ought fund these plans, we are pleased ought dine announced a quantity of transactions, including a recently completed $37.5 million convertible correspondence offering that strengthens our econmic post and extends our cash runway. Proceeds from this offering, across with existing cash property will fund the initial U.S. commercial launch of DEXTENZA, and affect can crude of the pipeline programs we will argue today into early 2020.

It is significant ought remember that aside from our collaboration with Regeneron, we include worldwide exclusive commercial rights can DEXTENZA and our entire pipeline, unburdened by important royalty obligations and post ought potentially attain high crude margins.

With that, I'd similar ought grow the growl can ought Scott Corning, Senior Vice principal of Commercial, who will say ought the commercialization of DEXTENZA.

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Scott Corning, Ocular Therapeutix, Inc. - SVP of Commercial [4]

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Thanks, Antony. We are incredibly excited almost the upcoming launch of DEXTENZA, and I used to similar ought update everyone can the nation of our commercialization efforts.

As Antony said, we linger can explore ought dine DEXTENZA available although sampling can May, with plans although our commercial launch can July upon receipt of pass-through payments nation when we desire CMS ought spread our new C code.

Starting with just opportunity. There are nearly 9 million topical ophthalmic steroid prescriptions can the United States, almost 4 million of which are associated with cataract surgery. Of those, nearly 2 million are cataract surgeries performed can patients covered below Medicare divide B. These cataract procedures will exist our initial entire just although they will exist reimbursable with a C constitution can hand.

We are launching DEXTENZA ourselves can the United States market, and we'll perform accordingly with a control sales force. This is an significant confront of our commercialization tactic based can our well belief that this specialized sale, essentially, the surgical sale of a pharmaceutical produce is best performed by a key explain team with undergo can ophthalmology, and selling buy-and-go products that can navigate the complexities of account-based selling.

For us, it is significant ought dine a dedicated team that no only shares can DEXTENZA's success although a produce besides during too can ocular's success although a company. We realized there are a quantity of new and existing products being used presently. Or that will exist used mail cataract or mail ocular surgery. And we trust we are robust positioned ought contest effectively, given DEXTENZA's only evaluate proposition although the only drug-alluding intracanalicular insert.

DEXTENZA releases up ought 30 days of preservative-free dexamethasone ought the ocular surface can a tapering basis. Replacing the most arduous postoperative drop regimen with a only insert, thereby, eliminating the lack although a steroid drop mail surgery.

We are robust underway can the hiring of our commercial team. We are pleased ought dine a headmaster of sales can place, who has already hired his regional directors. And we are now can the core of hiring our initial sphere sales and sphere reimbursement personnel.

We plan ought launch with an initial footprint of nearly 20 key explain managers plus a sphere reimbursement team, and plan ought add ought that quantity although we can obtain sales and reimbursement traction with the aim of being can nearly 40 key explain managers by the purpose of the year.

Our commercial strategies and efforts advantage from having a running stock, given the precommercial profession we conducted can 2017. Additionally, our distribution network is can place, we are working can our reimbursement services hub, and we will initiate conference with payers can the same near term. Surgeons are excited, across with our insights into the marketplace and with a produce similar DEXTENZA, we trust a company with targeted resources, such although Ocular, can successfully launch DEXTENZA.

I used to now similar ought grow the growl can ought Michael Goldstein, our headmaster Medical Officer, ought argue further can our pipeline.

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Michael H. Goldstein, Ocular Therapeutix, Inc. - headmaster Medical officer [5]

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Thanks, Scott. ago getting ought our pipeline, it is significant ought highlight our continued efforts ought enlarge the latent of DEXTENZA. DEXTENZA really describe a franchise occur although the company, with multiple lifecycle expansion opportunities and other indications where a produce profile similar DEXTENZA has latent ought convert the standard of care.

In January of this year, we submitted our supplemental new drug application ought enlarge DEXTENZA's label ought include the treatment of ocular data following ophthalmic surgery. We desire the FDA ought intimate its magazine can the second half of 2019. can addition, although we enlarge the DEXTENZA franchise, can 2019, we plan ought initiate clinical trials that will estimate DEXTENZA can pediatric cataract surgery and can allergic conjunctivitis. We dine received proposals although and plan ought assistance little investigator-initiated trials, evaluating DEXTENZA can various clinical situations.

Beyond DEXTENZA, our development efforts now inspire ought our pipeline of products that entire multiple other ocular diseases of both the front and assistance of the eye. each of the products within our pipeline targets and well-defined just that we trust is underserved by the modern standard of care.

And similar DEXTENZA, each of the products can the pipeline is a customized formulation that uses our proprietary hydrogel-technology platform, that we trust can figure treatments that present important benefits can those offered by existing drugs can the just today.

Two programs within the pipeline that we are same excited almost entire patients with glaucoma or elevated contractor pressure. And although many of you know, glaucoma is a big just and a illness that impacts an estimated 2.7 million nation can the United States. It is recognized although the chief meditate of blindness can nation can 50 years of age. It is too an piece where we trust one of the greatest unmet clinical needs is improving patient compliance. And although modern standard of worry relies can patients placing eye drops each day, the competence of patients ought use and spot eye drops is challenging. The prostaglandins are the most commonly used classification of medications ought treat patients with glaucoma. The products that we are developing are designed ought oration the spread of compliance by delivering a prostaglandin analog using our programs free hydrogel platform ought potentially lower interactive pressure although many months with a only insert.

Our most clinically advanced asset can the pipeline is OTX-TP, which is fully enrolled although the first phase III pivotal trial. OTX-TP is being developed although a latent treatment although patients with leading open-angle glaucoma or ocular hypertension. The produce is a long-acting, preservative-free formulation of the drug, travoprost delivered although an intracanalicular insert designed ought free drug can nearly 3 months. can the phase III clinical trial, we completed enrollment of 557 subjects with the leading efficacy endpoint being a statistically superior intend reduction of intraocular pressure or IOP from baseline although OTX-TP commerce of subjects compared ought placebo insert ought the subjects. A 3 diurnal quartile points of 2, 6 and 12 weeks following insertion.

In addition, cottage no a leading endpoint, the IOP reduction will lack ought exist clinically meaningful although regulatory approval. We linger can explore ought pronounce the sumit string data from this clinical experiment can the first half of this year. if this experiment is successful, we will lack ought accompany an additional phase III efficacy experiment although regulatory approval.

In supplement ought the ongoing phase III trial, we're conducting an open-label 1-year safety extension experiment with OTX-TP, that will exist included although divide of the modern pivotal program. This learn will supply additional long-term safety data with cite administration of OTX-TP.

OTX-TIC is our second pro forma program can development. This produce is a bioresorbable travoprost-containing hydrogel implants, delivered via an intracameral injection designed ought forward a higher even of IOP reduction. We outline ought enroll patients can a phase I prospective, multicenter and open-label dose escalation clinical experiment ought estimate the safety, efficacy, durability and tolerability of OTX-TIC.

As this is an open-label trial, we will exist capable ought impose early biological activity and safety. And then now treat our first prone although 9 months with a only insert. We desire ought gift initial results can the ARGO conference can April of this year.

Moving ought the assistance of the eye, we dine initiated a multicenter open-label phase I clinical experiment although OTX-TKI. OTX-TKI is a bioresorbable hydrogel fiber implant with antiangiogenic properties, delivered by intravitreal injection being developed ought treat patients with humid age-related macular degeneration and other retinal diseases. although a reminder, TKIs or tyrosine kinase inhibitors, constitution upstream of VEGF and therefore, can dine broader antiangiogenic properties.

Preclinical data dine demonstrated the competence ought forward an efficacious dose of TKI ought the posterior portion of the eye although the treatment of VEGF-induced retinal leakage although an extended duration of up ought 12 months. The phase I experiment will quiz the safety, durability and tolerability of OTX-TKI and estimate biological activity by following visual acuity can time and measuring retinal fitness using standard optical coherence tomography.

Last month, we announced that we dosed our first patient can this phase I clinical trial. We are now pleased ought pronounce that we dine too successfully dosed our second prone can this trial.

Finally, OTX-IVT is a sustained free formulation of the VEGF-TRAP Aflibercept or Eylea although the treatment of severe retinal diseases, such although humid age-related macular degeneration, that is being developed can partnership with Regeneron. although we dine said can previous calls, contractually, we are unable ought comment can any details of the program.

I used to now similar ought grow the growl assistance can ought Donald, who will magazine our fourth area and year ended 2018 econmic results.

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Donald Notman, Ocular Therapeutix, Inc. - CFO [6]

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Thanks, Michael. allow me initiate by summarizing our capitalization. although of the area ended December 31, 2018, we had $54.1 million can cash and cash equivalents versus $56.9 million can the purpose of the third quarter.

The cash surplus benefited during the fourth area from $5 million can net proceeds generated from the sale of normal stock below the company's 2016 sales agreement, or ATM, and $12 million of net proceeds from an expansion and extension of our existing 5-year word borrow facility. Offsetting the ATM inflows during the area with net losses of $17.4 million, and a chief debt and benefit repayments of $1.5 million.

As disclosed can this afternoon's 10-K filing, we dine continued ought opportunistically sell normal stock below the ATM into 2019, raising an additional $5 million net of expenses. can this point, we dine exhausted the modern ATM facility. can addition, although announced 2 weeks ago, we raised $37.5 million can a convertible correspondence offering ought farther assistance the launch of DEXTENZA and the ongoing development of our pipeline.

This 7-year correspondence bears annual benefit can a impose of 6%, and is convertible into normal stock can $6.50 per share, representing an 80% premium ought the closing stock wage can the appointment of announcement. We are pleased ought dine spot this additional funding can spot that's to ought minimize dilution ought existing shareholders.

Based can our modern plans and forecasted expenses, we trust that existing cash and cash equivalents will fund operating expenses, debt service obligations and headmaster expenditures into early 2020. This is, of course, prone ought a quantity of assumptions almost the velocity of, no only our inquiry can clinical econmic development programs besides during too the price related ought the commercialization of DEXTENZA too although other aspects of our business.

Research & development expenses although the fourth area were $10.3 million versus $7.9 million although the fourth area of 2017, and meditate increased unallocated other costs, chiefly can personnel costs, consulting services, external testing expenses, and costs associated with additional hiring.

Overall, R&D expenses although the full year ended December 31, 2018, increased $6 million ought $36.9 million from $30.9 million can 2017, reflecting increased unallocated personnel costs, consulting services and facility expenses associated with additional lab space can our corporate headquarters.

Selling and marketing expenses although the fourth area were $2.3 million although compared ought $2.9 million of the same area can 2017. This amplify relates ought initial scale-up and precommercial activities, although a originate of the early approval of DEXTENZA can November 30, 2018.

For the full year ended December 31, 2018, selling and marketing expenses decreased $12.1 million from $17 million ought $4.9 million, driven chiefly by decreased expenses associated with the previously delayed launch of DEXTENZA.

Finally, habitual and administrative expenses were $5.1 million although the fourth area versus $4.3 million can the similar area of 2017.

For the year ended December 31, 2018, G&A expenses increased $3.3 million ought $18.8 million from $15.5 million can 2017. The amplify can expenses although both the fourth area and year ended 2018, stemmed chiefly from increases can legal costs, related ought the defense of the company and ongoing legal proceedings.

Revenues although the fourth area and year ended 2018 were driven exclusively by ReSure Sealant, and totaled nearly $0.5 million and $2 million, respectively. although noted can the past, we are no currently providing promotional assistance ought ReSure, and we perform no desire produce revenues ought exist material can 2019.

With count ought the econmic results although the fourth area ended December 31, 2018, we reported a net loss of $17.4 million or a loss of $0.42 per share. This compares ought a net loss of $13.1 million or a loss of $0.44 per piece although the same ripen can 2017. The net loss although the fourth area of 2018 included $2.5 million can noncash charges although stock-based compensation and depreciation, compared ought $2.6 million although the same area can 2017. The company had nearly 42.8 million shares issued and noted although of March 1, 2019.

For the full year ended December 31, 2018, we reported a net loss of $60 million or a loss of $1.57 per share. This compares ought a net loss of $63.4 million or a loss of $2.20 per piece although the full year 2017.

This concludes my comments can our fourth area and year ended 2018 econmic results. And I used to similar ought grow the growl assistance ought Antony although some outline comments.

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Antony Mattessich, Ocular Therapeutix, Inc. - President, CEO & Director [7]

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