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Ocular Therapeutix™ Reports First Quarter 2019 Financial Results and Business Update

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DEXTENZA® Commercial Launch Scheduled for
Mid-Year 2019

Ocular Therapeutix™, Inc. (NASDAQ:OCUL), a biopharmaceutical company
focused on the formulation, development, and commercialization of
innovative therapies for diseases and conditions of the eye, today
announced financial results for the first quarter ended March 31, 2019
and provided a business update.

"This is an exciting time at Ocular Therapeutix and it has been a very
productive first quarter," said Antony Mattessich, President and Chief
Executive Officer. "We have made tremendous progress with DEXTENZA on a
number of fronts and are pleased that the launch is in full roll-out. In
addition, we have received a preliminary recommendation from the Center
for Medicare and Medicaid Services for our permanent HCPCS J-code for
DEXTENZA, and we were given a PDUFA target action date of November 2019
for the expansion of our DEXTENZA label to include the treatment of
ocular inflammation following ophthalmic surgery. Beyond DEXTENZA, our
pipeline continues to advance and we look forward to announcing results
from our first Phase 3 clinical trial of OTX-TP in the next several
weeks."

Key Highlights and Upcoming Events

  • Progressed DEXTENZA (dexamethasone ophthalmic insert):
    • Completed the initial hiring of its sales management, key account
      managers, medical science liaisons and reimbursement
      professionals. DEXTENZA is now available at distribution centers
      with a sampling program targeted at key surgery centers commencing
      later this month. The formal DEXTENZA commercial launch remains on
      track for mid-2019 pending the receipt of transitional
      pass-through payment status (C-code), by the Center for Medicare
      and Medicaid Services (CMS), anticipated in June for activation
      July 1, 2019.
    • Announced that CMS has included DEXTENZA 0.4mg for
      intracanalicular use on its list of products that has been
      preliminarily recommended for a new dedicated Healthcare Common
      Procedure Coding System (HCPCS) J-code, effective January 1, 2020.
    • Announced the U.S. Food and Drug Administration (FDA) has accepted
      for filing the supplemental New Drug Application (sNDA) for
      DEXTENZA to add the treatment of ocular inflammation following
      ophthalmic surgery as an additional indication. The FDA has set a
      PDUFA target action date of November for the completion of its
      review of the sNDA.
    • Presented data at the recent American Society of Cataract and
      Refractive Surgery (ASCRS) symposium including pooled Phase 3
      safety and efficacy data for DEXTENZA use after cataract surgery
      and Phase 3 data highlighting DEXTENZA's benefit in treating
      symptoms of allergic conjunctivitis using a modified conjunctival
      allergen challenge (CAC) model. The Company believes DEXTENZA has
      potential to be used in multiple ocular indications and is also
      pursuing preclinical work in post-operation pain, inflammation,
      antibiotics, dry eye and additional formulations for allergic
      conjunctivitis.
  • Topline efficacy data from the Phase 3 clinical trial of OTX-TP
    (travoprost ophthalmic insert) for the treatment of glaucoma expected
    in the second quarter of 2019.
    The Phase 3 clinical trial
    enrolled 550 subjects with the primary efficacy endpoint being a
    statistically superior mean reduction of intraocular pressure (IOP)
    from baseline for OTX-TP treated subjects compared with placebo insert
    treated subjects at three diurnal time points at each of three
    measurement dates of 2, 6, and 12 weeks following insertion. While not
    a primary endpoint, the Company will also analyze IOP reduction for
    clinical meaningfulness as we expect the FDA will require it for
    regulatory approval. The Company continues to enroll an open-label,
    one-year safety extension study with OTX-TP to provide additional
    long-term safety data with repeat administration of OTX-TP.
  • Reported interim results of the Phase 1 clinical trial of
    OTX-TIC (travoprost intracameral implant) at the Association for
    Research in Vision and Ophthalmology (ARVO) and ASCRS Annual Meetings.
    OTX-TIC
    is a bioresorbable, travoprost-containing hydrogel intracameral
    implant to treat patients with primary open-angle glaucoma or ocular
    hypertension. Interim data showed subjects achieved IOP lowering as
    good as topical travoprost in the non-study eye for a period of up to
    9 months with a single insert. While there were no adverse changes to
    the cornea, as measured by endothelial cell evaluation and corneal
    pachymetry, the Company saw several subjects with low-grade
    inflammation and mild peripheral anterior synechiae, both of which it
    believes may be addressable with modifications to the implants.
  • Continued dosing of patients in the Phase 1 clinical trial of
    OTX-TKI (tyrosine kinase inhibitor intravitreal implant).
    OTX-TKI
    is a bioresorbable, hydrogel fiber implant with anti-angiogenic
    properties delivered by intravitreal injection to the posterior
    segment of the eye for the treatment of wet age-related macular
    degeneration (AMD) for an extended duration. The Phase 1 clinical
    trial being conducted in Australia is a multi-center, open-label study
    testing the safety, durability, and tolerability of OTX-TKI. The Data
    and Safety Monitoring Committee met and agreed with the Company's
    recommendation to dose the next cohort of subjects at a higher dose.
  • Provided an update on the partnership with Regeneron. OTX-IVT
    is a sustained release formulation of the VEGF trap aflibercept, or
    EYLEA®, for the treatment of retinal diseases such as wet
    AMD that is being developed in partnership with Regeneron. The Company
    has recently agreed with Regeneron to cease development of the current
    formulation and is currently in discussions regarding the development
    of an alternative formulation.

First Quarter Ended March 31, 2019 Financial Results

  • The Company had $76.3 million in cash and cash equivalents at March
    31, 2019 versus $54.1 million at year end December 31, 2018. Both of
    these cash amounts exclude $6.6 million of restricted cash as required
    by the Company's existing senior debt facility and letters of credit
    for our property leases. The cash balance benefited during the first
    quarter from our $37.5 million subordinated convertible debt offering
    and $5.0 million in net proceeds generated from the sale of common
    stock under the Company's 2016 Sales Agreement, or 2016 Sales
    Agreement. Based on the Company's current plans and forecasted
    expenses, Ocular Therapeutix believes that existing cash and cash
    equivalents will fund operating expenses, debt service obligations,
    and capital expenditures into the second quarter of 2020.
  • The Company exhausted the 2016 Sales Agreement with the first quarter
    sales of common stock and cancelled the facility. On April 5, 2019,
    the Company entered into an Open Market Sale Agreement, or the 2019
    Sales Agreement with Jefferies LLC, under which the Company may offer
    and sell our common stock having aggregate proceeds of up to $50
    million from time to time. Through May 9, 2019, the Company has not
    sold any shares of common stock under the 2019 Sales Agreement.
  • Research and development expenses for the first quarter were $11.3
    million versus $8.2 million for the comparable period in 2018 and
    reflect an increase in unallocated costs, primarily personnel costs
    associated with additional hiring, and costs associated with the
    Company's pipeline programs as well as preclinical programs.
  • Selling and marketing expenses for the first quarter were $3.3 million
    as compared to $0.7 million for the same quarter in 2018. This
    increase relates primarily to DEXTENZA pre-commercial launch
    activities including the hiring of additional personnel and increased
    spending on consulting, conferences and related costs.
  • General and Administrative expenses were $5.4 million for the first
    quarter versus $4.8 million in the comparable quarter of 2018. The
    increase in expenses stemmed primarily from increased personnel and
    facilities costs.
  • Revenues for the first quarter were driven exclusively by ReSure
    Sealant and totaled approximately $0.5 million vs. $0.3 million in the
    comparable quarter of 2018. As noted in the past, the Company does not
    currently provide promotional support to ReSure and does not expect
    ReSure product revenues to be material in 2019.
  • The Company reported a net loss of $(17.1) million in the first
    quarter of 2019, or basic net loss of $(0.41) per share. This compares
    to a net loss of $(13.8) million, or basic net loss of $(0.40) per
    share, for the same period in 2018. The net loss for the quarter
    included $2.5 million in non-cash charges for stock-based compensation
    and depreciation compared to $2.4 million for the same quarter in 2018.
  • The Company had approximately 42.8 million shares issued and
    outstanding as of May 9, 2019.

Conference Call & Webcast Information
Members of
the Ocular Therapeutix management team will host a live conference call
and webcast today at 8:30 a.m. Eastern Time to review the Company's
financial results and provide a general business update. The live
webcast can be accessed by visiting the Investors section of the
Company's website at investors.ocutx.com. Please connect at least 15
minutes prior to the live webcast to ensure adequate time for any
software download that may be needed to access the webcast.
Alternatively, please call (844) 464-3934 (U.S.) or (765) 507-2620
(International) to listen to the live conference call. The conference ID
number for the live call will be 9580369. An archive of the webcast will
be available until August 12, 2019 on the Company's website.

About Ocular Therapeutix, Inc.
Ocular Therapeutix, Inc.
is a biopharmaceutical company focused on the formulation, development,
and commercialization of innovative therapies for diseases and
conditions of the eye using its proprietary bioresorbable hydrogel-based
formulation technology. Ocular Therapeutix's first commercial drug
product, DEXTENZA®, is FDA-approved for the treatment of
ocular pain following ophthalmic surgery. OTX-TP (intracanalicular
travoprost insert) is an intracanalicular insert in Phase 3 clinical
development for the reduction of intraocular pressure in patients with
primary open-angle glaucoma and ocular hypertension. The Company's
earlier stage assets include OTX-TIC, an extended-delivery intracameral
travoprost implant for the reduction of intraocular pressure in patients
with glaucoma and ocular hypertension, as well as sustained release
intravitreal implants for the treatment of retinal diseases. These
intravitreal implants include OTX-TKI, containing a tyrosine kinase
inhibitor (TKI), and, in collaboration with Regeneron, OTX-IVT, an
extended-delivery protein-based anti-vascular endothelial growth factor
(VEGF) trap. Ocular Therapeutix's first product, ReSure®
Sealant, is FDA-approved to seal corneal incisions following cataract
surgery.

Forward Looking Statements
Any statements in this press
release about future expectations, plans, and prospects for the Company,
including the commercialization of DEXTENZA®, ReSure Sealant,
or any of the Company's product candidates, including the anticipated
commercial launch of, and receipt of reimbursement codes for, DEXTENZA;
the development and regulatory status of the Company's product
candidates, such as the Company's regulatory submissions for and the
timing and conduct of, or implications of results from, clinical trials
of DEXTENZA for the treatment of post-surgical ocular inflammation and
the prospects for approvability of DEXTENZA for post-surgical ocular
inflammation or any other indications, OTX-TP for the treatment of
primary open-angle glaucoma and ocular hypertension, OTX-TIC for the
treatment of primary open-angle glaucoma and ocular hypertension,
OTX-TKI for the treatment of retinal diseases including wet AMD, and
OTX-IVT as an extended-delivery formulation of the VEGF trap aflibercept
for the treatment of retinal diseases including wet AMD; the ongoing
development of the Company's extended-delivery hydrogel depot
technology; the potential utility of any of the Company's product
candidates; the potential benefits and future operation of the
collaboration with Regeneron Pharmaceuticals, including any potential
future payments thereunder; the sufficiency of the Company's cash
resources and other statements containing the words "anticipate,"
"believe," "estimate," "expect," "intend", "goal," "may", "might,"
"plan," "predict," "project," "target," "potential," "will," "would,"
"could," "should," "continue," and similar expressions, constitute
forward-looking statements within the meaning of The Private Securities
Litigation Reform Act of 1995. Actual results may differ materially from
those indicated by such forward-looking statements as a result of
various important factors. Such forward-looking statements involve
substantial risks and uncertainties that could cause the Company's
clinical development programs, future results, performance or
achievements to differ significantly from those expressed or implied by
the forward-looking statements. Such risks and uncertainties include,
among others, those related to the timing and costs involved in
commercializing DEXTENZA, ReSure Sealant or any product candidate that
receives regulatory approval, including the conduct of post-approval
studies, the ability to retain regulatory approval of DEXTENZA, ReSure
Sealant or any product candidate that receives regulatory approval, the
ability to obtain reimbursement codes for DEXTENZA, the initiation,
timing and conduct of clinical trials, availability of data from
clinical trials and expectations for regulatory submissions and
approvals, the Company's scientific approach and general development
progress, the availability or commercial potential of the Company's
product candidates, the sufficiency of cash resources, the Company's
existing indebtedness, the ability of the Company's creditors to
accelerate the maturity of such indebtedness upon the occurrence of
certain events of default, the outcome of the Company's ongoing legal
proceedings and need for additional financing or other actions and other
factors discussed in the "Risk Factors" section contained in the
Company's quarterly and annual reports on file with the Securities and
Exchange Commission. In addition, the forward-looking statements
included in this press release represent the Company's views as of the
date of this release. The Company anticipates that subsequent events and
developments will cause the Company's views to change. However, while
the Company may elect to update these forward-looking statements at some
point in the future, the Company specifically disclaims any obligation
to do so except as required by law. These forward-looking statements
should not be relied upon as representing the Company's views as of any
date subsequent to the date of this release.

       

Ocular Therapeutix, Inc.
Consolidated
Statements of Operations and Comprehensive Loss

(In
thousands, except share and per share data)

(Unaudited)

 
 
Three Months Ended
March 31,
2019 2018
Revenue:
Product revenue $ 492   $ 340  
Total revenue   492     340  
Costs and operating expenses:
Cost of product revenue 128 80
Research and development 11,317 8,227
Selling and marketing 3,347 717
General and administrative   5,358     4,771  
Total costs and operating expenses   20,150     13,795  
Loss from operations   (19,658 )   (13,455 )
Other income (expense):
Interest income 329 176
Interest expense (1,018 ) (486 )
Change in fair value of derivative liability   3,223      
Total other income (expense), net   2,534     (310 )
Net loss and comprehensive loss $ (17,124 ) $ (13,765 )
Net loss per share, basic $ (0.41 ) $ (0.40 )
Weighted average common shares outstanding, basic   42,251,292     34,792,848  
Net loss per share, diluted $ (0.45 ) $ (0.40 )
Weighted average common shares outstanding, diluted   44,174,369     34,792,848  
 
       

OCULAR THERAPEUTIX, INC.
CONSOLIDATED BALANCE SHEETS
(In
thousands, except share and per share data)

(Unaudited)

 
 
March 31, December 31,
2019 2018
Assets
Current assets:
Cash and cash equivalents $ 76,251 $ 54,062
Accounts receivable 276 201
Inventory 265 217
Prepaid expenses and other current assets   2,380     1,713  
Total current assets 79,172 56,193
Property and equipment, net 10,548 10,236
Restricted cash 6,614 6,614
Operating lease assets   5,156      
Total assets $ 101,490   $ 73,043  
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 3,902 $ 2,965
Accrued expenses and other current liabilities 4,037 6,194
Operating lease liability   675      
Total current liabilities 8,614 9,159
Other liabilities 3,221
Operating lease liabilities, net of current portion 7,909
Derivative liability 11,462
Notes payable, net of discount 24,843 24,788
2026 convertible notes, net   23,014      
Total liabilities   75,842     37,168  
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.0001 par value; 5,000,000 shares authorized and
no shares issued or outstanding at March 31, 2019 and December 31,
2018, respectively
Common stock, $0.0001 par value; 100,000,000 shares authorized and
42,836,978 and 41,518,091 shares issued and outstanding at March 31,
2019 and December 31, 2018
4 4
Additional paid-in capital 340,011 333,114
Accumulated deficit   (314,367 )   (297,243 )
Total stockholders' equity   25,648     35,875  
Total liabilities and stockholders' equity $ 101,490   $ 73,043  
 

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