Good morning, and welcome to the Ocugen conference call. At this time, all participants are in listen-only mode, a question and answer session will follow the presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to Ken Inchausti, Head of Investor Relations and Communications for Ocugen. You may begin.
Thank you, operator. I'd like to welcome you to our conference call. With me today is Ocugen's Chairman and CEO, Dr. Shankar Musunuri, who will provide a business update, and our Chief Financial Officer and Head of Corporate Development, Sanjay Subramanian, who will provide a financial update. Earlier this morning, we issued a press release including a business update and second quarter 2021 financial results. We encourage listeners to review the press release, which is available on our website at www.ocugen.com. This call is also being recorded, and a replay, along with accompanying slide presentation, will be available on the investor section of the Ocugen website for approximately 45 days. As always, we need to advise you that this call will contain forward-looking statements.
Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from expectations, including, among other things, the uncertainties inherent in research and development of our product candidates, risks to our business related to the ongoing COVID-19 pandemic, uncertainty regarding whether and when we will be able to submit a Biologics License Application for COVAXIN to the FDA, and whether and when we will receive regulatory approvals for COVAXIN in the United States or Canada. These and other risks and uncertainties are more fully described in our periodic filings with the Securities and Exchange Commission, including the risk factors described in the section entitled "Risk Factors" in the quarterly and annual reports we file with the SEC. You should read carefully the risks and uncertainties described in today's press release, as well as the risk factors included in our filings with the SEC.
Note that we intend to file our Form 10-Q with the SEC today. I will now turn the call over to Ocugen's Chairman and CEO, Dr. Shankar Musunuri.
Thank you, Ken. Good morning, everyone. Thank you for joining. We hope you and your families are safe and well. We are now more than 18 months into coronavirus pandemic. We share the concerns of our public health officials of the risks and challenges posed by this mutating virus. The headlines speak every day to our fourth pandemic wave washing over many regions in the United States. We now have a pandemic of the unvaccinated that represents the vast majority of new cases surging through North America. It is really difficult to hear accounts of people in the hospital realizing too late that a vaccine and that taking well-known precautions could potentially have prevented serious illness and death. The same holds true for our friends in the north.
Last week, the Public Health Agency of Canada, too, reported that almost 85% of recent reported COVID-19 cases across Canada are among those who are unvaccinated. Every day, my leadership team and I, along with the staff at Ocugen, discuss our role and potential contributions to the broader public health agenda and the fight against COVID-19. Just as I stated on our last call with you, our hearts go out to those who have lost loved ones or have been personally touched due to this virus. Our thoughts are also with the healthcare workers, public health officials, and scientists who are working every day to bring this pandemic back under control. Today, I would like to provide you an update on Ocugen's achievements in conjunction with our co-development partner for COVAXIN, Bharat Biotech, for the second quarter.
We continue to believe that COVAXIN, if approved, would be a critical addition to our national arsenal to fight this pandemic, and we believe that our efforts during the second quarter represent important steps forward toward bringing COVAXIN to North America. All of this would not be possible without our collaboration with Bharat Biotech. As you know, these past months continue to be trying times for India. The demand for vaccines is great, and they have continuously been working to deliver for India and the 16 other countries in which COVAXIN has been authorized or approved for use. For their work and partnership, we say thank you. On this slide, we have summarized the major events that have transpired over the second quarter of 2021.
In June, Ocugen entered into an amendment to our agreement with Bharat Biotech that expanded our ability to develop, manufacture, and commercialize COVAXIN into Canada, in addition to our existing rights in the United States. That was followed up with the discussions with Health Canada officials and led to our ability to file a regulatory submission under their interim order, which was transitioned into a new drug submission for COVID-19. We're extremely pleased that this was accomplished in such a short order, especially when the urgency is increasing in Canada. Now their review has started. We are ready to answer their questions and will work with them throughout their review. It's important to note that Ocugen utilized an affiliate called Vaccigen in Canada to help facilitate the submission and interaction with Health Canada. This affiliate will be responsible for the development and potential commercialization of COVAXIN in Canada.
Next, I will discuss our engagement in the United States. As we stated in early June, the U.S. Food and Drug Administration directed us to submit a Biologics License application, or BLA, for COVAXIN. The data requirements for COVAXIN are still being evaluated. While we anticipate a need for an additional clinical trial, we're confident in our ability to navigate and address the FDA's process and requirements. Our partner, Bharat Biotech, posted compelling phase III clinical data in early July, which are being evaluated for peer-reviewed publication. These data showed that COVAXIN demonstrated an overall efficacy against COVID-19 at 77.8% and 93.4% against severe disease. Equally impressive is that this phase III clinical trial was the first one to evaluate the efficacy of a COVID-19 vaccine against the Delta variant within a controlled setting.
In fact, the majority of the symptomatic cases identified in aggregate in the COVAXIN and control arms in the phase III clinical trial were COVID-19 variants, the majority of which were identified to be Delta variant B.1.617.2. Data showed COVAXIN achieving a 65.2% efficacy rate against the Delta variant. Data from COVID cases demonstrated lower viral load, at least 100-fold less in vaccinated individuals compared to placebo group, showing potential for less transmission of the disease by individuals who received COVAXIN. Furthermore, the data showed an efficacy against asymptomatic disease at 63.6%, suggesting the potential of the vaccine to reduce the asymptomatic spread of the disease. Finally, a readout of the safety data demonstrated that only 12.4% of participants in both the treatment and control arms of the clinical trial reported an adverse event. Less than 0.5% of participants reported a severe adverse event.
The totality of this data raises two important points which make me optimistic about COVAXIN serving a critical role in North America. The first, these data on Delta are very suggestive that COVAXIN is a valuable tool in our fight against this virus now, especially with this variant now dominating this fourth wave we are experiencing. This is a point we have been communicating to stakeholders, including FDA and Health Canada. Second, because this vaccine trains the immune system to attack the whole COVID-19 virus based on multi-antigens, including the spike and nucleocapsid proteins, COVAXIN has the potential to be effective against multiple variants and reduce the possibility of mutant virus escape.
We recognize that this COVID-19 pandemic will continue to be a long-term challenge to our healthcare system and society, and such a multi-pronged ability to attack the virus so effectively has the potential to bring flexibility into our public health strategies. Providing COVAXIN as an option, which is built on traditional platform similar to polio vaccine, which has an established efficacy and safety record, may benefit many unvaccinated individuals and result in significant benefit to public health. On a final note about our progress for COVAXIN, in June, Ocugen selected Jubilant Hollister, which is a renowned contract manufacturing organization, to be our partner for COVAXIN to prepare for potential commercial manufacturing in North America. Technology transfer from Bharat Biotech to Jubilant has also been initiated.
As you saw back in March, we hired J.P. Gabriel as our Head of Manufacturing and Supply Chain, which he is now building out a team experienced in drug substance and drug product management, logistics and packaging, and procurement. This team is not solely focused on COVAXIN, but will have supply chain responsibilities for our entire portfolio of assets. This rounds out our update on COVAXIN. I'd like to turn our attention to our ocular portfolio. We remain on track to initiate our first gene therapy phase I/II clinical trial for OCU400 later this year. These trials will be targeting two specific genome types, rhodopsin and NR2E3. Currently, our toxicology studies are progressing well with readouts forthcoming. All of these will support an IND that we anticipate being filed in the fourth quarter.
This has been a busy quarter with much going on behind the scenes to advance COVAXIN and our ocular portfolio, and there is much more ahead. I will now turn the call over to Sanjay to provide our second quarter 2021 financial update. Sanjay?
Thank you, Shankar, and good morning, everyone. I will now provide an overview of key financial results for the second quarter of this year. We ended the quarter with cash equivalents, and restricted cash totaling $115.8 million as of June 30, 2021, compared to $24.2 million on hand as of December 31, 2020. Our research and development expenses for the quarter ended June 30, 2021, were $18.9 million, compared to $1.6 million for the second quarter ended June 30, 2020. R&D expenses for the quarter ended June 30, 2021, included $15 million of expense related to the upfront payment made to Bharat Biotech for rights to COVAXIN in Canada. General and administrative expenses for the quarter ended June 30, 2021, were $6.8 million, compared to $1.8 million for the previous year's second quarter ended June 30, 2020.
The increase was primarily driven by a $1.5 million increase in non-cash stock-based compensation expense, approximately $2 million of proxy solicitation costs incurred for our stockholder meetings, and an increase in infrastructure costs to support the continued growth of the organization. Net loss was $26 million, or $0.13 net loss per share for the quarter ended June 30, 2021, compared to a net loss of $16.2 million, or $0.19 net loss per share for the previous year's quarter ended June 30, 2020. Finally, we are very pleased with our inclusion into the Russell 3000 Index, as with the 2000 Index. It's a demonstration of the growing value of Ocugen, and we are happy to be a part of this important benchmark. That concludes my report.
Thank you, Sanjay. With that, we'll open up the call for questions. Operator?
As a reminder, if you'd like to ask a question, simply press star one on your telephone keypad. Our first question comes from the line of Keay Nakae . Please go ahead.
Go ahead, Keay.
Oh, I'm sorry. Didn't know they were pronouncing my name. Yeah, thank you, Shankar. Let's start with the Canadian approval review. Do you have a good understanding of, at this point, what other data they're going to need and just any estimate on how long you think the review might take and when the authorization might be granted?
We have submitted all the data, what is needed for the submission, for the Canadian submission, Keay . Again, on the specific timeline and the approval clock, we can't give you that at this stage. All I can say is it's under active review by Health Canada. As we get questions, we're ready to respond to them very promptly and provide any information they need.
Okay. Maybe let's switch then to the U.S. and the FDA. In terms of the additional study, can you give us a review of what the design of that study might look like?
We are in discussions with the BLA continuously, and as soon as we reach an agreement on requirements for the BLA, any additional studies we need, we'll be updating the markets.
Okay. Is there an expectation in terms of timing when you might be in position to start that study?
From our resource perspective and from Ocugen perspective, we'll be ready to start the study this year.
Okay.
Once.
Okay.
So.
Okay, great. Let's go ahead and shift to the gene therapy programs. Can you give us an estimate of when you may complete the GLP tox, and what do you anticipate you'll be able to say about those results?
Yeah. The GLP tox studies, we're anticipating data in the next few months. We are on target to file our IND by the end of the year as planned. Once again, as the readouts come out prior to filing IND, we'll be happy to share that news with the markets. Currently, everything is on target.
Okay. All right. Well, great to hear that. Okay, let me jump back in queue.
Your next question comes from the line of Robert LeBoyer with Noble Capital.
Good morning. First question is on the submission of the data for publication from the phase III. Could you give any details about the type of publication, whether it's a general interest like The New England Journal or something more specific like an immunology journal, and what the timing might be?
The publication, Bharat Biotech, our partners are directly dealing. It's going to be one of the key medical journals. They're directly dealing with them.
Okay.
As soon as we know more, we'll update you.
Sure. Okay. In terms of the FDA and the BLA submission, can you elaborate at all on the type of study that might be needed in terms of its size, scope, or any of the timing? Is it too early to determine those things, or are there any details that you can share?
At this stage, unfortunately, I cannot share any details. Once again, as soon as we reach an agreement on the path, we'll be happy to provide update to the markets at that time.
Okay. Thank you very much.
Your next question comes from the line of Swayampakula Ramakanth with H.C. Wainwright.
Thank you. This is R.K. from H.C. Wainwright. Good morning, Shankar and Sanjay.
Good morning, R.K.
Morning, R.K.
Couple of quick questions. I understand you're in discussions with the Canadian regulatory authority. Assuming the review goes fine and you have a successful result, in terms of commercialization, how does this work? Do they have to be approved by individual provinces, or is this a federal program in the Canadian geography?
Actually, this is Health Canada. They give approval for Canada. Once you get the approval, yeah, it's across Canada.
Okay. You don't need to go across. In terms of discussions with the FDA, are you planning to meet with them further before your submission, and what's the trigger point for your submission? It looks like you have most of the data with you at this point, right?
Yeah, we have most of the data from our phase III clinical trial, including all the manufacturing. We are still discussing the regulatory path for the BLA, what is required, if any additional studies. That's the part. As soon as we finalize those, as I mentioned before, we have resources to initiate as soon as we reach an agreement with FDA, and we'll work on them, and our goal is to efficiently conduct those studies if needed and do the filing for BLA.
Okay. Talking about resources, as you stated in your prepared remarks, Bharat has gotten its COVAXIN approved in 16 different countries, including India, I would think. What's their capacity, and do they have enough capacity to manufacture the product, at least initially, both for Canada and the U.S.?
Yeah, Bharat has been our partners working extremely hard. Every month their capacities are going up. In fact, publicly, they stated they're going to target more than 500,000,000 doses per year, their capacity, and they're hopeful to get there in the next few months. Therefore, we're optimistic we'll get whatever supplies we need for North American market.
Perfect. Thank you, gentlemen.
Thank you, R.K.
Thank you.
Thank you.
Your next question comes from the line of Kristen Kluska with Cantor Fitzgerald.
Hi, good morning, everyone. Thanks for taking my question. Just wanted to ask for U.S. trial, there's a lot of talk right now about booster vaccines as well. Can you speak to whether your discussions with the agency are focusing on vaccinating people for the first time, or if you're also planning to look at COVAXIN perhaps as a potential booster for those here that have received one of the other vaccines that has an EUA?
Good question. Yeah, we'll be looking into all those options, Kristen. As you know, many of the vaccinated too, they can get infected, and they'll be looking for boosters in the future. We'll be looking into all potential options and unmet medical needs in the U.S., including children. We're carefully evaluating and conducting the clinical trials, whatever is needed to support the market.
Okay, thanks for that. Wanted to ask if you could please discuss how you believe the efficacy of COVAXIN, specifically against the Delta variant, has compared to some of the other current vaccines where there are data available at this point, and then also wanted to hear your thoughts about some of the emerging variants beyond Delta. Thank you.
Yeah. I think one thing I want to make it very clear, COVAXIN is the only product which has data from controlled phase III clinical trial on efficacy on Delta variant, which showed 65.2%. Some of the data probably you're seeing is neutralization data coming from surveillance. Again, it is only vaccine with controlled clinical trials. That's very important to note. The second question.
Can you repeat your second question?
Can you repeat your second question, Kristen?
Of course. I just wanted to ask what your thoughts are about emerging variants beyond Delta and how you're thinking about the situation, let's say, in the next six months from now?
Yeah. We are seeing emerging variants almost every few months, every week probably. This is going to continue. If you look at the data generated with COVAXIN in the clinical trial too, as we stated, majority of the cases are from variants. It showed solid efficacy, overall 78%, inclusion of all those variants. That's very important. This vaccine is built on broad spectrum whole virus. You have multi-antigenic approach. You give a broad protection of cellular and humoral responses. Therefore, we believe this has potential to address even emerging future variants. That's why it's important to have this kind of a vaccine as an option in our toolkit.
That you are not looking at every variant by itself, like spike-based vaccines. You have a broad protective vaccine which can work for longer term.
Okay, thanks. The last question I have for you is, maybe if you could just walk through the experience with COVAXIN in India. I think the last earnings call you hosted was definitely a different situation in terms of the number of cases, and seems to be getting somewhat under control, at least from where we were a couple of months ago. I wanted to ask, generally speaking, how the experience there has kind of helped you think about the efficacy and role of COVAXIN, broadly speaking, and if you have any thoughts you could share from your partners generally about what they're hearing out there, again, about people who have received COVAXIN. Thanks again for taking the question.
Thank you, Kristen. They have an amazing journey. Again, last, they administered over 50 million doses of COVAXIN in India, and it is also a public government report coming out of the government, between 5 million-6 million subjects who got initial surveillance data coming out on both COVAXIN and COVISHIELD, and the report clearly stated they don't have SAEs related to blood clots, which is very important. The vaccine has shown to be effective and safe. They continue to increase their capacity and continue to meet the demand, and trying to support the public health agenda in India.
Okay. You have a follow-up from the line of Keay with Chardan.
Yeah. Just for Sanjay on operating expense going forward. If we strip out the one-time expenses from R&D and SG&A, is $4 million a quarter for each of those a reasonable assumption for the next several quarters, or is that too aggressive?
I think on the G&A side, that would be a little too aggressive, Keay, because we just had a little one-time related to the shareholder expenses and some non-cash expenses related to stock-based compensation that really impacted that, Keay. On the R&D side, as you know, we are definitely investing more in our ocular programs, and of course, COVAXIN is a huge component of it. There, of course, we had a one-time related to the Canadian rights, which of course will not be incurred again. There's other items that we are anticipating in terms of procuring at-risk to get ready for the commercialization within the Canada or the U.S. With regards to that, I think you should factor a little bit of a growth coming in from the general expenses for R&D as we bolster our teams and invest in programs.
There will be these one-off expenses related to preparations for COVAXIN, including any potential clinical trials as they emerge, or decisions from discussions with the FDA. That helpful, Keay?
Okay, thanks. Yeah, it is. Thank you.
Sure.
At this time, I'll turn the call back over to Ken Inchausti for closing comments.
That basically, thank you, ladies and gentlemen, for your participation and joining us. This concludes today's conference. You may disconnect your lines at this time, and thank you for your participation and have a wonderful day.