Earnings Call Transcript - OCS 2026-05-29

Operator

Greetings, and welcome to the Oculus conference call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note that this conference is being recorded. I would now like to turn the call over to Sylvia Schoen. Thank you. You may begin.

Speaker 3

Thank you, Julian. Earlier today, we issued a news release providing top-line results from Oculus Phase 3 results with OCS-01 and diabetic macular edema. A copy of this news release and the presentation accompanied this call are available on our Investors Relations section on our website. Before we begin, I would like to remind everyone that some of the statements we are making today are forward-looking statements under applicable securities law. Forward-looking statements include, but are not limited to, statements regarding our regulatory and development plans for OCS01, the timing, progress, and regulatory strategies for our other development and research programs, and our cash runway and statements about the potential therapeutic effects of our product candidates. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those that we expect. We encourage you to read more about these risks and uncertainties associated with our business in the sections entitled Risk Factors and Cautionary Note Regarding Forward-Looking Statements in documents that we file or furnish with the SEC. Any forward-looking statement speaks only as of today, May 29, 2026, and we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. Now I will turn a call over to our Chief Executive Officer, Riyad Sherif.

Riyad Sherif, CEO

Thank you, Sylvia. and thank you to everyone for joining us to discuss the results from the phase 3 program with OCS01 in DME. Needless to say that we are naturally disappointed with the outcomes as both DIAMOND-1 and DIAMOND-2 studies did not meet primary endpoints. This first slide shows two types of endpoints. The first one is visual function, which is the functional endpoint and the regulatory endpoint and the primary endpoint of the study, which is the typical DME endpoint at week 52, which shows that the diamond one and diamond two didn't meet the both endpoints. The second endpoint is retinal anatomy, which is an objective measure of drug effect in retina, which shows, and we will go into the details in the next slide, which shows actually a rapid and sustained reduction in active arm versus sinker through week 52. On a safety point of view, OCS01 was well-tolerated with no unexpected safety findings based on this top-line research. And at this time, Oculus does not plan to pursue FDA regulatory filing with OCS01 for DME. If we go now back to the study and go into the details of the research, but let's start with study design and patient population. As you may recall, a DIAMOND program was two trials, identical trials, DIAMOND 1 and DIAMOND 2, with the objective to evaluate the safety and efficacy of OCSR-1 versus vehicle for the treatment of DME in two adequate, well-controlled, multi-central global phase 3 clinical trials. The primary endpoint, as aligned with FDA, was change in BCVA-ETBRS letter score at week 52. The key secondary endpoint was percentage of patients with equal or superior to 15 letters gained in BCVA at week 52. And the secondary endpoint was TST change versus baseline. The study population was an adult population with a DME following diabetes type 1 or 2, with the inclusion criteria with PTDRS-BCVL letter score between 24 to 65, and retina thickness equal or superior to 310 microns. The study was a one-to-one. We had a six-week induction phase and 46-week maintenance phase. The end point or the readout was at week 52.

Speaker 9

If we go to the patient disposition, the two parallel studies, which were exactly the same,

Riyad Sherif, CEO

Diamond 1 and Diamond 2, randomized 404 patients in Diamond 1, 401 in Diamond 2. We had per arm around 200 patients, and we were able to have more than 80% of patients completing the drug, which shows a very good and very solid execution of the protocol

Speaker 9

for a 52-week study with the daily treatment, a superiority trial compared to this. If we go to the next slide, which is the diamond baseline demographic,

Riyad Sherif, CEO

we can see that the two groups in both trials, Diamond I and Diamond II, were well-balanced. In terms of age, sex, duration of DME, BCVA baseline, which is in fact pretty similar to what we had in the stage 1, Diamond 1, DST as well, IOP, and treatment status between naive and previously treated, and LAND status between fakic and pseudofakic. We will now go to the efficacy, and we will start with the objective measure, which is the CMT. And here you have each data point until week 52, where we see a rapid and sustained reduction of the thickness of the retina. and you have the dots at week 6 and at week 12 which are the results we got in stage 1 and it is very similar so we were able to replicate what we saw in stage very closely, almost the same number in fact in terms of OCS01. If we go to the next diamond 2, we see the same thing rapid substantial improvement and rapid and sustained over time in Diamond 2 as well vis-à-vis vehicle till week 52. Despite this very clear and objective drug effect in the retina, this was not translated in BCVA functional improvement and we can see it in the next slide where we see the mean change where the OCS01 didn't reach the positive endpoint in both Diamond 1 and Diamond 2 in the function, in both mean change, BCBA, and also responders, which we see in the next slide. We go to the safety profile. OCS01 was well-tolerated with no unexpected adverse event observed. Overall, the safety profile was consistent with that of previous trials. And as expected, elevated IOP and cataract were higher in the OTSO-1 treated patients

Speaker 9

and in line with chronic use of steroid indians. We go to the summary.

Riyad Sherif, CEO

I would like to summarize the situation following the top-right results of Diamond 1 and Diamond 2. Despite showing a rapid, substantial, and sustained reduction in retinal thickness in patients treated with OCS01, which is an objective measure, primary, which was mean change in BCBA, and key secondary, which was the gainers' endpoints for both trials, were not met at week 52. Based on the results, at this time, Oculus does not plan to pursue an FDA regulatory filing for OCS01 in DME. Oculus will strategically focus resources on advancing our late-stage portfolio, including the Privossector platform, starting with the Pioneer Program for Privossector in Optic Neuropathies and the PREDICT-1 trial for Likaminumab, and I would like to give an update about these two assets as well.

Speaker 9

to drive precision medicine in dry eye disease.

Riyad Sherif, CEO

We can do so thanks to our strong balance sheet with $278 million in cash, cash equivalent, and short-term investment as of March 31st, 2022, which provides a cash runway into the second half of 2019. Before going into the Q&A, I would like rapidly just to make an update on PREDICT and update on Pioneer. As already communicated, we started the PREDICT-1 registration trial for dry eye disease to drive a precision medicine late last year. The trial is planned to enroll 160 patients, randomized into two arms. The primary endpoint is the global ocular discomfort score at day 29 in patients with TNF R1 positive. The trial initiation activities are proceeding accordingly to plans and planned site activation expected to be fully completed around mid-year. We have approximately 70% of planned sites in active screening with prospective patients in the run-in phase prior to randomization. The trial is in early stage, and we will provide an update later in the year, of course, as things progress. For Privosector, Privosector in Pioneer Program has three trials for optic neuropathies. Pioneer 1 and 2 are for optic neuritis, and Pioneer 3 is for NAOI. We received the breakthrough therapy and prime designation for the optic neuritis, which speaks to the urgency recognition of the unmet need in this disease. The Pioneer 1 trial design is aligned with FDA under SPA, and the Toro Execution Program is focusing on preparing the centers, educating the centers, training, and monitoring all aspect of protocol to make sure that the execution of the protocol is perfectly done. We now have over 70 US and international sites currently in various stages of activation. Enrollment into the study is, of course, event-driven, but we expect to treat our

Speaker 9

first patients in the near future. Thank you very much, and I would like to open the session for

Operator

finish. Thank you. And with that, we will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone would indicate that your line is in the question queue. You may press star two to remove yourself from the queue. For any participants using speaker equipment, it may be necessary to pick up the

Speaker 9

handset before pressing the star keys. One moment while we pull for questions. And our first question comes from the line of Annabelle Samini with Steeple. Please proceed with your question.

Speaker 1

Hi, everyone. Thanks for taking my question. I'm sorry to hear about the disappointing news on OCS01. But you do have, obviously, two very valuable programs in private sector and OCS02. So, maybe you can help us understand whether you have, right now, the ability to accelerate the initiation of the additional programs that you are going to explore for ProvaSector, not just in A1 and NEON, but perhaps in MS, or perhaps work on accelerating the formulation for other indications, other broader indications that could benefit from neuroprotection. So I guess that's my first question. And then for OCSO2, I guess we can sort of ask the same, given that only one of the trials right now for dry eye is underway. So what are your thoughts around bringing these programs forward a little bit faster? Thanks.

Riyad Sherif, CEO

Thank you, Annabelle. Yeah, so to the first question, and in fact, I completely agree with you. The pre-world sector is, as we say, and as you know, really a platform. So we will make sure first really to deliver on Pioneer 1. This is very important, and this is very important to deliver a quality trial and potentially a successful trial. This is our aim. And I think the good news with Pioneer 1 is we are really repeating exactly what we did in acuity in terms of dose, regimen, patient and duration. We had a readout at month three. We are repeating the readout at month three, which gives us most probably a strong confidence about it. And this is important for Pioneer 1 and 2, which are optic neuritis. we will of course we just had this top line result as we said we will refocus or even focus more our resources into the privo sector platform and we will be very happy to come back to you and to all your colleagues to give an update about what we would like to do more but I would say for us focusing on pioneer program and delivering against expectation is the most important. On Likamin Limab, really the strategic choice for the companies to do the first trial. If you recall, we did two trials where we showed the efficacy in the TNFR1 in symptoms and signs. In signs, it was pre-specified. In symptoms, the first trial was exploratory. We want to repeat it in a pre-specified manner. This is what we are doing. And once we have the data, we will be able to advance in the rest of the tribes with the coming.

Speaker 3

Got it. Thank you.

Speaker 9

Thank you. Thank you, Anand. Thank you.

Operator

And our next question comes from the line of Yadin Senea with Guggenheim Partners. Please proceed with your question.

Yatin Senea, Analyst — Guggenheim Partners

Hey, guys. Thank you for taking my question. Tough news today. So two for me, one on Pioneer, second on Predict. So number one, on PREDICT, with regard to that study that you're running, how would you characterize that? Is it a phase two study? What would be the regulatory strategy if this study is successful? Do you need another one? And how should we think about enrichment? And then with regard to the Pioneer study, obviously now you have an alignment with the FDA. You have a SPA on the endpoint. Can you maybe just talk about how should we think about the responder analysis versus an average increase in BCVA? How does this sort of help you achieve the goal with the current endpoint of responder analysis?

Riyad Sherif, CEO

Yeah, thank you, Yathim. So for the first trial, the predict one is a registrational trial. So, therefore, it will be part of the registration of the product. What we always said about dry eye, we wanted to separate signs and symptoms. And, therefore, we always said we would like to do two trials in signs and two trials in symptoms. Now, as you know, we heard about FDA that they wish to go to one trial. If this materializes, we don't know yet. But if this materializes, then it will mean that for us it will be one trial in symptoms, one trial in signs. I would say the strategy is the following. Let's deliver on PREDICT-1, meet with FDA, and clarify how many trials we need. But at least the base case scenario, what we always communicated, is two trials in signs, two trials in symptoms. The benefit of the TNFR1 is it gives us trials which are much more efficient in terms of capital deployment and risk, because, I mean, you see PREDICT-1 is 160 patients, it's almost unheard of in dry eye. So these are very small trials, very efficient in terms of number of patients and therefore capital needed, but also should be a lower risk if the hypothesis of the TNFR1 materializes, which is our aim, is to validate this hypothesis in the predict one. this is on OCS OCS1. On OCS O5 or previous sector, yes the primary endpoint is responders, the secondary endpoint is mean so therefore in all our statistical calculations both endpoints actually are solid, are positive, the sample size is in all our hypotheses actually very solid and it just allows us with the responder analysis, it allows us to have one and it's the only difference because if I take the DME trial for example or wet AMD trial the typical DME trial you always need to hit both you need to hit mean and you need to hit responders unless you go with only responders. If you go with only responders, then if you hit responders, then it is a winning trial. This is why it was actually better for us in terms of risk management to go with one endpoint, which is responder in this case.

Speaker 9

Got it. Thank you.

Riyad Sherif, CEO

You're welcome. Thank you, Yatul.

Speaker 9

Thank you.

Operator

And our next question comes from the line of Tess Romero with J.P. Morgan. Please proceed with your question.

Tess Romero, Analyst — J.P. Morgan

Hi, team. Thanks so much for taking our question this afternoon. You know, if you had to look big picture at the data that you generated in these two studies, you know, what do you think the misstep was? And I know this was the top line, but what is your view at this stage at what factor or factors drove these results, particularly around vehicle, and also the variability that it seems to have appeared in the study and, or the studies, and what greater, was greater diabetic control a factor here? Thank you.

Riyad Sherif, CEO

Yeah, thank you. Thank you, Ted. Yeah, so with the data we have in hand, which are only top-line research, as you know, we don't have full data. We did the multiple analysis, and we really don't, we do not see the reason why placebo is behaving the way it is behaving in these two trials. In fact, when you compare in any other DME trial, the five letters in placebo is more than the double of the best placebo response in any other trial. So therefore, it's surprising. I completely agree with you. Now, as you know, the variability in DME is very high. the way we treat DME today different diabetes actually because in the end of the day DME is a complication of diabetes. So the way we treat diabetes in 2024 2025, 2026 is different from 2010. We have GMP1, we have new products and therefore this might change but we don't have all the data to explain it yet. And all the assessment we did so far really does not give a clear picture. Most probably it is a mix of multiple things. Now I would say there are multiple things we can ask ourselves. So do we have a drug attack? Yes, we have a drug attack in DME. Do we have a safety profile which is clean? Actually, the safety profile is very clean. It is very unfortunate, I have to say, that we were not able to hit on the regulatory endpoints, which are BCDA at week 52. You know that the need for a topical product is huge for patients, and it is really unfortunate for patients as well.

Tess Romero, Analyst — J.P. Morgan

Okay. And Riyad, just to follow up here, it sounds like based on what you know today, you don't think there were any clear clinical trial conduct issues across your site?

Riyad Sherif, CEO

No. So this was a very important question, as you can imagine, and we cross-checked everything in terms of quality of execution, quality of execution of the protocol, and they have to say in a very clear manner, the execution of the trial was very good, was really good.

Speaker 9

It's really not a problem of execution at all. You're welcome. Thank you.

Operator

And our next question comes from the line of Mark Goodman with Lee Rink Partners. Please proceed with your question.

Speaker 5

Hi, everyone. This is Alyssa on for Mark. Just a few questions from us. You mentioned that you're planning on giving a update towards the end of the year on Latina Linumab. Can you explain or provide a little bit more color on what those updates will be? and when we might expect data from PREDICT-1. And secondly, could you give an update on how site activations are going with RevoSector and Pioneer 1? Thank you.

Riyad Sherif, CEO

Yes, yes, of course. So on PREDICT, what I have been saying is really toward around the end of the year, I would say the very end of the year, the beginning of the next year, this is what we say. so therefore it's still aligned with this. The activation is going as planned. Now because we are selecting basically patients on TNFR1, we need to screen much more patients to be able to select patients of TNFR1 and this is ongoing. So this is why we will give an update based on screening and based on randomization towards Q3 because we will have a better view on where we are in terms of randomization and so on. But so far, the plan is really around the end of the year, beginning of the next year, basically. On previous sector, so the question yes so the site so basically just to step back so we initiated Pioneer 1 in the end of the last between initiation and randomization is in average and this is just a benchmark I'm sharing in average is between 6 to 9 months so therefore we are on schedule vis-a-vis what we assumed because as you can imagine we need to make sure that the protocol is executed we have the approvals we have we make sure that we train centers we certify the centers for lcva we have the infusion center for for injecting the the product we have the mri system in place so it is actually an easy study in terms of duration it's five days it's three months is two LCBA, one at baseline, one at month three. But we need to put everything in sync to deliver a quality study. And quality is really important for us. And we are doing what we need to make sure that execution is solid after. But overall, we are on schedule based on what we planned on Pioneer 1. Now, Pioneer 2 will be starting as soon, will be initiated, to be precise, as soon as we start to randomize patients in Pioneer 1. I would not like to take a risk to start Pioneer 2 without starting concretely and materially to randomize patients in Pioneer 1.

Speaker 9

Okay. Thank you very much.

Riyad Sherif, CEO

You're welcome. Thank you.

Operator

Thank you. And our next question comes from the line of Colleen Cusey with the Baird. Please proceed with your question.

Nick, Analyst — Baird

Hey, everyone. It's Nick on for Colleen. Thanks for taking the question. Just a couple here. Just wanted to know if you had any color on compliance in the study and if you saw if that was a factor that may have led to the results here. And then a second question, just thinking of the OSRDEX results, we saw a better signal in pseudophagic versus phagic patients. I know it's top line, but wondering if you saw any difference there. And just in general, if you see potential look for a signal that could warrant going after an approval in a subgroup of the DME population.

Riyad Sherif, CEO

Yeah. No, we didn't see a material difference between the groups. The compliance was... monitored and it was as expected actually high uh and in line with the stage one so therefore it is not a compliance it is not cataract all what we all this is why i really highlighted execution because it was an important question for us and it's it's schizophrenic what i'm going to say but within the context of of study which is not positive the execution was extremely good And everything we decided we control in terms of cataract, in terms of IOP, in terms of dropout, in terms of everything was within the KPIs we set in place in the beginning of the trial.

Speaker 9

So therefore, nothing really to highlight. Thank you.

Operator

And our next question comes from Patrick Dolezal with Lifescience Capital. Please proceed with your question.

Patrick Dolezal, Analyst — LifeSci Capital

Hi, thanks for taking the questions, and yeah, apologies on the disappointing outcome here. Appreciate those, some of these post-hoc learnings that you're speaking to, though. So just a quick one, you know, you recently announced the SPA for Pioneer, and as noted, the primary endpoint is the proportion of patients with three-line low-contrast visual acuity gains. Could you just contextualize the data from the Phase II acuity study that give you confidence on the likelihood of success on this responder endpoint and pioneer, as opposed to, say, mean LCV gains? Thanks.

Riyad Sherif, CEO

Thank you, Patrick. Yes. So basically, as I shared, the responder analogy was really our choice. Why? Because it allows us to have one primary endpoint. If we go with the two, yes, we could have done mean. I'm not saying it was not an option. It was an option. But then mean is sufficient only when the difference is 15 letters and more. So therefore, and then if it is below 15 letters, it's like DNE or what AMD, 3%. If it is below 15 letters, then you need a secondary endpoint. And then you ask yourself, okay, the variability between phase two and phase three is important, and we see it. So therefore, it's better to be conservative and to go with the responder. And then we took our data on equity and we did the multiple models reducing the mean. And it allows us actually to have a higher probability to deliver the 15 letters than mean higher than 15 letters, basically. So this is why we are more confident about it. The second part of confidence, which is really important, is we are repeating not 99%, but 100% of equity. And really knowing the end point at three months and repeating the end point at three months is crucial. And this is what we are doing in Pioneer One.

Speaker 9

Thank you.

Operator

And our next question comes from the line of Jason Birberry with Bank of America. Please proceed with your question.

Speaker 3

Hi, this is Melanie on for Jason. Just one question from us. So does this study result elevate your internal bar for lichaliminumab in dry eye, given the inherent variability in dry eye data sets?

Riyad Sherif, CEO

I would say you are totally right. First, dry eye has a very high variability, just a fact. And this is why we decided to go with the genotype and not to go to all corners, because we totally recognize it. It's just fun. And this is why we always say, and we will continue to say it even more, we will not go to dry eye without the TNFR1 positive. And this is why we decided also to do only one trial, go to TNFR1 positive, and we have high expectations. And it needs to be true precision medicine, which means that we expect an endpoint which is not 10% or 20% better than another product, but much better. But the way to address the variability is really to do what we are doing, which is a biomarker which allows us to see consistently in signs and symptoms that we have a much higher response, if you recall, five times more in signs and seven times more in symptoms. But you are right. Yes, DRY has five variables. And our response is the person from the person.

Speaker 9

Our next question comes from the line of Dan Escuti with Pareto Securities.

Operator

Please proceed with your question.

Dan Escuti, Analyst — Pareto Securities

Hi, Riyad, and thank you for taking my questions. Obviously, very sad that at the same time, I think very good that it's communicated directly that you hold the program. Just one question, a follow-up on the – there was already one question on the CIDO FACIG and FACIG that we see from other DEX data. you mentioned you haven't seen any difference there if you could just elaborate there if it was really just nothing in the top line data or if you need to wait for the full data set and then the cash runway into second half 29 that is already now assuming no further major expenses for OCS01 just the winding down activities. Thank you.

Riyad Sherif, CEO

Yeah, thank you. Thank you, Dan. So first, for cataract, we didn't see a meaningful difference. And I think that somehow it showed that we said we will control for cataract, and we did it. And we didn't see meaningful difference, really, between fake or sort of fake things. In terms of runway, yes, with what we have in hand and with the plan we want to execute, we have cashed in the second half of 2029.

Operator

And our next question comes from the line of Yi Chen with H.C. Wainwright. Please proceed with your question.

Speaker 13

Hi, this is Katie Onfreyi. I just wanted a couple quick clarifying questions for modeling purposes. Are there any wind-down costs associated with the diamond programs that will hit in the near-term quarters? And can you clarify the current status of any licensing agreements tied to OCS-01 and whether there are any outcome triggers that modify any financial obligations?

Riyad Sherif, CEO

I will ask our CFO, Sylvia, to address the question.

Speaker 3

Thank you, Riyadh. Thanks, Katie, for the question. With regards to license fees, the answer is no. Oculus owns the technology OptiReach as well as the candidate OCS01, so there is no payments related to it. But normal site closeout costs related to the Diamond 1 and Diamond program are expected in Q2 and the beginning of Q3. But that's just normal part of routine site closeout expenses.

Speaker 9

Thank you. Thank you.

Riyad Sherif, CEO

Thank you, Kate.

Operator

And our next question comes from the line of Serge Bellinger with Needham & Company. Please proceed with your question.

Serge Bellinger, Analyst — Needham & Company

Hi, good afternoon. A lot of questions already. A lot of questions been answered, maybe just one. I believe OCS01 was put through a registrational study for post-ocular surgery in the past, and it was ready for NDA filing. Just curious if you plan on going forward with that or if somebody else maybe would be willing to take out the baton and move it to registration. Thank you, Serge.

Riyad Sherif, CEO

Yeah, you are totally right. We were and we are ready, actually, to file for ocular surgery. We will make a full assessment and we'll take a decision, but the file is ready for ocular surgery. Yeah.

Speaker 9

Thank you.

Operator

And with that, this does conclude our question and answer session. I would now like to turn the floor back to Riyadh for any closing remarks.

Riyad Sherif, CEO

Thank you all. I really would like, I have a word just to thank the patients, investigators, and all the clinical experts who help us. I would like also to thank our investors and all the analysts who have been very supportive to us for the last years. thanks to our strong balance sheet currently and also, and very importantly, to a very differentiated product with PrivoSector, which has the potential to go to diseases where we do not have any solutions, such as optic neuropathies, but also to go to MS. And if you recall, we have this plan to meet with FDA in the second half of the year to discuss the MS potential and to broaden the optic neuritis into relapse of MS. And also with Likaminimab, which is a very differentiated, innovative product with precision medicine. We are extremely now focused on these two candidates to bring value to investors and bring solutions to patients. Thank you all for your support. I appreciate it.

Operator

Thank you. And with that, ladies and gentlemen, this does conclude today's teleconference. We all thank you for your participation. You may disconnect your lines at this time and have a wonderful rest of your day.