Ocugen (OCGN)

Risks

• Risks Related to Our Financial Position and Capital Requirements
• We have incurred significant losses from operations and negative cash flows from operations since our inception. We may incur losses over the next several years and may never achieve or maintain profitability. These factors raise substantial doubt about our ability to continue as a going concern absent obtaining significant additional funding.
• We have no history of commercializing pharmaceutical products, which may make it difficult for you to evaluate the success of our business to date and to assess our future viability.
• We will need substantial additional funding. If we are unable to raise capital when needed, we could be forced to delay, reduce, or eliminate our product development programs or commercialization efforts.
• We will need additional funding in order to enable us to successfully develop COVAXIN, and such funding may not be available on acceptable terms, or at all. The commitment of substantial resources to this program entails additional risks.
• Raising additional capital may cause dilution to stockholders, restrict our operations, or require us to relinquish rights to our technologies or product candidates.
• Our management will have broad discretion in the use of the net proceeds from our capital raises, including our February 2022 public offering, and may not use them effectively.
• Our existing and future indebtedness may limit cash flow available to invest in the ongoing needs of our business.
• If we are unable to use carryforward tax losses or benefit from favorable tax legislation to reduce our taxes, our business, results of operations, and financial condition may be adversely affected.
• Recent and any potential future U.S. tax legislation may materially adversely affect our financial condition, results of operations, and cash flows.
• Risks Related to Our Business and the Development of Our Product Candidates
• We are substantially dependent on the success of our product candidates, and in particular, COVAXIN, which is in a later stage of development than our other product candidates. We cannot guarantee that our product candidates will successfully complete development, receive regulatory authorization or approval, or be successfully commercialized.
• COVAXIN has been evaluated by Bharat Biotech in a Phase 3 clinical trial in India in adults, who were healthy or had stable chronic medical conditions ages 18 and older, and approved for EUL by the WHO. We will need to conduct a Phase 2/3 immuno-bridging and broadening clinical trial and a safety-bridging clinical trial to support a BLA submission for COVAXIN for adult use in the United States. We may be unable to successfully produce and commercialize a vaccine that
• effectively and safely treats the virus in a timely manner, if at all, and ultimately may be unable to obtain regulatory approval for adult use in the United States.
• We have obtained the rights to develop and commercialize COVAXIN in Canada and we have completed a rolling submission to Health Canada for COVAXIN. We have been provided with a NOD from Health Canada regarding our NDS submission. We have responded to and provided proposed resolutions for the deficiencies included in the NOD but there is no guarantee that Health Canada will accept our proposed resolutions. We have no experience in obtaining marketing approval for, or commercializing products in Canada.
• We have submitted an EUA application to the FDA for COVAXIN for pediatric use. The FDA may not grant us the EUA for pediatric use, and, even if they do, absent supplemental BLA approval for that indication, such EUA would be revoked when the COVID-19 emergency terminates, and, prior to that time, we would face significant competition from other pharmaceutical and biotechnology companies, and may not be able to compete effectively.
• Newly emerging SARS-CoV-2 variants could reduce the immunogenicity and effectiveness of COVAXIN as a potential COVID-19 vaccine.
• The regulatory approval processes of the FDA and comparable foreign authorities are lengthy, time consuming, and inherently unpredictable. If we are not able to obtain, or if there are delays in obtaining required regulatory approvals, we will not be able to commercialize our product candidates as expected, and our ability to generate revenue will be materially impaired.
• The ongoing COVID-19 pandemic and actions taken in response to it may result in disruptions to our business operations, which would have a materially adverse effect on our business, financial position, operating results, and cash flows.
• As an organization, we have no experience in the development, manufacturing, distribution, or commercialization of a vaccine candidate.
• Our ability to produce a successful vaccine may be curtailed by one or more government actions or interventions, which may be more likely during a global health crisis such as COVID-19.
• Our product candidates generated from our modifier gene therapy platform are based on a novel technology and face an uncertain regulatory environment, which makes it difficult to predict the time and cost of product candidate development and subsequently obtaining regulatory approval.
• The development and manufacture of biologics is a complex process and entails particular risks.
• OCU400 has received four ODDs from the FDA and two OMPDs from the EC. However, there is no guarantee that we will be able to maintain these designations, receive this designation for any of our other product candidates, or receive or maintain any corresponding benefits, including periods of exclusivity.
• In the future, we may seek FDA designations to facilitate product candidate development, such as fast track or breakthrough therapy designation. We may not receive any such designations or if we receive such designations they may not lead to faster development or regulatory review or approval and it does not increase the likelihood that our product candidates will receive marketing approval.
• The FDA may determine that our product candidates have undesirable side effects that could delay or prevent their regulatory authorization or approval or commercialization. If such side effects are identified during the development of our product candidates, we may need to abandon our development of such product candidates.
• If we experience delays or difficulties in the enrollment of patients in clinical trials, our completion of clinical trials and receipt of necessary regulatory approvals could be delayed or prevented.
• Data from preclinical studies and early-stage clinical trials may not be predictive of success in later clinical trials.
• We may expend our limited resources to pursue a particular product candidate or indication and fail to capitalize on product candidates or indications that may be more profitable or for which there is a greater likelihood of success.
• We may, in the future, conduct clinical trials for product candidates at sites outside the United States, and the FDA may not accept data from trials conducted in such locations.
• Failure to obtain marketing approval in international jurisdictions would prevent our product candidates from being marketed abroad.
• We may be subject to fines, penalties, injunctions, or other enforcement actions if we are determined to be promoting the use of our products, if approved, for unapproved or “off-label” uses, resulting in damage to our reputation and business.
• Even if our product candidates receive regulatory approval, we will be subject to ongoing obligations and continued regulatory review, which may result in significant additional expense.
• We will need to obtain FDA approval of any proposed product names, and any failure or delay associated with such approval may adversely affect our business.
• Risks Related to the Commercialization of Our Product Candidates
• We have no prior experience in the marketing, sale, and distribution of pharmaceutical or biologic products and there can be no assurance that our products, if authorized or approved, will be successfully commercialized.
• We face significant competition from other pharmaceutical and biotechnology companies, academic institutions, government agencies, and other research organizations. Our operating results will suffer if we fail to compete effectively.
• If we are unable to establish effective marketing and sales capabilities or enter into agreements with third parties to market and sell our product candidates, if they are authorized or approved, we may be unable to generate product revenues.
• If our product candidates do not achieve broad market acceptance, the revenues that we generate from their sales will be limited.
• If the market opportunities for our product candidates are smaller than we believe, our revenue may be adversely affected and our business may suffer.
• If third-party payors do not reimburse patients for our products candidates, if authorized or approved, or if reimbursement levels are set too low for us to sell our product candidates at a profit, our ability to successfully commercialize our product candidates, if authorized or approved, and our results of operations will be harmed.
• If we obtain approval to commercialize our product candidates outside of the United States, a variety of risks associated with international operations could materially adversely affect our business.
• Risks Related to Our Dependence on Third Parties
• We have selected a manufacturing partner for COVAXIN, if authorized or approved, to provide commercial supply for the United States and Canada. We may still encounter difficulties with respect to the manufacturing of COVAXIN, including with respect to our third-party manufacturers, which could impair our ability to commercialize COVAXIN, if authorized or approved. Further, if we encounter difficulties in negotiating commercial manufacturing and supply agreements with third-party manufacturers and suppliers of our other product candidates or any product components, our ability to commercialize our other product candidates, if approved, would be impaired.
• We rely, and expect to continue to rely, on third parties to conduct, supervise, and monitor our preclinical studies and clinical trials we may initiate, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such trials or failing to comply with regulatory requirements.
• If the manufacturers upon whom we rely fail to produce our product candidates or components pursuant to the terms of contractual arrangements with us or fail to comply with stringent regulations applicable to biologic and pharmaceutical manufacturers, we may face delays in the development and commercialization of, or be unable to meet demand for, our product candidates and may lose potential revenues.
• We or our third-party manufacturers may also encounter shortages in the materials necessary to produce our product candidates in the quantities needed for our clinical trials or, if our product candidates are authorized or approved, in sufficient quantities for commercialization.
• The number of available, qualified third-party manufactures is limited, and if we are compelled to locate an alternative manufacturing partner, our product development activities and commercialization could be delayed and additional expense would be incurred.
• We recently entered into a non-binding LOI to acquire a commercial manufacturing plant, which is preliminary and subject to the negotiation and execution of definitive transaction agreements. We cannot assure you that the acquisition will be completed on a timely basis, if at all. Assuming the acquisition is completed, we have limited experience developing manufacturing facilities or manufacturing COVAXIN, and we cannot assure you that we will be able to develop such manufacturing plant or manufacture COVAXIN at full capacity and in compliance with regulations at a cost or in quantities necessary to make it commercially viable.
• We may seek to collaborate with third parties for the development or commercialization of our product candidates. We may not be successful in establishing or maintaining collaborative relationships, any of which could adversely affect our ability to develop and commercialize our product candidates.
• Should we desire to pursue a collaboration agreement but are not able to establish collaborations, we may have to alter our development and commercialization plans and our business could be adversely affected.
• Risks Related to Legal and Compliance Matters
• We are currently, and may in the future be, subject to securities litigation, which is expensive and could divert management attention.
• If we fail to comply with federal and state healthcare laws, including fraud, abuse, and health and other information privacy and security laws, we could face substantial penalties and our business, financial condition, results of operations, and prospects could be adversely affected.
• Healthcare legislative or regulatory reform measures may have a negative impact on our business and results of operations.
• Our employees, independent contractors, consultants, commercial partners, principal investigators, or CDMOs may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements, which could have a material adverse effect on our business.
• We are subject to anti-corruption laws, as well as export control laws, customs laws, sanctions laws, and other laws governing our operations. If we fail to comply with these laws, we could be subject to civil or criminal penalties, other remedial measures and legal expenses, be precluded from developing, manufacturing, and selling certain products outside the United States, which could adversely affect our business, results of operations, and financial condition.
• Risks Related to Our Intellectual Property
• We may be unable to obtain and maintain patent protection for our technology and product candidates, or the scope of the patent protection obtained may not be sufficiently broad or enforceable, such that our competitors could develop and commercialize technology and products similar or identical to ours, and our ability to successfully commercialize our technology and product candidates may be impaired.
• Patent reform legislation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents.
• If we are not able to obtain patent term extension in the United States under the Hatch-Waxman Act and in foreign countries under similar legislation, thereby potentially extending the term of our marketing exclusivity for our product candidates, our business may be materially harmed.
• We may become involved in lawsuits to protect or enforce our patents or other intellectual property, which could be expensive, time-consuming, and unsuccessful.
• Third parties may initiate legal proceedings alleging that we are infringing, misappropriating, or otherwise violating their intellectual property rights, the outcome of which would be uncertain and could have a material adverse effect on the success of our business.
• Obtaining and maintaining patent protection depends on compliance with various procedural, document submission, fee payment, and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.
• Certain aspects of our product candidates are protected by patents exclusively licensed from other companies or institutions. If these third parties terminate their agreements with us or fail to maintain or enforce the underlying patents or licenses thereto, or we otherwise lose our rights to these patents, our competitive position and our market share in the markets for any of our approved products will be harmed.
• Some intellectual property which we own or have licensed may have been discovered through government funded programs and thus may be subject to federal regulations such as “march-in” rights, certain reporting requirements, and a preference for U.S. industry. Compliance with such regulations may limit our exclusive rights, subject us to expenditure of resources with respect to reporting requirements, and limit our ability to contract with non-U.S. manufacturers.
• If we fail to comply with our obligations in our intellectual property licenses and funding arrangements with third parties, we could lose rights that are important to our business.
• We may not be able to protect our intellectual property and proprietary rights throughout the world.
• We may be subject to claims by third parties asserting that our employees or we have misappropriated their intellectual property or claiming ownership of what we regard as our own intellectual property.
• Intellectual property litigation or other legal proceedings relating to intellectual property could cause us to spend substantial resources and distract our personnel from their normal responsibilities.
• If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.
• Risks Related to Our Common Stock
• We do not currently intend to pay dividends on our common stock, and, consequently, your ability to achieve a return on your investment will depend on appreciation, if any, in the price of our common stock.
• Sales of a substantial number of common stock by our stockholders in the public market could cause our stock price to fall.
• Provisions in our charter documents and under Delaware law could discourage a takeover that stockholders may consider favorable and may lead to entrenchment of management.
• Our sixth amended and restated certificate of incorporation, as amended, provides that the Court of Chancery of the State of Delaware is the exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.
• The trading price of the shares of our Common Stock could be highly volatile, and purchasers of the Common Stock could incur substantial losses.
• If securities or industry analysts do not publish research or reports or publish unfavorable research or reports about our business, our stock price and trading volume could decline.
• Our future success depends on our ability to retain key executives and to attract, retain, and motivate qualified personnel.
• We expect to expand our development, regulatory, and manufacturing capabilities and potentially implement sales, marketing, and distribution capabilities, and as a result, we may encounter difficulties in managing our growth, which could disrupt our operations.
• We incur increased costs as a result of operating as a public company, and our management is required to devote substantial time to compliance initiatives and corporate governance practices.
• If we or any contract manufacturers and suppliers we engage fail to comply with environmental, health, and safety laws and regulations, we could become subject to fines or penalties or incur costs that could have a material adverse effect on the success of our business.
• If we fail to maintain proper and effective internal control over financial reporting, our ability to produce accurate and timely financial statements could be impaired, investors may lose confidence in our financial reporting, and the trading price of our common stock may decline.
• We face potential product liability exposure, and if successful claims are brought against us, we may incur substantial liability for our product candidates and may have to limit our commercialization.
• Our internal computer systems or those of our development collaborators, third-party CDMOs, or other contractors or consultants may fail or suffer cybersecurity or other security breaches, which could result in a material disruption of our product development programs and cause our business and operations to suffer. We face risks related to our collection and use of data, which could result in investigations, inquiries, litigation, fines, legislative and regulatory action, and negative press about our privacy and data protection practices.