Ocular Therapeutix, Inc. (OCUL) Q2 2025 Earnings Call Transcript

Access earnings results, analyst expectations, report, slides, earnings call, and transcript.

Overview

The earnings call reveals strong confidence in product development, particularly with the strategic alignment of rescue criteria for better adoption and a focus on gaining a superiority label. Despite some uncertainties in management responses, the overall sentiment suggests optimism about the drug's market positioning and potential regulatory advantages. The market cap indicates a potential for significant stock movement, aligning with a positive sentiment.

Key Financial Performance

Cash and Cash Equivalents Over $390 million as of the end of the second quarter of 2025, representing an increase due to raising approximately $97 million through the ATM facility. This was a deliberate decision to provide financial flexibility for upcoming initiatives.

Expected Runway Into 2028, which is beyond the anticipated top-line data readouts for both SOL-1 and SOL-R trials. This does not yet factor in the full impact of potential clinical trial activities for AXPAXLI in NPDR or the long-term extension study in wet AMD.

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Operating Highlights

AXPAXLI: AXPAXLI is being developed as a treatment for wet AMD with a focus on best-in-class durability, meaningful efficacy, and real-world flexibility. The SOL-1 trial is designed to achieve a superiority claim, while the SOL-R trial focuses on non-inferiority. AXPAXLI aims to offer dosing intervals of 6 to 12 months, potentially providing a unique position in the market.

Market Expansion in Diabetic Eye Disease: Ocular Therapeutix is preparing to expand into nonproliferative diabetic retinopathy (NPDR) and diabetic macular edema (DME). Positive FDA feedback has been received for trial designs, and AXPAXLI could offer durable protection with 1-2 injections per year.

Clinical Trials Progress: Both SOL-1 and SOL-R trials are advancing with exceptional retention and adherence to protocol. A long-term open-label extension study is planned to generate real-world insights and long-term safety data.

Financial Position: The company has over $390 million in cash and cash equivalents, with a financial runway into 2028. Recent capital raised through an ATM facility provides flexibility for strategic investments.

Strategic Trial Design: The SOL trials are designed to address durability, repeatability, and flexibility of AXPAXLI. The trials are aligned with FDA guidance, and the company plans to leverage the 505(b)(2) NDA review pathway to potentially shorten the review timeline.

Investor Engagement: An Investor Day is scheduled for September 30 to provide deeper insights into the SOL trials, diabetic eye disease strategy, and global commercial vision.

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Risk or Challenges

Regulatory Approval Risks: The success of AXPAXLI is contingent on FDA approval, which depends on the outcomes of the SOL-1 and SOL-R trials. Any failure to meet the FDA's stringent requirements or unexpected regulatory hurdles could delay or prevent approval.

Clinical Trial Risks: The SOL-1 and SOL-R trials are critical to the company's strategy. Any issues with trial integrity, patient retention, or data reliability could compromise the results and impact the approval process.

Competitive Pressures: The wet AMD market is highly competitive, with existing and emerging therapies. AXPAXLI's success depends on its ability to demonstrate superiority and differentiation from competitors.

Financial Risks: While the company has over $390 million in cash, the financial runway is dependent on successful trial outcomes and eventual market adoption. Additional funding may be required for expansion into diabetic eye disease and other areas.

Market Adoption Risks: Even if approved, AXPAXLI's adoption depends on convincing retina specialists and payers of its long-term benefits and cost-effectiveness. Failure to achieve broad adoption could limit its commercial success.

Manufacturing and Commercialization Risks: The company is investing in manufacturing and commercial infrastructure. Any delays or inefficiencies in these areas could impact the product's launch and scalability.

Expansion Risks: Plans to expand into diabetic eye disease and other indications are in early stages. Any setbacks in these areas could limit the company's growth potential.

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Guidance & Outlook

AXPAXLI's Potential Superiority Label: If approved, AXPAXLI could be the first product for wet AMD with a superiority claim, potentially allowing dosing every 6 to 12 months. This would provide a unique and potentially dominant position in the market.

SOL-1 and SOL-R Trials: Both trials are progressing well with exceptional retention and adherence to protocol. SOL-1 top-line data is expected in Q1 2026, and SOL-R data in the first half of 2027. These trials aim to address durability, repeatability, and flexibility of AXPAXLI.

Long-term Open-label Extension Study: Plans to incorporate a long-term extension study for SOL-1 and SOL-R to generate real-world insights and long-term safety data, enhancing AXPAXLI's commercial profile.

Diabetic Eye Disease Expansion: Following positive FDA feedback, AXPAXLI is being prepared for trials in nonproliferative diabetic retinopathy (NPDR) and diabetic macular edema (DME), with potential for 1-2 treatments per year.

Financial Position and Capital Allocation: The company has over $390 million in cash, providing runway into 2028. Recent capital raise of $97 million supports key initiatives, including commercial infrastructure and trial expansions.

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Shareholder Return Plan

The selected topic was not discussed during the call.

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Key Q&A

Q:When do you expect to complete randomization of the 555 patients required for the SOL-R trial?

A:Management stated that they will update when appropriate. They confirmed that enrollment has been completed and the trial conduct is going superbly.

Q:What drove the change in the rescue criteria for the SOL-R study?

A:The change was made purely for strategic advantage, not required by the FDA. It was based on confidence in the SOL-1 mass data and feedback from investigators to make the drug more adaptable for immediate adoption upon approval.

Q:Was there anything on a mass basis in SOL-R that drove the change in the rescue criteria?

A:Yes, the change was driven by confidence in the SOL-1 mass data and feedback from investigators. The goal was to align rescue criteria with current community practices for better adoption.

Q:How are you thinking about the potential for a shortened review timeline given the filing of the application after SOL-R reads out?

A:Management expects the FDA to require two well-controlled, well-masked studies with positive results. They believe the 505(b)(2) pathway will shorten the time period by at least two months.

Q:When will you start preparing for the potential launch of the drug?

A:Details on the national and global commercial strategy will be outlined during the Investor Day.

Q:How will the updated rescue criteria impact the FDA's evaluation of the primary endpoint for SOL-R?

A:Management stated there is no change in how the FDA will evaluate the primary endpoint. The modification was purely strategic and not an FDA requirement.

Q:Did you speak with the FDA about the change in rescue criteria for SOL-R?

A:No, the change was not discussed with the FDA as it was a purely strategic decision.

Q:What percent of rescues in SOL-R were for the other criteria, and does this change delay the primary endpoint readout?

A:Management stated that the change does not delay or alter the timing of the primary endpoint readout. The trial design ensures no impact on patient outcomes.

Q:What is the rationale and purpose of the single long-term extension study for both trials?

A:The extension study aims to generate data supporting the superiority label and long-term clinical advantage. It will also address questions about delayed adoption of AXPAXLI and its impact on patients.

Q:What is the commercial bar for AXPAXLI to gain a dominant position in the wet AMD market?

A:Management emphasized the importance of meeting the primary endpoint and providing data that shows a clear profile of the drug, including visual acuity and anatomy. They aim to secure a superiority label to distinguish the drug in the market.

Q:Will there be visibility into a meaningful proportion of patients out to 15 or 18 months on SOL-1 to assess the impact of redosing?

A:Management plans to provide data addressing the link between SOL-1 and SOL-R but has not specified the data cuts yet.

Q:What are the off-protocol rescue criteria for SOL-1?

A:Off-protocol rescues are at the doctor's discretion for patient safety. The primary endpoint is based on rescues for 15-letter vision loss or macula-threatening hemorrhage.

Q:What was the rescue criteria for SOL-R before the change, and how will the change impact the number of patients being rescued?

A:The previous criteria included a pure 10-letter loss with no fluid stipulation. The change was made to align with real-world practices and is expected to make the drug more adoptable without impacting the primary endpoint.

Q:What feedback prompted the change in rescue criteria for SOL-R?

A:Feedback from investigators indicated a desire for rescue criteria aligned with real-world practices to ensure immediate adoption of the drug.

Q:What is the expectation for the cadence of rescues for EYLEA versus AXPAXLI?

A:Management is confident in the expected pattern of rescues for AXPAXLI, which aligns with their expectations based on masked data.

Q:How should investors think about the interplay of time to market for AXPAXLI with a potential superiority label versus competitors entering the market sooner?

A:Management believes a superiority label will place AXPAXLI in a different orbit, distinguishing it from competitors and providing long-term value for patients and the company.

Q:Why start the open-label extensions now instead of earlier?

A:The timing was based on logistics and the confidence gained from masked data. The extension study aims to answer clinically relevant questions.

Q:Will excluding patients with high fluctuations in OCT from the trial impact the commercial effort or label?

A:Management believes excluding these patients provides purer scientific data and does not expect any label restrictions based on this exclusion.

Q:Is the readout of SOL-1 a derisking event for SOL-R or complementary?

A:Management views it as both. They aim to provide data that links SOL-1 success to SOL-R while emphasizing the derisked patient selection and optimal trial design of SOL-R.

Q:Review of Unclear Management Responses

A:Management avoided providing a direct timeline for the completion of randomization in the SOL-R trial, stating only that they would update when appropriate. Additionally, they did not specify the data cuts for assessing the impact of redosing in SOL-1, despite acknowledging its importance.

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Earnings Word Cloud

The most frequently occurring keywords in this quarter's earning call

OCUL Transcript

Ocular Therapeutix, Inc. (OCUL) Q3 2025 Earnings Call Transcript

Positive11-4

AXPAXLI's potential superiority label and dosing flexibility present a strong market opportunity. While regulatory and execution risks exist, the company is well-capitalized with $390 million in cash. The Q&A highlighted confidence in trial outcomes and competitive advantage. Despite some management vagueness, the overall sentiment is positive, driven by strong trial progress and financial health.

Ocular Therapeutix, Inc. (OCUL) Q2 2025 Earnings Call Transcript

Positive8-5

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Neutral5-7

Ocular Therapeutix at Leerink Conference: Strategic Insights on AXPAXLI

Neutral3-10

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