Ocugen Inc.
03/04/2026 | Press release | Distributed by Public on 03/04/2026 10:39
Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)
Management's Discussion and Analysis of Financial Condition and Results of Operations.
You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the consolidated financial statements and the notes thereto included elsewhere in this Annual Report. Some of the information contained in this discussion and analysis, including information with respect to our plans and strategy for our business and related financing, include forward-looking statements that involve risks, uncertainties, and assumptions. These statements are based on our beliefs and expectations about future outcomes and are subject to risks and uncertainties that could cause our actual results to differ materially from anticipated results. Except as required by law, we undertake no obligation to publicly update these forward-looking statements, whether as a result of new information, future events, or otherwise. You should read the "Risk Factors" and "Special Note Regarding Forward-Looking Statements" sections of this Annual Report for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
Overview
We are a biotechnology company focused on discovering, developing, and commercializing novel gene therapies that improve health and offer hope for patients across the globe.
Our technology pipeline includes:
•Novel Modifier Gene Therapy Platform -
OCU400- Based on the use of nuclear hormone receptors ("NHRs"), we believe our novel modifier gene therapy platform has the potential to address major blindness diseases, including rare genetic diseases such as RP (OCU400), with a gene-agnostic approach. OCU400 is intended for early to advanced cases of RP including clinical and/or genetic diagnosis with both syndromic and non-syndromic forms of the disease. In January 2025, we announced positive two-year data for multiple mutations from the Phase 1/2 clinical trial for OCU400. In February 2025, we announced that the European Commission ("EC") has provided a positive opinion from the European Medicines Agency's ("EMA") Committee for Advanced Therapies for OCU400 Advanced Therapy Medicinal Product ("ATMP") classification. We have completed enrollment in the Phase 3 liMeliGhT clinical trial for OCU400 and are on track to begin a rolling BLA submission in the third quarter of 2026. Positive long-term, 3-year Phase 1/2 durable, safety and tolerability data for OCU400 demonstrate sustained clinically meaningful, approximately 2-line LLVA gain, reinforcing durable gene-agnostic benefit. Positive long-term, 3-year Phase 1/2 data for OCU400 were recently assessed in evaluable subjects and builds on prior 2-year results showing consistent clinically meaningful, approximately 2-line LLVA gain across mutations. OCU400 maintained a favorable durability, safety and tolerability profile with no new treatment-related serious adverse events or adverse events of interest emerged.
Additional data include:
◦Visual function benefits were consistently observed over 3 years, with 88% (7/8) of evaluable treated subjects showing improvement or preservation versus untreated fellow eyes.
◦Approximately 2-line gain (N=8) observed across multiple mutation types in treated eyes compared to untreated eyes at 3 years.
We are on track to begin a rolling BLA submission in the third quarter of 2026. Topline Phase 3 data expected in the first quarter of 2027, advancing OCU400 towards potential approval in 2027 as a treatment option for early- to late-stage RP.
OCU410ST- We initiated dosing in GARDian3 pivotal confirmatory trial for OCU410ST in July 2025. The OCU410ST Phase 2/3 pivotal confirmatory trial represents our second late-stage clinical program. We plan to submit a BLA for OCU410ST in the first half of 2027 in alignment with our strategic goal of filing three BLAs over the next three years. In November 2024, the EMA granted orphan medicinal product designation ("OMPD") for OCU410ST for the treatment of ABCA4-associated retinopathies (>1200 mutations) including ST, RP 19, and CORD3. In May 2025, we announced that the FDA granted Rare Pediatric Disease Designation ("RPDD") for OCU410ST for the treatment of ABCA4-associated retinopathies including ST, retinitis pigmentosa 19 ("RP19"), and cone-rod dystrophy 3 ("CORD3"). In June 2025, we announced that the FDA has cleared the Investigational New Drug ("IND") amendment to initiate a Phase 2/3 pivotal confirmatory trial of OCU410ST, a modifier gene therapy candidate being developed for all ST (ABCA4-associated retinopathies). In August 2025, we announced that the Committee for Medicinal Products for Human Use ("CHMP") of the EMA reviewed the study design, endpoints and planned statistical analysis of the ongoing pivotal confirmatory OCU410ST Phase 2/3 GARDian3 clinical trial for ST and
provided acceptability of a single U.S.-based trial for submission of a Marketing Authorization Application ("MAA"). The Phase 2/3 GARDian3 trial is progressing as planned with anticipated enrollment completion in early 2026.
In January 2026, the Company announced publication of Phase 1 GARDian1 Trial results for OCU410ST in EYE journal. The study supports the favorable safety tolerability and efficacy profile of OCU410ST and its potential to provide clinically meaningful functional and structural benefits in ST patients.
The OCU410ST Phase 1 clinical trial demonstrated that atrophic lesions grew slower by 54% at 12 months for evaluable treated subjects when compared to untreated fellow eyes. In the secondary endpoint- Best Corrected Visual Acuity (BCVA), treated-eyes showed an improvement with 1-line (6 ETDRS Letter) gain in the visual acuity when compared to untreated fellow eyes. Additionally, 100% of evaluable treated eyes demonstrated stabilization or improvement vs. untreated eyes in visual function. In evaluable subjects (N=6) the rate of ellipsoid zone (EZ) loss was 116% slower in OCU410ST-treated eyes compared to untreated fellow eyes at 12 months, demonstrating preservation or stabilization in photoreceptor integrity. The untreated eyes showed expected decline in atrophy.
OCU410- We completed dosing in Phase 2 of the Phase 1/2 ArMaDa clinical trial for OCU410 for the treatment of geographic atrophy ("GA"), an advanced form of dAMD. Positive preliminary efficacy and safety data from the Phase 1 dose-escalation portion of the OCU410 Phase 1/2 ArMaDa clinical trial included: no drug-related serious adverse events ("SAEs"), reduced lesion growth, preservation of retinal tissue, and-most importantly-there was a positive effect on the functional visual measure of low luminance visual acuity ("LLVA"). In March 2025, OCU410 and OCU410ST received ATMP classification from the EMA.
We shared encouraging 12-month Phase 1 and 2 ArMaDa results for OCU410 in January 2026, including a 20.2% relative reduction in GA lesion from baseline as an early efficacy signal for slowing GA progression in Phase 1 subjects. Interim first time Phase 2 data (covering ~50% of subjects) demonstrated a 46% reduction in lesion growth in treatment group (combined high and medium doses) compared to control in 12 month follow up analysis. In a subgroup of patients (N=14, subjects with ≥7.5 mm2 at baseline) showed 57% greater reduction in lesion size compared to control (across doses). No OCU410-related serious adverse events or adverse events of special interest were reported across the Phase 1 and Phase 2 clinical trials. In evaluable subjects (N=7) ellipsoid zone (EZ) loss was 60% slower in OCU410-treated eyes compared to untreated fellow eyes at 12 months, EZ-RPE complex loss was reduced in treated eyes versus fellow eyes, demonstrating photoreceptor + RPE preservation. In addition, OCU410 treatment demonstrated a 20.2% reduction in sqrt geographic atrophy lesion growth at 12 months compared to untreated fellow eyes.
•Other Programs -
Novel Biologic Therapy for Retinal Diseases - OCU200 is a novel recombinant fusion protein consisting of two human proteins, tumstatin and transferrin. OCU200 possesses unique features which potentially enable it to treat vascular complications of diabetic macular edema ("DME"), diabetic retinopathy ("DR"), and wet age-related macular degeneration ("AMD"). Tumstatin is the active component of OCU200 and binds to integrin receptors, which play a crucial role in disease pathogenesis. Transferrin is expected to facilitate the targeted delivery of tumstatin into the retina and choroid and potentially help increase the interaction between tumstatin and integrin receptors. The first subject was dosed in the OCU200 multicenter open label Phase 1 clinical trial in January 2025 and enrollment is expected to be competed during the first quarter of 2026.
Regenerative Medicine Cell Therapy Platform - Our Phase 3-ready regenerative cell therapy platform technology, which includes NeoCart (autologous chondrocyte-derived neocartilage), is being developed for the repair of knee cartilage injuries in adults. We received concurrence from the FDA on the confirmatory Phase 3 trial design and have completed renovating an existing facility into a current GMP facility to support clinical study and initial commercial launch. This facility is needed to generate patient-specific NeoCart implant from chondrocytes derived from knee biopsy. During 2025, we transferred the assets related to our NeoCart product candidate to OrthoCellix.
Inhaled Mucosal Vaccine Platform - Our next-generation, inhaled mucosal vaccine platform includes OCU500, a COVID-19 vaccine; OCU510, a seasonal quadrivalent flu vaccine; and OCU520, a combination quadrivalent seasonal flu and COVID-19 vaccine. We have completed IND-enabling studies and GMP manufacturing of clinical trial material for OCU500. In January 2025, we announced that the Investigational New Drug ("IND") application is in effect, and the National Institute of Allergy and Infectious Diseases ("NIAID"), part of the National Institutes of Health ("NIH") intends to initiate a Phase 1 clinical trial for OCU500. The NIAID intends to initiate the OCU500 Phase 1 clinical trial in the second quarter of 2026.
Novel Modifier Gene Therapy Platform
We are developing a modifier gene therapy platform designed to fulfill unmet medical needs related to retinal diseases, including IRDs, such as RP, ST; and multifactorial diseases such as dAMD. Our modifier gene therapy platform is based on the use of NHRs, which have the potential to achieve homeostasis - the basic biological processes in the retina to restore a healthy state from a diseased state. Unlike single gene replacement therapies, which only target one genetic mutation, our modifier gene therapy platform, through its use of NHRs, represents a unique, gene-agnostic approach designed to address not just the mutated gene but provide a molecular "reset" of health and survival of gene networks. OCU400, our lead product candidate in our modifier gene therapy platform, has received ODD from the FDA for RP and LCA, a RMAT designation for the treatment of RP associated with NR2E3 and RHO mutations from the FDA, and OMPD from the EC, based on the recommendation of the EMA, for RP and LCA. These broad ODD, RMAT, and OMPD designations further support the broad (gene-agnostic) therapeutic potential of OCU400 to treat RP associated with mutations in multiple genes.
OCU410 and OCU410ST are being developed utilizing the RORA (RAR Related Orphan Receptor A) gene for the treatment of GA secondary to dAMD and ST, respectively. OCU410 is a potential one-time, curative therapy with a single sub-retinal injection that targets multiple pathways associated with AMD pathogenesis, in contrast to products currently approved or under development that treat only one cause of GA, require multiple injections per year, and have safety considerations. OCU410ST has received ODD from the FDA and OMPD from the EMA for the treatment of ABCA4-associated retinopathies (>1200 mutations) including ST, RP19, and cone-rod dystrophy 3 (CORD3), and has the potential to be the first approved therapy to treat ST.
OCU410ST/OCU410 utilizes a first-in-class modifier gene therapy approach by delivering the human RORA gene to diseased retinal tissue via subretinal AAV5 delivery. RORA modulates lipid metabolism, oxidative stress, and inflammation key drivers of retinal degeneration that restores retinal homeostasis by offering a unique four-way disease-modifying potential.
Currently, there is significant economic burden of vision loss diseases in the US. ST and GA are major contributors to vision loss. OCU410 has the potential to reduce treatment costs, prevent vision-related disability, and ease the broader healthcare and societal burden driven by structural and functional vision loss.
In February 2025, we announced that alignment has been reached with the FDA to move forward with a Phase 2/3 pivotal confirmatory clinical trial for OCU410ST which can be the basis of a BLA submission. The GARDian Phase 2/3 clinical trial will randomize 51 subjects, 34 of whom will receive a single, subretinal, 200-μL injection of OCU410ST at a concentration of 1.5x1011 vector genomes (vg)/mL in the eye with worse visual acuity, and 17 of whom will serve as untreated controls. The primary endpoint in the clinical trial is change in atrophic lesion size. Secondary endpoints include visual acuity as measured by best corrected visual acuity and LLVA compared to untreated controls. One-year data will be utilized for the BLA filing. The Phase 2/3 pivotal confirmatory trial has adaptive design with sample size re-estimation. OCU410ST is intended for early to advanced cases of ST. The masked interim analysis for the OCU410ST Phase 2/3 GARDian3 trial in Stargardt disease is on track as planned for mid-2026 for 24 subjects (16 treated, 8 controls).
The latest data from the OCU410ST Phase 1 clinical trial demonstrates that atrophic lesions grew slower by 54% at 12 months for evaluable treated subjects when compared to untreated fellow eyes. In the secondary endpoint- Best Corrected Visual Acuity (BCVA), treated eyes showed an improvement with 1-line (6ETDRS Letter) gain in the visual acuity when compared to untreated fellow eyes. Additionally, 100% of evaluable treated eyes demonstrated stabilization or improvement vs. untreated eyes in visual function."). The Phase 2/3 GARDian3 trial is progressing as planned with anticipated enrollment completion in 2026.
In January 2026, the Company announced publication of Phase 1 GARDian1 Trial results for OCU410ST. The study supports the favorable safety, tolerability and efficacy profile of OCU410ST and its potential to provide clinically meaningful functional and structural benefits in ST patients.
The OCU410ST Phase 1 clinical trial demonstrated that atrophic lesions grew slower by 54% at 12 months for evaluable treated subjects when compared to untreated fellow eyes. In the secondary endpoint, Best Corrected Visual Acuity (BCVA), treated eyes showed an improvement with 1-line (6 ETDRS Letter) gain in the visual acuity when compared to untreated fellow eyes. Additionally, 100% of evaluable treated eyes demonstrated stabilization or improvement vs. untreated eyes in visual function. In evaluable subjects (N=6) ellipsoid zone (EZ) loss rate was 116% slower in OCU410ST-treated eyes compared to untreated fellow eyes at 12 months, demonstrating preservation or stabilization in photoreceptor integrity. The untreated eyes showed expected decline in atrophy.
Positive preliminary efficacy and safety data from the OCU410 Phase 2 ArMaDa clinical trial at 12 months demonstrated no drug-related serious adverse events (SAEs).In evaluable subjects in Phase 1 ArMaDa clinical trial (N=7) ellipsoid zone (EZ) loss was 60% slower in OCU410-treated eyes compared to untreated fellow eyes at 12 months, EZ-RPE complex loss was
reduced in treated eyes versus fellow eyes, demonstrating photoreceptor + RPE preservation. In addition, OCU410 treatment demonstrated a 20.2% reduction in geographic atrophy lesion growth at 12 months compared to untreated fellow eyes. Positive preliminary efficacy and safety data from the OCU410 Phase 2 ArMaDa clinical trial at 12 months demonstrated no drug-related serious adverse events (SAEs), 46% lesion growth reduction (medium + high dose vs. control; p=0.015; N=23) at 12 months, medium dose achieved 54% lesion reduction (p=0.02; N=10) vs. high dose 36% (p=0.05; N=8) compared to control, 50% responder rate with patients achieving >50% lesion size reduction vs. control, and a subgroup of patients (N=14, subjects with ≥7.5 mm2at baseline) showed 57% greater reduction in lesion size compared to control (across doses).
Novel Biologic Therapy for Retinal Diseases
OCU200 is a novel recombinant fusion protein consisting of two human proteins, tumstatin and transferrin. OCU200 possesses unique features which potentially enable it to treat vascular complications of diabetic macular edema ("DME"), diabetic retinopathy ("DR"), and wet age-related macular degeneration ("AMD"). Tumstatin is the active component of OCU200 and binds to integrin receptors,which play a crucial role in disease pathogenesis. Transferrin is expected to facilitate the targeted delivery of tumstatin into the retina and choroid and potentially help increase the interaction between tumstatin and integrin receptors. The first subject was dosed in the OCU200 multicenter open label Phase 1 clinical trial in January 2025 and enrollment is expected to be completed during the first quarter of 2026.
Regenerative Medicine Cell Therapy Platform
NeoCart is a Phase 3-ready, regenerative cell therapy technology that combines breakthroughs in bioengineering and cell processing to enhance the autologous cartilage repair process. NeoCart is a three-dimensional tissue-engineered disc of new cartilage that is manufactured by growing the patient's own chondrocytes, the cells responsible for maintaining cartilage health. Current surgical and nonsurgical treatment options for knee cartilage injuries in adults are limited in their efficacy and durability. In prior clinical studies, Phase 2 and Phase 3, NeoCart has shown potential to accelerate healing, reduce pain, and provide regenerative native-like cartilage strength with durable benefits post transplantation. NeoCart was shown to be generally well-tolerated and demonstrated greater clinical efficacy than microfracture surgery at two years after treatment.
Based on this clinical benefit, the FDA granted a RMAT designation to NeoCart for the repair of full-thickness lesions of knee cartilage injuries in adults. Additionally, we received concurrence from the FDA on the confirmatory Phase 3 trial design where chondroplasty will be used as a control group. We have completed renovating an existing facility into a GMP facility in accordance with the FDA's regulations in support of NeoCart manufacturing for personalized Phase 3 trial material. We intend to initiate the Phase 3 trial contingent on adequate availability of funding. During 2025, we transferred the assets related to our NeoCart product candidate to OrthoCellix.
Inhaled Mucosal Vaccine Platform
We are party to the WU License Agreement with Washington University, pursuant to which we licensed the rights to develop, manufacture, and commercialize a mucosal COVID-19 vaccine for the prevention of COVID-19 in the Mucosal Vaccine Territory. In addition, we internally developed technology related to the flu and COVID-19's vaccine design and filed intellectual property. We are developing a next-generation, inhalation-based mucosal vaccine platform based on a novel ChAd vector, which includes OCU500, a COVID-19 vaccine; OCU510, a seasonal quadrivalent flu vaccine; and OCU520, a combination quadrivalent seasonal flu and COVID-19 vaccine. Our inhaled mucosal vaccine platform is driven by our conviction to serve a major public health concern, which requires the endorsement and support of government funding in order to develop and ultimately commercialize our vaccine candidates. As these vaccine candidates are being developed to be administered via inhalation, we believe they have the potential to generate rapid local immune response in the upper airways and lungs, where viruses enter and infect the body. We believe this novel delivery route may help reduce or prevent infection and transmission as well as provide protection against new virus variants. In October 2023, OCU500 was selected by the NIAID Project NextGen for inclusion in clinical trials. OCU500 will be tested via two different mucosal routes, inhalation and intranasal delivery. The NIAID intends to initiate a Phase 1 clinical trial in the second quarter of 2026.
Recent Events
2026 Underwritten Registered Direct Offering and 2025 Registered Direct Offering
In January 2026, we closed an underwritten registered direct offering of 15.0 million shares of our common stock at an offering price of $1.50 per share of common stock for gross proceeds of $22.5 million, before deducting commissions and other estimated offering expenses payable by us.
In August 2025, we closed a registered direct offering pursuant to a securities purchase agreement with an institutional investor, for the purchase and sale of 20.0 million shares of our common stock and warrants to purchase up to an aggregate of 20.0 million shares of common stock at a purchase price of $1.00 per share and accompanying warrant. The warrants have an exercise price of $1.50 per share, are exercisable immediately upon issuance, and will expire two years following the date of issuance. Our net proceeds were $18.5 million after deducting the placement agent fees and other offering expenses.
CEO Performance Share Unit Grant
On January 2, 2026, we granted 9.4 million Performance Share Units ("PSUs") to our Chief Executive Officer under our 2019 Equity Incentive Plan (the "2019 Plan"). The grant date for these PSUs, as defined under ASC 718, occurred subsequent to year-end, on January 2, 2026, after all terms and conditions of the award were finalized and communicated.
The PSUs are eligible to vest based on the achievement of pre-established performance criteria over a three-year period ending December 31, 2028. The performance metrics include certain regulatory milestones and achievement of a stock performance related milestones as determined by the Compensation Committee.
In accordance with ASC 718, Compensation-Stock Compensation, the fair value of the PSUs will be measured on the grant date January 2, 2026 and recognized as compensation expense over the requisite service period. As the grant date occurred after December 31, 2025, no compensation expense related to this award is reflected in our results for the year ended December 31, 2025.
Management has evaluated subsequent events through March 4th, 2026 and determined that this grant does not impact our financial position as of December 31, 2025, but is disclosed herein as a subsequent event.
Financial Operations Overview
We have not generated revenue from our product candidates to date and have incurred net losses in each year since inception. We expect to continue to incur net losses until our product candidates, if approved, are successfully commercialized. We incurred net losses of $67.8 million and $54.1 million for the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025, we had an accumulated deficit of $408.1 million and a cash balance of $18.6 million. Substantially all of our net losses resulted from expenses incurred in connection with our research and development programs and from general and administrative costs associated with our operations.
Segment Information
As of December 31, 2025, we viewed our operations and managed our business as one operating segment consistent with how our chief operating decision-maker, our Chief Executive Officer, makes decisions regarding resource allocation and assessing performance. As of December 31, 2025, substantially all of our assets were located in the United States. Our headquarters are located in Malvern, Pennsylvania.
Research and development expense
Research and development costs are expensed as incurred. These costs consist of internal and external expenses, as well as depreciation expense on assets used within our research and development activities. Internal expenses include the cost of salaries, benefits, and other related costs, including stock-based compensation, for personnel serving in our research and development functions, as well as allocated rent and utilities expenses. External expenses include development, clinical trials, patent costs, and regulatory compliance costs incurred with research organizations, contract manufacturers, and other third-party vendors. License fees paid to acquire access to proprietary technology are expensed to research and development, unless it is determined that the technology is expected to have an alternative future use. We record costs for certain development activities, such as preclinical studies and clinical trials, based on our evaluation of the progress to completion of specific tasks. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in the consolidated financial statements as prepaid or accrued research and development expense, as applicable. Our recording of costs for certain development activities requires us to use estimates. We believe our estimates and assumptions are reasonable under the current conditions; however, actual results may differ from these estimates. Our research and development expenses are not currently tracked on a program-by-program basis for indirect and overhead costs. We use our personnel and infrastructure resources across multiple research and development programs directed toward identifying, developing, and commercializing product candidates.
Research and development expenses account for a significant portion of our operating expenses. We plan to incur research and development expenses for the foreseeable future as we expect to continue the development of our product candidates. We anticipate that our research and development expenses will be higher in fiscal year 2026 as compared to fiscal year 2025 due to an increase in BLA and clinical activities with respect to our product candidates as well as an increase in headcount.
At this time, due to the inherently unpredictable nature of preclinical and clinical developments as well as regulatory approval, we are unable to estimate with any certainty the costs we will incur and the timelines we will require in our continued development and commercialization efforts. As a result of these uncertainties, the successful development and completion of clinical trials as well as the regulatory approval process are uncertain and may not result in approved and commercialized products. Completion dates and completion costs can vary significantly for each product candidate and are difficult to predict. We will continue to make determinations as to which product candidates to pursue and how much funding to direct to each product candidate on an ongoing basis in response to our ability to enter into partnerships with respect to each product candidate and the scientific and clinical success of each product candidate as well as ongoing assessments as to the commercial potential of each product candidate.
General and administrative expense
General and administrative expense consists primarily of personnel expenses, including salaries, benefits, insurance, and stock-based compensation expense, for employees in executive, accounting, commercialization, human resources, and other administrative functions. General and administrative expense also includes expenses related to pre-commercial activities, corporate facility costs, such as allocated rent and utilities, insurance premiums, legal fees related to corporate matters, and fees for auditing, accounting, and other consulting services.
We anticipate that our general and administrative expenses will increase in fiscal year 2026 as compared to fiscal year 2025 due to an increase in headcount.
Results of Operations
The following table summarizes the results of our operations for the years ended December 31, 2025 and 2024 (in thousands):
| Year ended December 31, | |||||||||||||||||
| 2025 | 2024 | Change | |||||||||||||||
| Collaborative arrangement revenue | $ | 4,413 | $ | 4,055 | $ | 358 | |||||||||||
| Total Revenue | 4,413 | 4,055 | 358 | ||||||||||||||
| Operating expenses | |||||||||||||||||
| Research and development | 39,750 | 32,126 | 7,624 | ||||||||||||||
| General and administrative | 27,579 | 26,686 | 893 | ||||||||||||||
| Total operating expenses | 67,329 | 58,812 | 8,517 | ||||||||||||||
| Loss from operations | (62,916) | (54,757) | (8,159) | ||||||||||||||
| Other (expense) income : | |||||||||||||||||
| Interest income | 922 | 1,251 | (329) | ||||||||||||||
| Interest expense | (5,188) | (688) | (4,500) | ||||||||||||||
| Other (expense) income, net | (664) | 140 | (804) | ||||||||||||||
| Total other (expense) income | (4,930) | 703 | (5,633) | ||||||||||||||
| Net loss | $ | (67,846) | $ | (54,054) | $ | (13,792) | |||||||||||
We believe the following table provides more transparency as to the type of research and development expenses incurred. The following table summarizes our research and development expenses by product candidate for the years ended December 31, 2025 and 2024 (in thousands):
| Year ended December 31, | |||||||||||||||||
| 2025 | 2024 | Change | |||||||||||||||
| OCU400 | $ | 9,871 | $ | 6,846 | $ | 3,025 | |||||||||||
| OCU410 and OCU410ST | 5,465 | 3,653 | 1,812 | ||||||||||||||
| NeoCart | 295 | 489 | (194) | ||||||||||||||
| COVAXIN | (2) | 25 | (27) | ||||||||||||||
| Inhaled mucosal vaccine platform | 417 | 2,464 | (2,047) | ||||||||||||||
| OCU200 | 756 | 379 | 377 | ||||||||||||||
| Unallocated costs: | |||||||||||||||||
| Research and development personnel costs | 16,786 | 12,992 | 3,794 | ||||||||||||||
| Facilities and other support costs | 3,581 | 2,984 | 597 | ||||||||||||||
| Other | 2,581 | 2,294 | 287 | ||||||||||||||
| Total research and development | $ | 39,750 | $ | 32,126 | $ | 7,624 | |||||||||||
Collaborative arrangement revenue
Collaborative arrangement revenue increased by $0.4 million for the year ended December 31, 2025 compared to the year ended December 31, 2024. The increase resulted from greater advancement in fulfilling the terms of the collaboration agreement.
Research and development expense
Research and development expense increased by $7.6 million for the year ended December 31, 2025 compared to the year ended December 31, 2024. This growth was mainly attributable to an additional $3.0 million spent on phase three clinical activities for OCU400, $1.8 million associated with confirmatory phase two/three clinical activities related to OCU410, and
$3.8 million resulting from increased staffing levels. These increases were partially offset by a $(2.0) million reduction related to OCU500, primarily due to lower preclinical activity and decreased GMP manufacturing expenditures.
General and administrative expense
General and administrative expense increased by $0.9 million for the year ended December 31, 2025 compared to the year ended December 31, 2024. The increase was primarily due to $0.7 million increase in professional service fees.
Interest income
Interest income for the year ended December 31, 2025 decreased by $(0.3) million, compared to year ended December 31, 2024. The primary reason for this reduction was the lower average balances of cash and restricted cash, which resulted in less interest being generated compared to the previous year.
Interest expense
Interest expense for the year ended December 31, 2025 increased significantly by $4.5 million, compared to year ended December 31, 2024. The primary reason for this increase is the interest charges associated with the long-term debt that the company initiated in the fourth quarter of 2024.
Other (expense) income, net
Other (expense) income, net changed by $(0.8) million for the year ended December 31, 2025 compared to the year ended December 31, 2024. The change was primarily due to $(0.8) million recorded for a one-time contract termination fee.
Liquidity and Capital Resources
As of December 31, 2025, we had $18.6 million in cash and $0.3 million restricted cash. We have not generated revenue from our product candidates to date, and have primarily funded our operations to date through the sale of common stock, warrants to purchase common stock, the issuance of convertible notes and debt, and grant proceeds. Since our inception and through December 31, 2025, we have raised an aggregate of $389.9 million to fund our operations, of which $345.2 million is from gross proceeds from the sale of our common stock and warrants, $10.3 million is from the issuance of convertible notes, $33.4 million is from the issuance of debt, $0.8 million was from the royalty agreement, and $0.2 million is from grant proceeds.
In November 2024, we entered into a debt financing transaction with Avenue for net proceeds of $29.2 million. The Loan and Security Agreement provides for term loans in an aggregate principal amount of up to $30.0 million delivered on November 6, 2024 (the "Term Loans"). The loan has a maturity date of November 1, 2028, of which the first 24 months are interest only, and bears interest at a variable rate per annum equal to the greater of the prime rate as reported in The Wall Street Journal plus 4.25% or 12.25%. Additionally, the Lenders have the right to convert an aggregate amount of up to $6.0 million of the outstanding principal amount into shares of our common stock at a conversion price per share equal to 80% of the trading price on the date of conversion, which shall be at Lenders' option. In the event we elect to prepay the Term Loans in full, Lenders shall have 10 days to elect to exercise its conversion right prior to such prepayment. All conversion rights shall terminate on Term Loans payoff. In connection with the entry into the Loan and Security Agreement, we entered into a Subscription Agreement (the "Subscription Agreement") by and among us and the Lenders, pursuant to which we issued (i) 211,268 shares of common stock to Avenue 1 and (ii) 845,070 shares of common stock to Avenue 2, with an issue date as of November 6, 2024 (the "Equity Grant"). Notwithstanding the foregoing, the aggregate amount of our common stock issued pursuant to this conversion right and the Equity Grant shall not exceed a number of shares equal to 19.9% of our outstanding common stock. The agreement is collateralized by all of our assets in which the Agent is granted senior secured lien. We also granted the Lenders a negative pledge on our intellectual property.
In January 2026, we closed an underwritten registered direct offering of 15.0 millionshares of our common stock at an offering price of $1.50 per share of common stock for gross proceeds of $22.5 million, before deducting commissions and other estimated offering expenses payable by us.
During the year ended December 31, 2025, we issued and sold 20.0 million shares of our common stock in a registered direct offering at price of $1.00 per share and accompanying warrant. We received net proceeds of $18.5 million after deducting equity issuance costs.
During the year ended December 31, 2024, we issued and sold $32.7 million shares of our common stock at a public offering price of $1.15 per share pursuant to the July 2024 Public Offering. We received net proceeds of $34.7 million after deducting equity issuance costs.
Since our inception, we have devoted substantial resources to research and development and have incurred significant net losses and may continue to incur net losses in the future. We incurred net losses of approximately $67.8 million and $54.1 million for the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025, we had an accumulated deficit of $408.1 million. In addition, as of December 31, 2025, we had accounts payable and accrued expenses and other current liabilities of $20.9 million, lease liability of $4.4 million, and indebtedness of $28.8 million.
The following table shows a summary of our cash flows for the year ended December 31, 2025 and the year ended December 31, 2024 (in thousands):
| Year ended December 31, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Net cash used in operating activities | $ | (56,964) | $ | (42,142) | ||||||||||
| Net cash (used in) provided by investing activities | (311) | (3,385) | ||||||||||||
| Net cash provided by financing activities | 17,328 | 64,858 | ||||||||||||
| Effect of changes in exchange rate on cash and restricted cash | 13 | 28 | ||||||||||||
| Net (decrease) increase in cash and restricted cash | $ | (39,934) | $ | 19,359 | ||||||||||
Operating activities
Cash used in operating activities was $57.0 million for the year ended December 31, 2025, and primarily consisted of a net loss of $67.8 million adjusted for non-cash items including stock-based compensation of $7.7 million, depreciation and amortization of $2.4 million, non-cash lease expense of $1.3 million, non-cash expense from collaborative arrangements, net of $2.5 million, non-cash interest expense of $0.1 million, and a change in net working capital of $(0.5) million.
Cash used in operating activities was $42.1 million for the year ended December 31, 2024, and primarily consisted of a net loss of $54.1 million adjusted for non-cash items including stock-based compensation of $7.4 million, depreciation and amortization of $2.0 million, non-cash lease expense of $0.9 million, non-cash expense from collaborative arrangements, net of $2.2 million, non-cash interest expense of $0.1 million, and a change in net working capital of $3.7 million.
Investing activities
Cash used in investing activities was $0.3 million for the year ended December 31, 2025, and primarily consisted of payments of security deposits and purchases of property and equipment. Cash used in investing activities was $3.4 million for the year ended December 31, 2024, and primarily consisted of payments related to purchases of property and equipment.
Financing activities
Cash inflows from financing activities totaled $17.3 million for the year ended December 31, 2025, a notable decline from the $64.9 million recorded for the year ended December 31, 2024. The principal contributor to cash provided by financing activities in 2025 was the August 2025 Public Offering, which resulted in $19.9 million in gross proceeds, offset by equity issuance expenditures of $1.5 million. In comparison, the 2024 period saw its financing cash primarily generated from two sources: the July 2024 Public Offering, delivering $37.6 million in gross proceeds less $2.9 million in equity issuance costs, and a debt financing deal with Avenue, which contributed an additional $30.0 million in gross proceeds before deducting $0.8 million in related equity issuance expenses
Contractual Obligations
Licensing and Development Agreements
We have obligations under certain license and development agreements for our product candidates including annual payments, payments upon the achievement of certain milestones, and royalty payments based on net sales of licensed products. See Note 3 in the notes to the consolidated financial statements included in elsewhere in this Annual Report for information regarding our obligations under licensing and development agreements.
Lease Obligations
We have obligations under our operating leases, which include leased office, laboratory, and future manufacturing space, located in Malvern, Pennsylvania and other locations. As of December 31, 2025, we had future minimum operating lease base rent payment obligations of $5.7 million, with $1.2 million payable within 12 months of December 31, 2025. See Note 8 in the notes to the consolidated financial statements included elsewhere in this Annual Report for information regarding our obligations under lease obligations.
Indebtedness
We have outstanding debt related to the funds borrowed from EB-5 Life Sciences pursuant to the United States government's foreign national investor program, commonly known as the EB-5 Program. Pursuant to the Loan agreement, we have borrowed $1.5 million to date. We also entered into the Loan and Security Agreement with Avenue that is secured by a lien on all of our assets. Pursuant to the Loan and Security Agreement, we have borrowed $30.0 million to date. See Note 10 in the notes to the consolidated financial statements included elsewhere in this Annual Report for information regarding our obligations under the EB-5 Loan agreement and the Loan and Security Agreement.
Funding requirements
We expect to continue to incur significant expenses in connection with our ongoing activities, particularly as we continue research and development, including preclinical and clinical development of our product candidates, prepare to manufacture our product candidates, prepare for the potential commercialization of our product candidates, add operational, financial, and information systems to execute our business plan, maintain, expand, and protect our patent portfolio, explore strategic licensing, acquisition, and collaboration opportunities to expand our product candidate pipeline to support our future growth; expand headcount to support our development, commercialization, and business efforts, and operate as a public company.
Factors impacting our future funding requirements include, without limitation, the following:
•the initiation, progress, timing, costs, and results of trials for our product candidates;
•the preparation and submission of Investigational New Drug applications, or INDs, with the FDA for current and future product candidates;
•the outcome, timing, and cost of the regulatory approval process for our product candidates;
•the costs of manufacturing and commercialization;
•the costs related to doing business internationally with respect to the development and commercialization of our product candidates;
•the cost of filing, prosecuting, defending, and enforcing our patent claims and other intellectual property rights;
•the cost of defending intellectual property disputes, including patent infringement actions brought by third parties against us;
•the acquisition of or in-licensing of additional product candidates and technologies;
•the costs of expanding infrastructure to support our development, commercialization, and business efforts, including the costs related to the development of a laboratory and manufacturing facility;
•the costs involved in recruiting and retaining skilled personnel;
•the extent to which we in-license or acquire other products, product candidates, or technologies and out-license our product candidates;
•the impact of geopolitical turmoil, macroeconomic conditions, social unrest, political instability, terrorism, or other acts of war; and
•the changes in tariffs and indirect trade restraints, including increased costs associated with global and retaliatory tariff polices.
As of December 31, 2025, we had cash of approximately $18.6 million.This amount will not meet our capital requirements over the next 12 months. We believe that our cash and cash equivalents will enable us to fund our operations into the fourth quarter of 2026. Due to the inherent uncertainty involved in making estimates and the risks associated with the research,
development, and commercialization of biotechnology products, we have based this estimate on assumptions that may prove to be wrong, and our operating plan may change as a result of many factors currently unknown to us.
We are subject to risks and uncertainties frequently encountered by companies in the biotech industry, and while we intend to continue research, development, and commercialization efforts for our product candidates, we will require significant additional funding. If we are unable to obtain additional funding in the future and/or our research, development, and commercialization efforts require higher than anticipated capital, there will be a negative impact on our financial viability. We will continue to explore options to fund our operations through public and private placements of equity and/or debt, payments from potential strategic research and development arrangements, sales of assets, licensing and/or collaboration arrangements with pharmaceutical companies or other institutions, funding from the government, particularly for the development of our novel inhaled mucosal vaccine platform, or funding from other third parties. Such financing and funding may not be available at all, or on terms that are favorable to us. While management believes that we have a plan to fund operations, our plan may not be successfully implemented. If we cannot obtain the necessary funding, we will need to delay, scale back, or eliminate some or all of our research and development programs and commercialization efforts; consider other various strategic alternatives, including a merger or sale; or cease operations. If we cannot expand our operations or otherwise capitalize on our business opportunities because we lack sufficient capital, our business, financial condition, and results of operations could be materially adversely affected. Given this uncertainty, and despite the additional funding from the 2026 underwritten registered direct offering, we will need to raise significant additional capital in order to fund our operations until we recognize significant revenue from product sales. Our management continues to evaluate different strategies to obtain the funding required for our future operations. These strategies may include, but are not limited to: public and private placements of equity and/or debt, payments from potential strategic research and development arrangements, sales of assets, licensing and/or collaboration arrangements with pharmaceutical companies or other institutions, funding from the government, particularly for the development of our novel inhaled mucosal vaccine platform, or funding from other third parties. Our ability to secure funding is subject to numerous risks and uncertainties, including, but not limited to the impact of the geopolitical turmoil, macroeconomic conditions, and the impact of inflation and as a result; or cease operations. If we cannot expand our operations or otherwise capitalize on our business opportunities because we lack sufficient capital, our business, financial condition, and results of operations could be materially adversely affected.
As a result of these factors, together with the anticipated continued spending that will be necessary to continue to research, develop, and commercialize our product candidates, there is substantial doubt about our ability to continue as a going concern within one year after the date that these consolidated financial statements are issued. The consolidated financial statements do not contain any adjustments that might result from the resolution of any of the above uncertainties.
Off-Balance Sheet Arrangements
We did not have any off-balance sheet arrangements during the periods presented, and we do not currently have any off-balance sheet arrangements as defined in the rules and regulations of the SEC.
Critical Accounting Policies and Significant Judgments and Estimates
Our consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States ("GAAP"). The preparation of our financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of expenses during the reported period. We base our estimates on historical experience, known trends and events, and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions and conditions.
While our significant accounting policies are described in more detail in the notes to the consolidated financial statements included elsewhere in this Annual Report, we believe that the following accounting policies and estimates are those most critical to the preparation of our consolidated financial statements:
Research and Development and Clinical Trial Accruals
As part of the process of preparing the consolidated financial statements included elsewhere in this Annual Report, we are required to estimate and record expenses, for which a large portion are research and development expenses. Research and development expenses include, among other categories, development, clinical trials, patent costs, and regulatory compliance costs incurred with research organizations, contract manufacturers, and other third-party vendors. The estimation process
involves identifying services that have been performed on our behalf by third-parties, estimating and accruing expenses in our consolidated financial statements based on the evaluation of the progress to completion of specific tasks and the facts and circumstances known to us at the time of the estimate, and assessing the accuracy of these estimates going forward to determine if adjustments are required. We periodically collaborate with our third-party vendors to assist in determining our estimates. Payments for these activities performed by our third-party vendors are based on the terms of the individual arrangements with our third-party vendors, which may differ from the pattern of costs incurred, and are reflected in the consolidated financial statements as prepaid or accrued research and development expense, as applicable. We believe our estimates and assumptions are reasonable under the current conditions; however, actual results may differ from these estimates. Any changes to estimates will be recorded in the period in which a circumstance causing a change in estimate becomes known and the impact of any change in estimate could be material.
Collaborative Arrangements and Revenue Recognition
We analyze our collaborative arrangements to assess whether they are within the scope of ASC 808, Collaborative Arrangements("ASC 808") to determine whether such arrangements involve joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards. This assessment is performed throughout the life of the arrangements based on changes to the arrangements. For collaborative arrangements within the scope of ASC 808 we may analogize to ASC 606 for certain elements.
We identify the goods or services promised within each collaborative arrangement and assesses whether each promised good or service is distinct for the purpose of identifying the performance obligations in the contract. This assessment involves subjective determinations and requires management to make judgments about the individual promised goods or services and whether such are separable from the other aspects of the contractual relationship. Promised goods and services are considered distinct provided that: (i) the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer and (ii) the entity's promise to transfer the good or service to the customer is separately identifiable from other promises in the contract.
The allocation of the transaction price to the performance obligations in proportion to their standalone selling prices is determined at contract inception. If the consideration promised in a contract includes a variable amount, we estimate the amount of consideration to which it will be entitled in exchange for transferring the promised goods or services to a customer. We determine the amount of variable consideration by using the expected value method or the most likely amount method. We include the unconstrained amount of estimated variable consideration in the transaction price. The amount included in the transaction price is the amount for which it is probable that a significant reversal of cumulative revenue recognized will not occur. At the end of each subsequent reporting period, we re-evaluate the estimated variable consideration included in the transaction price and any related constraint, and if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis in the period of adjustment.
In determining the transaction price, we adjust consideration for the effects of the time value of money if the timing of payments provides us with a significant benefit of financing. We do not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the counterparty and the transfer of the promised goods or services to the counterparty will be one year or less. We assess its collaboration arrangements in order to determine whether a significant financing component exists and concluded that a significant financing component does not exist in any of its arrangements.
We recognize as collaboration revenue the amount of the transaction price that is allocated to the respective performance obligation as each performance obligation is satisfied over time, with progress toward completion measured based on actual costs incurred relative to total estimated costs to be incurred over the life of the arrangement. Significant management judgment is required in determining the level of effort required under an arrangement and the period over which we our expected to complete their performance obligations under the arrangements and in determining the estimated market value of the co-development services included in the transaction price.Weevaluate the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition.Adjustments to original estimates will be required as work progresses and additional information becomes known, even though the scope of the work required under the contract may not change. Any adjustment as a result of a change in estimates is made when facts develop, events become known, or an adjustment is otherwise warranted.
Under our collaborative arrangements, the timing of revenue recognition and receipt of consideration may differ, and result in assets and liabilities. Assets represent revenues recognized in excess of the consideration received under collaborative arrangement. Liabilities represent the consideration received in excess of revenues recognized under collaborative arrangement.
Stock-based compensation
We account for our stock-based compensation awards in accordance with the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 718, Compensation-Stock Compensation("ASC 718"). We have issued stock-based compensation awards including stock options and restricted stock units ("RSUs"), and market-condition based restricted stock units ("PSUs"), and we also account for certain issuances of preferred stock and warrants in accordance with ASC 718. ASC 718 requires all stock-based payments, including grants of stock options and RSUs, and PSUs, to be recognized in the consolidated statements of operations and comprehensive loss based on their grant date fair values. We use the Black-Scholes option-pricing model to determine the fair value of options granted. For RSUs, the fair value of the RSUs is determined by the market price of a share of our common stock on the grant date. For PSUs, we determine fair value by using a Monte Carlo simulation technique. We recognize forfeitures as they occur.
Expense related to stock-based compensation awards granted with service-based vesting conditions is recognized on a straight-line basis based on the grant date fair value over the associated service period of the award, which is generally the vesting term. Stock-based awards generally vest over a one to three year requisite service period. Stock options have a contractual term of 10 years. Expense for stock-based compensation awards with performance-based vesting conditions is only recognized when the performance-based vesting condition is deemed probable to occur. Expense for stock-based compensation awards with market-based and service-based vesting conditions is recognized ratably over the grantee's requisite service period. Compensation cost is not adjusted based on the actual achievement of the market-based performance goals. Expense related to stock-based compensation awards are recorded to research and development expense or general and administrative expense based on the underlying function of the individual that was granted the stock-based compensation award. Shares issued upon stock option exercise, PSU and RSU vesting are newly issued common shares.
Estimating the fair value of stock options requires the input of subjective assumptions, including the expected term of the stock option, stock price volatility, the risk-free interest rate, and expected dividends. Estimating the fair value of PSUs requires the input of subjective assumptions, including stock price volatility, total shareholder return ("TSR") ranking, the risk-free rate, and expected dividends. The assumptions used in our Black-Scholes option-pricing model and Monte Carlo simulation technique represent management's best estimates and involve a number of variables, uncertainties, assumptions, and the application of management's judgment, as they are inherently subjective. If any assumptions change, our stock-based compensation expense could be materially different in the future.
The assumptions used in our Black-Scholes option-pricing model for stock options and in our Monte Carlo simulation technique for PSUs are as follows, unless noted otherwise:
Expected Term.As we do not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term, the expected term of employee stock options subject to service-based vesting conditions is determined using the "simplified" method, as prescribed in SEC's Staff Accounting Bulletin No. 107, whereby the expected term equals the arithmetic average of the vesting term and the original contractual term of the option. This expected term assumption is not an assumption used in our Monte Carlo simulation technique for PSUs. The expected term of the PSUs is equal to the performance period of the PSUs.
Expected Volatility.The expected volatility is based on historical volatilities of Ocugen and similar entities within Ocugen's industry for periods commensurate with the assumed expected term.
Risk-Free Interest Rate.The risk-free interest rate is based on the interest rate payable on United States Treasury securities in effect at the time of grant for a period that is commensurate with the assumed expected term.
Expected Dividends.The expected dividend yield is 0% because we have not historically paid, and do not expect for the foreseeable future to pay, a dividend on our common stock.
TSR ranking.The TSR, over a three-year period, is relative to the TSR, for that same period, as related to other companies within the Nasdaq Biotechnology Index. This assumption is only used for the market-based PSUs.
Stock-based compensation expense was $7.7 million and $7.4 million for the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025, we had $10.9 million of unrecognized stock-based compensation expense, which is expected to be recognized over a remaining weighted-average period of 2.0 years.
Recent Accounting Pronouncements
For a discussion of recent accounting pronouncements, see Note 2 in the notes to the consolidated financial statements included elsewhere in this Annual Report.
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