Outlook Therapeutics, Inc. (NASDAQ:OTLK) is a biopharmaceutical company focused on developing and commercializing ONS-5010, an ophthalmic formulation of bevacizumab for use in retinal indications. The company's mission is to enhance the standard of care in the retina anti-VEGF space by achieving the first approval for an ophthalmic formulation of bevacizumab for the treatment of retina diseases in the United States and Europe.

Business Overview

Outlook Therapeutics is working to launch the first ophthalmic formulation of bevacizumab approved by the U.S. Food and Drug Administration (FDA), the European Commission in the European Union (EU), and the Medicines and Healthcare products Regulatory Agency (MHRA) in the United Kingdom (UK) for use in retinal indications. The company's initial goal is to launch directly in the United States, EU and UK as the first and only approved ophthalmic bevacizumab for the treatment of wet age-related macular degeneration (wet AMD), diabetic macular edema (DME), and branch retinal vein occlusion (BRVO).

In March 2022, Outlook Therapeutics submitted a Biologics License Application (BLA) with the FDA for ONS-5010/LYTENAVA™ (bevacizumab-vikg), an investigational ophthalmic formulation of bevacizumab. In May 2022, the company voluntarily withdrew the BLA to provide additional information requested by the FDA. The BLA was re-submitted in August 2022, and in October 2022, the FDA accepted the filing with a goal date of August 29, 2023 for a review decision. However, on August 29, 2023, Outlook Therapeutics received a Complete Response Letter (CRL) in which the FDA concluded it could not approve the BLA during this review cycle due to several chemical, manufacturing and control (CMC) issues, open observations from pre-approval manufacturing inspections, and a lack of substantial evidence.

Separately, in October 2022, Outlook Therapeutics submitted a Marketing Authorization Application (MAA) for ONS-5010 with the European Medicines Agency (EMA). On December 22, 2022, the MAA was validated for review by the EMA. On March 22, 2024, the EMA's Committee for Medicinal Products for Human Use (CHMP) issued a positive opinion concerning the authorization of ONS-5010/LYTENAVA™ (bevacizumab gamma) for the treatment of wet AMD in the EU. The CHMP's positive opinion supports the grant of marketing authorization by the European Commission for the ONS-5010 MAA. The European Commission is expected to make a decision within approximately 67 days following the CHMP opinion. Additionally, in April 2024, Outlook Therapeutics submitted an MAA to the MHRA in the UK seeking approval of ONS-5010/LYTENAVA™ (bevacizumab gamma) for the treatment of wet AMD.

Regulatory Progress and Outlook

In the EU, which represents a significant market opportunity for Outlook Therapeutics, the company is making tremendous progress and expects to be in a position to launch in the UK and in the EU in the first quarter of calendar 2025 following potential approval this quarter.

Regarding the United States, Outlook Therapeutics has been actively engaged with the FDA and reached agreement on a Special Protocol Assessment (SPA) for NORSE EIGHT, an ongoing 90-day non-inferiority study for which the company expects top-line data in the fourth calendar quarter of 2024. Shortly thereafter, the company's goal is to resubmit its BLA by the end of calendar year 2024.

Additionally, through a Type A meeting and additional interactions, Outlook Therapeutics has identified the approaches needed to resolve the CMC comments in the CRL. The company is working to address the open CMC items and has scheduled a series of Type C and Type D meetings with the FDA to help resolve these comments prior to reporting top line results from NORSE EIGHT.

Financials

For the fiscal year ended September 30, 2023, Outlook Therapeutics reported an annual net loss of $58,983,000, with no revenue generated. The company's annual operating cash flow and free cash flow were both -$42,973,398.

In the second fiscal quarter of 2024, the company's research and development expenses increased compared to the first fiscal quarter as it began recruiting and initiating clinical trial sites for NORSE EIGHT and also began enrolling patients. General and administrative expenses were in line with the first fiscal quarter, and the company expects this to continue for the next two fiscal quarters as it prepares for the anticipated approval in the EU and UK and plans for a launch there in early calendar 2025.

Liquidity

Outlook Therapeutics recently closed a private placement with gross proceeds of up to $172 million. Of that, $65 million is in cash from the issuance and sale of common stock, which are accompanied by warrants to purchase shares of common stock, and an additional $107 million will be available upon the full cash exercise of the warrants. Assuming the full cash exercise of the warrants, the company expects its accessible capital to fund the business through its potential approval and commercial launch in parts of Europe and through the completion of NORSE EIGHT plus a potential FDA approval and the subsequent launch in the United States.

The financing included participation from long-time supporters of the company, as well as a number of additional fundamental healthcare-focused institutional investors. Outlook Therapeutics believes this financing, combined with the expected proceeds from the full exercise of warrants, would be sufficient to support its operations through calendar 2025.

Risks and Challenges

While Outlook Therapeutics has made significant progress, there are still risks and uncertainties associated with the company's path to approval and commercialization. The FDA's requirements for the additional clinical trial (NORSE EIGHT) and the resolution of the CMC comments in the CRL represent potential hurdles that the company must overcome. Additionally, the global financial markets have experienced significant disruptions due to various macroeconomic factors, including the impacts of ongoing overseas conflict, rising inflation, and liquidity concerns in the banking sector, which could impact the company's ability to access capital in the future.

Conclusion

Outlook Therapeutics is poised for a potentially transformative year in 2024. With the positive CHMP opinion in Europe and the progress made in the United States, the company is well-positioned to potentially receive approvals and launch ONS-5010 in both major markets. The recent financing provides the necessary capital to support these efforts, and the company's engagement with the FDA suggests a constructive path forward for the BLA resubmission. While challenges remain, Outlook Therapeutics' focus on enhancing the standard of care in the retina anti-VEGF space could make it a compelling investment opportunity for those willing to navigate the risks.