Executive Summary / Key Takeaways

• Ocular Therapeutix is strategically focused on redefining retinal disease treatment, led by its bioresorbable hydrogel technology platform, ELUTYX, and its lead candidate AXPAXLI for wet AMD.
• The company's registrational program for AXPAXLI in wet AMD, comprising the SOL-1 (superiority) and SOL-R (non-inferiority) trials, is advancing rapidly with strong enrollment and recent FDA alignment, including an SPA amendment for SOL-1 redosing potentially supporting a 6-12 month label.
• Despite a recent year-over-year decline in Q1 2025 DEXTENZA net product revenue due to pricing strategy and MIPS impact, the company anticipates quarterly revenue growth for the remainder of 2025 driven by expected unit sales increases and expanded HOPD access.
• Ocular Therapeutix holds a strong liquidity position with $349.7 million in cash and equivalents as of March 31, 2025, providing runway into 2028 and fully funding the wet AMD registrational trials to topline results, with no current intention to raise additional capital in 2025.
• Beyond wet AMD, AXPAXLI shows compelling potential in non-proliferative diabetic retinopathy (NPDR) and diabetic macular edema (DME) based on Phase 1 data, representing a significant pipeline opportunity pending expected FDA feedback in H1 2025.

The Retina Revolution: Ocular Therapeutix and the Promise of Sustained Delivery

Ocular Therapeutix, Inc. is a biopharmaceutical company built on a foundation of innovative material science, specifically its proprietary ELUTYX bioresorbable hydrogel-based formulation technology. Since its incorporation in 2006, the company has been dedicated to developing therapies for eye conditions, evolving from early R&D efforts to launching its first commercial product, DEXTENZA, and strategically sharpening its focus on the high-impact field of retinal diseases. This strategic pivot, particularly targeting wet age-related macular degeneration (wet AMD), underscores the company's ambition to redefine the retina treatment experience and address significant unmet needs in large, underserved markets.

The core of Ocular Therapeutix's differentiation lies in its ELUTYX technology. This bioresorbable hydrogel platform is designed to enable sustained drug release over extended periods from a single administration. For patients and physicians, this translates into tangible benefits: potentially fewer injections, reduced treatment burden, improved compliance, and potentially better long-term outcomes compared to therapies requiring frequent dosing. In the context of wet AMD, where the burden of monthly or bimonthly injections leads to up to 40% of patients discontinuing treatment within the first year, a therapy offering significantly longer durability could be transformative. The technology's versatility is demonstrated across the pipeline, from the commercial DEXTENZA insert to the investigational AXPAXLI intravitreal implant and the PAXTRAVA intracameral injection.

AXPAXLI (formerly OTX-TKI), an axitinib intravitreal hydrogel, is the company's flagship program in retina. Axitinib is a small molecule tyrosine kinase inhibitor with anti-angiogenic properties, and its sustained delivery via the ELUTYX hydrogel aims to provide continuous suppression of VEGF, a key driver of wet AMD. The company has optimized the drug load for its pivotal trials to 450 µg, designed to provide a slightly increased daily release and improve synchronization with hydrogel bioresorption, potentially enhancing efficacy and durability compared to earlier formulations while remaining within the safety window observed in prior studies.

The competitive landscape in wet AMD is dominated by established anti-VEGF therapies from major players like Regeneron (REGN) (Eylea, Eylea HD), Novartis (NVS) (Beovu), and Roche/Genentech (RHHBY) (Lucentis). These companies command significant market share and possess vast financial resources, extensive sales forces, and established physician relationships. Regeneron's Eylea, for instance, holds a dominant position, generating billions in revenue annually. While recent approvals have offered modest extensions in dosing intervals (often only a couple of weeks), Ocular Therapeutix believes AXPAXLI has the potential for a step-change in durability, targeting a 6-12 month dosing interval. This potential for significantly extended duration is Ocular's primary competitive differentiator against the current standard of care and recent market entrants.

Ocular Therapeutix's strategy to compete in this market centers on demonstrating best-in-class durability and flexibility through a robust and differentiated clinical trial program. The company is conducting two complementary Phase 3 registrational trials for AXPAXLI in wet AMD: SOL-1 and SOL-R. SOL-1 is designed as a superiority trial comparing a single dose of AXPAXLI to a single dose of aflibercept (2 mg) with a primary endpoint at Week 36, aiming to establish superior durability. SOL-R is a non-inferiority trial comparing AXPAXLI dosed every 24 weeks to aflibercept (2 mg) dosed every 8 weeks, including an aflibercept (8 mg) masking arm dosed every 24 weeks, designed to evaluate repeat dosing and real-world applicability with a primary endpoint at Week 56.

A key strategic move was securing a Special Protocol Assessment (SPA) agreement with the FDA for SOL-1, providing a clear regulatory roadmap. More recently, in February 2025, the FDA approved an amendment to the SOL-1 SPA to incorporate re-dosing at Week 52 and Week 76 in all patients. This amendment, while shifting the SOL-1 topline data expectation to Q1 2026 (due to maintaining masking until Week 52), is strategically crucial as it is expected to provide valuable long-term durability and safety data to support a potential 6-12 month dosing label. In response to the additional safety data generated by the SOL-1 redosing, the company subsequently reduced the target randomization for the SOL-R trial from 825 to approximately 555 subjects. This reduction is intended to accelerate the timeline for SOL-R data and regulatory filing, enhance capital efficiency, and maintain robust statistical power (90%). The FDA has indicated that one superiority and one non-inferiority trial are generally acceptable for an eventual wet AMD NDA submission.

The company's clinical trial design incorporates patient enrichment strategies, such as loading doses of anti-VEGF therapy (two in SOL-1, five in SOL-R) and monitoring to select responsive and stable patients, aiming to de-risk the trials and improve the likelihood of successful outcomes. Importantly, neither SOL-1 nor SOL-R utilizes sham masking, aligning with the FDA's stated preference and avoiding potential bias. The rapid pace of enrollment, with SOL-1 completing randomization ahead of schedule in December 2024 and SOL-R enrollment gaining momentum allowing direct enrollment from SOL-1 sites, underscores the enthusiasm within the retina community for a more durable treatment option.

Beyond wet AMD, Ocular Therapeutix sees a significant opportunity for AXPAXLI in non-proliferative diabetic retinopathy (NPDR) and diabetic macular edema (DME). Diabetic retinopathy is a leading cause of blindness, particularly in the working-age population, yet many patients remain untreated due to the burden of frequent injections. The Phase 1 HELIOS trial of AXPAXLI in NPDR showed compelling proof-of-concept results, with a single injection demonstrating the potential to prevent vision-threatening complications for up to 12 months and improving DME in all affected patients at Week 48. The company is actively planning its next steps for these indications and expects to receive FDA feedback on the clinical trial design in the first half of 2025.

The company's commercial product, DEXTENZA, also leverages the ELUTYX technology for sustained delivery of dexamethasone following ophthalmic surgery and for allergic conjunctivitis. While DEXTENZA net product revenue saw a year-over-year decrease in the first quarter of 2025 ($10.6 million vs. $14.7 million in Q1 2024), primarily attributed to the impact of pricing strategy on distributor stocking and buying patterns, as well as the inclusion in the CMS MIPS cost performance category for 2025, the company anticipates quarterly revenue should increase for the remainder of 2025. This expected increase is driven by anticipated increases in unit sales as clinicians adjust to MIPS and increased sales efforts towards HOPDs, which receive separate payment for DEXTENZA in 2025. The recent supplemental FDA approval for pediatric use of DEXTENZA in April 2025 further expands its label, although significant revenue from this population is not expected. DEXTENZA's commercial success provides valuable infrastructure and market presence that the company plans to leverage for a potential AXPAXLI launch.

Financially, Ocular Therapeutix maintains a strong liquidity position. As of March 31, 2025, the company held $349.7 million in cash and cash equivalents.

While the company has a history of operating losses ($64.1 million net loss in Q1 2025, $955.1 million accumulated deficit as of March 31, 2025) and negative cash flows from operations ($44.7 million used in Q1 2025), it believes its existing cash, based on current operating plans and anticipated DEXTENZA sales, is sufficient to fund planned operating expenses, debt service obligations (including the $82.5 million Barings Credit Facility), and capital expenditures at least through the next 12 months from the May 5, 2025 filing date, and into 2028 based on prior guidance.

This runway is expected to fully fund the wet AMD registrational trials to topline results. The company does not currently intend to raise additional capital in 2025. Operating expenses, particularly R&D, are expected to continue increasing as the pivotal trials progress and new programs advance.

Selling and marketing and G&A expenses are also anticipated to rise to support commercialization efforts and general business growth.

Risks inherent in the biotechnology industry, such as the uncertainty of clinical trial outcomes, the lengthy and unpredictable regulatory approval process, dependence on third-party manufacturers, potential challenges in obtaining adequate reimbursement, intense competition, and the need for future financing (despite the current runway), could materially affect the company's business and prospects. The concentration of revenue and accounts receivable among a few specialty distributors also presents a risk.

Conclusion

Ocular Therapeutix is at a pivotal juncture, with its strategic focus squarely on the retina market and its lead asset, AXPAXLI, advancing through late-stage clinical development. The company's proprietary ELUTYX hydrogel technology offers a compelling value proposition centered on sustained drug delivery and reduced treatment burden, directly addressing a significant unmet need in wet AMD and potentially other retinal diseases. Recent FDA agreements and accelerated clinical trial enrollment have provided a clearer, potentially faster path to regulatory submission and the opportunity for a highly differentiated product label emphasizing extended durability. While the commercial performance of DEXTENZA faced headwinds in early 2025, the company anticipates a return to quarterly growth, leveraging this product to build infrastructure for future retina launches. Bolstered by a strong cash position providing runway into 2028, Ocular Therapeutix appears well-funded to execute its core clinical strategy. The investment thesis hinges on the successful execution of the AXPAXLI registrational program, the realization of its potential for best-in-class durability, and the ability to effectively compete in a market dominated by larger players. The potential expansion into NPDR and DME represents significant upside, further leveraging the ELUTYX platform. Investors should closely monitor clinical trial readouts, regulatory progress, and the company's ability to translate its technological innovation into commercial success against established competitors.