OCUL

Business Context and Reporting Period

Ocular Therapeutix, Inc. (OCUL) is an integrated biopharmaceutical company focused on developing and commercializing therapies for retinal diseases and other eye conditions using its proprietary ELUTYX bioresorbable hydrogel technology. The reporting period covers the fiscal year ended December 31, 2025. The company's commercial portfolio consists of DEXTENZA, while its primary development focus is on AXPAXLI (axitinib intravitreal hydrogel) for wet age-related macular degeneration (wet AMD) and diabetic retinal disease.

Key Financial Metrics

Material Changes vs. Prior Period

• Revenue Decline: Net product revenue decreased by 18.3% ($11.6 million) year-over-year. Management attributes this to the Medicare reimbursement cap, increased rebates and discounts, and the inclusion of DEXTENZA in the cost performance category of the Merit-based Incentive Payment System (MIPS). Despite the revenue decline, in-market unit sales increased by approximately 5,000 units to 180,000.
• Increased R&D Spend: Research and development expenses increased by 54.4% ($69.5 million), driven by the progression of the SOL-1 and SOL-R Phase 3 trials for AXPAXLI in wet AMD and the initiation of the HELIOS-3 trial for diabetic retinal disease.
• Capital Raise: In October 2025, the company completed an underwritten public offering of approximately 37.9 million shares, raising net proceeds of $445.6 million. This significantly bolstered liquidity, increasing cash balances by over $340 million compared to the prior year.
• Debt Structure: The company fully repaid its MidCap Credit Facility in 2023 and converted its Convertible Notes in March 2024. As of year-end 2025, the only outstanding debt is the $82.5 million Barings Credit Facility, which includes a royalty fee obligation tied to DEXTENZA sales.

Guidance, Outlook, and Management Commentary

• AXPAXLI Clinical Milestones:
  • SOL-1 (Wet AMD): All subjects have completed Week 52 visits and been re-dosed. Topline results are expected to be presented at the 49th Macula Society Annual Meeting in late February 2026. The company intends to submit a New Drug Application (NDA) based on Week 52 data pending favorable results.
  • SOL-R (Wet AMD): Randomization of 631 subjects was completed in December 2025. Topline data is now expected in Q1 2027, accelerated from previous guidance of H1 2027.
  • HELIOS-3 (Diabetic Retinal Disease): The first subject was randomized in November 2025. The company plans to refine its regulatory strategy for this indication based on the outcome of the wet AMD program.
• Liquidity Runway: Management believes existing cash resources ($737.1 million) are sufficient to fund operations, debt service, and capital expenditures into 2028. However, additional funding will likely be required to support the commercialization of AXPAXLI if approved.
• Regulatory Environment: The company notes potential disruptions due to the 2025 federal government shutdown and FDA workforce reductions but reports no material disruption to its dialogue with the FDA to date. The company is also monitoring the impact of the "One Big Beautiful Bill Act" (OBBBA) and new Medicare pricing initiatives.

Investor Verification Checklist

• DEXTENZA Reimbursement Status: Verify the sustainability of separate reimbursement for DEXTENZA in Ambulatory Surgery Centers (ASCs) and Hospital Outpatient Departments (HOPDs) under the 2026 Medicare Physician Fee Schedule, given the recent inclusion in MIPS cost performance categories.
• SOL-1 Trial Data: Monitor the unmasked Week 52 results of the SOL-1 trial (expected late February 2026) to confirm the efficacy and safety profile required for NDA submission.
• Capital Requirements: Assess the company's burn rate relative to its $737 million cash position to determine if additional equity or debt financing will be needed prior to or immediately following a potential AXPAXLI launch.
• Debt Covenants: Confirm continued compliance with the Barings Credit Facility's minimum liquidity covenant of $20.0 million and the impact of the royalty fee (3.5% of net DEXTENZA sales) on cash flow.
• Manufacturing Scale-Up: Verify progress on the transformation of the Bedford, MA facility to support commercial manufacturing volumes for AXPAXLI, as the company currently relies on single-site facilities.