How Will Histogenics Shareholders Fare in the Merger with Ocugen

Histogenics Corporation (NASDAQ: HSGX), a clinical-stage company, focuses on the development of restorative cell therapies in the United States. The company offers NeoCart, a tissue implant, which is in Phase III clinical trial to treat tissue injury in the field of orthopedics, specifically cartilage damage in the knee.

On April 8th, the company announced that they have entered into a definitive merger agreement under which the stockholders of Ocugen will become the majority owners of Histogenics’ outstanding common stock upon the close of the merger. The proposed merger will result in a combined publicly-traded, clinical-stage biopharmaceutical company operating under the Ocugen name.

The merger is structured as a stock-for-stock transaction whereby all of Ocugen’s outstanding shares of common stock and securities convertible into or exercisable for Ocugen’s common stock will be converted into Histogenics’ common stock and securities convertible into or exercisable for Histogenics’ common stock. Immediately following the closing of the transaction, the former stockholders of Ocugen will hold approximately 90% of the outstanding shares of common stock of the combined company and the current Histogenics stockholders will retain an ownership interest representing approximately 10% of the outstanding shares of common stock of the combined company, subject to certain  adjustments as described in the merger agreement of up to an additional 5% ownership for the current Histogenics stockholders based on Histogenics’ cash at the closing of the proposed merger, including proceeds from sale of the assets underlying Histogenics’ NeoCart product in connection with the closing.

Recent Events

“Since Ocugen’s founding, we have sought to develop innovative therapies to treat rare and underserved eye diseases through a combination of therapeutic approaches that utilize small molecules, biologics, and gene therapies,” said Shankar Musunuri, Ph.D., M.B.A., Chairman, Chief Executive Officer and Co-Founder of Ocugen.  “We have developed a broad pipeline which includes OCU300, an orphan drug candidate for ocular graft versus host disease, and OCU310 for dry eye disease; our modifier gene therapy platform and OCU400, a gene augmentation therapy for patients with inherited retinal diseases caused by mutations in the NR2E3 gene, which recently received orphan drug designation from the FDA.  We’ve also made pre-clinical progress toward our retinal disease programs which includes novel biologic therapies for wet- age-related macular degeneration, diabetic macular edema and diabetic retinopathy, as well as for retinitis pigmentosa.”

“This transaction with Ocugen reflects the continued commitment of our management team and Board of Directors to deliver value to stockholders and make a difference in patients’ lives,” said Adam Gridley, President of Histogenics. “Following a thorough review of strategic alternatives for Histogenics and the NeoCart program, we have determined that a merger with Ocugen will enable Histogenics investors to participate in Ocugen’s broader pipeline of ocular disease and gene therapy opportunities, including several late-stage clinical candidates, and a robust preclinical platform.  In addition, we plan to continue to evaluate opportunities to realize additional value from the discontinued NeoCart program over the coming weeks.”

Ocugen’s broad pipeline of promising ophthalmology programs in development include:

Modifier Gene Therapy Platform

Ocugen’s modifier gene therapy platform is licensed from the Schepens Eye Research Institute of Massachusetts Eye and Ear (Harvard Medical School) and involves targeted delivery and expression of one or more nuclear hormone receptor (NHR) genes in the disease tissues.  NHRs are believed to play a vital role in regulating retinal cell development, maturation, metabolism, visual cycle function, survival, and maintaining the cellular and molecular homeostasis of various tissues, including the retina. Multiple animal models have shown that expression of NHRs within the retina can stabilize retinal cells and suppress/prevent the development of inherited diseases, demonstrating their modifier function. Many degenerative retinal conditions are caused by genetic mutations that are passed down within families and lead to progressive disease, severe visual impairment and blindness. 

OCU400 (NR2E3-AAV) for the treatment of NR2E3 mutation-associated retinal degenerative diseases consists of a functional copy of the NHR gene, NR2E3, delivered to target cells in the retina using an adeno-associated viral (AAV) vector.  OCU400 is a novel gene therapy currently in development as a gene augmentation therapy product for the treatment of NR2E3-mutation associated retinal degenerative diseases, and in February 2019, received Orphan Drug Designation (ODD) from the U.S. Food and Drug Administration (the FDA).  In a mouse model of Nr2e3 mutation, Nr2e3 delivery to retinal cells reversed disease progression and restored retinal histology. Based on preclinical studies, Ocugen plans to initiate a Phase 1/2a clinical study of OCU400.  Unlike single-gene replacement approaches, which have shown tremendous promise in rare retinal diseases despite being highly specific for a single condition, OCU400 represents a powerful and remarkably broadened means of potentially treating a variety of IRDs (inherited retinal diseases) with a single therapy.

OCU410 (RORA-AAV) is a second in-line modifier gene therapy being developed for the treatment of dry age-related macular degeneration (AMD). OCU410 utilizes an AAV delivery platform for retinal delivery of the RORA gene (RAR Related Orphan Receptor A). OCU410 is currently in preclinical development.

Ocular Surface Disease Programs

OCU300 (brimonidine 0.18%, OcuNanoE™), is currently in a Phase 3 clinical trial for the treatment of ocular graft versus host disease (oGVHD), which develops in approximately 60% of patients following an allogeneic bone marrow transplant.  OCU300 consists of FDA-approved brimonidine tartrate formulated in a proprietary nanoemulsion based on Ocugen’s patented OcuNanoE™ technology. In August 2017, OCU300 received Orphan Drug Designation (ODD) from the FDA.  Currently there are no FDA-approved products for the prevention or treatment of oGVHD.

Ocugen has developed its proprietary OcuNanoE™ nanoemulsion formulation to deliver drugs more efficiently to relevant ocular tissues, provide protection to the ocular surface, and potentially increase overall efficacy compared to conventional eye drops.  We recently completed our first Phase 3 clinical trial of OCU310 (brimonidine 0.2%, OcuNanoE™) for the treatment of dry eye disease.  We are waiting for a full dataset from this trial and will provide an update once we complete full analysis.    

Retinal Disease Programs

Ocugen has two protein biologic preclinical programs in development, focused on treating inflammatory, degenerative and neovascular diseases of the eye.  OCU200 is being developed for the treatment of wet AMD and OCU100 for the treatment of retinitis pigmentosa (RP).  OCU100 has received Orphan Drug Designation from both the FDA and European Medicines Agency (EMA).

OCU200 is a biologic product candidate in preclinical development for the treatment of wet AMD, a severely sight-threatening disease caused by the abnormal growth and infiltration of new, leaky blood vessels into the retina. OCU200 is a novel fusion protein consisting of two naturally occurring molecules, transferrin and tumstatin, that are present normally in retinal tissues.  In preclinical studies, OCU200 demonstrated superior efficacy compared to anti-VEGF therapies in reducing choroid neovascularization (CNV) lesion areas in laser-induced rats and mice CNV models.   We believe these results highlight the potential for OCU200 to deliver disease modification for wet-AMD and other high-need ocular neovascular diseases, such as diabetic macular edema (DME) and diabetic retinopathy (DR).

OCU100 is a protein-based biologic in preclinical development for the treatment of retinitis pigmentosa (RP), which is a class of diseases that leads to the progressive degeneration of the retina and blindness. There is currently no FDA approved treatment for RP.


Histogenics Corporation, a clinical-stage company, focuses on the development of restorative cell therapies in the United States. The company offers NeoCart, a tissue implant, which is in Phase III clinical trial to treat tissue injury in the field of orthopedics, specifically cartilage damage in the knee. It has an exclusive channel collaboration agreement with Intrexon Corporation for the development and commercialization of allogeneic genetically modified chondrocyte cell therapeutics for the treatment or repair of damaged articular hyaline cartilage in humans. Histogenics Corporation was founded in 2000 and is headquartered in Waltham, Massachusetts.

Stock influences and risk factors

The merger has not closed and is subject to final conclusion.

Their exploration and pursuit of strategic alternatives may not be successful.

They are substantially dependent on remaining employees and consultants to facilitate the consummation of a strategic transaction.

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