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BEDFORD, Mass. (TheStreet) -- Ocular Therapeutix (OCUL) - Get Ocular Therapeutix Inc Report ran into additional problems with its small implantable plug designed to deliver drugs into the eyes of patients following cataract surgery. A second phase III study failed to reduce swelling in patients' eyes compared to a dummy plug, the company announced Monday.

Plans to seek U.S. approval for the Ocular device, known as OTX-DP, are now up in the air. Ocular intends to meet with regulators from the U.S. Food and Drug Administration to "chart the appropriate path forward" given the mixed clinical trial results, Ocular said.

OTX-DP reduced swelling and pain in the eyes of cataract surgery patients enrolled in Ocular's first phase III study, according to results disclosed in March.

Ocular shares fell 27% to $27.98 in Monday's after-hours trading session. The stock closed Monday's regular session down 6% to $38.30.

In the second, identical study, 39.4% of patients treated with OTX-DP showed an absence of inflammatory cells in the anterior chamber of the eye compared to 31.3% for patient treated with the dummy device. The difference was not statistically significant, which tanked the study. On the pain reduction endpoint, 77.5% of OTX-DP patients reported less pain at day 8 compared to 58.8% of patients in the control arm. This difference was statistically significant.

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"Following the favorable results from our first phase III trial, we are disappointed that the second phase III clinical results for resolution of inflammation did not have the same magnitude of differential as what OTX-DP achieved in the first trial," said Ocular CEO Amar Sawhney, in a statement. "Although the efficacy results for the absence of inflammatory cells in the OTX-DP treatment group met our expectations, the placebo group response was significantly higher than expected. We have begun a thorough analysis of the data from the second phase III trial to fully understand the difference in efficacy between these two trials that had essentially the same trial design and similar patient populations."

OTX-DP is a small plug containing the steroid medication dexamethasone. When inserted into the tear duct, the plug is designed to release the steroid over four weeks to reduce swelling and control pain in patients following eye surgery. Today, doctors prescribe daily eye drops sold by companies like Bausch & Lomb (owned by Valeant Pharmaceuticals (VRX) ), Allergan (AGN) - Get Allergan plc Report and Alcon (owned by Novartis (NVS) - Get Novartis AG Report) to treat the complications resulting from eye surgery.

Thee current prescription eye drops used once or twice daily following cataract surgery are relatively inexpensive and typically eliminate pain and swelling in 80-90% of patients. 

Even before Monday's study failure, a cross-trial comparison didn't make a strong case for OTX-DP being any better than eye drops. Ocular was banking on the improved convenience of OTX-DP, which is inserted once and gradually dissolves over time. The company has not conducted clinical trials to demonstrate that OTX-DP is any better than eye drops in reducing swelling and pain in the eye.

A private company, Icon BioSciences, is developing a competing long-acting form of dexamethasone for use in patients following cataract surgery. 

Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.