Clearside Biomedical Q3 2023 Earnings Call Transcript

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November 13, 2023

There are 8 speakers on the call.

Operator

Greetings, and welcome to the Clearside Biomedical Third Quarter 2023 Financial Results and Corporate Update Call. At this time, all participants are in a listen only mode and a question and answer session will follow the formal presentation. Please note, this conference is being recorded. I will now turn the conference over to your host, Jenny Kobin of ClearSite Investor Relations. Ma'am, the floor is yours.

Speaker 1

Good afternoon, everyone, and thank you for joining us on the Call today. Before we begin, I would like to remind you that during today's call, we will be making certain forward looking statements. Various remarks that we make during this call about the company's future expectations, plans and prospects constitute forward looking statements for purposes of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward looking statements as a result of various important factors, including those discussed in the Risk Factors section of our annual report on Form 10 ks for the year ended December 31, 2022, Our quarterly report on Form 10 Q for the quarter ended September 30, 2023 to be filed today and our other SEC filings available on our website. In addition, any forward looking statements represent our views as of today and should not be relied upon as representing our views as of any subsequent date.

Speaker 1

While we may elect to update these forward looking statements in the future, We specifically disclaim any obligation to do so even if our views change. On today's call, we have George Lizescay, our Chief Executive Officer and Charlie Deignan, our Chief Financial Officer. After our formal remarks, we will open the call for your questions. I would now like to turn the call over to George.

Speaker 2

Thanks, Jenny, and good afternoon, everyone. Today, I'm excited to discuss several recent value creating achievements related to our suprachoroidal platform. We've had 2 weeks of really good news. We completed enrollment in ODiSI, our Phase 2b wet AMD clinical trial with top line data expected in the Q3 of 2024. We announced a new partnership with BioCryst Pharmaceuticals to expand our external development pipeline with a plasma kallacrine inhibitor for the treatment of diabetic macular edema.

Speaker 2

Both of our other suprachoroidal collaboration partners, REGENXBIO and ORA Biosciences, Recently presented positive safety and efficacy data through Phase 2 with their respective compounds using our SCS microinjector. As for our XIPERE partners, Sasha Lam announced that XIPERE has been granted a permanent Category 1 CPT code in the U. S. To help facilitate better access and adoption of the product. Anarctic Vision completed enrollment in their Phase III clinical trials, Arcadis, also known as XIPERE in uveitic macular edema in China.

Speaker 2

So let me discuss let me start with discussing our lead program CLSAX. Last month, we completed recruitment in our ODiSI Phase 2b clinical trial evaluating the safety and efficacy of CLS A X, Our highly potent Tyrosine Kinase inhibitor delivered by our patented SCS microinjector. As a reminder, ODYSSEY is a randomized, double masked, Active controlled multicenter study and participants with wet AMD. One of the most encouraging aspects of our CLS A X program is the feedback that we received from the medical community. Multiple leading retinal physicians have presented data from our OASIS Phase 1, 2a clinical trial of CLS ax in wet AMD at top ophthalmic meetings, including the recent AAO, ASRS and Retina Society Meetings.

Speaker 2

These presentations highlighted the excellent safety profile, stable vision and reduced frequency of injections observed for up to 6 months. These presentations also created significant The completion of recruitment is a critical accomplishment for us as the final participants in the study advance to randomization either to the CLS AX treatment arm or the on label of flivarcept comparator arm. We expect randomization to be completed by the middle of December 2023, And we remain on track to report top line data from ODiSI in the Q3 of 2024. Our goals for the ODiSI trial are to demonstrate an excellent safety stable visual acuity and a lower treatment burden in the CLS ax arm. The efficacy and safety results from Odysee We'll then guide our pivotal Phase 3 development program for CLS AX.

Speaker 2

We believe the differentiated mechanism of action and high potency of axitinib Combined with safe and reliable delivery into the suprachoroidal space has the potential to be a best in class approach for long term maintenance therapy for individuals with wet AMD. We were thrilled to start this month by announcing our new global licensing partnership with BioCryst Pharmaceuticals. This collaboration expands the reach and demonstrates the versatility of our suprachoroidal injection platform by adding another compound to be delivered with our proprietary SCS microinjector. The agreement includes $5,000,000 in an upfront license fee plus the potential for future milestone payments and sales royalties. The partnership with BioCryst is focused on the development of their proprietary small molecule, ovorlistat, To be administered via the suprachoroidal injection for the treatment of diabetic macular edema.

Speaker 2

DME is the most common cause of vision loss in individuals with diabetes We believe there's a significant market opportunity in this indication. Ovorlistat has high potency and low solubility, which are characteristics that are well suited for suprachoroidal administration and important to achieving potential efficacy with reduced dosing frequency. Delivering oforlistat into the suprachoroidal space and behind the visual field could allow oforlistat to inhibit plasma calacrine directly at the location where the edema forms With a desirable durability of effect, BioCryst expects to continue conducting formulation and non clinical work into 2024 and begin clinical trials in 2025. The versatility of our suprachoroidal injection platform was on at this month's American Academy of Ophthalmology Medical Meeting, where 2 of our other partners, REGENXBIO and Oral Biosciences, presented very promising data with their respective compounds utilizing our SCS micro injector. REGENXBIO reported the results of their Phase 2 ALTITUDE trial evaluating their gene therapy ABBB RGX-three fourteen in diabetic retinopathy, The leading cause of vision loss in adults between 2475 years of age worldwide.

Speaker 2

314 continues to be well tolerated in 50 patients from dose levels 12 with no drug related serious adverse events. At the second dose level, 314 prevented disease progression And reduced vision threatening events in non proliferative diabetic retinopathy at 1 year. REGENXBIO has indicated they believe Onetime in office suprachoroidal injection of 314 gene therapy has the potential to stabilize and improve Diabetic Retinopathy severity score and reduce the long term risk of vision threatening events. Ora Biosciences reported positive clinical efficacy updates from its ongoing Phase 2 clinical trial with suprachoroidal administration of Belsar for the first line treatment of early stage choroidal melanoma. Their Phase 2 trial is assessing the safety and preliminary efficacy of single And multiple ascending doses of Belsar for up to 3 cycles of treatment.

Speaker 2

The Phase 2 data with 90% of their patients at 12 months of follow-up Demonstrated 80% tumor control and 90% visual acuity preservation for patients that have been treated with 3 cycles of Velsar and that meet the Phase 3 enrollment criteria. Safety profile continues to be favorable with no significant or treatment related serious adverse events. This is very encouraging as most of these patients had tumors close to the fovea or optic disc and would likely have experienced severe and irreversible vision loss With the current standard of care, Auris also announced agreement with the FDA under a special protocol assessment for the design and planned analysis of their Phase 3 COMPASS trial. They plan to dose the first patient in this trial this quarter. In addition to the R and D progress over the last few months, our commercial partnership with XIPERE have also announced important achievements.

Speaker 2

Klaus and Long announced that the American Medical Association has granted a new current procedural terminology or CPT code for XIPERE with Category 1 code for the suprachoroidal injection procedure will help facilitate better access and adoption of XIPERE in the United States. The new CPT Category 1 code will be effective on January 1, 2024, replacing the current miscellaneous Category 3 code. At AAL, Bashemal also presented survey data on positive physician experience using XIPERE in the treatment of uveitic macular edema, indicating that physicians found XIPERE suprachoroidal injection easy to learn with patient outcomes consistent with clinical trial data. Our Asia Pacific partner, Arctic Vision, also accomplished a major milestone with completion of enrollment in China of its Phase 3 randomized Double blind placebo controlled clinical trial with XIPERE in uveitic macular edema. As a reminder, XIPERE is referred to as Arcadis in China.

Speaker 2

If positive, the data from the Phase III trial will allow Arctic Vision to apply for marketing approval in China. In addition, earlier this year, Arctic Vision applied for marketing approval of Arcadis in Australia. We appreciate the commitment of both Bausch and Lomb and Arctic Vision to expand the use of XIPERE and look forward to further updates. I'll now turn over the call to our CFO, Charlie Deignan, to

Speaker 3

Thank you, George, and good afternoon, everyone. Our financial results for the Q3 were published earlier in our press release and are available on our website. Therefore, I will just provide a summary of our financial status. As of September 30, 2023, our cash and cash equivalents totaled approximately $29,000,000 Subsequent to the end of the third quarter, We entered into the licensing agreement with BioCryst. We will receive $5,000,000 in non dilutive capital in the form of an upfront license fee.

Speaker 3

With this combined cash balance, we believe we have sufficient resources to fund our planned operations into the Q4 of 2024, which moves us past the expected completion of our ODiSI trial and the related top line data announcement. In terms of investor outreach, We look forward to participating in the Stifel Healthcare Conference on Wednesday of this week at BTIG's 3rd Annual Ophthalmology Day later this month. We look forward to keeping the investment community updated on our progress. And I'll now turn the call back over to George for his closing remarks.

Speaker 2

Thanks, Charlie. The level of awareness and usage of suprachoroidal administration continues to grow with the progress from Both our internal programs and our suprachoroidal development commercialization partners. When it comes to the adoption of new therapeutic treatments, we know that safety It's a top priority for physicians and their patients. Our suprachoroidal approach is already proven method of delivery Actively targeting the suprachoroidal space for treatment of multiple serious retinal diseases using our SCS microinjector. We believe this represents significant future value for ClearSign and for our shareholders.

Speaker 2

I would now like to ask the operator to open up the call for questions.

Operator

Thank you. At this time, we will be conducting our question and answer It may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. Thank you. Our first question is coming from Serge Belanger with Needham and Company.

Operator

Your line is live.

Speaker 4

Hi, good afternoon. Thanks for taking my questions and congrats on the recent developments. I guess first one on the ODiSI trial, you completed enrollment. I think Your target was 60 patients. Just curious if you overshot that number and you're Some level of attrition to get through a 36 week trial.

Speaker 4

And then secondly, Maybe just talk about potential inflection points for the REGENX and Ora by Aura partnership. Thank you.

Speaker 5

Sure.

Speaker 2

Thanks, Serge. Let me take the first one. We had a very healthy recruitment rate in Odyssey. We had 32 sites signed up, 30 sites recruited at least one subject. So we had really good participation across all our sites.

Speaker 2

We're very happy about that. We have our target, as you know, was 60 patients, a 2:one Randomization, 40 into the CLS AX group and 20 in the on label of Libercept comparator group. And when we terminated our recruitment, we had exceeded that slightly. So we're a little over that goal. We may have some attrition as you normally do during the conduct of the clinical trial.

Speaker 2

But right now, we're very happy with where we are. We got more than 60 in the trial. And so we're very grateful and very thankful To the sites and the KOLs and the investigators that participated, we had like I said, it was a really Very robust screening and recruitment program and we were glad for everybody's participation. Your other questions were?

Speaker 4

Regarding Special inflection points for the REGENX, BIO and Aura patients.

Speaker 2

Well, the most important one is I'll start with Aura first It's already got the FDA for going to Phase 3. I think the FDA looked at their Phase 2 data, felt very comfortable about that And they're looking to recruit their first patient. So the start of Phase 3 is going to be very meaningful to them as well as to us, And that should happen sometime this quarter. We're very hopeful on that and they are going to be not restricted to the United States. They're going outside the United States as well For REGENX, REGENX bio comes in 2 stages.

Speaker 2

First, their Doctor from their ALTITUDE trial and then They'll have their wet AMD data, I think early next year. But we were very, very happy with what they were reporting In terms of what they saw in Phase 2 for diabetic retinopathy, so the next big inflection point is them making a decision as to exactly when and how they're Go into Phase 3, but I think that data looks very encouraging to them and you'd have to ask them a little bit more what they're the ones that really know their plans, but Them declaring a start of Phase 3 in 1 or both of those indications would be very meaningful certainly for them and for Amphi, but would be very Corporate Clearside as well. But we'll see what they say when they take more questions on that and they put together their The final clinical development plans. I think we were very encouraged by what we saw in the Phase 2 data in Doctor.

Speaker 4

Thank you.

Operator

Thank you. Our next question is coming from John Wallobin with JMP Securities. Your line is live.

Speaker 5

Hey, thanks for taking the question. A couple on the BioCryst partnership. Just wondering about your current responsibilities and the handoff BioCryst, I think you said sometime next year. Wondering what kind of work has been done already? And then what else do you think needs to get done before getting this in the DME patients?

Speaker 5

And then I have a follow-up on CFAX.

Speaker 2

Sure. Remind me of the follow-up, John. I'll then forget as I'm talking about this. But in terms of BioCryst, we have been working with BioCryst for some time on formulation work and some early preclinical work That encouraged them to move ahead and take the license. That kind of work will continue into next year, as I said in my prepared remarks.

Speaker 2

We will be collaborative with them probably through next year doing IND enabling studies, But the real handoff and we'll really probably be at IND and they will take it forward from there. So we are going to work with them on some more animal studies and some fine tuning of formulation. But once that's done, the IND is filed, it's their molecule and their product to take forward. So Got it. That's it on BioCryst.

Speaker 2

So now remind me of the follow-up.

Speaker 5

To your comments, it does seem like we're at Getting to a critical mass on suprachoroidal news flow and then also in the TKI space and wet AMD with some readouts coming soon With expectations there, can you remind us of what you want to see in Odyssey and what you think a competitive profile will be? And how any competitive dynamics may change Before Odyssey reads out.

Speaker 2

Well, I've said this before. I said this to you almost a year ago. I remember us Sitting together and talking about this. And I hope that EyePoint has good readout on their data. I think Ocular, I hope the same thing for Ocular too.

Speaker 2

I think all three of the companies really are in a position that we're trying to prove that Tyrosine Kinase inhibitors Have a place. We're all coming at it slightly differently. There's 2 tyrosine kinase inhibitors, 3 different ways of administering them. Our Chief Medical Consultant, our Retina Consultant, Tom Sciulla, who we still talk to on a regular basis, always said People knew that Tyrosine Kinase inhibitors would have a place. It was just a matter of how to deliver them properly.

Speaker 2

So I think all of us have that approach and we're looking forward to that. I think that we believe in talking to our KOLs and our medical consultants That if we have maintenance therapy that can guarantee from patients 4 to 6 months, We think we have a very good product to be part of the overall treatment paradigm for wet AMD patients. Personally, in our trial, I'm looking I'm hopeful and very encouraged. I just believe that we're going to get more than that. We're going to get At least 5 to 6 months, but the data will be in the data.

Speaker 2

But I think anything any kind of data that supports The dosing is 4 to 6 months, 5 to 6 months, when you look at where the anti VEGF As are right now, They can't really guarantee everybody gets to 4 months. They can't even guarantee everybody gets to 3 months if you look at the VAVISMA label Even the high dose EYLEA label. So we look at this as we believe we're going to have at this extended duration. We think it's going to have a place. And the other thing I would say to you is, I keep telling people I look at the future of wet AMD in particular as more like Cancer chemotherapy and that there'll be different mechanisms of action, different places where the drugs work in the retina.

Speaker 2

And I think combination therapy is really going to be a very important for a number of the patients right now. We know that anti VEGF only Underserved a certain amount of patients. There's a certain number of patients that don't respond very well, don't respond at all or over time Become somewhat refracted to this that single mechanism of action. So we think there's a very good place Different mechanism action in our particular case, we think we have a very safe and reliable way to administer It doesn't cause any problems in the front of the eye in terms of impairment of vision or anterior chamber toxicity Certainly no systemic problems. So we think we have a very good chance to become an important part of treating the wet AMD patient population As long as we're in that 5, 6 month duration.

Speaker 5

That's helpful context. Thanks, George. Appreciate the color. Sure. Thank

Operator

you. Our next question is coming from Jack Padovanov with Stifel. Your line is live.

Speaker 6

Hi, this is Jack calling on for Annabel. Thanks for taking our question.

Speaker 2

Hi, Jack.

Speaker 6

So for ODiSI, have you powered the study to see non inferiority at 3 months or 6 months? And How are you now accounting for rescue treatment? Because I know that in the OASIS study, there were some patients who were rescued per protocol And there were some others who were rescued because the investigator got a little nervous. So how are you handling that?

Speaker 2

Okay. First of all, let me make a clarifying remark about powering. This is not This trial is not designed to be a non inferiority trial. It is not designed to be a superiority trial. What we're doing is just comparing 2 groups.

Speaker 2

We have a single dose. What we're trying to determine is what is the optimal duration of effect That we would then go into establishing a Phase 3 trial that would be powered appropriately either for non inferiority or superiority Compared to standard of care. And we're still not even really sure what the standard of care might be by the time we get there. We don't know whether REVYSMO will be So we're just trying to we're trying to do is see how well can how far can we How much duration can we affect and not be substantially different than the kind of best corrected visual acuity in the comparator group? So it's not really powered.

Speaker 2

Statistically speaking, it's not powered for non inferiority or superiority. What we try to do and you're right about OASIS. We and I was looking at the OASIS data again the other day. And in our 2 high dose cohorts, The half milligram and the milligram, and we're using the 1 milligram in ODiSI. Actually, the Most of the off protocol or early rescues happened 1 month in to our highest dose And it didn't happen in the lower dose, the 0.5, for some odd reason.

Speaker 2

I think that was just a matter Small numbers and randomization and what have you. But so but we were very concerned about that because we thought, well, in some cases, the doctors didn't have a lot of experience with this And they pulled the trigger early even though we had very strict criteria. It was the first time they were using CLS AX. They may not have known what to expect. Couple of things I would say about off protocol treatments now.

Speaker 2

Our study design with the 3 loading doses giving CLS A X with the 2nd loading dose, we think will help prevent those off protocol near term supplemental treatments. 2nd, this time around, we spent a lot of time in multiple meetings training the site investigators going over the OASIS data and really training them that The CLS ax, they don't have to worry about it too much early on. They need to stick strictly to the criteria that we've given them In terms of rescue or supplemental therapy, and I think the increased familiarity with many of these physicians that were in the previous A number of them were in the previous OASIS trial. Now with that increased familiarity with the change in the study design with our loading doses, I think that we're going to do a very good job of minimizing off protocol early retreatments.

Speaker 6

Great. Thanks for the clarification.

Speaker 5

Okay.

Operator

Thank Our next question is coming from Yi Chen with H. C. Wainwright. Your line is live.

Speaker 7

Thank you for taking my question. In view of the recent FDA draft guidance on wet AMD and Phase III trial design from your competitors, can you comment on what parts of the ODYSSEY trial design need to be changed in the future pivotal trial? Thanks.

Speaker 2

Well, thanks for the question. The answer is, I don't know right now because we want to see what the data is that The data from the ODiSI trial will dictate a lot of how we go to the FDA and propose to do a Phase 3 trial. I think the draft guidance and we're waiting for the guidance to be finalized by the way. The draft guidance, the Phase III trials are probably going to have to be at least 9 months long. They're going to have to have multiple dosing and they're going to have to have some comparison to a standard of care that we know.

Speaker 2

Where I think there needs to be some clarification is part of the draft guidelines, and I know a number of companies have probably commented on this, About the dosing of the comparator to be the same dosing as the treatment. And I think That's been a question of how to deal with that when you're what you're trying to do is dose much less frequently than the standard of care. Now we've seen ocular go in a direction where they're saying, well, we're going to give one dose of apliberceb and one dose of our axitinib. A lot of questions about that trial design, what went into that trial design, what was the thinking and the conversations with the FDA. So It's a little early for us to do that.

Speaker 2

We're very committed to this current trial design of ODiSI as Phase 2b. The a comparator, in view of the draft guidelines, we moved it back to doing a flivarceb on label. We think that makes sense. We think that's the thing that is the most relevant is to compare yourself to an on label standard of care. And that's what we think makes the most sense.

Speaker 2

So we'll see what the data comes out of ODiSI as the data comes out and as we evaluate that data that will really guide how

Operator

Thank you. As we have no further questions in queue at this time, I will hand back to Mr. Lizesky for any closing remarks he may have.

Speaker 2

I want to thank everyone for joining us on the call this afternoon. We appreciate your continued interest in Clearside and we look forward to updating you on our progress. Operator, you may now disconnect the call. Thank you again.

Operator

Thank you. This concludes today's conference and you may disconnect your lines at this time. We thank you for your participation.

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