EyePoint Pharmaceuticals Q2 2023 Earnings Call Transcript

Quartr
Provided by Quartr
August 2, 2023

There are 11 speakers on the call.

Operator

Good morning. My name is Valerie, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the EyePoint Pharmaceuticals Second Quarter 2023 Financial Results and Recent Corporate Development Conference Call. There will be a question and answer session to follow at the completion of the prepared remarks. Please be advised that this call is being recorded at the company's request.

Operator

I would now like to turn the call over to George Elston, Chief Financial Officer of Ipoint Pharmaceuticals.

Speaker 1

Thank you, and thank you all for joining us on today's conference call to discuss EyePoint Pharmaceuticals' Q2 2023 financial results and recent corporate developments. With me today is Doctor. Jay Duker, President and Chief Executive Officer. Jay will begin with a review of recent corporate updates and discuss Phase 2 clinical trials for UYP-nineteen oh one. I will close with commentary on the Q2 2023 financial results, and we will then open the call for your questions.

Speaker 1

Earlier this morning, we issued a press release detailing our financial results and recent operational developments. A copy of the release can be found in the Investor Relations tab on the corporate website, www.eyePointpharma.com. Before we begin our formal comments, I'll remind you that various remarks we will make today constitute forward looking statements for the purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. These include statements about our future expectations, clinical developments and regulatory matters and time lines, the potential success of our products and product candidates, financial projections and our plans and prospects. 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 most recent annual report on Form 10 ks, which is on file with the SEC and in other filings that we may make with the SEC in the future.

Speaker 1

Any forward looking statements represent our views as of today only. While we may elect to update these forward looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our views change. Therefore, you should not rely on these forward looking statements as representing our views as of any date subsequent to today. I'll now turn the call over to Doctor. Jay Duker, President and Chief Executive Officer of EyePoint Pharmaceuticals.

Speaker 2

Thank you, George. Good morning, everyone, and thank you for joining us to discuss our continued success as we advance 1st in class therapeutics and delivery technologies to provide a brighter future for those at risk of losing their sight. First of all, I'd like to say that I'm honored to have been named EyePoint's CEO, and I would like to thank the EyePoint Board of Directors for their confidence in me. I would also like to thank Nancy and the entire executive team for their partnership, collaboration and leadership during my tenure at EyePoint. As a physician dedicated to improving outcomes in retinal disease, I'm incredibly passionate about EyePoint's mission of bringing innovative therapies to patients at risk of losing their sight.

Speaker 2

For the past 7 years, I've had the opportunity to work closely with the exceptional team of talented professionals at EyePoint to advance our exciting pipeline of products with the aim of transforming treatment paradigms for patients. I'm committed to continued execution towards this goal. With the recent sale of YUTIQ, we at EyePoint have completed information to a pure play development stage biopharmaceutical company, and I'm incredibly excited to be stepping into the CEO role at this important juncture. With our compelling clinical pipeline representing multibillion dollar product opportunities, our best in class sustained ocular delivery systems, along with a strong balance sheet, we are well positioned to grow as a leader in ocular drug delivery and to bring impactful therapies to patients. With that, I'll now review our recent progress and give an overview of upcoming milestones.

Speaker 2

Turning to our lead program, EYP-nineteen oh one, a potentially paradigm shifting maintenance treatment for patients suffering from serious eye diseases. We are now fully enrolled in 2 oversubscribed Phase 2 clinical trials, the DAVIO-two trial for wet age related macular degeneration for wet AMD and the PAVEA trial for non proliferative diabetic retinopathy or NPDR. As a reminder, EYP-nineteen oh one is an investigational sustained release therapy that consists of Durasert E, the bio erodible formulation of our Durasert technology with virolinib, a highly selective small molecule tyrosine kinase inhibitor with unique properties. EYP-nineteen oh one brings a new mechanistic approach to the treatment of VEGF mediated chronic serious posterior segment diseases such as wet AMD, NPDR and diabetic macular edema by acting as a pan VEGF receptor blocker, blocking all VEGF isoforms. Compared to other TKIs, for roliniv features reduced off target binding and does not inhibit the tie 2 receptor at clinically relevant doses, leading to a potentially improved safety and efficacy profile for this differentiated molecule.

Speaker 2

Additionally, another potential treatment benefit of EYP-nineteen oh one's mechanism of action is the possibility for neuroprotection and anti fibrotic effects. EYP-nineteen oh one delivers virolimab consistently and reliably with steady zero order kinetic dosing for approximately 9 months in the eye through the Durasert E technology. At the ARVO Annual Meeting in April, we presented preclinical data highlighting the potential neuroprotective effect of vironolim, the active drug in EYP-nineteen oh one against photoreceptor degeneration in a validated rodent retinal detachment model. The preclinical data highlighted vorulinib's potential new mechanism of action for treating retinal diseases and its potential unique benefits that may set it apart from existing ligand binding biologics. These preclinical data demonstrated that vironolinib significantly reduced the severity of change in baseline visual acuity and improved contrast thresholds in mice treated with vironolinib compared with placebo, suggesting a neuroprotective effect against photoreceptor degeneration.

Speaker 2

Should this be reflected in clinical data, it would provide an important new mechanism of action for the treatment of these chronic blinding retinal diseases, such as wet AMD, NPDR, DME and retinal vein occlusion. We are very pleased with the progress of our 2 key Phase 2 trials of EYP-nineteen oh one. In the DAVIO-two trial, EYP-nineteen oh one is being investigated in 160 subjects with previously treated wet AMD, with a goal to sustain the treatment effect for the majority of wet AMD patients up to 6 months or longer following a single injection of EYP-nineteen oh one. This could represent a significant improvement compared to current standard of care anti VHS, which are dosed on average every 2 months in the United States. This lifetime of frequent treatment represents a tremendous burden for patients who are at risk for losing sight from wet AMD.

Speaker 2

By using EYP1901 as a maintenance therapy Following induction treatment with large molecule anti VEGFs, we aim to provide a sustained delivery of vorulinib so that patients and practitioners can potentially have the flexibility to reduce the number of visits to their retina specialist without sacrificing visual outcomes. All patients in the Dovio-two trial were previously treated with a standard of care anti VEGF therapy and were randomly assigned to 1 of 2 doses of UIP-nineteen oh one, approximately 2 milligrams or approximately 3 milligrams versus an on label of Libercept control. EYP-nineteen oh one is delivered with a single Injection in the physician's office similar to current FDA approved anti VEGF treatments. Recently, we provided updates at several medical meetings for the Phase 1 DABO and Phase 2 DABO2 trials. At the OIS Retinal Innovation Summit in July, we presented interim mass safety and baseline patient demographics from the WA-two clinical trial in wet AMD.

Speaker 2

As of July 1, 2023, a mask safety summary found that there were no reported drug related serious ocular adverse events or SAEs or drug related systemic SAEs in the 160 enrolled patients in the DAVIO-two trial. Additionally, an analysis of the reported baseline patient demographics suggest that the Phase 2 DAVIO-two patients have on average better starting visual acuity and less central subfield thickness than the Phase 1 DAVIO cohort. Mean BCVA at baseline was 74 letters for patients in DAVIO-two versus 69 letters for patients in the DAVIO-one trial, while on OCT evaluation, the mean central subfield thickness was 265 microns for patients in DAVIO-two versus 299 microns in the Phase 1 DAVIO trial. Additionally, at this year's American Society of Specialists Annual Meeting in July, we presented 12 month ocular pharmacokinetic results from a study evaluating EYP-nineteen oh one's drug delivery through the Durasert platform. We also presented an encore subgroup analysis of the EYP-nineteen oh one final 12 month Phase 1 DABEO results, which showed that of the 9 Phase 1 DABEO patients that had no excess fluid at screening, 67% did not require a supplemental anti VEGF injection for up to 6 months and over 50% did not require any additional therapy for up to 1 year.

Speaker 2

In June, we presented an ENCORE presentation of 12 month results at the European Society of Ophthalmology Congress 2023 in Prague for the Phase 1 Dovio clinical trial evaluating UIT-nineteen oh one and previously treated wet AMD. The presentation is significant because it marks the first time that we presented EYP-nineteen oh one clinical trial results outside of the United States. We are very excited by the trial's progress and we look forward to reading our top line results for the Dovio-two trial in December of this year. Now let me turn to our 2nd indication, NPDR. In June, we were pleased to report that we completed enrollment in the Phase 2 PAVEA clinical trial.

Speaker 2

This is a randomized controlled Phase 2 trial evaluating UIP-nineteen oh one as a potential 9 months treatment for moderate to severe NPDR. Similar to the W2 trial, our BEVIA trial saw significant investigator and patient interest during enrollment, and the trial enrolled 77 patients exceeding the 60 patient target. Patients were randomly assigned to 1 of 2 doses of BYP-nineteen oh one approximately 2 milligrams or approximately 3 milligrams or to the control group that received a sham injection. As in the wet AMD trial, CYP-nineteen oh one is delivered with a single intravitreal injection in the physician's office for NPDR. As a reminder, NPDR is a very common eye disease that affects almost 1 third of diabetic adults over the age of 40 and is projected to impact over 14,000,000 Americans by 2,050.

Speaker 2

In NPDR, blood vessels are weakened, potentially leading to swelling of the macula, which is called diabetic macular edema or DME, and eventually abnormal blood vessel growth, which is called proliferative diabetic retinopathy or PDR. Both of these complications can ultimately result in severe visual loss. It's important to note that there remains a great unmet need for a safe, efficacious and convenient treatment option for NPDR that proactively maintains the patient's vision over a long period of time with fewer intravitreal injections than the currently available therapeutic options. Approximately 90% of patients with NPDR received no course of treatment apart from observation by their eye doctor until the disease progresses to a sight threatening complication due to the burdensome nature of the currently approved short acting treatments. EYP-nineteen oh one in our Phase 2 PAVEA trial could potentially safeguard patients' vision for a much longer period of time between treatments.

Speaker 2

Top line data remains on track for the Q2 of 2024. Looking ahead, we also plan to initiate a Phase 2 trial evaluating EYP-nineteen oh one and DME in the Q1 of 2024. Importantly, in May, we sold YUTIQ to Alimera Sciences for $82,500,000 in addition to future royalties. This value creating transaction allowed us to retire all of our outstanding bank debt, reduce our projected SG and A and extend our cash runway into 2025 as we prepare for potential Phase III trials. The sale also completed EyePoint's transformation into a pure play drug development company with sharpened focus on advancing and expanding our pipeline of sustained delivery treatments for serious eye diseases.

Speaker 2

I would like to thank the entire EyePoint team for an incredibly productive quarter. I will now turn the call back over to George to review the financials. George?

Speaker 1

Thank you, Jay. As the financial results for the 3 months ended June 30, 2023 were included in the press release issued this morning, My comments today will focus on a high level review for the quarter. As Jay mentioned, in May, we sold the YUTIQ franchise to Alimera Sciences for $82,500,000 in addition to future royalties. EyePoint received a $75,000,000 upfront cash payment at closing and will receive an additional $7,500,000 in equal quarterly installments in 2024. Importantly, we were able to pay off all and existing bank debt from the upfront proceeds of this transaction, significantly improving our balance sheet.

Speaker 1

In addition, commencing in 2025, we will receive a lowtomidoubledigitroyalty on Alimera's related U. S. Net sales above defined thresholds for the calendar years 2025 through 2028. Under the terms of the agreement, Alimera received global rights to YUTIQ outside of China, in Hong Kong, Taiwan, Macau and Southeast Asia, where YUTIQ is exclusively licensed to Ocumension Therapeutics and EyePoint will continue to receive royalties from OcuMention for its YUTIQ sales. For the Q2 ended June 30, 2023, Total net revenue was $9,100,000 compared to $11,600,000 for the quarter ended June 30, 2022.

Speaker 1

Net product revenue for the Q2 was $5,300,000 compared to net product revenues for the Q2 ended June 30, 2022 of $11,300,000 Consistent with our exit from the commercial business, the decline in revenue resulted from the sale of the YUTIQ franchise to Alimera in May, along with the discontinuation of marketing activity for the DEXYCU franchise earlier this year due to the loss of pass through reimbursement by CMS effective on January 1, 2023. Net revenue from royalties and collaborations for the Q2 ended June 30, 2023 totaled $3,800,000 compared to $300,000 in the corresponding period in 2022. The increase was primarily due to recognition of deferred revenue from the sale of YUTIQ, which will be recognized over a 2 year period. Operating expenses for the Q2 ended June 30, 2023, totaled $31,900,000 versus $30,800,000 in the prior year period. This increase was primarily driven by higher R and D spending on EYP-nineteen oh one clinical trials, partially offset by lower sales and marketing expense.

Speaker 1

Non operating expense net totaled $200,000 and net loss was $22,900,000 or $0.61 per share compared to a net loss of $19,400,000 or $0.52 per share for the prior year period. Cash and investments at June 30, 2023 totaled $142,500,000 compared to $144,600,000 at December 31, 2022. We expect the cash, cash equivalents and investments on hand at June 30, 2023 will enable us to fund our current and planned operations into 2025. In conclusion, we are pleased with EyePoint's progress in the Q2 year to date and are well capitalized to advance our product pipeline and key value inflection points. I'll now turn the call back over to Jay for closing remarks.

Speaker 2

Thank you, George. As you can see, 2023 has been an Excellent year for EyePoint thus far as we continue to execute on multiple clinical catalysts. Moving forward, we are well positioned to achieve a number of potentially value creating milestones, including top line data from our Phase 2 WAVE-two clinical trial in December, dosing of the first patient in the Phase II clinical trial of BYP-nineteen oh one and DME in the Q1 of next year, reading out top line data from our Phase II Pavia clinical trial in the Q2 of 2024 and advancing our discovery stage pipeline that includes both fully owned products and partnered programs. We believe EYP-nineteen oh one is a potentially game changing treatment for patients suffering from with serious eye diseases providing unique benefits, including delivery of the active drug virolinib consistently over approximately 9 months with the majority of patients not requiring any supplemental therapy up to 6 months after a single treatment. A new mechanism of action to treating retinal disease beyond anti VEGF Ligand blockers, potential for neuroprotection and anti fibrotic benefits to the retina and a proven delivery technology with a positive safety profile.

Speaker 2

This remains an incredibly exciting time to be part of the EyePoint story as we are well positioned to execute on our upcoming milestones and continue to transform the treatment landscape with innovative long term solutions to improve both the vision and the lives of patients with serious eye diseases. Thank you all very much for listening this morning. I will now turn it over to the operator for questions.

Operator

Thank you. Our first question comes from the line of Tyler Van Buren of TD Cowen. Your line is open.

Speaker 3

Hey, guys. Good morning. Congrats on all the progress. There's a lot to look forward to over the next year. I've got a couple of questions for you.

Speaker 3

So the first one is, you mentioned the starting visual acuity and central subcutaneous for the DAVIO-two patients that were enrolled and presented on over the weekend, of course. But can you discuss how that compares to the subgroup of patients in the Dovio-one trial that had no excess fluid at baseline and what the read through for those for the what read through that has for the results coming in Q4? And then, the second question is, Given the safety issues experienced by Cifovir early in the launch, what can you guys do during clinical trials to ensure that 1901 does not have the same issues pop up upon potential market introduction.

Speaker 2

Thanks, Tyler. Appreciate the questions. I'll take the first one on visual acuity and CST from the Dovio 2 trial. Again, just to remind people, in DAVIO-one, we had a pretty heavily treated group of patients. On average, they have received 8.6 injections in the year prior.

Speaker 2

DAVEO II, we believe represents more of a cross section of wet AMD population out there. And so the visual acuities In WA-two, we're about aligned better than in WA-one and the CSTs were drier $299,000,000 versus $265,000,000 Now if you go back and look at that subgroup analysis in WA-one, by definition, that subgroup had no excess fluid. Remember in Dovio 2, we allowed some fluid, and the CST cutoff was 350 microns, which allows some fluid. So the CSTs in the no excess fluid group was about 244 microns, so naturally less than the entire W01 cohort or even W02. Visual acuity's however were worse in the subgroup analysis, again reflecting the severity of the disease in DAVIO-one.

Speaker 2

As for read through, again, I like to say, WAVE-one was in end of 2017, and so it's dangerous to make broad statements about read through. But I think it's safe to say that the Dovio 2 population was under better control with their wet AMD than the W1 population. The second question was around safety and of course that is on everybody's mind in the retina community and has been for a while. The good news is There really has never been any significant safety signal that we are aware of in the Durasert platform. Remember the Durasir platform has been in 4 FDA approved products over the last few decades.

Speaker 2

We estimate over 80,000 people have received it and again has a very clean safety record. The Durasert E where erodible from a Durasert that we're using EYP-nineteen oh one has actually fewer excipients. So, we believe the safety profile should be similar. Turning to virolinib, virolinib was tested as an oral agent in wet AMD in two trials, Approximately 150 patients in total received it. And while it did have systemic toxicity as an oral agent, it had no ocular toxicity.

Speaker 2

And so far in the DAVIO-one and DAVIO-two trials, we have seen no evidence or had no reports of any drug related ocular SAEs. Turning to preclinical, we have preclinical data on rabbits that show that the equivalent dose in a human of 10 times what we could ever put into a human was safe in a rabbit. So we've not found the maximally tolerated dose of virolimab in arabid at this point. Looking at inserts, we've injected up to 6 inserts into a rabbit eye. The rabbit eye is about a quarter of the size of a human eye and no toxicity was reported.

Speaker 2

So we're very comfortable with the preclinical talks and so far the clinical talks with EYP-nineteen oh one. Of course, if you're talking about events that can occur 1 in 5000 or 1 in 10000, you got to do a lot of patients before something like that would come out. That answered your question, Tyler?

Speaker 3

Yes. That's wonderful. Thank you very much.

Speaker 2

Great.

Operator

Thank you. One moment please. Our next question comes from the line of Yatin Suneja of Guggenheim. Your line is open.

Speaker 4

Thank you. Maybe just following up on Tyler's question. Can you maybe just tell us like in terms of these Patient, the baseline that you provided, like what was the average injection for them coming into the study? So that's first. And then can you maybe talk about the retreatment plan in Phase 3?

Speaker 4

What the goal would be? How Would you get retreatment on the label once you moved into the pivotal? Would you have to show that in the pivotal study?

Speaker 2

Thanks, Yatin. The first question about the number of injections for the Phase II patients leading into the trial. That data has been collected, but it hasn't been collated yet. That's the type of data that we will hold off from talking about or showing publicly until we're ready to show the top line. So At this point, we as a company haven't seen that data and won't be talking about it until we're confirmed that the data is accurate.

Speaker 2

With respect to retreatment, we've been very consistent from the start of the UIP-nineteen oh one program that we want to get a label for every 6 months retreatment. That's been our goal. Why every 6 months? Well, the answer is, first of all, That's what most retina specialists want when you hold them and ask them. Number 2, you could ask, well, why you have insert that could last About 9 months in a human, why would you go for 6 months?

Speaker 2

And the answer is flexibility. Every patient is different. And that's been shown really if you really drill down to the data in all these anti VEGF programs that the number one determinant of when a patient needs a retreatment is the patient, it isn't the drug. So as a result, we have patients in our Phase 1s, A third of them went out a full year without a retreatment. But we would like the doctors to have the flexibility to retreat as as early as every 6 months on the label, and that's been the plan.

Speaker 2

This was discussed with the FDA in our Type C meeting last year. And the TOX studies to show that reinjection is safe in animals have been completed. And so we are optimistic that when we have our end of Phase II meeting to plan the pivotal trials, the FDA will be agreeable to our plan to do Q6 dosing throughout the pivotal trials.

Speaker 4

Thank you.

Operator

Thank you. One moment please. Our next question comes from the line of Jennifer Kim of Cantor. Your line is open.

Speaker 5

Hey, thanks for taking my questions and congrats on another great quarter of execution. Jay, again, congrats on your new role.

Speaker 6

Thank you.

Speaker 2

I have

Speaker 5

a few questions here. Yes. The first is just following up on the last question about the baseline average injections of of patients coming into WAVE-two. Could we get that data prior to the December readout? And then my second question is on the December readout, just any thoughts on the planned granularity of data in terms of the patients' reasoning for rescues, etcetera, what should we expect in terms of what we'll get in December?

Speaker 5

Thanks.

Speaker 2

Thank you, Jennifer. First, baseline injections, again, That data has been collected, but this is historical from charts of the investigators. It isn't controlled within a study and it's not something that necessarily you want to state publicly until you're confident that the numbers are correct. So I don't believe there's any value or advantage for us to talk about interim data around the injection numbers. Suffice it to say, we would expect it to be less than the 8.6 that we saw in WAVE-one, but we really don't know at this point.

Speaker 2

However, when you really talk about that, what you're really getting at is the reduction in treatment burden. And I actually believe that the more important denominator here to look at is not Effective injections leading into the study, but it's the prospective injections that the EYLEA arm will receive. So drilling down into that, after month 2, when all the patients received their last EYLEA load and then they got either 1901 or a sham. For the 6 months following that visit, the EYLEA arm should on average get at least 3 injections. And in fact, they may get more because they could also get That's really the best comparator because that is under the control of the study.

Speaker 2

In 6 injections a year. Multiple studies have shown us that's kind of the average that patients get in the real world. So when we talk about treatment burden reduction at The top line, the first treatment reduction burden will be prospective against that EYLEA arm, but we will also talk about retrospectively. One last point, which again drilling down a little bit, 3 injections in the EYLEA arm and Dovio-two goes to 6 injections per year. That's a smaller number than the 8.6 that the DAVIO-one trial showed.

Speaker 2

So even if we do just as well in Dovio-two with supplements or lack thereof in the treatment arms, the percentages will be different, will be lower because the denominator against that will be lower. So just a note there. Finally, granularity of the data. I'd say once again, we're working through exactly what we will be able to show and be confident in early December because the data will not be locked at that point. That takes another month or 2.

Speaker 2

But we will certainly show by group The visual acuity, change in visual acuity, OCT data we expect to show supplement free rate for all the arms and percentages of patients who were supplement free up to month 6, which I'm sorry, up to month 8 in this study. And also safety. Of course, we showed some safety data already and we should have the reported safety data pretty complete by the time we do top line. Jennifer, anything else?

Speaker 5

No, that was great. Actually, maybe one question beyond DAVIO-two. The NPDR data is also right around the corner. So I'm wondering, when you're thinking about that opportunity, we hear a lot of talks at these retina conferences about homo CT and increased prevalence rates in Doctor than previous estimates. Does that all factor into how you're viewing that opportunity?

Speaker 5

Thanks.

Speaker 2

Well, that's part of it. We view the opportunity basically as large because Physicians and patients report that the reason that they're really not opting for the large molecule lipoGAM blocker of dizziness disease is the treatment frequency is too great. If the treatment frequency were much less, say every 9 months or once a year and the treatment was safe, effective and tolerable, we believe a lot of patients and doctors would opt for it. Home OCT is an early warning system. Again, under the clinical trials, when you've got patients who are motivated and are coming in every month or 2 in a clinical trial, You don't necessarily need homo CT.

Speaker 2

You're picking up any problems. But in the real world, that's not what happens. We know 50% of diabetics don't even go in for eye exams. So, home OCT, I think, for the diabetic population in general, if you could get them to do it at home, would be very helpful to catch the disease earlier. And again, probably be an early warning for all of these retinal vascular diseases that the patient should be treated.

Speaker 5

Okay, great. Thanks and congrats on the shareholder again.

Speaker 7

Thank you.

Operator

Thank you. One moment please. Our next question comes from the line of Colleen Cusi of Baird. Your line is open.

Speaker 8

Great. Good morning. Congrats on the progress and thanks for taking our questions. Jay, you spoke a little bit to the variability of response of patients with wet AMD to current therapies. Do we have a sense of what's driving the variable response to current therapy?

Speaker 8

And is there a way to control for that in your enrollment?

Speaker 2

Colleen, that's a great question. And so I would say the simple answer of what's driving it is how fast VEGF levels come up in an eye after an injection. Most eyes in wet AMD respond to anti VEGFs, respond anatomically, meaning the fluid gets better and 50% of the time goes away. Remember 50% of the wet AMD population approximately, you never get all the fluids to go away. But we all have seen You never get all the fluid to go away.

Speaker 2

But we all have seen patients who despite monthly injections continue to have Systemic fluid or worsening fluid. The good news is there are not many of them. But the point again is, I don't think you can take a patient who requires and monthly injection with one drug. And every time you try to treat and extend that patient to 5 weeks or 6 weeks they get fluid, you can't expect to switch that patient to another drug and get them to go out 3 or 4 months because they're just got high VEGF levels. Now to turn it back to EYP-nineteen oh one, we really don't know yet how that's going to really pan out because this is a different mechanism of action.

Speaker 2

We're blocking intracellularly at the receptor level, all isoforms of VEGF. So there may be a similar type of knowledge where there are good responders and bad responders. We expect that with any drug. And just going back to the data that we have, the end of 2017 from our Phase 1 trial, it did appear that eyes that were failing standard of care, meaning despite monthly or every 6 week injections of a standard of guarantee VEGF, these eyes had worsening fluid, it didn't appear that EYP-nineteen oh one had much to offer those eyes. But we do believe that the bulk of the rest of the WAY MD population could benefit from our drug if the safety, efficacy and tolerability that we saw in Phase 1 holds throughout the rest of the studies.

Speaker 8

That's helpful. Thank you. And then can you just speak to how you approached The rescue criteria for the Phase 2 in light of balancing visual acuity, fluid and getting patients rescue free.

Speaker 2

Sure. So, rescue criteria is interesting because as I know you know and I think a lot of people who in the field know that There's no standard for this. And again, there's also 2 categories really. There's criteria, which means the day of that visit, the patient gets a non mandated injection, non mandated by the protocol. And then there's disease activity.

Speaker 2

Disease activity means that the eye shows disease activity. They're in that day anyway for mandated injection. So they're not being rescued. They're just being shifted to a different interval of visit based on that. So there are 2 different definitions.

Speaker 2

And within those definitions, every study has kind of different parameters. As far as I'm aware, the FDA has never actually given direction to companies on what the rescue criteria should be. And you see companies changed the rescue criteria from Phase 1 to Phase 2 to Phase 3. So that's just general statements. For us, recall that The primary endpoint that we would like to achieve and are striving to achieve in the pivotal trial is non inferiority change in visual acuity against the EYLEA control arm.

Speaker 2

So we elected in the Phase 2 to lower the standard for supplement in visual acuity to 5 letters. It was 10 letters in the Phase 1. And that's again in an effort to try to bracket the visual acuity, to try to keep it intact, which ultimately, that's really what patients care about. Yes, you can show a patient a picture of their OCT and say, oh, look, there's fluid or there's not fluid. But ultimately, what they care about, what the retina specialist cares about is how are they seeing.

Speaker 2

So OCT and fluid are a biomarker, but not a perfect biomarker for visual acuity. So ultimately, that's the goal that we need to achieve, non inferiority change in visual acuity.

Speaker 8

Great. That makes sense. And then last one from us. Can you just remind us what your current thinking is for the planned Phase 3 design. Would you go non inferiority?

Speaker 8

And just what your thoughts are for funding that program?

Speaker 2

Well, the first part is easy. The second part is a broad question, but I'll go with the first part first. So our Phase 2 was designed to look very similar to the planned Phase 3. Remember, we did have a Type C meeting with the FDA to go over this, and the FDA gave us excellent guidance at the time to what was the expectations. So if you look at our Phase 2 protocol, the WA-two protocol, there are going to be 2, I think, obvious changes in the pivotal trial.

Speaker 2

And one of them we talked about already, which is reinjection. We plan on doing reinjection of EBITDA-nineteen oh one every 6 months in the 2 year pivotal trial. The second difference is the efficacy readout. The efficacy readout in WA-two was at 8 months, 32 weeks. The efficacy readout for the pivotal trials will be at approximately 1 year.

Speaker 2

Now things like dosing, and of the study inclusion, exclusion criteria, that's all undecided until we see the results of Dovio-two. And the science from WAO-two will inform us on those other things. But ultimately, the structure of WAO-two and the Phase III will look very similar. Now from a funding perspective, I just will say we're very well funded right now. Our balance sheet looks great.

Speaker 2

The sale of YUTIQ really helped us. We've got cash into 2025, so we can fund all our Phase II trials. There are multiple options we have and are discussing to fund the pivotals. And Maybe I'll ask George to kind of give a little more color on that.

Speaker 6

Yes. Hi, Colin. Good morning. I think we've talked about this publicly. As we look at the Phase II and the ultimate cost of the Phase III, it really is going to be defined.

Speaker 6

We talked openly that We do have some strategic interest involved. You never know what those transactions pardon me. We are evaluating a range of mechanisms to ultimately fund the Phase 3s, which includes bringing in a partner potential equity raises in other structures that may make sense. And I think we're going to be guided by the data.

Speaker 1

The Phase 2 data is really going

Speaker 6

to give us a lot more clarity on what the total cost of the Phase 3 will be and the required funding. But I'm thinking for us sitting here today, We're on a good position and trajectory to date in December.

Speaker 8

Great. Thanks for taking our questions and congrats again.

Speaker 6

Thank you.

Operator

Thank you. One moment please. Our next question comes from the line of Danny Gottlieb of Chardan. Your line is open.

Speaker 9

Hey, good morning. Thank you for taking the question and congrats on the progress. Just wanted to ask, what is your strategy for showing that UIP-nineteen oh one could also provide a benefit in patients with other approved anti VGS other than EYLEA? Thank you.

Speaker 2

Thanks for the question. At the present time, the FDA guidance, at least for wet AMD, has been in a pivotal trial, the control group can either be on label LUCENTIS or on label EYLEA. So we're limited by the choices for wet AMD pivotal. It's certainly possible that when we start our DME pivotals, that guidance for DME may be different and the standard of care for treating DME at that point may be different, in which case the control arm may be different. But currently, our wet AMD plan is to use EYLEA on label in patients who have previously treated wet AMD as the control arm.

Speaker 9

Thank you.

Operator

Thank you. One moment please. Our next question comes from the line of Sean Kemp of Jones Trading. Again, Sean Kemp, your line is open.

Speaker 10

Yes. Hi. Thank you for taking my questions. I guess first question is, could you remind us whether the Phase IIW2 trial is a statistically And also relating to the statistics, and comment on the variability in visual acuity changes following treatment with 19 oh one as observed in Phase 1 trial and looking ahead for the Phase II W2, what your expectations are regarding the variability? And maybe specifically standard deviation for both 19 oh one and the FLIRBAR sat control?

Speaker 2

Thanks, Sean. Great questions. First of all, with respect to the Phase 2, the statistics are descriptive only. The study is not powered to show a well, certainly confidence interval that would be necessarily non inferior. It could do that, but the end of the study is probably too small to have that absolute confidence.

Speaker 2

The variability of visual acuity in the Phase 1, again, there's no statistics around that. There was variability. But remember, this was 4 different doses of EYP-nineteen oh one and I'm not sure that there's much read through to variability in DAVIO-one to DAVIO-two. And finally, expectations for standard deviation. All we can do is go by what's out there for previous studies.

Speaker 2

And if you look at the standard deviation for treatment naive wet and trials, it's usually around 12 letters. It's pretty variable. The only study that we're aware of that looked at a perhaps similar population of maintenance patients was The port delivery system Phase 3 trial, which had a standard deviation of 7.1 letters. But that study limited enrollment to patients who were diagnosed with wet AMD for 9 months or less. Our study allowed essentially any time of diagnosis of wet AMD.

Speaker 2

And if I were guessing, I would guess that our standard deviation would be closer to the 7.1% than the 12, I think that would make sense. However, we don't know. That's one of the many reasons that we chose to do what I would refer to as kind of a classic Phase 2 trial. Did that answer your questions?

Speaker 10

Yes, very helpful. Thank you very much. And if I Could squeeze in another question, just a separate question. So I guess relating to the new proprietary injector that you're developing, Could you confirm if 1901 will be packaged as a drug device combination for potential approval or would you maybe allow an option for clinicians to use the standard intravitreal needle and arthritis?

Speaker 4

Thank you.

Speaker 2

No, I can confirm that this will be a drug device combination. We've been aware of that from the start of the development of the program since the EMA requires that. And while we were into the program, the FDA changed its guidance around that. So we've been preparing for this to be a drug device combo. No, we wouldn't intend to have doctors load the inserts into any kind of their own hypodermic.

Speaker 2

These injectors And it's true of the current syringe injector that we're currently using in the Phase II trials. They are preloaded, sterilized, prepackaged. The physician just opens up the sterile package, takes a tab or a wire out and then goes ahead and injects. So there would be no plan to deviate from that. This is going to be something that's going to be completely preloaded, pre sterilized and self contained for the doctors to make it really easy for them to safely and sterilely deliver the inserts.

Speaker 10

Okay. Thank you very much.

Operator

Thank you. One moment please. Our next question comes from the line of Yale Jen of Laidlaw and Company. Your line is open.

Speaker 7

Good morning and thanks for taking the question. Jay, the first question is that In terms of the label seeking potential label seeking for the pivotal after the pivotal study, You mentioned earlier you seek for 6 months, but just curious in case for Very few patients that potentially need to be rescaled or need to be treated retreated in 5 months, for example, would that also be a label that you are seeking so the patient you can cover all the patients being treated?

Speaker 2

So Yale, at the present time, we're planning on every 6 months in the pivotal trials. If we see positive results there, I could see a post approval study pushing that to shorter timeframe. And part of that really depends on the results. If we're not getting a lot of supplements in our pivotal trials at month 5 or month 7 it would be after the 1901 goes in, then there may not be value with that. I think it's something we'll clearly be looking at.

Speaker 2

But at this point, I don't believe that we'll be testing it shorter than 6 months. Part of this again is our whole view here about the treat to maintain, where in the Phase 1 trial, over 50% of the patients could go up to 6 months with stable vision and stable OCT and didn't require any other supplement. There was another approximately third of the patients in the Phase 1 who did get a supplement prior to month 6, but the majority of those only got one. And many of those patients have been treated every 4 weeks or 6 weeks going into the study. So you've now shifted a patient from being treated every 4 to 6 weeks to being treated every 3 months, albeit it could be alternating a approved Ligand blocker with 1901.

Speaker 2

And there's a lot of reasons why doctors might consider doing that even as they push patients out further and further in treat and extend. Remember with the ligand blockers, The drug is gone by certainly by 3 or 4 months. And if that patient misses a visit or gets sick, I think doctors would appreciate a safe, effective and tolerable sustained release insert that they know is working in the background for up to 8 or 9 months in that patient if they miss visits. So again, back to the original question, right now, not planning on pushing it The label sooner than 6 months, but it's something we will certainly consider based on the data and based on what the retina community wants.

Speaker 7

Okay, great. That's very helpful. And maybe just one housekeeping question for George. You mentioned I believe you mentioned that YUTIQ sales revenue incomes will be amortized over 2 years period. I'm just curious what might be the reasoning behind that given that the sales is already completed?

Speaker 6

Yes. So thanks for that question, Yale. It's really accounting driven. And because of the nature of the agreement and the ultimate sale and license to Alimera, there was really 2 components. 1 is the sale of the asset and license of the IP, and that's the $82,500,000 upfront.

Speaker 6

Part of that, we also have a supply agreement with Alimera will continue to supply YUTIQ to them. And based upon the interpretation of the accounting rules, those are tied together. And so that total of $82,500,000 will be recognized over a 2 year period based on predicted volumes. So if you think about it from your modeling perspective, it would be roughly even quarterly over those 2 Again, it's non cash. We've already got $75,000,000 upfront.

Speaker 6

It's just the accounting treatment of the revenue. And that will show up As you see in the financials today, that shows up as a collaboration and royalty line. It's not a product That

Speaker 7

will be great.

Speaker 6

That's And we'll continue product sales, for sales to both Alimera and our partner in China, Aku mentioned, but it gets Very, very different line on our P and L notes. It's not true commercial sales, but we're following the accounting pronouncements.

Speaker 7

Okay, great. That's very helpful. Maybe just squeeze one more question here for Jay. In terms of NPDR, It is known that more than 90% of patients not receiving treatment at the moment. So in terms of 19 oh one, if the data turn out to be robust, the question is that Besides the infrequent dosing, is there other factors that can encourage physician and patient to use the drug against the current backdrop of the sort of treatment paradigm?

Speaker 2

And Yes, true. Again, it's a great way to think about this, but I go back to the first principle, which is the efficacy and safety. And so if the safety continues to look really good as it has so far and the efficacy because of the zero order kinetics of the vironib release. If you imagine that is advantageous against the staccato injection of a large molecule ligand blocker, it's possible that our efficacy could be even better than what we've seen with the currently approved therapies. I think those two things coupled would really drive the market in our direction.

Speaker 2

But flipping it around and saying, well, what if you're Safe, but your efficacy is less. Well, given that essentially physicians and patients are not opting to any large Degree for the current ligand blockers. Even if our efficacy is less than they have, if we're safe and tolerable, I still think we'll get a significant part of that market and we'll grow that market.

Speaker 7

Okay, great. That's very helpful. And again, thanks and congrats looking forward in December for the data.

Speaker 2

Thank you.

Operator

Thank you. One moment please. Our next question comes from the line of Chaitanya Galakota of H. C. Wainwright.

Operator

Your line is open.

Speaker 4

Hey, this is Chetan on behalf of Yi Chen. You've answered most of my questions, so I'll just leave you with one quick one. Any major developments in the competitive landscape that you've noticed specifically for the maintenance treatment of wet AMD? Thank you.

Speaker 2

Thank you for that question, Inet. I would say recently, no, I don't think there are any developments. I think when you talk about true sustained release, true sustained release is what we're doing with EYP-nineteen oh one, meaning that you've got a device or a method that continues to release drug and that would be the Sustained release inserts like EYP1901 or gene therapy. I'd put that in the same category. Against that is what I would refer to as Extended duration.

Speaker 2

The extended duration means you've got first order kinetics, but you're putting in more of the drug in order to have it last longer. And obviously, that might refer to faricimab or high dose EYLEA. Those 2 have been around for a while now. Obviously, hydrocitely hasn't launched yet. But again, I don't we don't consider those to be really competitors because we're looking at a maintenance population and we can be used in conjunction with them if the patient needs it or The doctor desires it.

Speaker 2

So unlike the previous iterations of anti VEGFs, where when the new one came out, The promise was we're better than the last one. We last longer. You don't need them anymore. That's not our value. Our value is we can do something they can't, which is take, we believe, if the data holds, at least half the wet AMD population out 6 months or longer with a single injection and possibly provide neuroprotection and possibly provide anti fibrosis, which may result in better visual acuity.

Speaker 2

So back to the question, the simple answer to your question is, I don't think there's been any significant changes in the competitive landscape in the last quarter.

Speaker 4

Thank you so much and congrats again on all the progress. Thanks.

Operator

Thank you. And I'm showing no further questions in the queue at this time. Ladies and gentlemen, thank you for participating in today's conference. This does conclude your program. You may now disconnect.

Operator

Everyone have a great day.

Speaker 2

Thanks everybody.

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Earnings Conference Call
EyePoint Pharmaceuticals Q2 2023
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