Clearside Biomedical Q3 2024 Earnings Call Transcript

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November 12, 2024

There are 9 speakers on the call.

Operator

and welcome to the Clearside Biomedical Third Quarter 2024 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.

Operator

Please note, this conference is being recorded. I will now turn the conference over to your host, Jenny Kopin, Investor Relations. Ma'am, you may begin.

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, 2023, that was filed on March 12, 2024 and our quarterly report on Form 10 Q for the quarter ended September 30, 2024 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 Lizeskay, our Chief Executive Officer Doctor. Victor Chong, our Chief Medical 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

Thank you, Jenny, and good afternoon, everyone. We continue to make outstanding progress advancing our differentiated suprachoroidal delivery pipeline. Last month, we reported the positive results from our ODiSI Phase 2b clinical trial in patients with wet AMD. These data strongly support the potential efficacy, safety and versatility of CLSAX to treat this chronic disease. We believe CLSAX is now positioned for real world success in the wet AMD market with its potential to provide physicians with an extended duration maintenance therapy combined with the option for flexible redosing.

Speaker 2

These features may improve outcomes and reduce the treatment burden for patients and their caregivers. Importantly, ODiSI also demonstrated a positive safety profile with the ability to redose with our own drug as part of a maintenance treatment regimen. We are the only TKI wet AMD program with repeat dosing data, giving us a competitive advantage as we advance CLS A X into Phase 3. In addition to our wet AMD program, our research team is currently evaluating certain specific small molecules through in vivo models for the potential treatment of geographic atrophy, a market size valued at over $20,000,000,000 in sales. Victor will expand on this opportunity in his remarks.

Speaker 2

We are also working to expand the overall value of our suprachoroidal platform. Clearside is the proven leader in delivery of drugs to the suprachoroidal space. Our SCS microinjector continues to provide safe and reliable delivery with well over 10,000 injections performed to date. We have successfully navigated the drug device regulatory pathway to obtain commercial approval for XIPERE, the 1st and only FDA approved product for suprachoroidal administration. And a permanent CPT code has been granted for suprachoroidal injections as a result of XIPERE's U.

Speaker 2

S. Approval. A tremendous amount of work is also happening behind the scenes. We have solidified our formulation expertise in developing suspensions that can be delivered into the suprachoroidal space and we have commercial scale microinjector manufacturing capability that includes ISO certification. This industry leading know how continues to be recognized.

Speaker 2

We are seeing significant interest among the retinal specialist community and from leading biopharmaceutical companies in applying our innovative approach to treating serious retinal diseases. The last several months have seen continued advancement by our collaboration partners. In the Asia Pacific region, our partner Arctic Vision has made excellent progress advancing the development of XIPERE, including regulatory reviews in Australia and Singapore and a pending regulatory submission in China. We were delighted by the announcement last week of the commercial collaboration between Arctic Vision and Santen Pharmaceuticals, a highly respected global ophthalmic company. This collaboration leverages the capabilities of Santen to bring this potential important treatment to patients with uveitis macular edema in China.

Speaker 2

Importantly, this partnership is tremendously gratifying as it provides additional strategic validation of our suprachoroidal delivery platform by another global pharmaceutical company. REGENXBIO is partnered with AbbVie to utilize our SCS microinjector to deliver their gene therapy ABBB RGX-three fourteen for the treatment of wet AMD, diabetic retinopathy and diabetic macular edema. Last week, they reported on their programs administering 314 via our SCS microinjector. Based on the positive interim results from Phase 2 ALPHA2 trial in diabetic retinopathy, AbbVie and REGENX have accelerated a planned end of Phase 2 meeting with the FDA that they now expect to have this quarter. REGENXBIO expects to initiate the 1st global pivotal trial in diabetic retinopathy in the first half of twenty twenty five.

Speaker 2

In addition, ALTITUDE is enrolling a new cohort of patients with center involved diabetic macular edema. And finally, in wet AMD, the Phase 2 AAVI8 trial is enrolling a new cohort based on a favorable safety profile and to evaluate dose levels for a planned pivotal program. At the Retina Society Annual Meeting in September, our ocular oncology partner, Ora Biosciences presented positive Phase 2 end of study results evaluating Belsar for the first line treatment of early stage choroidal melanoma. Ora continues to enroll their global Phase 3 trial in choroidal melanoma. We have been working closely with our partner, BioCryst Pharmaceuticals on the formulation of their plasma calacrine inhibitor, avorlistat.

Speaker 2

In 2025, BioCryst plans to advance avorlistat into a clinical trial of patients with diabetic macular edema. BioCryst believes that avorlistat delivered to the suprachoroidal space as a depot formulation utilizing our SCS microinjector can potentially provide high drug levels to the retinal vessels with long lasting exposure. With that, I would now like to hand the call over to our Chief Medical Officer, Doctor. Victor Chong to provide additional perspectives on our ODiSI results, the current plans for our Phase 3 program and exciting new opportunity to expand our suprachoroidal pipeline. Victor?

Speaker 3

Thank you, George, and good afternoon, everyone. We are extremely pleased with the ODiSI trial result, which we reported last month, which exceeded our expectations for the data needed to advance CRSAAX into Phase III development. There were 3 key objectives we were looking for from the ODDyssey trial. 1st, safety. We showed that the CLS A X was well tolerated and maintained a positive safety profile with repeat dosing of the drug.

Speaker 3

This was especially important as almost all of the patients were administered at least 2 doses of CLSAX. Importantly, our Phase 2b trial had no treatment related serious adverse events, including no endovomitis and no retinal vasculitis. 2nd, efficacy. We saw stable measurement of best corrected visual acuity and central subfield thickness. We were able to maintain vision over 36 weeks.

Speaker 3

With BCVA within 2 letter from baseline at both week 24 week 36. We were also able to demonstrate that CRSAX reduced CST fluctuations and provide stable anatomical control over 36 weeks as confirmed by independent reading center. And third, duration and reduction of treatment burden. We were able to show an 84% reduction in the frequency of injection after the initial dose of CR SAA, with approximately 90% of CR SAA participants not require any additional treatment up to 4 months, 81% up to 5 months, and 67% up to 6 months. Where AMD is a chronic disease, over the patient's lifetime, they will be given numerous injection to maintain vision and stabilize the disease.

Speaker 3

We are developing CRS8 as a maintenance treatment and the fact that we demonstrate the ability to administer multiple dose of CRSAA was a critical component of the ODDyssey trial. We want CRSAA to be easily adopted into current physician practice. Based on the input we have received from numerous clinicians, in order to be meaningful, a new therapy entered the wet AMD market needs to have the option of flexible dosing. Any new agent that can only be dosed every 6 months will be a challenge for physicians to utilize. The frequency of treatment differ from patient to patient.

Speaker 3

In fact, even from eye to eye in the same patient, the frequency might differ. Precision need the flexibility to deliver a treatment that will accommodate the varying needs and schedule for each eye of the patient at different time of the treatment journey. We continue to evaluate data from the ODDyssey trial to help refine our Phase III plans. We are focused on designing a Phase III trial program that will produce data supportive of label with flexible dosing between 3 to 6 months. As I mentioned, this will align with the current wet AMD driven approach desired by most retinal specialists and enable easy adoption in the physician practice.

Speaker 3

Keeping in mind that our Phase 3 plans remain in development and are subject to change, we are currently planning to run 2 Phase 3 trials with afilibosap 2 milligram as a comparator. We are likely to conduct the study in TRU-nine thousand patients with a flexible dosing component, consistent with the Phase 3 trial design of recently approved efilipacep high dose and farizumab. We expect to conduct an end of Phase 2 meeting with the FDA in early 2025 to present and finalize our plans. One of the main reasons I joined ClearSign was to further explore the potential for suprachoroidal delivery with our SCS microinjector. Over the course of my career, I have had a great deal of translational experience in advancing new molecules into the clinic, and I see many opportunity to utilize our device and formulation platform to potentially expand our pipeline.

Speaker 3

Beyond well AMD, we are targeting geographic atrophy, a preference disease with a market size valued at over $20,000,000,000 in sales. We believe that geographic atrophy is primarily a choroidal disease. Several of my colleagues in the academic world have demonstrated that endothelial cells in the choroid are damaged even well before any significant change occur in the retinal pigment epithelium or RPE. The vascular density is also significantly lower in the eye of patient with geographic atrophy, supporting the hypothesis that geographic atrophy is a choroidal disease. Therefore, drug that directly target the choroid are important for GA as well as for wet AMD.

Speaker 3

And our suprachoroidal delivery platform does just that. Delivering small molecule via the suprachoroidal injection enables comprehensive drug coverage of both the retina and choroid, while also potentially minimizing systemic and anterior segment side effects. I'm pleased to report that our research team have made great progress in evaluating certain specific small molecule through in vivo models for the potential treatment of GA. We are currently focused on 2 approaches. 1 may improve choroidal perfusion and the other may moderate pro inflammatory cells.

Speaker 3

Our team is doing the necessary work to potentially advance 1 or both of these candidates toward an investigational new drug application. As George described, our partners continue to make extensive progress with their respective suprachoroidal delivery programs, utilizing our SCS microinjectors. This advancement combined with our positive CISAX result so that our innovative suprachoroidal delivery platform could have a tremendous impact in the treatment of retinal diseases. I'm excited by what the future holds for ClearSign and suprachoroidal drug administration. With that, I'll now turn the call to our CFO, Charlie Dignity to provide a financial update.

Speaker 4

Thank you, Victor, and good afternoon, everyone. Our financial results for the Q3 2024 were published earlier in our press release and are available on our website. Therefore, I will just provide a summary of our financial status on today's call. As of September 30, 2024, our cash and cash equivalents totaled approximately $23,600,000 We believe we have sufficient resources to fund our planned operations into the Q3 of 2025. This supports planning for CLSAX Phase 3 program and research work to expand our pipeline into geographic atrophy.

Speaker 4

We look forward to participating in the Stifel Healthcare Conference next week and we will continue to update you on our progress. I will now turn the call over to George for his closing remarks.

Speaker 2

Thank you, Charlie. Earlier this month, we made a couple of key personnel changes to further advance our mission. Tony Gibney was appointed to serve as Chair of our Board of Directors, bringing many years of relevant ophthalmic business development and strategic experience, most recently serving as the Executive Vice President, Chief Business and Strategy Officer of IVERIC Bio. During his time as a Director for Clearside, Tony has been a very active contributor working closely with management and providing valuable strategic and financial guidance. I'd like to thank Clay Thorpe, our outgoing Chairman for his support and significant contributions during his tenure.

Speaker 2

Clay will remain as a valued member of our Board of Directors. In addition, Victor Chong has assumed a broader set of management responsibilities to utilize his extensive expertise in advancing drugs from preclinical through clinical development to commercialization. In his expanded role as Chief Medical Officer and Executive Vice President, Head of Research and Development, Victor will lead our preclinical, clinical and medical affairs teams providing an efficient structure as we prepare for the CLSAX end of Phase 2 meeting, plan for Phase 3 and advance our preclinical suprachoroidal programs. In summary, we are very excited that our innovative drug delivery platform is now being used in commercial products and promising clinical development programs by Sausch and Lomb, Regenxbio and AbbVie, Arctic Vision and Santen, Aura Biosciences and BioCryst Pharmaceuticals. We remain motivated by the progress made internally and with our partners to expand the use of our differentiated suprachoroidal delivery pipeline to treat patients with numerous retinal diseases.

Speaker 2

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

Operator

Thank you. At this time, we will be conducting our question and answer Thank you. Our first question is coming from Annabel Samimy with Stifel. Your line is live.

Speaker 5

Hi, all. Thanks for taking my questions. So I had a few. I guess you just presented your data at AAO. I was just wondering if you can give us some feedback on what you heard.

Speaker 5

And I'm specifically interested in what they thought of the study design that incorporated retreatment rather than supplemental rescue with aflibercept? And also what's the feedback on the 3 to 6 months flexibility that you're looking for on your label relative to some of the competitors that might be looking for longer duration flexibility? So I guess that's the first question.

Speaker 2

Thanks Annabel. It's George. I appreciate that. Let me just say I'll make a comment or 2, then I'll turn it over to Victor who can spend more go into the details more. We had a very good AAO meeting.

Speaker 2

I think people were very happy with the data that we presented. They thought it was very strong data. It was very favorably received by the KOLs we talked to. We had a Scientific Advisory Board. I think everybody looked at the data and felt it was very positive and clearly was a product that should advance on to Phase 3.

Speaker 2

As to the specific questions that you asked, I'll let Victor address some of those. Victor?

Speaker 3

Thank you, George. Thank you, Annabel. I think in AO that our message is getting through and as a key differentiation about the flexibility. I think before that, there was still some confusion about the priority and the suggestion and the argument between different companies. I think that now that it's become very clear that we are the only one who are offering a variability.

Speaker 3

And actually that the variability is actually more physicians really very keen on. And I think that's really supporting our notion on the commercial side. What sorry, I apologize that other than that part, what was the other part of the question?

Speaker 5

Well, the flexibility was 1. And then what were their thoughts about the retreatment rather than the traditional supplemental flibercept design

Speaker 6

in the trial?

Speaker 3

Yes. So I think that was like in the beginning that people not totally understanding the sector differences. In Academy that we had multiple presentation, people are starting to understand their differences. And the our Phase 2 design able for us to read those already and again allow that people to understand that it's already possible in our Phase 2. So I think also the positive to show a differentiation in the marketplace and potentially also show a preference of KOL and physicians that how they can thinking about that in the future to incorporate in the practice.

Speaker 3

And the fact that as I mentioned earlier, the fact that we do think is critical for that.

Speaker 5

Okay, got it. And then some questions regarding dosing of CLSAX at the second of Flibercept dose rather than the 3rd. Were there any, I guess, concerns or ability to tease out or inability to tease out the effect of a Flibercept rather than that of CLS ax at 12 weeks? And do you have any details on who might have been rescued rather than retreated in a less than 12 week timeframe?

Speaker 3

So I think that wasn't really discussed by most people. Certainly, no one really questioned that. And in fact, that because we have just to confirm that every patient that when the first intervention would be on redosing without drug. So I think I appreciate that there has a little confusion about the concept of intervention. So in our Phase 2b study, every first intervention will be on our drug.

Speaker 3

So they will never be using a 3% and second is that is on the sorry, Annabelle. Yes.

Speaker 5

I guess I'm curious if who like if there was any data prior to 12 weeks on who might have been rescued rather than retreated. Right. There's no rescue. I think every intervention was on.

Speaker 3

Correct. There's actually no intervention needed at all. I think that was I appreciate that. I was not quite understand that was what you're asking. When we were sharing that, there was no intervention at all at week up to week 12.

Speaker 3

And so that was absolutely no intervention, not just there's no redosing because no one misses it.

Speaker 5

Okay, got it. And I guess it's too early to talk about non inferiority margins for Phase 3. Would it be the standard that FDA typically looks for? Or could it be smaller, larger? What are your thoughts around what non inferiority is going to be in for Phase 3?

Speaker 5

Or it's going to be defined as in Phase 3?

Speaker 3

Yes. I think the draft guidelines have suggested that 4.5 letter. And I think that the agency that's still holding that is the expected in line with the royalty margin is 4.5% lesser.

Speaker 5

Okay, great. Thank you.

Speaker 2

I bet just to be clear Annabel, we have not gone we don't have our end of Phase 2 meeting until maybe sometime early in 2025. And all that, it will end up being worked out and be clear by then exactly the specifications of the Phase 3 trials.

Speaker 5

Okay, great. Yes, no, I appreciate that. Thank you.

Speaker 3

Okay.

Operator

Thank you. Our next question is coming from Andreas Arguerides with Oppenheimer. Your line is live.

Speaker 7

Thank you for taking our questions. 2 for us here. And I know it's early and you haven't had trended to Phase 2, but I think it is helpful to kind of maybe get a little bit of sense of the Phase 3 trial design and maybe to some extent you made comments in the past about sizing and kind of maybe patient criteria. So maybe, I mean, to whatever to what you can kind of provide a little bit more data after having thought about it and talked to KOLs at AAO and the like and digesting the data, how you're thinking about this and positioning essentially CLS ax in the best position versus the competition as well in the TKI space? And then just looking into 'twenty five, could you give us some additional color on the expansion of the geographic atrophy program and what we may be able to get or in terms of early data?

Speaker 7

That would be helpful. Thanks, guys.

Speaker 3

All right, Victor? Yes. I think we have previously shared that we are targeting to have the end of Phase 2 meeting with the agency early in 2025. And as we said earlier that we will finalize the data and finalize our design then. Currently, as we also shared earlier that our Phase III design will be taught similar to the atypocept high dose and farizumab design.

Speaker 3

So basically, it's a non inferiority design with flexible dosing and compared with atopocept 2 milligram on label. At the moment that our position is towards a human naive patient and whether that further detail that we will share as time goes along? In reference to geographic atrophy, I think that was the second question. We have like what we shared earlier that we have looking at several molecules, there are small molecules that can utilizing our suspension platform, which is proven and then to see whether that we can delivering those molecules. And in particularly, there's 2 areas that are of particular interest to us.

Speaker 3

1 is improving cordial perfusion and the other one is to moderate co inflammatory cell. And those two pathway are potentially important pathway from that perspective. And that is what we are working on at this stage.

Speaker 7

Okay. And then just one last follow-up. And just looking into 25 and then the Phase 2, when do you think you might start the Phase 3 trial?

Speaker 3

So at the moment that our target is to start the Phase III trial in the second half of twenty twenty five.

Speaker 7

Fantastic. Thanks for the color there and congrats on all the progress this quarter. Thanks.

Speaker 3

Thank you.

Operator

Thank you. Our next question is coming from Devanjan Achaljeet with Jones Trading. Your line is live.

Speaker 8

Hi. Thanks for taking my question. So I wanted ask if you will be sharing any additional data analysis from ODiSI? And if so, when can we expect it and what data points will you report on?

Speaker 3

Yes. So we're going to share more data in the upcoming medical conferences, including that sharing in Singapore, in the Asia Pacific Vitrual Retinal Society meeting, the APBRS meeting. We are also looking at presenting some data in fulretina in Florence in December in Europe. And at the same time that we were also presenting potentially more data in the Hawaiian Eye Meeting as well as angiogenesis meeting in the U. S.

Speaker 3

In January early February.

Speaker 8

Yes. That's very helpful. Would you be able to share what kind of data points we might expect?

Speaker 3

Yes. So I think that we are the type of data that we are sharing is to clarifying some of the area that we might have some real confusion in the top line results and also some of the analysis that additional analysis that we are putting together.

Speaker 8

Okay. Thank you so much.

Operator

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

Speaker 3

Hi, this is Eduardo on for Yi. Just to start off, if you anticipate any apprehension for the FDA that would make them not want to recommend the re dosing with the TKI within 6 months? Sorry, I missed the question. If I just because I understand the question.

Speaker 2

I think what he's asking is there any reason to believe the FDA may not look kindly on us redosing the CLSAX less than every 6 months?

Speaker 3

Oh, that means the agency. I'm sorry. The agency, yes. Yes. So on our Phase II study, we've already done that.

Speaker 3

I think that we are really more comfortable than anyone else, if anything, that because that we have data to support that we've already been able to redose on Phase II. And in addition to that, as we have previously shared that there is a small number of patients even had free dose of CLA within the 36 weeks. They are minority, but that also providing even additional safety data to supporting multiple redosing is certainly possible. So we don't have any concern from the agency perspective.

Speaker 6

Got it. Got it. And in regards to the Phase 3 program for the wet AMD asset, do you have an estimated cost for what that would be?

Speaker 3

That's something that we're still working

Speaker 2

on that. That's going as we put together the final trial design, that will come into focus. So right now, I think it's premature to talk about that, but we'll have those kind of details will certainly be available as we finalize that Phase III design and have our end of Phase II meeting. We're working very hard on that right now.

Speaker 6

Understood. Understood. And then in the geographic atrophy studies that you were doing, I was hoping to get you mentioned a few comments on the endothelial cells and why you consider it a choroidal disease versus the retinal one. Could you elaborate a little bit on that and the mechanism there?

Speaker 3

Yes. So I think that when we took about geographic atrophy because the FDA approval and the clinical endpoint is on RPE cell death. And as I said, a lot of people somewhat automatically assume that RPE cell death was the primary problem. And indeed that what we have seen a lot of data shown that there was a lot of choroidal damage occur way before RPE cell death. And in fact, the RPE cell death is almost like a terminal effect.

Speaker 3

And so we believe that treating the cause rather than just the last bit of presenting the RPE cell death would be able to providing additional efficacy. And at the moment, the current approved therapy that they probably wouldn't necessarily get to the choroid because they are quite big. And so again, from a complement point of view that you have a lot of complement activation even on the choroidal side as well. So that is actually one of the reason that would be that we think that the relatively limited efficacy for the current GAA treatment related to that, that they are only treating the RPE side. So I think that was something that we think that our unit supercoroidal and small molecule that we can get a comprehensive drug delivery to both the corrugal side as well as the retinal side and obviously the IVU cell in the retinal side.

Speaker 6

Got it. And do you have a time line for IND submission? I know you guys are kind of still in the exploratory phase in your in vivo models, but just any color there would be helpful.

Speaker 3

Yes. We think it's too early to say exactly when, but it is a little so we are working on that. And I think it's we are already moving towards a more specific candidate to move forward. So it's not just the building model, but we have candidates.

Speaker 2

Got it. Thank you.

Operator

Thank you. As we have no further questions on the lines at this time, I would like to turn it back over to Mr. Lizesky for any closing remarks.

Speaker 2

Thank you, Ali. Thank you all 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 not discontinue or disconnect the call. Thanks again.

Operator

Thank you, sir. Ladies and gentlemen, this concludes today's call and you may disconnect your lines at this time. We thank you for your participation.

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