Clearside Biomedical Q4 2023 Earnings Call Transcript

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March 12, 2024

There are 7 speakers on the call.

Operator

and welcome to the Clearside Biomedical Q4 2023 Financial Results and Corporate Update Call. At this time, all participants are in a listen only mode. 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 Clearside Investor Relations.

Operator

Jenny, 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 will 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 Degnan, 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. The tremendous progress that we accomplished in 2023 has propelled us into 2024 and positioned us for an important year. Last year, we advanced our CLS ax clinical development program in wet AMD meeting our targeted timeline and budget. In February 2023, we reported positive results from our OASIS extension study that supported initiation of our Phase 2b clinical trial ODiSI. Later that year, we initiated and completed enrollment in ODiSI, again, on our targeted timeline and budget.

Speaker 2

This rapid enrollment was primarily a result of significant enthusiasm from physicians because of the compelling aspects and potential clinical impact of the program. During 2023, each of our licensing partners reported excellent progress in their clinical development programs. Collectively, there are now 4 assets in clinical development with suprachoroidal delivery for 5 different indications. In addition, we were pleased to announce a new collaboration with BioCryst Pharmaceuticals to utilize our SCS microinjector to deliver their proprietary compound of orlistat to treat diabetic macular edema. This adds both another asset and another indication to our collaboration pipeline.

Speaker 2

As we look ahead, 2024 will be a critical year for Clearside as we execute on 2 key areas of focus. First, the primary data readout for our ODiSI Phase 2b trial will occur in Q3 this year. 2nd, we and our partners expect to continue demonstrating the benefits of drug delivery into the suprachoroidal space with our SCS microinjector device technology. I'll start with ODiSI, our randomized double masked active controlled clinical trial in participants with wet AMD. We are utilizing our patented suprachoroidal injection technology to deliver CLS AX, a small molecule suspension of the Tyrosine Kinase inhibitor axitinib.

Speaker 2

Our proven delivery method combined with the differentiated mechanism of action and high potency of axitinib offers the potential for CLS AX to be a long term maintenance therapy for wet AMD patients. In ODiSI, we are looking to replicate the excellent safety profile, stable vision and reduced frequency of injections over 6 months that we observed in our OASIS extension study. The efficacy and safety results from ODiSI will support the design of our pivotal Phase III development program or CLS A X. With our focus on extending treatment duration utilizing suprachoroidal delivery of small molecules, I think it's relevant to highlight recent positive real world outcomes from XIPERE usage. This analysis was presented by Doctor.

Speaker 2

Michael Singer at the Maculus Society meeting last month. In his presentation, Doctor. Singer evaluated nearly 800 eyes utilizing the American Academy of Ophthalmology IRIS Registry and open source claims data. This real world data showed excellent durability where over 75% of eyes did not require retreatment for 6 months after just one dose of XIPERE. This durability is consistent with the XIPERE preclinical pharmacokinetic data and the data from our Phase 3 PEACHE3 clinical trial.

Speaker 2

Importantly, we believe this analysis validates Clearside's approach to extended small molecule drug release and reduce treatment burden for patients by delivering drug directly to the suprachoroidal space with our SCS microinjector. As we look back over the last several years, I'm thrilled with the progress we have seen leading to the adoption and acceptance of suprachoroidal delivery. As the original pioneers in the space, we are proud that ClearSign's The suprachoroidal injection procedure now has a permanent Category 1 CPT code available to help facilitate better access, adoption and insurance coverage. This CPT code is a major milestone for the procedure itself. Our proprietary SCS microinjector continues to enable reliable, simple in office, nonsurgical drug delivery as shown with its use in multiple ongoing clinical trials and with our commercially approved product XIPERE.

Speaker 2

Most importantly, our SCS microinjector has demonstrated a positive safety profile with over 2,000 injections performed to date. We believe this strong safety profile is due in part to the fact that drug delivery by SCS injection is compartmentalized in the suprachoroidal space, keeping it away from non disease tissues and entirely behind the visual field. We do not put drug into the vitreous and we do not place physical inserts or gels in the vitreous that rely on complete bioerosion over time. Since the suprachoroidal injection allows for drug to flow behind the retina to the back of the eye, this limits the risk of vitreous floaters, vitreous or anterior chamber toxicity or possibly impairing or interfering with the patient's vision. To date, we've established multiple partnerships with leading biopharma companies who have elected to utilize our SCS microinjector over other delivery methods.

Speaker 2

We believe that suprachoroidal delivery may become the delivery method of choice for gene therapy in ophthalmology. Utilizing our SCS microinjector, our partner REGENXBIO has demonstrated in their wet AMD clinical trial that there were 0 cases of inflammation observed in patients who received just 7 weeks of prophylactic topical steroids. In contrast, recently reported data from other gene therapies in development using intravitreal delivery have shown inflammation despite prophylactic steroid treatments of over 20 weeks. These steroid regimens involved injections, oral medications and in some cases extended release steroid inserts. So we're excited about the progress REGENXBIO has made in their 2 programs utilizing our SCS microinjector.

Speaker 2

In diabetic retinopathy, REGENXBIO presented data last November from their ALTITUDE trial showing that RGX-three fourteen prevented disease progression in non proliferative Doctor patients at 1 year. In wet AMD, they presented data in January 2024 from their AVA trial showing that patients treated with 314 continued to demonstrate stable vision and retinal anatomy with a meaningful reduction in treatment burden at 6 months. REGENXBIO expects to share new program and data updates for ALTITUDE trial in Q2 of this year and for the ABA trial in mid-twenty 24. ORA Biosciences chose to exclusively use suprachoroidal delivery over intravitreal injection for their Phase 3 COMPASS trial, which is evaluating the safety and efficacy of Belsar for first line treatment in adults of early stage choroidal melanoma. The design of this trial is covered under a special protocol assessment written agreement with the FDA.

Speaker 2

Oura is currently enrolling participants in their COMPASS trial. We're also looking forward to continued progress by our Asia Pacific partner Arctic Vision, who's developing XIPERE, which they have branded as Arcadis. This year will include completion of their Phase 3 trial in China in uveitic macular edema and data from their Phase 1 DME trial. In addition, they plan to announce the results of their new drug application submission in Australia and additional NDA submissions in other Asia Pacific territories. In our most recent partnership development, we expanded the use of the SCS microinjector with a new small molecule.

Speaker 2

Last November, we entered into an exclusive worldwide license with BioCryst Pharmaceuticals to use our SCS microinjector for the delivery of their proprietary plasma chelocrine inhibitor, vorlistat for DME. This partnership provided us with an upfront license fee of $5,000,000 Additionally, the agreement includes 77,500,000 dollars in potential clinical, regulatory and post approval sales based milestone payments and tiered mid single digit royalties on of net product sales. We are working closely with the BioCryst team as we collaboratively conduct formulation and non clinical work this year with a target of BioCryst initiating clinical work in 2025. We are very encouraged by the continued progress in all 5 suprachoroidal development collaboration programs. I'll now turn over the call to our CFO, Charlie Deignan to provide financial update.

Speaker 2

Charlie?

Speaker 3

Thank you, George, and good afternoon, everyone. Our financial results for the Q4 year end 2023 were published earlier in our press release and are available on our website. Therefore, I will only provide a summary of our financial status on today's call. As of December 31, 2023, our cash and cash equivalents totaled approximately $29,000,000 Subsequent to the end of Q4, we completed a registered direct offering of stock and warrants, which generated $15,000,000 in gross proceeds. With this combined cash balance, we believe we will have sufficient resources to fund our planned operations into the Q3 of 2025.

Speaker 3

This takes us through the anticipated data readout for the Odysee trial this year and supports our planning for CLS X Phase 3 program. In terms of investor outreach, we will be participating in the upcoming Needham Healthcare Conference and Citizen JMP Securities Life Science Conference. We look forward to keeping the investment community updated on our progress. I will now turn the call back over to George for his closing remarks.

Speaker 2

Thanks, Charlie. As I highlighted, we have 2 key areas of focus this year. We expect to complete our ODiSI Phase 2b clinical trial in wet AMD and report top line data in the Q3 of this year. We believe that the data readout may demonstrate that CLS ax could be a valuable addition to the treatment regimen for patients with wet AMD. In addition, we'll continue our leadership in suprachoroidal space as we and our partners generate additional data demonstrating the benefits of drug delivery with our SCS microinjector.

Speaker 2

We remain steadfastly committed to developing new treatments and collaborating with leading healthcare companies to improve vision for individuals living with sight threatening diseases. I would now like to ask the operator to open the call for questions.

Operator

Thank you. At this time, we'll be conducting a question and answer And the first question today is coming from Annabel Samimy from Stifel. Annabel, your line is live.

Speaker 4

Hi, thanks for taking my question. Congratulations on the RAVI enrollment. That's great. I just was hoping maybe you can clarify something for me. I guess it's a little bit more bigger picture, but I'm a little confused as to how each of these Phase 2 trials were designed, not just yours, but just in general, the TKI inhibitors, obviously, yours has a loading dose for 2 EYLEA loading doses, then you treat EyePointe's 3, Ocular Therapeutics is now doing a superiority trial.

Speaker 4

And I guess, one of the other things you noted was that yours is not powered for non inferiority or statistical significance and just it's just really to identify duration. So I guess the question is, how are we supposed to read all these data and really understand how it fits into the evolving landscape for TKIs? And at what point do you think there might be some harmonization of all these trials, not just for our clarification, but for physicians who need to choose between these different treatments, right, as a maintenance therapy. So I was hoping maybe you can sort of discuss this a little bit more big picture.

Speaker 2

Well, it's an interesting point that you raise and there does need to be I mean, I'm not sure there needs to be, but perhaps there will be some harmonization over time. We're in the process right now, in about our Phase 2 trial is 3 loading doses. Just to be clear, I think I heard you say something different. Right. Yes, 3 loading doses It's

Speaker 4

3 loading doses Before your injection, yes, sorry.

Speaker 2

Yes. We are in our injection CLSAX is concurrent with the 2nd loading dose and then there's a 3rd loading dose a month later. Yes, Ocular really kind of throws us for a loop a little bit because they're just basically doing one dose of each theirs and of Libercev and then waiting to see who needs to be retreated. And I understand I'm learning more and more about why they've done it that way. But we're in the process now to try to harmonize things.

Speaker 2

We're in the process now. We'll begin it over the next couple of months to discuss what our pivotal program would look like. And so you're right about what we're looking at in Odysee is we want to measure duration. Where do we think the best dosing regimen would be to go into Phase 3? But that doesn't really get to your question, which is how do we harmonize how these TKIs are being used, because each one of us is using some offliber or some anti VEGF A, but slightly differently.

Speaker 2

We're timing our TKI administration slightly differently. And it looks like eye point is going for non inferiority, ocular is clearly going for superiority. Those trials are very different in design. And when we disclose our Phase III, we'll see if we match up with 1 or the other or we come up with a 3rd design. So I can appreciate where you're having a bit of a problem.

Speaker 2

But as we learn more about how the TKIs work and where they fit in, I think you'll begin to see this come together. And I don't think that necessarily the loading doses are going to be that big a deal over time to harmonize. But the thing is with ocular, they're going after treatment naive patients. And so I'm a little bit puzzled why they didn't do a bigger, more on label loading dose with aflibercept. But I think I understand why they're trying to do it this way and we'll see what happens.

Speaker 2

But I can't guarantee we're going to harmonize, but I think over time what you will see between the 3 different studies, I think you will see that the Tyrosine Kinase inhibitors as a group are going to be a very important addition to the treatment alternatives that physicians have for their wet AMD patients in particular. I think you're going to see that. I don't think we're I think that's going to be very clear that we have a place in that treatment regimen. And we have to wait for the data to come out. But I think if you talk to the other two companies, I think they would believe the same thing.

Speaker 2

And most of the physicians that we talk to believe that as well. So we have to go out and we have to demonstrate it. We may all demonstrate it in a slightly different way. But I think you're going to see that the Tyrosine Kinase inhibitors have duration, have effect. Mechanistically, they're very competitive excuse me, not competitive, but very they conform very nicely with anti VEGF A because they don't compete and they kind of help and supplement the anti VEGF A mechanism of action by blocking receptors instead of just binding with circulating VEGF.

Speaker 2

So there's a theoretical reason why they should work. I think we've all seen data in our clinical trials that indicate that they have extended duration. And I think as we go through all of our additional clinical trials, the place for the TKIs is going to be very clear.

Speaker 4

Okay, got it. And if I can just add one more question to that as you discuss this with more of the retinal community, does it seem that the TKIs are kind of landing in this maintenance treatment sort of domain? Or is ocular therapeutics essentially going to blow that up if they're looking at treatment naive? What's their mindset as far as where anti VEGF serves and where TKIs will be best served?

Speaker 2

Where we've studied this and where everybody studied this and maybe ocular will change things. Again, they're going treatment naive. So we'll see how that works. In particular, we'll see how it works early on in their therapy in the 1st couple of months after they put their insert in. But I think most people right now would look at us and the way we're most of us have been studying this is more maintenance therapy than first line monotherapy.

Speaker 2

But that maybe ocular will show that where they're doing their trial, I don't know. But I can tell you that I think most people look at this as extended duration maintenance therapy is where we go and that the 2 drugs, mechanistically, the anti VEGF A and the TKI should work very nicely. They should complement one another. I always draw the comparison, I believe, to cancer chemotherapy or even antidepressant therapy is you're trying to affect an outcome, better vision, improved or treating cancer, better vision, treating people who are depressed and making not depressed. And so physicians have multiple approaches in cancer chemotherapy and anti depressant.

Speaker 2

They haven't really had that. They've had multiple different approaches to the same mechanism of action from the old days of macugen going to Lucentis, going to EYLEA and even VAVISMO. So they're principally going after anti VEGF A approach. That allows for the overexpression of C and E that doesn't get taken care of. That doesn't account for binding all of circulating VEGF A that's circulating.

Speaker 2

So I think that the 2 drugs could work very nicely together, finding circulating VEGFAA, but blocking A, C and E if there's overexpression at the receptor level. So I see them as I think physicians should look at this and I think companies should look at this as a real opportunity to add complementary therapy to wet AMD rather than seeing it one replacing the other necessarily. And over time as it gains usage, we'll see what happens. But I think right from the start, I think it's a very complementary approach and I think patients will be the main beneficiary of this complementary approach.

Speaker 4

Okay, great. Thank you.

Speaker 2

Sure.

Operator

Thank you. The next question is coming from John Walden from JMP. John, your line is live.

Speaker 2

Hey, John.

Speaker 5

Hi, it's Catherine on for John. I just had a few questions on the ODiSI trial and just how your population compares to other mid stage wet AMD studies? I know you talked about Ocular, just generally some color on that. And then another one just on how you think about safety of suprachoroidal administration approach that clearsizing and how that compares to other wet AMD candidates?

Speaker 2

Okay. In ODiSI, we made a very determined attempt to enroll patients who had been diagnosed with wet AMD, had had some treatment experience, so they were more or less likely treatment experienced. So they weren't patients that were naive. And importantly, we've tried to make sure that they either had the presence of intraretinal fluid or subretinal fluid or both or leakage, that was documented on fluorescein angiography. So what we did was and I don't know that other any of the other TKI companies have done this, but we made a very concerted effort to make sure trial.

Speaker 2

We did not want to enroll and tried very hard not to enroll patients who had been diagnosed, but were dry. And that's certainly been the case to some degree in previous trials by other companies. And because the dry patient can get in there and artificially inflate your positive results because you can see a dry patient and they may not require any real intervention for many months. So we wanted to make sure that the patients that are in our trial had fluid, required therapy, had responded to some degree in the past, but weren't like our OASIS patients that were our KOLs would call anti VEGFAA addicts. They were responsive, but they were super they needed a lot more anti VEGF intervention than you might expect.

Speaker 2

So they were getting their Lucentis or their EYLEAs far more frequently than you would expect. So we wanted patients that had some response, had some experience there, but weren't overly dependent on a lot of anti VEGFA. And when enrolled in the trial, they had the presence documented presence of fluid, documented by independent reading center. So that's one thing we've tried to do. I don't know that the other companies have been that careful about that enrollment criteria, but that was very important to us and we believe that's the right thing for us to do.

Speaker 2

You had a second question on safety. That was on safety. We've had very good luck with the suprachoroidal injection from a safety perspective. We've looked at it over time, compare it to intravitreal injections in terms of complications in patients and we found that they're essentially the same. We've had no particular safety issues that I'm aware of in the OASIS, our Phase IIIa trial.

Speaker 2

From an injection procedure point of view, our safety results in OASIS were very, very good. We had no inflammation, no dose limiting toxicities. But if you just look at the injection procedure itself, we had no issues there. And so the safety from suprachoroidal injection has been very good. With proper training, the physicians do it well.

Speaker 2

It's not really a big issue for them. The prep time for patients is basically the same as it would be for an intravitreal injection and we don't see anything. And there was no demonstrable difference in safety between suprachoroidal and intravitreal when we've gone back and looked at quite a number of clinical trials and compare them both. So we feel very good about the safety of the procedure itself. We feel very good about the safety of the TKI axitinib itself.

Speaker 2

And so that's hopefully that's an answer to your question.

Speaker 5

Thank you so much. That's really helpful.

Speaker 2

Yes, sure. No problem.

Operator

Thank you. And the next question is coming from Serge Belanger from Needham and Company. Serge, your line is live.

Speaker 6

Hi, everyone. This is John on for Serge and thank you for taking our questions. I'd like to hit on a couple of different points. First, going back to the OASIS trial, you guys had mentioned a slightly higher degree of the need for off protocol or early rescues for patients at the 1 milligram dose. Knowing this going into ODYSSEY, is there any degree to which you guys have higher expectations for potential patient dropouts?

Speaker 6

And if you have any kind of color at least at this point into whether or not your expectations are being reflected where the trial stands now? And then kind of moving past Odysee and wet AMD, are you guys starting to explore any additional indications for the use of CLSAX, whether it be DME or things like diabetic retinopathy? Thanks.

Speaker 2

Well, let me answer the last one first. Right now, we don't have any plans to look into DME or Doctor for CLS ax. So we're focusing entirely our efforts on wet AMD. If I go back to the early off protocol rescues that were seen in OASIS, when we looked at that, there were a couple of things. First of all, it was an open label trial, so there was no blinding involved.

Speaker 2

And it was the first time that people had injected Tyrosine Kinase inhibitor into the suprachoroidal space in these wet AMD patients. So there was a little bit of nervousness, I think, and it was kind of site specific when we really looked at it. There was no good reason why 1 milligram should have had these off protocol or early rescues and the 0.5 milligram didn't. And I mean, there's no logical reason for that. But when we looked in the cohort 4, that 1 milligram dose, it seemed to be more of a site specific issue.

Speaker 2

And I think there was a little nervousness about injecting and not having any experience with the Tyrosine Kinase inhibitors and kind of jumping the gun on some early rescues. After that first couple of early rescues in Cohort 4 with the 1 milligram dose, Basically, in Cohorts 34, they had about the same they had a couple of off protocol rescues. But the majority were in the 1st month in that Cohort 4. And I think that was best we can tell was kind of a site specific issue for a particular investigator. So we've designed our ODiSI trial to not we don't you talk about expectations.

Speaker 2

Our expectation is that we should not see a very limited number of off protocol, which we worked very hard with our sites and through our training and our materials and our on-site people to make sure that they're very well educated in terms of the retreatment criteria. In addition, this ODiSI trial has 3 loading doses of afliberseb as I was talking about with Annabel earlier. And we think that that and dosing on the second loading dose we think will eliminate any nervousness about a very early rescue. So we really don't have an expectation of early rescues here. We have an expectation that the patients are going to do quite well on this regimen and we're going to see extended duration of treatment.

Speaker 2

And just to be very clear, I have no insight into that. I'm totally blinded on the data, so I have no idea whether our expectations are being met or not. So, those are my expectations. I don't know whether they're being met, but we'll find out later this year.

Speaker 6

Great. Yes, thanks for the clarification on that. Sure. If I could just follow-up real quickly. Do you guys have any color on how the Experian is performing so far regarding volume and sales?

Speaker 2

Is Ipe here?

Speaker 6

Yes.

Speaker 2

Charlie, I'll let you handle that one if you want.

Speaker 3

Yes. So again, as we talked previously, until Bausch announced the sales, we can't get ahead of them. If you remember the first $45,000,000 in sales from XIPERE is excluded from royalties. So until they get past that $45,000,000 we don't have any revenues to report yet.

Speaker 6

Great. Thank you.

Operator

Thank you. And at this time, I would now like to turn the call back to ClearSite's CEO, George Luzewski for

Speaker 3

closing remarks.

Operator

And at this time, I would now like to hand the call back to George Luzewski for closing remarks.

Speaker 3

Yes. George, you may be having a phone issue. You got it?

Speaker 2

Yes. I'm here. Sorry, I was on mute for a minute. Okay. Well, I want to thank everybody for joining us on the call this afternoon.

Speaker 2

We certainly appreciate your continued interest in Clearside, and we look forward to updating you on our progress. Operator, you may now discontinue.

Operator

Thank you. This does conclude today's conference. You may disconnect your lines at this time and have a wonderful day. Thank you for your participation.

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Key Takeaways

  • Clearside completed enrollment in its ODiSI Phase 2b trial of CLS-AX on budget and schedule, with primary data expected in Q3 2024 to guide pivotal Phase III design.
  • The company’s suprachoroidal delivery platform now supports four partnered assets in clinical development across five indications, including a new BioCryst collaboration to deliver orlistat for diabetic macular edema.
  • Real-world data for XIPERE showed over 75% of eyes required no retreatment for six months after a single dose, underscoring the durability of suprachoroidal small-molecule delivery.
  • Clearside’s SCS microinjector procedure achieved a permanent Category 1 CPT code and >2,000 injections to date, demonstrating a strong safety profile and facilitating adoption and reimbursement.
  • With approximately $29 million in cash at year-end and $15 million gross from a subsequent stock offering, Clearside expects a financial runway into Q3 2025, including the ODiSI readout and planned Phase III program.
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Earnings Conference Call
Clearside Biomedical Q4 2023
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