Clearside Biomedical Inc (CLSD) 2019 Q1 法說會逐字稿

Good morning, ladies and gentlemen, and welcome to the Q1 2019 Clearside Biomedical, Inc. Earnings Conference Call. (Operator Instructions) As a reminder, this conference call is being recorded.

I would now like to turn the conference over to your host, Ms. Jenny Kobin, Clearside Investor Relations.

Good morning, 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 most recent annual report on Form 10-K for the year ended December 31, 2018, filed with the SEC on March 15, 2019, and our other SEC filings, all 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 any subsequent date. While we may elect to update these forward-looking statements at some future point, we specifically disclaim any obligation to do so even if our views change.

On today's call, George Lasezkay, our interim Chief Executive Officer and member of the Board of Directors, will provide strategic updates. Dr. Tom Ciulla, our Chief Medical Officer, will highlight our recently presented data and current development plans. Brion Raymond, our Chief Commercial Officer, will review our plans for XIPERE. And Charlie Deignan, our Chief Financial Officer, will conclude the formal remarks with the financial summary. We will then open the call for your questions.

I would now like to turn the call over to George.

Thank you, Jenny. Good morning, everyone, and thank you for joining us on the call today.

I'm pleased to join you today at this important stage in the evolution of Clearside. I joined the Board of Directors in 2017 with a very firm belief that our proprietary injection platform targeting the suprachoroidal space, or SCS, can have a profound impact on the treatment of patients suffering from vision-threatening eye diseases. Having worked with multiple biotechnology and pharmaceutical companies, I'm confident that Clearside is well positioned to bring our first product, XIPERE, to market if approved.

Our new drug application for XIPERE, a suprachoroidal injection, is currently under review by the FDA for the treatment of macular edema associated with uveitis. This is a strategically focused indication for which there are currently no approved options. We can deploy a targeted approach to educating uveitis and retinal specialists on the potential benefits of XIPERE and our SCS injection platform.

The PDUFA date for XIPERE is October 19, 2019. We are also planning to meet with European regulatory authorities to better understand the most reasonable regulatory path forward for XIPERE in the EU.

In addition, we are looking to prudently build our ophthalmic product pipeline. We are exploring multiple ways to accomplish this, including expanding our internal discovery and research efforts as well as seeking strategic collaborations to leverage our platform into other ophthalmic indications.

Utilizing our proprietary SCS injection platform to deliver gene therapy for inherited retinal disorders is increasingly becoming a research priority for us as the science of this area continues to evolve and show some promise. Recent scientific data presentations have shown that our SCS injection technology may be a viable nonsurgical delivery mechanism for both viral and nonviral approaches to gene therapy. And our research team will continue to focus its efforts on this space.

I will now turn the call over to our team to review the progress this quarter. First will be our Chief Medical Officer, Tom Ciulla, who will highlight the applicability of our platform and recently presented data. Tom?

Thank you very much, George. Since we recently returned from the Association for Research in Vision and Ophthalmology, or ARVO, Conference and the adjunct events there, I wanted to talk about our activities at this key ophthalmology event. ARVO was an extremely busy and productive meeting for Clearside. We had a medical and peers group at the conference in order to engage and educate the uveitis and retinal specialists in attendance about the broad applicability of our SCS injection platform and our planned launch of XIPERE if approved. Overall, our platform has been well received by the medical community, and the feedback from physicians was quite positive. In addition to the booth, we had several presentations and posters at the medical meetings on the utilization of our platform in both uveitis and gene therapy. Multiple posters were presented on utilizing a suprachoroidal approach to deliver gene therapies in nonclinical models.

In totality, the presentations at the conference suggest that suprachoroidal administration has the potential to offer targeted deliveries of ocular gene therapies without the risks inherent in vitrectomy and subretinal surgery. This is extremely important because if we can deliver gene therapy via our SCS injection platform, patients could be treated by a retinal specialist in an office setting instead of undergoing surgery in an operating room. This would be a much more patient-friendly treatment option and makes gene therapy an option for all retinal specialists, not just surgeons.

At the Uveitis Society Spring Meeting, Dr. Eric Suhler reinforced our work with XIPERE for the treatment of macular edema and noninfectious uveitis. His presentation pooled the results of our 3 clinical trials, that is PEACHTREE, DOGWOOD and AZALEA, and showed that the use of XIPERE resulted in a rapid and durable improvement in vision and reduction in retinal thickness in a majority of patients following a single suprachoroidal injection. When administered a second injection of XIPERE at week 12, a majority of patients continued to show macular edema resolution through week 24 and did not require additional treatment.

In addition, Dr. Christopher Henry's ARVO poster modeled the 198 patients treated in PEACHTREE and AZALEA. In the model, the 198 patients averaged a 12-letter improvement in best corrected visual acuity and a 157-micron decrease in central subfield thickness after treatment with XIPERE.

These presentations continue to demonstrate the effectiveness of XIPERE to treat patients suffering from macular edema secondary to uveitis.

Moving forward. Our discovery and clinical teams continue to work to expand the potential indications and uses of our SCS platform. While we seek to optimize our procedure for gene therapy delivery, we also continue to explore small molecules that may achieve therapeutic synergies within the SCS platform.

As George mentioned, for XIPERE, we are planning to meet with regulatory authorities in Europe later this year to discuss a marketing authorization application for uveitic macular edema. And as we mentioned on our last call, we believe XIPERE can provide a benefit to patients with diabetic macular edema or DME. We are currently evaluating strategies in preparation for discussions with the FDA regarding a path forward to advance clinical development of XIPERE as a monotherapy into the therapy rotation with anti-VEGF for DME.

To review, the growing understanding and enthusiasm from the physician community is encouraging as we look forward to bringing our first potential product to market and look to expand our platform to other indications.

I will now turn the call over to Brion Raymond, our Chief Commercial Officer, to provide an update on our plans for XIPERE.

Thank you, Tom. Uveitic macular edema is an attractive opportunity for Clearside for 2 key reasons. First, this is an area of high unmet medical need as it is the leading cause of vision loss for patients with uveitis, and nearly 50% of these patients have persistent edema despite receiving current treatments for the uveitis. XIPERE [has the] potential to provide a new effective treatment option for these patients.

Second, these patients are treated by a concentrated base of uveitis and retinal specialists whom we believe we can readily and efficiently access. In preparation for the potential launch of XIPERE in the first quarter of next year, we continue to make tremendous progress executing against our launch strategy, and we will be prepared to effectively educate the health care community should we receive approval. We are confident that we will be able to reach this physician base and to provide the level of service expected by the uveitis and retinal communities in a prudent and efficient manner.

I would now like to discuss some of our plans and highlight the progress we have made thus far. Let's start with the physician audience. In order to optimize the services we will offer, it is important for us to truly know and understand the retinal and uveitis specialists, particularly whom we believe will be the earliest adopters of XIPERE. We continue to gather direct input and feedback from these physicians and their practice managers on how we can best serve them and their patients. This feedback is crucial as we create the educational materials and programs and the reimbursement services required to support adoption of our product.

For instance, training new physicians on the suprachoroidal injection procedure is one of our top priorities. We're developing a variety of training options, including prep materials, video demonstrations and hands-on sessions, in order to provide the right level of support for each individual physician's needs. As I discussed last quarter, XIPERE will be administered by physicians in their office and will be a buy-and-bill therapeutic. This means the physician practice will purchase the drug and then bill insurers. To ensure this process goes smoothly for both physician offices and patients, we're gathering input from the practice managers who currently oversee this process for other therapies, and we are evaluating reimbursement services solutions to support patient access.

Importantly, we are also gathering input and feedback from public and private payers to ensure any patient who qualifies for a treatment will have access to XIPERE. All of this is being done to ensure we deploy the programs and services in the most well-equipped field force to support physicians, their staff and patients.

We have made extensive progress across multiple fronts and will continue our engagement with all of the stakeholders I discussed to ensure we are prepared for the successful launch of XIPERE should we receive FDA approval.

I look forward to keeping you updated on our commercialization efforts and would now like to turn the call over to our Chief Financial Officer, Charlie Deignan, to review our financial results.

Thank you, Brion.

In the first quarter of 2019, our research and development expenses were $11 million compared to $13.4 million in the year ago quarter. The $2.4 million decrease was primarily related to lower clinical development costs for XIPERE.

General and administrative expenses for the first quarter of 2019 were $4.4 million compared to $3.1 million in the year ago quarter. The $1.3 million increase primarily reflected higher employee-related costs and activities associated with our XIPERE commercialization efforts.

The net loss for the first quarter of 2019 was $15.4 million or $0.45 per share compared to $16.6 million or $0.62 per share in the year ago quarter.

As of March 31, 2019, our cash, cash equivalents and short-term investments totaled $34.9 million. This includes $6.6 million of net proceeds from the sale of common stock under our at-the-market facility and $5.6 million of which we reported in March earlier this year. As you will -- can see, we have reduced our R&D expenses by shutting down our Phase III clinical trials, and we are allocating funds to our near-term priorities, including the launch of XIPERE.

Based on our current plans and our anticipated available funding facilities, we expect to have sufficient resources to fund our planned operations into the first quarter of 2020. This includes the preparation for a potential commercial launch of XIPERE and our ongoing research and development activities, including nonclinical work in gene therapy.

In summary, we are carefully managing our resources to deliver on the compelling opportunities we have in front of us. And we continue to be proactive in our outreach to the investment community and plan to conduct presentations and investor meetings at several upcoming events, including the annual UBS and Wedbush health care conferences.

With that, I'll turn the call back over to George for his closing remarks. George?

Thank you, Charlie. As Tom and Brion discussed, we continue to receive positive feedback from the physician community about our SCS injection platform and our potential commercial launch of XIPERE. FDA approval of XIPERE would be a major milestone for the company as it validates potential of our nonsurgical SCS platform to be useful in other vision-threatening eye diseases. The advancements we have made to date, both in discovery and in the clinic, create the opportunity to collaborate with other companies on our technology and leverage the use of our platform for other ophthalmic indications.

I would like to express my appreciation to all our stakeholders who have remained committed to Clearside in our pursuit of transformative, elegant and precise solutions to restore and preserve vision for patients. I've been working closely with our experienced and committed team, and I am confident in our abilities to achieve our first drug approval with XIPERE and the long-term success of our suprachoroidal space injection platform.

And now I'd like to ask the operator to open the call for questions.

(Operator Instructions) Your first question comes from Liana Moussatos with Wedbush Securities.

With the October 19 PDUFA for XIPERE, do you expect an AdCom in Q3? And my second question is, what's the status of using SCS microinjection for gene therapy and small molecules? And for gene therapy, which inherited retinal diseases are you going to go after first?

I'll take that question. This is Tom Ciulla. So first of all, with regards to the AdCom, we don't currently expect to have an Advisory Committee meeting. It's our understanding that we would have been notified by the FDA regarding that type of request at the time of the NDA acceptance. And I think your second question was surrounding a first indication for gene therapy. Is that correct?

Yes. And what's the status of gene therapy in general using your technique as well as small molecules? And then yes, which indication you're going to go after first?

So to date, we've only gone preclinical testing, and that looks promising. It looks like -- it suggests that there's potential for this technique. What's interesting, though, is that there is already a public study suggesting that suprachoroidal administration of gene therapy has potential. And at ARVO, we had our own poster of our own treatment clinical work. We had a poster with an academic collaborator, again, another preclinical project. And then there was an independent poster presented by an academician in collaboration with another company suggesting that suprachoroidal administration of viral vector gene therapy has potential. So those suggest a path forward with this administration technique.

And then in terms of your -- the second part of your question, indications. What I find very interesting here is that I think -- I don't have a crystal ball, and it would be cracked if I did have one. But I think one size won't fit all. I think there'll be different ways to administer gene therapy depending on the indication. So it's just like everything else in medicine, but I think that there will be a role for suprachoroidal gene therapy depending on the disease and depending on the vector. We've had the first gene therapy approved, of course, with subretinal surgery in ultrarare disease at Spark Therapeutics where I was before this. And there are other ways to administer gene therapy. Right now, we're not really disclosing our first planned indication, but we're currently planning.

Your next question comes from Anupam Rama with JPMorgan.

This is Tessa on for Anupam this morning. Maybe the first one, Tom, how are you thinking about XIPERE in the monotherapy setting in DME? Do you continue to anticipate those FDA conversations to occur in the second half of this year to solidify the plan forward? And is the focus really on DME? And are there any other discussions? And are these discussions really the gating factor to moving the program forward in monotherapy?

And then maybe my second one for Brion on the pre-commercial side. I think you guys have said you're expecting about 20 to 30 reps. I was just wondering if that's kind of continuing to be what you anticipate or if there has been any changes here.

Okay. Brion, can you take that?

Sure. I'll take the commercial question first. We've made quite a bit of progress on our targeting efforts to identify the top physician targets in our retina and uveitis communities. And we now believe that we can reach this target market with less than 20 reps based on where we expect the usage to really pick up in the early days. And then over long term, we'll revisit that to see if we are ready to expand. But at this point, we think we can monitor with even a more efficient sales force than we had previously been considering.

I'll turn it over the Tom.

Yes. So with regard to DME, we're no longer pursuing a combination therapy strategy, but we believe that there's potential for monotherapy just as there are other monotherapy clinical steroids that are approved for this indication. We want to discuss some questions with the FDA, and we're preparing materials to schedule a meeting. The timing of the FDA meeting is not set, but we hope to meet with them in the second half of the year. We've consulted with several of our scientific and medical advisers to evaluate a path forward in our DME program. And based on their advice, as I mentioned, we decided not to continue any combination therapy clinical development. And they agreed that there is potentially a path forward as monotherapy to get XIPERE monotherapy into the rotation with anti-VEGF therapy for DME patients because anti-VEGF, as you know, doesn't work in all patients.

(Operator Instructions) And your next question comes from Boris Peaker with Cowen.

I just wanted to generally ask, what can we learn from OZURDEX regarding this market? And is OZURDEX a good proxy or not a good proxy? How should we think about that?

Brion, please.

Yes. So let's say there's a couple of differences that we have when we look at indication statements. OZURDEX is currently indicated for posterior uveitis. Our trial design and our expectation for indication is that we will have an indication for all anatomical occasions of uveitis: anterior, intermediate, pan and posterior; and for macular edema. Additionally, we were the first drug to demonstrate visual improvements in our trials, in our clinical trials as an endpoint.

And then finally, I think we have a compelling overall clinical profile that physicians, as Tom mentioned, are already expressing interest in. So while we are going after the uveitis community, I think the indications and the market size, and as well as the frequency of injections will be quite different for XIPERE.

I actually just wanted to add, one comment here is that physicians are eager to use our platform because they realize that it may be used in many other indications going forward. So they want to get experienced with it, so they're eager to employ it whenever indicated.

And can you just comment then, just an extension of the answer, how big is the intermediate and posterior -- anterior market relative to the posterior uveitis market?

So posterior uveitis represents about 1/3 of the total market.

I am showing no further questions at this time. I would now like to turn the conference back to Dr. Lasezkay.

Thank you once again for joining us on the call today. We appreciate your continued interest in Clearside, and we look forward to updating you on our progress in the future.

Operator, you can disconnect us now.

Ladies and gentlemen, this concludes today's conference. Thank you for your participation, and have a wonderful day. You may all disconnect.