Clearside Biomedical Inc (CLSD) 2021 Q3 法說會逐字稿

Good day. Thank you for standing by, and welcome to the Clearside Biomedical Q3 2021 Financial Results and Corporate Update Call. (Operator Instructions)

I would now like to hand the conference over to your speaker today, Ms. Jenny Kobin, Clearside Investor Relations. The floor is yours.

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-K for the year ended December 31, 2020, 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. 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 Lasezkay, our Chief Executive Officer; Dr. Thomas Ciulla, our Chief Medical Officer and Chief Development 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.

Thank you, Jenny. It's our pleasure to join you on the call today to discuss Clearside's accomplishments in the last 2 months. Simply put, we've achieved an impressive number of firsts. With the FDA's recent approval, XIPERE is the first commercial product developed by Clearside and the first product approved for injection into the suprachoroidal space. In addition to being an exciting accomplishment for Clearside, we believe this approval represents a potential game changer as we have developed a truly innovative therapeutic approach in the field of retinal diseases. Our suprachoroidal injection platform is a novel, patented approach, providing unparalleled access to the back of the eye that precisely administers drug at the site of disease. With our proprietary SCS Microinjector, we have developed a clinically tested, nonsurgical, repeatable microinjection platform designed to unlock the potential clinical benefits of suprachoroidal administration.

Further, XIPERE is now the first therapy approved for patients suffering from macular edema associated with uveitis. And I'm proud of the fact that we are able to make a difference in the lives of these patients battling this potentially blinding condition. With this approval, we are redefining the treatment of macular edema associated with uveitis. XIPERE will be commercialized in the U.S. by our partner, Bausch + Lomb. Bausch is a well-respected leader in our industry and has been a tremendous partner throughout this process. We now expect to receive $15 million in approval and prelaunch milestones from Bausch. We continue to work closely and cooperatively with the Bausch team as they prepare to launch XIPERE and educate retinal specialists on the use of our SCS Microinjector. Bausch expects to launch XIPERE in the first quarter of 2022.

Also during the quarter, we expanded our XIPERE licensing agreement with Arctic Vision, a Chinese-based biotechnology company focused on ophthalmic therapies. Based on Arctic's commitment and belief in the product, we agreed to expand their licensed territory from Greater China and South Korea to also include Australia, New Zealand, India and 10 Southeast Asian countries. We received $3 million in upfront payments as consideration for the expanded territory, and we also expect to receive $4 million based on our recent U.S. approval of XIPERE.

Arctic Vision is planning to initiate a confirmatory Phase III clinical trial in macular edema associated with uveitis in China by the end of this year with the ultimate goal of commercializing XIPERE, if approved, in their licensed regions.

In addition, in the past 2 months, our clinical development partners reported promising results utilizing our SCS Microinjector to deliver their therapeutics into the suprachoroidal space. REGENXBIO reported initial data from 2 Phase II clinical trials, which represents the first data ever presented utilizing gene therapy delivered into the suprachoroidal space. We look forward to REGENXBIO reporting additional Phase II data at the upcoming American Academy of Ophthalmology meeting later this week.

And our partner, Aura Biosciences reported the first data ever presented in ocular oncology with their viral-like drug conjugate administered by suprachoroidal injection to treat choroidal melanoma. We're very excited about the progress to date from our partners, and we look forward to future results from these trials.

Finally, our lead clinical development candidate, CLS-AX, continues to progress in our Phase I/IIa OASIS trial in patients with wet AMD. CLS-AX combines our proprietary suspension of the tyrosine kinase inhibitor axitinib for suprachoroidal use with our SCS Microinjector. We have completed enrollment in Cohort 2 and expect to report safety and tolerability data from this cohort by the end of this year.

With the pan-VEGF attributes of axitinib delivered into the suprachoroidal space, we have the opportunity to improve the treatment of patients with wet AMD as we believe CLS-AX may offer improved safety and efficacy as well as prolonged durability by reducing the frequency of patient injections.

With an approved product and 4 ongoing clinical trials utilizing 3 distinctly different therapeutic assets, we are revolutionizing the delivery of therapeutics to the back of the eye through the suprachoroidal space.

I will now turn the call over to Dr. Tom Ciulla, our Chief Medical Officer and Chief Development Officer, to discuss our clinical development programs and more detail around the data disclosed by our partners. Tom?

Thank you, George, and good afternoon, everyone. Before I discuss our clinical development programs, I would just like to take a moment to recognize the excitement and momentum created by the approval of XIPERE. This is a tremendous achievement for our dedicated employees as they have worked diligently to bring the first drug approval to fruition.

As a retina physician, I'm truly thrilled that my physician colleagues and their patients now have a new innovative treatment option for those suffering from uveitic macular edema, a serious potentially blinding disease. Retina physicians love adopting new technologies and embracing new therapies to add to the treatment arsenal. And as many of our meeting presentations and publications have shown, there was strong interest in our suprachoroidal delivery platform within the retina community.

In fact, our published study evaluating use of our SCS Microinjector highlighted that suprachoroidal injection was well accepted by physician investigators with potential for rapid adoption into clinical practice. Importantly, our microinjector has been clinically tested in multiple disorders with over 1,200 suprachoroidal injections and a favorable safety profile in clinical trials. As background on the treatment need for XIPERE, uveitis is a set of ocular inflammatory conditions.

Approximately 1/3 of uveitis patients will develop uveitic macular edema, the build-up of fluid in the macula, which causes rapid swelling and distorted vision. Macular edema is a leading cause of vision loss and blindness in uveitis patients and can occur in uveitis affecting any anatomic location, anterior, intermediate, posterior or panuveitis.

We are pleased with the FDA-approved label for XIPERE, which includes all of these anatomic locations to potentially treat a broad patient population with macular edema associated with uveitis. Approval of XIPERE supports our suprachoroidal delivery platform as our preclinical work has now translated to proven clinical results. The core advantages of treating via the suprachoroidal space include targeted delivery to affected chorioretinal tissues for potential efficacy benefits, compartmentalization away from unaffected tissues for potential safety benefits and bioavailability as the chorioretinal tissues are essentially bathed with therapy. Furthermore, for small molecule suspensions, there are prolonged pharmacokinetics which facilitate durable therapies.

This targeted delivery and compartmentalization was associated with our successful Phase III PEACHTREE clinical trial supporting the efficacy and safety of XIPERE. Durability was demonstrated in our MAGNOLIA extension study and is driven by the relative insolubility in particle size of the formulation in the suprachoroidal space. We have seen similar preclinical durability with other small molecule suspensions, including a complement inhibitor, a plasma kallikrein inhibitor and the tyrosine kinase inhibitor, axitinib, which is the active ingredient in our CLS-AX proprietary formulation.

I will next discuss our CLS-AX program in more detail. I'm very excited about combining the potential benefits of pan-VEGF inhibition with the targeting, compartmentalization and durability potential benefits of suprachoroidal delivery. Of note, current AMD therapies bind VEGF-A, However, in addition to VEGF-A, has been shown to upregulate other forms of VEGF, which may contribute to limited outcomes. Axitinib, a highly potent tyrosine kinase inhibitor, may improve these outcomes with its broad VEGF blockade and has already been shown to effectively inhibit corneal, retinal and choroidal angiogenesis in numerous animal models.

In addition, suprachoroidal administration may further leverage these potential benefits of axitinib by more directly targeting the affected retinal and choroidal tissues. We recently published a preclinical study demonstrating this targeted delivery with suprachoroidal administration, along with favorable ocular distribution and durability compared to intravitreal delivery. These preclinical studies help provide the rationale for our first-in-man suprachoroidal CLS-AX clinical program and support our belief that suprachoroidal CLS-AX could represent a very competitive therapy in the future.

As we reported last quarter, we are pleased with the promising safety and tolerability results from Cohort 1 of OASIS, our ongoing Phase I/IIa clinical trial with CLS-AX. OASIS is a multicenter open-label study to establish the safety and tolerability of escalating doses of CLS-AX administered by suprachoroidal injection in patients suffering from wet AMD. The study involves 3 cohorts of approximately 5 patients each. The primary endpoint for the trial will assess the safety and tolerability for 3 months following suprachoroidal administration of CLS-AX.

To recap our suprachoroidal safety and tolerability data from Cohort 1, no study suspension or stopping rules were met, and there were no serious adverse events. Importantly, there are no signs of inflammation, vitreous haze, intraocular pressure safety signals, vasculitis or intravitreal dispersion of CLS-AX. There were 2 treatment-emergent adverse events that were assessed as unrelated to CLS-AX.

Durability is an important component of our treatment plan, and we are encouraged by the preliminary signs of potential durability that we saw in Cohort 1 especially given the very low initial dose of 0.03 milligrams of CLS-AX in these highly anti-VEGF treatment experienced patients that were enrolled. With these results from Cohort 1, we have advanced to Cohort 2 at a dose of 0.1 milligram.

While this is still a low dose of CLS-AX, it's a 3.3-fold increase compared to the Cohort 1 dose. In September, we reported that we completed enrollment in Cohort 2, whereby all patients have received aflibercept at their first visit and a single dose of CLS-AX at their second visit 1 month later. Patients were monitored monthly by their physicians for the next 3 months of their treatment. And we expect to report safety and tolerability results from Cohort 2 by the end of this year.

For Cohort 2, we're also adding a 3-month extension study to follow patients over a longer period of time. We believe that by combining the pan-VEGF attributes of axitinib with our proprietary CLS-AX formulation and delivery via our SCS Microinjector, we may facilitate an effective treatment option for patients suffering from wet AMD. Furthermore, a well-characterized small molecule like axitinib may have less potential for immune response compared to a biologic agent.

With the recent well-documented safety challenges associated with other approved investigational wet AMD therapies, we cannot emphasize enough the importance and prime focus of the safety component in our OASIS trial. If our Cohort 2 data readout continues to demonstrate supportive safety results, we will dose escalate in Cohort 3 and have potential to escalate even further if we believe it's appropriate.

With respect to our partner programs, the last few weeks have been a very exciting time for Clearside in our suprachoroidal delivery platform as our development partners have reported promising results from several trials using our SCS Microinjector to deliver their product candidates into the suprachoroidal space.

I will start with REGENXBIO as they are running 2 multicenter, open-label, randomized controlled, dose-escalating studies, evaluating the efficacy, safety and tolerability of suprachoroidal delivery of RGX-314. Excitingly, data presented by REGENXBIO is the first data ever presented utilizing gene therapy delivered in the suprachoroidal space. The first trial entitled AAVIATE is targeting the treatment of patients with severe wet AMD who are responsive to anti-VEGF treatment. Importantly, patients in the trial do not receive prophylactic immunosuppressive corticosteroid therapy.

In September, REGENXBIO reported the following. In Cohorts 1, 2 and 3, suprachoroidal delivery of RGX-314 was well tolerated in 50 patients with no drug-related serious adverse events. In Cohort 1, positive initial efficacy data at 6 months after onetime treatment of RGX-314 showed a treatment effect, observed with stable visual acuity and retinal thickness. And RGX-314 demonstrated a meaningful reduction in anti-VEGF treatment burden.

For Cohort 2, REGENXBIO plans to report interim results at 6 months of follow-up at the upcoming AAO meeting later this week. Cohort 3 has completed dosing in patients positive for neutralizing antibodies. And REGENXBIO is expanding the trial to enroll Cohorts 4 and 5 at a higher dose.

The second RGX-314 clinical trial is a Phase II trial for the treatment of diabetic retinopathy entitled ALTITUDE. Similar to AAVIATE, patients in this trial do not receive prophylactic immunosuppressive corticosteroid therapy before or after administration of RGX-314. In October, REGENXBIO reported the following. Cohort 1 had positive initial data that demonstrated suprachoroidal delivery of RGX-314 was well tolerated in 15 patients with no drug-related serious adverse events. No intraocular inflammation was observed and 33% of patients demonstrated a 2 or more step improvement from baseline on a standardized diabetic retinopathy severity scale compared to 0% of patients in the observational control. Cohort 2 is currently enrolling. And Cohort 3 is currently enrolling patients positive for neutralizing antibodies.

In addition, our partner, Aura Biosciences presented the first set of data utilizing suprachoroidal delivery to treat choroidal melanoma, the most common primary ocular cancer in adults. Aura reported that suprachoroidal administration here by SCS Microinjector may improve the therapeutic index and optimize treatment parameters for AU-011. Aura is currently running a Phase II trial comprised of an open-label dose-escalating phase and a randomized mouse dose expansion phase that is assessing the safety and efficacy of an ascending single and repeat doses of AU-011 via SCS Microinjector administration.

In October, Aura reported the following. Interim safety data showed no treatment-related serious adverse events, dose-limiting toxicities or grade 3 adverse events. Cohorts 1 through 5 are fully enrolled with a total of 13 patients and Cohort 6 is enrolling. The randomized phase of the trial is planned to begin in the second half of 2022 in patients with documented growth to establish the safety and efficacy of AU-011 and serve as the first pivotal trial for the treatment of indeterminate lesions in choroidal melanoma.

The continued progress by REGENXBIO and Aura Biosciences is very encouraging, and we look forward to their ongoing clinical trial results.

Before I conclude my discussion, I would like to touch on our integrin and gene therapy programs. We're working on integrin formulation studies that will continue into 2022 as our research team is currently running preclinical studies, including pharmacokinetic work assessing ocular distribution. In our gene therapy program, this year, we presented and published data including preclinical studies in suprachoroidally delivered nonviral DNA nanoparticles containing the Myo7 gene, which causes Usher syndrome and is too large to fit in AAV vectors. Outside of our existing gene therapy licensing relationship with REGENXBIO, we have the opportunity to partner with other companies working on gene therapy using nonviral vectors or viral vectors targeting diseases that are not primarily treated with current standard of care anti-VEGF therapies such as geographic atrophy in inherited retinal diseases, including Usher syndrome or Stargardt disease.

In closing, we continue to remain active within the retina physician community with 10 presentations recently given at the Retina Society and American Society of Retina Specialists medical meetings. We also have 3 XIPERE presentations at the American Academy of Ophthalmology meeting this weekend. These presentations and other ongoing interactions with leaders in the field continue to generate interest in the suprachoroidal space and the potential to adopt this procedure in their practices.

I will now turn the call over to our CFO, Charlie Deignan, to review our financial results. Charlie?

Thanks, Tom. Our financial results for the third quarter were published this afternoon in our press release and are available on our website. Therefore, I will summarize our current financial status.

Our cash and cash equivalents as of September 30, 2021, totaled approximately $25.2 million, which included the $3 million in payments from Arctic Vision for the expansion of their licensed territories for XIPERE. Our quarterly cash burn is primarily due to the activities related to our CLS-AX program and obtaining approval for XIPERE. Investments in our broader research pipeline are also incorporated into their operating areas. With the approval of XIPERE, we anticipate receiving a total of $19 million in nondilutive funding for approval and prelaunch milestones from our commercialization partners. We expect these funds, along with the $5 million of deferred revenue from the Bausch upfront payment, will be recorded in the fourth quarter of 2021 as license revenue on the income statement.

This additional capital will be utilized to advance our clinical development pipeline led by CLS-AX. Based on our current funding and planned need spend, we now expect to have sufficient resources to fund our operations into 2023. We appreciate the interest and support from our shareholders and the broader investment community, and we look forward to participating in several virtual investor events over the next few weeks: the Stifel Healthcare Conference, the Piper Sandler Healthcare Conference and the UBS Ophthalmology Day.

I will now turn the call back over to George for his closing remarks.

Thank you, Charlie. In closing, I'd like to take a moment to recognize the accomplishments of our team here at Clearside. Their hard work and dedication for the past several years has taken XIPERE through discovery, research, clinical development and ultimately to FDA approval. I'm extremely proud of their efforts to get XIPERE to the finish line. I'd also like to thank our shareholders, clinical investigators and Board of Directors who have supported us through this multiyear process. Our recent success only inspires us to continue to move forward as we focus on advancing CLS-AX through its clinical program and exploring future opportunities to make a difference in the lives of patients suffering from sight-threatening diseases.

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

(Operator Instructions)

You have your first question coming from the line of Annabel Samimy from Stifel.

I have a few. So first for CLS-AX and Cohort 2. I just want to verify whether this would be the same heavily pretreated population that you saw in Cohort 1. And the -- you added on the 3-month extension. That was not part of Cohort 1 as well, right? I think that was just a 1 month. So just can you go through those details one more time? And for Cohort 3, you're going to be adding -- sorry, you're going to be increasing dose again to 10x what it was Cohort 1. Are you also adding extension studies to that one? I think I missed that. And then also, again, on CLS-AX, obviously, the treatment landscape is evolving to go longer and longer. Some are already pushing out to 6 months, aiming for a year. I know that you're also aiming for that 6 to 12 months. If you don't reach that durability, where is it that you have room to modify? Is it primarily in the dose? Or is there something in the formulation that you can adjust for SCS delivery? And then I've got a couple more follow-ups.

Tom, you want to take the first several of those questions?

Yes. Thank you.

Several of the 20 questions I asked? Sorry.

So let me take -- I think the first one was about the extension study. So if you recall, Cohort 1 was a very low dose, 0.03 milligrams, and we did not include an extension study for that. For Cohorts 2 and beyond, we are adding a 3-month extension study. The primary study is -- includes 3 months of follow-up in all cases, including Cohort 1. And then the extension study includes another 3 months of follow-up after the initial dose. So it will be 6 months of follow-up. So I think that was your first question.

The second question was -- I think you were asking what the Cohort 3 dose is. We've already announced that we intend to use the 0.3 milligram dose. And yes, it is a tenfold increase in the dosing versus Cohort 1. And I should add that the primary focus of the study is safety because it has to be. This is a first-in-man study using a tyrosine kinase inhibitor in the suprachoroidal space. So we're purposely starting low, and we're purposely escalating gradually because safety is our primary concern.

As I mentioned in my prepared remarks, there's been some well-publicized safety issues with other companies in the space using biologics. And although we're confident in our safety profile, we feel that a small molecule may have less intrinsic risk of an inflammatory response. We're still very much focused on safety, so we are escalating gradually.

I think your third question was about durability. And this is a conversation we have a lot with other KOLs and investors. And everybody talks about prolonged durability, 6 months, 1 year, one and done. But the truth of the matter is that we don't have anything right now that's beyond 3 or 4 months. And even if you look at some of the therapies that are about to be approved, when we talk about 3 and 4-month durability, it's only a fraction of the patients that go that long. So I think there's an aspirational bar of durability that's quite high, but the reality is far less. So we think that durability is somewhere in the sweet spot of 3 months. Retina physicians are going to evaluate their patients at least once a quarter, regardless of the durability of the therapy. And anything beyond that, obviously, is great. But I think the reality is that it's set much lower.

And then I think your fourth question was, what else does this approach offer besides durability? And as I mentioned in my prepared remarks, axitinib is a very, very highly potent tyrosine kinase inhibitor. It's a pan-VEGF inhibitor. There is potential for it to not only be durable because of its formulation in the suprachoroidal space, but there's also potential for it to have better efficacy. And we've seen that with another company using a blockade of VEGF-C and D in conjunction with VEGF-A inhibition. And in their Phase II trial, they showed superior results over VEGF-A-only blockage. Of course, there were 2 injections every month. But nevertheless, conceptually, it suggests that blocking multiple forms of VEGF could lead to better efficacy outcomes.

So we think our approach has multiple potential benefits, including durability and pan-VEGF blockade which has potential for better efficacy.

And you're going to be enrolling the same treatment-experienced population, correct?

Yes. So all patients have to have had a prior treatment in this study. And it's a great question because in a way, we're choosing the most difficult patients to treat initially. These are patients who have been very treatment-experienced in our Cohort 1. They had an average of 26 prior injections, and they had to have persistent activity confirmed by a masked reading center assessment of imaging. But these are patients who are highly VEGF -- or anti-VEGF treatment dependent with persistent disease. So it's a very high bar. And we simply are keying our initial studies on safety, but yes, very highly treatment experienced and it sets a high bar.

Okay. And if I could just squeeze in one more question about partnership programs. I noticed that AbbVie signed an agreement with REGENXBIO, I think, for their subretinal formulation for 314. To what extent could this involve SCS delivery in the future? Do you know if there are any options for them to sort of expand into the SCS delivery of it? Just curious if there are any behind-the-scenes discussions there.

Let me take that one. We have not seen the details of the AbbVie-REGENX deal. I guess it closed today, was signed some time ago, but then it obviously closed today. But our understanding is that the deal is not limited to subretinal. It's all -- it has any form of administration of RGX-314. That's our understanding.

Your next question comes from the line of Yi Chen from H.C. Wainwright .

Can you remind us who are the -- which drugs are the major competitors on the market today for XIPERE?

Tom, do you want to take that?

Sure. I think the obvious competitor is Ozurdex. It's also a steroid. It's delivered intravitreally. Ours as a steroid delivered suprachoroidally. So I think that's probably the most analogous. Of course, there's others. There's YUTIQ and Retisert. And then there's a whole host of other therapies given systemically, anti-metabolites.

But physicians like to use local therapy. And so the field of competition for local therapy is still somewhat limited. And we think our approach of suprachoroidal delivery is very much a differentiating feature. As I mentioned in my prepared remarks, we target the affected chorioretinal tissues, but we're essentially injecting the therapy directly in the affected tissues. The therapy is compartmentalized away from the front of the eye, which is potentially very important for a corticosteroid. As you know, corticosteroids can increase the risk of ocular hypertension, glaucoma and cataract. We have pharmacokinetic data showing that we do indeed compartmentalize the steroid away from the front of the eye. And we have a really robust safety profile in our various uveitic macular edema studies, especially the PEACHTREE, AZALEA studies. We've also shown durability in our MAGNOLIA study. So there is competition, but we think that our approach is very differentiated and has potential benefits over other therapies.

Got it. And second question, do you believe CLS-AX has to show superiority over aflibercept to be commercially successful in the future?

That's a really great question. It's an important question, but it's -- we're just at the very beginning innings with this ball game. This is just a very simple, straightforward, single dose-escalating study, and it would have to be -- everything is data dependent as we go along. So we have potential to show better durability than existing therapies. We have potential to show better efficacy than existing therapies. And because we compartmentalize the drug in the space and we use a small molecule instead of a biologic, we have potential to show maybe better safety. But again, all this is all speculative. I think everything is data dependent.

Next question is from Andreas Argyrides from Wedbush.

Congrats on all the progress during the quarter. So just some thoughts. I guess, this question is for Tom on the REGENXBIO data that was recently presented. Just to get your thoughts on -- provide -- well, one, give your thoughts on the data but also how you see them either as a read-through to the CLS-AX program. Yes, just thoughts on those. That would be great.

Let me take your second question first. I think there's very little read-through to our CLS-AX program. They're utilizing a gene therapy. It's a viral vector. We're using a small molecule. It's not a biologic. If I didn't know any of their data, I would predict that a small molecule has some potential safety benefits because it doesn't have potential for an immune response like a viral vector does.

But to the second half of your question -- the first half -- to your first question now, I'm very excited about their data. I actually think their data is very, very compelling so far. It's early. Their diabetic retinopathy data, in particular, had a really clean safety profile. I think this paves the way for suprachoroidal gene therapy delivery, which, of course, is an in-office procedure as opposed to subretinal surgery. I was at Spark previously and helped launch Luxturna and helped train the ocular gene therapy treatment centers.

And as you know, administration of Luxturna and most of the gene therapies involve subretinal delivery, which is a trip to the operating room with vitrectomy, a hole in the retina that we call a retinotomy, you inject the therapy under the retina, you create a limited retinal detachment, all of which has potential to cause problems. So an in-office gene therapy delivery would be really fantastic not just for REGENXBIO and Clearside but really for the entire field. So I think that REGENXBIO is doing some really important work in advancing the entire field. And I think the diabetic retinopathy study data is very exciting.

Just a quick follow-up. Again, your thoughts as a retinal specialist, any possible explanation for the difference in the inflammation rates in those studies from, as you mentioned, [cleaning] diabetic retinopathy, but there were some instances in the wet AMD study?

It's hard for me to comment on another company's trial. Although we are partners with them and work with them closely, I don't have access to all the data they do. But from afar, I can say that just reflect at what they said is that the inflammation they've seen in their AMD patients was in a minority of patients. It was subclinical. It was treated with topical therapy. It was limited. It really didn't have any meaningful safety effect. And also, again, it's very early, and I think time will tell. But I do think their actions speak to their confidence in the approach because they're dose escalating an additional cohort so to a meaningfully higher dose. They're assessing this in patients who are neutralizing antibody positive for their vector, and they're not using corticosteroid immunosuppressive regimens. So I think, to me, that shows that they are very -- they have very meaningful confidence in their approach and in the safety of their approach.

Your next question is from Jon Wolleben from JMP Securities.

Congrats on all the progress. A couple of quick ones for me. I know you're targeting 5 patients in each cohort. You had 6 in Cohort 1. I don't think I've seen you say how many patients have been dosed in Cohort 2. So I was hoping you could let us know that and then also, if you started dosing in Cohort 3. And if not, when that might kick off.

We've announced publicly that we've completed dosing in Cohort 2. And as you might recall from the study design, patients are followed 3 months after they receive CLS-AX. We have a safety monitoring committee meeting, review all the data and then decide on dose escalation. So we have not started Cohort 3 yet.

Okay. And how many patients did you dose in Cohort 2?

I think all we've really talked about is the total number of patients, the approximate number of total patients in the 3 cohorts.

That's right. So we've said that we're targeting 5 patients per cohort. And I think that's all we've disclosed publicly.

Okay. And back to an earlier question, you mentioned that these patients are pretreated. So my guess is we're not going to see much wiggle in retinal thickness, but you did see nice improvements in BCVA in Cohort 1. Is the expectation to see dose-dependent increases in BCVA in these patients? Or is there a ceiling perhaps given the stage of the disease? Or is it more of the durability that we want to see in terms of retreatment? Just wondering what you're expecting when we get to these higher doses.

That's a great question. With small numbers of patients, it's hard to -- a small number of very treatment-experienced patients, it's hard to speculate what we're going to see. I think what we saw was a pleasant surprise because we weren't expecting these patients to improve. And again, with small numbers of treatment-experienced patients, there could be ceiling effects with visual acuity improvement and floor effects with CST improvement. We did see some floor effects in CST improvement in Cohort 1, so it's hard to predict. And really, the study is a safety study. And what we really want to do is continue the dose escalation until we find a dose that is both safe and shows meaningful signs of biologic activity.

Your last question is from Zegbeh Jallah from ROTH Capital Partners.

Congrats on the update. Looking forward to the CLS-AX data. I just have 3 quick questions. The first one is just about your thoughts on the competitive landscape in wet AMD. I know you can't really say if we're going to do late-stage studies in pretreated or treatment-naive patients. But I was just wondering if, Tom, perhaps you can talk about how you see the hurdle in the pretreated versus the naive setting. And the time line, perhaps the approval, which could be faster?

And then the second one is just because this came up a little bit from the REGENX data in terms of viscosity of what you've been injecting to the suprachoroidal space. Can you talk a little bit about the proprietary suspension that XIPERE is in? And is that the same suspension for CLS-AX? And what kind of viscosity do you guys look for? And what are you trying to optimize for with that viscosity? And then the last bit here is a comment on inherited retinal diseases. Tom, I think you mentioned it. And I know the focus still leans on CLS-AX, but I was just wondering if you guys can comment on how you're thinking about that opportunity. And if that could be a partnership or you could do it independently.

Sure. So you asked about competitive landscape initially. As I mentioned earlier, I think there's a little bit of a disconnect between the sort of the aspirational durability and what we see in reality. Right now, patients are dependent on very frequent fixed dosing. We know that most patients in the United States are undertreated because they simply can't come in often enough to receive their therapy. And ultimately, their real-world outcomes are pretty poor. And I published on this extensively in the past. And then so if you use on-label, they can do okay, and we'll soon have therapies approved that in a meaningful fraction of patients, they can potentially go 3 to 4 months. And so I also think most of the therapies out there are anti-VEGF-A.

So I think CLS-AX is well positioned potentially with respect to durability and the fact that it's a pan-VEGF inhibitor that we leverage that further by targeting the affected tissues to really get high levels where we want them and keeping it away from unaffected tissues. As I mentioned earlier, I also think we have potential safety benefits with a well-characterized small molecule like axitinib over a complex biologic. So I think CLS-AX could fit very well into the competitive landscape. And then -- and I also think that, again, it's data dependent. But we don't know if it will be used for maintenance of efficacy because of its potential durability or be used as potentially the primary monotherapy or used even in refractory cases. So I think it will fit well into the competitive landscape.

For your second question about formulations, I'm not sure how much of this we've disclosed publicly. I don't know, George, if you want to take that one, formulations of XIPERE and axitinib. George?

Anyway, I can just say that I don't think we've discussed the formulation in detail. But basically, these are small molecule suspensions. I mentioned that the durability is driven by the relative insolubility of the suspension as well as the particle size. And so that's what drives durability, and we've seen this with a multitude of small molecule suspensions preclinically. We've seen it with triamcinolone or XIPERE. We've seen it with axitinib. We've seen it with a complement inhibitor as well as a plasma kallikrein inhibitor. And what's really encouraging now with respect to XIPERE is that it's been approved, and so we're seeing read-through of what we saw preclinically now into the clinic, especially with respect to our MAGNOLIA study, which suggested durability.

And then finally, Zegbeh, you asked about inherited retinal diseases. We think that REGENXBIO is paving the way for suprachoroidal delivery of gene therapies. And obviously, that would include gene therapies for inherited retinal disease. We also believe that suprachoroidal delivery covers a large surface area potentially of the posterior pole. It covers it peripherally and posteriorly and circumferentially. And so in theory, suprachoroidal delivery could provide an in-office means to expose a large surface area peripherally of the retina, which may lend itself really well to the treatment of inherited retinal diseases, which start in the retinal periphery. So as I mentioned earlier, that field is still open for collaboration. We've also looked at that preclinically with DNA nanoparticles and have published and presented that at ARVO this year.

That concludes today's conference call. Thank you all for participating. You may now disconnect.

Thank you.