Clearside Biomedical Inc (CLSD) 2021 Q4 法說會逐字稿

Good day, and thank you for standing by. Welcome to the Clearside Biomedical Fourth Quarter 2021 Financial Results and Corporate Update Conference Call. (Operator Instructions)

And now it is my pleasure to hand the conference over to your host today, Jenny Kobin, Clearside Biomedical Investor Relations. Thank you. Please go ahead.

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 than 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. We expect that our 10-K for the year ended December 31, 2021, will be filed tomorrow. 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. 2021 was a year of validation for Clearside and our suprachoroidal injection platform. Last quarter, we achieved our first FDA approval with XIPERE, which solidified our position as the leader in delivering drugs into the suprachoroidal space. We have developed a truly innovative therapeutic approach in treating retinal diseases that allows unparalleled access to the back of the eye to directly target the site of disease.

XIPERE is being commercialized in the U.S. by our partner, Bausch + Lomb, for the treatment of macular edema associated with uveitis. XIPERE is the first therapy approved for this indication, and we're honored to make a difference in the lives of these patients battling this potentially blinding condition. Bausch announced last month that they have launched XIPERE in the United States with focused physician training in the use of our proprietary SCS Microinjector. Bausch is a well-respected leader in our industry, and we're confident in the strength and capabilities of their commercial team to advance this therapy to patients in need.

During 2021, Arctic Vision, our China-based development and commercialization partner, also made great strides with XIPERE, which they refer to as ARVN001 and the brand name Arcadis. Last quarter, Arctic Vision initiated their confirmatory Phase III trial in China in macular edema associated with uveitis. Their ultimate goal is to commercialize Arcadis, if approved, in their licensed regions of Greater China, South Korea, Australia, New Zealand, India and 10 Southeast Asian countries. In addition, last week, Arctic Vision announced that they have dosed the first patient in China in a Phase I clinical trial of ARVN001 for the treatment of diabetic macular edema.

The XIPERE related milestones also strengthened our balance sheet. In total, we generated $20 million of non-dilutive funding in the fourth quarter from Bausch and Arctic Vision that will be utilized to advance our internal pipeline programs. While XIPERE is our first commercially available product, we also have a broad pipeline of internal programs and collaborations with our development partners, targeting multiple indications, including macular degeneration, diabetic retinopathy, diabetic macular edema and ocular cancer. The approval of XIPERE in the U.S. validates our strategic approach to focus on small molecule suspensions.

Our lead internal pipeline product candidate, CLS-AX, combines our proprietary small molecule suspension of the tyrosine kinase inhibitor, axitinib, with delivery by our SCS Microinjector. In 2021, we reported positive data from Cohorts 1 and 2 in our Phase I/IIa OASIS trial in patients with wet AMD. We achieved our primary safety endpoints in these 2 -- first 2 cohorts as CLS-AX was well tolerated with no serious adverse events. And we are making progress in cohort 3 with the 0.5 milligram dose of CLS-AX and we remain on track to report results from this cohort midyear.

As a reminder, OASIS is a dose-escalating study to explore a broad range of doses to take into a Phase IIb clinical trial. Based on the positive safety profile to date and input from our scientific and clinical advisers, we are planning to add a fourth cohort in this trial. Prior to moving forward with a higher dose in cohort 4, we will review the preliminary 1-month safety data from cohort 3. Unless we see dose-limiting toxicities, we plan to initiate cohort 4 promptly after the safety data review at a higher dose than we used in cohort 3. We expect both of these events to occur in the second quarter. Because we will be conducting cohorts 3 and 4 in an overlapping schedule, we expect to complete the entire OASIS study and begin recruiting a larger Phase IIb clinical trial by the end of this year.

I also want to highlight that our gene therapy and oncology partners have made tremendous strides in their suprachoroidal clinical trials. Our gene therapy collaborator, REGENXBIO, continues to advance their 2 Phase II clinical trials with their asset, RGX-314, delivered suprachoroidally with our SCS Microinjector in patients with wet AMD and diabetic retinopathy. Last month, REGENXBIO reported positive interim data in patients with diabetic retinopathy reporting that RGX-314 continues to be well tolerated at 6 months with nearly 50% of patients demonstrating a 2 or more step improvement from baseline compared to 0% of patients in the observational control. We look forward to additional data from both their wet AMD and diabetic retinopathy trials later this year.

Our ophthalmology oncology partner, Aura Biosciences, is utilizing our SCS Microinjector to deliver their viral-like drug conjugate, AU-011, for the treatment of choroidal melanoma, the most common intraocular tumor in adults. We expect Aura to disclose more data from their current suprachoroidal clinical trials later this year.

To date, we have presented and published promising preclinical data on our gene therapy programs, and we are excited about the potential of our suprachoroidal injection platform for both viral and nonviral vectors. Gene therapy remains an extremely promising approach to treating retinal disease and the use of our proprietary SCS Microinjector offers the potential to deliver a variety of gene therapy constructs suprachoroidally through a noninvasive in-office procedure for the potential treatment of several ocular diseases. We believe that companies with specific gene therapy expertise will be able to advance these programs more rapidly.

Therefore, in keeping with our strategic approach to focus on small molecule suspensions, we have decided to consider additional development and commercialization partners for gene therapy. Outside of the specific indications licensed to REGENXBIO, we are in a position to partner with other companies working on gene therapy using nonviral vectors for any retinal disorder or viral vectors targeting inherited retinal disorders or retinal diseases that are not primarily treated with current anti-VEGF standard of care therapies, such as geographic atrophy.

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

Thank you, George, and good afternoon, everyone. I'd like to begin by saying that as a retina physician, I believe we have truly redefined the treatment of retinal diseases. Clearside studied the suprachoroidal space, developed the SCS Microinjector device to offer unprecedented access to the back of the eye, achieved the first approval of a therapy delivered to the suprachoroidal space and with our partners develop therapeutics for suprachoroidal delivery are being studied in multiple indications.

At the forefront of our accomplishments is XIPERE, the first FDA-approved product for suprachoroidal administration. This is the first and only therapy for macular edema associated with uveitis, and we are proud to have developed an innovative treatment option for patients suffering from this serious and potentially blinding disease. Since XIPERE approval in October, we've been working very closely with Bausch + Lomb to support their commercial and medical affairs teams on XIPERE and the SCS Microinjector. Bausch is focused on educating U.S. retina specialists on the platform and training them on the injection procedure as part of their extensive product launch program. And XIPERE is just the beginning.

We've shown in preclinical models that small molecule suspensions are durable when delivered into the suprachoroidal space. In addition to triamcinolone acetonide, we have tested axitinib, a complement inhibitor in a plasma kallikrein inhibitor that have also shown durable drug levels in the RPE-choroid sclera at 1,000x higher than their respective in-vitro IC50, a standard used to describe the half maximal inhibitory concentration. Our current lead development asset is a proprietary suspension of axitinib a small molecule suspension that we have formulated for suprachoroidal delivery. We made steady progress in our CLS-AX program last year, and our efforts are continuing in 2022. As a reminder, CLS-AX combines the potential benefits of a pan-VEGF inhibitor with the targeting compartmentalization and durability of suprachoroidal delivery.

Axitinib is a highly potent tyrosine kinase inhibitor and has shown to effectively inhibit corneal, retinal and choroidal angiogenesis in numerous animal models. We believe that suprachoroidal administration may further leverage these potential benefits of axitinib by more directly targeting the affected retinal and choroidal tissues. In December, we reported safety and tolerability data from cohort 2 as well as the combined data on cohorts 1 and 2 from our ongoing Phase I/IIa clinical trial with CLS-AX entitled OASIS. OASIS is a multicenter open-label study to establish safety and tolerability of escalating doses of CLS-AX administered by suprachoroidal injection in patients suffering from wet AMD. The primary endpoint for the trial is to assess safety and tolerability for 3 months following suprachoroidal administration of CLS-AX.

To date, the primary endpoints have been met in cohorts 1 and 2 of OASIS. CLS-AX was well tolerated with no serious adverse events. There were no treatment-emergent adverse events related to aflibercept, CLS-AX or the suprachoroidal injection procedure. And there was no dispersion of drug into the vitreous. In addition, there were no adverse events related to intraocular pressure, inflammation, or vasculitis. In cohort 2, 5 patients were enrolled at a dose of 0.1 milligrams. All were heavily treatment experienced with numerous injections of standard of care anti-VEGF treatments prior to entering the OASIS trial. At 3 months post CLS-AX dosing, 1 patient did not require any retreatment and 1 other patient was retreated per protocol defined retreatment criteria. 2 patients were retreated at month 2 and 1 patient was retreated at month 1. Although based on independent reading center assessment, the protocol-defined retreatment criteria were not met in these 3 patients.

In the combined cohorts 1 and 2, 11 patients were enrolled and all were heavily treatment experienced prior to entering the OASIS trial. The mean Best Corrected Visual Acuity score and the mean change in central subfield thickness of the macula were stable in the combined cohorts. We also saw promising signs of durability in this early part of the study. In particular, 4 patients or 36% of the total went at least 3 months post CLS-AX dosing without retreatment. 6 patients or 55% of the total went 2 months without retreatment and 1 patient or 9% of the total was retreated at month 1. As George mentioned, we've made progress with cohort 3 of the trial. As a reminder, we've established stringent criteria in our protocol for patient enrollment. Unlike similar trials ongoing in the wet AMD space assessing TKIs or tyrosine kinase inhibitors, we are only enrolling treatment-experienced patients with active disease based on reading center confirmation. We remain on track to report results from cohort 3 midyear.

We also plan to add cohort 4 to explore a broad range of doses to evaluate in a Phase IIb trial. This decision was based on input from our scientific and clinical advisers, combined with the positive safety results with no dose-limiting toxicities in cohorts 1 and 2. Prior to moving forward with a higher dose in cohort 4, we will review the preliminary 1-month safety data from cohort 3. Unless we see dose-limiting toxicities, we plan to initiate cohort 4 at a higher dose. We expect this data review and initiation of cohort 4 to occur in the second quarter of this year, and therefore, cohort 3 and 4 overlap. We expect to report data from cohort 4 later this year. We've begun planning for our Phase IIb clinical trial, and we are targeting to opening enrollment for this trial by the end of the year.

We've also been working on another small molecule program utilizing suprachoroidal administration of an integrin inhibitor suspension which we are referring to as CLS-301. Integrins play a role in pathogenic processes such as inflammation, angiogenesis and fibrosis. And we believe that integrin inhibition may play a role in the treatment of certain diseases, including diabetic macular edema and macular degeneration. We believe that integrin inhibition could potentially service primary therapy, adjunctive therapy to anti-VEGF agents or secondary therapy in refractory cases of diabetic macular edema and macular generation.

Suprachoroidal delivery of an integrin inhibitor suspension could provide targeting, compartmentalization and durability advantages over topical individual delivery, similar to what we've observed in other preclinical studies of small molecule suspensions. Therefore, we are assessing ocular tolerability, distribution and pharmacokinetics of our integrated inhibitor suprachoroidal suspension. Our initial preclinical data has shown that the agent is well tolerated with favorable ocular distribution targeting the choroidal retina, and we've seen encouraging initial signs of durability. We are optimizing the formulation and expect to start a second preclinical study soon. We expect to have results from this study in the second half of this year.

Moving now to our partner programs. 2021 was a clinically impactful year for our suprachoroidal delivery platform as the first ever data was presented in both gene therapy and ocular oncology. Both of our development partners, REGENXBIO and Aura Biosciences have reported promising results from several trials using our SCS Microinjector to deliver their product candidates into the suprachoroidal space. I'll start with REGENXBIO. We're not only excited about the promising early results from REGENXBIO trials, but also the fact that suprachoroidal injection may offer these patients the option for onetime gene therapy treatment with a simple in-office injection. REGENXBIO is running 2 multicenter open-label randomized controlled dose escalation studies evaluating the efficacy, safety and tolerability of suprachoroidal delivery of RGX-314. Importantly, patients in these trials do not receive prophylactic immune suppressive corticosteroid therapy before or after administration of RGX-314.

As reported in November for the AAVIATE trial for the treatment of patients with wet AMD, suprachoroidal delivery of RGX-314 continues to be well tolerated and positive interim efficacy data was reported at 6 months for cohorts 1, 2 and 3. Last week, REGENXBIO updated the enrollment status for AAVIATE. Enrollment is complete in cohort 4 and expected to be completed in cohort 5 in the first half of 2022. Cohort 3 and cohort 5 are evaluating RGX-314 in patients who are neutralizing antibody positive.

In addition, last month at the angiogenesis conference, REGENXBIO updated their positive interim data from the Phase II ALTITUDE trial in patients with diabetic retinopathy and reported the following from cohort 1 at 6 months. Suprachoroidal delivery of RGX-314 was well tolerated in 15 patients with no drug-related serious adverse events and no intraocular inflammation observed. And importantly, 47% of patients demonstrated a 2 or more step improvement from baseline on standardized diabetic retinopathy severity scale at 6 months compared to 0% of the patients in the observational control. This is an increase from 33% of patients at the 3-month time point.

Enrollment is expected to be completed in the ALTITUDE trial in the first half of 2022 for cohorts 2 and 3. Cohort 3 is evaluating RGX-314 in patients who are neutralizing antibody positive. 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 their interim Phase II safety data for AU-011 delivered via our SCS Microinjector. The data showed a favorable safety and tolerability profile with no treatment-related serious adverse events, dose-limiting toxicities or Grades 3, 4 adverse events. We expect Aura to disclose more data from its current suprachoroidal clinical trials later this year. The continued progress by REGENXBIO and Aura Biosciences is very encouraging, and we look forward to their ongoing clinical trial results.

2021 was a year of extensive engagement with retina specialists with attendance at 8 medical congresses featuring 30 presentations delivered on our suprachoroidal injection platform and our clinical development programs. Last month, I delivered a presentation entitled suprachoroidal space and suprachoroidal delivery for clinicians to my physician colleagues at the Bascom Palmer Eye Institute's Angiogenesis, Exudation, and Degeneration Conference. The presentation described the preclinical and clinical data demonstrating the methodology and benefits of suprachoroidal delivery, including advantages of intravitreal delivery, the durability potential of small molecule suspensions and the possible suitability of suprachoroidal delivery for gene therapy. We plan to continue this momentum in 2022 as we engage and educate the retina community. I look forward to keeping you updated on our clinical progress this year.

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

Thank you, Tom. As George and Tom mentioned, the XIPERE's approval has had a broad impact on our company. Our financial results for the fourth quarter and full year were published this afternoon in our press release and are available on our website. Therefore, I will summarize our current financial status. Our progress over the course of last year significantly strengthened our balance sheet with nondilutive funding. In 2021, we generated nearly $30 million in revenue, primarily from XIPERE development and approval-related milestones. From Bausch + Lomb, we recorded a total of $20 million of revenues in 2021 related to milestones, including the recognition of the previously deferred revenue of $5 million from their upfront payment. On a cash basis, $5 million was received in 2021 and $10 million was received in quarter 1 2022.

From Arctic Vision, we received a total of approximately $9 million in 2021 based on the approval of XIPERE, their Phase III trial initiation in China and the expansion of their license territory. Therefore, our cash and cash equivalents as of December 31, 2021 totaled approximately $30 million. As a reminder, this does not include the $10 million we received in first quarter of 2022 from Bausch + Lomb related to the XIPERE milestone. This additional capital will be utilized to advance our clinical development pipeline led by CLS-AX. In 2022, our cash burn will focus on funding our current operations and planned spend on our broader research pipeline, and we expect to have sufficient resources to fund our operations into the second quarter of 2023.

We remain very active in the investment community with participation in the healthcare -- Cowen Healthcare Conference earlier this week, and we look forward to joining the upcoming ROTH and Needham conferences as well. We greatly appreciate the interest and support from all of our stakeholders as we obtain our first FDA approval last year, and we look forward to advancing our suprachoroidal injection platform in 2022.

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

Thank you, Charlie. Clearside is revolutionizing the delivery of therapies to the back of the eye through the suprachoroidal space. Our suprachoroidal injection platform is a novel patented approach for ocular drug delivery that offers numerous advantages over other types of administration. And now with our first drug approved for suprachoroidal administration and well over 1,200 clinical suprachoroidal injections to date, we have validated the clinical utility of this innovative technology and demonstrated our leadership in this increasingly important space, but our work does not stop there. In conjunction with our partners, there are currently 6 ongoing clinical trials targeting multiple indications. We continue to advance CLS-AX and expect to complete our OASIS trial this year, and we look forward to additional progress and data readouts from all of our development and commercialization partners throughout the year.

Last week, we were also pleased to announce that Dr. Ben Yerxa has joined our Board of Directors. Ben was an initial founder of Clearside and as the current CEO of Foundation Fighting Blindness, he brings deep scientific ophthalmic research and clinical development expertise to our Board. He has a unique perspective on patient needs, the global retinal disease treatment landscape and our technology. We look forward to leveraging his expertise as we advance Clearside's internal pipeline and external strategic collaborations.

In closing, I would like to thank all of our stakeholders, including the Clearside team, our shareholders and clinical investigators whose broad support helped us accomplish several major milestones last year. We are excited about the future and inspired to bring additional therapies to patients with sight-threatening diseases.

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

(Operator Instructions) Your first question is from Annabel Samimy with Stifel.

Just want to get a little bit more color on the decision to add the fourth cohort to CLS-AX. And how at this point you're going to choose the upper limit. So in terms of the feedback you've gotten from your advisers, was it something that they (inaudible) is on other axitinib trials? Is it strictly driven by safety? And should we read anything into this decision about it being a question of efficacy or duration that you're seeing in the first cohort? So just a little color behind that decision would be great. And then I'll follow up with a second after that.

This is George. I'll let Tom give you the details on that -- on the questions that you're asking around cohort 4. We think this is an important move on behalf of the whole overall program. And I'll let Tom explain to you the rationale and where we are on that. Tom?

Sure. You basically shouldn't read too much into this. Since we haven't seen any dose-limiting toxicities to date, we wanted to explore the broadest range of doses that will be most effective as we consider Phase IIb and the take into Phase IIb. Given the positive safety profile in cohorts 1 and 2, and as you alluded to, the input from our scientific and clinical advisers, we simply decided to add a fourth cohort to continue the dose escalation. And we're going to do this while we continue to evaluate the cohort 3 dose. So there will be an overlapping schedule, I think, as George mentioned.

Throughout the process of initiating and conducting OASIS, we've highlighted that there is room to escalate dose levels further if we believe it's appropriate. We believe the FDA and IRB is supportive of a broader range of doses based on our preclinical toxicity data. And as I alluded to, decision is not based on any information from Cohort 3. We're still enrolling and dosing patients in cohort 3.

And then just bigger picture as far as the wet AMD landscape is concerned, I guess there's quite a bit of development in wet AMD, a number of programs in pan-VEGF (inaudible) antibodies, gene therapy. So how do you see this market bifurcating between who's appropriate for VEGF, pan-VEGF treatment versus gene therapy? And do you have any sense as to how things might break down, assuming that these are successful?

Yes. There's been some -- some major failures and commercial issues with wet AMD treatments lately. And if you had asked me a few years ago, I wouldn't have predicted some of these. So it's hard to predict going forward, but I think that what we have is differentiated from many of the therapies out there because pan-VEGF inhibition has potential to show better efficacy. Axitinib is a small molecule, and we expect it to be -- to continue to be very safe with less potential for an immune response like you'd see with a biologic or a gene therapy.

We also think that suprachoroidal delivery will leverage some of these features even further because we can target the effected choroidal issues and get very rapidly high levels that may potentiate efficacy. We can compartmentalize away from the front of the eye to potentially enhance safety. And we know from our preclinical studies that we have potential for many months of durability. So I think overall, going forward, our therapy is very differentiated, not only as a mechanism of action being pan-VEGF but also because of potential safety benefits being a small molecule less potential for immune response and of course, suprachoroidal delivery with the potential for the targeting, compartmentalization and durability benefits.

So ultimately, it could be used as maintenance therapy in patients who have ongoing established therapy. It could be potentially used as -- for patients who are somewhat refractory to current anti-VEGF-A focused therapy and it could even be used as primary monotherapy. And we're still obviously sorting that out with this dose escalation study.

And as far as gene therapy, is there a population that would be more appropriate for gene therapy versus just traditional VEGF therapy?

Well, I think some of the inclusion and exclusion criteria from some of the gene therapy programs are somewhat telling because patients have to be treatment responsive to current therapy. And so -- and potentially treatment dependent. So the ideal patient for gene therapy would be a patient that, as I mentioned, is responsive to current therapy and is highly dependent. Suprachoroidal CLS-AX potentially could serve that role with its durability, but there's potential for a broader role because of the pan-VEGF inhibition. It may, as I mentioned, have better efficacy. It may be used for treatment refractory patients. And the durability has potential to be quite attractive. We think that having dosing somewhere between the 3- and 6-month intervals is consistent with the current practice model in retina specialist practice. And we even think that our therapy could potentially be adjunctive to patients who have undergone gene therapy and have breakthrough, for example.

Your next question is from Andreas Argyrides with Wedbush.

I have a couple here. So to start with the Phase IIb and planning, does that suggest you're getting close to finding a go-ahead dose? Or is there a possibility of adding a fifth cohort if safety is positive and you can potentially maximize efficacy? And then with the detail -- what details of the design of the Phase IIb can you share at this moment? And then lastly, do you also plan to present data from the extension study at the same time you present cohort 3 results?

Tom, I think you can take all of those questions. If you can't, I will, but I think you can do that.

Well, I think you asked about the dosing. So we have -- as I mentioned, we want to have the broadest range of possible doses. And if you recall, we started at 0.01. So we've actually escalated quite meaningfully already and even higher in cohort 4. And we expect to see some biologic response. We expect that cohort 3 or cohort 4 dosing will one or the other would be what we would potentially use in a Phase IIb study. So we don't anticipate adding a fifth cohort at this point. I think your next question was a little bit about the Phase IIb trial design. And we're still in the planning phases for that. It'd be premature to comment on it. And I think your final question was on extension study results, and we would plan to release the extension study results from cohort 2 when we announce cohort 3 data in mid-2022.

Your next question is from Yi Chen with H.C. Wainwright.

This is Chait on behalf of Yi. We just have 3 quick questions. Based on your initial conversations with Bausch + Lomb, any feedback from physicians, any immediate feedback from physicians during their educational programs and launch plans? And the second question is in your OASIS study. What can we expect from the cohort 3 data presentation later this year compared to the data that you've shown so far? And I'm sorry if I missed this, but do we know the potential dose that you would want to explore in cohort 4? And lastly, I know you spoke about potential licensing agreements. Are you in contact or are you in discussions with potential companies already?

Tom, do you want to comment on the -- I think the first question had to do with the Bausch reaction. And more comment specifically on what you've done with Bausch in terms of their training and what we know about how they intend to roll out this training and the reaction to the physicians in the training program, in particular.

Sure. Absolutely. So we've been very involved with Bausch + Lomb assisting with the development of their training program. They developed a very nice robust program. Their goal is to train all of the retina specialists and uveitis specialists in the United States. They've adopted a train -- the trainer program. So it will be a peer-to-peer program with retina specialists training other retina specialists. So the Clearside team was involved with some of these initial sessions in which some of the key trainers, retina specialist trainers were trained and that went extraordinarily well. They're very excited and positive about the training. They feel it's very effective. And then they in turn will then train retina specialists regionally. And we've gotten very positive feedback from the program. Physicians feel well trained and feel quite capable of being able to administer suprachoroidal therapies in the office.

I think your second question was the format -- or the sort of results we could expect from cohort 3. So I think the format of those results will be similar to what we've presented previously. Just a reminder, this single dose escalating study is really about safety, and that's what the focus has to be and will be. But we'll be presenting similar data sets as to what we've presented previously. I think you asked about -- go ahead.

No, no, I was going to say, Tom, I think the other one was have we decided on a dose for cohort 4.

Right. And we have not finalized that yet. It will be higher than cohort 3, but we have not finalized that.

And the last one on potential licensing agreements. Are you -- have you already started discussions?

Well, I would answer that one. And I'd say, listen, we have interest from a number of companies contact us and talk about potential licensing. So it's a regular feature of our ongoing business. I've said before that partnering going forward is not immediately critical strategically for us. But as we also said in our remarks, for gene therapy, this is something that if we're going to go any farther in gene therapy than we've done with REGENXBIO or Aura Biosciences, it would have to be with a partner; that is not something we're going to focus on as part of our internal pipeline. So all I can tell you is we do have discussions from time to time, and we're exploring possible relationships, but it's just a matter of ongoing business like any company in our position would do. We're not -- I can't make any more comments than that, except that we do talk to people, and we are talking to multiple people about potential collaborations.

Your next question is from Zegbeh Jallah with ROTH Capital Partners.

Congrats on the progress. I think a lot of the questions have been asked, so I'm just going to ask a couple of cheeky ones here. And I think the first one for me is just trying to get a better understanding of the exposure that's been achieved with the dose being used in cohort 3. Meaning are you saturating your receptors with cohort 3 and could you really get much more by going higher?

Tom, do you want to attempt to answer Zegbeh's question?

Sure. Zegbeh, that's a great question. And there's 2 aspects of the dose escalation, well, 3. Obviously, safety is #1, but efficacy, as you alluded to. But the other thing -- the other aspect that we need to think about is the suprachoroidal space acts like a natural drug reservoir. And it is possible as you escalate, we may achieve -- we may saturate inhibition of the tyrosine kinase receptors, and may not be able to inhibit more. But as we add more drug to the space, we're basically filling the reservoir further, and that would -- has potential to provide us more durability. So we have to look at safety, obviously, efficacy or, in this case, biologic effect in the small single dose escalating study but also as we escalate the dose, there's potential for more and more durability.

One of the fascinating features of axitinib is that it is a very highly potent tyrosine kinase inhibitor. It's more potent than some of the other tyrosine kinase inhibitors that have been assessed and are being assessed currently. And the interesting part of that is that, that also can facilitate durability because as we continue to dose escalate and ultimately, over time, as the drug levels start to decay on a microgram per microgram basis, we still have efficacy because of the high potency. So to answer your question, even if we do potentially saturate in terms of the potential efficacy, we also have potential to enhance durability with a greater dose.

And as a follow-up here for cohort 3, is the point to show some efficacy? Or is it similar to cohort 2 where you're just wanting to show some kind of clean safety profile?

Well, I think obviously, we have to focus on safety. We want to show it from a safety profile. It would also be helpful to see some biologic sign. And you may recall that we had a web conference at the end of cohort 2 and had Peter Kaiser, who is an extraordinarily well-respected KOL retina specialists on with us. And he observed that even between cohorts 1 and 2, there was potentially already a bit of a dose response because he felt that the CST -- we provide subject-level data, and he felt that the CSTs appear to be more stable in cohort 2 than in cohort 1. And he thought that may suggest the beginnings of a dose response. So as we escalate, we think we're in that dose response curve, and we may start to see more and more signs like that, which would be helpful as we start to think about doses for Phase IIb.

And related to that, as it relates to efficacy, is the goal really to show superiority of Eylea or to show maintenance of efficacy being achieved by Eylea, but with longer durability, something like you said, Dr. Kaiser mentioned just maybe even better or just slightly better maintenance in CST or something like that, but with greater durability?

With such a small study and even smaller numbers per cohort, it's hard to really make any inferences to compare this to Eylea. So I think really, we want to focus on safety. We'd like to see the beginnings of some biologic effect, which has helped guide us in terms of dose selection. But really the comparison to Eylea, although it's intriguing to speculate, really can't make any inferences with just such a small sample sizes and look really without a control group.

I guess what I'm trying to get at is trying to understand what you need to see to kind of feel confident that you have a program with a differentiated profile.

I think we're going to have to study that further in a Phase IIb study. But bear in mind, as I mentioned in my prepared remarks, we are selecting patients in a way who are refractory. So these are patients who are generally highly treatment experienced. And as you recall, they have to have had 2 prior doses within the 4 months to study entry. And then at screening, they have to have reading center of confirmed activity. So in a way, we're selecting patients who are almost by definition, treatment refractory.

And as we -- if we see a biologic effect, I think that could potentially be very exciting because these patients represent the 30% to 40% of patients who respond sub-optimally to current therapy. And that's what we're essentially selecting. There are other trials currently that don't require reading center confirmation of activity, but our study does. And this will help inform us a bit about Phase IIb. So to answer your question, I think we're confident that this approach has potential for nice safety given the fact that this is a well-characterized molecule, it's a small molecule, it's not a biological potential for immune response. And as you know, immune response has been a big deal in recent AMD trials.

And then the pan-VEGF in addition really may have potential, particularly in these patients who are treatment refractory. And then we think the durability potential is there. As you know, we published data recently showing that we could achieve levels several log orders above the IC50 in a rabbit model for up to 6 months. So we think the safety, the efficacy and the durability of this approach are quite attractive, and this could be a really very helpful therapy for retina specialists who deal with patients with wet AMD.

And I think that's what I was just trying to get at in terms of how refractory these patients are and the magnitude of efficacy or magnitude of response that investors can kind of hope to see because it may not be as high because of the patient population you're working with. And then my last question here is just about the Phase IIb. I know you haven't really made any plans yet. But as we're talking about this heavily appreciated patient population and then thinking about that relative to a naive patient population. Regarding your decision as to whether or not you should go into the pretreated naive setting, what are some things that you think might be prioritized? Maybe that's a better question for George. Is it going to be the size of the market opportunity, the indication or the patient population that can lead to a faster path to market? What are some things that you think you'll be prioritizing to kind of help make that decision?

Well, I think, Zegbeh, you just listed all the ones that we have to consider. We obviously have to consider -- we have to look at competition. We have to look at size of market. We have to look at, is there a better path forward. We go through, do you go in for a moonshot, do you try to get something that's approved. There's a lot of things that are going to go into the decision around Phase IIb, which will lead to hopefully setting up the Phase III clinical trials. As you said, as we've said, we're in the middle of that planning now. We have not finalized the Phase IIb plan yet, but we have lots of input. We're considering a lot of different factors in deciding how we want to approach Phase IIb with ultimate approval in mind.

So you have to be very sensitive and take into account all of the things that you've just mentioned, which one is more important. That will be which one decides is the deciding factor. That's going to be -- that's still -- we're still having that conversation and waiting for some of the data that comes out of the OASIS trial to make a final determination of that. Tom, if you have anything to add to that?

Yes. Perfect. And congrats on all the progress. Nice to have all this optionality regarding licensing the platform.

Zegbeh, we always appreciate your support.

Your next question is from Rohit Bhasin with Needham.

This is Rohit on for Serge. In regards to the Arctic Vision trials, can you provide some color about the studies and if the trials are doing anything different? And then for the integrin inhibitor program, what indications are you looking to market with this mechanism of action?

Well, I'll let Tom comment. He's probably closer to what Arctic is doing than I am. But regarding integrin, that's still very early stage. And we have a number of ways we could go in terms of indications. Currently, we're thinking of diabetic macular edema. But that's not necessarily carved in stone. We think that Integrin, as we carry that forward, could have some other potential opportunities to be pursued. So that's still -- that's not a well-defined or a decision that's been carved in stone at this point in time. But Tom, do you want to comment on Arctic Vision and their 2 trials that they've started in China?

Sure. So the -- they're doing a uveitic macular edema trial in China, and it's essentially very similar to our PEACHTREE registration trial. And that's underway. I believe they've announced dosing of the first patient. They've also announced dosing of a patient in their diabetic macular edema trial. And this is a Phase I study, so it's still early for them. I believe they're calling it a pharmacokinetic study. But as you know, corticosteroids have been approved for the treatment of diabetic macular edema. Their use is often limited because of the potential to cause cataract progression and ocular hypertension. We think by compartmentalizing the corticosteroid in the suprachoroidal space and away from the front of the eye, we can minimize the risk of ocular hypertension and cataract development. So there is potential for XIPERE to have a role in diabetic macular edema in addition to uveitic macular edema. And we're very excited about the trials. We have a great relationship with Arctic Vision. Our clinical teams and biostatisticians have open dialogue with them. It's an excellent relationship and we wish them lots of success.

Yes. And I'll just echo what Tom said about Arctic Vision. They've been a very engaged and a terrific partner, and we're very happy to be working with them. They're very aggressive, but appropriately so. And I think they see the potential of XIPERE, they call Arcadis, in their territories. And so I think we have a terrific partner in the overall Asia, Australia and New Zealand region. They've been -- they've just been really wonderful to work with, very happy about that.

And your last question is from Jon Wolleben with JMP Securities.

Just 2 for me. You talked about the Phase IIb in wet AMD, but wondering what expansion for CLS-AX and the other indications might look like? And then also with XIPERE, wondering if we should expect any meaningful royalties this year. If I remember right, the first $450 million is royalty free, just hoping to confirm that for expectations for this year.

Charlie, do you want to take the royalty question first?

Jon, yes, the first $45 million, you're right, is royalty-free for Bausch. So I can't talk about their guidance and -- but they definitely -- we'll start earning royalties once we get a dollar past $45 million in those sales.

And then, Tom, Jon asked about other potential indications for a Phase IIb trial for CLS-AX. I believe that was it, Jon. And currently, may -- currently our thinking in OASIS, obviously, we're doing it in wet AMD patients.

Yes, absolutely. So there's potential in diabetic macular edema, diabetic retinopathy and retinal vein occlusion related macular edema, those are sort of the other classic indications for this sort of therapy. So we -- those -- we discuss those and haven't made any firm decisions at this point.

Those are all basically VEGF-mitigated disorders, correct, Tom?

Yes. Absolutely. They're all VEGF-mitigated disorders. And we think with the durability potential of this approach and also the targeting, particularly the peripheral retina, we think there's real potential here for diabetic retinopathy as well. We can get targeted at high levels to the retinal periphery where diabetic retinopathy tends to start. So there's a lot of potential with this approach. And again, we haven't made any, obviously, any firm decisions yet.

That was the last question?

Yes, George, why don't you give your closing remarks?

Okay. All right. Since that was the last question, I want to thank everyone 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 now disconnect the call. Thank you.

Thank you. So as a reminder to all participants, you may now disconnect. Have a good day. Stay safe and well.