IVERIC bio Inc (ISEE) 2015 Q4 法說會逐字稿

Good day and welcome to the fourth-quarter 2015 Ophthotech Corporation earnings results conference call. Today's conference is being recorded. At this time I'll turn the conference over to Kathy Galante. Please go ahead.

Good morning and welcome to our fourth-quarter, year-end 2015 earnings call. Joining me today I have Dr. David Guyer, Chief Executive Officer and Chairman of Ophthotech; Dr. Samir Patel, President and Vice Chairman; and Mr. Michael Atieh, Executive Vice President and Chief Financial and Business Officer.

Before we begin, I would like to remind you that today we will be making statements relating to Ophthotech's future expectations regarding its financial results, potential receipt of milestone payments, clinical and regulatory developments, and commercialization plans. These statements constitute forward-looking statements for purposes of the Safe Harbor provision under the Private Securities Litigation Reform Act of 1995.

These statements cover many events and matters that are subject to various risks that could cause actual results to differ materially from those expressed in any forward-looking statements. I refer you to our SEC filings, and in particular to the risk factors section in our quarterly report on Form 10-Q filed on November 5, 2015, for a detailed description of the risk factors affecting our business.

In addition, any forward-looking statements represent our views only 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 at some point in the future we disclaim any obligation to do so, even if our views do change.

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

Thanks Kathy and thank you to everyone for joining us on the call this morning. As we think back over the last year we have made significant scientific and clinical advances in our Fovista and Zimura programs. We are extremely pleased with the continued progress of the Phase 3 Fovista clinical development program, the continuing progress on our Fovista expansion studies and the advancement of our Zimura programs in wet and dry AMD.

Additionally, we have begun to build our capabilities to support pre-launch activities for Fovista. Ophthotech has completed patient recruitment in two large-scale Phase 3 pivotal clinical trials of Fovista anti-PDGF therapy, in combination with Lucentis, for the treatment of wet age-related macular degeneration. We would like to thank all the patients, participating investigators and their staff for their commitment to the Fovista trials. We expect to announce initial top line data from both Phase 3 trials of Fovista in combination with Lucentis in the fourth quarter of this year.

These first two Phase 3 trials are investigating the superiority of Fovista in combination with Lucentis, compared to Lucentis monotherapy and are identical with respect to the trial design in the first year. Therefore the databases from both trials of Fovista in combination with Lucentis will be locked and analyzed together, which will allow for the full analysis for certain relevant endpoints in accordance with the statistical analysis plan. We believe these studies will be the two trials needed for our regulatory filings.

A third Phase 3 trial which is investigating Fovista in combination with either Eylea or Avastin continues to enroll patients and is on track to complete recruitment this year. This third Phase 3 trial was initiated approximately nine months after the Fovista in combination with Lucentis trials. We are pleased with the rate of recruitment to date, and the level of interest expressed by the investigators.

Our key objective and plan is to make Fovista commercially available to physicians for their patients with wet AMD as quickly as possible, assuming a positive data outcome from the Phase 3 program and regulatory approval.

As we continue to explore various regulatory filing options, we believe that the most likely scenario is to initially submit a new drug application to the US Food and Drug Administration for Fovista in combination with Lucentis, based on data from the first two Phase 3 trials of Fovista in combination with Lucentis and subsequently submit an amendment to the NDA with data from the phase 3 trial of Fovista in combination with Eylea or Avastin. Alternatively, we may elect to file a supplementary NDA for Fovista in combination with Eylea or Avastin, following FDA review of the NDA for Fovista in combination with Lucentis.

As you will recall, the FDA granted fast-track status for Fovista for the treatment of wet AMD in September 2013. We believe Fovista is the most advanced anti-PDGF agent in development for the treatment of wet AMD, and if approved, is expected to be first to market in this class of novel therapies for wet AMD. If granted priority review by the FDA, Fovista could be launched in the US as early as fourth quarter 2017.

In addition to our Phase 3 Fovista program, we have a number of Fovista expansion studies that are ongoing. These studies are designed to evaluate other important benefits of Fovista in combination with anti-VEGF drugs in wet AMD patients. Samir will discuss some of these studies in a few moments.

At the end of 2015, our ex-US partner for Fovista, Novartis, informed us that Genentech, a Roche wholly-owned subsidiary, exercised its option to participate in the financial arrangements relating to Novartis' rights under the Ophthotech Novartis ex-US agreement for Fovista to treat wet AMD. This option originates from a pre-existing agreement between Roche and Novartis. Our agreement with Novartis, including its financial terms, remains unchanged.

We continue to retain sole rights to Fovista in the US. We believe that this arrangement further validates Fovista's novel technology, reflects the industry's need for the next generation therapeutic option for wet AMD, and also highlights the industry's acknowledgment of the large ex-US commercial opportunity resulting from the significant unmet need in the large and expanding market for wet AMD. We continue to be very impressed with the extensive resources and tremendous commitment that Novartis is putting into the Fovista program.

Turning to Zimura, our complement factor C5 inhibitor, we've been interested in the role of complement inhibition for wet AMD for some time. We are pleased to have recently initiated a phase 2 study of Zimura in combination with anti-VEGF therapy for the treatment of wet AMD. We also recently initiated a phase 2/3 clinical study of Zimura in patients with geographic atrophy, an advanced form of dry AMD.

I'll now turn the call over to Samir.

Thank you, David. Thank you everyone for joining us this morning. As David mentioned, we are pleased with the progress of the Fovista expansion studies to date. Recruitment has been completed in two of the Fovista expansion study trials.

In May 2015 we completed enrollment in the first trial of our anti-fibrosis program in which Fovista is administered in combination with anti-VEGF therapy in wet AMD patients. In October 2015 we completed enrollment in the trial of Fovista administered in combination with anti-VEGF therapy which is investigating the optimal regimen for the Fovista administration with the currently utilized anti-VEGF agents for wet AMD patients. We continue to progress with our Fovista expansion studies and have initiated a pilot study to understand the role of multimodal imaging. In addition, we have initiated a trial to investigate the potential role of Fovista in combination with Avastin with a discontinuous regimen during the maintenance phase.

In December we hosted an R&D investor day with leading retinal specialists in the United States, and we want to thank them all for their participation. The panelists provided their insight into the progress and challenges in the treatment of age-related macular degeneration, and some related scientific underpinnings. We are pleased with the feedback and we believe it reinforces the potential for Fovista combination therapy in wet AMD.

During the event we presented interim data from our uncontrolled anti-fibrosis study in a subgroup of 16 patients. There were no evident safety issues related to the drug in this subgroup. In addition, these patients were treated with a discontinuous regimen of Fovista combination therapy following an induction phase of monthly or continuous dosing during the first six doses. On average, patients maintained their visual benefit during the discontinuous phase dosing.

However, the study was uncontrolled and the sample size was small, but we're encouraged by the potential of Fovista to maintain visual benefit with a discontinuous regimen. In addition fundus photos from the trial were evaluated for sub-retinal fibrosis by a masked independent reader. There was no evidence of fibrosis development or progression at the one year time point in this subgroup.

During the fourth quarter of 2015 the results of our phase 1 Fovista combination therapy study in wet AMD were published in the Journal of the American Academy of Ophthalmology. As you may recall, this was an uncontrolled study in 23 wet AMD patients to assess safety of Fovista combination therapy with Lucentis. The initial safety visual and anatomic outcome of this study served as a basis for our successfully completed randomized control of 449 patients, phase 2b study investigating the superiority of Fovista combination therapy with Lucentis, versus monotherapy Lucentis.

I will now turn the call over to Mike.

Thank you, Samir. Here is a brief update on our results of operations. Collaboration revenue for the fourth quarter of 2015, which we recognize under the Novartis agreement, was $4.8 million, an increase of $3.1 million versus the fourth quarter of 2014.

For the full fiscal year ended December 31, 2015, we recorded revenue of $51.5 million, an increase of $10.2 million versus 2014. This increase in both the quarter and for the year is related to revenue from shipments of Fovista API and increased amortization of deferred revenue. As we look ahead to 2016, we expect to earn our final clinical milestone of $30 million under the Novartis agreement related to the enrollment of the Fovista Phase 3 Eylea Avastin trial, and recognize revenue from additional shipments of Fovista API to Novartis.

Research and development expenses were $33.9 million for the quarter ended December 31, 2015, compared to $22.2 million for the same period in 2014. Research and development expenses were $131 million for the year ended December 31, 2015, compared to $88.4 million for 2014. The increase in research and development expense in the quarter and the year ended December 31, 2015, relates primarily to the advancement of Fovista Phase 3 clinical program and the Fovista expansion studies including higher clinical trial costs due to a larger number of patients enrolled in the studies and associated costs related to the manufacture of Fovista for these clinical studies, as well as increased compensation expenses associated with additional research and development staffing.

R&D expenses for the fourth quarter of 2015 declined sequentially compared to the third quarter due to lower manufacturing expenses for Fovista. As we have mentioned on previous earnings calls, our R&D expenses could have some unevenness during the year due to manufacturing schedules. For 2016 we would expect this unevenness to continue and also would expect R&D expenses to rise substantially as we reach full enrollment in our Fovista Phase 3 trials, and increase enrollment in the Fovista expansion studies as we enroll patients in our two Zimura studies and as we validate our Fovista API manufacturing process and begin to produce commercial grade Fovista API.

General and administrative expenses were $12.1 million for the quarter ended December 31, 2015, compared to $10.7 million in the same period in 2014. G&A expenses were $44.1 million for the year ended December 31, 2015, compared to $33.4 million for 2014.

The increase in general and administrative expense in the quarter and year ended December 31, 2015, relates primarily to increases in cost to support the expansion of the company's operations including the company's public company infrastructure and our hiring of additional management and corporate staffing, professional services, and consulting fees, and increased share-based compensation. We expect to see additional increases in G&A costs in 2016 due to the expansion of our commercial organization and operations.

The Company reported a net loss for the quarter ended December 31, 2015, of $35.6 million or $1.02 per diluted share, compared to a net loss of $31.7 million or $0.94 per diluted share for the same period in 2014. The Company reported a net loss for the year ended December 31, 2015, of $105.7 million or $3.06 per diluted share, compared to a net loss of $116.8 million or $3.51 per diluted share for the same period in 2014.

Fully diluted weighted average common shares outstanding for the year ended December 31, 2015, were 34.6 million. Turning to the balance sheet cash, cash equivalents, and available for sale securities totaled $391.9 million at December 31, 2015.

And now I will turn the call over to David.

Thank you Mike. And thank you for your time this afternoon and for your continued support. I will now turn the call over to the operator so we can open up the lines for any questions.

Thank you.

(Operator Instructions)

Yigal Nochomovitz, Citigroup.

Hi guys. Thanks for taking the question. Samir, you mentioned the pilot study on multimodal imaging, presumably you're referring to OCT angiography. I was wondering if you could talk in a bit more detail about the goals of that study with regard to educating physicians on maximizing the clinical benefit of Fovista plus anti-VEGF in newly diagnosed patients, or potentially Fovista monotherapy in the patients that are refractory to anti-VEGF. Thanks.

Yes, thank you for your question, Yigal. In general terms first, with the current monotherapy anti-VEGF we try to understand the imaging modalities. The only correlation with vision that we are aware of that has been demonstrated with OCT guided therapy is during the induction phase or roughly the first three months of therapy. Subsequent to that, to the best of my knowledge, I'm not aware of any biomarker that correlates with visual acuity using OCT.

With that as a background we believe that we need to understand modalities, imaging modalities, and what its relevance is to patient function. That is vision. And so newer modalities are coming about, one of them is OCT angiography. Basically the multimodal study is there to understand with combination therapy how do the various modalities such as fluorescein OCT, angiography OCT, with spectral domain and also ICG, how do they get sorted out with respect to visual benefit? And that is really the goal of this. I hope that answers your question, underneath that obviously there are lots of details that I can address if needed.

Following up on that, might we see some initial results from that pilot study this year? And related to that on the Phase 2 trials, any potential for data for anti-fibrosis or injection burden before the big Phase 3 readout in the latter part of the year?

There is no plan at the moment. I think our focus is to wrap up the enrollment in the ongoing 1004 study and get ready for the NDA filing.

Okay. And obviously you published the Phase 1 data last year. We've just been getting questions from clients regarding potential to see the Phase 2 study in print. Any plans for that this year?

We plan to submit the Phase 2 paper, I think it's just an issue more than anything else of priority and getting the key aspects related to the Phase 3 trial going and subsequently finishing enrollment. That is really responsible for what some may perceive as delay in getting the Phase 2 paper out. But I can assure you that we've put a lot of effort into it lately and as we added more individuals to our team and we expect to have that submitted very shortly.

Okay great. And if I could just get a question in for Mike on the financials. Mike, you mentioned the revenue recognition for shipments of API to Novartis. Can you be more quantitative on that at this point or not?

Sure, Yigal. For the quarter it was a small number. As you see, the total collaboration revenue was about $4.8 million, of that about $1.7 million was the recognition of deferred amortization. The rest was API revenue. When you think about 2016, we will be ramping up shipments to Novartis for their clinical use, obviously. I think expectations of about $15 million is reasonable.

Okay. And then regarding the R&D ramp up, can you provide some more metrics there as far as how much we should model that going up in the latter part of the year?

I won't provide any specific projection other than to say as I mentioned, the quarter we saw a downdraft in R&D on a sequential basis, still obviously an increase over the prior year. But I think for 2016 you have to think in terms of a minimum of the -- in terms of R&D of what we saw in Q3, about $41 million and build from there. Recognizing that it could be uneven because of the way that the API is produced. As it's produced, it's recognized as an expense.

Understood. Thank you very much.

Matthew Harrison, Morgan Stanley.

Great, thanks. Good morning guys. Just two for me. One, I'm just wondering, obviously at Bascom this year we saw some initial Ang-2 data. I'm just wondering if you can comment on that mechanism versus PDGF and where you think that might fit in or might not fit in, in the landscape. Obviously the data is preliminary at this point.

And then second, we saw some additional follow-up data at Bascom too related to Fovista in fibrosis patients. A little bit more detail versus what you guys had presented at your analyst day. Any additional conclusions you think can be drawn related to either the duration of the response or the kinds of patients in which you see a response? Thanks.

Good morning Matthew. It's Samir. Thanks for your question. I think when we talk about the relevance of target, at the end it's all about the clinical data as we progress through the various phases of the trials. I think one comment that can be made, if you just quickly are talking about targets is PDGF is one of the oldest cytokines in medical history, I believe, that we understand in a great level of detail. If you look at the amount of publications that are related to PDGF and its potential role in inhibiting some of the wound healing responses, I think the strength of science is significant.

When you couple that with the clinical data to date, I don't think one can sit here today and say that comparing one with the other without having the clinical data to really look at. That being said, I think that at least the data that has been presented if we examine it in a critical fashion, we continue to believe PDGF is the best target to add onto anti-VEGF, and we believe that we're best-in-class in that. I think that's based on clinical data that's out there.

Thanks. Any comments around the additional fibrosis data?

I think if you look at the Phase 2b study retrospective analysis of anti-fibrosis, in other words a dose response related anti-fibrotic effect, that is in the context of a positive Phase 2b trial that is adequately powered with reasonable follow-up. With that overlay if you look at the data both from the IFC that was presented at the angiogenesis meeting and the prospective data from our 1005 anti-fibrosis program, I think it's very reinforcing. And more important than anything else is, if you look at additional new science coming out of the fibrosis arena, it's all very consistent.

For example, in idiopathic pulmonary fibrosis the two drugs that were approved a little over a year ago, they certainly have one of the mechanisms that is affecting the PDGF signaling pathway. So really taken together, I think the data in itself is hard to really talk more about, to editorialize. But taken together, it's certainly reinforcing and provides a lot of hope for patients with wet AMD if the drug is approved.

Thanks very much.

Joseph Schwartz, Leerink Partners.

Good morning. Thanks very much. I was wondering if you could speak to whether, on a blinded basis, whether the baseline characteristics for the two Phase 3 trials are more or less consistent with Phase 2 and your expectations for who would be enrolled in Phase 3. And whether there are any differences between the two Phase 3 studies, again on a blinded basis? Baseline characteristics only.

Good morning, Joe, it's Samir. Thank you for your question. We wouldn't know the baseline characteristics. Of course the [NASH] studies, the database hasn't been closed and one of the Phase 3 trial is ongoing. I think as far as from a general standpoint, the inclusion criteria are quite similar between the Phase 2b and 3 and I think we've addressed that.

There's no reason for us to believe that there would be, especially the key characteristics related to baseline vision, lesion compositions and sizes of lesions, et cetera should be quite similar. And don't forget that the inclusion in this trial just as it was in the Phase 2b, it's done by an independent reading center. It's the same reading center and that process is probably the single most variable in making sure that the patient characteristics of relevance are similar.

I would also just add that the Fovista effect has been very, very broad as we've shown many times. Anyway you cut the data as far as baseline characteristics, as far as (inaudible) endpoints, the Fovista combination group always does better than the anti-VEGF monotherapy control group. As Samir said, while we believe because the criteria are so similar that most likely the patient population should be similar, because of this very broad effect even in anti-VEGF treatment failures we see an effect in the Fovista expansion trial.

It really should not matter, we're talking about a drug that we believe will show a broad effect among all comers. And so far that is what the data shows. We, again, have not seen the baseline demographics; we won't until we get the data and while we expect them to be close to Phase 2, what's been very exciting is just how broad the effect of Fovista has looked in both naive and limited data with treatment failures across the board anyway you cut the data.

And of course the last point, all this has to be confirmed in a controlled trial fashion. But the suggestion is exactly what David said.

That is helpful. And just one more for me. I was curious if you could talk a little bit about how consistent are the -- is the methodology or the philosophy that you think physicians are using to guide how many injections they are giving patients in the second year of the studies.

I think they, to the best of my knowledge, they have to continue based on what the protocol dictates. There's no reason for us to believe that they would deviate from that.

Yes. I'm just asking because, obviously the goal is always to improve vision, and yet the drug works -- may work differently than the VEGFs and where they often just look for fluid and other anatomic changes. I'm wondering how -- I think the data, it's going to be borne out in the data and we will learn a lot from that data, but I'm just wondering if a priori you have any hypotheses for what to expect as far as how physicians are going about the deciding whether or not if any individual patient needs to get another injection or can wait longer to get an injection. Any thoughts on that?

Unrelated to our specific trial, I think as a general question it's a very relevant one. An important one that we spend a lot of time on. That is, what is the best way to address the long-term outcome for wet AMD patients with, which I think there's very little debate that as the anti-VEGF agents are currently used, long-term benefit is not as great as we expected. In fact most patients return to baseline or actually lose vision depending on the study from two to four year time point.

In that particular setting what could be the effect of Fovista add-on? I think that it's a fairly well shown by multiple studies that the key variables responsible for decreased vision are scarring, atrophy, and increased lesion size. Our Phase 2 study specifically showed that there is a relative decrease compared to monotherapy in the increase in the lesion size. So that certainly gives us a little bit of hope that these patients may fare better. When you add to it the anti-fibrotic effect, that adds -- gives it, the story is strengthened.

And we have no reason to believe that Fovista additional or inhibiting anti-PDGF leads to increased atrophy. Really taken together there are two, in my opinion, there are two basic ways to improve the outcomes over the longer-term. One is increase the frequency of injections and I think that has been shown with widespread data from anti-VEGF monotherapy. And the second is to address the three biomarkers I just talked about, and I think, PDGF inhibition stacks up favorably. It is our hope that long-term study will show a little better outcome than we currently see. Does that answer your question?

Yes. It's definitely helpful. I'm just wondering how enlightened do you think the clinicians that are enrolled, that are treating the patients in the Phase 3s will be before having any data in a clinical trial setting to adapt throughout the study and observe these anatomic and vision changes, in order to determine when to -- how often to be administering the therapy. It's a hard question I think to answer before the data.

But I think it's a fair one to project. I think it's our responsibility to some extent, to gather all this relevant data and try to make the connection in a scientifically robust fashion with the thought leaders. And collectively, the more data we have in the proper setting and analyzed in a rigorous fashion, hopefully this group of physicians are extremely intelligent and are driven by data if presented in an adequate fashion. We're hoping that all this will be driven by data and the behavioral changes that are responsible for better outcome will take place based on data.

Thank you.

Yatin Suneja, SunTrust Robinson Humphrey.

Thank you for taking my question. Just a broader question. Could you maybe help us put in perspective the expectations from the Phase 3 program? In the Phase 2, I believe you showed 62% comparative benefit and there was also a benefit on several other endpoints on visual acuity. How should we think about the Phase 3 and maybe could you remind us on the powering assumptions?

I think, first thank you for your question. I missed the first part, were you talking about the benefit on the Phase 2 study. What is the connection with Phase 3, you were asking in relation to that?

So basically I just wanted to understand what sort of product profile we should be looking at, what are your expectations? I think our understanding is that you powered the trial well. So just help us understand what your expectations are from Phase 3 in terms of efficacy.

Sure. That's a very valid question, an important one. One way to look at it is very simple. If you just look at the Phase 2b study as the baseline, we had roughly 150 patients per arm in that study. And that showed a statistically significant benefit at six months at a level that you just said, stated, 62% vision benefit from baseline.

That particular situation, having 150 patients and we have used the Hochberg procedure because of multiplicity, there were two doses, so if you look at that and say if you extend that to a year and you have the same data, one can reasonably state that 150 patients is all you need when you especially, when you're eliminating one of the doses. So the multiplicity issue is not as important, so I think a very valid case can be made that 150 patients is adequate for each arm. We have roughly twice of that much in the Phase 3 studies. So it gives us a great deal of comfort that power won't be an issue in determining the benefit of Fovista addition to anti-VEGF regimen. Does that answer your question?

Yes. What are the powering assumptions?

We have not disclosed those, but I think one can easily look at the 150 analogy that I gave. It's north of 80%.

And then on the anti-fibrotic properties of Fovista, is there a way that you can get that on the claim, based on the ongoing Phase 3 trials, and maybe the sales rep can go out and talk about that, how can we get that on the label?

I think at the end it's the improvement of vision or reduction of vision loss and trying to correlate and making the case. If indeed it's related to fibrosis then I think the regulatory agencies will look at it. And always connecting it to function. I think that's the right thing to do.

Great, thank you very much.

Stephen Willey, Stifel.

Thanks for taking the questions. Just a couple on the recently initiated Zimura study, actually. Just wondering if you guys plan on disclosing the doses that you have moved forward. I know in the 2A there was dose escalation up to 2 mgs and it looked like there was a continued benefit with respect to [letter] gain there, relative to the 1 mg dose. So just wondering if you've moved the dose into this recently started study that's actually above that 2 mg threshold?

Yes. I think to the best of my knowledge it is the higher dose that we're going with. But as you correctly stated, the data was supportive in that dose. But by the way, I think all the doses if you just look at patients at Phase 1 that have been presented in our studies and other studies with other target, the complement addition stacks up very favorably. We did go with the higher dose, again to the best of my knowledge. I think that we will see what the data shows.

Okay. With respect to pre-specified secondary endpoints in that study, I'm presuming GA is one of those. But are there any others that are included in the study that are not posted to ClinTrials?

Are you referring to the Zimura wet AMD trial or the dry?

No, the dry AMD study.

I think that the standard anatomic endpoint is a good way to think about it as secondary endpoints for the dry AMD.

Okay. And then maybe just a quick question for Mike. Just curious, I guess, post some of this ramping in G&A towards year end, just wondering where you are from the organizational headcount? And as you think about building out some of this additional infrastructure throughout the course of 2016, what your target range is for headcount by the end of 2016? Thanks.

Sure, Stephen. Thank you. Just a couple things about G&A. Obviously it's a line that includes -- that will now include, and does, our commercial organization and perhaps at some point in the future we'll start to identify sales and commercial as a separate line or break it out separately. Headcount is growing, it's growing for a few reasons. One is the ramping up of the G&A staff, both finance and legal et cetera. It's also related to commercial, we'll start to build out our commercial organization, Samir alluded to that in his remarks.

But more importantly, the increase in spending related to the commercial we'll be spending money on market research and market planning and things like that. It's hard to predict when that spending will start to ramp up, but more than likely it's in the second half of the year. When I think about G&A for next year, we closed the quarter with a run rate of around $12 million, and again that includes all of our stock comp expense et cetera. And when you think about next year, I would probably model in that as a minimum number and build from there. Hopefully that is helpful.

It is. Thanks for the color.

Tyler Van Buren, Cowen and Company.

Good morning and thanks for taking my questions. Just a follow-up to an earlier question asked on the publication of Phase 2b data. You mentioned that you would be expecting to have the data submitted for publication shortly. Just one clarification on that. Does it mean that we could potentially get a publication this year prior to the Phase 3 data that's going to be released?

And then secondly just more of a conceptual question on Zimura. You have a Phase 2 study ongoing in wet AMD. Clearly there's a fair amount of evidence out there for complement inhibition in dry AMD. If both Fovista and Zimura are eventually successfully developed, how can we think about both of these drugs treating wet AMD patients? Could it potentially be used in more mild patients as a bridge from dry to wet? I'm just curious to get your thoughts there. Thanks so much.

Great. Hi Tyler. Thanks for the question. Let me go backwards, on the Zimura, it's an excellent question. What we know currently is if you look at patients with neovascular AMD and postmortem studies show that there's a lot of staining that occurs through some of the terminal in effect or components of the complement pathway. And the question is, is that upstream or downstream?

We also know from other publications by independent labs, that complement activation can up regulate a variety of angiogenic cytokines such as VEGF and PDGF. One could argue that complement inflammation is upstream and as a result, if that is true, by inhibiting complement you may be able to decrease the release of these angiogenic cytokines which may translate into reduction of treatment burden. That's one way to think about it.

On the other hand if complement-mediated inflammation is downstream and it is responsible for one of the reasons for anti-VEGF resistance, then the very patients that you alluded to, patients, but not mild, but those patients who have failed anti-VEGF therapy, that might be the appropriate target. Again I think what we showed in our Phase 1/2a study was treatment naive patients benefit significantly. The answer could be both of those are responsible. It's hard to tell. So what we're doing now is actually looking at if you can reduce treatment burden. Because we thought -- we think we have a signal from the Phase 1/2a study that you can get enhanced visual outcome.

As far as the publication question is concerned, we are confident based on the data that has already been presented, that is already in the S-1, I think the key opinion leaders have exhibited their enthusiasm for the Fovista expansion study. We don't believe that getting it published is an issue. As far as the timing is concerned, it's a peer-reviewed process and really depends upon the specific journal and what their comments are and what they'd like to see or have us explain. That process is hard to predict. I can't say whether it's going to be this year or whenever.

Okay. Just a follow-up on potentially reducing treatment burden for Zimura. I guess you are saying then potentially you could use an anti-VEGF Fovista and Zimura, that's three injections, would it potentially be at different time points over the course of treatment?

Yes. I have no knowledge to figure out the optimal regimen of this. As we know, even today, one could argue that we don't know the optimal regimen of the anti-VEGF agents, even after almost a decade of the drugs being out there. That has to be worked out.

I think we first have to show the proof of concept that we know what typically is required for anti-VEGFs, usually a quarterly dosing regimen. None of the anti-VEGFs have convincingly shown efficacy to be same as monthly. With that as a background, if you are able to maintain the vision with that type of administration with Zimura, it's a good place to start, that there is a signal here and maybe a more controlled study is warranted. And then you can work backwards and try to lengthen the time and see if it still efficacious.

That's fair. Thanks again.

Anupam Rama, JPMorgan.

Hi, it's Eric in for Anupam this morning. Thanks for taking the question, just a follow-up on Zimura, if I could. Related to the Phase 2 wet AMD study, just wondering if the trial design calls for an interim analysis? You elaborated on how the approach may be differentiated with other anti-VEGF combination. Just wondering if part of that differentiation might be allowing for the enrollment of Fovista experienced patients and how you might be looking to differentiate from other combination approaches with anti-VEGFs. Thanks.

I don't think at this time we have any plans of doing -- if you are alluding to a triple therapy. I think that we first have to answer the questions which I alluded to earlier, once we get the data on Zimura to understand how it's working, if indeed it shows a signal.

I don't think -- I think the second issue you brought forth was how it would work with different anti-VEGF combinations. I think all the anti-VEGF agents are roughly similar in their safety efficacy and so if you look at it there's no product differentiation as far as that is concerned. One could argue that there is product differentiation based on the regimen. Of course Eylea has been shown to be non inferior to monthly administration of Lucentis. Yet Lucentis and Avastin to the best of my knowledge have not been studied adequately with a bi-monthly administration.

Net-net you really don't know what the optimal regimen are. Again, the way we think about it, if you're going to add Zimura to the mix, you just have to make sure all anti-VEGF agents are administered with the same frequency and so that you are able separate is the effect on treatment burden because of the drug, or is it because of anti-VEGF agents or Zimura. Those are the kinds of signals we're seeking to go into a larger sample size study.

Okay great. Thanks.

Terence Flynn, Goldman Sachs.

It's Samir on for Terence. Thanks for taking my question. For Fovista, just to clarify, will you begin hiring your sales force in advance of the Phase 3 data? And can you review expectations for size of the sales force? Thanks very much.

Yes. We have said that we believe the full marketing and sales force will be approximate 100 people or less, that includes the sales force. We have hired our Chief Commercial Agent -- Officer, Henric Bjarke, who came from Alexion, who launched the first blockbuster in ophthalmology when he was at Pharmacia, the Pfizer drug Xalatan and also launched the first anti-VEGF drug for us at Eyetech. Henric not only knows the field but has gotten great experience with Alexion.

He recently hired his head marketing person, another Alexion person who just joined us last week. And we have an analytics person on the commercial end, we have a reimbursement expert that's been with us for a while as well and they will build out the rest of the team appropriately. We really have not publicly mentioned when we will bring in certain positions, but I would just say that we think we've built a really exciting team and we will continue to do that through a prelaunch.

Thank you.

That concludes today's question-and-answer session. Mr. Guyer, at this time, I'd like to turn the conference back to you for any additional or closing remarks.

Great, thank you all for your interest and continued support and we look forward to giving you further updates. Thank you.

That concludes today's conference, we appreciate your participation.