IVERIC bio Inc (ISEE) 2016 Q3 法說會逐字稿

Good day, everyone, and welcome to the Ophthotech Corporation third-quarter 2016 earnings results conference call. Today's conference is being recorded. At this time I'd like to turn the call over to Kathy Galante. Please go ahead.

Good morning and welcome to our third-quarter 2016 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. Glenn Sblendorio; Executive Vice President, Chief Operating Officer, and Chief Financial Officer.

Before we begin, I would like to remind you that today we will be making statements relating to Ophthotech's tax future expectations regarding its financial results, potential receipt of milestone payments, clinical and regulatory development and commercialization plan. These statements constitute forward-looking statements for purposes of the Safe Harbor provision under the Private Securities Litigation Reform Act of 1995. These statements may cover 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 August 5, 2016, 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.

This is an exciting time for Ophthotech, as we prepare for initial top line data readout from two trials of Fovista in combination with Lucentis for the treatment of wet age-related macular degeneration. As we have previously stated, we are presently on track with final data cleaning and expect data lock and unmasking of data for both trials to be completed in time to allow us to report initial top line data from both of these pivotal trials in this fourth quarter.

Our key objective and plan is to make Fovista commercially available to physicians for their patients with wet AMD as quickly as possible, subject to positive data outcome from the Phase 3 program and successful regulatory approval. Between now and data, we continue to focus on compiling a new drug application shell in an effort to ensure efficiency for an optimized NDA submission to the FDA, again subject to obtaining a positive outcome for the Phase 3 trials.

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.

The third Phase 3 trial, which is investigating Fovista in combination with either Eylea or Avastin, completed patient recruitment in June 2016. The Company expects initial top line data from this trial to be available in the second half of 2017.

I will now turn the call over to Samir.

Thank you, David. Thank you, everyone, for joining us this morning.

As David stated, we are actively engaged and busy working towards generation of a new drug application shell, assuming the positive outcome of the Phase 3 trial. We were pleased to announce last week that the results of our Phase 2b Fovista combination therapy study in wet age-related macular degeneration have been published in Ophthalmology, the journal of the American Academy of Ophthalmology. As you may recall, this prospective, randomized, controlled Phase 2b clinical file of 449 patients with wet AMD indicates that Ophthotech's Fovista 1.5 mg, and with certain combination with Lucentis, met the pre-specified primary endpoint of mean change in visual acuity.

Patients receiving the combination of Fovista 1.5 mg and Lucentis gained a mean of 10.6 letters of vision on the ETDR standardized chart at 24 weeks, compared to 6.5 letters for patients receiving Lucentis monotherapy, a p-value of 0.019. This represented a 62% additional benefit from baseline. No significant [test] issues were observed for either treatment group in the trial.

The safety visual and anatomic outcomes of the study served a basis for our Phase 3 Fovista in combination with anti-VEGF registration program. The published article enclosed dual antagonism of PDTF and VEGF in neovascular AMD, and of course can be accessed on the Ophthalmology website. We would like to thank all of the co-authors for their time and commitment to the Fovista Phase 2b study.

The Fovista expansion studies are designed to further evaluate the potential of Fovista and addressing the variety of unmet needs in wet AMD, including investigating the potential role of Fovista in combination with multiple anti-VEGF agents to reduce subretinal fibrosis and investigating the potential role of Fovista combination therapy to reduce treatment burden for wet AMD patients. These studies are progressing just fine.

We continue to enroll patients in the Phase 2/Phase 3 trial of Zimura in patients with geographic atrophy, an advanced form of dry AMD. In addition to Phase 2 trial, evaluating the potential role of Zimura when administered in combination with anti-VEGF drugs for the treatment of wet AMD has also been activated.

I will now turn the call over to Glenn.

Thank you, Samir, and good morning, everybody. This morning I will present a brief update on our financial results.

Collaboration revenues for the quarter ended September 30, 2016, which you will recognize under the Novartis agreement was $1.7 million, a decrease of $1.7 million compared to the same period in 2015. The decrease in the quarter primarily related to a decrease in drug shipments to Novartis. Collaboration revenue for the nine-month period ended September 30, 2016, was $45.6 million, a decrease of $1.1 million versus the same period in 2015.

As we look forward to Q4, we expect to recognize revenue primarily from our R&D activities, and planned shipments -- additional shipments to Novartis during the period. Research and development expenses were $50.9 million for the quarter ended September 30, 2016, compared to $40.5 million for the same period of 2015. Research and development expenses were $136.9 million for the nine-month period ended September 30, 2016, compared to $97.1 million for the same period in 2015.

The increase in R&D expense in both the quarter and the nine-month period ended September 30, 2016, relates to increased costs associated with our Fovista program, which includes manufacturing activities, our Phase 3 clinical program, and the FES studies, as well as increased compensation expense associated with additional research and development staffing. We anticipate R&D expenses to increase as we continue our Fovista Phase 3 trials, also continue our enrollment in the Fovista expansion studies and continued enrollment in the two Zimura studies and ongoing manufacturing spend, including validation.

As we have mentioned in previous calls, our R&D expense may fluctuate from quarter to quarter as we continue to validate our Fovista manufacturing processes. In addition to that, we will continue to produce commercial-grade Fovista API and continue to produce Zimura API for our ongoing clinical program.

General administrative expenses were $12 million for the quarter ended September 30, 2016, compared to $10.4 million for the same period in 2015. General administrative expenses were $37.2 million for the nine-month period in ended September 30, 2016, compared to $32 million for the same period in 2015. The increase in general administrative expenses in both the quarter and the nine-month period ended September 30, 2016, relates primarily to increased costs to support the expansion of the Company's operations, additional staffing, and increased share-based compensation.

The Company reported a net loss for the quarter September 30, 2016, of $60.9 million or $1.71 per diluted share, compared to a net loss of $39.6 or $1.14 per diluted share for the same period in 2015. The Company reported net loss for the nine-month period ended September 30, 2016, of $127.1 million or $3.59 per diluted share, compared to a net loss of $70.1 million or $2.03 per diluted share for the same period last year.

Fully diluted weighted average common shares outstanding for the quarter ended September 30, 2016, were $35.6 million. Finally, turning to our balance sheet, cash, cash equivalence, and available for sell securities totaled $321.2 million as of September 30, 2016.

Now I'd like to turn the call back over to David.

Thank you, Glenn. Thank you, everyone, for your time this morning and for your continued support. I will now turn the call back over to the operator so we can open up the lines for any questions.

Thank you.

(Operator Instructions)

Anupam Rama, JPMorgan

Hello guys. It's Eric in for Anupam. Thanks for taking the question. Just a question regarding the potential label, assuming positive data at the end of the year. I know you've had a lot of questions about whether we should expect a (inaudible)specific label or whether you will be seeking a broader anti-VEGF indication.

Do you have a sense from regulators what would satisfy a broader VEGF label? And to the extent the concern is more potentially around safety than efficacy, do you have the ability to supplement the initial NDA with data from the Avastin/Eylea combo study? Thanks.

Good morning. Thanks for your question. I think we haven't had specific level of specificity that you indicated about the label, but in general I think I can make the following comments which may be helpful to you.

I think that in connection to the aspect of the subtypes of lesions and things of that sort, I think it's been shown that, we believe fairly convincingly, that when you adjust for all the variables that there's really not much difference between those subtypes. And we think we'll have a fairly good argument in connection to that, assuming the data are supported.

In connection to the breadth of label in different anti-VEGFs that are utilized in combination, I think we have to just demonstrate that the addition of Fovista and its response is not really different amongst all the three anti-VEGF agents, and specifically on the 1004 study is to show rough equivalence across the spectrum of efficacy and safety parameters. Does that answer your question?

Yes, mostly. I guess I was just sort of specifically wondering whether safety data from the third Phase 3 study was something that could be used to supplement the initial filing without a look of efficacy at the end of the second half of 2017. Thanks.

I think in general, in all these trials and safety you look at all safety of exposure of the drug, not just the study that is forthcoming 1004. But also previous studies, the Phase 1 studies, the Fovista expansion studies, any exposure, because, as you know, the trials are powered for the pre-specified primary endpoint on efficacy. And the real understanding of safety is a ongoing process, not only previous trials but the trial in question and future exposure as well.

Got it. Thanks for taking the question.

Yatin Suneja, SunTrust.

Hello guys. Thank you for taking my question. A couple of questions. First one on the manufacturing, we recently saw you lined up the fill-in finish provider. What else do you need to make sure you have in place so that you can have a timely launch? And then I have another question.

I think that's right fill-in finish really with the last piece of the manufacturing chains. We were very happy to get that in place. I think on the API, we have been talking about validation. That continues to go well.

Obviously as time goes on, we will continue to look at second sources, which we're actually doing now both on the API and on the [COGS] substance side. I think we are well prepared for getting ready for next year and data.

Got it. And then just one more question. After the failure of Regeneron co-formulated product, what is your updated thought on what sort of expectations do you have from this trial? Do you think the failure of Regeneron PDGF co-formulation might have lowered the bar? And do you have any updated parts on the co-formulation work that you are doing with Novartis? Thank you. I think with respect to our confidence on the Phase 3 trial and its outcome is really unchanged. I think that the strength of data brought from our Phase 1 and highly supported Phase 2 trial design and its sample size, and the data outcome and the robustness of the Phase 2 study sort of speaks for itself. And the publication highlights some of the recent publication that we just discussed highlights this particular strength and its support for confirmatory Phase 3.

I think that there are other, as we previously stated, we continue to believe we are first in class and best in class at something we have always felt was the case. We also believe that targeting the light end is definitely more beneficial than targeting the receptor. I think we talked about that previously, as well. And I think that it would not be appropriate for me to comment on all the data from the study you are referring to simply because I don't think we've seen the totality of the data.

So I don't think it affects anything. I think if you look at the Phase 1 data that were in that trial, we're not really surprised by the outcome in the Phase 2 trial. It has really no bearing on what we think is going to happen with the Phase 3 trial on our side.

The co-formulation question, we've nothing more to add that what we have before, that is we think that, as you've seen and heard in various times (inaudible) that we've had the physicians' preferred choice with respect to the availability of the anti-PDGF and anti-VEGF agents as separate presentations. But we also are developing with and thinking about variety of other presentations, which includes co-formulations as one of them, normally through Novartis, that you referred to, but other avenues as well.

Thank you very much, guys.

Thank you.

Yigal Nochomovitz, Citibank.

Hello, thank you for taking the question. Just firstly on the timing of the data for the Phase 3 Lucentis plus Fovista, can you be any more specific about when in the fourth quarter we expect the data to arrive? Thanks.

No, as we said earlier, we are in final data cleaning, and very soon we will have the database lock with the unmasking of the data. In a previous earnings call, I think one of the questions we went over, just industry-wise, was how long that takes. We believe we are on track, as of now, for data this fourth quarter. Some time between now and end of the year.

Thanks, David. And then I had a few questions on the Phase 2b paper. I just was curious, I guess I was expecting to see some data on retinal sickness reported in the Phase 2b, given that you had OCT measurements taken at weeks 4, 8, 12, and 24. Samir any thoughts on why that wasn't included in the study, in the paper? Thanks.

Specifically, I think as far as talking about the paper, it is written by multiple authors, so I think rather than talking about the paper, in general to your question, which has the same type of parameters that have been shared in previous meetings, and as one, the sickness parameters are there, but what really matters is what is its relevance.

If you look at the relevance, I don't understand why what happens at three months or four months or five months really is relevant. If you take a look, for example, in some of the randomized, controlled trials, the thickest retina -- sorry, the group with the thickest retina did the best in one trial and in another trial the thinnest one did the best, so there's no correlation at all. That is something not really that relevant.

If you look at the [cap] study, the patients who had the thinnest and the thickest retina had the worst outcome. What you really want to look at is the morphologic parameters, and thickness can involve a variety of different elements. It could reflect the health of the neurosensory retina, the amount of hyper reflective materials that's made up of fibrosis, for example, if it's subretinal, pigment epithelial detachment, none of these have really that much relevance for vision.

So I think that it doesn't serve any purpose. What we've shown is, I think, much more relevant in showing the fluid in various compartments, and that, I think, is much more informative, and we believe it's a much more sophisticated treatment of the process. I will say this, though, as far as the paper is concerned, the amount of information that was given, I think the editors probably saw it as more than what typically is shown. Not a single question came out about giving the thickness and the parameters that you just asked.

Okay. Thanks. And it was great to see the error bars reported on the primary endpoint to see that there was a good separation for 1.5 mg and Lucentis control. I guess I was curious why you chose not to show error bars for some of the other anatomic endpoints, specifically on the improvements in visual acuity as a function of baseline CMB lesion size.

If you're scientific about it in terms of clinical trials and you think the shift is statistics, those are all exploratory endpoints. And all exploratory endpoints are just that: they're hypothesis-generating. And secondly, as far as evaluation is concerned, given the multiplicity, you can't look at a point estimate and give error bars.

For example, just to give you an example, you could have a p value that is significant, but it doesn't necessarily mean that the inference is what one would want to gather in a setting of descriptive statistics. So they're not valid, and for that reason it could be misleading.

The way to really look at descriptive statistics is look at the actual numbers and the totality of the data and trends that they give. And any inference based on error bars or p value is not appropriate.

Okay thanks. Just a few specific questions on the way the Phase 3s are being run. I am assuming that you are using a sham injection for the control for the Phase 3s as was done in the Phase 2bs. Is that correct?

Yes, it is the same as all randomized trials to date. Most of the randomized trials to date that I'm aware of it is sham injection. It doesn't really penetrate, if that's what you're asking. You can't see the syringe itself pressing on the eye. That's been the standard for as long as I can remember since perhaps the year 2000. All were in my control files.

When Fovista is administered thirty minutes later, are the investigators re-administering the anesthetic, or is it just done with the initial anti-VEGF?

I think all the details and the protocols are there in whatever's publicly available. I don't have anything else to add at this point.

Okay, great. Thank you.

Tyler Van Buren, Cowen and Company.

Hello, good morning there. Thanks for taking my question. Next month when the data reads out, there is clearly multiple ways to win here. Perhaps one of the scenarios that is more in the middle, say the scenario where both trials reach statistics yet only show a 2.5 letter benefit, which is obviously right on the edge of statistics, how do you think about the clinical utility of that?

And more importantly, what other data will be important to consider as you examine the overall clinical utility? For instance, will we see three-line gainers or losers, and what delta would be meaningful, say like a 5%, 10%, 20%? Any insight would be helpful there.

Sure. Hello, Tyler. So it's a very important question and a very complex one. And perhaps I'll try to summarize some of the fundamentals. First and foremost what is really important is the totality of the data, looking at the safety in efficacy.

And the totality in particular related your question, there's no magic number whether it's three, four, or five letters or whatever it is that constitutes either clinical meaningfulness or approval, for that matter. You have to look at the totality of the data. The broad range of parameters for clinical meaningfulness. They are really complicated when you have mean change of vision because of differing baseline variables at different endpoints.

These are a lot of the ones you talked about were finery endpoints of clinical meaningfulness. There's a fundamental disadvantage of creating a primary variable in that considerable amount of information is lost. You can get a reduction in power. If you have alt-scores on one side of the cutpoint, they're all weighted equally. There's loss of information. There's influence of ceiling and floor impact. And you have to examine this for each trial in each of those combined.

So what I'm trying to say here is a great depth of analysis is necessary to put the proper context so that you understand what the mean change of vision means. I realize that some individuals often say three is significant and four is and five, and I understand the need to do that, but it really is the totality of the data. And we share and agree with the FDA that totality has to be evaluated.

I'll give you a specific example to your question. If you look at protocol T, for instance, I think you had a 3.6 letter or somewhere in that range difference in that particular study. Yet if you look at the subgroup of patients that were 20/30, 20/40, there wasn't much of a difference. But then when you went to 20/50 or worse, it was approximately a 4.2 letter difference, and that was considered very meaningful.

I don't even think that was -- not all of those aspects were evident if you looked at the secondary endpoint, for example. That serves as a good backdrop to see that the totality of the data requires thorough analysis so you understand what the mean change in vision is.

Okay that's helpful. Is it possible that we would have the data stratified by baseline visual acuity when it reads out potentially next month?

That's clearly an analysis amongst what we have to do that I just talked about. I think that those kind of level details I would not expect in general in what I consider top line where you have to do a thorough analysis.

And just to be clear, besides mean visual acuity gain, would you look at three-line gainers or three-line losers as potentially the other most important visual acuity endpoint? And if so, what delta has been observed there that is meaningful in most clinicians eyes?

So again, it's not something you can just have a finery answer to, as much as I would like to share with you. I'll just do it by example.

If you take a look in Phase 2, for example, I think we had in the one of the analyses using missing values, I think it was ITTL (inaudible) roughly there was a difference in three-line gain of 36% versus 30%, which on surface looks like it could be meaningful. But yet you look at the four- and five-line gainers and you see a marked difference between the combination mark, meaning that the 36% in the combination where most of the patients kept on going on, and you had a significant number that were gaining four and five lines, yet because of the cutpoint issue I just mentioned earlier, it doesn't expose the true benefit when you use a cutpoint.

So only if the context is presented in that example of the four- and five-line gainers can you analyze with any validity what the three-line gain means. Otherwise it's open to misinterpretation. Does that example help explain why it is that you have to look at the totality of the data with a greater depth of analysis?

Yes, that's helpful. I appreciate your thoughts. Thank you.

Geoff Meacham, Barclays.

Morning, guys. Thanks for taking the question. David, you mentioned completing a lot of work ahead of the filing. I'm just curious if you could go into a little bit more detail, what's the gating factor beyond the Phase 3? Is it CMC, is it talks, is it preclinical? Just curious what's left to be done.

I was referring to writing out the shell for all of the various sections as far as -- we are in very good shape on all of them. It's really about getting the data and being able to put in your shell, and all of the components have been written, or partially written, or written where we just need to fill things in. That's the goal for us to get through by data.

Got you. Okay. For David or Samir, I just wanted to get your thoughts on the Ang2 mechanism and what that -- based on the data so far or any of the work that you guys have done on that as a combination approach in wet AMD or DME.

So we have looked at it. We don't think it is anywhere close to anti-PDGF. And its potential in improving outcomes in wet AMD, I think most would agree, if it has any role, it would be for stabilization of ethylene anti-permeability. And if you look in one of the Phase 1 studies from one of the pharmaceutical companies, you see that monotherapy administered anti-angiopoietin-2 did not affect the permeability at all.

I believe there was one patient that lost eight letters and continued to get therapy and lost even greater amount of letters all the way through. When we see that kind of data, it gives us a little bit of pause. We have looked at it, but we just don't think it meets our standards for development into a clinical study.

Okay great. Thanks guys.

Joseph Schwartz, Leerink Partners.

Thanks very much. I was wondering if you can talk about whether you've been doing any pricing work to position yourselves to have the most market impact depending on how the data in three Phase 3s looks?

In other words, are you making your decision on pricing based on the data from the two Phase 3s in combo with Lucentis, or do you think that you are going to need to take into account the data you see in the third Phase 3 in combo with Eylea or Avastin? Are there different price elasticities in these different market segments, and how are you thinking about having the most impact based on the data that you see for Fovista on top of the various VEGFs?

We've done a lot of work on pricing. Obviously we really need to see the data before we can make our final recommendations. And it is something that we're not going to discuss publicly at this time.

In short to say, we have got a commercial team, a Chief Commercial Officer who launched the first anti-VEGF in this space, launched the first (inaudible) blockbuster, Xalatan Pharmacia, and comes from Alexion's Board. Another person from Alexion with him, we have Dominic, a reimbursement expert that has been full time with us for a number of years now. So we've got a very good team that has done a lot of pre-launch work in this area. But really can't share anything publicly at this point.

Okay. And then maybe a question for Samir. Is there any reason to believe that Fovista or PDGF inhibitors in general will produce more or less of a benefit in combination with different VEGF inhibitors?

Obviously the Eylea/rinucumab data was a surprise. Do you think that any of that could be due to the VEGF that's being used in combo with a PDGF antibody or even [aftemer]?

I think we can comment on the formulation that's still (inaudible), the basis of clinical data that served as the basis for the study you are talking about. I think, suffice to say as far as your question about Fovista's compatibility with other anti-VEGF agents, we see no reason why there should be any issues.

I think that's one of the benefits of aftemers to begin with. And I think you've seen the data in the science today where those are real-world patients with very advanced disease, and, grant you, the number of patients were limited and with a follow-up up to one year. Those were not with Lucentis. They were with other anti-VEGF agents, and also there was an IFP done by retina consultants in Arizona. Even there, the other anti-VEGFs agents were used with compelling data, as well. There's no reason to believe that Fovista would act any differently as of today with any of the anti-VEGF agents.

Thanks for taking my questions.

Thank you.

Matthew Harrison, Morgan Stanley.

Hello this is [Decrum] on for Matthew. A lot of investors have been focused on baseline imbalance and lesion size as it impacting the strength of the Phase 2 data. Could you give your views on how important lesion size is as a prognostic factor in these trials, and if you think that impacted the Phase 2 data?

First, I think the publication speaks for itself. There's no discussion of that. It's a very -- it's a top journal. You would expect that something -- I think that tells you there is no validity to the statement of impact of the data because of lesion size measurement in itself. Just to give you some background.

I don't know why someone would think that would affect at that level in terms of a one-to-one correlation with lesion size, nor are we aware of any uniform or constant or consistent trends. If you look for example, at the ANCHOR trial, if you look at three-line gain in the 0.5 mg, the largest lesion did not have the worst outcome, as you would expect. The 0.3 mg, the smallest lesion in the ANCHOR, did not have the best vision, as you would expect. If you look at mean vision with the 0.3 mg in ANCHOR, the second quartile in fact had the best outcome, not the smallest lesion.

In MARINA, there was no real difference in mean change in vision in the two smallest quartiles. Harvard has a publication, for example, stating different predictors of visual outcome, and total area of lesion was not a predictor of outcome. In the VIEW trials, I think it was VIEW 1, the smallest CMB size had the worst outcome and the largest one had the best income. In the CATT, the second quartile had the best outcome, not the smallest lesion.

So you've got here CATT, VIEW, Harvard, MARINA, ANCHOR, and those are all randomized, controlled trials, and you don't see that type of directionality and consistency as some may want to implicate. It's simply not true.

Thank you.

Stephen Willey, Stifel.

Thanks for taking the question. I guess just another Phase 2b manuscript question. I know that there was an analysis showing that there was a reduction in RPE atrophy with the combination. I guess I was just wondering one, if patients were actually precluded from having RPE atrophy at baseline, and then two, what do you think is the underlying biology that is driving this trend towards reduced RPE in the combo [arm]?

Sure, thanks for your question. I can give you the biology, but the first part of the question I missed. What was the first part of the question, please?

Were patients actually excluded from having RPE atrophy at baseline?

Oh sure. To the best of my recollection, I think if they had atrophy in the center area, they're excluded for the simple reason that it would be very difficult to assess any drug effect.

As far as the biology is concerned, ultimately corneal neovascularization is a wound-healing response. In that particular setting you could expect epithelial mesenchymal transformation, for example, to be occurring, and you could have migration of the retinal pigment epithelium to the side of corneal neovascularization. And PDGF has been shown to be chemotactic for the retinal pigment epithelial cells. It's been shown to be operative in pussier segments in augmenting epithelial mesenchymal transformation.

There's a lot of plausibility by inhibiting PDGF, you may be retarding the loss of retinal pigment epithelium through those mechanisms. But, of course this needs to be validated it in a more randomized, controlled, and prospective fashion. We look forward to the results to teach us something in connection to your question.

Okay. And then maybe just another question more preclinical. Some of the literature seems to suggest that there is some controversy around parasite biology just with respect to cell type of origin and the characterization of cell surface signatures. When you think about the parasites that you're trying to strip off the vasculature, do you feel that those have been adequately characterized with respect to the cell surface markers that those are supposed to be expressing? Thanks.

It's a good question. (inaudible) I think that it's difficult to quantify all of the parasites that are there because of either differing receptor expression and all the stains at different phases of the parasites. Chemical staining, for example, there's some heterogeneity depending on their stage and less flows on receptor expression. Some of the host parasites may not be expressing the receptors for PDGF, for example, whereas the active proliferating ones do.

What this really highlights are the cells themselves are reactive cells in their mesenchymal origin, and depending on the micro environment they may take on very different phenotypes, which may present a challenge to go ahead and characterize them and put them in neat categories all the way through. It is an evolving science, and we continue to learn more about it. Good question.

Okay. Thanks for taking my questions.

And we have time for one final question.

Ling Wang, BTIG.

Thank you for taking my question. First congratulations on getting the Phase 2b data positive.

The question I have, the first one is that I think you disclosed some of the secondary endpoints in your filings. I just wanted to understand whether there are additional anatomic endpoints, and how should we be thinking about those endpoints if they are included relative to the clinical endpoint?

Secondly, can you clarify whether, you mentioned you are doing the final data cleaning now. Are you using a third-party CRO or internal effort to clean the data? Thank you.

A word that I can say about the endpoints that you just referred to, as I stated previously in one of the questions, that the value in clinical meaningfulness requires a broad range of endpoints, especially in descriptive statistics. The issue of secondary and supportive gets blurred in that particular setting and can be quite misleading.

A good way to think about it is what you were really alluding to which is the functional endpoints and the anatomic endpoints. Now, as far as the functional endpoints are concerned, for reasons that I mentioned earlier, the loss of efficiency, that clinical meaningful endpoints have cutpoints, they have lots data and power issues. So you have to look at all the real endpoints to understand the distribution and the sub groups that are affected. We will do that as part of our total analysis.

As far as the imaging endpoints, yes, there will be imaging endpoints, as well. What we would like to do is to go ahead and try to understand if there are predictive biomarkers. You know in medicine in general, predictive biomarkers have been quite elusive. Anti-VEGF space is really no different as it is today, as our Phase 2 paper indicates that to the best of our knowledge, we are not aware of a single biomarker that is predictive from a visual acuity perspective after the induction phase.

So our purpose will be, if we are able to get clinically meaningful benefit, to look for some of the predictive biomarkers, and that would include imaging for sure, and try to make some sense out of it. I hope that answers your question, Ling.

Yes, thank you. That's very helpful. Maybe you can answer my second question about CRO or internal effort for data cleaning?

Yes. We work with a large outside CRO.

Got it. Thank you. Looking forward to the Phase 3 data.

Thank you. And I would like to thank everybody for your attention and continued support. We will now end the call. Thank you.

Thank you, and that does conclude today's conference. Thank you for your participation. You may now disconnect.