IVERIC bio Inc (ISEE) 2013 Q3 法說會逐字稿

Good day and welcome to the Ophthotech Corporation Q3 2013 earnings results conference. Today's conference is being recorded.

At this time, I would like to turn the conference over to Mr. Bruce Peacock. Please go ahead, sir.

Thanks, Alicia. Good morning, everyone, and thank you for joining Ophthotech's third-quarter 2013 earnings conference call. Ophthotech started trading on the NASDAQ Global Select Market, trading under the ticket symbol OPHT on September 25, 2013, and this is our first earnings call as a public Company.

Before we get started, please be reminded that this conference call contains estimates and forward-looking statements that represent the Company's view as of today, November 13, 2013. Ophthotech disclaims any obligation to update or revise these statements to reflect future events or circumstances. You should not base undue reliance on these forward-looking statements because they involve known and unknown risk, uncertainties and other factors that are in some cases beyond our control. Please refer to today's press release and Ophthotech's filings with the SEC for information concerning important factors that could cause actual results to differ materially from those expressed or implied by such statements.

Our third-quarter earnings release is available on the investor relations page of our Corporate website, that's http//investors.ophthotech.com. Our 10-Q for the third quarter will be available on our website following this call. An audio replay of the call will also be available on the Company's website starting two hours after the end of this conference call.

I will now turn the call over to Dr. Guyer.

Thank you, Bruce. I would like to welcome everyone to Ophthotech's first earnings call. I will begin with a review of our recent highlights and progress for Ophthotech. I will then turn the call over to Bruce to review our results for the quarter and then Samir and I will provide a product development program update. We'll then field some questions.

Since this is our first earnings call and some of you might not be completely familiar with us, I will begin by speaking in general terms about our Company and what we do. Ophthotech is a biopharmaceutical Company, specializing in the development of novel therapeutics to treat diseases of the eye. After a very successful Phase 2b trial, we have initiated a pivotal Phase 3 clinical program for our product candidate Fovista, an anti-platelet derived growth factor, PDGF, therapy which we are developing for use in combination with anti-vascular endothelial growth factor, or VEGF drugs, for the treatment of wet age-related macular degeneration. We also have another compound in our pipeline called ARC1905, a complement inhibitor for AMD, that we are planning to advance in future clinical studies.

We recently completed a very successful IPO on the NASDAQ Global Select Market which priced on September 24 and began trading the following day. We were able to raise approximately $192 million in gross proceeds, making us one of the years largest IPOs in the biotechnology sector. The majority of these IPO proceeds will be used to fund our pivotal Phase 3 clinical program for Fovista, which is being studied for the treatment of newly diagnosed patients with wet macular degeneration. The program consists of three clinical trials, evaluating the safety and efficacy of Fovista administered with various anti-VEGF therapies.

We have already started enrolling patients in the United States in the two trials are Lucentis as the anti-VEGF agent. And the third trial with Avastin or Eylea as the anti-VEGF agent is scheduled for initiation in the United States in the first quarter of 2014. The three trials are expected to enroll a total of approximately 1,866 patients at approximately 225 centers worldwide.

Outside of the United States, we have filed applications to initiate the two Lucentis combination Phase 3 trials in selected countries. We have already received regulatory approvals to initiate these trials in multiple countries. We also recently received further scientific advice from the European Medicines Agency about Fovista and we will provide further information on this later in the call.

Importantly, we have expanded our Management team to advance the global Phase 3 clinical program for Fovista. Richard Beckman, M.D., ex Alcon at Allergan has joined Ophthotech as Chief Medical Officer; Doug Brooks as ex Eyetech/OSI in Regado as Vice President of Manufacturing Development; Kathy Galante ex OSI as Vice President of Investor Relations; Doug Kollmorgan, ex Eyetech and Abbot as Senior Vice President of Quality Assurance; Jeff Nau ex Genentech as Vice President of Clinical and Medical Affairs and Barbara Wood, ex OSI as Senior Vice President and General Counsel.

Our new senior employees add approximately an additional 140 years of pharmaceutical industry experience to our team and most of them have been involved specifically in the development of ophthalmology products. We could not be more pleased to add such a collection of highly intelligent talented and skilled people as we continue to move forward with our development plans. I know that they will add a great deal of value to our Company.

At this point, I'd like to turn the call back over to Bruce who will present our financial results for the third quarter.

Thanks, David and good morning, everyone.

Operating expenses for the quarter ended September 30, 2013 were $15.3 million with $11.1 million attributable to research and development. This compares to operating expenses of $3.9 million and research and development expenses of $1.6 million for the same period last year. The primary reason for the increase in spend was the manufacture of Fovista for our Phase 3 trials, milestone payments related to the initiation of the Fovista Phase 3 trials, costs related to then initiating the trials and an increase in general and administrative expenses.

The Company reported a net loss for the quarter ended September 30, 2013 of $18.4 million, or $10.26 per share, compared to a net loss of $5.9 million, or $4.04 per share for the same period last year. As of September 30, 2013, the Company had $236.1 million in cash and cash equivalents. This reflects the proceeds from the Company's IPO completed in the third quarter. In addition, the Company has an additional $83.3 million of potential funding available under the Company's royalty purchase and sale agreement with Novo A/S providing $319.4 million of potential available funds.

With that, I'd like to turn the call back over to Dr. Guyer, who will provide an update on the Fovista Phase 3 program.

Thank you, Bruce.

As you have heard, Ophthotech is developing novel therapeutics to treat diseases of the eye with a particular focus on diseases of the back of the eye. For those of you who are not aware of the results of previous clinical trials with Fovista, I will provide a very quick recap. In our Phase 2b clinical trial, we treated 449 patients with wet AMD with a combination 1.5 mgs of Fovista with an anti-VEGF therapy. The pre-specified primary efficacy endpoint of mean vision change was met with Fovista combination therapy demonstrating statistical significance and superiority compared to anti-VEGF monotherapy and providing a 62% comparative benefit from baseline. No significant safety issues were observed for either treatment group in the trial and the relative magnitudes of visual benefit continued to increase over time as the vision curves continue to diverge throughout the study. A classic dose response relationship was also observed.

The Fovista Phase 3 program consists of three clinical trials to evaluate the safety and efficacy of Fovista anti-PDGF therapy which Ophthotech is developing for the use in combination with the anti-VEGF drugs for the treatment of wet AMD. Two of the trials will incorporate significant aspects from the design of our Phase 2b trial and will evaluate Fovista in combination with Lucentis. And the other trial will evaluate Fovista in combination with each of Eylea or Avastin. The three trials are planned to enroll a total of approximately 1,866 patients in approximately 225 centers internationally.

In the United States, the protocols for the three Fovista Phase 3 clinical trials were submitted to the FDA in July. Enrollment was initiated in the United States in August in the two Lucentis combination trials, and the third trial is targeted for initiation in the United States in the first quarter of 2014. Outside of the United States and particularly in Europe, I expect as most of you know the regulatory process has multiple parts. One part is to submit applications seeking to initiate clinical trials with the regulatory agencies in individual countries. We have initiated this process in selected ex-US countries by filing applications seeking to initiate Phase 3 clinical trials evaluating Fovista in combination with Lucentis, and have received regulatory approvals to initiate these trials in multiple European and other ex-US countries.

Another part of the process involves the centralized procedure with the European Medicines Agency, or the EMA. We have sought the advice of the EMA on our Phase 3 program and our plan for regulatory submission if our Phase 3 clinical studies are successful. We believe that we have made significant progress in resolving multiple issues and plan to continue discussing the remaining open items with the EMA via ongoing dialogue.

Samir will now walk you through the key points of the advice that we have so far received.

Thank you, David, and good morning.

In September, we received preliminary feedback from the scientific advice working party of the EMA regarding the Phase 3 program for Fovista with additional feedback recently from the EMA's committee for medicinal products for human use, with the acronym CHMP. The CHMP provided non-binding scientific advice in a letter which we considered generally favorable. The key points include first, the planned primary endpoint for each of the planned Fovista Phase 3 clinical trials, a mean change in best corrected visual acuity from baseline was found to be acceptable. Secondly, it was confirmed that carcinogenicity studies are not needed. Third, CHMP agreed that the non-clinical package for Fovista and Lucentis combination therapy is supported. Fourth, we were advised that consideration should be given to toxicology studies with Fovista in combination with Eylea and Avastin, because we had no data for Fovista when administered in combination with either Eylea or Avastin. Ophthotech believes that pre-existing and additional pre-clinical and/or clinical data that we will be collecting prior to the start in Europe for the Fovista and Eylea and Avastin Phase 3 trial will be sufficient.

Fifth, CHMP stated that, quote, the safety of the timing of anti-VEGF and Fovista injections in the Phase 3 studies for Avastin and Eylea should be justified by the applicant prior to the start of the studies, end of quote. This statement relates to the hypothetical potential that Eylea and Avastin may have different retinal penetration rates and affect the retinal sensitivity to Fovista administration. CHMP has stated that the evidence in the literature and pre-clinical studies that we have provided them were, quote, reassuring, end of quote. Sixth, with respect to Avastin use, CHMP indicated that, quote, maybe required, end of quote. To specify the licensed anti-VEGF agents that were studied in combination with Fovista rather than receiving a broad anti-VEGF inhibitor label. The intravitral root of Avastin administration is unlicensed in the EU and an Avastin inclusive broad label, quote, might be regarded as a promotion of unlicensed use, end of quote. This comment is reasonable in Ophthotech's opinion and not unexpected.

Seventh, the letter stated that studying treatment-naive patients is acceptable and will be reflected in the label. Again, this is expected, typically anti-VEGF trials have used naive patients for approval and so we would expect similar labels. Eighth, given the divergence between the labels currently granted in the US and the EU for Lucentis and neovascular AMD, the letter noted that, quote, CHMP considers that the proposed treatment regimen in the Phase 3 trials of Fovista in combination with Lucentis, whilst informative for clinical practice in the United States, will be of limited value in determining the effectiveness of Fovista as adjunctive therapy with Lucentis in the EU, end of quote. Again, this is due to the different labels currently granted in the US and the EU for Lucentis in neovascular AMD. The US label recommends ongoing monthly injections whereas the EU label recommends treatment on a peer end basis after the first three months. The CHMP advised that, quote, there will be a requirement for further data to bridge the results from the proposed Phase 3 studies to the use of Fovista, end of quote, as an adjunct to the license regimen of Lucentis.

While we believe that a reduced dosing schedule is important for patients and physicians and is consistent with Fovista's anti-PDGF mechanism of action, in fact, it will be an important commercial advantage for us if future studies show that Fovista combination therapy decreases the number of anti-VEGF treatments in addition to increasing efficacy as it has demonstrated in our Phase 2b trial. We have already incorporated a design to address this reduction of treatment burden issue in the second year of the planned Phase 3 trials and are aligned with the EU concept of dose reduction following attainment of maximal visual efficacy. However, the regimen in our trial does not mirror that of the labeled EU treatment regimen for monotherapy Lucentis.

As we will be discussing with CHMP, there is a very strong rationale, scientific rationale, that the reduced dosing schedule suggested and consistent with EU label for Lucentis would not allow Fovista combination therapy to maximize visual benefits for patients due to Fovista's unique mechanism of action and continued increasing efficacy over time. Fovista combination therapy, unlike anti-VEGF monotherapy, shows continued relative efficacy and divergence of visual acuity curves at six months in our Phase 2b trial. In order to maximize for patients, we must first determine when the maximum Fovista combination efficacy occurs by using a fixed monthly dosing schedule before we can know the correct time period to initiate dosing reductions. Anti-VEGF therapy peaks in general at three months, and thus three months is where the EU reduced dosing starts in the EU label. Since Fovista is a different mechanism of action than anti-VEGF drugs, it is not unexpected that the optimal time for reduced dosing would occur at a time different from that of anti-VEGF. In our opinion, year two is the appropriate time to study dose reduction.

The EU dosing regimen in its label will not allow Fovista's maximal potential relative to monotherapy Lucentis to be realized and allow maximum benefit for patients. We will discuss with CHMP the scientific rationale for dose reduction in the second year of our trials as opposed to an earlier time point when Fovista combination therapy is still showing the additional efficacy. Eighth, the CHMP also commented we should consider the Eylea dosing regimen used in the label approved in the EU. We have previously stated that we were considering this and now plan to dose Eylea arms in our study at every eight weeks after the loading doses, consistent with the EU request. So we believe that we are in agreement here.

In summary we have made significant progress in resolving multiple issues with the EMA and plan to continue discussing the remaining items via an ongoing dialogue.

I will turn the call back over to David who will discuss the projected timelines.

As Samir described, we continue to make good progress with our ongoing dialogue with the EU. We believe that dose reduction should occur in year two of our trial to potentially maximize the visual benefit for patients. If, however, we do determine to conduct a bridging trial for the EU, we would not expect it to have any material effect on our projected timeline to completion of the Phase 3 program and approval. Further discussions with the CHMP will determine the appropriate path forward, but we believe that we have multiple options with minimal timeline change, if any. The Company is also assessing the estimated cost of any additional studies, if any, that it may determine to conduct. The Company believes that existing cash and cash equivalents and potential funding under the Company's royalty, purchase and sale agreement with Novo A/S should be sufficient to cover any reasonable additional costs, if any are needed beyond those previously estimated to obtain initial top line data on time from our Phase 3 program for Fovista.

The two Fovista Lucentis Phase 3 trials are presently recruiting well. We expect US sites to be ready to enroll in our Fovista and Avastin Eylea trial in the first quarter of 2014. The Company does not expect that any adjustments, if any, to the Fovista development plan reflecting the CHMP input will affect the overall timing to obtain initial top line data from the Fovista Phase 3 program which the Company still continues to expect to report in 2016. If the results are favorable, the Company plans to submit applications for marketing approval for Fovista in both the United States and the European Union before the end of 2016, also as previously stated.

Ophthotech is also developing ARC1905, a chemically synthesized aptamer, which targets complement factor C5, a central component of the complement cascade that is believed to be involved in the development of AMD. We have initiated the process to begin manufacture of supplies for clinical trials and we are actively preparing for initiation of clinical trials in AMD. We will provide an update on this exciting program in a future call.

I will now turn the call over to the Operator so we can open up the lines for any questions.

(Operator Instructions)

Geoff Macham, JPMorgan.

This is [Carter] on for Geoff. Congratulations on the eventful quarter. First question is given all of the new data today that you've given out, what specifically are the gating steps to enrolling EU patients? Is it really just the completion of the toxicity studies and the safety and timing of the anti-VEGF injections with Fovista or is it really just that second year issue?

Sure, this is Samir. Hi, Geoff. So the process of starting the EU trial as David stated earlier is really predicated on the standard applications that we're doing at the national country levels. That process has been ongoing and we don't believe that the timing is going to be affected in any way based on the initial interactions that we've had.

Okay, and then my follow-up question is in the past you had mentioned specifically potentially going into some of the smaller indications with Fovista, you talk about anti-VEGF resistant populations, (inaudible), has today's news in any way changed your timing or previous comments in that regard?

No, those remain on track. We said that we would be initiating those trials that we believe will expand the Fovista franchise initiating them in 2014 with data in 2015 so those remain on track.

Thank you.

David Friedman, Morgan Stanley.

I was wondering if you could describe conceptually what a bridging study would look like from your currently designed Lucentis Phase 3 trials to a trial that adopts the EU label? Is it a head-to-head with different dosing regimens in each arm or what might that look like and how long do you think that trial would have to be?

Sure, David. This is Samir Patel. So I think when we talk about bridging studies, it's important to realize that conceptually, this is an ongoing dialogue with CHMP. We -- our current trial actually incorporates the concept of reduction of treatment burden after maximization of visual efficacy, which is really consistent with the underlying concept that the EU label currently has. So the ongoing discussion will certainly be directed towards bridging that gap and coming to a mutual understanding that it in essence is achieving the very concept underlying the EU label. In addition, we'll have additional ongoing discussions regarding Fovista's mechanism of action and data generated to support why the current design as is, is in essence a bridge, if you will, is analogous to the EU label. And so we'll continue that dialogue and when we have additional information, we'll certainly provide those.

Yes and David, I would just add to that, as you know, discussions with the regulatory agencies are always, as Samir alluded to, an ongoing process where we are at this time point, we believe in giving you complete details. We expect and are hopeful that because of the scientific rationale that we described that it makes sense to first maximize Fovista benefit, show that and then we are in complete alignment that reduction of dosing should be looked at then. And we already have that in our trials, we said in year two. So I think while we have multiple options we're jumping the gun to talk about a bridge. We wanted to mention that that certainly was a possibility, but we're hopeful that we will through continued dialogue be able to get on common ground since we do agree in dose reduction.

However, we mentioned that because if for some reason we do not, we believe that a relatively simple bridge could enhance the data and this would be relatively simple trial that would not affect the timeline in any way nor be of any cost that would be out of our budget. So again, very important, no one has made a decision to do a bridge. We don't -- we believe -- the good news is that's a backup plan that could work without affecting the timeline or cost significantly that we have. But our first line approach right now is to have continued dialog and get on the same page because we do agree with dose reduction, just at what point should we do it is the question.

Got it.

And David, this is Samir. I think it's also important to realize that if one examines the current EU label, that there's tremendous amount of flexibility in terms of the interpretation of that label. And as a result, that is a great deal of heterogeneity and flexibility in potential designs that one could do if one had to in order to demonstrate treatment reduction.

Thanks.

Joseph Schwartz, Leerink.

Communicate with the rest of the street as far as when you might be able to reach full alignment with EMA on your development plans?

It's an ongoing process and it'll involve multiple conversations. I think it's a near-term event that will not affect the timing of our trials or recruitment or data as expected in 2016. So we'll continue the conversation back and forth. We believe we'll have resolution in the near term. But importantly, the trials will go on on track and data on track as we last mentioned.

Okay and then can you tell us what prompted the EMA's focus on toxicology issues? Was this a surprise to you? Did they see anything in animals or any findings in particular?

Hi, this is Samir. So no, there were no issues from any safety perspective. I think this is a standard process that just to be clear, we have used very similar approach in the US submission as well. And so I think this is not based on any data that indicates any sort of issues of any safety.

Okay, great. Thanks for taking my questions.

(Operator Instructions)

Adnan Butt, RBC Capital Markets.

I had a protocol clarification question, if you can give that, please. Are there any differences in US and EU protocols at this time, the way Fovista will be given in combination with Eylea and Lucentis, or will they be uniform in terms of how Fovista is given? Thanks.

At this time we don't anticipate any difference between the two geographies with respect to the trial design.

Okay, thank you.

(Operator Instructions)

Stephen Willey, Stifel.

Can you maybe provide a little bit more color around the pre-clinical toxicity data that you have in combo with Avastin and Eylea that you think will be sufficient for EMA?

Hi, this is Samir, hi, Stephen. So I don't think -- I don't believe that we can comment on any specific data, but I think suffice to state as we've stated before, we have no reason to believe that any safety issues would occur when Fovista is administered in combination with any of the anti-VEGF agents.

Okay, and then with respect to the differences in retinal penetration rates that CHMP brought up, how much data is there out there with respect to the differences there with respect to the three VEGF inhibitors and is there really a meaningful difference between each agent? And is there the potential for you to run kinetic studies in the pre-clinical setting to prove that up?

So Stephen, just this is Samir again. I think it's important to clarify that the EMA's question was based on theoretical reasons that because the other anti-VEGF agents by size are larger than Lucentis, that they may theoretically have different penetration rates. Yes, there are data out there which state that is not the case. We provided that and they found that to be, end quote, reassuring, end of quote. So that's the level of discussion that we've had.

And can you remind us if you're capping the percentage of patients that are allowed to see either Avastin or Eylea in the third Phase 3 study?

Yes, there's a one-to-one randomization to Avastin, Eylea both in the treatment group and control group. So yes it is highly controlled and stratified.

Okay, thanks a lot, guys.

Operator, are there anymore questions?

We have no further questions.

We'll turn it over to Dr. Guyer for closing remarks.

Great. Well, thank you all very much for your attention and we look forward to discussing our program with Fovista and anti-complement in the near future. Thank you.

Thank you.

That does conclude today's conference. We thank you for your participation.