IVERIC bio Inc (ISEE) 2014 Q1 法說會逐字稿

Good day, everyone, and welcome to the Ophthotech first-quarter 2014 earnings results conference call. Today's conference is being recorded.

Now, I'll turn the conference over to Kathy Galante. Kathy, please go ahead.

Good morning, and welcome to our first-quarter 2014 earnings call. Joining me today, I have Dr. David Guyer, Chief Executive Officer and Chairman of Ophthotech; Dr. Samir Patel, President and Vice Chair; Bruce Peacock, Chief Financial and Business Officer.

Before we begin, I would like to remind you that we will be making forward-looking statements relating to the Company's future expectations regarding it's financial results and clinical and regulatory developments on the call today. These statements constitute forward-looking statements for the purposes of the safe harbor provision under the Private Securities Litigation Reform Act of 1995.

These statements cover many events that are subject to various risks that could cause the 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 selection in our annual report on Form 10-K, which is on file with the SEC, for a detailed description of the risk factors affecting our business.

In addition, any forward-looking statements represent our view only as of today and should not be relied upon as representing our view 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 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.

The first quarter of 2014 was a very productive time for Ophthotech. On the clinical front, we continued to execute on our strategy for our pivotal Fovista Phase III program in combination with an anti-VEGF treatment wet age-related macular degeneration. In addition, we announced claims to expand our Fovista program in wet AMD and to advance our Zimura program in both dry and wet AMD.

We also continued to build our financial position and completed a successful follow-on public offering of our common stock, resulting in net proceeds to the Company of approximately $55.4 million. In addition, we achieved an enrollment milestone in Phase III Fovista program, triggering $41.7 million from a second tranche payment under our royalty financing agreement with Novo A/S. These transactions resulted in the Company finishing the first quarter with $290.8 million in cash, cash equivalents, and marketable securities, as compared to $210.6 million at the end of December 2013.

Now I'd like to take a few minutes to discuss the progress of our pivotal Fovista Phase III clinical program, which remains on track. As planned, during the first quarter, our Clinical Operations Team activated initial trial sites for the third Fovista Phase III clinical trial with Avastin or Eylea as a combination anti-VEGF therapy.

As you may recall, we expect to enroll a total of 1,866 patients in the three trials at more than 225 centers worldwide and have initial topline data from the Fovista Phase III program available in 2016. These trials are designed to build upon results from our large Phase IIb trial in which the Fovista and Lucentis combination therapy demonstrated statistically significant superiority over Lucentis monotherapy in terms of improving visual outcome. Additional data resulting from that controlled trial also showed minimum balances in the safety profile between the study arms.

In addition to our pivotal Fovista program, plans are underway for multiple expansion clinical trials of Fovista in wet AMD. These trials include combination Fovista and anti-VEGF therapy aimed to investigate the potential for a reduction in the treatment burden for patients, for the improvement of visual outcome for anti-VEGF treatment-resistant cases, and a reduction of subretinal fibrosis to prevent sub-optimal visual outcome over the long term.

We also announced during the first quarter our plans to advance our second product candidate, Zimura, to a Phase II/III clinical trial for the treatment of geographic atrophy, a severe form of dry AMD, which affects approximately 8 million people worldwide. While both wet and dry AMD clearly represent major unmet medical needs, there is no FDA approved treatment for dry AMD, a precursor to wet AMD.

Further, a Phase II clinical trial is planned for Zimura and Fovista in combination with anti-VEGF therapy for wet AMD patients who are believed to have complement-mediated inflammation.

In March, we hosted our first Research and Development Day with a panel of 10 of the top retinal specialists in the US and abroad giving their insight into the progress and challenges in the treatment of age-related macular degeneration, as well as a look at the future of dry and wet AMD therapies. We could not have been more pleased with the turnout and the panelist statements that they welcome the potential of Fovista administered in combination with anti-VEGF therapy, as well as their support of our expansion programs.

Samir will give an overview of the key learnings from the panel later on the call, but it was encouraging to hear from physicians that we are on track in meeting substantial unmet needs in the ophthalmology space and we're responding to physicians' preference for access to multiple treatment options. We want to thank all the investors and analysts who attended and participated in the meeting, and if you weren't able to attend, a replay of the discussion remains posted on our website for your access.

All in all, we have developed and expanded our clinical program with a plan that now triples the number of anticipated clinical trials with a total of 10 trials ongoing or to be initiated in 2014 and 2015, of which four are Phase II or II/III trials.

With that, I would like to turn the call over to Samir who will provide more detail on some of the new clinical programs we will be starting this year, as well as an overview of some of what we've learned from the experts at R&D Day.

Thank you, David. Good morning, everyone, and thank you for joining us today.

We are in the process of starting to expand our clinical programs at Ophthotech as part of our mission to develop the next generation of science-driven AMD therapies to address unmet needs.

As David mentioned, we had a very successful R&D Day in March, and I wanted to thank all the retinal experts who participated at the event. The insights we gathered from these specialists were invaluable to us and confirmed our confidence that we are on the right path. I would like to address some of the things that came out of the panel, starting with a discussion about retinal fibrosis.

The panelists were particularly enthused about the possibility of Fovista providing an anti-fibrotic effect. They felt the effects of anti-VEGF treatments diminish over time and that some patients end up worse than when they had started the progress. Unfortunately, retina physicians are currently quite limited in their treatment options to address the lack of visual improvement in the chronic phase of wet AMD.

We are therefore excited about our investigation into possible anti-fibrotic effects of Fovista in wet AMD management. We have seen in recent published studies that evolution of subretinal fibrosis in wet AMD patients treated with monotherapy anti-VEGF regimens can cause distortion and damage to [neural] retina, and it's potentially associated with poor visual outcome. Pre-clinical models of retinal scarring and fibrosis and our initial evaluation of retinal images from our Phase IIb trials suggest that combination therapy with Fovista 1.5 milligrams plus Lucentis may inhibit fibrosis relative to monotherapy Lucentis in patients with poor visual outcome.

Taken together, it is our opinion that the pre-clinical and clinical studies provide strong support to investigate PDGF inhibition by Fovista in wet AMD patients receiving anti-VEGF therapy. We hope to eventually demonstrate that treatment with Fovista in wet AMD patients receiving anti-VEGF therapy will result not only in an enhanced visual outcome due to neovascular regression, but also present sub-optimal visual outcome over the longer term. Planning for our anticipated anti-fibrosis trial is currently underway, and a Phase II clinical trial is scheduled to commence in the second half of 2014.

Another topic the panel covered was the question of how retinal physicians want to administer anti-VEGF and anti-PDGF treatments. The unanimous opinion of the panel was that retinal physicians would like to have treatment choices, including separate injections available when treating patients. Essentially, physicians want to select the best treatment regimen and plan for their patients in respect to being able to choose their preferred anti-VEGF agent for combination therapy with Fovista.

In summary, all the panelists' positions expressed that their overall desire is to have choices available to them, and Fovista administered in combination with any anti-VEGF therapy provides that flexibility. [The preference] was also expressed by a panel hosted by Morgan Stanley at the American Academy of Opthalmology in 2013.

As David mentioned earlier, some of the other trials we have planned for Fovista include adding Fovista therapy to an anti-VEGF regimen in wet AMD patients to reduce treatment burden and address anti-VEGF resistance. We look forward to initiating these trials in 2014. We are also planning a trial in proliferative vitreoretinopathy, while the National Eye Institute is planning to utilize Fovista in a study of von Hippel-Landau disease.

We're also excited about our planned Phase II trial studying Zimura in geographic atrophy. Zimura inhibits the complement protein C5, a central component of the complement cascade. Studies indicate that complement-mediated inflammation plays a major role in pathogenesis of dry AMD.

By inhibiting C5, we believe Zimura [may stick with] complement-mediated inflammation and cell damage in dry AMD. Our Phase IIa clinical trial evaluating safety and tolerability of Zimura administered as monotherapy to patients with geographic atrophy did not show any evidence of drug-related adverse events.

As you may remember, our Phase IIa trial was uncontrolled. However, trends favoring the increased frequency of Zimura administration in the higher dose group was observed when compared to decreased frequency of administration, with increased administration correlating to a relative reduction in the mean growth of geographic atrophy lesion area as measured by an independent reading center at 24 weeks.

The safety profile of Zimura in this trial and the trend indicating a potential drug effect, coupled with strong science for a disease with major unmet need, leads us to continue the development of Zimura towards a Phase II/III clinical trial designed for a geographical atrophy scheduled to initiate in late in 2014 or early 2015. We're also planning a Phase II trial with Zimura and Fovista in combination with anti-VEGF therapy for the treatment of anti-VEGF resistance in wet AMD patients. This trial is scheduled to initiate in 2015.

I will now turn the call over to Bruce.

Thanks, Samir.

I'd like to provide a brief update on our results of operations for the first quarter and our current cash position. Operating expenses for the quarter ended March 31, 2014, were $20.7 million, with $14.4 million attributable to research and development. This compares to operating expenses of $4.1 million and research and development expenses of $2.4 million for same period in 2013. The Company reported a net loss for the quarter ended March 31, 2014, of $20.7 million, or $0.64 per share.

The increase in research and development cost in 2014 is primarily attributable to our efforts to advance our Fovista Phase III clinical program, including clinical trial costs and costs to manufacture Fovista for the trials, as well as increased personnel costs associated with visual management and research and development staffing, and it also includes share-based compensation expense.

The Company's general and administrative expenses were $6.3 million for the quarter ended March 31, 2014, compared to $1.7 million for the same period in 2013. The increase was primarily due to an increase in personnel costs, including additional management and corporate staffing to support our public company infrastructure, and increased share-based compensation and professional services and consulting fees.

As David stated earlier, as of March 31, 2014, the Company had $290.8 million in cash, cash equivalents, and marketable securities, versus $210.6 million as of December 31, 2013. Our end-of-the-quarter cash position includes a second tranche payment from Novo A/S that we received in January 2014, and the public follow-on offering we completed in February of 2014.

With that, I'd like to now turn the call back over to David.

Thanks, Bruce.

As you've heard today, we are very excited about the progress that we have made in the first quarter. With a strong cash position, we believe our expertise and Management's prior experience developing and commercializing wet AMD products provides the elements necessary to move our Fovista and Zimura franchises forward.

We are encouraged by the potential promise of our programs to meaningfully benefit the lives of patients and create opportunities for value for our shareholders. We look forward to providing you with updates as our programs progress. Thank you for your time this morning and for your continued support.

I will now turn the call over to the operator to open the lines for any questions.

(Operator Instructions)

Our first question today comes from Geoff Meacham with JPMorgan.

Hi, David and Samir. This is Carter on for Geoff. My question is: Can you give us any incremental color on the design of the geographic atrophy study; and specifically, how you're planning to incorporate biomarkers, given some of the data from your competitors over the past, say, six months or so?

Sure. Hi, Carter. So, we really haven't disclosed the details of the study. Suffice to state that the imaging criteria for geographic atrophy continue to evolve for the assessment of that biomarker, and we continue to investigate all the new technologies coming aboard, and we'll certainly try to incorporate as many as we can. I think, at this point, as we stated previously, we're just going to look at the progression of geographic atrophy, and we'll be looking at it in a randomized design, which will be classified as a Phase 2/3 study.

Thank you.

(Operator Instructions)

We'll take our next question from David Friedman with Morgan Stanley.

Thanks for taking the question. Just wondered, first, if you guys had any planned, stated presentations this year at all, from the Fovista Phase 2b study -- any additional analyses or specific areas that you think we will see anything? And then the second is: For the trials that you're going to be starting this year and early next year, do you have any sense of the timelines in terms of when we could start seeing data from the first of the studies? Thanks.

Good morning, David. This is Samir. In connection to the first question, yes, we have some, what we believe are continued and exciting data from the Phase 2b, which sheds light on anatomic confirmation of our pre-specified primary endpoint conclusions. Specifically, we'll be looking at some of the biomarkers and their relation to visual outcome, and we will be presenting, hopefully, based on acceptance of the abstract, at the upcoming meetings.

With respect to the second question, the studies are -- as we speak, we're going through the process of activation and going through the designs, and we expect some data flow in 2015.

That's great. Thanks very much.

(Operator Instructions)

We will now go to Joseph Schwartz with Leerink Partners.

Great. Thanks very much for taking the question. I was wondering if you can talk a little bit about how you might be able to help, or might need to help, your investigator community and ultimate users of Fovista measure, interpret, and appreciate the newer measures, such as geographic atrophy and fibrosis? Since seems like they're all very used to looking for fluid leakage on the retina, but some of these newer methods are still evolving, as you said.

This is Samir again. Hi, Joe. That's a very good question. First and foremost, at the Academy this year in November, I think you'll see at the pre-Academy that one of the major aspects of thinking about neovascular disease and wet AMD is to think about it more as wound healing, and the fact that although it is, by terminology, a choroidal neovascularization, we state that, but [pathologically], it's a choroidal neovascular complex. And I think you'll see a lot of discussion about that.

And I think that's quite important because the [OTO] meeting that just concluded about a week ago -- there were a lot of presentations on decreased visual outcome over a longer term or a lack of significant improvement from their initial diagnosis with monotherapy anti-VEGF strategies. And what was a recurrent theme in the discussion was the presence of fibrosis limiting the visual outcome. So, there is a lot of discussion already occurring.

And I would also state that there were a number of papers indicating that fluid really did not correlate with visual [outcome]. Specifically, if you look at subretinal fluid, it was remarkable that there was almost a nine-letter difference, whereby a little bit of fluid in the subretinal space, as presented by the [CAD] investigators, resulted in better outcome. In other words, approximately a nine-letter improvement in patients who had presence of subretinal fluid at two years compared to patients who didn't.

So, I think that highlights a shift that I believe is going to continue, that fluid is important in terms of improving a visual outcome in the acute phase during the induction phase of monotherapy anti-VEGF, but subsequent to that, we better start looking at some of the other phenomenon that are responsible for what appears to be a suboptimal visual outcome over the longer term. So, with that stated, fibrosis is really center stage in our opinion, and the first way to think about it is think about it in terms of a choroidal neovascular complex and wound healing, and I think you'll see a lot of that at the Academy.

With respect to the second question, which really dovetails to the initial question we are asked in geographic atrophy, certainly we think we're very excited about the underlying signs. And, as we did with choroidal neovascular complex, we looked at very novel strategies of OCT to assess this complex. I believe we were the first to look at that and its resolution, and we will continue to be very, hopefully, cutting edge and scientifically driven to truly be able to tell what the differences are with or without treatment, and use the latest technology for that.

Great. Sounds good. Thanks very much.

And with no other questions in queue, Mr. Guyer, I'll turn it back to you for closing remarks.

Thank you, everyone. We appreciate your attendance, and look forward to talking to you again in the future. Thank you.

Ladies and gentlemen, thank you for your participation. This does conclude today's conference.