Clearside Biomedical Inc

NASDAQ:CLSD

Earnings Call Transcript 2024-Q3

[Operator]

Greetings, and welcome to the Clearside Biomedical Third Quarter 2024 Financial Results and Corporate Update Call. [Operator Instructions] Please note, this conference is being recorded.

I will now turn the conference over to your host, Jenny Kobin, Investor Relations. Ma'am, you may begin.

[Jenny Kobin, executive]

Good afternoon, everyone, and thank you for joining us on the call today. Before we begin, I would like to remind you that during today's call, we will be making certain forward-looking statements. Various remarks that we make during this call about the company's future expectations, plans and prospects constitute forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995.

Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the Risk Factors section of our annual report on Form 10-K for the year ended December 31, 2023, that was filed on March 2024, and our quarterly report on Form 10-Q for the quarter ended September 30, 2024, filed today, and our other SEC filings available on our website.

In addition, any forward-looking statements represent our views as of today and should not be relied upon as representing our views as of any subsequent date. While we may elect to update these forward-looking statements in the future, we specifically disclaim any obligation to do so even if our views change.

On today's call, we have George Lasezkay, our Chief Executive Officer; Dr. Victor Chong, our Chief Medical Officer; and Charlie Deignan, our Chief Financial Officer. After our formal remarks, we will open the call for your questions.

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

[George Lasezkay, executive]

Thank you, Jenny, and good afternoon, everyone. We continue to make outstanding progress advancing our differentiated suprachoroidal delivery pipeline. Last month we reported the positive results from our ODYSSEY Phase IIb clinical trial in patients with wet AMD. These data strongly support the potential efficacy, safety and versatility of CLS-AX to treat this chronic disease. We believe CLS-AX is now positioned for real-world success in the wet AMD market with its potential to provide physicians with an extended duration maintenance therapy combined with the option for flexible redosing. These features may improve outcomes and reduce the treatment burden for patients and their caregivers.

Importantly, ODYSSEY also demonstrated a positive safety profile with the ability to redose with our own drug as part of a maintenance treatment regimen. We are the only TKI wet AMD program with repeat dosing data, giving us a competitive advantage as we advance CLS-AX into Phase III.

In addition to our wet AMD program, our research team is currently evaluating certain specific small molecules through in vivo models for the potential treatment of geographic atrophy, a market size valued at over $20 billion in sales. Victor will expand on this opportunity in his remarks.

We are also working to expand the overall value of our suprachoroidal platform. Clearside is the proven leader in delivery of drugs to the suprachoroidal space. Our SCS Microinjector continues to provide safe and reliable delivery with well over 10,000 injections performed to date. We have successfully navigated the drug device regulatory pathway to obtain commercial approval for XIPERE, the first and only FDA-approved product for suprachoroidal administration. And a permanent CPT code has been granted for suprachoroidal injections as a result of XIPERE's U.S. approval.

A tremendous amount of work is also happening behind the scenes. We have solidified our formulation expertise in developing suspensions that can be delivered into the suprachoroidal space, and we have commercial scale microinjector manufacturing capability that includes ISO certification.

This industry-leading know-how continues to be recognized. We are seeing significant interest among the retinal specialist community and from leading biopharmaceutical companies in applying our innovative approach to treating serious retinal diseases.

The last several months have seen continued advancement by our collaboration partners. In the Asia Pacific region, our partner, Arctic Vision, has made excellent progress advancing the development of XIPERE, including regulatory reviews in Australia and Singapore and a pending regulatory submission in China. We were delighted by the announcement last week of the commercial collaboration between Arctic Vision and Santen Pharmaceuticals, a highly respected global ophthalmic company. This collaboration leverages the capabilities of Santen to bring this potential important treatment to patients with uveitic macular edema in China. Importantly, this partnership is tremendously gratifying as it provides additional strategic validation of our suprachoroidal delivery platform by another global pharmaceutical company.

REGENXBIO has partnered with AbbVie to utilize our SCS Microinjector to deliver their gene therapy, ABBV-RGX-314 for the treatment of wet AMD, diabetic retinopathy and diabetic macular edema. Last week they reported on their programs administering 314 via our SCS Microinjector. Based on the positive interim results from Phase II ALTITUDE trial in diabetic retinopathy, AbbVie and REGENX have accelerated a planned end of Phase II meeting with the FDA that they now expect to have this quarter.

REGENXBIO expects to initiate the first global pivotal trial in diabetic retinopathy in the first half of 2025. In addition, ALTITUDE is enrolling a new cohort of patients with center-involved diabetic macular edema. And finally, in wet AMD, the Phase II AAVIATE trial is enrolling a new cohort based on a favorable safety profile and to evaluate dose levels for a planned pivotal program.

At the Retina Society Annual Meeting in September, our ocular oncology partner, Aura Biosciences, presented positive Phase II end-of-study results evaluating Bel-sar for the first-line treatment of early-stage choroidal melanoma. Aura continues to enroll their global Phase III trial in coronal melanoma.

We have been working closely with our partner, BioCryst Pharmaceuticals, on the formulation of their plasma kallikrein inhibitor, avoralstat.In 2025, BioCryst plans to advance avoralstat into a clinical trial of patients with diabetic macular edema. BioCryst believes that avoralstat delivered to the suprachoroidal space as a depot formulation utilizing our SCS Microinjector can potentially provide high drug levels to the retinal vessels with long-lasting exposure.

With that, I would now like to hand the call over to our Chief Medical Officer, Dr. Victor Chong, to provide additional perspectives on our ODYSSEY results, the current plans for our Phase III program, and exciting new opportunity to expand our suprachoroidal pipeline. Victor?

[Victor Chong, executive]

Thank you, George, and good afternoon, everyone. We are extremely pleased with the ODYSSEY trial result, which we reported last month, which exceeded our expectations for the data needed to advance CLS-AX into Phase III development.

There were 3 key objectives we were looking for from the ODYSSEY trial. First, safety. We showed the CLS-AX was well tolerated and maintained a positive safety profile with repeat dosing of the drug. This was especially important as almost all of the patients were administered at least 2 doses of CLS-AX. Importantly, our Phase IIb trial had no treatment-related serious adverse events, including no endometritis and no retinal vasculitis.

Second, efficacy. We saw stable measurement of best corrected visual acuity and central subfield thickness, we were able to maintain vision over 36 weeks, with BCVA within 2 letters from baseline at both week 24 and week 36. We were also able to demonstrate that CLS-AX reduced CST fluctuations and provide stable anatomical control over 36 weeks as confirmed by independent reading center.

And third, duration and reduction of treatment burden. We were able to show an 84% reduction in the frequency of injection after the initial dose of CLS-AX, with approximately 90% of CLS-AX participants not require any additional treatment up to 4 months, 81% up to 5 months, and 67% up to 6 months.

Wet AMD is a chronic disease. Over the patient's life time, they will be given numerous injections to maintain vision and stabilize the disease. We are developing CLS-AX as a maintenance treatment. And the fact that we demonstrated the ability to administer multiple dose of CLS-AX was a critical component of the ODYSSEY trial.

We want CLS-AX to be easily adopted in the current physician practice. Based on the input we have received from numerous conditions, in order to be meaningful, a new therapy entrant to the wet AMD market needs to have the option of flexible dosing. Any new agent that can only be dosed every 6 months will be a challenge for physicians to utilize.

The frequency of treatment differ from patient to patient. In fact, even from eye to eye in the same patient, the frequency might differ. Physicians need the flexibility to deliver a treatment that will accommodate the varying needs and schedule for each eye of the patient at different times of the treatment journey.

We continue to evaluate data from the ODYSSEY trial to help refine our Phase III plans. We are focused on designing a Phase III program that will produce data supportive of label with flexible dosing between 3 to 6 months. As I mentioned, this will align with the current wet AMD driven approach desired by most retinal specialists and enable easy adoption in the physician practice, keeping in mind that our Phase III plans remain in development and are subject to change. We are currently planning to run 2 Phase III trials with aflibercept 2-milligram as a comparator. We are likely to conduct the study in human naive patients with a flexible dosing component, consistent with the Phase III trial design for recently approved aflibercept high dose and faricimab. We expect to conduct an end of Phase II meeting with the FDA in early 2025 to present and finalize our plans.

One of the main reasons I joined Clearside was to further explore the potential for suprachoroidal delivery with our SCS Microinjector. Over the course of my career, I have had a great deal of translational experience in advancing new molecules into the clinic. And I see many opportunities to utilize our device and formulation platform to potentially expand our pipeline.

Beyond wet AMD, we are targeting geographic atrophy, a [ preference ] disease with a market size valued at over $20 billion in sales. We believe that geographic atrophy is primarily a choroidal disease. Several of my colleagues in the academic world have demonstrated that endothelial cells in the [ choroid ] are damaged even well before any significant change occur in the retinal pigment epithelium or RPE. The vascular density is also significantly lower in the eye of patient with geographic atrophy, supporting the hypothesis that geographic atrophy is a choroidal disease. Therefore, directly target the choroid are important for GA as well as for wet AMD. And our suprachoroidal delivery platform does just that. Delivering of small molecule via the suprachoroidal injection enables comprehensive drug coverage of both the retina and choroid, while also potentially minimizing systemic and anterior segment side effects.

I'm pleased to report that our research team have made great progress in evaluating certain specific small molecule through in vivo models for the potential treatment of GA. We are currently focused on 2 approaches. One may improve choroidal perfusion, and the other may moderate for inflammatory cells. Our team is doing the necessary work to potentially advance 1 [indiscernible] candidate toward an investigational new drug application.

As George described, our partners continue to make extensive progress with their respective suprachoroidal delivery programs, utilizing our SCS Microinjector. This advancement, combined with our positive CLS-AX results, show that our innovative suprachoroidal delivery platform could have a tremendous impact in the treatment of retinal diseases. I'm excited by what the future holds for CLS-AX and suprachoroidal drug administration.

With that, I'll now turn the call to our CFO, Charlie Deignan, to provide a financial update.

[Charlie Deignan, executive]

Thank you, Victor, and good afternoon, everyone. Our financial results for the third quarter 2024 were published earlier in our press release and are available on our website. Therefore, I will just provide a summary of our financial status on today's call.

As of September 30, 2024, our cash and cash equivalents totaled approximately $23.6 million. We believe we have sufficient resources to fund our planned operations into the third quarter of 2025. This supports planning for CLS-AX Phase III program and research work to expand our pipeline into geographic atrophy.

We look forward to participating in the Stifel Healthcare Conference next week, and we will continue to update you on our progress.

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

[George Lasezkay, executive]

Thank you, Charlie. Earlier this month, we made a couple of key personnel changes to further advance our mission. Tony Gibney was appointed to serve as Chair of our Board of Directors, bringing many years of relevant ophthalmic business development and strategic experience, most recently serving as the Executive Vice President, Chief Business and Strategy Officer of Iveric Bio (sic) [ Ivesarric Bio ].

During his time as a Director for Clearside, Tony has been a very active contributor working closely with management and providing valuable strategic and financial guidance. I'd like to thank Clay Thorp, our outgoing Chairman, for his support and significant contributions during his tenure. Clay will remain as a valued member of our Board of Directors.

In addition, Victor Chong has assumed a broader set of management responsibilities to utilize his extensive expertise in advancing drugs from preclinical through clinical development to commercialization. In his expanded role as Chief Medical Officer and Executive Vice President, Head of Research and Development, Victor will lead our preclinical, clinical and medical affairs teams, providing an efficient structure as we prepare for the CLS-AX end-of-Phase II meeting planned for Phase III and advance our preclinical suprachoroidal programs.

In summary, we are very excited that our innovative drug delivery platform is now being used in commercial products and promising clinical development programs by Bausch & Lomb, REGENXBIO and AbbVie, Arctic Vision and Santen, Aura Biosciences and BioCryst Pharmaceuticals. We remain motivated by the progress made internally and with our partners to expand the use of our differentiated suprachoroidal delivery pipeline to treat patients with numerous retinal diseases.

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

[Operator]

Our first question is coming from Annabel Samimy with Stifel.

[Annabel Samimy, analyst]

So I had a few. I guess you just presented your data at AAO. I was just wondering if you can give us some feedback on what you heard. And I'm specifically interested in what they thought of the study design that incorporated retreatment rather than supplemental rescue with aflibercept. And also what's the feedback on the 3 to 6 months flexibility that you're looking for on your label relative to some of the competitors that might be looking for longer duration flexibility? So I guess that's the first question.

[George Lasezkay, executive]

Annabel, it's George. I appreciate that. Let me just say I'll make a comment or 2, and then I'll turn it over to Victor, who can spend more -- go into the details more.

We had a very good AAO meeting. I think people were very happy with the data that we presented. They thought it was very strong data. It was very favorably received by the KOLs we talked to. We had a scientific advisory board. I think everybody looked at the data and saw them as very positive. And clearly, it was a product that should advance on to Phase III.

As to the specific questions that you asked, I'll let Victor address some of those. Victor?

[Victor Chong, executive]

Thank you, George. Thank you, Annabel. I think in AAO, that our message is getting through as a key differentiation about the flexibility. I think before that there was still some confusion about the priority and the suggestion and the argument between different companies. I think that now that it's become very clear that we are the only one who are offering a variability. And actually that variability is what physicians are really very keen on. And I think that's really supporting our notion on the commercial side.

What -- sorry, I apologize, other than that part, what was the other part of the question?

[Annabel Samimy, analyst]

Well, the flexibility was one. And then what were their thoughts about the retreatment rather than the traditional supplemental aflibercept design of the trial. .

[Victor Chong, executive]

Yes. So I think that was like in the beginning that people not totally understanding the differences, in academy that we had multiple presentations, people are starting to understand the differences. So our Phase II design able for us to redose already, and again, allow that people to understand that is already possible in our Phase II.

So I think also the positive to show a differentiation in the marketplace and potentially also show a preference of KOL and physician to how do they get thinking about that in the future to incorporate in their practice. As I mentioned earlier, the fact that [ redosing ] is critical for that.

[Annabel Samimy, analyst]

Okay. Got it. And then some questions regarding dosing of CLS-AX at the second aflibercept dose rather than the third. Were there any, I guess, concerns or ability to tease out, or inability to tease out the effect of aflibercept rather than that of CLS-AX at 12 weeks? And do you have any details on who might have been rescued rather than retreated in a less than 12-week time frame?

[Victor Chong, executive]

So I think that wasn't really discussed by most people, certainly no one questioned that. And in fact, that because we have to test to confirm that every patient that when the first week intervention would be on redosing with our drug. So I think I appreciate that there has been a little confusion about the concept of intervention. So in our Phase IIb study, every third intervention will be on our drug. So they will never be on -- using aflibercept.

And second is that is -- on the -- sorry, Annabel.

[Annabel Samimy, analyst]

Yes. I guess I'm curious who -- like if there was any data prior to 12 weeks on who might have been rescued rather than retreated -- every intervention was on...

[Victor Chong, executive]

Correct. No intervention needed as a whole. I think that was -- I didn't appreciate that I was not quite understand that that was what you were asking. So when we were sharing that, there was no intervention at all up to week 12. So that was absolutely no intervention, not just there's no redosing, because no one needed it.

[Annabel Samimy, analyst]

Okay. Got it. And I guess it's too early to talk about noninferiority margins for Phase III. Would it be the standard that FDA typically looks for? Or could it be smaller, larger? What are your thoughts around what non-inferiority is going to be for Phase III? Or is it going to be defined in Phase III?

[Victor Chong, executive]

Yes. I think the draft guideline has suggested that 4.5 letter. And I think that the agency that still holding that is the expected noninferiority margin is 4.5 letters.

[George Lasezkay, executive]

Just to be clear, Annabel, we are not going -- we don't have our end-of-Phase II meeting until maybe sometime early in 2025. And all that, it will end up being worked out and be clear by them exactly the specifications of the Phase III trial.

[Operator]

Our next question is coming from Andreas Argyrides with Oppenheimer.

[Andreas Argyrides, analyst]

Two for us here. And I know it's early and you haven't [indiscernible] the Phase II, but I think it is helpful to kind of maybe get a little bit of sense of of the Phase III trial design. And maybe to some extent that you made comments in the past about sizing and kind of maybe patient criteria. So maybe, I mean, to whatever -- to what you can kind of provide a little bit more data after having thought about it and talk to KOLs at AAO and the like and digesting the data, how you're thinking about this and positioning essentially CLS-AX in the best position versus the competition as well in the TKI space?

And then just looking into '25, could you give us some additional color on the expansion of the geographic atrophy program and what we may be able to get in terms of early data? That would be helpful.

[George Lasezkay, executive]

All right. Victor?

[Victor Chong, executive]

Yes. I think we have previously shared that we are targeting to have the end-of-Phase II meeting with the agency early in 2025. And as you said earlier, that we will finalize the data -- finalize our design then.

Currently, as we also shared earlier, that our Phase III design will be similar to the aflibercept high dose faricimab design. So basically, it's a noninferiority design with flexible dosing and compare it with aflibercept 2-milligram on label.

At the moment that our position is towards human naive patients, and whether there's further detail that we will share as time goes along.

In reference to geographic atrophy, I think that was the second question, we -- like what we shared earlier that we have looking at several molecules, small molecules that can utilizing our suspension platform, which is proven, and then to see whether that we can be delivering those molecules.

And in particularly, that there's 2 areas that of particular interest to us is one is improving choroidal perfusion, and the other one is to moderate for inflammatory cells. And those 2 pathways are potentially important pathway from that perspective. And that is what we are working on at this stage.

[Andreas Argyrides, analyst]

Okay. And then there's just 1 last follow-up. And just looking at the '25 and the end of Phase II, when do you think you may start the Phase III trial?

[Victor Chong, executive]

So at the moment, our target is to start the Phase III trial in the second half of '25.

[Operator]

Our next question is coming from Debanjana Chatterjee with JonesTrading.

[Debanjana Chatterjee, analyst]

So I wanted to ask if you'll be sharing any additional data analysis from ODYSSEY. And if so, when can we expect it? And what data points will you report on?

[Victor Chong, executive]

Yes. So we're going to share more data in the upcoming medical conferences, including the sharing in Singapore in the Asia Pacific Vitreo-Retina Society Meeting, the APVRS meeting. We are also looking at presenting some data in Floretina in Florence in December, in Europe. And at the same time, that we were also presenting potentially more data in the [indiscernible] meeting as well as the angiogenesis meeting in the U.S. in January and early February.

[Debanjana Chatterjee, analyst]

Yes. That's very helpful. Would you be able to share what kind of data points we might expect?

[Victor Chong, executive]

Yes. So I think that we are -- the type of data that we are sharing is to clarify in some of the area that we might have some real confusion in the top line results and to -- and also some of the analysis, that additional analysis that we are putting together.

[Operator]

Our next question is coming from Yi Chen with H.C. Wainwright.

[Antonio Arce, analyst]

This is Eduardo on for Yi. Just to start off, if you anticipate any apprehension for the FDA that would make them not want to recommend the redosing with the TKI within 6 months.

[Victor Chong, executive]

Sorry, I missed the question. If I just make sure I understand the question.

[George Lasezkay, executive]

I think what he's asking, is there any reason to believe the FDA may not look kindly on us redosing the CLS-AX less than every 6 months?

[Victor Chong, executive]

That means the agency. Sorry. Yes. So on our Phase II study, we've already done that. I think that we are really more comfortable than anyone else, if anything, because that we have data to support that we'll already be able to redose on Phase II.

In addition to that, that as we have previously shared, that there is a small number of patients even have redose of CLS-AX within the 36-week, they're a minority, but that's also providing even additional safety data to supporting multiple redosing is certainly possible. So we don't have any concern from the agency perspective.

[Antonio Arce, analyst]

Got it. And in regards to the Phase III program for the wet AMD asset, do you have an estimated cost for what that would be?

[George Lasezkay, executive]

That's something that we're -- yes, we're still working on that. That's going -- as we put together the final trial design, that will come into focus. So right now, I think it's premature to talk about that, but we'll have those kind of details will certainly be available as we finalize that Phase III design, have our end-of-Phase II meeting. But we're working very hard on that right now.

[Antonio Arce, analyst]

Understood. And then in the geographic atrophy studies that you were doing, I was hoping to get -- you mentioned a few comments on the endothelial cells, why you considered a choroidal disease versus a retinal one. Could you elaborate a little bit on that and the mechanism there?

[Victor Chong, executive]

Yes. So I think that when we talk about geographic atrophy because the FDA approval and the clinical endpoint is on RPE cell death. And as I say, a lot of people somewhat automatically assume that LTE cell death was the primary problem. And indeed, that what we have seen, a lot of data shown that there was a lot of choroidal damage occur way before RPE cell death. And in fact, the RPE cell death is almost like the terminal effect. And so we believe that treating the cause rather than just the last bit of preventing the RPE cell death would be able to providing additional efficacy.

And at the moment, the current approved therapy, that they probably wouldn't necessarily get to the choroid because they are quite big, and so again, from a complement point of view, that you have a lot of complement activation even on the choroidal side as well. So that is actually one of the reasons that would be -- that we think that the relatively limited efficacy for the current GA treatment related to that, that they are only treating the RPE side. So I think that was something that we think that using suprachoroidal and small molecule, that we can get a comprehensive job delivery to both the choroidal side as well as the retinal side, and obviously, the RPE cells in the retinal side.

[Antonio Arce, analyst]

Got it. And do you have a time line for IND submission? I know you guys are kind of still in the exploratory phase in your in vivo models, but just any color there would be helpful.

[Victor Chong, executive]

Yes. We think it's too early to say exactly when, but it is -- so we are working on that. And I think it's -- we are already moving toward a more specific candidate to move forward. So it's not just a filing more but we have candidates.

[Operator]

Thank you. As we have no further questions on the lines at this time, I would like to turn it back over to Mr. Lasezkay for any closing remarks.

[George Lasezkay, executive]

Thank you, Ali. Thank you all for joining us on the call this afternoon. We appreciate your continued interest in Clearside, and we look forward to updating you on our progress. Operator, you may now discontinue or disconnect the call. Thanks again.

[Operator]

Thank you, sir. Ladies and gentlemen, this concludes today's call, and you may disconnect your lines at this time. We thank you for your participation.