Clearside Biomedical, Inc.
Q3 2020 Earnings Call Transcript

Published: 10 Nov 2020

[Operator:]

Ladies and gentlemen thank you standing by and welcome to the Clearside Biomedical Third Quarter 2020 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation there will be a question-and-answer session. I would now like to turn the conference over to Jenny Kobin, Clearside Investor Relations. Thank you and please go ahead madam.

[Jenny Kobin:]

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.

[George Lasezkay:]

Thank you, Jenny. Good afternoon and thank you for joining us on the call today. The third quarter of 2020 was very productive for Clearside both operationally and clinically as we had numerous positive advances to our pipeline. As we announced on our last quarterly call we secured acceptance of our investigational new drug application for our lead development asset CLS-AX, our proprietary suspension of axitinib for suprach oroidal injection. With this IND we plan to initiate our first clinical trial with CLS-AX in Wet AMD patients. I'm extremely proud of the cross-functional team that's worked so diligently to take axitinib from just a concept a little over one year ago to our expected initiation of a phase 1, 2a clinical trial by the end of this year. As Tom will discuss in his remarks we are eager to advance axitinib into the clinic as we believe its intrinsic, tyrosine kinase inhibitor characteristics, can be further leveraged through our SCS micro-injector. In pre-clinical studies CLS-AX delivered suprachoroidaly was observed to be well tolerated and showed significant tissue concentrations over time. These characteristics if demonstrated clinically may support suprachoroidal axitinib potential to reduce the profound treatment burden for patients suffering from Wet AMD. Our phase 1, 2a clinical trial for CLS-AX is expected to begin by the end of this year and we anticipate reporting initial data from the first cohort in mid-2021. In addition, we continue to progress our internal pre-clinical work to expand our pipeline. One of our focus areas is on a non-viral vector gene therapy program that we refer to as our therapeutic biofactory. We are also working on a development program utilizing suprachoroidal administration of an immigrant inhibitor small molecule suspension initially focused on diabetic macular edema. Tom will elaborate on these early stage programs shortly.

[Thomas Ciulla:]

Thank you, George. We've made significant advances in our pipeline over the last several months and I'm pleased to share these updates with you today. As George mentioned our clinical development team is on track to initiate our CLS-AX phase 1, 2a clinical trial by the end of this year in patients with Wet AMD. Our outside clinical research organization has been chosen and we are working with them to prepare the trial sites for initiation. As a reminder the phase 1, 2a trial will be an open label dose escalation trial to assess the safety and tolerability of a single dose of CLS-AX administered through the suprachoroidal injection procedure. Eligible patients are those who demonstrate stable visual acuity following two or more previous injections with the flipper set and anti-VEGF agent. As a tyrosine kinase inhibitor that inhibits VEGF receptors 1, 2 and 3 axitinib span VEGF inhibition could be more effective than current focused anti-VEGF A inhibition and there is already independent literature demonstrating its potential efficacy in pre-clinical models of corneal, retinal and choroidal angiogenesis. Also in pre-clinical models it has been shown to be more potent and have better ocular biocompatibility than other TKIs suggesting the potential for efficacy and safety advantages and we believe that delivery of the agent via suprachoroidal injection not only has the potential to leverage the attributes of axitinib but may also allow for less frequent dosing and therefore a lower treatment burden for patients which addresses a large unmet need. Because this is the first inhuman trial our primary objective is to assess the safety and tolerability of CLS-AX in these Wet AMD patients. We will also evaluate secondary metrics including pharmacokinetics, visual function, ocular anatomy and the need for additional treatment with individual of flipper set. The trial of approximately 15 patients and 3 cohorts will include a total of 5 patient visits. With the timeline for each cohort at around 6 months we expect initial safety data from the first cohort in mid-2021. In addition to CLS-AX we remain dedicated to expanding our internal pipeline. As noted previously we have been interested in suprachoroidal administration of gene therapy. Recently a published pre-clinical paper from the renowned ocular gene therapy group at the University of Iowa demonstrated that suprachoroidal delivery is a viable route for AAV mediated retinal transduction and they concluded that further investigation for potential human gene therapy as warranted.

[Charles Deignan:]

Thank you, Tom. Our financial results for the third quarter were published this afternoon in our press release and are available on our website. Therefore I will summarize our current financial status. As we reported our cash and cash equivalents at the end of September 2020 totaled approximately $15 million. Our quarterly cash burn remains consistent with spending focus primarily on resubmission of the NDA for XIPERE and our anticipated clinical trial initiation for CLS-AX. The planned investments in our pre-clinical work are also incorporated into our operating plans. As George and Tom discussed our partner REGENXBIO initiated their phase 2 clinical trial utilizing our SCS micro injector which triggered a milestone payment from them of $3 million. With this additional licensing revenue we are able to extend our cash runway and currently expect to have sufficient resources to fund planned operations into the third quarter of next year. We remain active participants in Southside sponsored events and look forward to presenting at this people virtual healthcare conference next week. I will now turn the call back over to George for his closing remarks.

[George Lasezkay:]

Thank you, Charlie. In August of last year we introduced a new strategic direction for Clearside. The two-prong strategy included first building an internal research and development pipeline in areas such as noble small molecules and non-viral gene therapy and second establishing external collaborations with other companies to allow them to access the suprachoroidal space in specific therapeutic areas we could not or did not intend to pursue. As you have heard in our remarks today this strategy has come to fruition through the hard work and dedication of our team over the last 15 months. We have built a diversified pipeline of clinical and pre-clinical programs. We have focused our spending on the growth of key assets and we have secured non-diluted funding via upfront and milestone-based payments with a potential future royalty revenue stream. We expect this momentum to continue into 2021 with the potential approval of XIPERE, receipt of initial clinical data for CLS-AX and Wet AMD patients and the advancement of our pre-clinical programs. I would now like to ask the operator to open the call up for questions.

[Operator:]

Our first question comes from the line of with Wed Bush. Your line is open.

[Unidentified Analyst:]

Hi, this is for . Thank you for taking our questions and congrats on all the progress. For XIPERE how long would it take for the new CMO to produce a registration batches and then from there how long would it take to generate the stability data to resubmit the NDA and I have one question on CLS-AX when you report the safety data mid 21 next year, do you also plan to report any secondary end points?

[George Lasezkay:]

Okay. Well, thank you for that question. I'll let Tom take the second question in a minute. I'll take the first one on XIPERE. We just disclosed again today that our timing on the NDA resubmission would be no later than the first half of next year 2021, where things are going very well with the new CMO to be precise. Once we make the registration batches it will take us three months to produce the stability data. Once we resubmit we expect that we will get action on our resubmission within six months of the resubmission date. Tom you want to answer the question about CLS-AX?

[Thomas Ciulla:]

Sure. Just a quick review so it's a phase 1, 2a study. It's an open label dose escalation study. There is three cohorts of five patients each. We'll begin at the 0.03 milligram dose and we have multiple endpoints that will include predominantly safety but we'll also be assessing the tolerability, visual function ocular anatomy and need for additional therapies and we will be presenting all of those endpoints in mid-2021.

[Unidentified Analyst:]

Great. Thank you.

[Operator:]

And our next question comes from the line of Zegbeh Jallah with Roth Capital Partners. Your line is open.

[Zegbeh Jallah:]

Hello. Thanks for taking my questions. Just have a couple here. The first one I think relates to CLS-AX, just kind of wondering for this study if we're going to have data from all of the cohorts or did I hear you Tom say that we'll just have data from cohort one and then do you expect that we will see efficacy data from just the lower dose for example the 0.03 milligram or do you expect efficacy at higher doses?

[Thomas Ciulla:]

Well, thanks for the question first of all. So as you know there's five patients per cohort and again it's really key towards safety. It'll be hard to make any efficacy conclusions for the small sample size but nevertheless we'll have some signals of biologic effect including visual acuity, OCT, and angiographic parameters. We will of course be presenting data from each cohort as we accumulate that data and escalate the dose.

[Zegbeh Jallah:]

Thanks Tom and another follow-up one here with the data from coming up early next year, I think a lot of people are also going to be interested in your efforts with non-viral gene delivery. So can you just talk about where you are with that process in a little bit more detail?

[Thomas Ciulla:]

Sure. So as I mentioned in my prepared remarks we have two programs that we're working on and we've seen some interesting results so far. What we've already reported is that suprachoroidal delivery of a marker gene versus intro-vitro delivery results in the same activity of that marker team which provided us some hope about going forward. So we're now working with therapeutic transgenes. What we've observed so far is that we can open the suprachoroidal space acutely in this rapid model all the way to the posterior pole which suggests that we can treat macular disorders as well as peripheral disorders. We've also seen expression of this therapeutic gene for the duration of studies and we've also observed that when we inject suprachoroidaly versus intro-vitroly on clinical exam of these retinas the suprachoroidal delivery seems to be better tolerated. We're in the process of further quantifying these results and we hope to present this sometime in 2021.

[Zegbeh Jallah:]

Thank you. And the final one here for me, I think this is just the high level one for George maybe and maybe I've already asked this in the past but as you think about having different pipeline program, you also have the intervention stuff that you're working on, are you thinking about partnerships at all or do you anticipate independently moving these programs into the clinic and beyond?

[George Lasezkay:]

Thanks Zegbeh. I appreciate that question. I think the difference between now and 14, 15 months ago is that we have these choices to make when we didn't this time last year and that's a good thing. We are going to be actively evaluating how we go forward with our various programs. I wouldn't say that the collaborations are out of the picture but right now what we're really focused on is getting the XIPERE NDA resubmitted in the most timely fashion to kick off the CLS-AX clinical program and to generate more data on those pre-clinical programs so we can make the decision as to whether they're programs that we can afford to bring forward because they justify that or they should be programs that we might be able to do better with a partner but our strategy is still to develop an internal pipeline as well as external collaborations and that that's not changing.

[Zegbeh Jallah:]

Thanks George and congrats on the study progress.

[George Lasezkay:]

Thank you. Appreciate it.

[Operator:]

And our next question is from the line of Annabel Samimy with Stifle. Your line is open.

[Annabel Samimy:]

Hi. Thanks for taking my questions. I agree it's a lot of great progress and a big difference from last year. So I want to get a sense you made a comment earlier that the ophthalmology community is becoming much more comfortable with SCS platform and its use, I guess my question is how are they getting that comfort and that experience? There aren't any products on the market yet. Is it primarily through some of the clinical work that you're doing or is it just primarily through the published work? Are these physicians working with the SCS platform at all and getting much more comfortable with the delivery into that area of the eye. I guess the second question I have is with regard to some expectations around milestones and when we might see some, obviously you've got a lot of clinical and regulatory events coming up that may trigger some so for example with resubmission of XIPERE is that on resubmission? Is it only on approval? Are you going to get any milestones with some upcoming data? And then I guess finally in this COVID environment it's pretty clear that ophthalmology has been the worst hit, one of the worst hit areas in terms of clinical development. So are you seeing any slow down not necessarily of your partner's activity but in terms of additional partnership talks that or any additional requests that you get inbound requests from partners to use your technology? Thanks.

[George Lasezkay:]

That's a lot to digest. I don't know.

[Annabel Samimy:]

I can break it down if you forget.

[George Lasezkay:]

I was trying to take notes while you were talking. On the suprachoroidal there's maybe a couple of ways we can answer that. I'll let tom speak in a moment but the question was about people becoming more comfortable with suprachoroidal. I think there's a couple of reasons for that and then I'll let Tom elaborate on that and then he might talk about the COVID question as well. First of all our team has done a tremendous job in getting the word out about how safe and how reliable and how easy to use the suprachoroidal administration has been. Okay. We've done a number of presentations about in person before COVID hit and virtually since COVID has made most of these conference, all these conferences go virtual. So we've really gotten the news out. We've established the scientific advisory board with some key opinion leaders that really buy into the suprachoroidal approach. There is also been a fair number of pre-clinical work specifically work by Peter that's really started to create some justification for people to be interested in the space both for viral and non-viral gene therapy. He's done it both and that's probably what led to our a leading reason why REGENXBIO wanted to partner with us last year. So there's the pre-clinical work that's going on. There is the information that's being spread by our medical affairs team and just all the work we've done with Aura with with REGENXBIO in terms of training their people and then turning around and training their investigators, the word is spreading that this is a fairly straightforward process to use and the data is starting to be accumulated that looks like the suprachoroidal space can make a difference in many conditions that are being treated or with certain therapeutic agents that delivery to the behind the visual field might be preferable to administration in front of the visual field. Tom do you want to comment any further on that what seems to be a growing acceptance and interest in the suprachoroidal space?

[Thomas Ciulla:]

Sure. I think you summarized it really well. I just wanted to sort of start from scratch and mention that we've done over a thousand injections. We've run global trials Phase 1, 2, 3 global trials and we trained hundreds of clinician investigators. We found that it was a very well adopted and then as George mentioned there's been some pre-clinical gene therapy studies using suprachoroidal approach. He mentioned Johns Hopkins but I also wanted to highlight the University of Iowa has also published a paper recently pursuing suprachoroidal injection pre-clinically of gene therapy and then as George mentioned there's a whole host of trials now actually using our very micro inductor. So there'll be four clinical trials this year assessing three assets and of course we mentioned REGENXBIO. They will have two trials for AMD and DME. Their investigators have all undergone training. Aura Biosciences similarly has their phase 2 trial up and running with our SCS micro injector. Their investigators also have also received and are also undergoing training. We'll have our own phase 1m 2a trial with axitinib. We'll be training investigators for that and I also should mention that even globally plans to pursue clinical trials in China and they'll have training programs as about medical affairs will also be very actively engaging the retina community as it plans for launch. And then finally I just wanted to highlight or amplify what George mentioned our medical affairs team has been incredibly active this year. We've had over 35 presentations at multiple retina congresses and I did mention earlier that we just published it's available a fully online download. We just published a clinical characterization of the suprachoroidal injection procedure using a micro injector and that showed that the procedure is very well accepted by clinician, investigators and it showed that or suggests that the procedure could be very rapidly adopted in clinical practice.

[George Lasezkay:]

Tom you want to just comment very briefly and then we'll get to her final question on COVID impacting recruitment?

[Thomas Ciulla:]

Sure. So the American Society of Retina Specialist has put out guidelines for COVID and basically the guidelines essentially state that essential therapies like anti-VEGF therapies for AMD should not be halted because obviously patients require it and by and large the retina community has adopted quite well. They continue to treat patients with anti-VEGF therapies for AMD, DME and RVO. We think for our phase 1, 2a clinical trial as I mentioned the initial cohort will just be five patients. We have multiple sites that are initiating each of these sites has been up and running treating Wet AMD patients without interruption. They are all very experienced investigators with our suprachoroidal injection procedure as well as experience with our early phase Wet AMD trials. So we're fully confident that we'll be able to recruit five patients for our initial cohort without any significant interruptions.

[George Lasezkay:]

And I'll just make one final comment, I haven't seen COVID really affect anything in terms of potential partnership discussions or anything interesting collaborations. I haven't seen that impact to any noticeable degree and so that's all I can say we've actually not really been impacted in any significant way by COVID in terms of our business fortunately for us.

[Annabel Samimy:]

Okay. Great and then the last question regarding any way that we can start thinking about how to frame some milestones that might be coming in from various catalysts or developments you have with partners or have those not been disclosed and they won't be disclosed at any point going forward until they come off?

[George Lasezkay:]

I think we'll let Charlie handle that one.

[Charles Deignan:]

Hey Annabel, yes unfortunately due to the confidentiality agreements and the license deals we can't disclose those. But the most important majority the big milestone comes on approval of XIPERE we've disclosed Bausch. There is a $15 million payment there and also our Chinese licensee also there's some money associated with that but we can't give the details until they come in on any others.

[Annabel Samimy:]

Okay. If I may just ask one more question with regard to, I guess XIPERE with Wet AMD I know that you've been presenting not Wet AMD, I'm sorry, with DME even presenting your data or publishing your data the type data is obviously there's other programs in development and DME whether it's gene therapy for your partners or in moving on with Wet AMD with your own axitinib and possibly moving into another area is pushing forward time in DME. I guess thought of as an older technology that maybe you're more interested in moving on to some newer technologies non-steroid-based technology that may have better impact in the marketplace?

[George Lasezkay:]

The answer to that I think is it's fairly straightforward. Further development of XIPERE is entirely up to about Bausch and Lomb. It's their decision whether they want to push that forward for DME we shared all our data that we've generated both in RVO and DME with them, we've had conversations with them to bring them up to speed so they know but the decision about XIPERE going into additional indications is entirely in their control. We're working on other things on our internal pipeline and that's their product. They've licensed their product and the development is up to them.

[Annabel Samimy:]

Okay great. Thank you.

[George Lasezkay:]

Sure.

[Operator:]

Thank you. And our next question comes from the line of Jonathan Wolleben with JMP Securities. Your line is open.

[Jonathan Wolleben:]

Hey thanks for taking the questions. Just a couple from me. I'm wondering can you comment on the design of the CLS-AX trial on why the requirement for the anti-VEGF treatment and should you expect to see the same response in VEGF and VEGF experience patients and then based on your pre-clinical data is three months what you're expecting for the duration of effect or do you think it could have a longer impact? Thank you.

[George Lasezkay:]

I think that's for Tom. Tom do you want to address that?

[Thomas Ciulla:]

Sure. So let me start with the first question the design. So as you know, as you alluded to we're requiring patients to have been treatment experienced and the reason really is for patient safety. This is first in man, first time actually first time any tyrosine kinase inhibitor has been injected in the suprachoroidal space. So we want patients who've already been treated and we want to maintain the efficacy obtained with initial anti-VEGF therapy. However, that doesn't preclude later studying axitinib as primary therapy but we wanted to go with a more conservative route because this is the first time that any tyrosine kinase inhibitor been injected in the suprachoroidal space. And I think your next question, well actually before I finish next question I also want to add that other companies looking at noble therapies have also adopted a similar approach for their initial phase 1 studies that the patients have been treated as well. So it's a fairly common and quite typical trial design. I think your next question about expected duration. We expect to see multiple month duration. We know that the levels in the suprachoroidal space and retina with some of the doses that we're anticipating using will be above the IC50 for many-many months. This could very well be a six month therapy. Obviously it's too soon to tell without any clinical data but we're expecting multiple month durability and I think was there a third question?

[Jonathan Wolleben:]

No, you touched on it. Thank you very much and congrats on the progress.

[Thomas Ciulla:]

Thank you.

[Operator:]

And I'm not showing any further questions. So I'll now turn the call back over to George Lasezkay for closing your mark. Please go ahead.

[George Lasezkay:]

Thank you and thank you 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 in the future. Operator you may now disconnect.

[Operator:]

Ladies and gentlemen this does include the program. Thank you for participating and everyone have a great day.