Clearside Biomedical, Inc.
Q4 2020 Earnings Call Transcript

Published: 10 Mar 2021

[Operator:]

Greetings, and welcome to the Clearside Biomedical Fourth Quarter and Year-End Financial Results and Corporate Update Conference Call. As a reminder, this conference call is being recorded. I would now like to introduce your host, Jenny Kobin, Clearside, Investor Relations. Please go ahead.

[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 and about the company's future expectations, plans and prospects constitute forward-looking statements for purposes of the private securities Litigation Reform Act of 1995. The 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, 2019, our quarterly report on Form 10-Q for the quarter ended September 30, 2020, 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.

[George Lasezkay:]

Thank you, Jenny. Good afternoon and thank you for joining us on the call today. 2020 was a year of progress for Clearside, and we've continued this momentum into 2021. Despite the uncertainties brought on by the global pandemic, our internal team and our Board of Directors remained focused throughout the year, and we were able to successfully execute on our key initiatives. The broad applicability of our suprachoroidal injection delivery technology continues to grow as our programs advance both internally and with our partners. To-date, more than 1,200 injections have been performed in clinical trial patients using our novel SCS Microinjector, delivering multiple therapeutic products, small molecules, viral gene therapies and virus-like drug conjugates. These injections have been performed in a number of different retinal diseases, including uveitis, neovascular age-related macular degeneration, diabetic retinopathy and choroidal melanoma. This extensive clinical experience reinforces our belief that the SCS Microinjector has the potential to be a reliable, nonsurgical, office-based method to access the suprachoroidal space for the treatment of a broad range of retinal diseases. In addition to our clinical injection experience, we have a comprehensive intellectual property portfolio that protects our novel SCS Microinjector, as well as the treatment of various conditions with suprachoroidal administration of certain therapeutic products. We have 22 U.S. patents and more than 50 European and internationally issued patents. Our granted patents provide exclusivity for our delivery technology and product candidates into the mid 2030s. And if granted, our pending applications would extend exclusivity beyond 2040. We continually monitor the activity of competitors who have recently initiated development programs related to suprachoroidal administration. Given our patent state and clinical - extensive clinical experience, we feel confident we will be able to successfully protect and have our assets commercialized if they are approved and come to market. Now I'd like to discuss the specifics of our internal product pipeline, starting with XIPERE. XIPERE is our proprietary suspension of triamcinolone acetonide, a corticosteroid formulated for suprachoroidal injection using our SCS Microinjector for the treatment of macular edema associated with uveitis.

[Thomas Ciulla:]

Thank you, George. 2020 was a very productive year for us from a research and development perspective, and I'm excited to highlight some of these accomplishments for you today. We initiated our Phase I/IIA clinical trial in wet AMD with CLS-AX. And as we reported last week, we made progress in completing enrollment in the first cohort. This achievement was made possible through the combined efforts and commitment from patients, investigators, advisers and our internal team. The reception and interest in our program from the retina community has been amazing. Ultimately, we believe that CLS-AX will improve the overall patient experience with a longer-lasting treatment and a favorable tolerability profile. Over the course of the last year, our discovery and research teams also made meaningful progress. We are continually utilizing our capabilities to develop proprietary suspensions of various agents to utilize our SCS Microinjector in diseases where we can make a difference in the lives of patients. Our preclinical work with our integrin inhibitor program is ongoing, and we expect to conclude these studies this year. Together with our partners, significant progress has been made in expanding the use of our SCS injection technology into the gene therapy space and into new diseases. Our partner, REGENXBIO, is investigating the delivery of their gene therapy asset into the suprachoroidal space in two indications.

[Charles Deignan:]

Thank you, Tom. Our financial results for the fourth quarter and full year 2020 were published this afternoon in our press release and are available on our website. Therefore, I will summarize our current financial status. Our cash and cash equivalents as of December 31, 2020 totaled approximately $17 million. This includes $6.9 million of funds raised in the fourth quarter through our aftermarket or ATM facility. In January 2021, we raised aggregate net proceeds of $14.4 million from a registered direct offering and our ATM facility. Based on this additional funding, we currently expect to have sufficient resources to fund planned operations into the first quarter of 2022. This estimate does not include additional development and approval milestone payments we may receive under our current partnership agreements. Our current quarterly cash burn is primarily related to work on XIPERE manufacturing, NDA resubmission and the CLS-AX clinical trial. The planned investments in our preclinical work are also incorporated into our operating plans. In summary, we expect that our current financial resources will enable us to potentially reach multiple value-creating events over the next 12 months. We appreciate the interest and support of the investment community, and look forward to participating in the upcoming ROTH and Needham conferences. I will now turn the call back over to George for his closing remarks.

[George Lasezkay:]

Thanks, Charlie. I'd like to wrap up our formal comments today with a few final points. First, as the pioneers in treating back of the eye diseases through the suprachoroidal space, we continue to demonstrate that our injection technology platform can be utilized for a range of potential ophthalmic conditions and with multiple therapeutic entities. Second, we have considerably expanded the clinical use of our first-in-class proprietary SCS Microinjector. In just the last six months, four clinical programs using our SCS Microinjector have been initiated, both from our internal pipeline and from partner-led efforts. That is in addition to our XIPERE program that we expect to reach the development finish line later this year and then be ready for commercial launch. Finally, I'd like to thank the entire Clearside team, who, together with our many valued partners, has provided that it is proven that even in a global environment faced with the uncertainty and restrictions due to COVID-19, much can be accomplished in a short time with focused and dedicated efforts and the desire to make a difference for patients suffering for potentially blinding diseases. We appreciate and value this important opportunity. And with that, I'd now like to ask the operator to open the call for questions.

[Operator:]

First question comes from the line of Andreas Argyrides from Wedbush Securities. You are now live.

[Andreas Argyrides:]

This is Andreas on for Liana Moussatos. Our first question is with initial data from other pan-VEGF inhibitors now becoming available, what would you like to see as far as rescue free rates at three months in the upcoming readout of OASIS?

[George Lasezkay:]

Tom, I think that's your question.

[Thomas Ciulla:]

Thank you for the question. So the question has to do with potential or projected rescue rates in the upcoming OASIS study. And I just want to back pedal a bit and remind everybody that this study is really - at least the first cohort is really geared towards safety. This is the first time a tyrosine kinase inhibitor has been injected in man suprachoroidally. And so really, the first cohort is geared towards safety. We want to make sure it's well tolerated before we escalate. So with that in mind, we have absolutely no prior data on what we can expect with this mode of delivery, and it's very difficult to do cross-trial comparisons from other TKI studies where the TKI is packaging the sustained delivery device and injecting individually. So it's really hard at this point without any data for me to speculate. And that's really the whole goal of the study is to collect that initial data, again, geared towards safety with the first cohort and dose escalate thereafter.

[Andreas Argyrides:]

Understood. And I'll just ask one follow-up and then jump back in the queue. How are the - thinking about the higher doses in the second and third cohorts, how are those doses being determined? Are they predetermined or on a result basis?

[Thomas Ciulla:]

That's a great question. The question was doses for the upcoming cohort. So as we've noted on clinicaltrials.gov, the initial dose will be 0.03 milligrams. Cohort 2 will be 0.06 milligrams and cohort 3 will be 0.1 milligrams. But your point is well taken. So these are prespecified. But obviously, we have the ability to amend a protocol and adjust accordingly.

[Operator:]

Next one on the queue is Annabel Samimy from Stifel. You are now live.

[Annabel Samimy:]

Congratulations on the progress. A lot going on with your proprietary and your partner programs. I had a couple here. So I guess, first with CLS-AX. I guess I'm not going to ask you to comment on the grade but data. But there are a number of pan-VEGF trials that are ongoing or starting - about to start. And I'm just wondering, from a competitive perspective, would you envision SCS delivery might speed up or possibly slow down the development relative to competitors? For example, if you have a longer duration, could this be a problem competitively? I guess it won't matter if you had better data. But how do you think about the development pathway? Is it a race and how do you expect to sort of manage that?

[Thomas Ciulla:]

I guess I'll take that to start. That's a great question. And I think you mentioned other programs. So as I mentioned in my prepared remarks, suprachoroidal delivery of a tyrosine kinase inhibitor is well differentiated from other modes of delivery. We believe there are synergies between the intrinsic properties of axitinib and the attractive features of suprachoroidal delivery. So first, for axitinib, as you may know, it's a pan-VEGF inhibitor. It's one of the most highly potent tyrosine kinase inhibitors. And it's been shown in preclinical studies to have better compatibility with ocular cells and other TKI. So there may be not only an efficacy benefit intrinsically with axitinib due to its potency, but potentially a safety benefit. And then we think we can leverage that further with suprachoroidal delivery. So we know that when we inject small molecule suspensions suprachoroidally, we can compartmentalize them in the suprachoroidal space. We get very high levels in that space and very, very low levels in the vitreous and basically undetectable or rather limited in the aqueous. So we think by compartmentalizing the drug in the suprachoroidal space, we're going to minimize the risk of any snow globe effects or any off-target effects. And then in terms of efficacy, by achieving very high levels in that space, we can further potentially enhance the efficacy of axitinib. And finally, we know from the work we've done with several small molecule suspensions, we have multi-month durability. So we think that suprachoroidal delivery of a TKI, a potent TKI, like axitinib, is very well differentiated and, clearly, potentially separates us from other TKIs. And I might add that, as you know, TKIs have been assessed topically, systemically and intravitreally. And in many of these cases, there's been a biologic effect. So we think that TKIs probably work, and it's not a matter of mechanism of action, but really one of delivery. And we think we solved that problem.

[Annabel Samimy:]

Okay. Great. And then if I could ask a second question, I guess, regarding REGENXBIO, their program, 314. So we saw the long-term results from the subretinally administered RGX-314 and the durability seems really good. And I guess, that was measured partly by the - also by the reduction of the anti-VEGF - by the reduction of anti-VEGF injections. I guess, maybe - and it's something not quite long. And I guess maybe you can help us understand what expectations would be for suprachoroidally delivered 314 based on what you saw from the subretinal durability? And what is the possibility of that higher protein expression repeated in humans? I think you saw it preclinically already. So maybe you can talk a little bit about that.

[Thomas Ciulla:]

Sure. So it's a great question. And as you know, REGENXBIO is in Phase II for wet AMD and diabetic retinopathy. They've announced that they completed an enrollment of patients in cohort 1, their initial dose. They expect interim efficacy data from cohort 1 in the third quarter of this year, and they've already begun enrollment in cohort 2. But I want to, again, back up little bit and just remind everybody that, once again, this is first-in-man a viral vector gene therapy has been injected suprachoroidally. And I think that their announcement, that has been well tolerated to date, is really a huge step forward because, as you know, viral vectors can be associated with inflammation when delivered individually. And the fact that they've already announced that it's been well tolerated, again, is a step in the right direction. So I think just like our first cohort of our CLS-AX study, their first cohort of suprachoroidal delivery of their vector, RGX-314, is - I would speculate is really geared towards safety. And the fact that it's been well tolerated to-date, I think it's a huge step forward, not just for REGENXBIO and RGX-314, but really the entire field of viral vector gene therapy, particularly for biofactory. And obviously, they're going to dose escalate as they've already done in cohort 2. And I think just as they've done with their subretinal program with five cohorts, they'll escalate until they find a dose that's not only safe but also efficacious. So I think we're in the early innings, but I think it looks very promising so far.

[Annabel Samimy:]

Okay. And one last question, if I may. Is there any work that's being done, I know that Bausch is controlling the commercialization of XIPERE, but have you established - or have they established some kind of training program for physicians, given that SCS - I mean, I imagine that the SCS delivery would be something that you would - or XIPERE would be something that you would want to use the launch pad in training for all the other programs that are coming down the pipe? So can you talk about the training program that's being established for that?

[George Lasezkay:]

Yes, I think, Tom, you can speak to what med affairs has done with Bausch training of at least the Bausch employees.

[Thomas Ciulla:]

Sure. So we have a very robust training program. And actually, during this pandemic, we've actually developed a hybrid virtual program where we can ship artificial eyes to physician investigators, and we then can be with them virtually via webinar and train them. And we found that that's gone really well. We actually are looking at this with surveys and we'll be presenting this at ARVO as a means of physician training virtually. We also have a very robust in-person training program. And I can tell you that it's been extraordinarily well received by physicians. We recently published, what I call, our procedure performance paper, which is available on our website, which indicates that the procedure itself is very well accepted by physicians, and our interactions with Bausch as well as REGENXBIO and Aura in terms of training has been really stellar. We've had great experiences with these companies. And finally, I want to mention that we have some injection videos on our website. And I think if you have a chance to view those, I would encourage you to do so, because they demonstrate how relatively facile physicians can become with injecting. We actually have an injection video of CLS-AX. And you can see from the video that it seems to be well tolerated. It seems to be fairly quick and efficient. So we're really confident that this procedure could be readily adopted in clinical practice when it's approved, especially in the retina community where these physicians love gadgets and love procedures.

[Operator:]

Next on the queue is Jon Wolleben from GMP Securities. You are now live.

[Jonathan Wolleben:]

Congrats on all the progress. Just a couple from me as well on CLS-AX. Tom, you mentioned a few times that the focus for this first readout midyear is going to be on safety, but you are collecting a few different efficacy end points. So I was hoping you could let us know specifically what data to look forward to midyear on the efficacy front?

[Thomas Ciulla:]

Sure. We hate to even call these endpoints efficacy endpoints with only five patients. But your point is well taken. They tend to be traditional efficacy endpoints. And again, they're all listed on clinicaltrials.gov. But it will be the usual endpoints that most companies report. So, of course, we'll have best corrected visual acuity. We'll be looking at the need for rescue, we'll be looking at anatomic features on OCT and geography, and OCT and geography, particularly central subfield thickness. And of course, again, because it's mostly geared towards safety, we'll be looking at adverse events - treatment-emergent adverse events and serious adverse events.

[Jonathan Wolleben:]

That's helpful. And I think you mentioned that the plan is to start the second cohort in the second half of this year. So I'm wondering how much safety follow-up have you designated that's necessary before dose escalating? And is that the same between cohorts 2 and 3 as well?

[Thomas Ciulla:]

Great question. So as you know, patients will be followed for three months after their CLS-AX injection. Then we'll essentially tabulate their results, present it to the safety monitoring committee, and they'll help us decide whether it's safe to move on or not. We plan to start recruitment just at the beginning of the second half of this year and potentially have results from cohort 2 by the end of the year.

[Jonathan Wolleben:]

Terrific. And just shifting gears, one last one from me. On the preclinical Integrin platform, you mentioned wrapping up the preclinical work this year is the goal. Will we be seeing any of that data this year? And is the expectation to have a lead candidate or a multiple? How are you thinking about next steps for the Integrin platform?

[Thomas Ciulla:]

We've adopted an integrin inhibitor. We're very excited about this particular integrin inhibitor because it targets the alpha V beta 3, alpha V beta 5 and alpha V beta 1, which have been implicated in some of these important retinal diseases like diabetic macular edema, AMD and diabetic retinopathy. We're currently formulating this as a small molecule suspension. It's currently undergoing preclinical testing to assess the ocular tolerability, the ocular distribution and pharmacokinetics. As you know, we've done a significant amount of work with small molecule suspensions, and we expect it to be well tolerated to show favorable distribution, that is to be high levels in the targeted core retinal tissue layers and low levels anteriorly, and to have multi-month durability. So we will hopefully be wrapping those studies up this year and sharing some of those results with the retina community and the investment community.

[Operator:]

And there are no further questions at this time. I will now turn it over back to Dr. Lasezkay.

[George Lasezkay:]

Well, 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. Operator, you may now disconnect the call. And thanks again.

[Operator:]

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.