IVERIC bio, Inc.
Q1 2020 Earnings Call Transcript

Published: 7 May 2020

[Operator:]

Good day and welcome to the IVERIC bio First Quarter 2020 Results Conference Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Kathy Galante. Please go ahead.

[Kathy Galante:]

Good morning and welcome to IVERIC bio’s conference call. Representing IVERIC bio today is Mr. Glenn Sblendorio, Chief Executive Officer and President; Dr. David Guyer, Executive Chairman; Mr. Dave Carroll, Chief Financial Officer; Dr. Pravin Dugel, Chief Strategy and Business Officer; Dr. Kourous Rezaei, Chief Medical Officer; Dr. Abraham Scaria, Chief Scientific Officer; and Mr. Keith Westby, Chief Operating Officer.We would like to remind you that today we will be making statements relating to IVERIC bio’s future expectations regarding operational, financial and research and development matters, including statements regarding the impact of the COVID-19 pandemic on our research and development programs, operations and financial position and on the practices of the retinal specialists and the conduct of clinical trials; our expectations to use OPH2003, our previously announced clinical trial of Zimura for the treatment of geographic atrophy as a Phase 3 clinical trial; our development and regulatory strategy for Zimura, including our plans and expectations for a second Phase 3 clinical trial evaluating Zimura for the treatment of geographic atrophy; our hypothesis regarding complement inhibition and the mechanism of action for the treatment of geographic atrophy; our projected use of cash and cash balances; the timing, progress and results of clinical trials and other research and development activity; the potential utility and development potential of our product candidates; the size of the potential market for indications our product candidates are intended to treat; and the potential for our business development strategy. These statements constitute forward-looking statements for the purpose of the safe harbor provision under the Private Securities Litigation Reform Act of 1995. These statements cover many events and matters that are subject to various risks that could cause actual results to differ materially from those expressed in any forward-looking statement, including risks relating to the future progression of the COVID-19 pandemic and its impact on our research and development programs, operations and financial position; initiation and the progress of research and development programs and clinical trials; availability of data from these programs; reliance on university collaborators and other third-parties; establishment of manufacturing capabilities; expectations for regulatory matters; need for additional financing and negotiation; and consummation of business development transactions and other risks.I refer you to our SEC filings and in particular to the Risk Factors section in our annual report on Form 10-K filed on February 27, 2020, for a detailed description of the risk factors affecting our business. In addition, any forward-looking statements represent our views 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, except as required by law.I would now like to turn the call over to Glenn.

[Glenn Sblendorio:]

Thanks, Kathy and good morning everyone and thank you for joining our call this morning. Before I get started, I do want to acknowledge the COVID-19 situation and hope that all of you listening today, your families are healthy and safe.Let me begin today by introducing the newest member of our executive management team, Dr. Pravin Dugel. Pravin is a globally recognized retinal specialist who has extensive network and longstanding relationships with the biotech pharma ophthalmic community. Pravin has authored more than 200 papers, 35 book chapters, and has been invited to lecture at several marquee medical meetings and to serve as a visiting professor at universities worldwide. He’s on the editorial board of several major medical journals. Pravin is internationally recognized as a major clinical researcher and has been principal investigator in over 100 multi-center clinical trials. His research and educational contribution earns him the prestigious Senior Honor Award from the American Academy of Ophthalmology. He has been elected and previously served as the Retina Subspecialty Day Board Chairman for the American Academy of Ophthalmology’s Annual Meeting. And he has also been elected and previously served as a member of the board of directors of the largest retinal society in the United States, the American Society of Retina Specialists, and the largest retinal society in Europe, EURETINA.In addition to his many accomplishments and contributions to the retinal community, Pravin has also consulted to over 40 pharma and biotech companies. As our Executive Vice President and Chief Strategy and Business Officer, we believe Pravin’s experience will be instrumental in helping us build alliances with potential future collaborators, investors and other stakeholders. Pravin will help lead the company’s strategy as we advance our portfolio of therapeutics and gene therapy R&D programs targeting multiple retinal diseases, as well as new opportunities that could expand our portfolio and build our leadership in developing transformative therapies for treating retinal diseases. We are excited to have Pravin join the company. In a few moments you will hear from Pravin.We entered 2020 with positive data from our OPH2003 screening trial of Zimura in geographic atrophy, or GA, secondary to age-related macular degeneration, or AMD. These results, which we believe qualify OPH2003 as a pivotal trial for registration purposes, were a watershed moment for us and positions IVERIC bio as a late-stage clinical company in the potential multibillion dollar market. Although our view of results from this pivotal trial has not changed, we have changed the phase designation and will now refer to OPH2003 as a Phase 2/3 or Phase 3 trial. Recall that OPH2003 would not have qualified as a pivotal trial had the results not hit statistical significance threshold that we observed both in Zimura 2 milligram and the Zimura 4 milligram treatment groups. Following the positive efficacy results and favorable safety profile observed in this trial, we began the process of initiating a second Zimura Phase 3 clinical trial, which we call ISEE2008. This clinical trial was on track to initiate patient enrollment in March of 2020. From the outset of this terrible pandemic, our main priority has always been the health and safety of patients and their caregivers, as well as physicians and their staff and our employees and collaborators.Therefore in March, we chose to pause the initiation of patient enrollment for ISEE2008 due 2008. Due to the dedication and unwavering support of our clinical investigators and their staffs, along with our experienced clinical operations team, we put in place an aggressive strategy for Zimura and continued to activate additional sites and progress other trial initiative activities, including the identification of potential patients, so that we will be in a position to expeditiously begin enrolling patients as soon as we determine the appropriate time to do so. Kourous, in his review, will go into some of the details of the trial, as well as some of these initiatives that we have taken to keep engaged with our investigators and clinical trial sites.The beginning of 2020 has brought unprecedented times. However, it has also been a productive time for us here at IVERIC bio. In January, we announced the design of ISEE2008 clinical trial, and within 3 months of the announcements, our clinical operations team had completed the activities necessary to begin enrolling patients at a number of clinical sites. As I previously mentioned, we are poised to initiate enrollment as soon as the COVID-19 situation improves to a level that we and our investigators believe is safe to begin patient enrollment. Following the positive initial top line data that we reported at the end of October 2019, we are on track to receive the 18-month data from our OPH2003 Phase 3 clinical trial by the end of the second quarter 2020. Again, the primary purpose of the 18-month time point data is to gather additional safety data.We were granted Fast Track Designation from the U.S. FDA for Zimura for the treatment of GA secondary to AMD. Fast Track Designation offers important benefits, including frequent interactions with the FDA and the potential eligibility for rolling submission and priority review of a new drug application. If the relevant criteria are met, we look forward to working close with the FDA. Our ongoing Phase 2b clinical trial of Zimura for the treatment of autosomal recessive Stargardt disease, an orphan inherited retinal disease continues on track for top line data to be available during the second half of this year. However, we continue to closely monitor this trial, including the impact of the COVID-19 pandemic, on our patients and investigators. Although bringing Zimura to our patients is our top priority, we continue to focus on our gene therapy portfolio in orphan inherited retinal diseases.During this COVID-19 pandemic, we remain in close contact with our collaborators at University of Massachusetts Medical School, the University of Pennsylvania and the University of Florida, as well as our manufacturers. While there have been expected temporary slowdowns and temporary shutdowns at the academic centers due to COVID-19, we maintain an active dialogue with all of our collaborators. Natural history studies and IND-enabling activities for IC-100, which is intended to treat rhodopsin-mediated adRP, are ongoing, and we plan to file an IND by the end of 2020 or early 2021 and begin enrolling patients in a Phase 1/2 clinical trial during the first half of 2021. IC-200, which is intended to treat BEST1-related retinal diseases, continues on track, and we plan to initiate a Phase 1/2 clinical trial during the first half of 2021.Our minigene programs are also ongoing, and we expect to identify the lead minigene construct for our miniCEP290 program for the treatment of LCA10 during the second half of 2020. We look forward to providing you updates of all of these programs as they progress. The actions that we have taken prior to the COVID-19 pandemic to strengthen our balance sheet includes the completion of a successful follow-on public offering of our common stock and pre-funded warrants, resulting in net proceeds to the company of approximately $42.6 million in December of 2019. We believe that our cash and cash equivalents are sufficient to fund our operations and capital expenditures as currently planned into the beginning of 2022.In addition, we continue to aggressively, but selectively, continue our business development efforts as we continue to explore options for future development and potential commercialization of Zimura, including potential out-license and collaboration opportunities. While we cannot predict the depth of duration of the disruption caused by this pandemic, we remain committed to mitigating the impact of this global crisis on our business by effectively managing our cash position and focus on creating value for shareholders.With that, I’d like to now turn the call over to Pravin.

[Pravin Dugel:]

Thank you, Glenn, and good morning, everyone. First and foremost, I hope that all of you are well. I am excited to join IVERIC bio. I am extremely enthusiastic to work with Glenn, Kourous and David, whom I’ve known and respected for many years. I’m also looking forward to working closely with all of my new colleagues at IVERIC bio. I appreciate the opportunity to be here with you today to discuss our expectations regarding the impact of COVID-19 on the practices of retinal physicians and the conduct of clinical trials for geographic atrophy going forward. We believe that IVERIC bio OPH2003 trial may be the only pure pre-COVID positive Phase 3 clinical trial data in geographic atrophy secondary to AMD.Additionally, we believe that the quality of the OPH2003 data may provide an advantage for patient recruitment and retention for the ISEE2008 trial. Let me explain. We have seen in many surveys, most recently one by the American Academy of Ophthalmology that ophthalmology practices will continue to face unprecedented financial and logistical challenges due to the COVID-19 epidemic. We expect that recruitment and retention of patients for clinical trials will also be negatively impacted. In the post-COVID-19 era, like many business owners, we expect retinal specialists will need to adjust their practices to adapt to a new environment and will need to increase their revenue as quickly and efficiently as possible.As clinical trials eventually restart, geographic atrophy trials in particular may be a lower priority due to several factors

[Kourous Rezaei:]

Thank you, Pravin and good morning everyone. I hope everyone and their families are healthy and safe. The retinal specialist practice may be quite different post-COVID. In our discussion, the vast majority of retinal specialists recognize the need for their practices to adapt to the post-COVID era. We believe that the positive results and safety profile observed in our OPH2003 Phase 3 clinical trial is a major advantage as we prepare to initiate our second Zimura Phase 3 clinical trial, ISEE2008.As Glenn pointed out, we are excited about the results our first Phase 3 clinical trial for Zimura in GA secondary to AMD, indicating that Zimura slowed down the growth of GA over 12 months and was well tolerated. Following these results, we quickly started the process to initiate our ISEE2008 clinical trial. We were ready to begin enrolling patients in March as we had originally planned. However, based on what is happening with regards to COVID-19, we believe that we have made the correct decision to voluntarily pause the initiation of enrollment for ISEE2008 clinical trial.Our first priority is to protect the health and safety of patients, their caregivers, physicians and their staff. Pausing the initiation of enrollment provided time to allow sites to adapt to the new environment. We believe that the adaptations that the sites have implemented will protect and maintain patient and investigator safety in the new environment, thereby increasing our likelihood of obtaining high quality data from this trial. We continue to work closely in collaboration with our principal investigators as we monitor the pandemic situation in the United States and across the world. Based on feedback from our investigators, we plan to commence patient enrollment in stages based on the conditions in different communities and countries. While the initiation of enrollment is paused, we are aggressively continuing our efforts in regard to planning and risk mitigation to prepare the clinical trial sites so that we can be in a position to begin enrolling patients expeditiously when the COVID-19 situation improves to a level that we and our investigators believe is safe to begin enrolling patients.As Pravin mentioned, we believe that having one completed Phase 3 clinical trial with a positive outcome is a big motivator to help facilitate enrollment in second confirmatory Phase 3 clinical trial. I now want to outline some of the steps that we have taken to expedite recruitment once we determine to initiate the ISEE2008 Phase 3 clinical trial. We have asked the principal investigators to review their patient records and identify potential trial participants prior to the enrollment initiation. We have been in ongoing communications with our investigators in the U.S. and globally. They understand the importance of ISEE2008 for patients with GA and are eager to get the clinical trial underway.To-date, over 50% of North American clinical sites for the trial have been approved by the applicable IRBs. We are in discussions with our principal investigators to prepare for the potential second wave of COVID with the objective of minimizing disruption. In addition to contacting all investigators individually to keep them at the forefront of the ISEE2008 clinical trials, we have also hosted several webcast meetings with them. Our regional monitors are actively following up with sites on a weekly basis to ensure that the sites remain engaged and are able to continue to prepare for the trials or working remotely. We are taking advantage of ritual procedures at our sites to help minimize patient exposure during the study visits. We want to thank our principal investigators and their staff for their enthusiasm and support in completing many of the activities necessary so that when the time comes, we can begin enrolling patients as quickly as possible.Now I will provide some details on the clinical trial design. ISEE2008 is an international randomized, double-masked, sham-controlled, multicenter Phase 3 clinical trial evaluating the safety and efficacy of Zimura 2 milligram in patients with geographic atrophy secondary to AMD. As you may recall, in the first Phase 3 clinical trial for Zimura 2 milligram and Zimura 4 milligram cohorts demonstrated a similar 27% statistically significant reduction in the mean rate of GA growth over 12 months when compared to the corresponding sham-controlled cohorts. Since Zimura 2 milligram is administered as a single intravitreal injection, whereas Zimura 4 milligram requires 2 intravitreal injections, we selected the Zimura 2 milligram dose for evaluation in the ISEE2008 Phase 3 clinical trial. Our understanding from the FDA is that for marketing approval purposes for the 2 milligram dose from a safety perspective, at least 300 patients need to be treated with monthly Zimura 2 milligram, or a higher dose, for a duration of at least 12 months with a portion of these patients treated for 24 months.Based on the safety data we have already generated to date, we plan to enroll approximately 200 patients in the Zimura 2 milligram treatment arm in the next trial to reach the 300 patient threshold. In total, we are planning to enroll approximately 400 patients in the ISEE2008 Phase 3 clinical trial. These patients will be randomized 1

[Dave Carroll:]

Thank you, Kourous, and good morning, everyone. I’d like to highlight a few items from our press release of this morning and also update our year end cash guidance. For the quarter, our net loss totaled $15.1 million, or $0.28 per share, compared to a net loss of $12.5 million, or $0.30 a share, for Q1 2019. This increase in net loss was driven primarily by an increase in R&D expenses offset by favorable settlement of a state corporate tax audit. We’ve narrowed our year-end cash guidance. We now expect our year-end cash balance to range between $65 million and $70 million based on our current 2020 business plan, which includes initiation of our Phase 3 clinical trial, ISEE2008, and the continuation of our other ongoing R&D programs. If facts and circumstances were to change, we’ll adjust our guidance accordingly. Of course, these estimates do not reflect any additional expenditures resulting from the potential in-licensing or acquisition of additional product candidates or technologies or any associated development that the company may pursue.I will now turn the call back over to Glenn. Thank you for your time.

[Glenn Sblendorio:]

Well, thanks everybody for listening. Long update today. A lot going on in this COVID period. So, I want to thank everyone for listening, and I’d like to now turn the call back over to the operator for questions.

[Operator:]

[Operator Instructions] The first question comes from the line of [indiscernible] from Cowen.

[Unidentified Analyst:]

Hi, thank you so much for taking my question. So I just have a few questions on the gene therapy program, the IC-100, and then a very quick question on Zimura Phase 3 trial. So for IC-100, I just wanted to first talk about how you think the asset is differentiated from other therapies in development, such as the mutation-specific procured approach. And secondly, in terms of the Phase 1/2 trial, how should we think about the timing of the data? Do you expect the trial design to be similar to the other procure and have a similar 12-month primary endpoint? And then I can follow up on the rest of my question.

[Glenn Sblendorio:]

Yes, thanks, Georgie. So both questions, the first two questions are on IC-100. I’ll ask Kourous to talk about the differentiation and then a little bit about the trial. Kourous?

[Kourous Rezaei:]

Thank you, Glenn, and thank you for the question. So for the IC-100, it is a single subretinal injection versus a continuous intravitreal injection. So we believe that is the key differentiating factor is that you do a single treatment for hopefully a long time – a long-term effect. Second, IC-100 is a mutation-independent approach. As you know, for rhodopsin-mediated adRP, there are over 150 different mutations. Since we are shut down – shutting down all host rhodopsin production, it is a mutation-independent matter covering the entire disease spectrum. We are currently working with our collaborators on natural history studies. And we have not provided any detailed guidance regarding the clinical protocol design, but we will do that at the due time.

[Unidentified Analyst:]

Thank you. And just in terms of the Zimura Phase 3 trials, can you please remind us of how the Phase 3 study’s powered on the primary endpoint?

[Kourous Rezaei:]

The Phase 3 trial, as you know, we’ve reached statistical significance of 0.005 with somewhere around 80 patients. As I pointed out earlier, the reason for the number of patients is to make sure that we hit the safety number required, which is a total of 300 patients treated with a dose of Zimura 2 milligram or higher, which is the 4 milligram, an indication of indication. Obviously, the trial as it is designed now with 200 milligram per arm is overpowered.

[Unidentified Analyst:]

Thank you. This is very helpful. Thank you so much.

[Glenn Sblendorio:]

Thank you, Georgie.

[Operator:]

Thank you. We will now take our next question from David Nierengarten from Wedbush Securities.

[David Nierengarten:]

Hi, thanks for taking the question. I have a couple. First off, on the upcoming Stargardt data, could you remind us or tell us if those patients have any propensity to neovascularization or exudation? So is there any additional read-throughs of safety from that readout for your geographic atrophy studies? And then second on the upcoming Phase 3 and reopening, is there a situation where at least in the U.S., of course, certain states are reopening sooner, and you kind of having a staggered start to the study in different regions, or do you want to start across the country to eliminate any geographic bias? Just maybe walk us through how you anticipate reopening to occur? Thanks.

[Glenn Sblendorio:]

Thanks, David and good to talk to you. And maybe I’ll make a couple comments on the second question about the philosophy and strategy. I think it encompasses all of that and even more. One of the reasons we’re mentioning today the active dialogue with the sites is really to understand what’s going on in their respective regions, because there are differences. Being here in the New York metropolitan area, unfortunately we have quite a lot of cases here. And I think it’s a little bit different as you travel through the country. It does change. So that has definitely come in through the planning process, and it’s something that we’ll continue to monitor and keep an active dialogue. And probably will or may impact the way we initiate the trial, so more to come on that. But your question’s right on. We are looking at geographic differences of the pandemic. So more to come on that. On the Stargardt, I’ll let Kourous answer that. But I’d also like for both Kourous and Pravin to also give you their view of what’s happening in the retinal community, because they’re living it literally day to day. Kourous, maybe on Stargardt first?

[Kourous Rezaei:]

Sure. So regarding – obviously we have been looking for any kind of adverse events. We are not going to comment on the ongoing clinical trial, but certainly will be one of the things that also be looked at in that trial. And regarding the retinal community, I think the retinal physicians as I pointed out are very resourceful. They’re adapting as different cities and so forth are start opening up. We are starting doing elective procedures instead of doing only emergencies, and you’ll start seeing more patients in the practice. But again, different parts of the country are different, and based on that, then they make a decision how to go forward.

[David Nierengarten:]

Sorry, but is it – but do Stargardt patients have an increased or decreased risk do you know of neovascularization, just as a background? Since –

[Kourous Rezaei:]

As a background…

[David Nierengarten:]

Yes, just the background rates.

[Kourous Rezaei:]

In general, no, they don’t.

[David Nierengarten:]

Okay. Yes, just checking, great. Thanks.

[Glenn Sblendorio:]

Pravin, any thoughts on David’s second question?

[Pravin Dugel:]

Yes. Thank you for the question. I guess what I would say is really reiterate what I stated in my commentary, which is that it obviously is an unprecedented situation that we have. And clinical trials in general I think will start up in a less prioritized manner. And geographic atrophy trials I think will be more challenging for the reasons that I mentioned. So for that reason, as retinal specialists look at a competitive environment is enrolling, I think there will be a great deal of premium placed on the data that’s already present. And we have a fantastic clinical operations team. We’re ready to go. We have patients that are identified. I can’t think of a better time to pause the study if you would have to pause study for safety purposes than when we did. So I think the fact that we have an O3 trial with pre-COVID data with the robustness and the quality of data that we have that we can leverage to recruit and retain patients in the O8 trial will certainly give us a huge competitive advantage. And I think physicians that are enrolling patients into clinical trials, particularly patients that are most vulnerable, will look to enroll patients into a clinical trial to where there is great data with the drugs that are going to be given to those patients. And I think there will stand a very big advantage in terms of treatment and in terms of enrollment.

[David Nierengarten:]

Thank you.

[Glenn Sblendorio:]

Thank you, David.

[Operator:]

Thank you. And as there are no further questions in the queue, I would like to turn the call back over to Glenn Sblendorio for any additional or closing remarks.

[Glenn Sblendorio:]

Thank you everybody for listening today, and thank you for the questions. And I wish all of you safe and healthy times moving forward. Look forward to speaking soon. Thank you. Operator, we can conclude the call.

[Operator:]

Thank you. That will conclude today’s conference call. Thank you for your participation, ladies and gentlemen. You may now disconnect.