IVERIC bio, Inc.
Q1 2016 Earnings Call Transcript

Published: 4 May 2016

[Operator:]

Good day and welcome to the Ophthotech Corporation First Quarter 2016 Earnings Results Conference Call. Today’s conference is being recorded. At this time, it is my pleasure to turn the conference over to Kathy Galante. Please go ahead.

[Kathy Galante:]

Good morning and welcome to our first quarter 2016 earnings call. Joining me today, I have Dr. David Guyer, Chief Executive Officer and Chairman of Ophthotech; Dr. Samir Patel, President and Vice Chairman; and Mr. Glenn Sblendorio, Executive Vice President, Chief Operating Officer and Chief Financial Officer. Before we begin, I would like to remind you that today we will be making forward-looking statements relating to Ophthotech’s future expectations regarding its financial results, potential receipt of milestone payments, clinical and regulatory developments, and commercialization plans. These statements constitute forward-looking statements for purpose of the Safe Harbor provisions 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. 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 26, 2016 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 views as of any subsequent date. While we may elect to update these forward-looking statements at some point in the future, we disclaim any obligation to do so, even if our views do change. I would now like to turn the call over to David.

[David Guyer:]

Thanks, Cassie and thank you to everyone for joining us on the call this morning. The first quarter was a productive quarter for Ophthotech. We advanced our Zimura program and dosed the first patient in a Phase 2/3 clinical trial of Zimura in patients with geographic atrophy and advanced form of dry AMD. Our Phase 2 trial to evaluate the potential role of Zimura when administered in combination with anti-VEGF drugs for the treatment of wet AMD is ongoing. We look forward to reporting initial top line data from both of the pivotal Phase 3 trials of Fovista in combination with Lucentis in wet age-related macular degeneration in the fourth quarter of this year. Our key objective and plan is to make Fovista commercially available to physicians for their patients with wet AMD as quickly as possible assuming a positive data outcome from the Phase 3 program in regulatory approval. As you will recall, the FDA granted fast-track status for Fovista for the treatment of wet AMD in September 2013. We believe Fovista is the most advanced anti-PDGF agent in development for the treatment of wet AMD. And if approved, it is expected to be first to market in this class of novel therapies for wet AMD. If granted priority review by the FDA, Fovista could be launched in the U.S. as early as fourth quarter of 2017. As we remain anti-VEGF agnostic, let us turn to our third Phase 3 trial which is investigating Fovista in combination with either Eylea or Avastin. This trial continues to enroll patients and remains on track to complete recruitment this year. As you may recall, the final payment of $30 million of the $130 million enrollment based milestone payments under the ex-U.S. licensing and commercialization agreement with Novartis will be earned when the final Fovista Phase 3 study completes enrollment. Our collaboration with Novartis, our ex-U.S. partner for Fovista continues to go well. Last week, we had the privilege of announcing that Dr. Carmen Puliafito, former Dean of the Keck School of Medicine of the University of Southern California joined Ophthotech as Chief of Strategic Development. As a globally recognized innovator and distinguished scholar in the diagnosis and treatment of retinal disorders, we are delighted to have Carmen join our company during this exciting period for Ophthotech. Samir and I have had a close professional relationship with Carmen beginning our days at Harvard Medical School over 25 years ago. We are extremely pleased to work with Carmen again. I will now turn the call over to Samir.

[Samir Patel:]

Thank you, David and thank you everyone for joining us this morning. The 2016 Association for Research in Vision and Ophthalmology Annual Meeting is still in progress and the company has had one oral and two poster presentations. The presentations were part of our retrospective analysis of our large sample size Phase 2b studies investigating Fovista 1.5 milligram in combination with anti-VEGF versus anti-VEGF monotherapy. As you may recall, there have been multiple reports based on mass retrospective studies suggesting that monotherapy anti-VEGF use may result in retinal atrophy over the longer term. Our presentation showed no evidence of increased RPE atrophy associated with the addition of Fovista to the anti-VEGF regimen at the 24-week time point in the completed Phase 2b study. Another retrospective analysis of our Phase 2b data was based on the suggestion that in the CAT trial early visual lots in patients receiving monotherapy anti-VEGF. On average results in lack of long-term visual improvement or benefit when evaluated as mean change in overall visual acuity. Conversely, in light monotherapy anti-VEGF treated patients, the Fovista 1.5 milligram combination therapy treated patients in our Phase 2b study exhibited the potential for visual improvement despite the early visual loss in the Phase 2 study. We look forward to the confirmatory Phase 3 trials to further confirm and characterize the potential of Fovista in addressing the significant unmet need in wet AMD. Complete abstracts are available on our website. Please reference our press release that we issued this morning for details for locating the abstracts. As David had mentioned, we are excited about the appointment of Dr. Carmen Puliafito. Many of you know already know Carmen and his multiple accomplishments and contributions to the diagnosis and treatment of retinal diseases. Dr. Puliafito’s highly distinguished career includes his remarkable accomplishments as the Dean of the Keck School of Medicine. Under his leadership, this School of Medicine became one of the nation’s prominent research intensive medical schools. Prior to that, Dr. Puliafito served as the Chair and Professor of the Department of Ophthalmology at the Bascom Palmer Eye Institute at the University of Miami Miller School of Medicine, a leading eye center in the world. Prior to his leadership at Bascom Palmer, he served as Founding Director of the New England Eye Center and Chair and Professor of the Department of Ophthalmology at Tufts University. Dr. Puliafito is recognized worldwide for his innovative advances such as the co-invention of optical coherence tomography, or OCT, a revolutionary technology for the management of macular diseases. He also pioneered basic science research in excimer laser ablation and optical breakdown and photodisruption. Dr. Puliafito has been at the forefront of clinical innovation, including being part of the introduction of Avastin for the treatment of retinal disorders. Dr. Puliafito is on leave from his position as Professor of Ophthalmology and Health Management at the USC Roski Eye Institute. We decided to have his leadership, clinical and business acumen during this most exciting time for Ophthotech. The addition of Carmen be continued to bolster our leadership team, which now includes 5 board certified retinal specialists with synergistic skills and domain expertise. Turning to our Fovista Expansion Studies, these studies are designed to further evaluate the potential for Fovista and addressing a variety of unmet needs in wet AMD, including investigating the potential of Fovista in combination with multiple anti-VEGF agents to reduce sub-retinal fibrosis and investigating the potential role of Fovista combination therapy to reduce the treatment burden for wet AMD patients. Recruitment has been completed in these studies. Further two additional Fovista expansion studies which initiated at the end of 2015. One, a pilot study to investigate the role of multimodal imaging and the other to study and investigate the potential role of Fovista in combination with Avastin with a discontinuous regimen during the maintenance phase continues to recruit payments. I will now turn the call over to Glenn.

[Glenn Sblendorio:]

Thank you, Samir and good morning everyone. This morning, I would like to present [Technical Difficulty] collaboration revenue for the quarter ended March 31, 2016 which we recognized under the Novartis agreement was $15.7 million, a decrease of $26 million versus the same period in 2015. The decrease in the quarter related to a decrease of $38.1 million in license fee revenue which related to the enrollment based milestones we earned in the first quarter of 2015. The decrease was offset by an increase of $14.4 million in revenue we have recognized from shipments of Fovista API to Novartis. As we look forward into 2016, we expect to earn our final clinical milestone of $30 million under the Novartis agreement related to the enrollment of the Fovista Phase 3 Eylea-Avastin trial and recognized revenue from additional shipments of Fovista API to Novartis. Research and development expenses were $37.8 million for the quarter ended March 31. This was compared to $24.6 million for the same period in 2015. The increase in research and development expenses in the quarter ended March 31, 2016 relates primarily to the advancement of the Fovista Phase 3 clinical program and the Fovista expansion studies, including higher clinical trial expense due to a larger number of patients enrolled in the studies as well as the initiation of new clinical trials and associated costs related to the manufacturing of Fovista. Also compensation expense associated with additional research and development staffing increased. Going forward we anticipate R&D expenses to increase as we reach full enrollment in our Fovista Phase 3 trials, continued enrollment in the Fovista expansion studies, ongoing enrollment in the two Zimura studies and ongoing manufacturing spend including validations. As we mentioned in previous calls, our R&D expense may fluctuate from quarter-to-quarter based on the above activities. Turning to general and administrative expenses, they were $14.7 million for the quarter ended March 31, 2016 compared to $9.6 million for the same period in 2015. The increase in G&A expense in the current year relates primarily to increases in costs to support the expansion of the company’s operations including the company’s public company infrastructure and the hiring of additional management and corporate staffing, professional services consulting fees and increased share based compensation. We expect to see additional increases in G&A costs in 2016 due to the expansion of our commercial organization and operations. The company reported a net loss for the quarter on March 31, 2016, of $36.3 million or $1.03 per diluted share compared to net income of $6.6 million or $0.19 per diluted share for the same period 2015. Fully diluted weighted average common shares outstanding for the quarter on March 31, 2016, was 35.3million. Tuning to the balance sheet cash, cash equivalents and available for sales securities totaled $356.1 million at the end of the quarter. I would now like to turn the floor back over to David.

[David Guyer:]

Thank you, Glenn and thank you everyone for your time this morning and for your continued support. I will now turn the call back over to the operator, so that we can open up the lines for any questions.

[Operator:]

Thank you. [Operator Instructions] And our first question comes from Carter Gould of Barclays.

[Carter Gould:]

Hey, good morning guys. Thanks for taking our questions. First, I wanted to get your tick on the 5-year CAT data that was published earlier this week, I know in the past you have spoken at length about the erosion and visual acuity gains after sort of first 1 year to 2 years with anti-VEGF monotherapy and I guess beyond sort of the headline changes that were reported, were there any other data that were particularly illuminating or change your view on how the unmet need is setting up in the marketplace? And I have a follow-up.

[Samir Patel:]

Hi Carter, it’s Samir. Thank you for your question. I literally have spent very little time there, so I haven’t really digested all their data, so I can’t really comment on it. But I think I would just state that the real world data we have opposed to ourselves that will and it embraces the real world data with not only in ex-U.S. which has been published, but I believe it’s the first time that we have shown the real world data in the United States and the outcome is significantly lower in terms of the regional benefit to patients on what you would see in randomized trials. Now this could be any combination of under treatment or characteristics of patients presented at baseline. So remember the CAT initially had patients that were not – though they were broader in terms of entry criteria compared to other studies, but no where near real world criteria which is where our focus is.

[Carter Gould:]

Great. And then just the second question is against that backdrop of I mean importance of longer term data in your conversations with the other stakeholders beyond sort of regulators how critical will the 2-year datasets be relative to sort of the initial 12-month data?

[Samir Patel:]

Well, the 2-year data Carter if you are referring to our pivotal studies won’t be as important as the primary data analysis and the reason for that is simply that the power and the valuation of statistical significance is based on the regimen and time plan at 12 months. For second year, its main role is to look at further exposure and safety associated with it, not really as much emphasis on efficacy and also the regimen is markedly different, so it would be fairly inappropriate to make a true comparison.

[Carter Gould:]

Great. Thank you.

[Operator:]

Next we have Joseph Schwartz with Leerink Partners.

[Joseph Schwartz:]

Great. Thanks very much. I was wondering if you have been talking to payers yet about what they view is the right level of reimbursement for a second injection in what AMD patients and what are they most focused on and how are you setting up to provide them with what they need to give you the price that you hope for?

[David Guyer:]

Yes. So we have not yet publicly talked about reimbursement. We had put together very strong commercial team led by Chief Commercial Officer who worked at Alexion and actually launched the first anti-VEGF as well as the first blockbuster drug in ophthalmology, XALATAN, we have had an ophthalmic reimbursement expert on working for the company for the last several years. So, we are doing a lot of work, but we haven’t yet discussed publicly our strategy on reimbursement.

[Samir Patel:]

Yes. And I would – it’s Samir I would just also add it’s some of the also very data dependent to be able to talking in a more educated fashion, suffice to state to your specific question about the injection. There is a residual amount of effort and resources that required by the physicians, so I am sure that would be taken into account, but certainly not in terms of the detail we are having under any discussions.

[Joseph Schwartz:]

Okay. But then I heard you say that your collaboration with Novartis continues to go well, so I was wondering when do you think we might get a more detailed update, so that we can appreciate what’s being accomplished there?

[David Guyer:]

Yes. So our collaboration with Novartis is going extremely well. They are as you don’t know our ex-U.S. partner for Fovista. In fact on the Novartis first quarter 2016 earnings call Joe Jimenez, the Novartis CEO was talking about the broad and deep pipeline in Novartis. And in that public discussion included Fovista as one of their potential blockbusters in growing areas of healthcare. So we are very excited that throughout the Novartis organization there is great excitement about Fovista and we are seeing that in our day-to-day interactions. So they have been a great partner. And again the strategy for ex-U.S. we have not nor Novartis publicly announced, but the teams are working well together and they were terrific partner with great capabilities. In addition to the obviously great financial deal, we were able to get with mid 30% royalties and significant milestone payments in upfronts as well. So, it’s been a really great partnership.

[Joseph Schwartz:]

Thanks for the update.

[Operator:]

Your next question comes from Yigal Nochomovitz of Citi.

[Yigal Nochomovitz:]

Yes. Hi, guys. Good morning. Thanks for taking the questions. Just first of all, one sort of procedural one regarding the way you are going to analyze the Phase 3 data, but we are one week away from the primary end – the last patient in is primary endpoint for the first Phase 3 trial which I believe is on May 11, 2016, does that in anyway impact the plan for analysis or do you just wait until the last patient in for the second Phase 3 trial on October 26, 2016 to begin the analysis process? Thanks.

[David Guyer:]

Yes. So again first, we are on track for data from both trials Fovista or Lucentis fourth quarter. As we said previously, we will present the primary endpoint separately for each trial, but some of the supportive and secondary endpoints will use full data. So, for that reason, they will be analyzed and we will see them at the same time then in the fourth quarter. Of course, as one goes on, one always cleans data and is constantly doing that in both trials throughout. So, we will do that, but we will actually be analyzing and seeing for the first time the trials together at the same time.

[Yigal Nochomovitz:]

Okay. Thanks, David. And then I wonder if you could just offer some broad comments related to the hire of Dr. Carmen Puliafito, maybe you could just talk a little bit more about how you see his mandate at Ophthotech and what specifically he will be test with to advance the value proposition of Fovista?

[David Guyer:]

Yes, thanks for the question, Yigal. Yes, so as you know I mean the comments of the marketable individual with a very broad skill set is ready to forecast the impact of technology and also the execution of new programs with unmet need are really unmatched. In addition, it’s ability to identify and implement the effect of new technologies and most important, but important really I have watched in those years we have the unique ability to collectively really bring all stakeholders of the industry academia, industry and provide those at all different levels to embrace new technologies and implement them in a very effective manner. So, as you can imagine, it would be involved in all of these above and beyond what’s natural, which is identified key technologies that will be very synergistic to create additional value for Ophthotech. So, I think it would be improper not to use him through across the entire chain of development and commercialization.

[Yigal Nochomovitz:]

Great. And then just one last question, what’s the latest plan as far as how you are going to approach the FDA with respect to potential label for Fovista in combination with Lucentis is its plan to focus on Lucentis the trial designs or would you be able to claim a broader label with any anti-VEGF based on some of the other work you have done in the refectory patient setting? Thanks.

[David Guyer:]

I mean, ultimately there is no question we put lot of effort and done a very large study, because we have great confidence that Fovista regimen if confirmed and efficacious and the safety margin is adequate should be used with all anti-VEGF agents. I think it’s been shown with great deal of certainty that all the anti-VEGF agents are roughly equal with respect to the safety and efficacy. So, there is no reason to believe that Fovista wouldn’t be an attractive adjunct regardless of the anti-VEGF agent. So, as far as the timing and sequencing of how we would go back that, that nearly is dependent upon the data and when they are available, but we are confident that if this concept works as we think it should that Fovista will be an addendum for the regimen regardless of the anti-VEGF agent.

[Yigal Nochomovitz:]

Alright, thanks so much.

[Operator:]

Next, we will hear from Tyler Van Buren of Cowen & Company.

[Tyler Van Buren:]

Good morning. Thanks for taking the questions. I want to get your thoughts on the recent CMS Medicare Part B proposed rule changes. Specifically, what percentage of eventual Fovista patients you think this might effect potential timing of the rule changes as well as just your overall viewpoint on the impact of the potential Fovista commercialization and reimbursement? Thanks so much.

[David Guyer:]

Yes. So, overall we think we are in fine shape. We think that much of this is really more towards oncology and does not affect Fovista since it’s a novel and first-in-class agent. So, if you kind of look at it, it’s really in a sense of clinical trial of reimbursement in two parts and the first question – the first part that you are trying to understand is our physicians prescribing habits are linked to the financial situation where they make money from selling the dragon. I think we already know that answer, because we know that in the United States, there is over 60% off-label Avastin use and so if there was some type of motivation for physicians to use more expensive drugs, I think we would not see such a high penetrate. So, in essence I think we probably have the answer to that first part of the experiment that they – so they were going to do and also I want to mention there have been over 100 groups that have questioned even doing this and the design. So, we are far from even having any clue of knowing what will eventually come and that the results of this will probably take up to 5 years to even 6. Despite that, we think we have a good sense of what if it does stay in this present form of what the first part of the answer would be. The second part really relates more towards relative value efficacy and cost. And again hearing at least the initial description, it said that it was going to compare same mechanism of action, same mechanism of action meaning it’s the year in anti-VEGF that could be an issue that has a different class and different mechanism of action in anti-PDGF agent. Since there is no Avastin or other less expensive option, there we don’t believe that this is going to be an issue Fovista again although it could be for some of the anti-VEGFs. And then finally the last part of it linking efficacy to pricing, well you know in the sense we have that today if any drug doesn’t show the appropriate efficacy, it’s not going to be able to support its pricing and commercialization. So, while they made do some work on that, sooner we think Fovista is positioned in a very good place in that. These really will not have much of an effect in the reimbursement. I also want to mention one other thing we have talked earlier there is a question when you look at some of the recent pharmacoeconomic data that will support premium pricing. One recent study showed that if you ask the patients how long they would wait monthly in a doctor’s office for having stable vision? The answer was remarkable, 8 hours waiting in the physician’s office on monthly. And more importantly, they said that they would be willing to give up about a third of their life for maintaining the vision. So, you see that to patients this is very important we think that will support premium pricing reimbursement and has strong pharmacoeconomic value.

[Tyler Van Buren:]

That’s great. Do you think that there is potential for Avastin use to increase with these role changes?

[Samir Patel:]

Yes, this is Samir. I don’t think we can really project there. I mean, I guess one could make the academic or theoretical case that when you have all anti-VEGF agents being roughly similar in their safety efficacy profile, does that justify two branded agents at significant cost from that perspective. But again, I think without having the full picture that determines pricing the functional benefit of the patient, the economic benefit and without having the data in handy it would be premature to comment on that.

[Tyler Van Buren:]

Great. Thanks again.

[Operator:]

And next, we have Yatin Suneja with SunTrust. Please go ahead.

[Yatin Suneja:]

Hi, guys. Thank you for taking my question. First one, could you just comment on the pre-launch work that you might be doing right now if at all or when you might start that? And then maybe if you could give us an update on the formulation work that you are working on for tivozanib, I think you are working on a sustained release formulation. So, update us on the development plans there? Thanks.

[David Guyer:]

Yes. So, we are doing a lot of work on pre-launch both ourselves and of course in global branding with our partner, Novartis, that has great expertise in this area as well. And as I mentioned earlier, we have put in place very strong commercialization team, including our Chief Commercial Officer, Henric Bjarke, who comes to us from Alexion who also launched the first anti-VEGF and also was involved with the first blockbuster in ophthalmology with Pharmacia, XALATAN and we have put together very strong team again consisting of ophthalmic reimbursement experts, analysts etcetera. So, we are doing a lot of work as is our partners as far as the formulation of it is nearing to that.

[Samir Patel:]

Yes. And I would also say I think it’s really important to understand that various physicians have come up to me and said that they are – most are not aware at the depth and breadth of the unmet need that’s out there and now that we have access to some of these real world databases in the U.S. The story is it’s remarkably different in terms of the unmet need and of course will impact the utilization of new molecular entities that come out. So, I think the ability to truly understand that so that we can tailor our launch sitting the data are positive accordingly and make it optimal is going to be critical for the proper adoption. As far as the core formulation, I think we have mentioned this before that’s part of the equation here. You have to look at the totality of the unmet need, the service component of it, the allocation of the drug. So, I think we have had multiple science days, but the physicians have given their position on this, but I think it’s important to realize that we are going to be ready for whatever the market dictates for the most optical distribution of the drug new channel.

[Yatin Suneja:]

Okay. My question on the formulation was on tivozanib, so if you could give us an update there if I recall there was a sustained release formulation that you said you guys were working on?

[David Guyer:]

I apologize sorry on the tivozanib side we continue to develop it. We think that we maybe in a position to give you a little more guidance towards the end of the year. But we are encourage by its potential and certainly putting significant amount of resources and focus towards that.

[Yatin Suneja:]

Great. Thank you very much.

[David Guyer:]

Thank you.

[Operator:]

Your next question comes from Gbola Amusa of Chardan Capital.

[Gbola Amusa:]

Hi, thanks for taking my call. Sort of rehash and old topic, but our conversations with investors seems to touch on and that’s the question about the composition of the trials with regard to occult versus classic patients, as you are getting close to completing enrollments, could you tell us what percentage of your patients have occult with AMD and if you wouldn’t mind just frame the issue just so we can understand what we are – where you are in Phase 3 versus Phase 2?

[David Guyer:]

Gbola, thanks for your question. And you are correct it’s been addressed multiple times and nothing has changed, it’s a very simple answer. There is no occult in our pivotal study like Phase 2b study as well. So I think it’s suffice to stake the definition of occult requires fluorescein angiogram. And by definition that would make sure that somebody seeing occult included is when you don’t use fluorescein how can that statement be made. So, it doesn’t – we don’t understand it does make sense. Secondly, the subretinal hyper-reflective material which we have covered, which is the entry point is requires patients that have neovascular complex according to its definition above the RPE that would itself by analogy preclude occult. So, I can’t really give any further guidance where the perception that there is occult comes from. And I hope I have clarified and given the answer you are seeing, but I am happy to go into a little more granularity if you wish.

[Gbola Amusa:]

No, that’s fine. Thank you.

[Operator:]

And moving on of Morgan Stanley we will hear from Matthew Harrison.

[Vikram Ashoka:]

Hi, this is Vikram on for Mathew. Just a quick one from us, could you give some guidance around when you might expect more data and sorry if you had mentioned this before, but we haven’t heard any timelines prescribed to that candidate, so if you could give some guidance that will be helpful?

[David Guyer:]

Yes. So we have just recently started recruiting, Vikram. So it would be premature to give any guidance that have significant – any validity to – with respect to timing.

[Vikram Ashoka:]

Okay, thanks.

[Operator:]

And next we have Stephen Willey of Stifel.

[Stephen Willey:]

Yes. Thanks for taking my questions. Can you just remind us how you are actually measuring and quantifying sub-retinal level fibrosis in the Phase 3 and also within the expansion studies?

[Samir Patel:]

Hi Stephen, it’s Samir, can you repeat the question it was a little bit unclear because of the audio. I believe what you asked was how are we assessing sub-retinal fibrosis in the trial, is that correct?

[Stephen Willey:]

Yes. Correct, correct which imaging tool are you using to quantify sub-retinal fibrosis within the expansion studies in the limited history?

[Samir Patel:]

Sure. So, we are using fundus photography. I think it’s important to realize that fibrosis as it’s typically seen in the grade 3 or 4 that has been presented before by Usha Chakravarthy is fairly easy and specific by the use of fundus photography. But equally important is you understand that it’s a continuum and there isn’t an accepted methodology for the presence or absence of fibrosis when it’s in the category of sub-clinical if you will. One could argue that fibrosis could be evaluated by OCT, but it looks at reflectivity and there are various other components in the sub-retinal neovascular complex and/or the associated exhibition which may give you reflectivity that could be indicative of either fibrosis or sub-clinical fibrosis and that has yet to sorted out. So since specificity of OCT is in question, so we continue to go by fundus photography which other studies have used prior to our Phase 2 study.

[Stephen Willey:]

Okay. And then presuming that you show a benefit on the fibrosis, I just want to I mean if you think from a practice perspective it will be a greater effort to try to distinguish between CMV and fibrosis and whether or not that will be used to determine whether or not a patient continues on VEGF therapy? Thanks.

[David Guyer:]

Yes, again, a very good question. It’s hard to project but scientifically I can tell you my own personal opinion that the goal of therapy is doing provisional outcomes regardless of what the biomarker state to-date there has never been a biomarker whether its anything on ICG that physicians we treat patients with that after the initial induction phase that one can state if you would retreat based on x, y, and z biomarker parameter visual outcome is going to be in a specific direction. So, in spite of the fact that therapies administered by some form of flexible regimen, utilizing the ICG, none of them have shown any correlation. I think we believe based on some of the data in our Phase 2 that for example complete resolution of sub-retinal hyper-selective material correlates quite well with benefit that we see with Fovista administration. You can add to that fibrosis as well based on some retrospective analysis with that qualification and a few others that we hope to on earth bit detailed analysis in our Phase 3 data. But collectively, this will give us some feel how some of these biomarkers are valid. At the end though, it is all about inhibiting and/or regressing the devastating sequelae of choroidal neovascularization and its effect will be seen on visual acuity. And over time as our technology gets better, we may be able to sort out some of these issues.

[Stephen Willey:]

Alright. Thanks for taking the questions.

[Operator:]

And next we have Terence Flynn of Goldman Sachs.

[Terence Flynn:]

Hi. Thanks for taking the questions. Maybe just one follow-up on Zimura, I was wondering if you can tell us if there an analysis built into the Phase 2, 3 trial and will this single trial will be sufficient for approval in U.S. and Europe? And then I had one Fovista question after that? Thanks.

[David Guyer:]

Hi Terence. Thanks for your question. Yes. We will look at it in an interim fashion and I think the endpoints from our interaction one cannot say for sure that expansion of geographic atrophy in itself which is acceptable in the U.S. it has the same level of final reacceptance at QS. On the other hand the functional end point of improvement in visual function or reduction of visual loss using visual function is acceptable in both sides of the Atlantic. So I think that if we are able to do an interim look and be able to tell what the potential impact is on both of those, there may be a way forward by enriching the player and also determination of the ideal endpoint. I hope that answers your question some extent to that before moving on to the questions.

[Terence Flynn:]

Yes. And so I guess that’s the reason for the interim is really to gather some of the data and then make an assessment about maybe modifications to the trial in terms of addressing both U.S. and European regulatory questions right?

[David Guyer:]

That’s one component, Terence. Also the other is if you look at the body of evidence whether it’s from us or everybody other out there. We really believe that the strength of data in terms of natural history, what the impact is on the intervention, the statistical strength of evidence with sample size is simply not there in our opinion. So you would like to understand that as well before committing significant capital to a very large study.

[Terence Flynn:]

Okay, it makes sense. And then on the Fovista Phase 3 trials, I know in the past you guys haven’t provided power and assumptions for the primary end point, given where you are getting gain closer to the data and trials are nearly done, are you willing to share any insights there? Thanks.

[David Guyer:]

I’m not sure Terence that we haven’t provided. I think we have given adequate granularity. And to be transparent I just don’t know the exact number to the last digit, but I am happy to share with you the relevant power assumptions that most would require to make the assessment. As you know in our Phase 2b study there were 150 patients per arm. In this particular study I believe there are about 311 an arm. And so I can confidently tell you that it’s over 80%. As you know the subsequent powering that occurs by addition of patients is not linear. But I think it’s reasonable to state, it is at least in the low-80s if not higher. I just don’t have the exact number and at this level it’s the truth indeed is four letters for example at Phase 2, do we have any power that’s significantly higher than that, you suddenly start getting into a narrowed difference in visual acuity which maybe – may not be clinically significant. So trying to go much higher than where we have it which is quite high to begin with wouldn’t pay any dividend. So, certainly, we can look it up and try to give you a number but for practical purposes, I think you would have all the information that’s necessary to make the determination on adequate powering of the trial, if anything it is higher than vast majority of trials that have been done to-date in registration wet AMD trials?

[Terence Flynn:]

Okay, thanks a lot.

[Operator:]

And for our final question for today, we have a follow-up from Gbola Amusa with Chardan Capital.

[Gbola Amusa:]

Hi. It’s just to follow-on Glenn’s comments about Novartis mentioning for Avista is a potential blockbuster. This is just a couple of quarters ahead of the actual results and I was just curious if you can say whether what the data that Novartis may have seen in the last 6 to 8 months that is there anything new that they have seen or that you have seen and obviously would have shared with them in the last 6 to 8 months? And then what we saw at the December R&D Day or is there anything else that you can mention and if you cancel anything completely understood?

[David Guyer:]

Yes, we can’t comment in that area.

[Gbola Amusa:]

Great, thank you.

[Operator:]

And that does conclude our question-and-answer session for today. I would like to turn the conference back over to Dr. Guyer for any additional or closing remarks.

[David Guyer:]

Yes. Again, I would like to thank everybody for their interest and support and thanks again for attending the call.

[Operator:]

And that does conclude today’s conference call. We appreciate your patience and thank you for your participation today.