IVERIC bio, Inc.
Q1 2014 Earnings Call Transcript

Published: 13 May 2014

[Operator:]

Good day everyone and welcome to the Ophthotech First Quarter 2014 Earnings Results Conference. Today’s conference is being recorded. Now, I’ll turn the conference over to Kathy Galante, Kathy, please go ahead.

[Kathy Galante:]

Good morning and welcome to our first quarter 2014 earnings call. Joining me today, I have Dr. David Guyer, Chief Executive Officer and Chairman of Ophthotech, Dr. Samir Patel, President and Vice Chair, Bruce Peacock, Chief Financial and Business Officer. Before we begin, I would like to remind you that we would be making forward-looking statements relating to the company’s future expectations regarding its financial results and clinical and regulatory developments on the call today. These statements constitute forward-looking statements for the purposes of the Safe Harbor provision under the Private Securities Litigation Reform Act of 1995. These statements cover many events that are subject to various risks that could cause the results to differ materially from those expressed in any forward-looking statements. I would refer you to our SEC filings and in particular to the risk factors selection in our Annual Report on Form 10-K which is on file with the SEC, for a detailed description of the risk factors affecting our business. In addition, any forward-looking statements represent our view only as of today and should not be relied upon as representing our view as of any subsequent date. While we may like to update these forward-looking statements at some point in the future, we disclaim any obligation to do so, even if our views change. I would now like to turn the call over to David.

[David Guyer:]

Thanks Kathy, and thank you to everyone for joining us on the call this morning. The first quarter of 2014 was a very productive time for Ophthotech. On the clinical front, we’ve continued to execute on our strategy for our pivotal Fovista Phase 3 program in combination with anti-VEGF treatment for wet age-related macular degeneration. In addition, we announced plans to expand our Fovista program in the wet-AMD and to advance our generic program in both dry and wet-AMD. We also continued to build our financial position and completed a successful follow-on public offering of our common stock resulting in net proceeds to the company of approximately $55.4 million. In addition, we achieved an enrollment milestone in the Phase 3 Fovista program should bring $41.7 million from the second tranche payment under our royalty financing agreement with Novo A/S. These transactions resulted in the company finishing the first quarter with $290.8 million in cash, cash equivalents and marketable securities and as compared to $210.6 million at the end of December 2013. Now, I’d like to take a few minutes to discuss the progress of our pivotal Fovista Phase 3 clinical program which remains on track. As planned during the first quarter, our clinical operations team activated initial trial sights for the third Fovista Phase 3 clinical trial with Avastin and Eylea as a combination anti-VEGF therapy. As you may recall, we expect to enroll a total of 1,866 patients in the three clouds at more than 225 centers worldwide and to have initial top-line data from the Fovista Phase 3 program available in 2016. These trials are designed to build upon results from our large Phase 2b trial in which the Fovista in the centers combination therapy demonstrated statistically significant superiority over Lucentis monotherapy in terms of improving visual outcome. Additional data resulting from Avastin controlled trial also showed no imbalances in the safety profile between the study arms. In addition to our pivotal Fovista program, plans are underway for multiple expansion clinical trials at Fovista in wet-AMD. These trials include combination Fovista and anti-VEGF therapy aimed to investigate the potential for reduction in the treatment of our inter-patients, for the improvement and visual outcome for anti-VEGF treatment resistant cases and a reduction of subretinal fibrosis to prevent suboptimal visual outcome over the long-term. We also announced during the first quarter, our plans to advance our second product candidates in Zamora to a Phase 2, 3 clinical trial for the treatment of geographic atrophy, a severe form of dry AMD which affects approximately 8 million people worldwide. While both wet and dry AMD clearly represent major unmet medical needs, there is no FDA approved treatment for dry AMD a precursor to wet-AMD. Further, a Phase 2 clinical trial is planned for Zamora and Fovista in combination with anti-VEGF therapy for wet-AMD patients would believe to have compliment mediated inflammation. In March, we hosted our first Research and Development Day with a panel of 10 of the top dental specialist in the U.S. and abroad, giving their insights to the progress and challenges in the treatment of age-related macro degeneration as well as a look at the future of drawing wet-AMD therapies. We could not have been more pleased with the turnout and the panelist statements at date, welcome the potential of Fovista administered in combination with any anti-VEGF therapy as well as a support of our expansion programs. Samir will give an overview of some of the key learnings from the panel later on the call, it was encouraging to hear from his vision that we are on track and meeting substantial unmet needs in the ophthalmology space and in responding to physician’s preference for access to multiple treatment options. We want to thank all the investors and analysts we attended and participated in the meeting. And if you weren’t able to attend, a replay of the discussion remains posted on our website for your access. All-in-all, we have developed and expanded our clinical program, with a plan that now triples the number of anticipated clinical trials with a total of 10 trials ongoing or to be initiated in 2014 and 2015, of which four are Phase 3 or Q3 trials. With that, I would like to turn the call over to Samir, who will provide more detail on some of the new clinical programs we will be starting this year, as well as an overview of some of what we have learned from the experts at R&D Day.

[Samir Patel:]

Thank you, David. Good morning everyone, and thank you for joining us today. We are in the process of starting to expand our clinical programs that Ophthotech, as part of our mission to develop the next generation of science dry AMD therapies to affect unmet needs. As David mentioned, we had a very successful R&D Day in March, and I want to thank all the retinal experts who participated at the event. The insights we gathered from these specialists were invaluable to us and confirmed our confidence that we’re on the right path. I would like to address some of the scenes that came out of the panel with a discussion about retinal fibrosis. The panelists were particularly enthused about the possibility of Fovista providing an anti-fibrotic effect. They felt the effects of anti-VEGF treatments diminish over time and that some patients end up worse than when they had started as the years progressed. Unfortunately that and our physicians are currently quite limited in their treatment options to address the lack of visual improvement in the chronic phase of wet-AMD. We are therefore excited about our investigation into possible anti-fibrotic effects of Fovista in wet-AMD management. We’ve seen in recent published studies that evolution of subretinal fibrosis in wet-AMD patients treated with monotherapy anti-VEGF regimen can be – can cause distortion and damage to neural retina. And it’s potentially associated with poor visual outcome. Preclinical models of retinal scarring in fibrosis and our initial evaluation of retinal images from our Phase 2b trials suggest that combination therapy with Fovista 1.5 mg plus incentives may inhibit fibrosis relative to monotherapy Lucentis in patients with poor visual outcome. Taken together, it is our opinion that the preclinical and clinical studies provide strong support to investigate PDGF inhibition by Fovista in wet-AMD patients receiving anti-VEGF therapy. We hope to eventually demonstrate that treatment with Fovista in wet-AMD patients receiving anti-VEGF therapy will result not only in enhanced visual outcome due to neurovascular regression but also prevent suboptimal visual outcomes over the longer term. Planning for anticipated anti-fibrosis trial, it’s currently underway and a Phase 2 clinical trial is scheduled to commence in the second half of 2014. Another topic the panel covered was a question of our retinal physicians want to administer anti-VEGF anti-PDGF treatments. The unanimous opinion of the panel was their retinal physicians would like to have treatment choices including separate injections available when treating patients. Eventually, physicians want to select the best treatment of regimen and plan for their patients, in respect to being able to choose their preferred anti-VEGF agent for combination therapy with Fovista. In summary, all the panelists, physicians expressed that their overall desire is to have choices available to them and Fovista administered in combination with any anti-VEGF therapy provides that flexibility. The preference was also expressed by a panel hosted by Morgan Stanley at the American Academy of Ophthalmology in 2013. As David mentioned earlier, some of the other trials we have planned for Fovista include adding Fovista therapy to an anti-VEGF regimen in wet-AMD patients to reduce treatment burden and address anti-VEGF resistance. We look forward to initiating these trials in 2014. We’re also planning a trial in proliferative vitreoretinopathy while the National Alliance Institute is planning to utilize Fovista in their study of neurovascular disease. We’re also excited about our planned Phase 2 trials studying Zamora and Geographic Atrophy. Zamora inhibits the compliment protein C5, a central component of the compliment cascade. Studies indicate that compliment mediated inflammation plays a major role in pathogenesis of dry-AMD. By inhibiting C5, we believe Zamora made decreased compliment mediated inflammation and cell damage in dry-AMD. Our Phase 2a clinical trial evaluating safety and tolerability of Zamora administered at monotherapy to patients with Geographic Atrophy did not show any evidence of drug related adverse events. As you may remember, our Phase 2a trial was uncontrolled. However, planned favoring the increased frequency of Zamora demonstration in the higher dose group was observed when compared to decreased frequency of administration with increased administration correlating to a relative reduction in the mean growth of geographic atrophy lesion area as measured by an independent leading center at 24 weeks. The 54 file of Zamora in this trial and the trend indicating a potential drug effect coupled with strong science for a disease with major unmet need, leads us to continue the development of Zamora towards a Phase 2b clinical trial designed for Geographic Atrophy scheduled to initiate in late 2014 or early 2015. We’re also planning a Phase 2 trial with Zamora and Fovista in combination with anti-VEGF therapy for the treatment of anti-VEGF resistant in wet-AMD patients. This trial is scheduled to initiate in 2015. I will now turn the call over to Bruce.

[Bruce Peacock:]

Thanks Samir. I’d like to provide a brief update on our results of operations for the first quarter and our current cash position. Operating expenses for the quarter ended March 31, 2014 were $20.7 million, a $14.4 million attributable to research and development. This compares operating expenses of $4.1 million and research and development expenses of $2.4 million for the same period in 2013. The company reported a net loss for the quarter ended March 31, 2014 of $207 million or $0.64 per share. The increase in research and development costs in 2014 is primarily attributable to our efforts to advance our focus to Phase 3 clinical program, including clinical trial cost and cost of manufacture of Fovista further trials as well as increased personnel cost associated with additional management and research and development staffing, and it also includes share based compensation expense. The company’s general and administrative expenses were $6.3 million for the quarter ended March 31, 2014 compared to $1.7 million for the same period in 2013. The increase was primarily due to an increase in personnel cost, including additional management and corporate staffing to support our public company infrastructure and increased share-based compensation and professional services and consulting fees. As David stated earlier, as of March 31, 2014, the company had $290.8 million in cash, cash equivalents and marketable securities versus $210.6 million as of December 31, 2013. Our end of the quarter cash position includes a second charge from Novo A/S that we received in January ‘14 and the public follow-on offering we completed in February of 2014. With that, I’d like to now turn the call back over to David.

[David Guyer:]

Thanks, Bruce. As you’ve heard today, we are very excited about the progress that we have made in the first quarter. With a strong cash position, we believe our expertise and management’s prior experience developing and commercializing wet-AMD products provides the elements necessary to move our Fovista and Zamora franchises forward. We’re encouraged by the potential promise of our programs to meaningfully benefit the lives of patients and create opportunities for value for our shareholders. We look forward to providing you with updates as our programs progress. Thank you for your time this morning and for your continued support. I will now turn the call over to the operator to open the lines for any questions.

[Operator:]

Thank you. (Operator Instructions). And our first question today comes from Geoff Meacham with JPMorgan.

[Carter Gould:]

Hi, David and Samir, this is Carter on for Geoff. My question is, can you give us any incremental color on the design of the geographic atrophy study, and specifically how you’re planning to incorporate biomarkers given some of the data from your competitors over the past say six months or so?

[David Guyer:]

Sure, hi, Carter. So we really haven’t disclosed the details of the study for five, six days that the imaging criteria for geographic atrophy continue to evolve for the assessment of that biomarker. And we continue to investigate all the new technologies coming aboard. And we’ll certainly try to incorporate as many as we can. I think at this point, as we’ve stated previously, we’re just going to look at the progression of geographic atrophy and we’ll be looking at that in a randomized design which would be classified as a piece to slash-3 studies.

[Carter Gould:]

Thank you.

[Operator:]

(Operator Instructions). We’ll take our next question from David Friedman with Morgan Stanley.

[David Friedman:]

Hi, thanks for taking the question. I just wondered, first, if you guys had any planned stated presentations this year at all from the Fovista Phase 2b study, any additional analysis or on specific areas that you think we will see anything? And then the second is, for these trials that you’re going to be starting this year and early next year, do you have any sense of the timelines in terms of when we can start seeing data from the first of the studies? Thanks.

[Samir Patel:]

Good morning David, this is Samir. So, in connection to the first question, yes, we have some – we really believe our continued and exciting data from the Phase 2b which sheds light on anatomic confirmation of our three specified primary endpoint conclusions. Specifically we’ll be looking at some of the biomarkers and their relation to visual outcome. And we will be presenting hopefully based on acceptance of the abstract at the upcoming meetings. With respect to the second question, those studies are as we speak we’re going to the process of activation and going through the design when we expect some data flow in 2015.

[David Friedman:]

That’s great. Thanks very much.

[Operator:]

(Operator Instructions). We’ll now go to Joseph Schwartz with Leerink Partners.

[Joseph Schwartz:]

Great, thanks very much for taking the questions. I was wondering you can talk a little bit about how you might be able to help or might need to help your investigator community and ultimate users of Fovista measure, interpret and appreciate the newer measures such as geographic atrophy and fibrosis. It seems like they are all very used to looking for fluid leakage on the retina. But somebody’s newer methods are still evolving as you said?

[Samir Patel:]

Yes, this is Samir again, hi, hi Joe. Well, it’s a very good question. I think first and foremost at the academy this year in November, I think you’ll see at the pre-academy that one of the major aspects of thinking about neurovascular disease and wet-AMDs to think about it more as wound healing. And the fact that although it is by terminology a cordial neurovascularization, we think that’s basically, pathologically its cordial neurovascular complex and I think you would see a lot of discussions about that. And I think that’s quite important because the meeting that just concluded about a week ago, there were lot of presentations on decreased visual outcome over longer term or lack of significant improvement from their initial diagnosis of monotherapy anti-VEGF strategies. And what was a recurrent seen in the discussion was the presence of fibrosis limiting the visual outcome. So there is a lot of discussion already occurring. And I would also state that there were a number of papers indicating that fluid really did not correlate with visual outcome, specifically if you look at subretinal fluid, it was remarkable that there was almost nine level difference whereby a little bit of fluid in the subretinal space as presented by the CAB investigators resulted in better outcomes, in other words, approximately a 9-network improvement in patients who had presence of subretinal fluid at two years compared to patients who didn’t. So, I think that highlights a shift that I believe is going to continue that fluid is important in terms of improvement of visual outcome in the acute phase during the induction phase of monotherapy anti-VEGF but subsequent to that, we better start looking at some of the other phenomenon that are responsible for our what appears to be a suboptimal visual outcome over the longer term. So, with that stated, fibrosis is really center-staging our opinion. And the first way to think about it in terms of a cordial neurovascular complex in wound healing. And I think you’ll see a lot of that at the academy. And with respect to your second question, it’s really dovetails to the initial questions, you’re asking geographic atrophy. Suddenly, we think we’re very excited about the underlying science. And as we did with cordial neurovascular complex, we looked at very novel strategies of OCT to assess this complex. I believe we were the first to look at that and its revolution. And we’ll continue to be very hopefully cutting-edge and scientifically driven, truly be able to tell what the differences are with or without treatment and use of our latest technology for that.

[Joseph Schwartz:]

Great, sounds good. Thanks very much.

[Operator:]

And with no other questions in queue, Mr. Guyer, I’ll turn it back to you for closing remarks.

[David Guyer:]

Great. Well, thank you everyone. We appreciate your attendance. And look forward to talking to you again in the future. Thank you.

[Operator:]

Ladies and gentlemen, thank you for your participation. This does conclude today’s conference.