IVERIC bio, Inc.
Q4 2015 Earnings Call Transcript

Published: 24 Feb 2016

[Operator:]

Good day and welcome to the Fourth Quarter 2015 Ophthotech Corporation Earnings Results Conference Call. Today’s conference is being recorded. At this time, I’ll turn the conference over to Kathy Galante. Please go ahead.

[Kathy Galante:]

Good morning and welcome to our fourth quarter year-end 2015 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. Michael Atieh, Executive Vice President and Chief Financial and Business Officer. Before we begin, I would like to remind you that today we will be making 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 purposes 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 statements. I refer you to our SEC filings and in particular to the Risk Factors section in our quarterly report on Form 10-Q filed on November 5, 2015, 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 obligations to do so, even if our views do change. I would now like to turn the call over to David.

[Dr. David Guyer:]

Thanks, Kathy. And thank you to everyone for joining us on the call this morning. As we think back over the last year, we have made significant scientific and clinical advances in our Fovista and Zimura programs. We are extremely pleased with the continued progress of the Phase 3 Fovista clinical development program, the continuing progress on our Fovista Expansion Studies, and the advancement of our Zimura programs in the wet and the dry AMD. Additionally, we have begun to build our capabilities to support pre-launch activities for Fovista. Ophthotech has completed patient recruitment in two large scale Phase 3 pivotal clinical trials of Fovista anti-PDGF therapy in combination with Lucentis for the treatment of wet age-related macular degeneration. We would like to thank all the patients, participating investigators, and their staff for their commitment to the Fovista trials. We expect to announce initial top line data from both Phase 3 trials of Fovista in the combination of Lucentis in the fourth quarter of this year. These first two Phase 3 trials are investigating the superiority of Fovista in combination with Lucentis compared to the Lucentis monotherapy and are identical with respect to the trial design in the first year. Therefore, the data bases from both trials of Fovista in combination with Lucentis will be locked and analyzed together which will allow for the pooled analysis for certain relevant endpoints in accordance with the statistical analysis plan. We believe these studies would be the two trials needed for our regulatory filings. A third Phase 3 trial, which is investigating Fovista in combination with either Eylea or Avastin, continues to enroll patients and is on track to complete recruitment this year. This third Phase 3 trial was initiated approximately nine months after the Fovista in combination with Lucentis trials. We are pleased with the rate of recruitment to-date and with level of interest expressed by the investigators. 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 and regulatory approval. As we continue to explore various regulatory filing options, we believe that the most likely scenario is to initially submit a new drug application to the U.S. Food & Drug Administration for Fovista in combination with Lucentis, based on data from the first two Phase 3 trials of Fovista in combination with Lucentis and subsequently, submit an amendment to the NDA with data from the Phase 3 trial of Fovista in combination with Eylea or Avastin. Alternatively, we may elect to file a supplemental NDA for Fovista in combination with Eylea or Avastin, following FDA review of the NDA for Fovista in combination with Lucentis. As you’ll 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 in development for the treatment of wet AMD and if approved, 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 U.S. as early as fourth quarter 2017. In addition to our Phase 3 Fovista program, we have a number of Fovista Expansion Studies that are ongoing. These studies are designed to evaluate other important benefits of Fovista in combination with anti-VEGF drugs in wet AMD patients. Samir will discuss some of these studies in a few moments. At the end of 2015, our ex-U.S. partner for Fovista, Novartis, informed us that Genentech, a Roche wholly-owned subsidiary, exercised its option to participate in the financial arrangements relating to Novartis’ rights under the Ophthotech/Novartis ex-U.S. agreement for Fovista to treat wet AMD. Roche’s [ph] option originates from a pre-existing agreement between Roche and Novartis. Our agreement with Novartis, including its financial terms, remains unchanged. We continue to retain sole rights to Fovista in the U.S. We believe that this arrangement further validates Fovista’s novel technology, reflects the industry’s need for the next generation therapeutic option for wet AMD and also highlights the industry’s acknowledge of the large ex-U.S. commercial opportunity, resulting from the significant unmet need in the large and expanding market for wet AMD. We continue to be very impressed with the extensive resources and tremendous commitment that Novartis is putting into the Fovista program. Turning to Zimura, our complement factor C5 inhibitor, we have been interest in the role of complement in addition for wet AMD for some time. We are pleased to have recently initiated a Phase 2 study of Zimura in combination with anti-VEGF therapy for the wet AMD. We also recently initiated a Phase 2/3 clinical study of Zimura in patients with geographic atrophy, an advanced form of dry AMD. I will now turn the call over to Samir.

[Dr. Samir Patel:]

Thank you, David. Thank you everyone for joining us this morning. As David mentioned, we are pleased with the progress of Fovista Expansion Studies to-date. Recruitment has been completed in two of the Fovista Expansion Study trial. In May 2015, we completed enrollment in the first trial of our anti-fibrosis program in which Fovista is administered in combination with anti-VEGF therapy in wet AMD patients. In October 2015, we completed enrollment in the trial of Fovista administered in combination with anti-VEGF therapy, which is investigating the optimal regimen for the Fovista administration with the currently utilized anti-VEGF agents for wet AMD patients. We continue to progress with our Fovista Expansion Studies and have initiated a pilot study to understand the role of multi-modal imaging. In addition, we have initiated a trial to investigate the potential role of Fovista in combination with Avastin with a discontinuous regimen during the maintenance phase. In December, we hosted an R&D Investor Day with leading retinal specialists in the United States, and we want to thank them all for their participation. The panelists provided their insights into the progress and challenges in the treatment of age-related macular degeneration and some related scientific underpinnings. We are pleased with the feedback and we believe it reinforces the potential of Fovista combination therapy in wet AMD. During the event, we presented interim data from our uncontrolled anti-fibrosis study in the sub-group of 16 patients. There were no evident safety issues related to the drug in this sub-group. In addition, these patients were treated with the discontinuous regimen of Fovista combination therapy, following an induction case of monthly or continuous dosing during the first six doses. On average, patients maintained their visual benefit during the discontinuous phase dosing. However, the study was uncontrolled and the sample size was small but they are encouraged as a potential of Fovista to maintain visual benefit with the discontinuous regimen. In addition, fundus photos from the trial were evaluated for sub-retinal fibrosis by a mass independent leader. There was no evidence of fibrosis development or progression at the one-year time point in this sub-group. During the fourth quarter of 2015, the results of our Phase 1 Fovista combination therapy study in wet AMD were published in the journal of the American Academy of Ophthalmology. As you may recall, this was an uncontrolled study in 23 wet AMD patients to assess safety of Fovista combination therapy with Lucentis. The initial safety visual and anatomic outcome of this study served as a basis for our successfully completed randomized controlled 449 patients Phase 2b study investigating the superiority of Fovista combination therapy with Lucentis versus monotherapy Lucentis. I will now turn the call over to Mike.

[Michael Atieh:]

Thank you, Samir. Here is a brief update on our results of operations. Collaboration revenue for the fourth quarter of 2015, which we recognized under the Novartis agreement, was $4.8 million, an increase of $3.1 million versus the fourth quarter of 2014. For the full fiscal year ended December 31st 2015, we recorded revenue of $51.5 million, an increase of $10.2 million versus 2014. This increase in both the quarter and for the year is related to revenue from shipments of Fovista API and increased amortization of deferred revenue. As we look ahead to 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 recognize revenue from additional shipments of Fovista API to Novartis. Research and development expenses were $33.9 million for the quarter ended December 31, 2015 compared to $22.2 million for the same period in 2014. Research and development expenses were $131 million for the year ended December 31, 2015 compared to $88.4 million for 2014. The increase in research and development expense in the quarter and the year ended December 31, 2015 relates primarily to the advancement of Fovista Phase 3 clinical program and the Fovista expansion studies including higher clinical trial costs due to a larger number of patients enrolled in the studies and associated costs related to the manufacture of Fovista for these clinical studies, as well as increased compensation expenses associated with additional research and development staffing. R&D expenses for the fourth quarter of 2015 declined sequentially compared to the third quarter due to lower manufacturing expenses for Fovista. As we have mentioned on previous earnings calls, our R&D expenses could have some unevenness during the year due to manufacturing schedules. For 2016, we would expect this unevenness to continue and also would expect R&D expenses to rise substantially, as we reach full enrollment in our Fovista Phase 3 trials and increase enrollment in the Fovista expansion studies as we enroll patients in our two Zimura studies and as we validate our Fovista API manufacturing process to begin to produce commercial grade Fovista API. General and administrative expenses were $12.1 million for the quarter ended December 31, 2015 compared to $10.7 million for the same period in 2014. G&A expenses were $44.1 million for the year ended December 31, 2015 compared to $33.4 million for 2014. The increase in general and administrative expense in the quarter and year ended December 31, 2015, relates primarily to increases in cost 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 and 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 ended December 31, 2015 of $35.6 million or $1.02 per diluted shares, compared to a net loss of $31.7 million or $0.94 per diluted shares for the same period in 2014. The Company reported a net loss for the year ended December 31, 2015 of $105.7 or $3.06 per diluted share compared to a net loss of $116.8 million or $3.51 per diluted shares for the same period in 2014. Fully diluted weighted average common shares outstanding for the year ended December 31, 2015 was 34.6 million. Turning to the balance sheet, cash, cash equivalents, and available for sale securities totaled $391.9 million at December 31, 2015. And now, I will turn the call over to David.

[Dr. David Guyer:]

Thank you, Mike. And thank you for your time this afternoon, and for your continued support. I will now turn the call over to the operator, so we can open up the lines for any questions.

[Operator:]

Thank you. [Operator Instructions] And we’ll take our first question from Yigal Nochomovitz with Citigroup.

[Yigal Nochomovitz:]

Hi guys, thanks for taking the questions. Samir, you mentioned the pilot study on multi-modal imaging, presumably you’re referring to OCT angiography. I was wondering, if you could talk in a bit more detail about the goals of that study with regard to educating physicians and maximizing the clinical benefit of Fovista plus anti-VEGF in newly we diagnosed patients or potentially Fovista monotherapy in patients that are refractory to anti-VEGF? Thanks.

[Dr. Samir Patel:]

Yes. Thank you for your question, Yigal. So, in general terms, first, with the current monotherapy in anti-VEGF, we try to understand the imaging modalities. The only correlation with vision that we are aware of that has been demonstrated with OCT guided therapy is during the induction phase or roughly the first three months of therapy subsequent to that. To the best of my knowledge, I am not aware of any biomarker that correlates with visual acuity using OCT. So with that as a background, we believe that -- we need to understand modalities, anything modalities and what makes relevance is to patient function that is vision. And so, newer modalities are coming about, one of them is OCT angiography. And these three -- the multi-modal study is there to understand with combination therapy, how do the various modalities such as fluorescein, OCT angiography, OCTs with spectral domain and also ICG, how do they get sorted out with respect to visual benefit. And that’s really the goal of this. I hope that answers your question. Underneath that obviously, there are lots of details that I can address if needed.

[Yigal Nochomovitz:]

Well, just following up on that, might we see some initial results in that pilot study this year? And related to that on the Phase 2 trials, any potential for data for anti-fibrosis or injection burden before the big Phase 3 readout in the latter part of the year?

[Dr. Samir Patel:]

There is no plan at the moment. I think our focus is to wrap up the enrollment in the ongoing 1004 study and get ready for the NDA filing.

[Yigal Nochomovitz:]

Okay. And then, obviously you’ve published the Phase 1 data last year. We’ve just been getting questions from clients regarding potential to see a Phase 2 study in print. [Ph] Any plans for that this year?

[Dr. Samir Patel:]

Well, we plan to submit the Phase 2 paper. I think it’s just an issue more than anything else of priority and getting the key aspects related to the Phase 3 trial going and subsequently finishing enrollment that is really responsible for what some may foresee that’s delaying and getting to Phase 2 paper out. But I can assure you that we’ve put a lot of effort into it lately and as we added more individuals to our team and we expect to have that submitted very shortly.

[Yigal Nochomovitz:]

Okay, great. And if I could just get a question for Mike on the financials, Mike, you mentioned the revenue recognition for additional shipments of API to Novartis. Can you be more quantitative on that at this point or not?

[Michael Atieh:]

Sure, Yigal. For the quarter, it was a small number. As you see the total collaboration revenue was about $4.8 million, of that about $1.7 million was the recognition of deferred amortization, the rest was API revenue. When you think about 2016, we will be ramping up shipments to Novartis for their clinical use obviously. So, I think expectations of about $15 million is reasonable.

[Yigal Nochomovitz:]

Okay. And then regarding the R&D ramp up, can you provide some more metrics there, as far as how much we should model in that going up in a lot the latter part of the year?

[Michael Atieh:]

I won’t provide attorney specific projection other than to say, as I mentioned, the quarter, we saw a downdraft in R&D, on a sequential basis, still obviously an increase over the prior year. But I think for 2016, you have to think in terms of a minimum in terms of R&D of what we saw in Q3, about $41 million and build from there, recognizing that it could be uneven, because of the way that the API is produced; as it’s produced, it’s recognized as an expense.

[Operator:]

And we’ll take our next question from Matthew Harrison with Morgan Stanley.

[Matthew Harrison:]

Great, thanks. Good morning, guys. Just two from me, one, I’m just wondering, obviously at Bascom this year, we saw some initial Ang 2 [ph] data. I’m just wondering if you can comment on that mechanism versus PDGF and where you think that might fit in or might not fit in, in the landscape. Obviously the data is preliminary at this point. And then second, we saw some additional follow-up data at Bascom too, related to Fovista in fibrosis patients, a little bit more detail versus what you guys had presented at your Analyst Day. Any additional conclusions you think can be drawn related to either the duration of the response or the kinds of patients in which you see a response? Thanks.

[Dr. Samir Patel:]

Good morning, Mathew; it’s Samir. Thanks for your question. I think when we talk about the relevance of target, at the end, it’s all about the clinical data and as we progress through the various phase of the trials. I think that one comment that can be made, if you just particularly are talking about targets, PDGF is one of the oldest cytokines in medical history I believe that we understand in a great level of detail. And if you look at the amount of publications that are related to PDGF and its potential role in inhibiting some of the wound healing responses, I think it’s -- the strength of science is significant. And then you couple that with the clinical data to-date, I don’t think that one can sit here today and say that comparing one with the other without having the clinical data to really look at. That being said, I think that at least with the data that is presented, if we examine it in a critical fashion, we continue to believe that PDGF is the best target to add on to anti-VEGF. And we believe that we are best-in-class in that. And I think that’s based on clinical data that’s out there.

[Matthew Harrison:]

And any comments around the additional fibrosis data?

[Dr. Samir Patel:]

Right. I think if you look at the Phase 2 study retrospective analysis of anti-fibrosis, there was a dose response related anti-fibrotic effect, and that’s in the context of a positive Phase 2b trial that’s adequately powered with reasonable follow-up. With that overlay, if you look at the data, both from the IFC as well as presented at the angiogenesis meeting and the prospective data from our 1005 anti-fibrosis program, I think it’s very reinforcing. And more important than anything else is, if you look at additional new science coming out fibrosis arena, it’s all very consistent. For example, in idiopathic pulmonary fibrosis, the two drugs that were approved a little over year ago, they certainly have one of the mechanisms is effecting the PDGF signaling pathway. So really taken together, I think the data in itself is hard to really talk more about -- I mean to editorialize. But taken together, it’s certainly reinforcing and provides a lot of hope for patients for wet AMD if the drug gets approved.

[Operator:]

And we’ll take our next question from Joseph Schwartz with Leerink Partners.

[Joseph Schwartz:]

Good morning. Thanks very much. I was wondering if you could speak to whether, on a blinded basis, whether the baseline characteristics for the two Phase 3 trials are more or less consistent with Phase 2, and your expectations for who would be enrolled in Phase 3; and whether there are any differences between the two Phase 3 studies, again on a blinded basis, baseline characteristics only?

[Dr. Samir Patel:]

Good morning, Joe; it’s Samir. Thank you for your question. We would know the baseline characteristics. First math studies, the database hasn’t been closed and one of the Phase 3 trials ongoing. I think as far as from a general standpoint, the inclusion criteria are quite similar between the Phase 2b and 3. I think we’ve addressed that and there is no reason for us to believe that there would be, especially the key characteristics related to baseline vision and lesion compositions and sizes of lesion et cetera should be quite similar. And don’t forget that the inclusion in these trials just as is not as it was in the Phase 2. It’s done by independent lesion centers, the same lesion center. And that process is probably the single most variable in making sure that the patient characteristics of relevance are similar.

[Dr. David Guyer:]

I would also just add that the Fovista effect has been very, very broad, as we’ve shown many times, anyway you cut the data as far as baseline characteristics, as far as visual endpoints, the Fovista combination group always does better than the anti-VEGF monotherapy control group. So, as Samir said, while we believe because the criteria are so similar that most likely the patient population should be similar, because of this very broad effect and even in anti-VEGF treatment failures, we see effect in Fovista expansion trial, it really should matter. We are talking about a drug that will believe will show a broad effect among all comers and so for what the data shows. But we haven’t seen, based on demographic long until we get the data, and while we expect to be close Phase 2, what’s been very exciting is just how broad the effect of Fovista has looked in both naïve and limited data with treatment failures across the board anyway you cut the data.

[Dr. Samir Patel:]

And of course, the last point, all this has to be confirmed in a controlled trial fashion. But the suggestion is exactly, as David said.

[Joseph Schwartz:]

And just one more for me; I was curious if you could talk a little bit about how consistent are the -- is the methodology or the philosophy that you think physicians are using to guide, how many injections they are giving patients in the second year of the studies.

[Dr. Samir Patel:]

I think to the best of my knowledge, they have to continue based on what the protocol dictates. And there is no reason for us to believe that they would deviate from that.

[Joseph Schwartz:]

Yes. I’m just asking because, obviously the goal is always to improve vision and yet the drug works -- may work differently than the VEGFs and where they often just look for fluid and other anatomic changes. So, I’m wondering how -- and I think it’s going to be borne out in the data and we will learn a lot from data, but I’m just wondering if top priority you have any hypotheses for what to expect as far as how physicians are going about the deciding whether or not any individual patient needs together another injection or can wait longer to get an injection, any thoughts on that?

[Dr. Samir Patel:]

Yes. So, unrelated to our specific trial, I think as a general question, it’s very relevant one and important one that we spend a lot of time on that is what is the best way to address the long-term outcome for wet AMD patients with which I think that there is very little debate that as the anti-VEGF agents are currently used, long-term benefit is not as great as we expect, and in fact most patients return to baseline or actually lose vision depending on the study from two to four-year time point. So, in that particular setting, what could be the effect of Fovista add-on? I think that it’s fairly well shown by multiple studies that the key variables responsible for decreased vision are scarring, atrophy and increased lesion size. And our Phase 2 study specifically showed that there is a relative decrease compared to monotherapy in increase in the lesion size. So that certainly gives us a little bit of hope that these patients may fare better. When you add to it the anti-fibrotic effect, that adds -- gives it a little -- the story strengthens. And we have no reason to believe that Fovista addition or inhibiting anti-PDGF leads to increased atrophy. So really taken together, there are two -- in my opinion, there are two basic ways to improve the outcomes over the longer term. One is increase the frequency of injections and I think that has been shown with widespread data from anti-VEGF monotherapy; and the second is to address the three biomarkers, I just talked about. And I think -- and PDGF inhibition stacks up favorable. So it is our hope that long-term study will show a little better outcome than we currently see. Does that answer your question?

[Joseph Schwartz:]

Yes, it’s definitely helpful. I’m just wondering how enlightened do you think the clinicians that are enrolled that are treating the patients in the Phase 3s will be, before having any data to -- in a clinical trial setting to adapt throughout the study and observe these anatomic and vision changes in order to determine when to -- how often to be administering the therapy? It’s a hard question to answer before the data.

[Dr. Samir Patel:]

Yes. No, but I think it’s a fair one to project. And we -- I think it’s our responsibility to some extent to gather all those relevant data and try to make the connection in a scientifically robust fashion with the thought leaders. And collectively, the more data we have in the proper setting and analyzed in a rigorous fashion, hopefully this group of physicians are extremely intelligent and are driven by data, if presented in adequate fashion. So, we are hoping that all this will be done by data. And the behavioral changes that are responsible for better outcome will take place, based on data.

[Operator:]

And we’ll go to our next question from Yatin Suneja with SunTrust Robinson Humphrey.

[Yatin Suneja:]

Hi, guys. Thank you for taking my question, just a broader question. Could you maybe help us put in perspective the patients from the Phase 3 program and the Phase 2, I believe you showed 62% comparative benefit, and there was also benefit on several endpoints -- several other endpoints on visual acuity. How should we think about the Phase 3? And maybe, could you remind us on the powering assumptions?

[Dr. Samir Patel:]

Yes. Yatin, I missed the -- first, thank you. Thanks for your question. I missed the first part where you talking about the benefit on the Phase 2 study, and what’s the connection the Phase 2 you were asking in relation to that?

[Yatin Suneja:]

Basically, just wanted to understand what sort of product profile we should be looking at, what are your expectations. I think our understanding is that you powered the trial well, so just help us understand what your expectations are from Phase 3 in terms of that.

[Dr. Samir Patel:]

Sure. That’s a very valid question, an important one. So, one way to look at it is very simple, if you just look at the Phase 2b study as a baseline, we have roughly 150 patients who are in that study and that showed a statistically significant benefit at six months at a level that you just said at 62% additional benefit from baseline. Now, in that particular situation, having 150 patients and we have used [indiscernible] procedure because of multiplicity, there were two doses. So, if you look at that and say well, if you extend that to a year and you have the same data, one can reasonably state that 150 patients is all you need when you -- especially when you are eliminating one of the doses. So the multiplicity issue is not as important. So, I think very valid case can be made that 150 patients is adequate for each arm. And we have roughly twice as that much in the Phase 3 study. So, it gives great deal of comfort that powering won’t be an issue in determining the benefit of Fovista addition to anti-VEGF regimen. Does that answer your question?

[Yatin Suneja:]

Yes. And then, what are the powering assumptions?

[Dr. Samir Patel:]

We haven’t disclosed those, but I think one can easily look at the 150 analogy that I gave that it’s north of 80%.

[Yatin Suneja:]

And then on the anti-fibrotic properties of Fovista, is there a way that you can get that on the claim, based on the ongoing Phase 3 trials and maybe the sales rep can go and talk about that, how can we get that on the label?

[Dr. Samir Patel:]

I think at the end, it’s the improvement of vision or reduction of vision loss and trying to correlate and making the case, if indeed it’s related to fibrosis, then I think the regulatory agencies will look at it. And all is connecting it to function. I think that’s the right thing to do.

[Operator:]

We’ll go to our next question from Stephen Willey with Stifel.

[Stephen Willey:]

Thanks for taking the questions, just a couple on the recently initiated Zimura study actually, just wondering if you guys plan on disclosing the doses that you’ve moved forward. I know in the 2A I think there was dose escalation upto 2 mgs and it looked like there was a continued benefit with respect to letter gain there, relative to I think 1 mg dose. So, just wondering if you moved the dose into this recently started study that’s actually above that 2 mg threshold?

[Dr. Samir Patel:]

Yes. I think to best of knowledge, it is the higher dose that we are doing with. But as you correctly stated, the data was supportive in that dose. But by the way, I think all the doses, if you just look patients at Phase 1 that have been presented in our studies and other studies with other targets, the complement addition stacks up very favorably. But we did go with the higher dose, again to best of knowledge, and I think that we’ll see what the data shows.

[Stephen Willey:]

And then, with respect to I guess pre-specified secondary endpoints in that study, I’m presuming GA is one of those, but are there any others that are included in the study that are not posted to ClinicalTrials?

[Dr. Samir Patel:]

Stephen, you referring to the Zimura wet AMD trial or the dry?

[Stephen Willey:]

No, the dry AMD study.

[Dr. Samir Patel:]

I think that the standard anatomic endpoints is a good way to think about it as secondary endpoints for the dry AMD.

[Stephen Willey:]

And then maybe just a quick question for Mike. Just curious I guess post some of this ramping in G&A towards year-end, just kind of wondering where you are from the organizational headcount. And as you think about building out some of this additional infrastructure throughout the course of 2016, maybe kind of what your target range is for headcount by the end of ‘16? Thanks.

[Michael Atieh:]

Sure, Stephen. Thank you. Just a couple of things about G&A. Obviously it’s a line that includes -- that will now include and does our commercial organization. And perhaps at some point in future we’ll start to identify sales and commercial as a separate line or break out separately? Headcount is growing, it’s growing for a few reasons, one is the ramping up of G&A staff, both finance and legal et cetera, but it’s also related to commercial, start to build out our commercial organization. Samir alluded to that in his remarks. But more importantly, the increase in spending related to commercial will be spending money on market research and market planning and things like that. So, it’s hard to predict when that spending will start to ramp up but more than likely it’s in the second half of the year. So, when I think about G&A for next year, we close the quarter with a run rate of around $12 million. And again that includes all of our stock comp expense et cetera. And when you think about next year, I would probably model in that as a minimum number and build from there. Hopefully that is helpful.

[Stephen Willey:]

It is. Thanks for the color.

[Operator:]

Okay. And we’ll take our next question from Tyler Van Buren with Cowen and Company.

[Tyler Van Buren:]

Good morning and thanks so much for taking my questions. Just a follow-up to an earlier question asked on the publication of Phase 2b data. You mentioned that you would be expecting to have the data submitted for publication, shortly, just one clarification on that. Does it mean that we could potentially get a publication this year prior to the Phase 3 data that’s going to be released? And then, secondly just more of a conceptual question on Zimura. You have a Phase 2 study ongoing in wet AMD. Clearly, there’s a fair amount of evidence out there for complement inhibition in dry AMD. If both, Fovista and Zimura are eventually successfully developed, how can we think about both of these drugs treating wet AMD patients; could it potentially be used in more mild patients, as a bridge from dry to wet, just curious to get your thoughts there?

[Dr. Samir Patel:]

So, let me go backwards on the Zimura, it’s an excellent question. So, what we know currently is if you look at patients with neovascular AMD, and postmortem studies show that there’s a lot of staining that occurs through some of the terminal and affect the components of the complement pathway. And the question is, is that upstream or downstream. We also know from other publications by independent labs that complement activation can up-regulate variety of antigenic cytokines such as VEGF and PDGF. So, one could argue that complement inflammation is upstream. And as a result, if that is true, by inhibiting complement, you may be able to deeply decrease the release of these antigenic cytokines, which may translate into reduction of treatment burden. So that’s one way to think about it. On the other hand, if the complement-mediated inflammation is downstream and it is responsible for one of the reasons for anti-VEGF resistance, then the very patients that you alluded to patients -- not mild, but those patients who have failed anti-VEGF therapy, that might be the appropriate target. So, again, I think that what we showed in our Phase 1/2a study was treatment naïve patients benefit significantly. So, the answer could be both of those are responsible. So, it’s hard to tell. So, what we’re doing now is actually looking at if you can reduce treatment burden because we thought -- we think we have a signal from the Phase 1/2a study that you can get enhanced visual outcome. As far as the publication question is concerned, we are confident based on the data that’s already been presented, already in the S1 that -- and I think keeping in leaders have exhibited their enthusiasm for the Fovista Expansion Study. So, I don’t -- we don’t believe that getting it published is an issue. As far as the timing is concerned, it’s a peer-reviewed process and really depends upon the specific journal and what their comments are and what they’d like to see or have us explain. So, that process is hard to predict. And I can’t say whether it’s going to be this year or whenever.

[Tyler Van Buren:]

Just a follow-up on potentially reducing treatment burden for Zimura. So, I guess you are saying then potentially you could use in anti-VEGF Fovista and Zimura. That’s three injections. Would it potentially be at -- I guess at different time points over the course of treatment?

[Dr. Samir Patel:]

Yes. And I have no knowledge to figure out the optimal regimen of this. As we know even today, one can argue that we don’t know the optimal regimen of the anti-VEGF agents, even after almost a decade of the drugs being out there. So that has to be worked out. But I think we first have to show the proof-of-concept that we know what typically is required for anti-VEGF. Usually it’s quarterly dosing regimen. None of the anti-VEGFs have convincingly shown efficacy to be same as monthly. And so, with that as a background, if you’re able to maintain the vision with that type of administration with Zimura, it’s a good place to start that there is a signal here, and maybe a more controlled study is warranted. And then, you can work backwards and try to lengthen the time and see if it’s still efficacious.

[Operator:]

And we’ll take our next question from Anupam Rama with JP Morgan.

[Eric Joseph:]

Hi guys. It’s Eric in for Anupam this morning. Thanks for taking the question. Just a follow-up on Zimura, if I could, related to the Phase 2 wet AMD study. Just wondering if there’s -- if the trial calls for an interim analysis and just sort of -- I mean you elaborated on how the approach may be differentiated with other anti-VEGF combination. Just wondering if part of that differentiation might be allowing for the enrollment of Fovista experienced patients and how you may be looking to differentiate from other combination approaches with anti-VEGFs? Thanks.

[Dr. Samir Patel:]

I don’t think at this time we have any plans of doing, if you are alluding to a triple therapy, I think we first have to cancel the sensitivity [ph] trial. I alluded to earlier, once we get the data of Zimura to understand how it’s working if it shows a signal. I don’t think -- I think the second issue you brought forward was how we’d work with different anti-VEGF combinations. I think all the anti-VEGF agents are roughly similar in their safety, efficacy. And so if you look at, there’s no product differentiation as far as that, one could argue that there is a product differentiation based on the regimen. Of course Eylea has been shown to be non-inferior to monthly administration of Lucentis, yes Lucentis and Avastin to the best of my knowledge and been studied adequately with a bimonthly administration. So, net-net, you really don’t know what the optimal regimen are looking anti-VEGF. We think about it if you are going add Zimura to the mix, you just have to make sure, all anti-VEGF agents are administered with the same frequency and so that you are able to separate. If the effect on treatment burden because of the drug or is it because of anti-VEGF or Zimura, and those are kind of signals we are seeking to go into a larger sample size study.

[Operator:]

And we’ll take one more question. This question comes from Terence Flynn with Goldman Sachs.

[Unidentified Analyst:]

Hi, it’s Samir [ph] on for Terence. Thanks for taking my question. For Fovista, just to clarify, will you begin hiring your sales force in advance of the Phase 3 data and can you review expectations for size of the sales force? Thanks very much.

[Dr. David Guyer:]

Yes. So, we’ve said, we believe the full marketing and sales force will be approximately 100 people or less that includes the sales force. We’ve hired our Chief Commercial Officer, Henric Bjarke who came from Alexion, who launched the first blockbuster in ophthalmology when he was at Pharmacia, the Pfizer drug Xalatan and also he launched the first anti-VEGF drug for us Eyetech. So, Henric knows the field but has gotten great experience at Alexion. He recently hired his head marketing person and other Alexion person who just joined us last week. And we have an analytics person on the commercial end; we have a reimbursement expert that’s been with us for a while as well. And they will build out the rest of the team appropriately. We really haven’t publically mentioned when we will bring in certain positions but just say that we think we’ve built a really exciting team and we’ll continue to do that through pre-launch.

[Operator:]

And that concludes today’s question-and-answer session. Mr. Guyer, at this time, I’d like to turn the conference back to you for any additional or closing remarks.

[Dr. David Guyer:]

Great, thank you all for your interest and continued support. And we look forward to giving you out further updates. Thank you.

[Operator:]

That concludes today’s conference. We appreciate your participation.