Q4 2023 Clearside Biomedical Inc Earnings Call
Participants
Jenny Kobin; Investor Relations; Clearside Biomedical Inc
George Lasezkay; President and Chief Executive Officer; Clearside Biomedical Inc
Charles Deignan; Chief Financial Officer; Clearside Biomedical Inc
Annabel Samimy; Analyst; Stifel
John Todaro; Senior Analyst; Needham & Company LLC
Presentation
Operator
Greetings, and welcome to the Clearside Biomedical Q4 2023 financial results and corporate update call. At this time, all participants are in a listen only mode. (Operator Instructions)
Please note this conference is being recorded I will now turn the conference over to your host, Jenny Kobin, Clearside Investor Relations. Jenny, you may begin.
Jenny Kobin
Good afternoon, everyone, and thank you for joining us on the call today. Before we begin, I would like to remind you that during today's call, we will be making certain forward-looking statements. Various remarks that we make during this call about the company's future expectations, plans and prospects constitute forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995.
Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the Risk Factors section of our annual report on Form 10-K for the year ended December 31, 2023 that will be filed today and our other SEC filings available on our website.
In addition, any forward-looking statements represent our views as of today and should not be relied upon as representing our views as of any subsequent date. While we may elect to update these forward looking statements in the future, we specifically disclaim any obligation to do so even if our views change.
On today's call, we have George Lasezkay, our Chief Executive Officer; and Charlie Deignan, our Chief Financial Officer. After our formal remarks, we will open the call for your questions. I would now like to turn the call over to George.
George Lasezkay
Thank you, Jenny, and good afternoon, everyone. The tremendous progress that we accomplished in 2023 has propelled us into 2024 and positioned us for an important year.
Last year, we advanced our CLS-AX clinical development program in wet AMD, meeting our targeted time line and budget in February 2023, we reported positive results from our OASIS extension study that supported initiation of our Phase IIb clinical trial Odyssey later that year, we initiated and completed enrollment in Odyssey again on our targeted time line and budget.
This rapid enrollment was primarily a result of significant enthusiasm from physicians because of the compelling aspects and full potential clinical impact of the program during 2023, each of our licensing partners reported excellent progress in their clinical development development programs. Collectively, there are now four assets in clinical development with suprachoroidal delivery for five different indications.
In addition, we were pleased to announce a new collaboration with BioCryst Pharmaceuticals to utilize our SCS Microinjector to deliver their proprietary compound aboard Elestat to treat diabetic macular edema. This adds both another asset and another indication to our collaboration pipeline.
As we look ahead, 2024 will be a critical year for Clearside as we execute on two key areas of focus. First, the primary data readout for ODYSSEY Phase IIb trial will occur in third quarter this year. Second, we and our partners expect to continue demonstrating the benefits of drug delivery into the suprachoroidal space with our SCS Microinjector device technology.
I'll start with Odyssey, our randomized double-masked active controlled clinical trial in participants with wet AMD. We are utilizing our patented suprachoroidal injection technology to deliver CLS-AX, a small molecule suspension of the tyrosine kinase inhibitor, axitinib, our proven delivery method, combined with a differentiated mechanism of action and high potency of ixazomib offers the potential for CLS-AX to be a long-term maintenance therapy for wet AMD patients in Odyssey. We are looking to replicate the excellent safety profile, stable vision and reduced frequency of injections over six months that we observed in our OASIS extension study.
The efficacy and safety results from ODYSSEY will support the design of our pivotal Phase three development program for CLS-AX with our focus on extending treatment duration, utilizing suprachoroidal delivery of small molecules. I think it's relevant to highlight recent positive real-world outcomes for Xi pure usage.
This analysis was presented by Dr. Michael Singer at the Macula Society meeting last month in his presentation, Dr. Singer evaluated nearly 800 eyes utilizing the American Academy of Ophthalmology, IRIS Registry an open source claims data.
This real-world data showed excellent durability were over 75% of eyes did not require retreatment for six months after just one dose of SIP. This durability is consistent with design, pure preclinical pharmacokinetic data and the data from our Phase three PEACHTREE clinical trial.
Importantly, we believe this analysis validates ClearSign's approach to extended small molecule drug release and reduce treatment burden for patients by delivering drug directly to the suprachoroidal space with our SCS Microinjector.
As we look back over the last several years, I'm thrilled with the progress we have seen leading to the adoption and acceptance of suprachoroidal delivery as the original pioneers in this space. We are proud that ClearSign's technology has led the way for this important and innovative approach for delivering of drugs behind the visual field directly to the reps.
The suprachoroidal injection procedure now has a permanent Category one CPT code available to help facilitate better access adoption and insurance coverage. This CPT code is a major milestone for the procedure itself.
Our proprietary SCS Microinjector continues to enable reliable, simple in-office nonsurgical drug delivery as shown with its use in multiple ongoing clinical trials and with our commercially approved products side, most importantly, our SCS Microinjector has demonstrated a positive safety profile with over 2000 injections performed to date.
We believe this strong safety profile is due in part to the fact that drug delivery by SCS injection is compartmentalized in the suprachoroidal space, keeping it away from non diseased tissues and entirely behind the visual field. We do not put drug into the vitreous and we do not place physical inserts or gels in the vitreous that rely on complete bio erosion over time since the suprachoroidal injection allows for drug flow behind the retina to the back of the eye.
This limits the risk of vitreous floaters, vitreous or anterior chamber toxicity for possibly impairing or interfering with the patient's vision. To date, we've established multiple partnerships with leading biopharma companies who have elected to utilize our SCS Microinjector over other delivery methods. We believe that suprachoroidal delivery may become the delivery method of choice for gene therapy and ophthalmology.
Utilizing our SCS Microinjector, our partner, Regeneron bio, has demonstrated in their wet AMD clinical trial that there were zero cases of inflammation observed in patients who received just seven weeks of prophylactic topical steroids. In contrast, recently reported data from other gene therapies in development using intravitreal delivery have shown inflammation despite prophylactic steroid treatments of over 20 weeks.
These steroid regimens involved injections, oral medications and in some cases, extended release steroid inserts. So we're excited about the progress of Agennix Bio has made in their two programs using utilizing our SCS Microinjector in diabetic retinopathy for Genoptix bio presented data last November from their altitude trial showing that RGX. three, 14 prevented disease progression and nonproliferation proliferative DR patients at one year in wet AMD.
They presented data in January 2024 from their AVA trial showing that patients treated with three 14 continued to demonstrate stable vision and retinal anatomy with a meaningful reduction in treatment burden. At six months, Agennix bio expects to share new program and data updates for altitude trial in Q2 of this year and for the ADA trial in mid 2024, Aura Biosciences chose to exclusively use suprachoroidal delivery over intravitreal injection for their Phase three COMPASS trial, which is evaluating the safety and efficacy of BellSouth's for first line treatment in adults of early-stage choroidal melanoma.
The design of this trial is correct. We're under a special protocol assessment written agreement with the FDA or it is currently enrolling participants in their COMPASS trial. We're also looking forward to continued progress by our Asia-Pacific partner Arctic Vision, who's developing site here, which they have branded as our cadence this year will include completion of their Phase three trial in China in newly-added macular edema and data from their Phase one DME trial.
In addition, they plan to announce the results of their new drug application submission in Australia and additional NDA submissions in other Asia-Pacific territories in our most recent partnership development, we expanded the use of the SCS Microinjector with a new small molecule. Last November, we entered into an exclusive worldwide license with BioCryst Pharmaceuticals to use our SCS Microinjector for the delivery of their proprietary plasma kallikrein inhibitor aboard Elestat for DME. This partnership provided us with an upfront license fee of 5 million.
Additionally, the agreement includes $77.5 million in potential clinical regulatory and post-approval sales-based milestone payments and tiered single digit royalties on net project net product sales. We are working closely with the BioCryst team as we collaboratively conduct formulation and nonclinical work this year with a target of BioCryst initiating clinical work in 2025. We are very encouraged by the continued progress in all five suprachoroidal development collaboration programs.
I'll now turn over the call to our CFO, Charlie Deignan, to provide a financial update. Charlie?
Charles Deignan
Thank you, George, and good afternoon, everyone. Our financial results for the fourth quarter and year-end 2023 were published earlier in our press release and are available on our website. Therefore, I will only provide a summary of our financial status on today's call.
As of December 31, 2023, our cash and cash equivalents totaled approximately $29 million. Subsequent to the end of the fourth quarter, we completed a registered direct offering of stock and warrants, which generated $15 million in gross proceeds.
With this combined cash balance, we believe we will have sufficient resources to fund our planned operations into the third quarter of 2025. This takes us through the anticipated data readout for the ODYSSEY trial this year and supports our planning for CLS-AX Phase three program.
In terms of investor outreach, we will be participating in the upcoming Needham Healthcare Conference in Sydney and JMP Securities Life Science Conference.
We look forward to keeping the investment community updated on our progress. I will now turn the call back over to George for his closing remarks.
George Lasezkay
Thanks, Charlie. As I highlighted, we have two key areas of focus this year we expect to complete our Odyssey Phase IIb clinical trial in wet AMD and report top-line data in the third quarter of this year. We believe that the data readout may demonstrate that CLS-AX could be a valuable addition to the treatment regimen for patients with wet AMD.
In addition, we'll continue our leadership in the suprachoroidal space as we and our partners generate additional data, demonstrating the benefits of drug delivery with our SCS Microinjector.
We remain steadfastly committed to developing new treatments and collaborating with leading health care companies to improve vision for individuals living with sight threatening diseases.
I would now like to ask the operator to open the call for questions.
Thank you.
Question and Answer Session
Operator
At this time, we'll be conducting a question and answer session. (Operator Instructions)
Annabel Samimy, Stifel.
Annabel Samimy
Hi, all. Thanks for taking my question and congratulations on the revenue roll and it's great. I was hoping maybe you can clarify something for me just a little bit more bigger picture, but I'm a little confused as to how each of these Phase two trials were designed, not just yours, but just in general, the TKR. inhibitors.
Obviously yours has a loading dose for two two earlier loading doses, then you treat EyePoint has three Ocular Therapeutix is now doing a superiority trial. And I guess one of the other things you noted was that yours is not powered for non-inferiority or statistical significance and just it's just really to identify duration.
So I guess the question is how are we supposed to read all these data and really understand how it fits into that evolving landscape for TKIs?
And at what point do you think there might be some harmonization of all these trials, not just for clear clarification, but for physicians who need to choose between these different treatments, right as a maintenance therapy. So I was hoping maybe you can sort of discuss this a little bit more big picture?
George Lasezkay
Well, it's a it's an interesting point that you raise and there does need to be. So I mean, I'm not sure there needs to be, but perhaps there will be some harmonization over time. We're in the process right now and about our Phase two trial is three loading doses just to be clear, I think I heard you say that anything direct.
Yes, everybody is aware of Rio Ariari injection assay yet we are in our injection. Cls-ax is concurrent with the second loading dose and then there's either a loading dose a month later.
Yes, ocular really kind of throws a that's roses for a loop a little bit, though, because they're just basically doing one dose of each theirs and aflibercept and then waiting to see who needs to be retreated. And I understand I'm learning more and more about why they've done it that way, but we're in the process now to trying to harmonize things. We're in the process now.
We'll begin it over the next couple of months to discuss what our pivotal program would look like. And so you're right about what we're looking at and ODYSSEY is we want to we want to measure duration, where do we think the best our dosing regimen would be to go into Phase three.
But that doesn't really get to your question, which is how do we harmonize how these TKIs are being used because each one of us is using some of liver cells or some anti-VEGF A., but slightly differently, we're timing our TKI. administration slightly differently, and it looks like EyePoint is going for non-inferiority ocular is clearly going for superiority. Those trials are very different in design.
And when we disclose our Phase three, we'll see if we match up with one or the other and we come up with a third design. So I can appreciate where you're having a bit of a problem. But as we learn more about how the TKIs work and where they fit in. I think you'll begin to see this some together. And I don't think that necessarily the loading doses are going to be that big a deal over time to harmonize but the thing is with ocular, you know, they're going after treatment naive patients.
And so I'm a little bit of I'm a little bit puzzled why they didn't do a bigger you know, more on label loading dose for a liver said flat. I think I understand why they're trying to do it this way and we'll see what happens. But I can't guarantee we're going to harmonize.
But I think over time, what you will see between the three different studies, I think you will see that the tyrosine kinase inhibitors as a group our going to be a very important addition to the treatment alternatives that physicians have for their wet AMD patients in particular, I think you're going to see that I don't think we're I think that's going to be very clear that we have a place in that treatment regimen, and we have to wait for the data to come out.
But I think if you talk to the other two companies, I think they would believe the same thing and most of the physicians that we talk to believe that as well. So we have to go out and we have to demonstrate that we may all demonstrated in a slightly different way, but I think you're going to see that the tyrosine kinase inhibitors have duration of effect. And mechanistically, they're very competitive or excuse me, not competitive, but can vary.
They can form very nicely with anti budget Bay because they don't compete and they kind of help supplement the anti-VEGF a mechanism of action by blocking receptors instead of just a binding with circulating VEGF. So there's a theoretical reason why they should work. I think we've all seen data in our clinical trials that indicate that they have extended duration. And I think as we go through all of our additional clinical trials, the place for the TKIs is going to be very clear.
Annabel Samimy
Okay, got it. And if I can just add one more question to that. As you discuss this with more some of the retina community, does it seem that the TKIs are kind of landing in this maintenance treatment, some sort of domain or is Ocular Therapeutix essentially going to blow that up of therapy and treatment naive and what's how what's their mindset as far as where anti-VEGF It serves and where TKIs will be best served, where we've studied this and where everybody studied this and maybe ocular will change things get their go on treatment naive.
George Lasezkay
So we'll see how that works. In particular, we'll see how it works early on in their therapy in the first couple of months after they put their insulin. But I think most people right now with look at us and the way we're most of us have been studying.
This is more maintenance therapy than than first line monotherapy, but that, you know, maybe ocular will we'll show them where they're doing their trial. I don't know. But I can tell you that I think most people look at this is extended duration maintenance therapy is where we go into the two drugs. Mechanistically, the anti-VEGF A. and the TKI. should work very nicely.
They should complement one another I always draw the comparison, I believe, to cancer chemotherapy or even an antidepressant therapy is you're trying to affect an outcome, better vision, improved, you know, are treating cancer better vision than treating people were depressed and making not depressed. And so physicians have multiple approaches in cancer chemotherapy and any depressive, and they really have that.
They've had multiple different approaches to the same mechanism of action from the old days and Maxygen donor centers gone to Eylea and even provides more so there principally going after bids anti-VEGF, a approach that allows for the over expression of C. and E. that doesn't contain care that doesn't account for binding all of the circulating VEGF that A. that's circulating.
So we think that the two drugs could work very nicely together, finding circulating VEGF-A, but blocking A., C and E, if there's over expression at the receptor level. So I see them as I think physicians should look at this.
And I think companies should look at this as a real opportunity to add complementary therapy to wet AMD rather than seeing it one replacing the other necessarily and over time as it gains usage, we'll see what happens. But I think right from the start, I think it's a very complementary approach. And I think patients will be the main beneficiary of this complementary approach.
Annabel Samimy
Okay, great. Thank you.
Operator
Jon Wolleben, JMP.
Hi, Kathryn. On for a long time.
I've got a few questions on of the ODYSSEY trial and just how your population compares to other mid-stage wet AMD studies. I know you talked about occupancy as Dan said earlier on some color on that.
And then another one, just on a what how you think about safety of the suprachoroidal administration approach on that clear side and how that compares to other wet AMD candidates?
George Lasezkay
Okay. In Odyssey, we made a very determined attempt to enroll patients who had been diagnosed with wet AMD. We had had some treatment experience. So they were more or less likely treatment experienced. So they weren't patients that were naive. And importantly, we've tried to make sure that they either had the presence of intra retinol fluid or subretinal fluid or both or leakage that was documented on fluorescein angiography.
So what we did was I don't know that other any of the other TKI companies have done this, but we made a very concerted effort to make sure that the patients that we were enrolled had had some experience, but we clearly had fluid on enrolling into the trial. We did not want to enroll and tried very hard not to enroll patients who had been diagnosed, but for drug, and that's certainly been the case to some degree in previous trials by other companies.
And because the drive patient can get in there and kind of artificially inflate your positive results because you can see a dry patient and they may not require any any real intervention for many months. So we wanted to make sure that the patients that are in our trial had fluid required therapy had responded to some degree in the past, but weren't like our Oasis of patients that were our KOLs would call anti-VEGF addicts.
They were responsive, but they were super and they needed a lot more anti-VEGF intervention than you might expect. So they were getting their centers that are rightly as far more frequently than you would expect. So we wanted patients that had some response had some experience there, but weren't overly dependent on a lot of anti-VEGF.
And when enrolled in the trial, they had the presence documented presence of fluid documented by independent reading center. So that's that's one thing we've tried to do. I don't know that the other companies have bent that term that careful about that, that enrollment criteria, but that was very important to us and we believe that's the right thing for us to do.
On your second question on safety, that was unsafe, and we've had very good luck with the suprachoroidal injection from a safety perspective, we've looked at it over time compared to intravitreal injections in terms of complications in patients. And we find that they're essentially the same. And we've had no particular safety issues that I'm aware of in the Iowa basis, our Phase one 2a trial from an injection procedure point of view, our safety results in OASIS were are very, very good. We had no inflammation, no dose limiting toxicities.
But if you just look at the injection procedure itself, we had no issues there. And so the safety from suprachoroidal injection has been are very good at it with proper training, the physicians do it well, it's not really a big issue for them.
The prep time for patients is basically the same as it would be for an intravitreal injection and we don't see anything and there was no demonstrable difference in safety between suprachoroidal and intravitreal. When we've gone back and looked at on quite a number of clinical trials, we can compare them well. So we feel very good about safety of the procedure itself. We feel very good about the safety of the TKI. accident itself and down. And so that's hopefully that's an answer to your question.
Thank you so much. That's really helpful.
George Lasezkay
Yes.
No problem.
Operator
Serge Belanger, Needham & Company.
John Todaro
Hi, everyone.
This is John on for Serge and thank you for taking our questions. I'd like to hit on a couple of different points.
First, going back to the OASIS trial, you guys had mentioned a slightly higher degree of the need for off protocol or early rescues after patients at the one milligram dose arm and knowing this going into Odyssey, is there any degree to which you guys have higher expectations for potential patient dropouts?
And if you have any kind of color, at least at this point into whether or not your expectations are being reflected on where the trial stands now and then kind of moving past Odyssey and wet AMD are you guys starting to explore any additional indications for the use of CLS-AX, whether it be DME or things like diabetic retinopathy?
George Lasezkay
Let me answer the last one. First of right now we don't have any plans to look into DME or DR for CLS-AX. So we're focusing entirely our efforts on wet AMD.
If I go back to the early off protocol, rescues that we're seeing and always because when we looked at that, there were a couple of things. First of all, it was an open-label trial. So there was no blinding involved in. It was the first time that people had injected a tyrosine kinase inhibitor into the suprachoroidal space in these wet AMD patients.
So there was a little bit of nervousness. I think and it was kind of site-specific when we really looked at it, there was no good reason why one milligram should have these off protocol early rescue, 2.5 milligram BID. And I mean, there's no logical reason for that. But when we looked in the cohort for that one milligram dose, it seemed to be more of a site-specific issue.
And I think that was a little nervousness about injecting and not having any experience with tyrosine kinase inhibitors and kind of jumping the gun on some early rescue after the first couple of early rescues in Cohort four with the one milligram dose basically in cohorts three and four, they had about the same. They had a couple of protocol rescues, but the the majority were in the 1st month in that cohort four. And I think that was the best we can tell.
That's kind of a site specific issue for a particular investigator. So we've designed our ODYSSEY trial too, not that we don't talk about expectations. Our expectations is we should not see a very limited number of off protocol, which we worked very hard with our sites in through our training and our materials and our on-site people to make sure that they're very well educated in terms of the the retreatment criteria, in addition of this ODYSSEY trial has three loading doses of liver serve, as I was talking about within about earlier.
And we think that that dosing on the second arm, second loading dose, we think will eliminate any nervousness about very early rescue. So we really don't have an expectation of early rescues here. We have an expectation that the patients are going to do quite well on this regimen, and we're going to see extended duration of treatment.
And just to be very clear, I have no insight into them totally blinded on the data. So I have no idea what's ahead of our expectations are being met or not. So those are my expectations. I don't know whether they're being met, but we'll find out later this year.
John Todaro
Great. Yes, thanks for the clarification on that.
And if I can just follow up real quickly on, do you guys have any color on how the experience is performing so far regarding volume and sales is IPR?
George Lasezkay
Yes, Charlie, I'll let you handle that one, if you want to.
Charles Deignan
Yes, sell lots again, as we talked previously, until Bausch analysis sales, while we can't get ahead of them. If you remember the first $45 million in sales from Xi, Pierre, that's excluded from royalties. So until until they get past that $45 million now we we don't have any revenues to report yet.
John Todaro
Great. Thank you.
Operator
Thank you. And at this time, I would now like to turn the call back to Clearside's CEO, George Lasezkay, for closing remarks.
George Lasezkay
Yes, I'm sorry, I was on mute for me. Okay. Well, I want to thank everybody for joining us on the call this afternoon.
We certainly appreciate your continued interest in Clearside, and we look forward to updating you on our progress. Operator, you may now discontinue.
Operator
Thank you. This does conclude today's conference. You may disconnect your lines at this time and have a wonderful day and thank you for your participation.
