Q3 2019 Earnings Call

Greetings and welcome to the Clearside Biomedical third quarter 2019 financial results and corporate update conference call. As a reminder, this conference call as being recorded I would love to introduce your host Jenny Kobin beside Investor Relations. Please go ahead.

Operator: Welcome to the Clearside Biomedical 3rd Quarter 2019 Financial Results and Corporate Update Conference Call. As a reminder, this conference call is being recorded. I would now like to introduce your host, Jenny Kobin, Clearside Investor Relations. Please go ahead.

Jenny R. 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 may 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, 2018, our quarterly report on Form 10-Q for the quarter ended June 30, 2019, 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 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.

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 may 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 factor section of our interim report on Form 10-K for the year ended December 31st 2018, our quarterly report on Form 10-Q for the quarter ended June Thirtyth 20.

19, 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.

Jenny R. Kobin: On today's call, George Lasezkay, our Chief Executive Officer and a member of the Board of Directors, will provide a strategic update. Dr. Thomas Chula, our Chief Medical Officer, will provide R&D highlights, and Charlie Deignan, our Chief Financial Officer, will provide a financial summary. We will then open the call for your questions. Brian Raymond, our Chief Commercial Officer, is also with us today and is available for Q&A. I would now like to turn the call over to George.

On today's call George was ASCII, our Chief Executive Officer, and member of the Board of Directors will provide a strategic update Dr. Thomas Tula, Our Chief Medical Officer will provide R&D highlights and Charlie Dine in our Chief Financial Officer will provide a financial summary, we we'll then open the call for your questions Brian rain.

In our Chief commercial officer is also with US today and available for Q anyway, I would now like to turn the call over to George.

George M. Lasezkay: Thank you, Jenny. Good afternoon, everyone, and thank you for joining us on the call today. I'm pleased to report that we have made meaningful progress on our overall corporate strategy to broaden the reach of our supercoroidal space injection platform. A component of this strategic plan is the establishment of key external collaborations. Over the last three months, we have secured three significant partnerships that validate and will potentially expand the reach of our supercorroidal injection platform. Two weeks ago, we announced that Bausch Health and its ophthalmic division, Bausch & Lomb, acquired an exclusive license for the commercialization and development of Xipir in the United States and Canada. As a reminder, Xipir is our proprietary suspension of Triamcinolone administered supercoroidally with our SCS microinjector for the treatment of macular edema associated with uveitis.

Thank you Johnny Good afternoon, everyone and thank you for joining us on the call today.

I'm pleased to report that we have made meaningful progress on our overall corporate strategy to broaden the reach of our super cooler in space injection platform.

A component of this strategic plan is the establishment of key external collaborations.

Over the last three months, we have secured three significant partnerships that validate and will potentially expand the reach of our super choroidal injection platform.

Two weeks ago, we announced that Bausch health and its ophthalmic Division Bausch and Lomb acquired an exclusive license for the commercialization and development of zipper here in the United States in Canada.

As a reminder, is IP or is our proprietary suspension of try and sent alone administered Super core, Italy, with our SCS micro injector for the treatment of macular edema associated with uveitis.

George M. Lasezkay: We are thrilled to have License IPIRT as such a high-quality organization with a well-established and well-regarded presence in the ophthalmology community. Bausch has the right to pursue development and commercialization of Xypyr for additional ophthalmic indications, and they also have the right to develop and commercialize our proprietary SCS microinjector in combination with certain other specified corticosteroids and nonsteroidal anti-inflammatory drugs Licensing Xypyr to Bausch has achieved our primary corporate goal of finding a partner with an experienced ophthalmic sales force that can bring Xypyr to market more efficiently and cost effectively if approved.

We are thrilled to have license I appeared to such a high quality organization with a well established and well regarded presence in the ophthalmology community.

Now she has the right to pursue development and commercialization UBS I fear for additional ophthalmic indications and they also have the right to develop and commercialize our proprietary SCS micro injector in combination with certain other specified corticosteroids and nonsteroidal anti inflammatory drugs in the field of ophthalmology.

Okay.

[noise] Licensings I peer to Bausch has achieved our primary corporate goal of finding a partner with an experienced ophthalmic salesforce that can bring side pure to market more efficiently and cost effectively if approved.

George M. Lasezkay: They also have the resources to potentially develop additional indications for Zypyr. We believe this is a win for patience and for Bausch and also a win for Clearside as validation of the potential benefits of our proprietary method of accessing the supercoroidal space. Also regarding Xipir, as expected, last month we received a complete response letter, or CRL, from the FDA. Consistent with the outcome of the meeting we had with the FDA in August, the agency requested additional stability data on our Triamcinolone suspension. The CRL also included one new request for additional data on clinical use of the final to-be-marketed SES microinjector delivery system. However, importantly, the FDA did not identify any efficacy issues, and there were no requests for further clinical efficacy studies.

They also have the resources to potentially develop additional indications for sipe here.

We believe this is a win for patients and for Bausch and also will win for clear sight as validation of the potential benefits of our proprietary method of accessing.

The Supercross it'll space.

[laughter] also regarding zipper your as expected last month, we received a complete response letter or CRL from the FDA.

Consistent with the outcome of the meeting we had with the FDA in August the agency requested additional stability data on our triumphs in alone suspension.

The CRL also included one new request for additional data on clinical use of the final to be marketed SCS micro injector delivery system.

Importantly, the FDA did not identify any efficacy issues and there were no requests for further clinical efficacy studies.

George M. Lasezkay: We currently believe we can readily address the issues raised by the FDA and resubmit our new drug application in the first quarter of next year. Tom will elaborate on the details of our planned NDA resubmission in his remarks. In September, we announced an option and license agreement with Regenexx Bio for exclusive worldwide rights to our proprietary in-office SCS microinjector for the delivery of adeno-associated viruses, or AAV-based therapeutics, to the suprachoroidal space to treat wet AMD, diabetic retinopathy, and other conditions for which anti-VEGF treatment is currently the standard of care. We are very pleased that Regenexx Bioexercised This is an exciting time for us to collaborate with Regenexx Bio, one of the leaders in the gene therapy field, to evaluate the potential application of our injection platform for AAV ophthalmic gene therapy.

We currently believe we can readily addressed the issues raised by the FDA and resubmit, our new drug application in the first quarter of next year.

Tom will elaborate on the details of our planned in D.A. resubmission in his remarks.

In September we announced an option and license agreement with rejects file for exclusive worldwide rights to our proprietary in office, Mike SCS micro injector for the delivery of and no associated virus or Avi based therapeutics to the Supercross it'll space to treat wet AMD D diabetic retinopathy.

And other conditions for which anti VEGF treatment is currently the standard of care.

We're very pleased that rejects bio exercise their option last week.

This is an exciting time for us to collaborate with rejects bio one of the leaders in gene therapy field to evaluate the potential application of our injection platform for a b ophthalmic gene therapy.

George M. Lasezkay: We believe the delivery of gene therapy through the supracarotid space can potentially provide a targeted, in-office, non-surgical approach to treat patients with challenging retinal conditions. Finally, in July, we announced that Aura Biosciences had licensed our STS microinjector to deliver their proprietary drug candidates into the supracarotid space for the potential treatment of ocular cancers. This is a therapeutic area where there is a significant unmet

We believe the delivery of gene therapy through the supercritical space can potentially provide a targeted in office non surgical approach to treat patients with challenging retinal conditions.

Finally in July we announced that Aura bio sciences licensed our SCS micro injector to deliver their proprietary drug candidates into the supercritical space for the potential treatment of ocular cancers.

This is a therapeutic area, where the there is a significant unmet medical need.

George M. Lasezkay: Based on their recent public comments, we expect Aura to submit an IND amendment and initiate a clinical trial using our SES microinjector in the first half of next year. Meanwhile, our research and development team has also made progress on earlier stage research projects. Our internal initiatives are focused on gene therapy delivery by non-viral DNA nanoparticles, as well as small molecules that may show prolonged duration utilizing the SCS injection platform to address unmet needs in the back-of-the-eye diseases. Based on a fresh analysis of our prior data and recently presented data in the scientific community, we have decided to advance as our next development asset our proprietary suspension of Exitinib for supracaroidal injection, which we refer We are targeting submission of an investigational new drug application in mid-2020.

Based on their recent public comments, we expect or to submit an eye in the amendment and initiate a clinical trial using our SCS micro injector in the first half of next year.

Our research and development team has also made progress on earlier stage research projects.

Our internal initiatives are focused on gene therapy delivery by non viral DNA nanoparticles as well as small molecules that may show prolong duration utilizing the SCS injection platform to address unmet needs in the back of the eye diseases.

Based on a fresh analysis of our prior data and recently presented data in the scientific community. We have decided to advance as our next development asset our proprietary suspension of exited the for Super Choroidal injection, which we referred to as C. L S and X.

We are targeting submission of an investigational new drug application in mid 2020.

George M. Lasezkay: Tom will discuss this latest development in more detail in his remarks. The strategic shift that we embarked on earlier this year has benefited Clearside in a number of ways. We have eliminated the inherent risks and financial investment related to building and maintaining a commercial infrastructure for Xipir ourselves while retaining a significant financial upside in its potential commercial success. Our recent collaborations have validated our investment in suprachoroidal delivery using our SCS microinjector. And as a result, we have expanded our overall internal and collaborative product development pipeline to include both gene therapy and small molecule opportunities, targeting a broad range of additional potential ophthalmic indications beyond uveitis to include choroidal melanoma, wet AMD, and diabetic retinopathy. We are entitled now to receive $7 million of non-diluted capital in up-front payments this year. And finally, we are eligible to receive over $200 million in potential future development and sales milestones and have the opportunity to receive additional sales royalties from all three partnering deals, which may be used to continue to fund our internal R&D pipeline project. I will now turn over the call to Tom Chula, our Chief Medical Officer.

Tom will discuss this latest development in more detail in his remarks.

The strategic shifts that we embarked on earlier this year has meant to fight it benefited clear side and a number of ways.

We have eliminated the inherent risks and financial investment related to building and maintaining a commercial infrastructure for zeit pure ourselves, while retaining a significant financial upside and its potential commercial success.

Our recent collaborations have validated our investment in supercritical delivery using our SCS micro injector and as a result, we've expanded our overall internal and collaborative product development pipeline to include both gene therapy, and small molecule opportunities targeting a broad range of additional potential up sell me.

Indications beyond uveitis to include coil melanoma, with a empty and diabetic retinopathy.

We are entitled now to receive $7 million of non dilutive capital in upfront payments this year.

And finally, we are eligible to receive over 200 million potential future development and sales milestones and have the opportunity to receive additional sales royalties from all three partnering deals which may be used to continue to fund our internal R&D pipeline projects.

I'll now turn over the call to Tom Ciulla, our Chief Medical Officer.

Tom Chula: Thank you, George. This afternoon, I'll provide a summary of clinical and scientific information related to our XiPEER NDA resubmission, our Regenexx biopartnership, and our internal R&D progress. As background on the site here, it's helpful to understand the delivery approach. Supercoronal Injection is a novel drug dispensing method that employs proprietary piston syringes and a 30-gauge needle about one millimeter in length. The supracorridor injection procedure allows drugs to be administered into the transition region between the choroid and the sclera, called the supracorridor space. Superchoroidal injection provides almost direct drug access to the retina, the retinal pigment epithelial cells, and the choroids. Over the course of the development lifecycle for Xypyr, Clearside made quality enhancements to the drug product manufacturing process. While the formulation of the triacymalonacetonide suspension has not changed, the FDA wants to verify the stability profile between the batches we submitted and the intended commercial product to ensure that the process enhancements have not affected the drug product. During our meeting with the FDA in August, the agency provided clear guidance on the Chemistry, Manufacturing, and Controls, or CMC, data to be included in the NDA resubmission. We've been working closely with our contract manufacturer to produce the required material and to obtain the requested stability data.

Thank you George this afternoon I'll provide a summary of the clinical and scientific information related to our design appear NT Resubmission rejects bio partnership and our internal R&D progress.

As background onsite peers, how people understand the delivery approach.

Super Cotwo injection, there's a novel drug dispensing approach that employs proprietary piston Syrians and if there any gauge needle about one millimeter anyway.

The supercritical injection procedure allows drugs to be administered into the transition region between the quarterly and the scleroderma called the Super coil space.

Super Curdle injection provides almost direct drug access to the retina retinal pigment appealed the cells and the Corey.

Over the course of the development lifecycle for his IP or Clearside made quality enhancements to the drug product manufacturing process, while the formulation of the try and similar to see nice suspension has not changed the FDA wants to verify the stability profile between the batches resubmitted and the intended commercial product to ensure that.

The process enhancements have not affected the drug product.

During our meeting with the FDA in August the agency provided clear guidance on the chemistry manufacturing and controls or CMC data to be included in the end da Resubmission.

We've been working closely with our contract manufacturer to produce the required material into obtained the requested stability data.

The CRL also included the request for additional data on clinical use of the final to be marketed SCS, Michael injector delivery system.

Tom Chula: The CRL also included a request for additional data on clinical use of the final to be marketed SCS microinjector delivery system. We currently expect that this device use assessment will be conducted by at least three physicians and 30 patients, per the FDA's recommendation. We believe that this type of assessment can be conducted in a quick and streamlined way with clinicians who have worked with us before and who are experienced in using the device.

We currently expect that this device use assessment will be conducted by at least three physicians and 30 patients per the fdx recommendation.

We believe that this type of assessment can be to can be conducted in a quick and streamlined approach with can this clinicians who have worked at this before and who are experiencing using the device.

Tom Chula: Currently, over 1,000 supracortial injections of Zypyr have been performed across multiple clinical studies and multiple diseases without any significant adverse events related to the injector. And, as George mentioned, in the CRL, the FDA did not identify any efficacy issues, and there were no requests for further clinical efficacy studies. We remain confident in the results of our clinical trials and the potential future approval of XiPIR. Our CMC clinical and regulatory teams are working diligently to satisfy these requests in the CRL, and we expect to have a formal meeting with the FDA before the end of the year to discuss our plans for this device assessment. Once we confirm our plans with the agency, we will prepare for and generate the requested data, and we expect to resubmit the NDA in the first quarter of next year.

Currently over 1000 supercritical injections at site here have been performed across multiple clinical studies and multiple diseases without any significant adverse events related to the injector and as George mentioned in the CRL. The updated not identify any efficacy issues and there were no request for further clinical efficacy studies.

Yes.

We remain confident in the results of our clinical trials and the potential future approval of sites here.

Our CMC clinical and regulatory teams are working diligently to satisfy these requests in the CRL and we expect to have a formal meeting with the FDA before the end of the year to discuss our plans for this device assessment.

Once we confirm our plans with the agency, we will compare for in generate the requested data and expect to resubmit. The NDA in the first quarter next year.

Tom Chula: We believe the FDA will review the NDA resubmission within six months of the receipt date. Next, our partnership with GenX Bio further validates our supercortical approach and the potential benefit in the growing gene therapy field. Dr. Peter Camperchero's team at Johns Hopkins recently demonstrated in preclinical studies that AAV8-vectored supercoital gene transfer can produce widespread oculotransgene expression in several species. Compared to subretinal injection in rats, supracaroidal administration of Regenexx Bio's asset, RGX314, resulted in similar expression of anti-VEGF therapeutic protein and similar suppression of VEGF- Likewise, our own preclinical studies of non-viral DNA nanoparticle gene therapy showed similar activities of a marker gene when administered subretinally or supracarotally. We're excited to have the opportunity to collaborate with Regenexx Bio to evaluate the application of our proprietary SVS microinjector for AAV gene therapy with the hope of offering patients non-surgical, in-office access to one-time gene therapy treatment.

We believe the FDA will review the end da Resubmission within six months or the receipt date.

Next our partnership with Genex bio further validates our supercritical approach and the potential benefit and the growing gene therapy field.

Dr., Peter Camper Taros team at Johns Hopkins recently demonstrated in preclinical studies that 88, Vectored supercritical gene transfer can produce widespread articulate trans gene expression in several species.

Compared to sub retinal injection in rents Super Kurilla administration of rejects Bios asset Archie X. We won four resulted in similar expressions of anti VEGF therapeutic protein and similar suppression of debt, Jeff induce vascular leakage.

Likewise, our own preclinical studies of non viral DNA nanoparticle gene therapy showed similar activities of a marker gene when administered sub certainly or suprachoroidal.

We're excited to have.

The opportunity to collaborate with Virgin expire to evaluate the application of our proprietary SCS micro injector for Avi gene therapy with the hope of offering patients nonsurgical in office access to onetime gene therapy treatment.

Internally our discovery in R&D efforts have been primarily focused on performing nonclinical experiments around gene therapy, and small molecules. We are leveraging our learnings from this IP development program, which demonstrated that supercritical delivery of small molecule drugs suspensions can target effective Corey retinal.

Tom Chula: Internally, our discovery and R&D efforts have been primarily focused on performing non-clinical experiments around gene therapy in small molecules. We are leveraging our learnings from the Xipir Development Program, which demonstrated that superchoroidal delivery of small molecule drug suspensions can target affected chororetinal tissues with potential for enhanced clinical efficacy and prolonged durability. As part of our strategic shift, we have reviewed our internal assets to determine how we should proceed now that XiPIR has been successfully partnered.

Things with potential for enhanced clinical efficacy and prolonged durability.

As part of our strategic shift we've reviewed our internal assets to determine how we should proceed now that its IPO has been successfully partner.

Tom Chula: After careful evaluation of our prior work and recently presented data in the scientific community, we have determined that our suspension of excitinib for supracortyl injection, CLSAX, represents a very compelling opportunity. With current wet AMD therapy, there is a ceiling of efficacy, as increased dosage or more intense regimens yield no additional visual benefit. Nixitinib is currently approved to treat renal cell cancer, and with its broad VEGF blockade, it may have efficacy advantages over existing retinal therapies, which predominantly focus on VEGF blockade and may upregulate other forms of VEGF. Exitinib achieves pan-VEGF blockade by acting at a different level in the angiogenesis cascade, directly inhibiting VEGF receptors 1, Exitinib has been shown to effectively inhibit corneal, retinal, and choroidal antigenesis in multiple animal models by independent investigators.

After careful evaluation of our prior work and recently presented data and the scientific community. We have determined that our suspension of X sitting in for supercritical injection CLS Eightx represents a very compelling opportunity.

With current Whitney empty therapy, Theres, a ceiling of efficacy as increased dosage or more intense regimens yield no additional visual benefit.

Thanks. It never is currently approved to treat renal cell cancer and what it's broad that Jeff blockade. It may have Esa efficacy advantages over existing retinal therapies, which predominantly focused on that Jeff blockade and make up regulate other forms of digests.

Exit and have achieved 10, VEGF blockade by acting at a different level of the entry Genesis Cascade directly inhibiting VEGF receptor is one two and three with high potency and high specificity.

Thanks, It never has been shown to effectively inhibit corneal retinal incremental into Genesis and multiple animal models, but independent investigators.

Tom Chula: In one of these studies, excitinib was shown to more effectively inhibit experimental corneal neovascularization than other tyrosine kinase receptor inhibitors. In another study, it showed better biocompatibility with ocular cells than other tyrosine kinase inhibitors. In addition, current wet AMD therapy is associated with a very significant treatment burden. Real-world patients are undertreated, receiving only six to seven injections in the first year and only improving by one to three letters.

In one of these studies exit nibble shown to more effectively inhibit experimental Cornell neovascularization than other tyrosine kinase receptor inhibitors in another study, except NIPT showed better bio compatibility with argued ourselves than other tyrosine kinase inhibitors.

In addition, current whether Andy therapy is associated with a very significant treatment burden real world patients are under treated receiving only six to seven injections in the first year and only improving by one to three letters.

Charles A. Deignan: Given the durability of small-molecule suspensions in the supracordial space, we have assessed the potential of a proprietary suspension of exitinib for supracordial injection as a long-acting therapy for wet AMD in multiple species. These preclinical studies demonstrated reduced growth of experimental neovascularization with decreased fluorescein leakage, as well as durable drug levels via supracortial administration, supporting exsitinib's potential to Based on preclinical data, we believe that supercoital injection of a proprietary suspension of Exitinib has meaningful potential. First, Excentinib demonstrates intrinsic high potency and achieves pan-VEGF inhibition through receptor blockade. Second, preclinical results from Clearside and outside investigators show pharmacodynamic effects with reduced growth of experimental neovascularization and decreased fluorescein leakage. And third, supracortial administration of exfitinib can potentially achieve prolonged duration and targeted delivery to affected tissue layers.

Given the durability of small molecule suspensions and the supercritical space, we've assessed the potential of our proprietary suspension of Ics sitting in for supercritical injection as a long acting therapy for wedding empty in multiple species.

These preclinical studies have demonstrated reduced growth of experimental neovascularization with decrease worsening leakage as well as durable drug levels via supercritical administration supporting exit nims potential to address current treatment burden.

Based on preclinical data, we believe that supercritical injection that nonproprietary suspension of accident it has meaningful potential.

First incentives demonstrates intrinsic high potency and achieve Penn said, Jeff inhibition through receptor blockade.

Second preclinical results from Clearsight, an outside investigators show Pharmacodynamic effect with reduced growth with reduced growth of experimental Neovascularization and decrease foreseen leakage.

And third Super quarterly administration of exiting it can potentially achieve per long duration and targeted delivery to affected tissue layers.

Charles A. Deignan: Based on this data, we are working to submit an IND application for CLS-AX in mid-2020. Over the last several months, we have worked with prominent physicians to deliver over ten data presentations at key medical congresses, including the American Academy of Ophthalmology (AAO). These presentations, combined with our recent partnerships with Oro Biosciences and Regenexx Bio, have significantly expanded our presence into additional therapeutic areas, including ocular oncology, wet AMD, and diabetic retinopathy. We remain very encouraged by the support from the medical community and their enhanced understanding of the value of our supracaroidal treatment approach. With that, I will now turn the call over to our CFO, Charlie Deignan, to review our financial results.

Based on this data we are working to submit an eye NT application for CLS X in mid 2020.

Over the last several months, we have worked with prominent physicians to deliver over 10 data presentations at key medical Congresses, including the American Academy of Ophthalmology, or a Oh annual meeting.

These presentations combined with our recent partnerships with autopilot Sciences Energenic style has significantly expanded our presence into additional therapeutic areas, including occupying colleges.

Wedding empty and diabetic retinopathy.

We remain very encouraged by the support from the medical community and the or enhance understanding of the value of our supercritical treatment approach.

With that ill now turn the call over to our CFO , Charlie Degnan to review our financial results. Charlie. Thank you. Thank you Tom I would like to provide a summary of key financial developments general and administrative expenses were $3.8 million for the quarter ended September Thirtyth 2019, compared to 3.9 million for the quarter ended.

Charles A. Deignan: Thank you, Tom. I would like to provide a summary of key financial developments. General and administrative expenses were $3.8 million for the quarter ended September 30th, 2019 compared to $3.9 million for the quarter ended September 30th, 2018. Research and development expenses for the quarter ended September 30th, 2019 were $2.7 million compared to $20.1 million for the quarter ended September 30th, 2018. We expect R&D expenses to increase over the next several quarters as we complete the work to resubmit our NDA for ZYPIR and submit an IND for CLSAX. As of September 30th, 2019, our cash and cash equivalents totaled $22.6 million. As we disclosed in our 8K filing last month, in conjunction with our Xypire licensing deal, we amended our loan agreement with Silicon Valley Bank, repaid $5 million of the outstanding principal balance, and extended the period of interest-only payments up to an additional year.

September Thirtyth 2018.

Research and development expenses for the quarter ended September Thirtyth 2019 were $2.7 million compared to 20.1 million for the quarter ended September Thirtyth 2018.

We expect R&D expenses to increase over the next several quarters as we complete the work to resubmit R&D present pier and submitting 90 per CLS acts.

As of September Thirtyth, 2019, our cash and cash equivalents totaled $22.6 million as we discuss disclosed in our 8-K filing last month in conjunction with areas I pure licensing deal we amended our loan agreement with Silicon Valley Bank repaid 5 million of the outstanding principal balance and extended the period of interest.

The only payments up to an additional year.

Based on this debt repayment upfront licensing payments and our planned increase in R&D expenses, we expect that our existing cash and cash equivalents will enable us to fund our operating expenses into the third quarter of 2020.

This does not include any additional partnership related payments that we may gain from the achievement of development milestones.

We look forward to ongoing we look forward to ongoing engagement with the investment community at upcoming events, including the Stifel Healthcare Conference.

Charles A. Deignan: Based on this debt repayment, upfront licensing payments, and our planned increase in R&D expenses, we expect that our existing cash and cash equivalents will enable us to fund our operating expenses into the third quarter of 2020. This does not include any additional partnership-related payments that we may gain from the achievement of development milestones. We look forward to ongoing engagement with the investment community at upcoming events, including the Steeple Healthcare Conference. Now, I am pleased to turn the call back over to George for his closing remarks.

Now I am pleased to turn the call back over to George for his closing remarks.

Thank you Charlie.

It was a productive quarter for clear side, and we are proud to align ourselves with some of the leaders in the ophthalmology space.

We expect to satisfy satisfy the requests from the FDA and resubmit, our zipper year end da and the first quarter of next year.

We're also excited to submit a new I Andy for accident.

And continue to expand our internal development pipeline.

We appreciate the support of our shareholders over the last year and look forward to making additional progress.

George M. Lasezkay: Thank you, Charlie. It was a productive quarter for Clearside, and we are proud to align ourselves with some of the leaders in the ophthalmology space. We expect to satisfy the requests from the FDA and resubmit our Xipir NDA in the first quarter of next year. We are also excited to submit a new IND for Exitinib and continue to expand our internal development pipeline. We appreciate the support of our shareholders over the last year and look forward to making additional progress. I would now like to ask the operator to open the call to questions.

I would now like to ask the operator to open the call up for questions.

Ladies and gentlemen, if you have a question at this time. Please press Star then the number one can argue I touched on telephone is good question has been answered you wish to remove yourself from the Q.

The town key.

We do have a first question from the line of Liana Moussatos from Wedbush. Your line is open.

Thank you for taking my question and congratulations on all your progress.

So I remember.

Covering clear side for a while that exit.

Operator: Ladies and gentlemen, if you have a question at this time, please press the star and then the number one key on your touchtone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key. We do have our first question from the line of Liana Mosadas from Westbush. Your line is open.

Part of the pipeline.

A couple of years ago and.

In 2017, it was discontinued because competition sales so.

Happens sense and that makes you so confident about your current formulation.

I Liana this is George and I will start now I'll tell you have Tom chime in.

Liana Mosadas: Thank you for taking my questions, and congratulations on all your progress. So, I remember from covering Clearside for a while that Exit Nib was part of a pipeline a couple years ago. In, I don't know, 2017, it was discontinued because competition failed. So, what has happened since then that makes you so confident about your current formulation?

But in the past the you're correct that accident at was part of the pipeline several years ago and the work on it was put on hold.

The company at that time had limited R&D resources and it was singularly focused at that time on expanding the indications for zipper here.

George M. Lasezkay: Ileana, this is George, and I'll start, and then I'll have Tom chime in. But in the past, you're correct that Exidineb was part of the pipeline several years ago, and the work on it was put on hold. The company at that time had limited R&D resources, and it was singularly focused at that time on expanding the indications for Zyper. So this summer, we started a review internally, and it makes sense to review your internal assets or any assets periodically from time to time as science progresses and new data comes out. And based on our recent assessment of both what we did internally and what we've seen in the scientific community, we think that Exitinib used in the supercorridor space really offers us an exciting development opportunity with a large market and a high unmet need, as Tom explained. And I'll have Tom chime in and contribute more detail on, again, the rationale for making this move back to Exitinib and taking it forward and filing the IND.

So when this summer we started the review internally.

And it makes sense to review your your internal assets or any assets periodically from time to time as the science progresses and new data comes out.

And based on our recent assessment of both what we had done internally and what we've seen in the scientific community. We think that exceeded the used in the supercritical space really offers us an exciting development opportunity.

The large market in a high unmet need as Tom explained and I'll have Tom.

I'm in and contribute more detail on again, the rationale for making this move back to.

So the new and taking your forward and filing the R&D.

Thanks George.

I've worked with our team to take a fresh look at our prior data as well as preclinical data from scientific researchers in the ophthalmology community.

Tom Chula: Thanks, George. So, I've worked with our team to take a fresh look at our prior data, as well as preclinical data from scientific researchers in the ophthalmology community. What do you believe is evidence of potential treatment advantages using this therapy? Exsitinib demonstrates intrinsic high potency and achieves pan-VEGF inhibition through receptor blockade and therefore may have efficacy advantages over existing therapies. We also know that in preclinical work done by independent investigators, exsitinib has shown promising results in numerous ocular models. We also believe that recent data on VEGF regulation indicates that there may be improved outcomes with broad VEGF blockades. And our own preclinical data has demonstrated durable drug levels, as well as efficacy in preclinical models. So we believe we have one of the most potent tyrosine kinase inhibitors, and when we combine it with supracortyl delivery, we can target the drug at the location of the disease while achieving durable drug levels. Ultimately, we believe that Xitinib in supracortial suspension can reduce treatment burden and might even improve visual outcomes over current therapies, which predominantly focus on DGF blockade or DGF-A blockade, not broad DGF blockade through DGF receptor inhibition.

We believe is evidenced potential treatment of damages using this therapy.

Demonstrates in transit high potency that she's handsets with an addition to receptor blockade. Therefore may have efficacy advantages over existing therapies.

We also know that in preclinical work done by independent investigators.

As shown promising results and numerous aren't going to models.

We also believe that recent data on that Jeff regulation indicates that there may be improved outcomes with broad that Jeff blockade.

And our own preclinical data has demonstrated durable drug levels.

As well as efficacy in preclinical models. So we believe we have one of the most potent tyrosine kinase inhibitors and when we combine it with supercritical delivery, we can target the drug at the location of the disease, while achieving durable drug levels. Ultimately, we believe that exiting in super curdle suspension can reduce treatment burden and might even improve.

Visual outcomes over current therapies, which predominately focus on digest blockade, let's say just a blockade not broad Jeff blockade prove that Jeff receptor in a vision.

Any comments on the competition.

In past years venture question.

Right.

Operator: Any comments on the competition problems two or three years ago?

It was discontinued.

Operator: in the past years? Is that your question?

2017 press release.

Operator: Right, the reason why it was discontinued and this was a February 2017 press release was that it was mentioned because competition had failed. That sounds good, but do you have any insight right now or maybe we can follow up later on why, you know, you guys look like you could succeed where the competition failed?

You mentioned as competition had failed.

Okay.

Sounds good bye.

You have any insight right now where maybe we can follow up later on.

Hi.

You guys look like it could succeed where the competition.

Tom Chula: I'm glad you asked that question. That's a good question.

I'm glad you asked that question that's a good question.

Tom Chula: So the past trials you're referring to involve platelet-derived growth factor inhibitors added to VEGF-A therapy, and the company was looking at that as a combination therapy. But basically, I think it's not a perfect analogy. With a fresh look, we can see that we can completely inhibit VEGF. We achieve broad VEGF inhibition. Current therapies, as you know, focus on VEGF-A inhibition. And there are now some reports suggesting that when you inhibit VEGF-A, you have an upregulation of other members of the VEGF family. And that's been shown both in AMD patients and also in metastatic cancer patients. So when you have up-regulation of these other factors, that could potentially lead to treatment resistance and insufficient response. So while that analogy was made a couple years ago, I don't think it's a perfect analogy.

So the past trials you were referring to.

Involve platelet derived growth factor inhibitors added to that Jeff Thiede therapy.

And the company was looking that as combination therapy.

But basically I think it's not the perfect analogy.

What we have with a fresh look we can see that we can completely inhibit.

Jeff we achieve broad that Jeff. In addition, current therapies as you know focus on debt, Jeff a inhibition.

And there is now some reports, suggesting that when you inhibit that Jeff a you have up regulation of other members of the Digest family and that's been shown both and Andy patients and also in metastatic cancer patients. So when you have upregulation of these other factors that could potentially.

Lead to treatment resistance and insufficient response, so so while.

That analogy was made a couple of years ago I don't think it's a perfect analogy I think it's more about.

Tom Chula: I think it's more about VEGF inhibition or broad VEGF blockade. And there's also some early clinical data suggesting that that may actually achieve better visual outcomes in AMD patients. So we're very excited about the prospect, not only because we can achieve broad VEGF blockade, but we can also target the supracortial space, achieve high levels at the affected tissue levels, and also achieve durable drug levels.

And Jeff inhibition of abroad that Jeff blockade.

Also some clinical early clinical data, suggesting that that they actually achieve better visual outcomes in AML patients. So we're very excited about the prospect not only.

Because we can achieve broad that Jeff block cave, what we can also target suprachoroidal space achieved high levels at the effect the tissue level layers and also achieve durable drug levels.

Operator: Sounds good? Thank you. Again, ladies and gentlemen, if you have a question at this time...

Okay.

Okay.

Again, ladies and gentlemen, if you have a question at this time. Please press the star and then the number one key on your Touchstone, California.

Operator: Again, ladies and gentlemen, if you have a question at this time, please press the star and then the number one key on your touchtone telephone.

No.

Okay.

We do have a follow up question from Liana Moussatos from Wedbush.

Operator: and others. Thank you. Thank you.

Liana Mosadas: We do have a follow-up question from Leanna Mosadas from Redbush. Your line is open.

Your line is open.

Liana Mosadas: Now I have a couple questions for Charlie. So will operations in Q4 look as you see, and will 2020 be higher than 2019? And do you anticipate an increase in collaboration revenue in Q4 or in 2020 over Q3?

And I have a.

A couple of question for Charlie.

Operator.

Q4.

The higher than 29.

And.

Eight an increase in collaboration revenue in Q.

20 over Q3.

Charles A. Deignan: You broke up a little bit on me. I think I heard you ask if R&D is going to go up. Did I hear right?

Hi, you broke up a little bit I mean, I think I heard you ask him.

R&D is going to go up and I here.

Charles A. Deignan: Yeah, so as I said earlier, we have some R&D costs related to wrapping up our NDA resubmission, so it will creep up, but not significantly. And, you know, as I said, we have guidance that says our current cash takes us into Q3 next year, so you can kind of do the math on the burn there. R&D, I think I heard revenue. So we have, you know, we signed these two deals. The Bausch deal came in, and then the Regenexx option. I can't tell you today the proper accounting for all of that. We're still doing our research, but the rules have changed. It's a little more complex on how you record those kind of revenues, but we will have received the cash this year.

Yes, so as I said every well we have some.

R&D costs related to.

Wrapping up our NDA resubmission, so it will creep up not significantly and.

So you know as I said, we have guidance that says our current cash takes us into.

Q3 next year. So you can kind of do the math on the burn there.

R&D I think I heard revenue.

So we have.

We signed these two deals about deal came in and then never Genex option I can't tell you today the proper accounting of that we're still doing our research and the the rules of changes will more complex on how you record those kind of revenues, but we will have received the cash.

This year.

Charles A. Deignan: Okay, and do you anticipate collaboration revenue to go up in 2020 over what we have seen this year so far?

Okay and.

Hey collaboration revenue to go up in 2020 over what we saw this year so far.

Charles A. Deignan: Well, you know, the Bosch deals we announced with $20 million total in upfronts, five at signing, and then the other 15 come in around approval.

Well, yes.

Last yields we announced.

What's 20 million total in.

On slide five that signing and then the other 15 comes in around approval.

Okay.

Charles A. Deignan: All right, thank you.

Alright, thank you.

I'm showing no further questions at this time I'm, turning now to call back to Dr. George.

Operator: I am showing no further questions at this time. I am turning now to call back to Dr. George Lasezkay.

Thank you once again for joining us on the call. This afternoon. We appreciate your continued interest in clear side and we look forward to updating you on our progress.

George M. Lasezkay: Thank you once again for joining us on the call this afternoon. We appreciate your continued interest in Clearside, and we look forward to updating you on our progress. Operator, you may now disconnect. Ladies and gentlemen, the secret...

Operator, you may now disconnect.

Operator: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. Have a wonderful day.

Ladies and gentlemen. This concludes today's conference call. Thank you for your participation have a wonderful day.

Operator: www.cdc.gov.au BF-WATCH TV 2021

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