Q2 2022 Clearside Biomedical Inc Earnings Call
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Good day and thank you for standing by. Welcome to the Clear Side Biomedical Q2 2022 Financial Results and Corporate Update call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. Please be advised that today's conference is being recorded.
I would now like to hand the conference over to your speaker today, Janet Kolben, Clear Side Investor Relations. Please go ahead.
Good morning, 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. Control 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, 2021, 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 Lizeski, our Chief Executive Officer, Dr. Thomas Chula, our Chief Medical Officer and Chief Development Officer, and Charlie Dugnan, 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.
Thank you, Jenny.
Over the last three months we've made significant progress on multiple fronts.
With the approval of Xypir, the advancement of CLSAX.
broader use of our SCS microinjector with select partners.
We've created a new paradigm in retinal drug delivery.
On the clinical operations side, we achieved a significant milestone by successfully completing dosing in OASIS.
Our CLSA at phase one to a clinical trial.
CLSAX combines the Pan-Vegek inhibition from the highly potent TKI Exidinib
with targeted delivery to the affected chorioretinal tissues utilizing our proprietary SCS microinjector.
OASIS is a single dose escalation trial. In May, we announced that we were able to accelerate initiation of cohort 4 as a result of the positive safety data reviewed by the Safety Monitoring Committee.
And we recently announced we have now completed enrollment in both cohorts 3 and 4, with a total enrollment of 27 patients for all four cohorts.
We expect to report our final three-month OASIS safety and tolerability data from all four cohorts in November of this year.
We believe that this comprehensive data set will provide more insight into the potential benefits of CLSAX injected supercaroidally.
To further assist our planned clinical activities for CLS-AX, we announced in June the appointment of Susan Coltis as our Chief Clinical Officer.
Susan joins us with extensive operational experience and responsibility for advancing ophthalmic trials from early clinical stages through approval.
Tom, as Chief Medical Officer and Chief Development Officer, continues to have overall management responsibility for the ClearSide product pipeline and clinical development strategy, including all clinical trial design.
We are excited to now have Susan on board to assume responsibility for clinical operational planning and to provide management oversight of the execution of our future clinical trials.
Yesterday, we announced that we entered into a royalty interest purchase and sale agreement with healthcare royalty partners, primarily to support the funding of our plan. C. S. A. X phase 2 clinical trial.
This transaction was achievable because of the successful US FDA approval of our first commercial product, Xypir.
and the subsequent commercial launch of the product by our partner, Pao Xian Lam.
The opportunity to obtain meaningful non-diluted capital by leveraging future royalties from Zypyr and certain SES microinjector license agreements.
provides us financial flexibility during this volatile market environment.
We completed this financing now because the funds will assist us in advancing CLS-AX should the final data readout from OASIS-B support them.
If it is, this will position us to initiate activities by the end of this year for our phase two trial and enable us to begin enrolling patients soon thereafter.
Charlie will discuss the details of the financing transaction shortly.
We'll now turn the call over to Dr. Tom Chula to elaborate on our OASIS study and recent progress made by our partners.
Thank you, George, and good morning, everyone.
Starting with our lead program, CLSAX, I'm thrilled to discuss the tremendous progress CLSAX has made over the last three months as we complete enrollment in OASIS.
With the growing awareness of supracoratal delivery and increased interest in our trial, we were able to complete enrollment of OASIS with a total of 27 patients.
Last month we completed dosing in cohorts 3 and 4 of OASIS with 8 patients in each arm.
Cohort 3 patients receive a dose of one half milligram and cohort 4 patients receive a doubling of that dose to one milligram.
This final cohort four dose is 33-fold greater than our starting dose of 0.03 milligrams.
The completion of enrollment in OASIS is a critical milestone for the company.
I'm extremely grateful to the investigators, patients, and our team whose time and commitment made this possible.
As a reminder, OASIS is the first in human safety study. The data we have reported in cohorts 1 and 2, as well as the one month initial safety data from cohort 3, received by our safety monitoring committee, have all demonstrated that CLSAX is a human safety study study.
has been well tolerated to date with no dose limiting toxicity.
In OASIS, we set a high standard for patient inclusion.
Our enrollment criteria only allowed treatment experience patients with active disease, as confirmed by an independent reading center.
There is also an ongoing expansion study to follow patients in cohorts 2, 3, and 4 for up to three additional months after completion of OASIS.
We look forward to presenting the individual patient safety and tolerability data from both Cohort 3 and 4, as well as the complete analysis from all four dosing cohorts in November , as this will facilitate our selection of the most appropriate dosing protocol for our Phase 2 trial.
Our development and commercialization partner programs continue to advance as well.
Arctic Vision, our Xycir commercialization partner in Asia, has two clinical programs ongoing. They're currently conducting a phase three trial in patients with macular edema associated with uveitis, and a phase one trial in patients with diabetic macular edema.
In June , Aura Biosciences delivered a presentation at the International Society of Ocular Oncology on their phase 2 trial investigating AU011, a virus-like drug conjugate, delivered via SCS microinjector for the treatment of coronal melanoma.
ORRA has stated that they plan to finalize the decision on the write-up administration for AU011 and initiate their PIVITAL program before the end of the year.
WigenX Bio has also progressed RGX-14, an investigational one-time gene therapy
that utilizes Regenexx Bio's proprietary NAVAAV8 vector to deliver a gene encoding a therapeutic antibody fragment to inhibit VEGF.
Well GenX Bio is currently running two phase two trials evaluating supracoratal delivery of RGX314 via our SES microinjector.
The ADA trial has completed enrollment in cohort 5 for the treatment of wet AMD, and the altitude trial has completed enrollment for the treatment of diabetic retinopathy.
Regenexx Bio plans to present additional supercordal data later this year.
We look forward to further updates on the clinical programs from our partners.
I also want to take a few minutes to talk about the tremendous impact ClearSat has made on the retina community.
Last month at the annual meeting for the American Society of Retina Specialists, it was quite humbling to realize all that we have accomplished with our novel superchordal delivery approach.
Our commercial partner, Bausch & Lomb, had a strong presence, featuring their commercial launch of Xyper, which recently received its permanent J-code. This is an important milestone for a commercial drug, as U.S. physicians use this code for billing and reimbursement to insurers and other payers.
At ASRS, your team provided valuable clinical insights on the product, as well as on its novel use of the supracordal space to help treat patients with macular edema associated with your
With four agents in six clinical trials, the conversation around delivery of drugs into the supracordal space was absolutely extraordinary.
I was delighted to see the growing interest in a proprietary SES microinjector as physicians recognized this as an elegantly simple way to deliver therapeutics into the supracordal states.
The versatility of our office space SCS microinjector allows us to potentially treat peripheral and macular disorders.
as the SCS microinjector expands the supracortis base circumferentially and posteriorly to deliver drugs to the macula.
This occurs since a natural pressure gradient drives injectate toward the lower pressure posterior supracorals space.
In addition to ASRS, we also had a strong presence at the OIS Retina Innovation Summit.
and at ARGO 2022 and ASCRS annual meetings.
Also, awareness of supracoidal delivery is expanding in Asia with support from Arctic Vision, our partner.
Arctic Vision will have presentations at the triple meeting of the World Ophthalmology Congress, the Chinese Ophthalmologic Society, and the Asia Pacific Academy of Ophthalmology, as well as the Congress of the Asia Pacific Viterretinal Society.
To support our outreach and education to the physician community, three papers were published last quarter in peer-reviewed Medline Index journals to support XyPeer and the attributes of supracordal delivery.
We're also pleased that the well-known comprehensive retinal care journal, Retina Physician, published a special edition entitled Supercordial Drug Delivery Technology.
This publication highlights the potential versatility of the supercordal delivery system.
There are six articles that cover summary of SES delivery, biomechanics of SES injector,
flow mechanics of the injectate, the clinical trials leading to the approval of Xypera to treat uveotic macular edema, and potential uses in gene therapy in ocular oncology.
There's a link to the publication on our website and the press release we released today.
With that, I'll now turn the call over to our CFO , Charlie Degnan, to review our financial results.
Charlie?
Thank you, Tom. Our financial results for the second quarter were published this morning in our press release and are available on our website.
Therefore, I will summarize our recent financial transaction and current financial status.
As George mentioned, yesterday we announced that we entered into a royalty financing agreement with healthcare royalty partners. The terms of the agreement break down as follows. In total, we may receive up to $65 million, all of which is non-dilutive funding to clear side.
We will receive an upfront cash payment this month of $32.5 million less certain expenses.
An additional $12.5 million will also be deposited in an escrow count this month to be released to us upon attainment of a pre-specified sales milestone for Xypyr by March 31, 2024.
The terms of the agreement also provides for an additional milestone payment of $20 million to us upon attainment of a second pre-specified 2024 sales milestone for Xypir. In exchange, healthcare royalties will receive $20 million.
royalties and milestone payments due to clear side from Zypyr from certain SES microinjecture license agreements. This includes payments from our current partnerships with Bausch and Wam, Arctic Vision, Regenexx Bio, and Ora Biosciences. In our words, we can. Thank you. Thank you.
Importantly, the arrangement with Healthcare Royalty specifically excludes all of our internally developed assets and programs, including CLSAX, as well as any future in-license assets.
The repayment amount is capped at 2.5, the total payments made by healthcare loyalty.
If certain parameters are not met by the end of 2024, this cap will be increased to 3.4 times the total payments made by healthcare royalty.
Due to confidentiality agreements with our existing partners, we will not be publicly disclosing the sales milestones or other thresholds considered in this agreement.
Our cash and cash equivalents as of June 30, 2022, total $29 million. We expect that the combination of our existing $29 million plus the upfront payment of $32.5 million from the royalty transaction provides us with runway into 2024.
Once we determine our phase two clinical trial plans for CLFAx, we will be able to fine-tune our runway guides.
We have an active investment conference scheduled this month. We will be participating in the BTIG Biotechnology Conference later today, and at the Webb Bush Pack Row Healthcare Conference tomorrow. Later this month, we will also be participating in the ASU Wainwright Ophthalmology Day. We look forward to these interactions and keeping you updated on our progress. I'll turn the call back over to George for his closing remarks.
Thanks, Charlie.
We are building significant momentum leveraging our proprietary supercoroidal space platform technology featuring our SES microinjector.
As a result, we were able to improve our financial resources.
expand our management team, and we have multiple anticipated catalysts related to both our internal CLSAx clinical trial and the clinical programs from our development and commercialization partners.
We remain focused on both developing our own internal pipeline and partnering with other companies with strong interest in retinal diseases where it makes strategic sense for ClearSight.
As I conclude our formal remarks, I'd like to reiterate what Tom said and express my appreciation to our staff, our investigators, and especially to the patients who participated in our OASIS trial.
We look forward to announcing our final OASIS data in November .
I would now like to ask the operator to open the call up for questions.
As a reminder to ask a question, you will need to press TAR 11 on your telephone. You will then hear an automated message advising that your hand is raised.
Please stand by while we compile the Q&A roster.
And your first question comes from the line of Stacy Lee from South Stiful. Your line is open.
Hi, this is Stacey calling for Annabelle. Congrats on a great quarter. Two questions on our end. Do you have any color on reception to Xypier? Bausch and Lomb didn't report anything in terms of sales, but can you provide anything that you're hearing from the field as far as the overall reception, real-world experience, and the ease of adoption for the product and procedure? And then secondly, for CLL AX.
Some of the KOLs that have commented on competing next-gen products that are extended duration envision using these pan and vegev as maintenance therapy after the patient has been stabilized on vegev. Is this the way you are envisioning the project and can you do that with only three month duration versus six or twelve that the others are shooting for? Thank you.
All right, well, thanks for that question. Between Tom and Charlie, do you want to address the Bausch activities with Cyprian?
You guys are close to that. Yeah, I'll go first and then Tom can comment on the no. Yes, all right. All I could say is, you know, Bausch, although they didn't give.
sales numbers and type here. CEO Joe Papa was very positive about his KOL interactions at conferences and it appears to be a lot of them sitting around the product. But as we know they didn't, they had been giving sales estimates. But from my point of view and from our partners, nothing but positive remarks. And Tom was at a conference and heard some things firsthand, I could imagine. So I'll kick it over to Tom.
Sure. The reception for his eye peer has been really fantastic. As we discussed earlier, Bausch and Lomb plans to train all U.S. retina physicians as well as all U.S. uveitis physicians.
And the training program is quite robust. But physicians feel like this program prepares them well. I've received so many unsolicited emails from retina specialists around the country, congratulating ClearSide, complimenting the training program, and I think it's gone really well.
Tom, you might want to address the second part of that question, which was a Pan-VegF question, which was about the quality of the tyrosine kinase inhibitors and use in maintenance.
and our view on duration and use and maintenance.
Sure, so it's a good question.
In terms of these small molecule tyrosine kinase inhibitors.
you know, as
I think the retina community is becoming more and more aware, even for newly approved therapies, especially for the office-based therapies, durability remains limited. And what we found is that small molecule suspensions in the suprachloro space have prolonged durability. We've noted that in our preclinical studies. I think the questioner mentioned that we're shooting for three-month durability, but that's not necessarily the case. Our trial is a three-month trial, but we also have an extension trial.
for a total of six months of follow-up. In terms of these therapies, what we feel is potentially very important is safety because as we've seen with biological and gene therapies, safety has been a concern. We know that excitinib is a well-established small molecule and has less propensity for inflammation than a biologic or a gene therapy. This has been borne out in our cohorts one and two data release. There were no study suspension stopping rules.
no signs of inflammation, no signs of interventional dispersion of the drug or any interocular pressure safety signals. And as we escalate to these higher doses in cohorts three and four, we think that the pan-VEGF inhibitory attributes of excitinib coupled with its high potency, coupled with the supracoridyl targeted delivery to affected cori-renal tissues, has potential for not only durability, but...
significant efficacy. Of course, OASIS is a very small study with small numbers, so we'll be looking at all the data very holistically in terms of retreatment, visual acuity, and anatomic signs.
Amazing.
That was really helpful. Thank you so much.
Your next question comes from the line of Rohit Bazeem from the Edelman Company. Your line is open.
Hi, good morning. This is Rohit on for surge. Thanks for taking my questions. Can you just talk about your confidence level that you'll see the full 65 million, the financing based on the 2024 sales milestone that you discussed? And then post-funding, can you talk about how you prioritize the pipeline and any timelines associated? Thank you.
Charlie, do you want to take the first part and I'll probably take the second part of that there?
Sure, you know, as you know, we said, we.
You know, we can't talk about what the milestones for the other payments, but obviously, you know, we you know, we want to this agreement planning on getting all these these milestones so You know, we feel confident but you know, it's going to be based on the type your sales So, you know, they're not unreasonable Milestones, but you know, I can't really comment or place guarantees on it But you know, we signed this deal fully expecting them to receive all the cash
I'm sorry, the second question was prioritization.
I was just going to say that we currently have a number of opportunities in our non-CLS-AX pipeline.
Obviously, CLSAX is the most important product for us, and our focus is really moving that into the clinic. If the OASIS data is supportive, moving that further into the clinic in Phase 2. As for the other opportunities we have, we have several opportunities to add to our pipeline, and we're currently looking at a prioritization of those opportunities to see what makes the most sense, where we can create the most value.
That's stuff that we'll be working on through the end of this year and going into the beginning of next year to really come out and have a more concrete pipeline plan. What we see is a number of really interesting opportunities in the super-cruel space.
for us as an internal pipeline and that doesn't count the interest that we have from several companies to
use our supercaroidal injection platform with their technology. So we have a number of conversations and projects ongoing that we will over the next several months prioritize and make some decisions on what we can move forward and where it creates the most value.
Thank you.
Our next question comes from the line of Catherine Okokuni with JMP Securities. Your line is now open.
Hi, this is Catherine. I'm calling on behalf of John Wallaben from JMP. I just have a question about the Phase 2 study and what do you guys expect to see in the data from the Phase 1 to a data that would warrant further investigation into Phase 2?
Tom, you want to address that?
Sure. So as I mentioned earlier, our first priority in this initial first in man OASIS study remains safety. And as I mentioned earlier, you know, safety is really important these days in retina because we've seen some other therapies have problems with inflammation. So number one, it's a safety study. But we're also looking holistically at other aspects of the therapy. So we're looking at stability based on best corrective visual acuity.
on some anatomic parameters, including fluorescence and geography and OCT, as well as need for retreatment.
In terms of what we expect, excitinib is a well-established small molecule, so there's less propensity for inflammation. And as I mentioned earlier, that was born out in cohorts one and two. So we expect to see continued evidence of safety as we escalate.
And also at these higher doses, you know, we have this pan-BEGF effect with excitinib, and that allows us to potentially break through a ceiling of efficacy to see what focused that GFE in addition.
We can couple that with the ability to target very high levels to the effective coronal tissue severe supercoronal delivery. And we think that further leverage the benefits of panzajepin addition.
And then finally, you know, we're looking for durability and we've seen some impressive durability in our preclinical studies We published a paper last year showing in our rabbit pharmacokinetic model that
that there were levels in the retina and in the RPE and choroid out to six months that were several log orders higher than the IC50 for the vegef receptor 2. So in summary, you know, we're looking for safety primarily, but we're also hoping to see.
holistic signs of efficacy based on BCDA anatomic parameters and weight treatment as well as durability.
Your next question comes from the line of Yee Chen with HC main right. Your line is now open.
Thank you for taking my question. So in the future clinical trials,
of OTCOS AX.
We always target a highly treatment experience.
anti-VEGF sub-responder patients or the patient population could change in future trials.
I can take that. So that's a really insightful question.
In the current trial, as in many first and man trials, oftentimes you'll have treatment experience patients.
Hi. Hi.
you know, these are highly treatment-experienced patients, and we set a high bar for ourselves because we're requiring them to have active disease at screening, and that's confirmed by an independent reading center. So in essence, we're selecting anti-VEGF sub-responders, and they're sub-responders to...
numerous prior treatment.
So we're setting a high bar. But again, the study is geared towards safety. Going forward, as we learn more and more about supercurital exitinum, we don't feel compelled to follow that exact set of eligibility criteria. That may change going forward. But at least for this study by requiring patients to have active disease, we have a...
better potential to assess for a biologic effect than if we had patients in the trial with inactive disease.
Got it. Thank you.
And again, in order to ask a question, please press star 11 on your telephone.
Then wait for the automated message advising that your hand is raised.
Your next question.
comes from the line of
William Wood from B. Riley. Your line is now open.
Hi, this is William Wood on from my aunt, Montana B Riley appreciate you taking my question and great to see the good news coming out today I was just curious if you could give us maybe Share your experience of repeated dosing in human or animals Um, you know, maybe writing a little extra color on the PK profile local response, etc
Well, Tom, that would be your question, but I think in the past we've been.
somewhat careful about what we say in terms of our internal preclinical, you know, safety and repeat safety dosing.
I might be able to add some color to that though.
Sure. I'm suffice it to say that the current dosing we're using is supported by our preclinical safety studies. And as I mentioned earlier, so far the safety profile has been pristine. Obviously as we move forward, we'll study repeat dosing and we have preclinical studies, including GLP talk studies that will support.
the repeat dosing we plan to use.
we plan to use.
you asked about inflammation and as I mentioned earlier, excitatives and already approved molecules approved for renal cell carcinoma.
we think small molecules have less propensity for inflammation compared to a biologic or a gene therapy. So in summary, the safety profile in humans with a single dose has been robust and pristine. We have preclinical data as well as the OASIS data to support rete-dosing and we expect and hope that it will continue to be safe because as I said, it's a small molecule with less propensity for inflammation.
I appreciate that. And then one extra, if I may, you've got, you're obviously reading out cohort three, cohort four later this year in November . I was wondering if you could give us a little extra color on what we may be expecting. Specifically, I'm curious if we'll see any open-label extension data for a total of six months from cohorts one, two, or maybe even three.
So, we didn't—we don't have—we decided not to do an extension study on Cohort 1. Cohort 1 was done with an extraordinarily low dose. Our preclinical study suggested that we would have different levels, but we decided not to do the extension study for Cohort 1. We did include the extension studies for Cohorts 2, 3, and 4. We'll report out extension data from Cohort 2.
in November , along with the three-month data from cohorts three and four. The extension data from cohort three and four will in turn be read out in the first quarter of 2023.
Was there a second part to that question?
I believe just general color on what we may be expecting in November .
Sure. So, you know, as I alluded to earlier, we set a very high bar for ourselves. These are heavily treated treatment experienced patients. On average in cohorts one and two, patients had in the mid-20s prior injections. I believe the mean number of injections the year prior was nine. And despite being heavily treated, they had persistent activity as confirmed by the independent reading center. So, as I said earlier, we set a high bar for ourselves as well.
These are essentially anti-VEGF sub-responders.
Therefore, we're going to have a very holistic approach to our assessment. We'll be looking at needs for retreatment. We'll be looking at anatomic effects based on OCT and angiography. We'll be looking at visual acuity. And we think that by starting with this...
a higher bar of active patients at screening, we have potential to assess for a biological effect. It'd be very difficult to assess for a biological effect if the patients are heavily treated and inactive, because many of us patients don't require treatment.
So, you know, the readout will be just as we had in the past, very transparent, will include best corrective visual acuity, central subfield thickness, re-treatment, and we'll also, you know, because we'll be analyzing all four cohorts, may provide some additional color with respect to the OCT parameters as well as angiographic parameters.
Really helpful. I appreciate it. Thank you again.
And I see no further questions at this time. I will now turn the conference back to Dr. Nisuski.
I want to thank everyone for joining us on the call this morning. We really appreciate your continued interest in Clearside and I hope that you enjoy the rest of your summer operating. You may now disconnect the call.
This concludes today's conference call. Thank you for your participation. You may now disconnect.
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