Q3 2023 Ocular Therapeutix Inc Earnings Call
Good day, Thank you for standing by and welcome to the third quarter 2023, Ocular Therapeutics earnings Conference call. At this time, all participants are in a listen only mode.
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Please be advised that today's conference is being recorded I would now like to hand, the conference over to your first speaker today, Donald not men CFO.
Thank you operator, good afternoon, everyone and thank you for joining us on our third quarter 2023 financial results and business update conference call. This afternoon. After the close we issued a press release, providing an update on the company's product development programs.
And details of the company's financial results for the third quarter ended September 32023.
The press release can be accessed on the investors portion of our website at investors Ocu, TX Dot com.
Leading the call today will be Anthony Mato <unk>, our president and Chief Executive Officer, who will provide an update on our pipeline development and the commercial progress of DEXTENZA also speaking on the call today will be Dr. Robert Ashton.
Our Chief Medical Officer, Steve Myers, our senior Vice President commercial and Dr. Peter Kies, our chief Medical advisor retina. Unfortunately, Peter will not be available during the Q&A session. Following their comments I will provide an overview of the financial highlights for the quarter before turning the call back over to Anthony for a summary and questions.
As a reminder, on today's call certain statements, we will be making maybe considered forward looking for purposes of the private Securities Litigation Reform Act 1995.
In particular any statements regarding our anticipated net product revenues and our regulatory and product development plans as well as our research activities are forward looking statements. These statements are subject to a variety of risks and uncertainties that may cause actual results to differ from those forecasted including those risks described.
And in our Form 10-Q filed this afternoon with the SEC and our most recent annual report on Form 10-K filed March six 2023.
I'll now turn the call over to Anthony.
Thanks Al.
Hello, and welcome everyone to our third quarter 2023 earnings call.
To share with you the tremendous progress we've made over the past three months to build on our previous successes.
To provide clarity on our plans going forward.
Im also pleased to announce a number of exciting developments for <unk>.
Our exiting of containing interventional implant treatment of wet AMD.
To begin I'm pleased to share that we have announced a new trade name.
We will now refer to as <unk>.
As the program has advanced into its first pivotal trial.
Thought it appropriate to introduce this new name to begin to establish their brand identity for potential commercialization.
Clearly the most important development in the <unk> program is the recent agreement on a special protocol assessment with the FDA received just last week.
A special protocol assessment or Spa allows the FDA to efficiently evaluate and provide written guidance sponsors.
This feedback helps companies assess the adequacy and acceptability of critical elements in the protocol design to support future marketing application on the basis of the efficacy and safety endpoints in the trial.
For our spot we aimed to secure alignment with the FDA on both the protocol design and the statistical analysis plan.
Regarding protocol design.
Gained agreement on several crucial aspects these.
These include the precise precise competition at the study population to be enrolled in our clinical trial.
<unk> have a suitable control arm for Xbox live.
The determination of its dosing regimen.
Specification of baseline criteria.
The selection of primary endpoints and their corresponding timing as well as the establishment of an appropriate sample size to ensure a statistical robustness of our pivotal trial.
This alignment with the FDA instrumental and upholding the scientific rigor and regulatory standards of our study.
By coming to an agreement with the FDA on the specific elements of our pivotal trial design and statistical analysis plan that analysis plan. We believe we now have a clear regulatory path forward.
This is a program youre very excited about based on the compelling data that we have shared in the past year.
This program has demonstrated the potential for best in class durability, and we believe truly has the potential to change the standard of care in this multibillion dollar market.
Now with the initiation of trials sites already underway and the spa in place.
We look forward to screening and enrolling patients.
We remain on track to begin dosing, our first subject before the end of the year.
While we believe the path actually is now clear and our intent of our internal focus now turns from careful planning to flawless execution.
Still a tremendous amount of education done.
We believe the FDA draft guidance, coupled with our interpretation of the additional feedback we have received from the FDA has created significant change for the development of treatments in wet AMD, particularly for treatments like <unk> that are designed to demonstrate extended durability.
We are extremely lucky to have deep connections in the retina community with Dr. Jeff hire on our board and the recent addition of Dr. Peter Kaiser as our Chief Medical advisor.
Both Jeff and Peter have been instrumental in guiding the community through the implications of the changes and the reasons behind it.
Our goal in bringing <unk> forward.
As to improve the lives of patients living with wet AMD.
The only strong endorsement from the retina community will allow us actually to achieve its full potential.
Let me finish with an update on that spend.
We are pleased to report another impressive quarter for DEXTENZA net product revenues of $15 million for third quarter of this year, 26% over the same quarter previous year and in line with Q2 net product revenue.
Based on the trends, we continue to anticipate that extends our net product revenue guidance for the full year 2023 will come in at the upper end of our current $55 million to $60 million range.
Provided that to start with you.
Steve Myers, our senior Vice President of commercial will walk you through the drivers behind this growth.
With this background I would like to turn the call over to Dr. Robert <unk>, Our Chief Medical Officer, who will introduce you to the ongoing <unk> pivotal trial.
Which we refer to as the sole trial and provide some details on the Spa agreement Robby.
Thank you Anthony.
The FDA agreement on the special Protocol assessment Fiat excited to prepare for the enrollment of the first subject in our pivotal trial for <unk>, our investigational by a resolvable.
No gel implant containing occidental in the treatment of wet AMD by the end of December.
Let me first describe the proposed design of the superiority.
The trial will be a prospective multi center randomized parallel group pivotal phase III trial that will be run primarily primarily at U S sites and is designed to enroll approximately 300 evaluable with AMD subjects, who are treatment.
In this study.
In the trial, we will be comparing a single implant of expects me containing 450 microgram of oxygen.
Single injection of <unk> to assess the safety and efficacy of <unk> in subjects with that AMD by measuring the CVA and TSMC.
Our trial is anticipated to enroll subjects with good visual acuity at screening.
Every subject.
Received two operative asset injections wanted Vic minus eight.
And that does it.
Minus four subsea.
Subjects, reaching 2020 vision will then be randomized in the trial if they won baseline to receive either one implant of expressly in the investigational arm.
Our one injection of liver center in the control arm.
<unk>, followed monthly and risk it currently pre specified criteria.
Our primary endpoint is the proportion of subjects, who maintain visual acuity defined as less than 15, each of Drs, let ourselves be CVA loss at victory.
Our hepatitis C. The guidance from the FDA that Victor just fix is an acceptable time points towards the primary endpoint analysis in our study design.
No that although victorious six is acceptable to us.
With first Victoria.
After additional internal discussions we may choose to move the endpoint and timing to Vic.
Our risk criteria is 15 or more into the IRS letter loss compared to baseline.
Or a new hemorrhage that is likely to cause irreversible vision loss.
And is subject meets the rescue criteria, they will be treated with <unk> injections and then the next rescue treatment will be at the investigator's discretion.
We ask the Fda's guidance on two important questions.
First whether the FDA would allow 15 or more letters loss.
Any time in the trial to comp is a treatment failure at Victoria sex and second what would be the best analysis of subject Dropbox during the trial.
The FDA confirmed that loss of $15 at any point in the trial would be considered.
Having met the endpoints is that treatment failures.
Regarding subject until our parts the FDA informed us that patient characteristics and circumstances at the time I'll drop off from the study will be subject to review and provide detailed guidance on how they should best capture the information on the dropouts in the <unk>.
<unk>.
Overall, we are excited to have agreement on our special protocol assessment and look forward to running our first pivotal trial.
Guidance.
And then the last note on the protocol I would like to inform everyone that we intend to move forward into the pivotal trials. We then optimized throughout lot of 450 microgram or exit the NIM for implant.
This optimized configuration has the same components.
Occidental and hydro gel is a single 600 microgram Occidental implants, however, proactive at four slightly increased as a result of the rock and is designed to improve synchronization of Occidental dropped depletion. This hydrogel biodiesel.
Akshay.
With that introduction I would like to turn the call over to Peter to discuss the first preclinical Camino reaction to our special protocol assessment.
Assessment acres eight months and the prospects of successfully angle, our first pivotal trial Peter.
Thanks Robby.
This year there have been a lot of changes in the world of drug development for wet age related macular degeneration.
For those of US who has spent our lives developing drugs. The FDA requirements for clinical studies in wet AMD have remained remarkably consistent throughout the years, but these have changed.
For understandable reasons. The FDA has released new draft guidelines to change how we need to design studies.
The FDA needs to protect the public against Miss branding and ensure that any product, reaching the market is truly safe and effective.
The new rules released by the FDA required that durability to be proven by the comparator arm dosed the same frequency as the study arm.
For treatments like Xbox Lee that promise that promises greater durability than our current treatments, we believe that non inferiority, while still acceptable if youre comparing treatments at the same dosing frequency as control is no longer enough to ensure approval with a label of greater durability.
For that a superiority study is needed.
We should be pleased that the FDA is encouraging direct comparison and a superiority study.
As a clinician if I switch a patient from eylea to a product play.
Aiming greater durability I want to know that it will really extend the dosing interval for my patients.
With some of the newer recent product launches within wet AMD, we have no direct comparison against the standard of care at the same dosing schedule and with the same rescue criteria so comparisons about durability.
Possible.
The new rules, we believe will now require a company to provide this vital data going forward.
I've talked a lot about what has changed but one thing that is definitely not changed is the unmet need for greater durability products and wet AMD.
Mainly due to the heavy injection burden of currently approved treatments visual outcomes in a real world do not come close to matching those we see in clinical trials.
Continuous controlled treatments like <unk> that are designed to treat wet macular degeneration with a single injection for nine to 12 months are sorely needed and could change the visual outcomes for billions of patients worldwide.
As questions, we realize that innovation is the most important need for our patients.
Clearly, we need to balance the needs of the broader population with the protection of subjects in clinical trials.
My colleagues and I, who ran retina clinical studies believed that the protocol in the special Protocol assessment recently agreed to by the FDA does exactly this.
We also believe that how we conduct the trial will be hugely important and generating the right outcomes and protecting the safety of the enrolled subjects.
I am very excited to be associated with this trial and I believe the community will increasingly understand and endorse the approach we're taking.
I would now like to turn the call back over to Rob to discuss additional program updates.
Thank you Peter.
I'd like to briefly cover the opportunities we see for <unk> to treat non proliferative diabetic retinopathy.
We have completed enrollment of our phase one Helios trial, and multi center prospective masked randomized controlled U S based trial in 'twenty two subjects.
Thing a single implant of expects Lee containing 600 microgram.
<unk> compared to sham injection procedures.
I appreciate the potential value of <unk> in this indication required first and understanding of the condition and its population.
In the early stages diabetic retinopathy, we not FX site.
But it left untreated it progresses and eventually site will be affected.
In fact diabetic retinopathy is the number one cause of legal blindness in the working age population given the slow onset and the fact that thank you beat us FX a younger working age population the required frequency of current anti VEGF therapies mix effective treatment.
Especially challenging and this is why we believe ex Tac three visits design durability of up to nine months or longer may be especially effective.
We believe the same attribute the attributes that bank expects me a call.
Compelling product in wet macular degeneration.
Ease of use of an office space injection and long term durability could establish this is the first standard of care in the treatment of diabetic retinopathy.
Anthony in consultation with our scientific advisors.
We made the decision to unmask the Helios trial.
Nine months versus the initial six month time point, we believe nine months is a more meaningful time points and will allow us to better evaluate the effect of especially on this population.
We look forward to sharing the top line nine months data from the Helios trial in Q2 of 2024.
We are also making excellent progress with another one of late.
Late stage late stage pipeline programs <unk> <unk> growth intra cameral implants being developed for the treatment of patients with primary open angle glaucoma or ocular hypertension.
While there are many medications available to lower intraocular pressure or IOP glaucoma remains a leading cause of blindness.
In part because of unwanted side effects improper drop instillation technique or simply forgetting to take their daily drops.
Believe most patients fail to comply and may ultimately lose their vision.
<unk> is being developed to close the gap between clinical trials and real world outcomes by taking patient compliance.
The equation.
This prospective multi center masked randomized controlled U S based phase II clinical trial is evaluating the safety tolerability and efficacy of <unk> for the reduction of IOP in subjects with primary open angle glaucoma or ocular hypertension.
The trial is designed to observe the changes in diurnal IOP from baseline at two six and two our peaks and prolonged duration of IOP response over time compared to stop it.
As shared previously the phase II trial enrollment is now complete.
We plan to share phase III topline clinical data from the single dose portion of the trial.
Crs meeting in early April of 'twenty 'twenty four.
Im also very pleased to report that the sub study to evaluate the safety of a repeat dose of <unk> 26 microgram in a small subset of subjects within the current phase II clinical trial is progressing well.
After receiving a second implant of Ots TICC to any six microgram. This subjects will be pulled out for at least six months. So April right, there and the city of <unk>.
The data on the preservation of endothelial cells in this pilot repeat those self study could provide preliminary support that the product candidate is suitable for repeat dosing.
Regarding our ocular surface disease program, we remain committed to the development of our two dry eye program or.
<unk> and low dose <unk> Kennedy killer insert containing dexamethasone for the short term treatment of the signs and symptoms of dry eye disease, and <unk> CSI cyclosporin <unk> insert for the chronic treatment of patients Victor.
II disease.
Enrollment is going well in our study to evaluate the performance of all DXP D versus placebo in sites, namely fast dissolving colajanni blocks and knowing search settle with.
We plan to use the results of this trial to inform the selection of a more appropriate placebo controlled data for use in future clinical trials for both <unk> and ots CSI potentially de risking the pivotal programs moving forward.
I would now like to turn the call over to Steve for a commercial update Steve.
Thank you Rob you're.
In Q3, 2023, DEXTENZA recorded net product revenue sales of $15 million approximately 26% higher than the same period last year.
Also end market unit volume units sold to ambulatory surgery centers and hospital outpatient departments closed at 36902 units, which represents a 38% increase over Q3 2022.
After a modest start in July the extensive sales rebounded in August and September by recording the highest consecutive two months volume in 2023.
Over the last four quarters customer ordering sizes have also grown in Q3 2023, 49% of all DEXTENZA orders were for 30 or more units compared to 29% during the same time period in 2022.
We believe the increase in order size and number of orders is attributable to several factors, including the extensive clinical efficacy safety profile and market access coverage earlier.
Earlier this year, we launched a commercial assurance program to help with patient out of pocket costs and that is also helping increase surgeon utilization of DEXTENZA beyond Medicare part D.
Surgeons typically prefer to use the same treatment algorithm on all patients and many surgeons have recently expanded with DEXTENZA beyond Medicare part B.
We believe the commercial and Medicare advantage payer landscape provides another growth opportunity for DEXTENZA.
Now I'll provide an update on Cms's decision for CPT 688 <unk> co.
Could that describes the insertion procedure for DEXTENZA.
Call. The <unk> panel, which is an advisory arm of CMS recommended a change to the status indicator to allow for the insertion payment in the ASC.
Additionally, surgeons ASC administered striders and staff across the entire U S sent over 1000 letters to CMS. During the open comment period also requested the change.
Despite these efforts CMS made the decision to not change the status indicator.
While we're disappointed in the final ruling we are still confident in DEXTENZA as long term prospects. Our forecast models were built on the assumption that CMS would not change the status indicator.
Surgeons ASC and staff confidence into extensive efficacy and safety profile has resulted in significant growth over the last four quarters and we expect that to continue in Q4 and beyond.
While the CMS rule is final for 2024 to be clear, we intend to revisit the status indicator for calendar year 2025.
Finally, as Anthony noted previously and based on performance year to date and trends over the last several months, we remain confident reiterating our DEXTENZA net product revenue guidance for the full year 2023 to be between 55 and $60 million representing potential growth of <unk>.
Approximately 10% to 20% over 2022.
With that let me turn the call back to Donal to discuss our financial results.
Thank you Steve total net revenue, which includes both growth DEXTENZA product revenue net of discounts rebates and returns, which the company refers to as net product revenue and collaboration revenue was $15 1 million for the third quarter of 2023, an increase of approximately <unk>.
6% over third quarter 2022, net revenue of $12 million and in line with second quarter net revenue of $15 2 million for the third quarter of 2023, DEXTENZA net product revenue grew to $15 million from $11 $9 million over the comparable period in 2000.
<unk> 22, while collaboration revenue was approximately $2.
$1 million for each period.
Research and development expenses for the third quarter of 2023 were $15 million versus $13 7 million for the comparable period in 2022, driven primarily by an increase in expenses associated with clinical trial programs and personnel related costs, including stock based compensation.
Port supported these these programs.
Selling and marketing expenses in the third quarter of 2023 were $9 3 million as compared to $10 2 million for the comparable quarter of 2022, reflecting primarily a decrease in professional fees and services.
General and administrative expenses were.
$8 6 million for the third quarter of 2023 versus $8 $5 million in the comparable quarter of 2022, primarily due to an increase in personnel related costs, including stock based compensation offset by lower professional related fees and services.
The company reported net loss for the third quarter of 2023.
$5 million.
Were a loss of <unk> <unk> per share on a basic basis and 25 per share on a diluted basis compared to a net loss of $24 2 million or a net loss of 31 per share on both a basic and diluted basis per share for the comparable period in 2022.
Net loss in the third quarter of 2023 included a $6 $7 million noncash gain attributable to a change in the fair value of the derivative liabilities associated with the company's convertible notes and the bearings credit facility the.
The company also recorded gains and losses from debt extinguishment net of $14 2 million in the third quarter of 2023.
Noncash charges for stock based compensation and depreciation and amortization were $5 $4 million in the third quarter of 2023 versus $4 7 million for the comparable quarter in 2022.
As of September 32023, the company had $110 6 million in cash and cash equivalents versus $102 $3 million.
As of December 31, 2022.
Based on current plans and related estimates of anticipated cash inflows from DEXTENZA and anticipated cash outflows from operating expenses the company believes that existing cash and cash equivalents.
And reflecting our compliance with the $20 million minimum cash covenant in the bearings credit agreement.
<unk> sufficient to enable the company to fund planned operating expenses debt.
Service obligations and capital expenditure requirements into 2025.
This cash guidance is subject to a number of assumptions, including the revenue expenses and reimbursements associated with DEXTENZA and the pace of research and clinical development programs among other aspects of the business.
As of November seven 2023, the company had approximately $79 4 million shares outstanding.
I would now like to turn the call back to Anthony for some final thoughts.
Alright, Thanks Don.
Before turning the call over to questions. Let me go over a quick summary.
We received FDA agreement on a special protocol assessment for <unk> on track to enroll our first subject or year end.
We're anticipating a number of updates on our pipeline that we intend to share at upcoming medical meetings.
First we recently completed enrollment in our phase III program evaluating <unk>, our travel cost containing inter camera implant for the treatment of glaucoma and expect to present top line results in April 2024.
With the recent interest around the Idose program at <unk>, we are excited about the prospects.
<unk> bio resorbable prostaglandin delivery implant that is designed to be suitable for chronic dosing into pivotal programs, but as our next step.
Secondly, we look forward to sharing our interim nine months data from the Helios trial evaluating <unk> in non non proliferative diabetic retinopathy in Q2 of 2024.
We recorded $15 million and net product revenue for DEXTENZA in the third quarter.
2023, 26% over the same quarter prior year and in line with Q2 2023.
Based on the results, we are reaffirming our guidance and expect to come in at the high end of the current $55 million to $60 million range.
Finally, I'd like to mention that we will be posting an R&D day in December to further detail our plans around <unk> expect the pivotal program.
And discuss the rest of the development pipeline as well as extensive.
Please keep an eye out for further details on the date.
So I hope it's clear that this is a very exciting time for October and we're thrilled with our progress to date and look forward to sharing additional updates in the coming quarters.
With that I will turn the call over to the operator for questions.
Thank you.
As a reminder to ask a question you will need to press star one on your telephone and wait for your name to be announced.
Draw. Your question. Please press star one again please.
Please standby, while we compile our Q&A roster.
Our first question comes from the line of John Mulligan with JMP. Your line is now open.
Hey, good afternoon, thanks for taking the questions a couple for me first on DEXTENZA.
Follow up on.
Actually.
Just wondering without the CMS facility.
The decision the.
The other week, what can accelerate <unk> growth in the surgical setting in 2024, and then are you planning on are you currently promoting DEXTENZA for allergic conjunctivitis or plan on starting that next year, just wondering about any details there.
Sure I'll hand that off to Steve.
Sure, Yes, so next year in terms of our growth. This year, we expect that to grow about 26%.
In market volume and we expect to see the same next year as it relates to the CMS decision with the facility payment.
I think at the end of the day the hops panel made the recommendation to change the status indicator. We also had over a thousand comments and the open comment period to change it.
The rationale for not changing as they consider to not be a standalone procedure, which we disagree with that decision. So we'll revisit that next year.
We are hopeful that it will happen in 2025.
And what's your conjunctivitis any plans there.
Yeah, Great question, I think that we have a great opportunity with the AUC, but our plans for next year, we're going to continue with the same sales force, we have will meet customers, where they want to go whether it's in the office.
We are in the surgery center, but we still believe that the surgery Center provides us the greatest opportunity, we've only captured less than 5% of alcohol cataract volume and still believe thats the best opportunity for growth for <unk> in 2024.
Okay.
A couple of ex tactically.
What percentage of the wet AMD population do you think fit into your current.
Enrollment criteria.
And then how do you think about the translate ability from the data you'll generate here to the more broad wet AMD population and.
And then I guess, maybe one more of the discussion between <unk> 36, and week 40, what was the discussion with FDA and the difference of opinion there. Thanks.
So a lot of questions squeeze into one I'll hand, it off to Robert.
Yes, maybe I'll start with the last one John.
The.
36% versus 40 bps then.
It is really not a discussion with the FDA fda's responses that data set Victoria six.
Although they prefer.
I think that is coming from what is month nine whether it's Victoria to $6 40, and both of them are acceptable and well just have internal discussions on <unk>.
We really have no issues moving to Vic 40, because the.
The ash.
<unk> actually is.
The durability it covers that.
That's why.
Thats really the response nine months.
Victoria acceptable, although they prefer the quality.
Can you John repeat your first and second question.
What percentage of the population fit your enrollment criteria that how do you think the data translate to the broader population yeah. I mean first of all this is the population. This population exists and it is the way they are going to come in.
Screening is.
Just a population already.
At this site.
And actually do not qualify for any of the AMD trial.
We are looking for that.
<unk> vision.
Good vision wet AMD patients treatment nave again.
EBITDA discussions actually that population is actually not eligible for any of that trial and.
Just waiting to be enrolled in that trial.
The applicability this is a bit AMD population and.
Our enrollment criteria includes that.
They need to show we need the patients should have the bit AMD.
CMV lesion and that's why it would be applicable ultimately, Florida approval perspective.
In addition to that we're going to have definitely others.
Phase four trials and the.
I repeat dose trial, which is going to cover.
More AMD population.
As well the.
This vision patients, but for a pure mobility. This population is completely acceptable.
Yes, we expect a very broad label, we expect for treatment of wet AMD and that was part of the spa requests of what we expected from the.
The indication.
So we're very comfortable and certainly with the history of the FDA.
The applicability of the label will be.
Streaming abroad.
And I think that Ravi is bringing up is that we realize that doctors will probably want additional data for.
For marketing reasons later on so we certainly plan to have a very active phase for a program prior to launch.
That's very helpful. All right. Thanks for taking my questions and congrats on the progress guys appreciate it.
Thanks, John.
Thank you.
One moment for our next question.
The next question comes from Joseph Canton Sorrow with Piper Sandler Your line is now open.
Hi, everyone. This is alberto on for Joe.
My first question was to really better understand how this new formulation compares with what was used in the phase one study. So I was wondering how.
The struggle with optimize.
Whether with a different dynamic.
Drug.
Dilution is absorption still expected to occur on the eight month, Mark and then maybe a follow up thank you.
Yes, it's really kind of a misnomer to call. This a new formulation in fact, the hydrogel portion of it is exactly the same as what we've been using.
What we've changed is we've changed the load. So we've gone from 600 microgram to 450 microgram.
And we've discovered ways to allow that to come out faster. So we will have a faster release and we will have a higher amount.
Daily drug delivery.
<unk> matches, the the three times 200 that we saw.
In the phase one trial in Australia, which is where we have the bulk of our work with with naive.
Obviously at the end of the life of the.
The depot, which is exactly the same as we've seen in all the other trials between eight to nine months and we will have a little bit less drug available we want to have drug available, we'd like to create a sort of a period.
Where there is drug in the vitreous, where you can re dose without another foreign body being in the victories at that time.
If a doctor find that to be important, but it's just better matches up the drug delivery with the the buy a resort.
And as formulated we're very excited that we can bring this forward.
Okay. Thanks.
I was also wondering about.
The plans on how to handle public drops off drop off I know you mentioned that patient characteristics.
Circumstances are subject to review and maybe you can just maybe speak a little more on this if you can.
Sure I'll start first and then hand, it over to Rob here, but.
I mean, there were two hugely important points in this spa that we brought in that could have made the trial either more difficult or made us rethink the trial.
The first was with a lot of people are talking about LLC CFS meeting that if a patient.
Achieves a 15 letter loss at month, three and then as rescued.
Several times through the rest of the balance of the nine months are they considered a treatment failure at nine months and that was very unequivocal.
The FDA, saying, yes that that person would be treated as a treatment failure at nine months, even though theyre failure occurred at month three.
The second thing was realizing that this is a trial that in the Eylea arm is likely to have a relatively high number of dropouts comparative comparatively to other trials that may be in this space.
We asked the FDA, if we could if we could take the protocol violators and the dropouts and consider them in an ITT analysis.
Have them all put into the 15 letter loser.
Category.
The FDA understood the question.
Told us that it would be a review issue.
Clearly for patients that are dropping out or.
Going outside of treatment protocol for efficacy reasons and that appeared to be a reasonable approach and that is as part of the review we would look at all of the Doe data data in its totality that was a hugely reassuring bit of information from us.
Because as you know on an ITT analysis, those those dropouts and protocol violations.
Generally need to go in one of the two categories.
And we were we wanted to be sure that they would not be placed arbitrarily in the non 15 letter loser.
Cohort and that was that was confirmed by the FDA I know Robin is there any more you can add on this.
You described it really Ron Anthony the only thing that I would add is that we really like.
Happy to receive the guidance from FDA have they should collect the information on dose patients they are clear.
Direction on.
The information FDA wanted us to collect on that or they drop out because of the safety efficacy or some other reason that Anthony mentioned, that's very encouraging.
Okay.
Okay. Thanks, that's very helpful. Alright, Thanks again for taking my question.
Thank you.
Thank you one moment please.
Our next question comes from the line of calling Goosey with Baird. Your line is now open.
Hi, This is Adam on for choline, Congrats on the Spa and all the progress I had a question regarding.
The patients at baseline previously you'd said you're planning on enrolling patients that were closer to 2020 vision or he'll go out to 2020 vision Astra injection with Eylea is that still the plan and can you comment on how you think this entry criteria will impact rate of enrollment.
Yes, that's what's in our Spa our squad is.
For patients that after two doses of Eylea induction.
Improved to 2020.
They are enrolled in the trial now.
Now the great thing about having the spas that it's really allowed us to have a concrete response from the FDA.
It allowed us to have.
A tremendous number of conversations with sites and key opinion leaders.
And there is and we've had a lot of feedback from those sites now that they're used to the concept of what we're doing with this trial and now that you have the endorsement from the FDA that this is Ed.
Legitimate trial for registration.
A lot of ideas about other abroad.
Broadening that definition, allowing more patients into the trial now.
Now clearly to make any changes to that protocol, we need to go through a process with the FDA to ensure that the spa reflects that.
But even as is we're able to start.
Enrolling patients immediately and we do think that that pace.
Patient population that can get to 2020.
As reasonably sizable, especially given the.
The earlier diagnosis of wet AMD with the nearly ubiquitous use of OTT and yearly.
Yes.
So we think we're going to have enough patients with the protocol that is that there are opportunities to broaden that entry criteria as well.
Sure.
Yes.
Wonderful and then.
Then.
I was wondering if you could talk through what your expectations are in the Eylea control group as to what proportion of those patients you would expect to lose 15 letters.
The working assumption of between 30% to 50% of those of those patients will progress to a 15 letter loss allowed to do so.
Wonderful. Thank you so much thank you.
Thank you.
Our next question.
Yes.
The next question comes from Kelly <unk> with Jefferies. Your line is now open.
Hi, This is clara on for Kelly.
For taking my question and congrats on the progress.
Just wondering what the agreed study design with <unk>.
To be applicable to the second wet AMD trial last fall.
And also for diabetic nephropathy.
What kind of data do you need to see Q4 phase III pivotal trial and what <unk>.
That would be the expected costs associated with that child.
Sure Ravi you want to feel about yes. The first question.
The second pivotal would be the same yes, it would be the same design.
Isn't that like.
The design.
You are going to run with the first trial.
And can you please repeat your question.
Second question Kevin.
A quarter sorry.
Yes sure so.
Asking intra Asia of diabetic.
What kind of data in Q4.
Do you need to see in order to move forward to phase III pivotal trial and what might be the expected.
Costs associated with the pivotal trial and how do you plan to fund the trial.
Okay.
Let's take the first part of that question I'll leave the funding to Anthony.
For the <unk> trial is the unexpected and as you know this is a small trial the number of the subjects, we enrolled 202 subjects in the trial.
And they are like two to one.
In <unk> says the sham.
Our expectation is to see a trend.
In the.
The improvement in the DRA score.
We are really not looking for any non inferiority sample size would not.
Is not enough floor that that's why we are looking for trends in the Rss score improvement.
And Anthony would you like to take the rest of the question.
Sure I mean, obviously, we're not committed to a particular form of funding at the moment.
We're very fortunate that we have.
Cash at the moment and we have a runway into 2025.
There are opportunities in a number of different both dilutive and non dilutive opportunities to be able to help fund that second trial.
Clearly the spa gives clarity.
We did not have before and that.
Creates an investment opportunity or a partnership opportunity that's a bit more clearer than what existed in the past.
So I think the spot actually opens up more avenues than we had before.
But we haven't committed to a particular source of funding clearly.
Once we get traction on this first pivotal and.
The desire to set up another pivotal in order to get to market in a reasonably short period of time is overwhelming given that the destination the value of two positive pivotal in wet AMD with a nine to 12 months.
<unk> is a ism is a multi multibillion dollar opportunity.
And we'd like to get there as fast as we possibly can.
Terrific. Thank you. Thank you.
Thank you.
One moment for our last question.
Yeah.
This question comes from the line of <unk> Chen from H C. Wainwright. Your line is now open.
Thank you for taking my question I recall, you previously reported that.
783% of patients were rescue free months 10, with 600 milligrams 600 Microgram now you are you seeing 415 microgram, so what percentage what percentage of patients do you expect to be rescued free.
Nine months.
Well, we would expect that number to be the same or higher.
What this new formulation will deliver just like the older formulation or the <unk>.
Pre optimized formulation.
Will deliver drug continuously for nine to 12 months and as we mentioned for the first nine months it will deliver drug at a slightly faster rate than the 600 microgram dose.
Up until nine months, Youre actually going to get more drug to the target tissues than you would have.
With the previous 600 microgram formulation.
So up to that nine month timeframe, we're very confident that that will do at least or better than that.
Certainly in terms of the drug delivery, we will we.
We believe we will still have enough drug in the target tissues and in the vitreous post dose to be able to extend the effective concentrations and the ERP in the choroid.
Up into month 12.
And we use the 450 microgram formulation for subcutaneous <unk> in the future.
I believe we will yes, that's it's an optimized formulation.
Marrying the drug the drug elution with the life of the insert.
So I don't see why we would want to go with that.
Formulation, but.
It's just a better iteration of what we've done before.
Yes.
Do you expect to seeing safety profile during the first nine or 10 months.
More trucks to be delivered by this new formulation.
But we're comfortable that the amount that we're delivering as well within the safety window.
It is as you probably heard me mentioned earlier the elution rate that we have on this optimized formulation is about the same as we had on the two.
The three times 200 that we had in Australia.
So we certainly don't expect any difference in safety.
Having maybe a little less drug around at the end of the life of the.
The insert actually might not that we had safety issues with what we had before but it certainly would give us greater confidence.
There will be less drug moving around the vitreous at the end of the.
For the answer.
Okay. Thank you. Thank you.
I'm showing no further questions at this time and would now like to turn the call back to Anthony Mato <unk> for closing remarks.
Well, thanks, everybody for joining us today.
Not come through we are unbelievably excited to have the spa behind US now that we have a clear roadmap. We've done a lot of planning a lot of discussing with the FDA a lot of educating of the market that we still need to do.
But we really are in a situation now where we're going from from really intense planning.
So really putting our head down and getting getting behind the execution of this trial.
We have our sights that are excited to be able to join us. We actually are very lucky that we're launching this trial in a period, where there's a lot of infrastructure, particularly in the U S. That's capable of doing wet AMD trials that are currently not being utilized at a very high rate.
So we're very eager to get started we're very eager to get this product to patients.
Just can't wait to get going so thank you so much for attending today.
Yes. Thank you for your participation in today's conference. It does conclude the program and you may now disconnect.
Yeah.
[music].
Okay.