Clearside Biomedical, Inc. (NASDAQ:CLSD) Q4 2022 Earnings Call Transcript

Clearside Biomedical, Inc. (NASDAQ:CLSD) Q4 2022 Earnings Call Transcript March 9, 2023

Operator: Good day and thank you for standing by and welcome to the Clearside Biomedical Fourth Quarter 2022 Financial Results and Corporate Update Conference Call. At this time all participants are in a listen-only mode. After the speakers’ presentation there will be a question-and-answer session. Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your speaker today, Jenny Kobin, Investor Relations. Please go ahead.

Jenny Kobin: Good afternoon everyone and thank you for joining us on the call today. Before we begin, I would like to remind you that during today’s call, we will be making certain forward-looking statements. Various remarks that we make during this call about the company’s future expectations, plans and prospects constitute forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the Risk Factors section of our Annual Report on Form 10-K for the year ended December 31, 2021, our quarterly report on Form 10-Q for the quarter ended September 30, 2022 and our other SEC filings available on our website.

We expect that our 10-K for the year ended December 31, 2022 will be filed tomorrow. In addition, any forward-looking statements represent our views as of today and should not be relied upon as representing our views as of any subsequent date. While we may elect to update these forward-looking statements in the future, we specifically disclaim any obligation to do so even if our views change. On today’s call we have George Lasezkay, our Chief Executive Officer and Charles Deignan, our Chief Financial Officer. After formal remarks, we will open the call for your questions. I would now like to turn the call over to George.

George Lasezkay: Thank you, Jenny. Over the past year, we have reinforced Clearside’s leadership position in the delivery of therapeutics into the Suprachoroidal Space. We’ve successfully executed on our strategic plans with the launch and commercialization of the first FDA approved suprachoroidal product, XIPERE by our partner Bausch + Lomb and we completed and announced positive data from our Phase 1/2a OASIS trial of CLS-AX in Wet AMD. We have also seen promising data presented by partners utilizing our proprietary SCS Microinjector to administer gene therapy and oncology agents to treat a variety of diseases. On today’s call, I will cover key highlights from the past year and provide a snapshot of our plans for 2023. I will begin with our development programs both internal and with our partners.

Last month we reported exciting data from our lead internal program CLS-AX that combines our proprietary small molecule suspension of axitinib with delivery by our SCS Microinjector. Axitinib is a highly potent tyrosine kinase inhibitor or TKI achieves pan VEGF blockade directly inhibiting VEGF receptors 1, 2, and 3, with high potency and specificity. We believe this broad VEGF blockade may have advantages over existing retinal therapies by acting at a different level of the angiogenesis cascade. We reported positive data from OASIS, our open label Phase 1/2a trial in Wet AMD. The trial consisted of four cohorts with escalating doses that monitored participants for three months. This was followed by a three-month extension study in the higher dose cohorts for a total of six-month followup.

Participants enrolled in OASIS were heavily anti-VEGF treatment experienced patients with active disease at screening, which was confirmed by an independent reading center. In OASIS, we assessed three components, primary endpoint evaluated safety and tolerability of CLS-AX and we also looked at durability and biological effect. First, safety. We were very pleased with the safety results we saw with CLS-AX. In all participants in the trial, CLS-AX was well tolerated and demonstrated an excellent safety profile. There were no adverse effects, no dose limiting toxicities, and because we are injecting behind the retina, we did not have any instances of vitreous floaters or dispersion of drug into the vitreous. We anticipated this favorable safety profile as axitinib is well-characterized small molecule with less propensity for inflammation compared to a biological agent or gene therapy.

In addition, the safety of the suprachoroidal injection procedure with our SCS Microinjector has already been assessed through the approval of XIPERE. Second durability. OASIS demonstrated that two thirds of patients may be able to go at least six months without additional treatment, which is a really important element for patients and caregivers managing this disease. For those participants in the extension study that received higher doses in cohorts 3 and 4, 67% went at least six months without additional treatment and 50% of participants went beyond six months. This translates to a 77% to 85% reduction in treatment burden. That’s calculated by comparing the number of monthly injections participants had six months before CLS-AX to the monthly injections they received after CLS-AX.

We believe that reduction in treatment burden is the current unmet medical need in the Wet AMD space.

OCT: Furthermore, delivery via our SCS Microinjector into the Suprachoroidal Space specifically targets the affected chorioretinal tissues for potential efficacy benefits and compartmentalizes drug away from the front of the eye for potential safety benefits. OASIS reinforces our belief that CLS-AX has the potential to reduce treatment burden in patients with Wet AMD while maintaining stable visual acuity, which gives us confidence as we advance into our next clinical trial.

Photo by National Cancer Institute on Unsplash

aflibercept:

ranibizumab:

aflibercept:

aflibercept: Our clinical team is led by our Chief Clinical Officer, Dr. Susan Coultas, who joined us last year as a member of the leadership team with overall operational responsibility for conduct and execution of our clinical trials. She has substantial prior experience in advancing ophthalmic therapies from the early clinical development stages through final approval for commercialization, which is an important and valuable asset for us at this stage. We’ve had a smooth handoff related to our clinical operations as Dr. Tom Ciulla has transitioned to the role of Chief Medical Advisor-Retina and Chair of our Scientific Advisory Board. We are pleased that Tom continues to provide his expert advice and counsel on Clearside’s suprachoroidal development programs, including the ODYSSEY Phase 2b trial.

I would also like to highlight the progress being made with XIPERE, Clearside’s first FDA-approved product and the first commercial product used using the suprachoroidal delivery. XIPERE was launched in the United States almost a year ago by our commercialization partner, Bausch + Lomb. They’ve done excellent work getting the drug into the hands of physicians, and they continue to expand outreach and training to healthcare providers. We estimate that over a thousand retinal physicians have been trained to date in the use of the SCS Microinjector.

aflibercept: Our clinical team is led by our Chief Clinical Officer, Dr. Susan Coultas, who joined us last year as a member of the leadership team with overall operational responsibility for conduct and execution of our clinical trials. She has substantial prior experience in advancing ophthalmic therapies from the early clinical development stages through final approval for commercialization, which is an important and valuable asset for us at this stage. We’ve had a smooth handoff related to our clinical operations as Dr. Tom Ciulla has transitioned to the role of Chief Medical Advisor-Retina and Chair of our Scientific Advisory Board. We are pleased that Tom continues to provide his expert advice and counsel on Clearside’s suprachoroidal development programs, including the ODYSSEY Phase 2b trial.

I would also like to highlight the progress being made with XIPERE, Clearside’s first FDA-approved product and the first commercial product used using the suprachoroidal delivery. XIPERE was launched in the United States almost a year ago by our commercialization partner, Bausch + Lomb. They’ve done excellent work getting the drug into the hands of physicians, and they continue to expand outreach and training to healthcare providers. We estimate that over a thousand retinal physicians have been trained to date in the use of the SCS Microinjector.

Arctic:

Biosciences: At the Macular Society Annual Meeting last month, Aura presented positive interim efficacy data from their ongoing Phase 2 study. The data presented showed very favorable safety profile, along with an excellent response to the therapy with 89% to 100% tumor control. Based on their promising data, Aura announced final plans for its global Phase 3 trial utilizing the suprachoroidal route of administration. They expect to begin enrollment in that trial this year.

RGX: The ALTITUDE trial in diabetic retinopathy continues to enroll patients in two new cohorts at a higher third dose level. REGENXBIO has announced new data demonstrating that RGX-314 was well tolerated and BCVA remained stable through six months. Patients treated with RGX-314 demonstrated clinically meaningful improvements in disease severity and less disease worsening versus observational control at six months. Last week, REGENXBIO reported that both the Wet AMD and diabetic retinopathy suprachoroidal clinical trials are on track to be completed in the first half of 2023 with additional interim trial data expected in the second half of 2023. With our XIPERE approval, our successful OASIS trial and the ongoing clinical development programs by our partners in the U.S. and China, suprachoroidal drug delivery via our SCS Microinjector is now more widely accepted than ever by retinal community.

I will now turn over the call to our CFO, Charlie Deignan for a financial update. Charlie?

314: The ALTITUDE trial in diabetic retinopathy continues to enroll patients in two new cohorts at a higher third dose level. REGENXBIO has announced new data demonstrating that RGX-314 was well tolerated and BCVA remained stable through six months. Patients treated with RGX-314 demonstrated clinically meaningful improvements in disease severity and less disease worsening versus observational control at six months. Last week, REGENXBIO reported that both the Wet AMD and diabetic retinopathy suprachoroidal clinical trials are on track to be completed in the first half of 2023 with additional interim trial data expected in the second half of 2023. With our XIPERE approval, our successful OASIS trial and the ongoing clinical development programs by our partners in the U.S. and China, suprachoroidal drug delivery via our SCS Microinjector is now more widely accepted than ever by retinal community.

I will now turn over the call to our CFO, Charlie Deignan for a financial update. Charlie?

Charles Deignan: Thank you, George, and good afternoon everyone. Our financial results for the fourth quarter and full year were published this afternoon in our press release and are available on our website. In addition, we expect to file our annual report on Form 10-K tomorrow. As George mentioned, the growing acceptance of our suprachoroidal delivery platform has provided several opportunities for Clearside. Last year, we were able to secure royalty financing that provided meaningful non-dilutive capital by leveraging a portion of our future royalties from XIPERE and certain SCS Microinjector license agreements. This transaction was achievable because of the successful U.S. FDA approval for XIPERE and the subsequent commercial launch of the product by Bausch + Lomb.

As of December 31, 2022, our cash and cash equivalents totaled approximately $48.3 million. Based on our current outlook, we expect to have sufficient resources to fund our planned operations into the second quarter of 2024. As we finalize our Phase 2 clinical trial plans for CLS-AX, we will provide an update if there is any, on any impact on our current cash runway guidance. Over the next few months, we will be participating at several investor conferences, including the Needham Virtual Healthcare Conference and the JMP Life Science Conference. We look forward to these interactions and keeping updated on our progress. I will now turn the call back over to George for his closing remarks.

George Lasezkay: Thank you, Charlie. 2022 was a successful and productive year for Clearside, and we are carrying this momentum forward into 2023. Our team continues to stay engaged with the medical community with attendance at 15 medical congresses last year, featuring more than 40 posters and podium presentations delivered on our suprachoroidal injection platform and our clinical development programs. Our SCS Microinjector has been used in well over 2000 suprachoroidal injections in multiple clinical trials in a variety of retinal disorders, continuing to demonstrate a clinical safety and tolerability profile comparable to intravitreal injections. Importantly, it is commercially accepted by retinal physicians following the launch of XIPERE.

With our positive OASIS data and the upcoming ODYSSEY trial, we have a solid plan to advance CLS-AX as a potential treatment option for patients with Wet AMD. We look forward to initiating ODYSSEY and to the data readouts from all our development and commercialization partners throughout the year. We will continue building on the promising opportunities ahead for Clearside delivering therapies to the back of the eye and leveraging our SCS platform technology for patients with sight threatening diseases. I would now ask the operator to open the call up for questions.

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Q&A Session

Operator: Thank you. Okay, the first question comes from Annabel Samimy with Stifel. Your line is open.

Annabel Samimy: Hi, thanks for taking my question. So I noted that change that you had in the OASIS trial comparing it against Aflibercept, but you know, you’ve been studying your product against this current standard of care, but faricimab seems to be possibly taking over as in that position, and so I’m just wondering if you have any sense as to how CLS-AX may do against faricimab based on what you’re hearing? And as for a second question, I guess, you noted about a thousand retinal specialists have been trained on SCS delivery. I guess how are you sensing the increased appetite in terms of licensing your technology now that you’re seeing some success in administration across this program, XIPERE as well as additional programs and real world experience, is there any additional activity on the licensing? Thanks.

George Lasezkay: Well, thanks for the question, Annabel. I want to make sure I understand your — the first part of that question correctly. We were excited about the idea of going against faricimab, but given the recent guidance coming out from the FDA and in discussions with the FDA, we thought it was the better course of action to better prepare us for a Phase 3 trial to change to the comparator being Aflibercept instead of faricimab. We felt very confident against faricimab. We thought it was an innovative and forward-looking approach. But with the FDA’s position, at least expressed in the draft guidelines that the comparators should either be ranibizumab or aflibercept, we thought since the trial had not yet started, it was best to make this small adjustment and move forward with an aflibercept comparator.

Because brolucizumab and aflibercept basically brolucizumab was approved as being non-inferior to aflibercept, we feel pretty good about the switch to comparators, feel as good as we did before. So we’re glad to make that switch to be more in line with their guidelines. You asked about licensing interest. It’s an interesting question. We, as you know, really out licensing has not been a key part of our strategy. It was very strategic early on several years ago, but we have noted that we’ve had more interest, a little bit more interest recently in people wanting to work with us using our suprachoroidal Microinjector and approaching drugs by delivering them into the Suprachoroidal Space. So we continue to have those conversations with multiple other parties right now, and if a deal makes sense, we’ll do it, if not, it’s good to know that other people are starting to accept suprachoroidal injection as a more common place mode of administration.

Annabel Samimy: Okay, fair enough. Thank you.

George Lasezkay: Okay, thanks, Annabel.

Operator: Thank you. And our next question comes from Serge Belanger with Needham & Company. Your line is now open.

Serge Belanger: Hi, good afternoon. A couple questions. First hi, George. First one on the changes to the ODYSSEY trial, how does that change the loading dose portion at the start of this trial and maintenance? And then does it also change the sizing and statistical powering of the study?