EyePoint Pharmaceuticals, Inc. (NASDAQ:EYPT) Q3 2023 Earnings Call Transcript

EyePoint Pharmaceuticals, Inc. (NASDAQ:EYPT) Q3 2023 Earnings Call Transcript November 1, 2023

EyePoint Pharmaceuticals, Inc. beats earnings expectations. Reported EPS is $-0.33, expectations were $-0.62.

Operator: Good morning. My name is Leeway and I will be your conference operator today. At this time, I would like to welcome everyone to the EyePoint Pharmaceuticals Third Quarter 2023 Financial Results and Recent Corporate Development Conference Call. There will be a question-and-answer session to follow at the completion of the prepared remarks. Please be advised that this call is being recorded at the company’s request. I would now like to turn the call over to George Elston, Executive Vice President and Chief Financial Officer of EyePoint Pharmaceuticals. Please go ahead.

George Elston: Thank you, and thank you all for joining us on today’s conference call to discuss EyePoint Pharmaceuticals’ third quarter 2023 financial results and recent corporate developments. With me today is Dr. Jay Duker, President and Chief Executive Officer. Jay will begin with a review of recent corporate updates and discuss the ongoing Phase 2 clinical trials for EYP-1901. I will close with commentary on our second quarter 2023 financial results and we will then open the call for your questions. Earlier this morning, we issued a press release detailing our financial results and recent operational developments. A copy of the release can be found in the Investor Relations tab on the corporate website, www.eyepointpharma.com.

A medical scientist holding up a test tube, illustrating biopharmaceutical research.

Before we begin our formal comments, I’ll remind you that various remarks we will make today constitute forward-looking statements for the purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. These include statements about our future expectations, clinical developments and regulatory matters and timelines, the potential success of our products and product candidates, financial projections, and our plans and prospects. 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 most recent annual report on Form 10-K, which is on file with the SEC and in other filings that we may make with the SEC in the future.

Any forward-looking statements represent our views as of today only. While we may elect to update those forward-looking statements at some point in the future, we specifically disclaim any obligation to do so even if our views change. Therefore, you should not rely on these forward-looking statements as representing our views as of any date subsequent to today. I’ll now turn the call over to Dr. Jay Duker, President, and Chief Executive Officer of EyePoint Pharmaceuticals.

Jay Duker: Thank you, George. Good morning, everyone. And thank you for joining us to discuss EyePoint’s continued execution toward our milestones as we work to bring first-in-class therapeutics and delivery technologies to patients suffering from serious retinal diseases. In the third quarter, we both advanced and expanded our product pipeline with the announcement of positive masked safety data in our ongoing DAVIO 2 and PAVIA Phase 2 clinical trials for our lead product candidate EYP-1901, which is the small molecule of vorolanib and our proprietary bio-erodible Durasert E technology, as well as the unveiling of a new preclinical program, EYP-2301. EYP-2301 delivers a promising TIE-2 activator razuprotafib, formerly known as AKB 9778 formulated into Durasert E to potentially improve outcomes in wet age related macular degeneration, or wet AMD and diabetic eye disease.

It’s an exciting time that EyePoint, as our EYP-1901. Clinical trials approach key data events with top-line Phase 2 DAVIO 2 trial results anticipated in early December, and PAVIA results in Q2 of next year. And as we plan to initiate a third Phase 2 trial and diabetic macular edema or DME in Q1 of 2024. I’ll now review our recent program and corporate updates and give an overview of upcoming catalysts. Turning to our lead program, EYP-1901 is being advanced as a potentially paradigm shifting treatment for patients suffering from VEGF-mediated retinal diseases. EYP-1901 is delivered with a single intravitreal injection in the physician’s office, similar to the current FDA-approved anti-VEGF biologic treatments. EYP-1901 is immediately bioavailable, featuring an initial burst of drug followed by near constant zero order kinetic release for approximately nine months.

EYP-1901 delivers vorolanib, a selective and patent protected tyrosine kinase inhibitor formulated in a solid insert using our proprietary sustained release bio-erodible Durasert E technology. Vorolanib brings a new mechanistic approach to the treatment of VEGF mediated retinal diseases by acting as a pan-VEGF receptor blocker, blocking all VEGF isoforms. We expect EYP-1901, with its new MOA and sustained drug delivery for up to nine months to meaningfully reduce treatment burden in the majority of wet AMD patients, while keeping vision and retinal anatomy stable. Vorolanib features reduced off target binding and a clinically relevant doses does not inhibit Type 2 a critical pathway associated with vascular stability, which may result in improved efficacy.

In a rodent model of retinal detachment, vorolanib demonstrated neuro-protection and because it blocks PDGF may also have anti-fibrotic benefits. We were pleased to present preclinical and clinical data and multiple medical meetings that underscore the promising profile of EYP-1901. One highlight was at last month’s Retina Society meeting, where a comparison of the anti-angiogenic profile of three TKIs, vorolanib, axitinib and sunitinib validated vorolanib as a pan-VEGF receptor inhibitor that effectively blocks the critical pathways of pathologic angiogenesis. Importantly, the data show that for vorolanib is differentiated from the other TKIs tested in retinal disease. Unlike sunitinib, vorolanib does not bind the melanin, and unlike axitinib, varolanib is not expected to have a physiologic impact on normal TIE-2 function.

As a reminder, the fully enrolled DAVIO 2 trial was evaluating EYP-1901 in 160 subjects with previously treated wet AMD as a maintenance therapy with a goal to maintain stable vision and retinal anatomy for the majority of wet AMD patients for six months or longer following a single injection of EYP-1901 This could represent a significant improvement compared to the current anti-VEGF treatments that are dosed on average every two months in the United States under a treatment extend protocol. This lifetime or frequent treatment represents a tremendous burden for patients, physicians, and the healthcare system in general. EYP-1901 has the potential to change this treatment paradigm into a treat to maintain model by providing sustained delivery of vorolanib for approximately nine months following induction treatment with a large molecule anti VEGF ligand walker.

This may allow patients and practitioners the flexibility to reduce the number of visits without sacrificing visual outcomes. The subjects in the DAVIO 2 trial were randomized to two treatment arms, approximately 2 milligrams or approximately 3 milligrams of EYP-1901 or on label aflibercept as a control. All subjects as a trial received three loading doses of aflibercept on day one, month one and month two, followed by dosing and EYP-1901 or a sham injection 30 minutes after the last loading dose. The FDA approval pathway for this program, and the primary endpoint for DAVIO 2 is non-inferiority in the change of best corrected visual acuity, or BCVA for each of the 1901 arms versus the aflibercept control arm. The lower limit of non-inferiority margin is defined as minus 4.5 letter loss by the FDA.

For perspective, patients do not generally notice a change in vision until they lose five or more letters, which is the equivalent of one line on an eye chart. I’d like to share our perspective in terms of targeted outcomes for the non-inferiority BCVA as they are both numerical and statistical considerations for this outcome. First, a very successful outcome in DAVIO 2 would be to mirror the Phase 2 DAVIO BCVA results that showed an average at 2.5 letter loss six months after EVP-1901 was injected. Recall that DAVIO was an all-comers open-label non-randomized Phase 1 trial. Based on learnings from that Phase 1 trial we modified inclusion and exclusion criteria for the DAVIO 2 trial in an effort to exclude eyes that were not responding to standard of care therapy.

We presented masked patient demographic data last quarter that reflects the fact that we enrolled a more controlled patient population in DAVIO 2 than in the Phase 1 trial. Generally, an outcome of minus three letters or better would be a very strong numerical outcome and possibly statistically non-inferior, even in this relatively small trial. If the EYP-1901 arms match or better, the minus 1.4 letters difference versus the 2 milligram aflibercept control, which was what was seen in the 16-week 8 milligram EYLEA arm in the PULSAR trial. This would represent an outstanding outcome from a single injection of EYP-1901. In addition to stable BCVA, it is critical that the EYP-1901 continues to show a favorable safety profile, consistent with the interim masked safety update through October 1, 2023, across all of the EYP-1901 clinical trials.

As of October 1, approximately 170 patients have received EYP-1901 with a minimum of four months follow up post injection from the ongoing Phase 2 PAVIA and DAVIO 2 clinical trials and the completed DAVIO Phase 1 trial with no reported drug related-ocular SAEs and no record of drug related systemic SAEs. This continues to give us confidence in the results of this crucial endpoint. Although change in best corrected visual acuity as the primary endpoint reduction and treatment burden will also be a critical secondary outcome to consider giving the unmet need in this patient population for more durable therapies. For a clinically meaningful outcome, we believe that one or both EYP-1901 arms need to result in a reduction in treatment burden of a minimum of 50% or better for the six months following EYP-1901 injection at we get.

In addition, we also believe that 50% or greater of the EYP-1901 treatment advise [ph] should be supplement free up to the week 32 visit along with a relatively stable anatomy as measured by OCT. Based on our market research and KOL interactions these endpoints will be meaningful to retina specialists who treat wet AMD patients. We plan to host a virtual call with renowned retinal specialists Dr. David Boyer and Dr. David Lally on November 9 at 8 a.m. Eastern time to discuss their perspectives on the current treatment landscape and the DAVIO 2 outcome considerations that I just reviewed. We hope that you will all join us for this informative presentation and Q&A. And you can and find the link to that call in the investor tab of our website.

Looking ahead to the potential Phase 3 pivotal trials for EYP-1901 as maintenance therapy and wet AMD, our current plan is to initiate the first trial by the fourth quarter of 2024. This initial trial will be largely in the U.S. and Canada. We hope to initiate a second pivotal trial several months later, the second Phase 3 trial will be largely outside of the U.S. The Phase 2 DAVIO 2 trial with EYP-1901 was designed to mirror the anticipated design of the phase three trials, based on our Type C meeting with the FDA and other interactions with the agency. The key differences are that the Phase 3 trials will feature re-dosing of EYP-1901 every six months, and the primary efficacy endpoint will be non-inferior change in visual acuity to approximately one year instead of eight months as it is in DAVIO 2.

We expect to share more details about this trial in the coming months. Now let me turn to our second Indication NPDR. In June, we reported that enrollment of the Phase 2 of the clinical trial was complete. PAVIA is a randomized controlled Phase 2 trial evaluating EYP-1901 is a potential nine months treatment for moderate to severe NPDR. Similar to the DAVIO 2 trial, our PAVIA trials saw significant investigator and patient interest during enrollment. The trial enrolled 77 patients exceeding the 60 patient target. Patients who were randomly assigned to one of two doses of EYP-1901 approximately 2 milligrams or approximately 3 milligrams or to the control group that received a sham injection. As in the wet AMD trials, EYP-1901 is delivered with a single intravitreal injection in the physician’s office.

As a reminder, NPDR is a very common retinal disease that affects almost one third of diabetic adults over the age of 40 and is projected to impact over 14 million Americans by 2050. In NPDR, vessels are weakened, potentially leading to swelling of the macula, which is called diabetic macular edema or DME, and may eventually result in abnormal blood vessel growth, which is called proliferative diabetic retinopathy, or PDR. Both DME and NPDR could ultimately result in severe visual loss. It’s important to note that there remains a great unmet need for a safe, efficacious and convenient treatment for NPDR that proactively reduces the risk of progressing to a site threatening complication over the long term. Approximately 90% of patients with NPDR currently received no course of therapy, apart from observation by their eye doctor until their disease progresses to DME and or PDR.

EYP-1901 in our Phase 2 PAVIA trial could potentially reduce the risk of progressing to these complications with a less intrusive treatment protocol. Recently, we reported an interim analysis of masked safety data from the Phase 2 PAVIA clinical trial and NPDR which showed that as of October 1, 2023, EYP-1901 was well tolerated with no reported drug related ocular or drug related systemic SAEs demonstrating EYP-1901’s excellent safety profile in NPDR for the first time. Top-line data from the PAVIA trial remains on track for the second quarter of 2024. As mentioned earlier, we plan to initiate a Phase 2 trial evaluating EYP-1901 in DME in the first quarter of 2024, for which we are calling the VERONA trial. We will share details of that trial at a future date.

The goal of the VERONA trial was to gain experience with the EYO-1901 in this potentially large indication. In September, we disclosed the new preclinical program called EYP-2301. EYP-2301 is TIE-2 agonist razuprotafib, formerly known as AKB 9778, which we have formulated to work in Durasert E. This has the potential to provide intravitreal sustained delivery over six months or longer to improve the treatment of wet AMD and diabetic eye disease. Previous preclinical and clinical studies show that razuprotafib delivered subcutaneously demonstrated proof of concept in diabetic eye disease and we believe that if delivering EYP-2301 intravitreally has the potential to offer new site saving treatment for patients with severe retinal disease, either alone or in combination with anti-VEGFs. Finally, we were delighted to announce that EyePoint expanded its board of directors with the appointment of Stuart Duty, a seasoned biopharmaceutical financial executive who brings more than 25 years of experience to the role.

We also strengthen our executive leadership team with a promotion of our CFO, George Elston to the additional role of Executive Vice President. George has wealth of experience, financial acumen and strategic guidance has been a tremendous asset to our EyePoint team. On behalf of the entire leadership team, we welcome Stuart and congratulate George. And we are grateful for their valuable leadership at EyePoint as we continue to build value for our shareholders during this active time in the company’s growth. I’d like to thank the entire EyePoint team for an incredibly productive quarter. And I will now turn the call over to George, to review the financials, George?

George Elston: Thank you, Jay. As the financial results for the three months ended September 30 2023, were included in the press release issued this morning, my comments today will be focused on a high level review for the quarter. For the third quarter ended September 30, 2023, total net revenue was $15.2 million, compared to $10 million for the quarter ended September 30, 2022. Net product revenue for the third quarter was $0.8 million, compared to net product revenues for the third quarter ended September 30, 2022 of $9.7 million. Consistent with the exit from the commercial business, the decline in revenue resulted from the sale of the YUTIQ franchise in May 2023, along with the discontinuation of marketing activity for the DEXYCU franchise this year, due to the loss of pass through reimbursement by CMS effective 1/1/23.

Net revenue from royalties and collaborations for the third quarter ended September 30, 2023, totaled $14.4 million compared $0.3 million in the corresponding period in 2022. The increase was primarily due to a recognition of deferred revenue from the sale of YUTIQ, which will be recognized over a two year period, which began in Q2 of this year. Operating expenses for the third quarter ended September 30, 2023, totaled $29.6 million versus $28.4 million in the prior year period. This increase was primarily driven by higher R&D spending on EYP-1901 clinical trials, partially offset by lower sales and marketing expense. Non-operating expense net total of $1.8 million and net loss was $12.6 million or $0.33 per share, compared to a net loss of $18.4 million or $0.49 per share in the prior year period.

Cash and investments at September 30, 2023 totaled $136 million, compared to $144.6 million at December 31, 2022. We expect the cash cash equivalents and investments on September 30, 2023 will enable us to fund our current and planned operations into 2025. In conclusion, we are pleased with EyePoint’s progress in the third quarter and year-to-date and are well capitalized to advance our product pipeline to key value inflection points. I will now turn the call back over to Jay for closing remarks.

Jay Duker: Thank you, George. We believe EYP-1901 is a potentially paradigm shifting treatment for patients suffering from serious retinal diseases, providing unique benefits that may include delivery of a vorolanib consistently over approximately nine months, a new mechanism of action to treat retinal disease beyond anti-VEGF ligand blockade the potential for neuro-protection and anti-fibrosis and a proven delivery technology with a positive safety profile. I will close by recapping key upcoming catalysts including the top-line data from our Phase 2 DAVIO 2 clinical trial anticipated in early December, the dosing of the first patient and the Phase 2 vorolanib clinical trial of EYP-1901 and DME in the first quarter of next year, and top-line data released from our Phase 2 PAVIA clinical trial in the second quarter of 2024.

This remains an incredibly exciting time for EyePoint as we are well positioned to execute on our upcoming milestones and continue to transform the treatment landscape with innovative long-term solutions to improve both the vision and the lives of patients with serious retinal diseases. Thank you all very much for listening this morning. I will now turn it over to the operator for questions.

See also 25 Funny Prank Call Ideas for your Boyfriend and Analysts on Wall Street Lower Ratings for These 10 Stocks.

Q&A Session

Operator: Thank you so much. Presenters, our first question comes from the line of Tyler Van Buren of TD Cowen. Your line is now open.

Tyler Van Buren : Good morning. Congrats on the progress thanks very much for the call. I have a couple of questions for you. First one is, I appreciate how transparent you guys have been with respect to your BCVA outcome scenario ranges for the DAVIO 2 trial ahead of the data. But were these constructed in accordance with KOLs? And can you elaborate on what the KOL feedback have been regarding what they need to see from the trial, perhaps a preview of sorts of the upcoming KOL event? And then the second question is, upon positive data, can you talk about how quickly you would be able to start the Phase 3 program? And is it possible to get the top-line data in accelerated fashion? Or should we think of it being a more traditional wet MD Phase 3 program timeline?

Jay Duker: Thanks, Tyler. Appreciate the questions and your interest. First of all, with respect to the BCVA ranges, so there’s really kind of three ways to look at this. And the first way is what is the FDA want, and that’s pretty clear. Not the non-inferiority margin, it’s got to be minus 4.5 letters, you can’t cross it with your competence intervals. And depending on your — and your study and your standard deviation, you could come pretty close to 4.5, and get a result. But the second part of what you asked is, what the KOLs want. And interestingly, when you ask them that I’m sure you have, they’re generally fine with a good efficacy profile, a good safety profile, as long as the numerical change is in the range of three to four letters.

It’s interesting that I think that they believe in general that that type of change in vision is not noticeable to the patient. On the other hand, we, as a company look at it as a combination of both of those. And so that kind of minus three 3 or better, I think, based on what we anticipate the standard deviation of the trial might be in a pivotal trial would likely be non-inferior, and meet the KOLs expectations. Of course, we don’t know what the results are yet, we’ll know in approximately a month, but there’s reasons to believe that we could do considerably better than that. Second question was on the start of the Phase 3 with good to great data. We believe we can start the first Phase 3 trial in the second half of next year, it may be closer to the fourth quarter, we don’t know we haven’t really zeroed in on that.

Suffice it to say the company has been really focused on Phase 3 prep for basically the last nine months. And there’s a lot to do to get ready. And we continue to be on track for our goal to start in the second half of next year. From an accelerated perspective, I think the trouble with unmasking early is you penalize yourself with a higher end. And, cost and speed is critical here. And if our statistics suggest we can do the Phase 3s with relatively low ends, I think it’s best to get them done right and get them done fast as opposed to, be penalized for an early look. Hope that was sufficient. Anything else?

Tyler Van Buren : Nope, that’s clear. Thank you very much.

Operator: Thank you so much. Your next question comes from the line of Yatin Suneja of Guggenheim. Your line is now open.

Yatin Suneja : Thank you for taking my question. So Jay, you just mentioned that you need to focus on obviously delivering this data but also in the Phase 3. So my question to you is and it also has to do with the competitors, as how does the EYLEA induction relate to the mechanism of TKIs in wet AMD? And then can you maybe just talk about why you think it is necessary for patient to do that induction when your competitors are doing a superiority study with just a single dose aflibercept as a comparison, I’d love to get your thoughts there.

Jay Duker: Thanks, Yatin. Those are two great questions. Let me start with the induction. First of all, from a scientific perspective, it’s unclear if the induction offers anything to the patients treated with the EYP-1901. We have pretty good preclinical data that shows that our drug is bioavailable in a cord of animals [ph] within minutes of injection and reaches therapeutic levels and hours. On the other hand, we’ve set out from the beginning to use EYP-1901 as a maintenance therapy for previously treated wet AMD patients. The decision to do the reinduction is something that came up with our discussions with the FDA around the structure of the Phase 3 pivotal trials. When we had our Type C meeting the FDA was certainly agreeable to us using EYLEA as our control in the Phase 3.

And when we discussed on label EYELA, the FDA’s response was, yes, after you reinduce the patients, you can go to every other month on label EYLEA. And the rationale was to patients you enroll in that trial may be undertreated. And therefore, before you allow them to go to every other month, you’ve got to reinduce them, made sense. And then we had to re-engage the FDA and said, well, if we’re going to make an assumption that some of these sites are undertreated in the real world, which we think is probably true, we’d like to reintroduce all the patients in the study. And they were agreeable to that. What that did, however, is you may be aware, you can have a nine-month efficacy endpoint in a wet AMD study, but our nine months doesn’t start ticking until after the reupload of EYLEA.

So what it was, the trade-off here was we needed to do in our pivotal trial, the efficacy endpoint of approximately one year, we thought that was a fair trade-off, to be able to level the plain field and make sure that we weren’t allowing relatively undertreated patients to flood the EYP-1901 arms. So it really isn’t a scientific reason, I’d say it’s a regulatory reason and a de-risking reason that we’re reinducing. So that I think gets into the second question, why induction. Again, I think I’ve covered that. Our decision to do this, I think more typical non-inferiority, Phase 3 is again — comes out of our discussions with the FDA and a derisking. We think that this is the fastest and least risky pathway to FDA approval.

George Elston: I remind you that remember, we had a Type C meeting with FDA laying out the Phase 2 plans, which would inform Phase 3. And so that’s also a big driver of focus going into the Phase 3s next year.

Yatin Suneja : Got it. Very helpful. Just one more question, if I may. Could you talk about the dose response? There are two doses in this study. So just curious, what would you expect? Should we expect any dose response? And then, if, let’s say, if there is no dose response, just curious, like how you will decide on the dose to take forward? Thank you.

Jay Duker: Yeah, that’s another great question, Yatin. And we really don’t know if there will be a dose response, because it’s certainly possible that our 2-milligram dose will work efficiently to shut down the receptor for up to nine months. And therefore any additional drug may not give you additional benefit. So I would say we’re, as a company a little bit agnostic to that. I mean, it’s nice to show a dose response. And there’s some validation to that, understandably. On the other hand, if both our 2-milligram dose and our 3-milligram dose work great, and they’re essentially the same, we would opt to go with the 2-milligram dose approximately in our pivotal trial against a lower dose, most likely around 1-milligrams. What that will do of course, is enable us if successful, to have fewer inserts in the eye, and lower the COGS.

Yatin Suneja : Thank you so much.

Operator: Thank you so much. Your next question comes from the line of Jennifer Kim of Cantor Fitzgerald. Your line is now open.

Jennifer Kim : Thank you for taking my questions. As to, the first is just touching on the BCVA question. Jay, I think in your prepared remarks, you said a BCVA letter change differences, three letters are better would be good. And I think investors are generally aligned with that. The most pushback I’ve gotten is on the minus three to minus four letter scenario. So I was curious to see if you have any thoughts on that scenario. Is a base case or the hope that it would be better than that? And similar to that, in this scenario, where you get a minus three letter difference. With stat they have to assume a standard deviation better than what we’ve seen with say PDL.

Jay Duker: Sure. Great questions, Jennifer. Thanks. So the best corrected visual acuity of three or less difference, really would be I think kind of a clear pathway in everybody’s mind, if we can replicate that in the pivotal trials. Minus three to minus four is it kind of at theoretical range where one could argue that with a minus, let’s say three and a half letter difference in a large enough n and a small enough standard deviation, that that could be statistically non-inferior. But then you’re getting into a point here, where would it be commercially successful. So while it would meet that first bar of FDA approval, it may not meet the second bar of what the KOLs want, and perhaps, as you say, what the investment community might want to see as a result.

So I would say, again, centering on the three letters are better, I think that meets everybody’s test for success here. I’d remind everyone that, we were minus 2.5 letters in the Phase 2 at six months after the 1901 was injected and one would expect and of course, we don’t know this yet, but one would expect the EYLEA control arm to be relatively stable after the load between weeks, eight, and week 32. And if it is, and we can replicate minus 2.5 again, I think that that would be really an upstanding result. So the words again, is base case. And it’s again, I think a lot of this depends on what the view of what we need to do to advance the drug into, Pivotal trials. And one could see with a very tight standard deviation that even minus three letters would be statistically significant.

So you mentioned the PDS standard deviations. And again, if you go back and look at the pivotal trials, and wet AMD, I think basically, every one since EYLEA was approved was done on a non-inferiority basis, and treatment naïve patients and generally had standard deviation to the change in visual acuity of around 12 letters. That’s because their treatment naive, some eyes respond some eyes don’t. The PDS Phase 3 enrolled previously treated patients, like we did, but they limited the length of time to diagnosis to nine months prior. So some of those eyes were still relatively early in their treatment and still perhaps being treated extended. They weren’t at a stable kind of pace of their — treat of their disease, yet. They had 7.1 letter standard deviation.

So we have reasons to believe that because of our enrollment of eyes that had the disease longer than nine months, are suggesting they’d be more stable that our standard deviation could be lower than that. That ends the questions?

Jennifer Kim : Yeah, it does. If I could one more?

Jay Duker: Sure.

Jennifer Kim : Your competitor received — or announced that they received an agreement under their superiority trial design this morning. Net net, this seems like good news for the overall space given the post draft guidance world we’re in. But I’m wondering if you have any takes on that?

Jay Duker: Well, yeah. And again, that was just announced this morning, with no details. But at a high level, this is great news. It’s great news for all of the TKI companies, because it shows that the FDA is willing to work with us to advance this new paradigm into the clinic. And as we know, it’s great for the space. When investors see that there’s a clear pathway to approval, then things are derisk. From our perspective, we’re very comfortable with our Phase 2 design. And if we get good to great results. At this point, I think our Phase 3 design, which the FDA has already seen and commented on and through our Type C meeting, I think that still would represent the fastest, least risky way to get approval for our drug. Again, last comment about this, though, is once we are able to see the details of the spa [ph] that Oculus received.

We will like any company should do is, take a look at our program and see if there’s any learnings from what they’re doing. But I have to again, state we’re very comfortable with our approach to the pivotal trials in pathway to approval.

Jennifer Kim : Okay, that’s helpful. Thanks for taking my question.

Jay Duker: Thank you.

Operator: Thank you so much. Your next question comes from the line of Colleen Kusy of Baird. Your line is now open. Colleen, your line is now open. You may ask your question.

Jay Duker: Maybe we could go back Colleen after the next one.

Operator: All right. Your next question comes from the line of Daniel Catalin of Chardan. Please go ahead.

Daniel Catalin : I couldn’t hear that was my name that was called. Yeah. Thank you for taking the question. I have a quick one on 2301. Wanted to ask for the rationale for this product, and specifically, how does it fit with 1901 strategy given that there could be some overlapping indications? Thank you.

Jay Duker: Thanks, Daniel. That’s a great question. 2301 is based around a molecule that’s been studied into Phase 2, by a company called Aerpio, we acquired their assets, and their lead product AKB-9778, was delivered subcutaneously for diabetic macular edema, and for a diabetic retinopathy. And it showed really promising anatomic results. Although the visual results did not enable the company to really go forward into pivotal trials. This drug activates TIE-2, and by activating TIE-2, you stabilize blood vessels, and you down regulate angiopoietin or Ang2. Now, you may be aware that Obiosmo [ph] is bispecific that blocks VEGF and Ang2 so that pathway of Ang2 blockage is a validated. And we believe that AKB-9778 now EYP-2301 may be a better way to block that pathway by activating TIE-2.

Secondly, we can now deliver it sustained release. So these bispecific molecules still require relatively frequent injections. And we believe we can deliver at therapeutic levels for over six months with sync injection of 2301. So how does it fit in? Well, that remains to be seen. I think that we could develop it and tested in a non-inferiority fashion to get a label against the standard of care for either wet AMD or DME or both or we can choose to go for a superiority trial using it in conjunction with an anti-VEGF, that, of course, would be perhaps riskier because the anti-VEGF are so effective, it sets a really high ceiling. On the other hand, if one is successful with that approach, you would likely have a multibillion dollar product because doctors would relish the opportunity to do even better than anti-VEGF alone.

How would it fit into a EYP-1901? You can highly speculative, because we’ve got a long pathway to go with 2301 shorter pathway with 1901, but you could envision a day when both have approval as standalone and as combo and one could do it one of each in a single injection. Obviously, that there’s a long pathway to that and a lot of permutations that we’re going to look at. But in a nutshell, what we believe we can do with 2301 is activate the TIE-2 pathway secondarily inactivating Ang2 and to do — to do it in a sustained release fashion with a derisked molecule.

Daniel Catalin : All right, got it. Thank you.

Operator: So much. Your next question comes from the line of Sean Kim of Jones Trading. Please go ahead.

Sean Kim : Thank you for taking my questions. Just a couple quick ones. So I guess for the wet AMD program, following the DAVIO 2 readout, would you be requesting on end of Phase 2 trial with FDA to further guide to Phase 3 trial design?

Jay Duker: That’s our plan. In fact, we would plan currently on having both a clinical end to Phase 2 and a CMC into Phase 2 to gain alignment in both those areas.

Sean Kim : Okay, got you. And the potential timing of that meeting?

Jay Duker: I would say late in the first quarter of next year, may lead into early second quarter of next year, depending again, how soon we can get all the clinical tables DAVIO 2 in a format that we can submit.

Sean Kim : Okay, great. Thank you.

Jay Duker: And the [multiple speakers] winning step here.

Sean Kim : Okay, got you. And what rally by your complement inhibitor collaboration? What updates should it — should we be expecting from that program in 2024?

Jay Duker: Thanks for that question. Sean, that’s a good question. And the answer is, as we’ve kind of said before, we’re really excited about the collaboration, we’re really excited about the molecule. Getting complement inhibitors, to last several months at therapeutic levels in the eyes of challenge. If it wasn’t a challenge, you’d see them already. However, we’ve made great progress. And we remain optimistic that we will be able to sustain release a complement inhibitor. But until we have really, are confident in our formulation and our ability to do this consistently, we’re not going to make any public statements around that. So I would say that, again, we’re still working on it. We have made great progress. We have some really great scientists working on this. But it’s not an easy task to accomplish.

George Elston: Yeah, Sean. Maybe I can add to that, because if you look at how we — our cadence on disclosure, we just disclosed 2301 this past quarter, because we’ve gotten that to a point where it formulates and we’re in a position to move it into those preclinical programs. And I think you should think the same for the compliment space as well. Once we get that formulation that we know works and has the right window, we’ll start talking about it a little more publicly on what that pathway looks like.

Sean Kim : Okay, I got you. Thank you. And last one from me, is that about the cash runway into 2025. The study includes potential pivotal three, Phase 3 trials in wet AMD as well, now that you’re looking to start in second half.

George Elston: Yeah, thanks for that question, Sean. So our phase — I’m sorry, our cash guidance into 2025 includes the ongoing Phase 2s. The planned phase in DME, which is the VERONA trial, which will we expect to start in Q1 along with a significant amount of Phase 3 prep, to start to be in a position to start the trials, sometimes second half of next year. It does not include the actual clinical trial costs for the pivotals. And, as we’ve talked previously, that’s something that we’re going to look to a range of options to fund, which includes potential equity weight arrays, we’ve got strong strategic partner interest and some other levers that we can pull. And we’ll be talking about that, over the coming months on our plans to fund that really after Phase 2 results.

Sean Kim : Okay, thank you again, for taking my questions.

Jay Duker: Good question. Thank you.

Operator: Thank you so much. The next question comes from the line of Yale Jen from Laidlaw & Company. Your line is now open.

Yale Jen: Questions to end, my question probably will be focusing on the potential future Phase 3 study. The first one is that in the one of your latest presentations, you have laid out four scenarios in terms of Phase 3 of different BCVA outcomes. I’m just curious, based on those assumptions, what might be your thoughts in terms under each scenario, what the Phase 3 study sites might be, then I have a follow up.

George Elston: Yeah, you’re talking about on the BCVA measures? Is that what you’re refercing?

Yale Jen: Right from 1.0 all the way to minus 4?

Jay Duker: Yeah. Yale, if I may, that those are actually we’re — our interpretation of the Phase 2 outcomes of where they might land and what they might mean for those outcomes. Without knowing the standard deviation of the change in visual acuity, we can’t predict the size of the trials. But you can run it into a statistics package and we’ve certainly done that. If we’re minus one letter worse than the EYLEA control and the standard deviation is seven or less, we could do pivotal trials that might involve as few as 250 to 300 patients. So it’s fluid because we don’t know those results yet. But there’s a second consideration. I think for most of these trials, that when you’re doing treatment naive patients when the standard deviation is larger companies ended up doing 500-600-700 patient trials.

But that’s because not only the standard deviation, because the FDA requires a certain number of patients for safety. So the FDA requires that you submit and you’re able to submit with one year efficacy data of your second trial, you don’t needed to your safety to submit. But at the one year, you need to have 300 patients treated with your go-to-market dose or higher. Ultimately, you need approximately 400 patients treated with your go-to-market dose or higher for safety. So that’s another consideration for the end of the trial. And that might, suggest that we would maybe not do a one-to-one-to-one randomization in the pivotals and have more patients in the higher dose to reach those safety measures, knowing that the statistics would allow a smaller number.

As I’ve said already, our view is to do this as quickly as safely as de-risked it as less expensive as possible. And that’s how we’re going to view all the options and the pivotal trials.

Yale Jen: Okay, great. That’s very, very helpful. And you mentioned earlier that the Phase 3 also incorporate the retreatment options or costs. Could you elaborate a little bit more in terms of at least what you propose the retreatment, any details on that?

Jay Duker: Sure. Yeah, thanks. And we’ve been — I think we’ve been very consistent from the start. Even though we have in-vivo and in-vitro evidence that these EYP-1901 inserts will release the therapeutic levels for approximately nine months, we’ve done enough tox studies to show that even if we reinject earlier than that, we’re in a very safe area for toxicity of vorolanib in number of inserts. In fact, we have not found the maximum tolerated level of a vorolanib within [Indiscernible]. So from a safety perspective, it’s not a problem. Why did we choose six months? I think it’s simple. That’s what retina specialists want. They want flexibility to dose drugs when they want to dose them. And while it’s clear that some eyes can go longer than six months, remember, in our pivotal — in our Phase 1 trial rather, we had a third of the eyes made it a year without supplement.

We’re going for the label of every six months, because we want to give the doctors flexibility to dose that often should they choose to.

Yale Jen: Okay, great, that’s helpful. And then maybe just add one more that regarding spots from the competitors’ news, kind of this morning. Was that something you guys also consider or it still depends?

Jay Duker: Well, yeah, like, again, I think I did address this earlier, but I’ll reiterate. We have what we believe is an agreement with the FDA it’s in writing, that we have an acceptable protocol for our pivotal trials. If that is the fastest, least risky way to proceed that’s our plan. And we’ve seen nothing at this point alter that. Obviously, it’s dependent on good-to-great data from DAVIO 2. But there may be learnings from other companies’ approach and we’ll be studying that to see if there are any learnings for us. So until the details are out, I really can’t make any comment on that except to reiterate once more, we’re very comfortable with where our program is at right now.

Yale Jen: Okay, great, and congrats on the other progress and look forward in early-December.

Operator: Thank you so much. Your next question comes from the line of Yi Chen of H.C. Wainwright & Company. Your line is now open.

Yi Chen: Thank you for taking my question. So my question is by positioning 1901 as a maintenance therapy, well, your competitors seems to target treatment naïve patient in their Phase 3 trial. Does that mean you could potentially lose part of the market in the future? I mean, could you use 1901 for treatment naive patients as well? Thank you.

Jay Duker: So if we get a label for maintenance therapy, and the label includes follow — the use of 1901 after induction with EYLEA or any anti-VEGF, let’s say hypothetically. I think doctors knowing the retina specialist community the way I do. I think doctors will try it earlier than after three induction doses, in some cases. If we’re safe, effective and tolerable, I think the argument might be, why not use it after a second induction or first induction dose? Will it be used as solo therapy initially? I think that needs to be shown that it’s effective that way. So again, the market share depends on a lot of things. And once again, one of the things we just talked about was reinjection. And the hope and expectation is we would get a label for every six months reinjection.

The FDA was clear that if we wanted to label for reinjection, we needed to test reinjection in the pivotal trials. And so I think that — if that is the way our label reads, eventually, I think that will have an advantage also. So it’s hard to predict, I will certainly admit that. But once again, we are very comfortable with where our program is at and the approach that we’re taking. And the retina community that we’ve talked to, I think, is in favor of the approach that we’re taking. And if we get that label, I think retina specialists will figure it out.

George Elston: And yeah, maybe if I can add to that, just keep in mind, the vast majority of the market is previously treated patients, and the fact that we are going to be able to read those every six months is going to be meaningful on our label. And, I think ultimately, physicians will have the opportunity to use it sooner. But as we think about our approach and the market approach, we’re addressing a very significant portion of a $10 billion-plus market. So we’re comfortable with our pathway.

Jay Duker: And I could add one more, George that was an excellent point you made about for every newly diagnosed patient, a retina specialist probably has a dozen or more previously treated patients in their practice. So once again, from a recruitment perspective, and from speed to filling a trial, there’s a lot more maintenance therapy patients out there than there is newly diagnosed. And that’s one of the many reasons why we’ve chosen this pathway, speed to approval.

Yi Chen: Thank you.

Jay Duker: Could we see if Colleen is still on the line and wants to ask a question?

George Elston: Yes. She responded. She’s having issues, number of calls this morning. So she’s — we’ll find her later.

Operator: All right. And we actually don’t have any further questions in the queue at this time. So ladies and gentlemen, thank you for participating in today’s conference. This does conclude your webcast on your program. You may now disconnect. Everyone, have a great day.

Jay Duker: Thanks, everybody.