IVERIC bio, Inc. (NASDAQ:ISEE) Q4 2022 Earnings Call Transcript

IVERIC bio, Inc. (NASDAQ:ISEE) Q4 2022 Earnings Call Transcript March 1, 2023

Operator: Good morning. And welcome to the IVERIC Bio Fourth Quarter 2022 Earnings Conference Call. All participants will be in listen only mode . Please note this event is being recorded. I would now like to turn the conference over to Kathy Galante, Investor Relations. Please go ahead.

Kathy Galante: Good morning. And welcome to IVERIC Bio’s conference call. Representing IVERIC Bio today are Glenn Sblendorio, Chief Executive Officer; Dr. Pravin Dugel, President; Keith Westby, Chief Operating Officer; David Carroll, Chief Financial Officer; Dr. Dhaval Desai, Chief Development Officer; Chris Simms, Chief Commercial Officer; and Tony Gibney, Chief Business and Strategy Officer. I would like to remind you that today we will be making statements relating to our IVERIC Bio’s future expectations regarding operational, financial and research and development matters. These statements constitute forward-looking statements for the purposes of the safe harbor provision under the Private Securities Litigation Reform Act of 1995.

These statements cover many events and materials that are subject to various risks that could cause actual results to differ materially from those expressed or implied by any forward-looking statements. I refer you to our SEC filings and in particular to the risk factors included in our quarterly report on Form 10-Q filed on November 4, 2022, for a detailed description of the risk factors affecting our business that could cause actual results or events to differ materially from the forward-looking statements that we make. In addition, any forward-looking statements represent our views only 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 at some point in the future, we disclaim any obligation to do so, except as required by law.

I would now like to turn the call over to Glenn.

Glenn Sblendorio: Well, thanks, Kathy, and good morning, everybody. In 2022, we continued to deliver on our goal to deliver to provide potential treatments to patients suffering from retinal diseases with avacincaptad pegol or ACP achieving a statistically significant reduction in the rate of geographic atrophy progression at the 12 month pre-specified primary endpoint across two Phase 3 clinical trials. We began 2023 with the FDA’s acceptance of the filing of our new drug application for ACP for the treatment of geographic atrophy or GA secondary to age related macular degeneration. With the achievement of this important milestone, we moved closer to our goal of providing patients with the treatment for GA, a devastating disease that leads to irreversible blindness.

Additionally, our NDA has been granted priority review by the FDA and given a Prescription Drug User Fee Act or PDUFA date of August 19, 2023. We were also informed that at the time of the FDA acceptance letter, the FDA had not identified any potential review issues and the FDA was not currently planning to hold an advisory committee meeting for ACP. This morning, we announced results of a post talk analysis on the data from the ACP, GATHER1 and GATHER2 clinical trials signaling an up to 59% risk reduction in the rate of vision loss for the ACP 2-milligram dose compared to sham at 12 months of treatment. Pravin will discuss this new data in more details in a few moments. As we move closer to potential approval, our key focus in 2023 is to make ACP commercially available to physicians and their patients suffering with GA as quickly as possible.

About a year ago, we started to build world class commercial team that includes sales leadership, reimbursement, marketing and market access. Our commercial leadership team brings extensive experience in launching drugs for retinal diseases in large markets. We continue to accelerate our launch plans and expect to have a full US team, including a field based sales team hired by early April of this year. Our commercial team, which is led by Chris Simms, expects to have a field force of approximately 50 to 70 sales representatives and an organization of about 120 in total. Since it’s our year end call, I wanted to reflect back on some of the significant accomplishments of 2022. We received top line data from GATHER2 in early September and finished our rolling submission of the NDA for ACP in late December.

This was done in just over a little — just over three months. In November 2022, we announced the FDA granted breakthrough designation for ACP for the treatment of GA secondary to AMD. To date, ACP is the first and only investigational drugs to receive breakthrough therapy status for this indication, which was granted based on the 12 months results from both GATHER1 and GATHER2. We also intend to pursue further discussions with the FDA but utilizing that GATHER1 and GATHER2 clinical trial data included in the current NDA submission to support treatment of GA associated with earlier stage disease, including patients with intermediate AMD. We do not plan to conduct a new clinical trial of ACP in patients with intermediate AMD. We initiated an open label extension study for patients who have completed their month 24 visit in the GATHER2 clinical trial with the aim of providing patients long term access to ACP and collecting additional safety data.

And we continue to invest in additional lifecycle initiatives for ACP to expand the patient population and evaluate multiple sustained delivery technologies for ACP. On the financial front, in December of 2022, we raised approximately $324.3 million in net proceeds in an underwritten public offering of our common stock. Also in 2022, we secured a term loan credit facility providing us with up to $250 million in non-dilutive debt financing, under which we have drawn down $100 million to date. These financings further strengthen our balance sheet and provide financial flexibility, as we continue to build our US launch readiness plan and prepare for the potential commercialization of ACP. Dave is going to provide some more details on our cash position in a moment.

I also want to acknowledge Pravin’s election to the Board of Directors at the beginning of this year. Pravin has been instrumental in helping to shape the company’s business strategy and in overseeing the development and regulatory strategy for ACP. Pravin, it’s truly a pleasure to work with you and I look forward to our continued work together. Before I turn the call over to Pravin, on behalf of IVERIC Bio, we want to take a moment to congratulate Apellis for their approval of SYFOVRE, which finally provides patients with the first treatment for GA. We also want to commend the FDA for their ongoing commitment to finding treatment for patients suffering from AMD. I want to thank all of you for your continued support of IVERIC bio. And I will now turn the call over to Pravin.

Pravin Dugel: Thank you, Glenn, and good morning, everyone. I could not agree more with you, Glenn. A big congratulations to our friends at Apellis. Our plans to drive ACP to a potential approval in GA has been clear and consistent throughout this journey. We believe our special protocol assessment for GATHER2, fast track and rolling review of our NDA, breakthrough therapy designation and now priority review further strengthens our position as we get closer to a potential near term launch of ACP for GA patients. We look forward to collaborating with the FDA throughout the remaining NDA review process. We are excited to announce a post hoc time to event analysis of the data from the GATHER1 and GATHER2 trials that signaled a reduction in the rate of vision loss for the ACP 2-milligram groups compared to sham after 12 months of treatment.

In this analysis, we define vision losses greater than or equal to 15 letter loss in Best Corrected Visual Acuity or BCVA from baseline measured at any two consecutive visits. These results were consistent in the GATHER1 and GATHER2 clinical trials when analyzed independently, which signaled a 44% reduction with a hazard ratio of 0.56% and a 59% reduction with a hazard ratio of 0.41 respectively in the rate of vision loss for the ACP 2-milligram dose compared to sham after 12 months of treatment. And the combined analysis of GATHER1 and GATHER2 patients in the ACP 2-milligram groups experienced a 56% reduction with a hazard ratio of 0.44 in the rate of vision loss compared to sham after 12 months of treatment. This post hoc analysis evaluates the potential vision loss signal through 12 months of treatment and is an exploratory analysis in nature.

Photo by National Cancer Institute on Unsplash

On average, it takes only 2.5 years for GA lesions to start impacting central vision. It is encouraging to see vision loss reduction data at early time intervals in the first 12 months, which further supports the statistically significant GATHER1 and GATHER2 primary endpoint. This time to event analysis will be presented at ARVO in April. We believe this is the first time a reduction in the risk of vision loss will be presented for a potential treatment being investigated for GA. With the completion of our NDA submission in December of last year, we have been able to turn our attention to additional analyses of the GATHER program results. We believe the reduction in vision loss data we announced today is important for our planned discussions with European regulators and potential ex-US collaborators.

Additionally, this timing provides us the opportunity to have the data presented at a major scientific meeting, ARVO, in April. Cross GATHER1 and GATHER2 combined, the most common adverse reactions experienced by 5% or more of patients over 12 months and patients who received ACP 2 milligrams was conjunctival hemorrhage 13%, increased IOP 9%, most of which were transient and resolved within 30 minutes of injection and CNV 7%. In both GATHER1 and GATHER2 and the ACP 2 milligram groups, there were no cases of endophthalmitis, no serious intraocular inflammation events, no vasculitis and no ischemic optic neuropathy events reported through month 12. We look forward to our PDUFA goal date of August 19, 2023. In the meantime, we will continue to work collaboratively with the FDA on review of our NDA.

We believe we are well positioned to become a leader in the development and commercialization of safe and effective treatments for retinal diseases and to create long term value for our shareholders. We thank you for your time and support, and look forward to updating you on our progress going forward. I will now turn the call over to Dave.

David Carroll: Thank you, Pravin, and good morning, everyone. I’d like to highlight a few items from our press release to this morning and provide some guidance on our expected cash runway. For the quarter, our net loss totaled $59.1 million or $0.47 per share compared to a net loss of $33 million or $0.29 per share for Q4 €˜21. For the full year, our net loss totaled $185.2 million or $1.53 per share compared to a net loss of $114.5 million or $1.12 per share for 2021. This increased net loss was driven by increases in both R&D and G&A expenses. R&D expenses increased primarily due to the continued progress of the GATHER2 trial, increased manufacturing activities for ACP and increases in personnel costs associated with additional R&D staffing, including share based compensation.

G&A expenses increased primarily due to increases in commercial launch preparation expenses for ACP and increases in personnel costs associated with additional staffing, including share based compensation. Turning to our cash balance and expected cash runway. At December 31st, we had approximately $646.8 million in cash, cash equivalents and available for sale securities. With our successful equity financing and the flexibility provided by our term loan facility with Hercules Capital and Silicon Valley Bank, we believe we have the financial resources required to launch ACP for GA in the US if approved, and to meet our planned capital expenditures, debt service obligations and operating expenses for at least the next 12 months. This estimate does not include any potential new borrowings under our term loan facility beyond the $25 million that we plan to borrow in 2023 based on the FDA’s acceptance for filing of our NDA.

Upon the FDA’s approval of ACP, we may borrow an additional $75 million from our term loan facility. Thank you for your time. And I’ll turn the call back over to Glenn.

Glenn Sblendorio: Well, thank you, Dave, and thank you, Pravin. Operator, Andrew, if you can open the line for questions, please.

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Q&A Session

Operator: The first question comes from Annabel Samimy with Stifel.

Annabel Samimy: Thanks for taking my questions, and congratulations on the progress, getting to be really exciting and heated. So the vision loss benefit, I guess, is really interesting. I guess, the way it’s been phrased is that nobody really expected it this early on. So should we view this as a possible functional benefit that you can put in a label, will they put post hoc data or exploratory endpoints in a label, is there something that you can use to sort of, I guess, present yourself competitively to the market? And is there any more tangible functional measurement than that, like is this like the ultimate functional benefit that you can measure here?

Pravin Dugel: In regards to our labeling discussions, look, we are under review currently by the FDA and we obviously don’t want to be talking about our discussions with the FDA, so I really have no comment on that whatsoever. The message that I think this post hoc analysis gives us, and again, I want to emphasize that this is a post hoc analysis of a pre-specified safety endpoint and we should look upon this as exploratory data. However, having said that, we also believe that it’s quite impactful. The message here really is that vision matters and time matters. And let me take each one of them separately. The regulatory agencies have said that ultimately function will follow anatomy. And we’ve looked at a endpoint that that involves a slope analysis.

And I think what we’ve been able to show here with this post hoc analysis is that that loop maybe closed. This is the first time that we’ve really demonstrated a vision delta vision benefit based on the anatomy. So function did actually follow anatomy. In terms of time, time does matter. This is not like treating a wet AMD for instance. In wet AMD you can look — you can have fluid there, the fluid maybe resolved with anti-VEGF usage and function may come back. Here, once the photoreceptor cells die, they don’t come back. So the time of onset really does matter. We are very pleased to see that the time of onset was early in this retrospective analysis. So I think at the end of the day, this we consider supportive of our primary endpoint, which is the slope analysis.

This is supportive data of the endpoint. And again, I think the message here is that vision matters and time matters. And yes, there will be data coming out that will be additive to this. And we will be talking about this in major meetings and you will see other supportive data coming out as well. Thank you for your question.

Annabel Samimy: And if I can ask one more question. A lot of people are talking about target populations, who’s the low hanging fruit. And I think you have even stated in the past bilateral patients who’s loss vision in one eye and have the risk of loss in another eye, as well as possibly patients with GA in one eye and wet AMD in another, because they are already in the practices. So I guess, I’m curious about the latter target population. You had not studied patients with what AMD in the other eye. Just want to make sure I understand it correctly. You had excluded patients with wet AMD in the other eye, I think, just to reduce the risk of conversion. So how do we square that with the target populations that you might go after, or maybe I just didn’t understand it correctly, maybe you can clarify. Thanks.

Pravin Dugel: Yes, to be very clear, the reason that we excluded patients with choroidal vascular membrane in the fellow eye is really quite simple. It’s because, if we want to ensure that there is no crossover effect, these patients would effectively having to come in for up to two years every other week to be injected in one eye at a time. And we felt that, that was an excessive burden to be placed on these patients in clinical trials, and that’s why those patients were excluded. That was the only reason no other. In terms of the target patient population, I don’t think the fellow eye exclusion has any bearing on the target population whatsoever. I think what clinicians are looking for is a effective, efficacious and safe treatment.

And I believe that, as a clinician, I think all of my patients with geographic atrophy and also with severe intermediate macular degeneration are patients that I would consider for treatment. So I think, again, what we provided here today, the post hoc analysis, is a basis for that conversation, which is that there is potential here. Again, this is a exploratory retrospective analysis but there is potential here to prevent catastrophic vision loss and I think that is quite impactful.

Operator: The next question comes from Ken Cacciatore with Cowen.

Ken Cacciatore: Wondering if maybe you just step back and take a little bit of a crack at talking about the market itself, the size and maybe how we should be thinking about the evolution of it. And then Pravin, you get to be — you’re someone who’s sat in front of real patients with this real issue. Can you just talk about their motivation to treat? I know there is a lot of discussion about the frequency of treatment, but would really like to get your perspective on it. And then maybe within that, how the real world use on dosing may play out? And then just lastly, you keep on highlighting intermediate and it makes a lot of sense. Can you just talk about what the implications of that would be on utilization and how would it differentiate the label if you were able to get it?

Pravin Dugel: Let me first ask Chris Simms who is our Chief Commercial Officer to answer the first part of the question that you asked and I’ll handle the rest. Chris?

Chris Simms: I think the first part of your question is related to market size, and I think you’ll share what we’ve shared previously. We believe it’s a significant market, as we’ve said publicly, best measures is that we believe there’s about a 1.5 million to 2 million patients in the US alone that have some level or some stage of geographic atrophy. We also believe that number could be undiagnosed based on the sources of those data and the fact that some of that data is from a number of years back. And one of the things that we believe is important for this market is the education notably upstream where we believe a lot of these patients are not sitting with retina practices today. We believe the majority are under the care of a upstream ophthalmologist or an optometrist.

So therefore, the need, I think, to educate and engage with that community is critical to help facilitate awareness and fully ultimately diagnosis and referral for treatment. So our modeling on the market has not changed. We still believe it’s quite a significant market. However, the need for that education remains pretty high. I hope that helps.