With us for the Baird Global Healthcare Conference. My name is Colleen Kusy. I'm one of the analysts here covering biotech, and it is my pleasure to have with me the team from Oculis, including CEO Riad Sherif. Thanks for being with us, Riad.
Thank you.
So for those who are less familiar, let's start with a brief overview of Oculis.
Okay, thank you. So, yeah, formally, I'm not Sylvia. Sylvia is our CFO, and I have the pleasure also to be with our Head of R&D, Snehal Shah. So Oculis is a biopharma company focusing on Ophthalmology with three clinical-stage assets. I think I have a slide here. So three clinical-stage assets, OCS-01, OCS-02, and OCS-05. OCS-01 is the first and only product, as a topical product for DME in phase III, ongoing phase III. OCS-02 is a TNF inhibitor in ocular inflammation with the two indications, dry eye and uveitis. But what really differentiate this product materially vis-a-vis all other is we have a precision medicine approach in dry eye, and I will be able to explain and give more details.
OCS-05 is a neuroprotective agent in development in an indication which is called acute optic neuritis, with readout planned in few months now.
So, waiting for it.
Exciting, thanks. Great, so let's start with the lead asset, OCS-01. You're looking at it in a couple different indications.
The lead asset, diabetic macular edema-
Yeah
So DME. Kind of talk about what you view as the unmet need in DME and why you think OCS-01 could be an interesting option?
These are the programs. For DME, really, the unmet medical need is huge. Let me just give some background about the DME. In the U.S., in 2023, more than 60% of patient with a diagnosis of DME were not treated 12 months after the diagnosis, so therefore, huge population. Actually, in fact, patient with DME untreated represent two times patient who are treated, so this is the first unmet medical need. Just to be able to treat patient early instead of waiting for an injection into the eye, which patient do not accept immediately, and it takes time.
So therefore, if tomorrow you have a product which works as an injection, and our product works as an injection, exactly the same efficacy, but route of administration is fundamentally different, is a topical instead of injection, then you can treat this patient early. This is the first unmet medical need, and here, the good news for us is we do not have competition. The second unmet medical need is when the patient are treated, and today when the patient are treated with anti-VEGF, which represent 90% of what is being used in DME, 60% of them will respond appropriately, and 40% will not respond. And for this 40%, there is a material benefit into giving them a different mode of action, such as OCS-01, which is an anti-inflammatory.
And in fact, in our clinical trial, we have these two types of patient. We have naive patients who are coming from early, but also we have patient who were treated with a previous treatment and didn't respond appropriately. And the good news is both population, when you do the subgroups, both population respond positively to OCS-01. So therefore, the market we can address is between two to three times bigger than the current market.
Yeah, and you know, penetration in the back of the eye via an eye drop has been attempted many times in the past. But your Optireach technology has, you know, demonstrated that you're able to do that. What differentiates your technology that allows you to deliver the drug to the back of the eye?
Yeah. I think really, technology is built on three pillars. One is the technical. We are able to solubilize very high concentrations in a very small volume, and in fact, the reason I joined this company before I was working in Alcon. Alcon has dexamethasone. It's called Maxidex. We were trying to concentrate dexamethasone in more than two milligrams. We could not. This product is concentrate 15 milligrams per milliliter, so technologically, we have been able to address this hurdle. The second, we have nanoparticles, which has very long residence time in the eye. It's a matter of hours versus minutes, and in the same time, extremely safe for the eye. And the third, we are able to change the physical chemical characteristics of the nanoparticle to be hydrophilic in the beginning and then lipophilic after.
These three component, high concentration, long residence time, and penetrating different barriers, is able to create very high concentrations over time, which are just unheard of.
Yeah. And so you, last year, you reported some top-line data from stage one of the, of your first phase III study. Walk us through what those data showed.
So basically, the data in DME showed that an improvement in BCVA, which is best-corrected visual acuity, was 7.6 letters at week 12, which is, again, as I said in the beginning, identical to a monthly injection of anti-VEGF. The data also showed 27% of patient gained more than 15 letters at week 12, which is identical to what we get with anti-VEGF, and in the same time, very nice correlation in terms of reducing the edema in the retina measured by OCT as soon as week two. So efficacious and fast onset with nothing unexpected in terms of side effects. So this stage one gave us the confidence that the product works, it works extremely well, and it is safe.
And then we started the stage two, which is a full phase III, and the two trials, so we are doing two trials in parallel: Diamond-1 and Diamond-2 . Diamond-1 started in the end of the last year, and Diamond-2 started Q1 this year, in March this year. I'm extremely happy to say that the randomization is going really nicely, actually-
Ahead of our forecast, which is always good news.
Yeah. And what are the current timelines for enrollment expected?
Yeah, so we always said, we said we would need 12 months to enroll and 12 months treatment, because the readout is at week 52.
I would say we are on track. The Head of R&D will say to me, "No,"
We are on track. No, the team is doing great, great job, actually.
Great. And so the FDA signed off on a vehicle-controlled study, even though there are approved drugs for DME. Why is that?
It's the FDA guidance. It's really FDA position, and we made the proposal to have active against active two times, one in pre-IND and one in the phase II meeting, and FDA, for rational reasons, said, "Listen, you don't have a benchmark, and when you don't have a benchmark, you need to do a superiority trial versus placebo," which we are doing, and in the same time, of course, patients are protected because we have a rescue criteria which are aligned with FDA, so therefore, I would say it is a very elegant way to show superiority, which we showed in four trials, so this is the fifth and the last trial, and in the same time, in terms of patient safety, this is extremely well handled by the protocol itself and by FDA.
Great. And how are these studies powered, and what would you need to show in order for these to be positive studies?
So basically, what is expected by FDA to show statistical superiority in BCVA. So this is what we are planning to show. We showed it, so we are planning to show, but this is what is really expected.
What gives you confidence that the shorter timeframe that we looked at in stage one will translate into the longer timeframe in stage two?
Yeah. No, it's a very good question. So basically, in our trial with OCS-01, we did four clinical trials, all were twelve weeks treatment, and in the phase II, we did a follow-up of four weeks after. But in the same time, with the same API, as you know, which is dexamethasone, we have thirty-nine months experience with Ozurdex. And what we see with Ozurdex is if you are able to keep the same PK, you can maintain your gains, which we are able to keep our PK because we give the product every day. So therefore, we have actually very high confidence that this will work out. Now, of course, the trial is not done. Let's see the result.
But we are extremely confident. We are, we are extremely confident, and when we, when we speak with, with investigators also, and we ask them how, how the randomization is ongoing, patients are happy or not happy, do they have any issues? The feedback is extremely positive in terms of acceptance, in terms of adherence, and in terms of so far what they see. Now, of course, in double mask, you never know. But we, we... I mean, you know when, when the randomization goes very well, as it is going, it's always a very good signal in terms of the acceptance of your technology by the prescriber, acceptance of your technology by the patient, but also that there is, confidence into the community that they are doing the right thing for the patient.
And so when thinking about the market opportunity for this drug, where do you see OCS-01 fitting in commercially?
Commercially, we really... and this is really based on I don't know how many interviews we did directly, but also with third parties, like more than a hundred formal interviews with KOLs, and really, two, two segment: one is early intervention, which is first line.
As soon as you have DME, you start to treat with it. If it works, great. If it does not work, then actually it's easier to convince the patient to accept injections because, as a doctor, you would have shown that you started with something else and not immediately the injection. So therefore, first line will be really the driver. And the second is patient who are not responding to anti-VEGF. And in fact, without stratifying, without doing anything, in all our trials, it was all comers, and we always ended up with the same ratio between naive patient, which correspond to first line, and previously treated. It was always two-thirds first line, one-third previously treated.
So, yeah, the data so far that you've shown has been super compelling. I think kind of the main pushback or what, you know, some pushback that we get from certain investors is kind of on the interest in physician use of a steroid. Obviously, there's VEGF is also anti-VEGF is also approved. You know, how do you, what is the physician appetite for use of a steroid in DME?
I mean, it's huge. And again, I am back to just, like, actual, real data, randomization rate.
They are extremely motivated to use this drug. In fact, unmet medical need is huge. This product is efficacious, it's safe, and it's versatile. You can titrate up to drive more efficacy. If you have a side effect, you can always titrate down. If you have anything, you can stop, and you don't have any issues. So therefore, this product offers a versatile, efficient solution. So, and the feedback we have from both populations, because this product will open a door for a new population to be able to treat the patient who are GOs, who are comprehensive ophthalmologists today is retina.
But when you speak with the retina, they are using it, and actually when we asked them, we asked retina, "How do you see this product?" They say, "We are going to use it for first line or switch slide combination for our patients who are not responding." But for general ophthalmologists, they are so happy because this is for them, first time ever where they will have a solution. Today, they are making the diagnosis, referring the patient. We need six months for referral to the retina. Tomorrow, they see a DME, they will treat it, and they might refer, but at least the patient will not wait his or her disease to worsen before going to the retina. So the acceptance is very high because of the characteristics of the product.
On the safety side, you know, one of the things we see with a steroid is the elevation in intraocular pressure. Can you talk about what the data have shown so far, and then the comfort level of a GO for how to manage that intraocular pressure?
So basically, first, what we know about IOP. So we know that any steroid at any dose, you will have an IOP increase. Okay? The second thing we know is we see less IOP with topical than with injectables. Injectables are around 30%, topical is around 20%. It's nothing to do with OCS-01 itself. It's really the route of administration have the different IOP characteristics. In our trial, in all, in the four clinical trial we had, we had between 20%-22%, any IOP at any visit. It can be one millimeter, it can be 10, but any IOP, so the maximum is 22%. With injectable, you have more, like 30%-36%.
Within the 20%-22%, depending on the trial, we had between 7%- 11% of patients who took an IOP lowering.
They all responded to IOP lowering, and no one was stopped from the trial from IOP. And we know when we followed this patient, we know that all IOP was reversible four weeks after the stoppage of the treatment. So what it tells, and also what we know, 90% of the IOP, and we know it very well with Ozurdex because we have a very long-term data, we know that 90% of IOP happened in the beginning. So therefore, this is a known side effect. We can monitor it. It happened in the beginning. Like, it is not a surprise where you have patient who is responding stable, and at month nine, you have an IOP like a surprise. No surprise, it happened in the first three months.
Therefore, you can monitor it, and you will end up with 10% of patient, more or less, between 7% to 11- 10% of patients, where you ask your question: "Do you want to continue with O1, and I give you another eye drop to reduce your IOP? Or you want to switch to something else, which is an injection into the eye?
Yeah.
The patient will decide. But we are speaking about 10% of patient.
But 90% of patients will not have an issue.
So-
The follow-up of those patients, does that seem like a manageable thing for a general ophthalmologist to do? Or do you think a lot of that follow-up will be with a retina specialist?
This is very easy to do. In fact, actually, it's public. I'm a board member of another company a device company, and we have an IOP tool which we can do at home.
So therefore, IOP measurement can be done, can be self-made by the patient itself, and the data reported wirelessly to the doctor.
It's very easy.
Okay, great. And so shifting gears a little bit, OCS-01, you're also looking at in the treatment for pain and inflammation following ocular surgery.
Kind of give us the status update on that program.
So basically, the status update, so we had the pre-NDA meeting in August this year, and based on the data, we have the phase III OPTIMIZE-1 and phase II, which was called SKYGGN. FDA considered that we have enough data to submit, so we'll be ready to submit by Q1. Our approach in ocular surgery, and we discussed it in the past, is really very focused. Very focused on patient who could have retinal complication following ocular surgery. These are patients where we want to go, and why? Because we have the only products which penetrate retina. So therefore, our approach is not to go to ocular surgery, or I think there are drugs which are fine and cheap and it's perfect.
But for 20%-30% of patients who are diabetes, who have a complicated surgery, and they are at risk of CME, which is a cystoid macular edema, which is the same edema in the retina, the only topical drug you can give them is OCS-01. So OCS-01 was tested already in CME in a previous trial, which was positive. We are doing another trial in CME currently, with the data expected next year. And based on the CME data, the aim is to go to a very focused phased approach in terms of ocular surgery launch, which will reinforce and strengthen our position in retina, which is our core. Scope basically is really retina.
Great. And I think on the DIAMOND-2 study, there had been a third-party error. Can you just clarify, is there any involvement of the third party in the ongoing DIAMOND-1 or DIAMOND-2 studies?
It was in OPTIMIZE-2, in ocular surgery. It was an administrative error, actually, which didn't have. In these situations, you know, you really have three questions. One is: is there any safety concern?
The response is no, zero. Zero safety concern, okay? The second question you ask yourself: is it going to delay our submission? The response is no. Actually, potentially, it could accelerate it because we are ready.
We don't need to wait for the CSR for the OPTIMIZE-2. The third: is it changing the probability of success for the registration? The response is, "Not at all," because we have all the data we need, and we had an amazing, actually, phase II and phase III with an amazing result, where product is more efficacious with once daily versus four times a day of what is considered the most efficacious steroid. So this, and it's once daily, it's extremely efficacious, it's preservative-free, and reaches retina. Now, on the second part of your question, no, the third party is not involved in DIAMOND at all.
Okay, and so, shifting gears-
And we put ourselves even more processes to make sure that this cannot happen, even if didn't happen at all at our company.
Good. So shifting gears to OCS-02 in dry eye, you recently had some phase IIb data. Kinda walk us through what that drug has shown.
Yeah. So basically, perhaps just to step back, so is there an unmet medical need in dry eye? I mean, we had, like, multiple product launched and, actually, the conclusion despite many product launch is, yes, the unmet medical need continues. Why? Because we continue with 90% of patients unhappy, in the first six months, 85%-90% discontinuation. And, we really took the time to think about this, and we come up with something which showed a huge success in any inflammatory disease, in the body. Rheumatoid arthritis or psoriasis. So our solution is, we believe that we can address inflammation in ocular surgery, which is the core issue, with TNF. And why TNF?
Because they just represent three quarters of the most successful product in inflammation.
We have a TNF which is differentiated and specifically designed for the eye in a way that is just a fragment, which allows us to have small, therefore, high concentration and good ocular penetration. Product went into a very solid de-risking, three clinical trials, two in symptoms, one in sign. The symptoms, we showed efficacy in ocular discomfort, so this will be our endpoint for phase III. But also, what we were able to identify a biomarker which allows us actually to predict response, and this biomarker was identified in the second trial, the D2, and we have been able to validate this biomarker in DD3, in the last trial, where the product showed of the improvement in staining, which is important, and I will come back to staining.
But also, for this population, which is positive to this biomarker, we showed five times more improvement in staining. And why staining is important? For two reasons. The first reason is because it is the most relevant sign, which is used by the clinician to follow up a dry eye patient.
And for us, it's important to show in staining because actually this is the sign which is consistent with our mode of action, which is anti-inflammatory, anti-apoptosis. Now, related to this biomarker, so this biomarker showed the same behavior in other inflammatory diseases, such as psoriasis, for example, with Infliximab. So this population, which represent more or less 20% of the population in the world, reacts very positively, or in a profound manner, to TNF inhibitors. So this biomarker is something very easy to do. It's a qPCR, so it's like Covid test.
Today, it's done at the lab. Tomorrow, we can have it at the point of care. So therefore, we are extremely excited with this program because it is a program which is... Like, we are really addressing the need.
We have a product which works. But more than a product which works, we are really addressing a need of this disease, which is driven by trial and error, in a way that we have a precision medicine approach, targeting the right patient for the right drug.
How common is the biomarker that you've seen the signal?
It's around 20% of the population.
And so you're planning on meetings with the FDA in, I think, the Q1 of next year to discuss the phase III design. What are some of the key features of the phase III design that you'd like the FDA's input on, and what are the options?
Sure
for how the biomarker will be?
Yeah. So basically, I would say the following: our aim is really to have guidance from FDA how to leverage the most, the biomarker, to have a successful phase III program, but also have to have a product, a TPP, which is differentiated commercially. So therefore, a biomarker will play a key role. We are, I mean, transparently, we are preparing this meeting. I will be very happy to come back and-
share the feedback from FDA, but we are still preparing.
And remind us, the requirements for approval, though, it will be two phase III studies in signs and two phase III studies in symptoms. Is that?
This is what FDA allows me to do. We believe that it is smart to separate signs and symptoms because sometimes they are not correlated.
Sure.
And to randomize for sign, to show sign, randomize for symptoms, to show symptom, it's just more logical and more efficient in terms of cash use, but also probability of success.
Great. And then your third clinical stage asset, OCS-05, as you mentioned, is gonna have data in the next few months. Talk a little bit about the novel mechanism of action there.
Yeah. OCS-05 is an SGK2 activator. Really what the product does, it does two things. One, it reduces retinal ganglion cell death. Retinal ganglion cells are neurons we have in the retina. They are the neuron, which are the bridge between the photoreceptor, which captures with the light, and the axon, which when they merge together, create optic nerve, which goes to the brain. So they are really this bridge. And in glaucoma, for example, where there is this mechanistic pressure on the retina because IOP is high, the first cell which start to disappear or die are retinal ganglion cells because they are on the first layer in the retina, basically.
So therefore, this product reduces retinal ganglion cell death, and we showed it in multiple animal trials. We did seven animal trials in three models: acute optic neuritis, glaucoma, and the multiple sclerosis. The second thing what this product does, it avoid demyelinization. So therefore, we are testing the product in acute optic neuritis, which is really a disease, which is acute disease, and it comes with retinal ganglion cell death and demyelinization the optic nerve.
We expect the result in Q4. In parallel, we are submitting an IND for the product. As you may recall, this product currently is in development in Europe. We want to bring it to the US. Listen, this has been holy grail. Neuroprotection is huge unmet medical need. I would say when we think about our portfolio, we have two very solid pillars, and we have something which can be huge transformation in terms of medicine and is OCS-05, so let's see the results.
Yeah.
Yeah.
Remind us, how is OCS-05 administered, and what will be the key efficacy readouts to pay attention to in the-
Yeah
upcoming readout?
So basically, the product is administered in an infusion because it's the only way to reach the optic nerve. So IVT will not suffice or topical, so you need infusion. The primary endpoint for the study, safety, so therefore it is really important as a first in patient to show that this product is safe. So I would say this is really the focus. Now, we have a list of exploratory measurement to detect the signal in terms of efficacy, but I would say showing that the product is safe is a win for us because it allows us to go to the next step.
And then on the upcoming IND, remind us the next steps.
So basically, yeah, we are planning to submit in the end of this quarter, and then, as you may know, it takes thirty days, so in Q4 we should have a feedback.
Great.
Yeah.
And then, I know we're just wrapping up here in the last couple minutes, so maybe let's obviously a number of interesting clinical stage programs. Talk about your current cash position and cash runway to fund those programs.
So basically, all programs we are talking now are funded, and we have a runway till end of 2026, so we are, I would say, in a very good position. Looking forward into the readout, but
Great. And so, yeah, just in the last minute here, kind of if you can wrap things up for us, Riad, Why should investors be paying attention to Oculis over the next six to twelve months?
I mean, for multiple reasons, and I will go just one by one. In terms of portfolio, we have two very solid pillars. OCS-01 can create a market which is bigger than the current market. The current DME market is between $3 billion to $4 billion. This product will address two times the treated pools, so it's huge. OCS-02 is the only product in dry eye which is precision medicine driven, so it's with a mode of action, biology, which is very solid and, in the end, a potentially fantastic upside. This is on portfolio. On the second part, I think we have been able, as a team, to show that we are super efficient with our cash, and we are extremely, I would say, disciplined in terms of what we say, we do it.
And at least we do what we say, and we try to do better than what we say. So, I think this is important. The management team show that we are capable. And the third, I would say we are very well supported with good investors, but we will welcome new investors, of course.
Fantastic.
Yeah.
That was a great summary, and I think we are just about out of time, so we'll leave it there. Thank you, Riad.
Thank you. Thank you very much.