Good morning, everyone, and thanks for joining us for the Oculis Holdings presentation. We have Sylvia Cheung here, CFO of Oculis, and Oculis is, I guess, a newer name on the street. A number of ophthalmic conditions, as well as retinal conditions, two programs in the form of eye drops and another novel program coming up. So, Sylvia, maybe you can give us a quick overview of the company and just acquaint all of us.
Yes, absolutely. First of all, thank you for the opportunity to be here. It's great. We really appreciate it. So, Oculis is a late-stage biopharmaceutical company. We focus on ophthalmology. We have three core assets in our portfolio. So, our portfolio is focused on innovative technologies as well as highly differentiated products. Our three core assets are OCS-01, OCS-02, and OCS-05. So, OCS-01 is a truly unique topical eye drop that goes to the back of the eye where no other companies have been able to develop a product, and we are currently in phase III with two indications: DME and treatment of pain and inflammation post-ocular surgery.
We also have OCS-02, which is a precision medicine approach biological eye drop, an anti-TNF alpha eye drop, currently in phase II, phase II-B, and it's targeting dry eye. And OCS-05 is a completely new mode of action. It's a small molecule and has potential disease-modifying and newer protective benefits and features to it. So, we're currently wrapping up our phase II study, which is called ACUITY, and would have top-line readout very soon in December of this year.
Oh, great. Okay. Maybe we can start with your lead programs. OCS-01, one of the bigger indications that you have is for diabetic macular edema. This is a steroid drop, and there are steroid drops out there. We are all familiar with them. But what makes this one special? Because DME is a retinal condition, and drops aren't usually used for retinal conditions. So, maybe we can talk about the unique delivery here.
Absolutely. What makes it special is this is the only topical steroid that can go to the back of the eye, go to the retina, and we have multiple clinical trials that showed its efficacy and safety in the back of the eye, and in particular, DME is the indication that we're studying for. The product is based on Optireach, which is our proprietary technology. It's a formulation that allows the drop to go to the retina, and there are really three aspects that made it possible. First is high concentration because of the eye, and needing to go to the back, it needs to be highly concentrated.
Second is residence time, because you have to travel from the front of the eye to the back of the eye, and the residence time in studies that we have done shown that it's much longer than the other eye drops that are out there, and third, perhaps more important, is the formulation mechanism allows the eye drop to be hydrophilic upfront, and then it became lipophilic afterwards, which is really important because the eye is a very intricate organ, and to be able to go from the front to the back is not as easy as it sounds, and our formulation allows that chemistry, that property to happen such that the drug can go to the retina and be able to treat DME as we've seen in clinical trials.
Okay, so why don't you tell us about how this has been validated? Obviously, you have the DIAMOND trial, one of the DIAMOND trials that have given you some, I guess, nice clinical validation.
Absolutely.
So, can you talk about this data a little bit and what we've seen and how it compares to anti-VEGF, which is how DME is typically treated?
Yes, yes. So, we have done four clinical trials already. I'll perhaps focus on the latest one, which is our DIAMOND program. It's a two-staged program. Stage one was recently completed, and we had really good efficacy and safety results. So, the primary endpoint of the DIAMOND study, stage one, was BCVA, and what we saw was at week six, which is the end of the loading phase, a 7.2 gain on BCVA, and it continued to increase to 7.6 at the end of 12 weeks, which is the end of the maintenance period. So, that was statistically significant. We were pleased with that, and it's comparable to the anti-VEGF products. There are two secondary endpoints. The first one is percentage of patients that showed more than 15 letters gain.
For that particular secondary endpoint, we saw 25% of patients had more than 15 letters gain at the end of six weeks, which is the end of loading dose, and it increased to 27%, so close to 30% at the end of the maintenance dose, which is week 12. Again, very promising and very good result. You probably know the implant product, Ozurdex, was approved on the percentage gain, and our result at the same time point, we don't have head-to-head studies, but we looked at the labels for anti-VEGF and for Ozurdex implant, and our percentage gain is superior or better than the Ozurdex implant. We're very pleased with the results that came from the DIAMOND stage one. The second secondary endpoint is CMT, and there we also showed statistical significance.
What's interesting in that particular secondary endpoint is we saw reduction in CMT, which is the retinal thickness, already at week two, which is very fast onset. In addition to the efficacy results that I mentioned, the three of them, we also have very good safety and tolerability outcome that we saw in that study. The strong results really gave us the confidence to move into stage two, which we are currently conducting. It's a 52-week program and total approximately 700 patients, so 350 patients, two trials ongoing concurrently, 350 patients each. We recently announced a pretty good enrollment pace as well, which really speaks to the profile of the product.
Just remind us what the enrollment is right now?
Yeah. So, what we announced as part of our Q3 release was, as of the beginning of October, we were approximately 70% done with DIAMOND one and approximately 40% through enrollment for DIAMOND two, so it's really advancing pretty rapidly, very nice enrollment rate so far.
Okay, great. And you know, maybe we can talk a little bit about how you see the market segmentation. The low-hanging fruit obviously is part of the market that's not treated. There's a second part of the market that has been treated and does not respond well. So, can you lay out these opportunities for us and where you plan on positioning first?
Absolutely. So, maybe before I get into the segmentation, just a little bit background. Typically, DME patients are diagnosed with imaging, so you can see kind of the retinal edema. Based on publications out there, about 60% of patients are not getting treatments within 12 months from the diagnosis. That is largely due to the fact that current available treatments are all invasive. We're talking about injectables, anti-VEGFs, or implants like Ozurdex, which means that what it translates into is about two-thirds of the market is not treated. They have DME, it's getting worse, and it's not treated. The issue with that is it's known through literature that you can only regain up to half of what you lose.
By not treating, we're really making the patient's condition worse without being able to help them to get back to where they were. Within the one-third of the market where patients are getting treated, the first line is anti-VEGF. It works. It works well. The only issue is 40% of the patients who get anti-VEGF are not getting adequate results, and adequate result is defined as more than five or more letters of gain, so those patients are not getting the response that they should, so our product's profile is unique in a sense that it's obviously efficacious and safe, but at the same time, it's very versatile. It's self-administered, so we can really target the population, two-thirds of the market, where there is no treatment and there's no competition, and it's a large market.
And the back end for the patients who are not getting adequate response, we can come in and act as an alternative because our product works really well on inflammation where anti-VEGF isn't doing very well if the patient has a really severe inflammation component of DME. The diagnosed patient population is roughly about 1.8 million, and about 0.5 are getting the anti-VEGF. So, if you do the math, roughly about 1.3 million is basically either unserved or underserved. So, it's a huge market and can easily be a billion-dollar market depending on more, you know, even with a conservative segment of the population or pricing. So, the opportunity is large.
Yeah. OCS-01 has shown activity in both of these populations already?
Yes. So, we recently had, in our corporate deck, we had shown naive patients and previously treated patients, and both populations showed very nice results, both in terms of BCVA as well as CMT reduction.
Okay. And the treated population, was that on top of anti-VEGF or after they stopped anti-VEGF treatment? It was just OCS-01 by itself?
It was after a washout period for patients who had previously treated with, yeah.
Okay.
Yep.
Got it. Okay. So, you know, just one other question that we have regarding the market in DME. Do patients respond poorly because of lack of compliance, because they stop treatment, or is it because it's actually not working in them? And so, when you think about, you know, where your opportunity is, is it as a possible backstop to those patients? You know, with anti-VEGF, we see the curves of activity that after a few years it drops off because patients aren't compliant. So, do you see yourself possibly as a backstop to that as well?
Yeah. The short answer is we do. I think there are a couple of things there. One is compliance, because in clinical settings, I think patients need to go in, you know, 10 or 11 times a year, whereas in reality they're going to see their doctors, you know, maybe a little over three times a year based on studies that we've seen. So, having a topical product where physicians can prescribe to the patient to help maintain that durability would be very helpful.
And that's why OCS-01 is really a versatile, you know, treatment tool for retinal specialists. On top of that, for patients who have DME and where the inflammation is more of a factor or core component, OCS-01 actually works a lot better than anti-VEGF. So, based on those two, we believe that the non-responders to anti-VEGF can really be well served by OCS-01.
So, this could be really treatment paradigm changing, actually.
Absolutely.
So, can you talk about the feedback that you've received from physicians and how they see this treatment? You know, one other thing worth mentioning is that it is a six times a day drop initially, and then it goes to three times a day. So, as far as how they're going to use this product and how they see this fitting in, like, what is some of the feedback that you've sort of heard from them, you know, keeping in mind both, you know, how easy it is to use, but at the same time it's a high level of drops and possible compliance issues on that side? So, maybe you can discuss that.
Yeah, so maybe I'll talk about the compliance first, and then I'll talk about physician feedback. From a compliance standpoint, we in our previous studies had monitored compliance, and the rate was over 90%. Now, of course, it's a controlled study, so, you know, the compliance rate tends to be higher.
On the other hand, in real life, symptom is a driver for compliance, and in this case, visual, having visual gain or, you know, impairment to visual is a real symptom and a strong symptom, so as a result, we do have reasons to believe that compliance will be something that can be maintained and won't be an issue, and patients will see the results and gain in their vision, and in this phase III, stage two study, we also require patients to bring their eye drops back to us, so we have a mechanism of monitoring.
So, we don't see compliance being an issue both in terms of our study as well as in real life setting. From a physician feedback standpoint, we actually did three primary market research, and we also talked with, you know, KOLs and physicians, both ophthalmologists and retinal specialists, and the consistent feedback that we hear is this product is very much well perceived by physicians and needed by physicians.
On the front end, we hear from ophthalmologists, just an anecdotal comment where, you know, a patient comes in, right, they want to get a cataract surgery, they take the visual, and then they see that there is a DME. They can't treat cataract until DME is treated, so today, the patient will be basically told that we have to put you on hold, right? They typically ask, you know, what, do you have a pill?
Do you have an eye drop? Well, they first ask, do you have an eye drop? The answer is no. Then they ask, do you have a pill? And the answer is also no. And they have to deal with the DME first before they can get the cataract surgery. Tomorrow, when this product is approved, the ophthalmologist can say, hey, here's, you know, OCS-01, take this home, you know, we can treat your DME now, and then cataract surgery can progress. So, that's more on the kind of the ophthalmologist's side.
On the back end, the retinal specialists, they view this as being something that will help them to keep the patients longer because of the compliance topic with anti-VEGF that you talked about earlier, to be able to maintain in between visits and have the durability to last longer. So, we see that the product can be first line in the early intervention and then second line in the moderate population where anti-VEGF is used, and then we can add as a, you know, as a supplemental or post anti-VEGF use as the treatment. So, it's truly very versatile, and it covers the whole continuum of the disease progression.
That's great. So, why don't you talk about your two clinical programs that you have ongoing? You said 70% enrolled for the first, 40% for the second.
Right.
Can you give us a sense of the timelines? And are they designed similarly to the initial stage one DIAMOND, but with a 52-week tail on it?
Yep. So, the designs are essentially the same. The only two differences are duration, as you mentioned, so still six weeks induction, but for stage two, it's 52 weeks overall versus 12 weeks for stage one. And the other difference is patient population. So, 148 for stage one. And for stage two, we have 700 in total because it's two trials. They require two trials. So, each of the trials, we target 350 patients. Everything else is the same.
Okay.
Yep.
And timing?
I mean, obviously, the sites are different, but the trial design is the same.
Any expectations on timing?
We are progressing very nicely. We haven't given specific guidance on the target top line readout. Because it's a 52-week trial, so once we announce the last patient first dose, then we can just count the weeks because the last patient now would be 52 weeks from then. Then shortly after that, you know, we'll have a few weeks, not a few weeks, a couple of months of database closed analysis, and from there, we'll be announcing the data readout. Potentially first half 2026.
Okay. Got it. And then I just want to quickly touch on the second program for OCS-01. It's in post-surgical inflammation and pain. Obviously, it's a completely different market. A lot of steroid drops already for that condition. But you're looking at something very specific within that, which is the patients at high risk of CME, which is cystoid macular edema. You are in a position that you could potentially file this earlier than DME. What is your intention with this program? Is this something that you want to launch in the market? It's not as large as DME. So, can you just talk about how you're thinking about these two programs together?
Sure. Yep. So, just a little bit of background. We had a positive pre-NDA meeting with the FDA in August of this year. So, we're currently working on preparing for the NDA submission. So, it will be submission ready by Q1 of next year. Our intention and our goal for ocular surgery is, like you mentioned, target the population where there is high risk for CME because we believe in that particular segment, we are truly differentiated and unique because of the profile of OCS-01 to address that. We don't want to compete in the general population. That particular area we can own, and our product is extremely well suited for it, and that's where we'll focus on. So, it'll be a very focused market for ocular surgery.
On top of that, we have a proof of concept study, which is currently undergoing, and we expect to have readout in the second half of next year. So, that would also be very helpful data to aid the potential commercialization for ocular surgery. We're in the process of finishing our commercial and market assessment, and from there, we'll be sharing with the community about what our plans are and our marketing strategy and so forth.
Okay. Great. I want to move to OCS-02, which is also a very interesting product. It's the first biologic in a drop, which we haven't seen before. It's for dry eye, which is an inflammatory condition. So, tell us about how you think about this program in the very heterogeneous dry eye space? It looks like this could be a little bit more personalized. So, maybe we can just discuss this for a little bit.
Yeah. So, that's exactly right. The dry eye market is a very large market. Currently, what we know is the market is very unsatisfied. Data shows that 87% of dry eye patients are not satisfied with the treatment. And 80%-90% of patients actually drop their treatment within six months from usage, which is really bad. It just shows that products aren't really working, yeah, addressing the real need. So, what we have seen previous to our RELIEF trial, which is our phase II-B trial, was in the previous phase II trial, we saw that there was a subset of population which were super-responders to OCS-02. So, with the phase II-B study that we did, the RELIEF study, we basically designed a study to do three things. One is to look at the effect on all population, all comers.
The second is to look at the effect on the subset of patients that has TNF-R1 biomarker or genotype. And the third is to select the endpoint for our phase III trials. So, what we basically learned from the latest study is, and also from the previous study, is patients who have TNF-R1, they are basically from an effect standpoint, we saw five folds of better effects on signs and seven folds on symptoms, which is huge. And what this would allow the physician to do is through a very simple, easy to do kind of COVID slash saliva test, to be able to identify patients who would super respond and be able to predict the outcome, which I think makes a lot of sense just because of the fact that currently the market is basically trial and error.
Physicians are faced with patients coming in with a bag of products and say, none of these work. You know, what should I do, right, and being able to predict what the outcome is going to be is going to be hugely beneficial to physicians, payers, and patients.
How receptive are they to doing the tests?
They are very receptive. We've spoken with physicians, and the fact that it's a very easily administered test that you can get results in 20 minutes. Today, in the clinical trial setting, it is 24 hours sent into the lab. But in a commercial situation, it will be a 20-minute, very easy, you know, on-the-spot test result. And physicians are very open to this precision medicine approach because the outcome is predictable, and patients would be satisfied once they are tested and positive for TNF-R1.
Great. So, after a pretty successful phase II trial, you're coming into end of phase II meeting. What are some of your expectations of what you might get out of that meeting? Obviously, you're trying to position this as a precision medicine. Do you want this to be precision medicine, or do you want to have an all-comers trial again and hopefully catch that population in the general setting, or do you actually want them to do the testing? Maybe you can talk about those things.
Yes. So, the goal for the upcoming consultation with the FDA type two meeting is in Q1 of next year. And what you said is exactly right. We are looking to discuss with them the design for the next studies to make sure that there is alignment. Our preference would be to focus on patients with the TNF-R1 because we believe that from a market positioning standpoint, it really allows us to own that market because of the outcome that we saw from previous studies. In addition, I'm also biased because the top and the bottom line would be that much more favorable. And I think just from a financial standpoint, it would be a right approach. From the last study, we also selected, because I mentioned one of the goals is to select the endpoint, which we did.
This particular endpoint is inferior corneal staining, which also happened to be a clinical practice measurement as well. What we saw is comparing to, for example, Xiidra, which got approved on corneal staining, inferior corneal staining. What we saw in their label was a -0.03 to a -1.0 in terms of a range of the effect on corneal staining. Ours is -0.059. Substantially better, much better than the high end of their range in terms of TNF-R1 patients. We'll be looking to use, propose that that be our primary endpoint, and then discuss with the FDA about the TNF-R1 specific patient. We'll see what their feedback is, and their comments will really inform us on the design for the next study. We'll be advancing into the next stage once that consultation is done.
Okay. Great. I want to leave the last couple of minutes for OCS-05 because, as you mentioned, the data is coming out in December. This is an optic nerve protectant, essentially.
Yes. Yes.
So, talk to us about that because you are right now studying it in a very specific indication, which is acute optic neuritis. But there's a bigger vision for this program. So, maybe you can talk about that a little bit.
Yes. So, our OCS-05 is a complete new mode of action, SGK2 activator. We had seven animal studies that were previously done, including glaucoma. So, what we saw in the preclinical data is the utilization of OCS-05 actually has newer protective benefits. So, what it means is it actually showed slowing down of retinal ganglion cells in animal models. So, the results were extremely interesting. And we also, in the animal studies that we did, we also did functional tests, and we consistently saw improvement in functional tests, so not only biologics, but also on a functional level. So, we're currently studying OCS-05 in acute optic neuritis, which is an acute disease and early onset for MS patients. We expect a data readout in December, so imminent, December of this year. And the objective of the study is first safety.
We also have a couple of efficacy endpoints that we're exploring. The physicians are really telling us if we see signals in any of the efficacy endpoints, it will be a huge success in their mind because currently there isn't anything that deals with slowing down or protecting retinal ganglion cells.
Okay. So.
If successful, sorry, the second part of a question. If successful, it can potentially not only will we be able to launch into the next development for AON, which is an orphan drug status for us, we can also look to expand into glaucoma, DR, GA, NK. So, it really opens the door for a number of neuroprotective diseases.
And would this be something that's used on top of background treatment just as, you know, just a protectant or, or is it something that it would be to treat and possibly reverse?
We hope to treat. We have to do more studies to talk about other, you know, disease-modifying benefits. For AON, the current study that we have because there isn't anything, so steroid is the treatment. So, the trial design that we have is OCS-05 plus steroid, which is the active arm comparing to steroid only. So, depending on the diseases, we'll have to design the treatment for the indication.
Just really quickly, cash and cash runway.
Okay. So.
CFO, yes, this one's easy.
Yeah, this one is easy. So, we reported $125 million for September 30th on a balance sheet, no debt. Runway is into second half of 2026. And more importantly, we have multiple value catalysts coming up ahead of us. Thank you.
Got it. All right. Thank you very much.