Hi, good morning. I'm Serge Belanger, one of the healthcare analysts at Needham & Company. Want to welcome everybody to Needham's 25th Annual Healthcare Conference. For our next presentation session this morning, we have Oculis development stage company in the ophthalmic disease space. From the company, we have the CFO, Sylvia Cheung. I think Sylvia has slide presentations, and then we'll proceed to Q&A afterwards. Sylvia, thanks for joining us this morning. We're happy to have you with us, and I'll hand it over to you for the presentation.
Great. Thank you, Serge. I'm very happy to be here. Thank you for the introduction and thanks to Needham for the opportunity to present. Thank you everyone for joining the virtual conference. I'm excited to share with you the advancements by Oculis across our late-stage assets. Before I begin, I'd like to point out that forward-looking statements made during this presentation are subject to this safe harbor disclosure. I also encourage you to also review our public filings with the SEC. Oculis is a public global biopharma. We have three registrational stage assets targeting a market opportunity of over $25 billion. OCS-01 is a first non-invasive eye drop treatment for diabetic macular edema. Licaminlimab is a first genotype-based development for dry eye disease.
Privosegtor is a first-in-class neuroprotective candidate, and we have a PIONEER program for optic neuritis with the FDA, and recently granted Breakthrough Therapy, and the EMA granted PRIME designation to us. The second indication under the PIONEER program is NAION. In addition to that, we also have plans to expand into broader indications addressing neural axonal diseases. On the financial front, we have a strong balance sheet, no debt, and the current cash runway is into 2029. This is excluding a CHF 100 million loan facility. Our business is comprised of two franchises, an ophthalmology franchise with OCS-01 and licaminlimab, both are in the ophthalmology franchise, and the privosegtor is the candidate for neuro-ophthalmology. You can see from our pipeline that we have a catalyst-rich horizon driven by three transformative assets that are in active registrational programs. Let me highlight for you the following.
OCS-01 for DME is currently in final stages of two phase III trials, and we expect top-line readout this quarter in June. Licaminlimab for dry eye disease, our registrational study, called PREDICT-1, is active, and we expect top-line readout around the end of 2026. Privosegtor's PIONEER program has three trials, two for optic neuritis and one for NAION. The first trial, PIONEER-1, has initiated, and PIONEER-2 and three will follow later in the year. We'll now take a closer look at each of the core assets, OCS-01, licaminlimab, and privosegtor, and we'll start with OCS-01 for DME. The current U.S. DME market is roughly about $3 billion. Only invasive treatments are available today. For the 1.8 million diagnosed DME patients, about 500,000 is treated and well-controlled. OCS-01 is developed to transform DME treatment paradigm by enabling early intervention and effectively treat inadequate control patients.
OCS-01 is a non-invasive, self-administered eye drop treatment. It offers significant opportunity to address two segments of the market where there are no solutions today. OCS-01 is positioned to be first-line treatment in the diagnosed and untreated segment. It can also address the inadequately controlled patients as a standalone or an adjunct therapy in the diagnosed and treated populations of the market. Together, the two opportunities combined into one is over 1 million patients. It's a much larger opportunity than what the current market is serving. OCS-01 has demonstrated positive and consistent results across four prior studies, including a phase III stage I trial, which is part of our DIAMOND registrational program. Slide nine here is our summary of the protocol for the DIAMOND program, which comprises of two stages.
Stage I is a 12-week trial, which was completed, and I will go over the data in the following slides. Stage II contains two 52-week trials, which is near completion. Data readout is expected this quarter in June. Over 800 patients were enrolled in stage II, two trials. 400 patients in each of the trials. The trial has a six-week induction phase, followed by a 46-weeks maintenance phase. Primary endpoint is change in BCVA at week 52. Stage I of the DIAMOND program was completed successfully and showed substantial and clinically relevant visual improvements, as well as rapid reduction in retinal edema in both naive and previously treated population. From a safety standpoint, OCS-01 was well-tolerated with no unexpected AEs. Here you can see OCS-01 showed statistically significant visual improvement with 7.2 letter gain with BCVA versus baseline at week six, increasing to 7.6 at week 12.
Greater than 25% of patients gaining more than 15 letters at week six, increasing to more than 27% at week 12. OCS-01 eye drop showed favorable efficacy profile in DIAMOND phase III, stage I study here in comparison with the published data of Ozurdex, which is a steroid implant. You can see that Ozurdex results at week 12 was below 15% of letter gains of greater than 15 letters, while OCS-01 at the same time point is over 27%. Top-line results from both of the DIAMOND program phase III trials is expected this quarter in June, and if positive, NDA submission is planned for Q4 this year. Potential approval is in Q4 next year. Now let's move on to licaminlimab. It is a precision medicine approach for dry eye disease. Licaminlimab is a novel anti-TNF alpha eye drop for ocular inflammation with clinically proven mode of action.
Licaminlimab is a proprietary genetic biomarker. This antibody fragment technology is specifically formulated for topical delivery, and it enhances ocular penetration. It is widely known that dry eye market is large and very unsatisfied, with only 13% of patients experiencing lasting relief after 12 months. 85%-90% of patients discontinue within six months of prescription drugs. Our solution is licaminlimab, a precision treatment approach product to provide a preferred option for physicians and payers for TNFR1 genotype patients. We have three positive dry eye phase II trials, two on symptoms and one on signs. All phase II trials were completed and consistently showed positive results and potential for precision medicine approach. PREDICT-1 is our first registrational trial for dry eye, and it has been initiated, and the top-line results are anticipated around late 2026. Let's now turn our attention to privosegtor.
Privosegtor is a novel neuroprotective candidate with broad potential for neuroaxonal diseases. This new molecular entity is a peptoid small molecule that crosses blood-brain and retinal barriers. Privosegtor was selected by high-throughput screening for its unique ability to promote neuronal axonal survivals. It's validated across multiple in vitro injury models, including apoptosis, oxidation, and inflammation. Preclinical data confirmed neuron axonal survival in glaucoma, MS, and optic neuritis models. Privosegtor received FDA Breakthrough Therapy designation, as well as EMA PRIME designation for optic neuritis. Privosegtor has very compelling preclinical data showing prevention of retinal ganglion cell damage, reduction of optic nerve axonal loss, and reduction of optic nerve demyelination. The neuroprotection benefits of privosegtor can be translated into several indications. Our initial wave of development focuses on acute indications, being optic neuritis and NAION. Beyond that, there are vast opportunities in chronic indications.
Broad opportunity applies to both ophthalmic and neurological conditions due to lack of neuroprotection therapies. Privosegtor's first wave of development targets two main optic neuropathies, and they're under the same IND. Optic neuritis and NAION are both rare diseases. There are roughly around 30,000 cases annually for each of ON and NAION separately. Using the low end of the pricing analog range, which is roughly about $100,000-$400,000 per year, the market is estimated to be over $7 billion. Call point is very focused and efficient due to the highly concentrated neuro-ophthalmologist population of around 400-500 here in the U.S. Let's take a look at optic neuritis, which is an acute inflammation of the optic nerve. It's an orphan indication with around 65,000 patients per year in the U.S. and Europe together.
Optic neuritis is a type of neuropathy causing vision loss and pain and can lead to permanent visual impairment. The disease is mainly affecting young women with an average onset at age 32. Optic neuritis has a direct link with chronic conditions like MS and other autoimmune diseases. In fact, in our phase II trial, the ACUITY trial, two-thirds of our patients were MS patients. NAION is a rare disease which leads to significant and permanent visual impairment in most patients. Today, there is no treatment available. For patients with NAION, their retinal ganglion cells, axons, and optic nerve atrophy is caused by hypoperfusion, leading to vision loss. The disease causes sudden vision loss and leads to substantial visual impairment in over 60% of patients. Here's the trial design for the phase II ACUITY study in optic neuritis. It's a randomized, double-masked, placebo-controlled, multi-center study.
ACUITY trial is a first inpatient study, and we had safety primary endpoint. Secondary endpoints are on function, anatomy, and biology. The trial had two arms. The active arm is privosegtor plus steroid, and the comparator arm is placebo plus steroid. Patients would undergo five daily treatments, followed by a six-month evaluation period. Let's take a look at the efficacy data. First on function. Patients with privosegtor treatment achieved an improvement of 18 letters, which is clinically meaningful and is sustained through the study period. Functional improvement we saw on the prior stage also correlated with significant preservation of neurons in the retina. Privosegtor arm showed 43% better preservation of GC-IPL thickness comparing to the vehicle arm, and this is the layer with retinal ganglion cells.
The functional improvement that we saw in LCVA also correlated with significant preservation of axons, and this was measured by less thickness loss of RNFL, which is the axon layer of the retina. Privosegtor benefits also was observed in biological sign of neuronal and axonal death. We saw significantly less neurofilaments released into CSF and blood as a result of axonal and neuronal death. Safety profile reported in ACUITY phase II showed no AEs leading to drug withdrawal or study discontinuation. As I mentioned, privosegtor recently received Breakthrough Therapy designation from the FDA and PRIME designation from EMA. A global registrational program called PIONEER is underway, and there are three registrational trials in the PIONEER program, two for optic neuritis and one for NAION. PIONEER-1 has initiated, and top-line results are anticipated in 2027.
In conclusion, Oculis has significantly progressed and advanced toward building a global ophthalmology and neuro-ophthalmology company. We are currently targeting $25 billion of potential markets with highly differentiated products across our core assets. We have a catalyst-rich upcoming quarters with registrational trials readouts for each of the three transformative assets. First is DME DIAMOND program, readout this quarter in June, and FDA submission in Q4. Second is licaminlimab PREDICT-1, readout is anticipated around the end of 2026. For privosegtor, PIONEER-1 is underway, and its readout is anticipated in 2027, with PIONEER-2 and 3 commencing later this year. We're very excited about the upcoming milestone events and look forward to reporting on those in the coming quarters. On behalf of Oculis, I'd like to thank you for your time and participation. Serge, I think there may be some questions.
Thanks, Sylvia. Appreciate the overview. I guess on the OCS-01 DME program, since we're nearing the phase III readout, one of the questions we get from investors, and I assume that question will continue until we get the readout, is what is the bar for success for those results? Is it the stage I results that you were able to achieve at six weeks and 12 weeks? Is that what you'll be looking for at 52 weeks?
Yeah. Thank you, Serge. Yes, the readout is upcoming very soon. For us, I would say base case bar for success is similar to Ozurdex in terms of efficacy and safety. As you know, the active is the same, dexamethasone. With that particular profile, we'll be able to address a market that is potentially 8-10 x more patients with a topical solution for patients. In the early intervention space, nobody owned that space but us, once approved.
Now, a great scenario will be same safety, and higher and better efficacy, which we saw in our previous phase III, stage I. This would give us still the much larger accessible population, but most probably also give us a stronger penetration in those segments. The two segments are, on one hand, half of the diagnosed population who's currently not being treated. On the other hand, the treated population, where 40% of the patients are not getting adequate result, and our product will be able to either use as a standalone treatment or in combination with anti-VEGF.
Okay. If Ozurdex is the bar for success, I don't know if there's a specific number or range in terms of letter gains or 15-letter or three-line responders. Is there a specific number or range for those metrics?
The metric is statistical significance in both of the points that you mentioned. We are confident in the outcome based on the previous studies that we have, and if we can replicate what we saw in the prior study, I would say that it's a great outcome and will significantly aid our launch and market penetration.
Okay. Assuming you get statistical significant results, what kind of label would the data from the DIAMOND studies support? Do you expect a broad DME label? How would it be used?
Yes. We expect a broad DME label. As you know, this trial is an all-comers trial. The broad label is consistent with our interactions and discussions with the FDA previously, including the end of phase II meeting.
Okay. We've already discussed Ozurdex. Does that represent a good proxy for what OCS-01 could achieve commercially?
We believe that commercially, OCS-01, if proven successful from our phase III trial, and we're confident in that, we believe OCS-01 can address a much broader market than Ozurdex. This is due to the topical nature of the product, where today, half of the diagnosed population, so 1.8 million of patients are diagnosed, half of that, so 900,000 patients or close to a million today are not being treated. We will be the only product in that segment addressing patients who are currently on observation.
On the other hand, Ozurdex currently is a second or third-line treatment and a treated population addressing patients who are not getting adequate results from anti-VEGF, probably because inflammation is a bigger component of their disease. We're not looking to displace anti-VEGF, but in that treated segment, we have a couple of different options to aid the retinal specialist to treat their patients better, either through standalone or through combination.
Got it. All right. I am looking forward to seeing those data in June. On the privosegtor program, pretty novel to have a neuroprotection agent. Maybe why was acute optic neuritis chosen as the initial indication to demonstrate proof of concept?
Yes. Acute optic neuritis was chosen by the prior sponsor of the study before we took over. That particular company was a CNS-focused company. I think it made sense for a couple of reasons. We weren't there when the decision was made, but looking back, I think it makes sense. One is optic neuritis is characterized by acute inflammation of the optic nerve, leading to significant retinal ganglion cell death. Because the damage is acute, quantifiable, and measurable, visible, it allows for faster evaluation of neuroprotective drugs' ability to preserve structural and functional integrity. I think that's why optic neuritis was selected. Secondly, looking at optic neuritis being an orphan disease with high unmet need, I think that also supports the decision to test this neuroprotective agent, which turns out to be very promising from the data that we saw in the ACUITY study.
Yeah. For both ON and NAION, I believe there's no approved treatments. What were physicians using? Was it just corticosteroids to temper inflammation, or were there other agents also used for these indications?
Yeah. NAION, there is zero, no treatment whatsoever, nothing available. For optic neuritis, currently, physicians are using steroid, and it's a five-day treatment. Our trial was designed to kind of mirror the current standard of care, which is high-dose steroid, five days of treatment, and our product is an IV infusion. The ACUITY study that I was talking about earlier, the active arm was privosegtor plus steroid, five daily treatments. Both are high unmet need because nothing is approved for NAION, and for ON, there is no neuroprotective treatment for optic neuritis.
Okay. I imagine because there's no approved treatments, that's why you were able to get the Breakthrough Therapy designation from FDA and the PRIME designation from the EMA.
Yeah, I think.
Yeah. I guess, how does that help going forward for these programs?
Yeah. I think the Breakthrough Therapy and the PRIME designations really validated the clinical strength, in addition to the fact that the two diseases are a rare disease. Both agencies looked at the detailed information from the ACUITY study and granted the Breakthrough Therapy as well as the PRIME designations to us. I think the status enables us to have frequent dialogues with the agencies, which will make a more efficient clinical and regulatory development pathway, and it also has the potential to save time and improve the likelihood of approval. Ultimately, earlier patient access. We're very pleased about the outcome of achieving these two statuses, which really speaks to the ACUITY study's strength.
Yeah. I think you had your pre-phase III FDA interactions last year. Maybe just discuss how interested the FDA is in a neuroprotective agent for these indications and the discussions around the endpoint since there hasn't been anything approved, and how you're trailblazing the regulatory path here for both of these indications.
Yeah. Absolutely. While I don't have firsthand involvement in those dialogues, my expert regulatory team did. I think the observation that I have is the process was extremely engaging. The FDA is very supportive of the novel development privosegtor and is very supportive in terms of helping us to see the product through the regulatory pathway. We're very pleased with the interaction. The trial design is clearly discussed with them, with their feedback, and we are very excited to execute on the trial, and potentially bring top-line readout to physician community, investment community in 2027 from PIONEER-1.
Okay. Maybe just to finish off on the dry eye program that will generate additional data by year-end, maybe just talk about, I know there's been a couple new entrants in this market, the dry eye market, how it's evolving, and where do you think a program that offers a biomarker approach would fit within the treatment?
Yeah. While there were a couple of recently launched products that offer additional options for dry eye patients, the reality is significant unmet needs still remain. It's really due to the highly heterogeneous dry eye market, and treatment decisions are still driven by trial and error, people having gone through, tried multiple treatments, and not getting the results that they want or deserve. The vast majority of the estimated 10 million patients, this is the moderate to severe population of dry eyes, 30 million total, 10 million moderate to severe. The vast majority of them are still struggling to find lasting relief. What we have in hand is really a fundamentally different approach to treating dry eye with a genotype-based development program, licaminlimab.
In our phase II study, what we saw was the sign and symptom efficacy results were 5 to 7 x greater, in the population TNFR1, the genotype population. This particular genotype genetic biomarker is roughly about 20% of the U.S. population. We're talking about two million of moderate-to-severe patients, 2% of the 10 million are moderate-severe patients, so 2 million of genotype-positive patients who would have really strong efficacy response to licaminlimab.
We have designed a study and got FDA's agreement on the trial design. With the proven mechanism of action, anti-TNFα, we're basically in a position to potentially become the first-line treatment for dry eye patients with this particular TNFR1 genotype. It's a very unique approach. This approach, just from a commercial and economic standpoint, will be highly beneficial from a payer standpoint, from a P&L standpoint. So let's see. The trial is ongoing. Results are anticipated around late this year, and we'll be looking forward to report on that.
Great. Remind me again, do you need to develop a genotype assay for this biomarker?
Yeah.
Yeah.
The test is currently available. It's pretty rapid turnaround. Think of it as a saliva swab COVID type test. Results will be back within a day. It's a pretty easy process to identify the TNFR1 positive patients.
Okay. Most of these patients with this genotype with dry eye disease tend to be on the moderate to severe side of dry eye disease?
That, I do not know. What I do know is 20% of U.S. population is TNFR1 positive.
Got it. Okay.
Yeah. Whether or not that genotype causes dry eye, it's not something that I'm aware of.
All right. Maybe I'll let you wrap up and highlight if there's anything you feel is misunderstood or underappreciated by investors or analysts on any of the three assets that Oculis is currently in late-stage development.
Yeah. I think analysts and investors are having much better appreciation of where OCS-01 will be placed in the market in the two segments, early intervention where OCS-01 will be standalone with no competition, and on the back end, how we can be an additive to anti-VEGF as well as a standalone to address patients who are not getting the adequate results. I think initially people were thinking of Ozurdex as being a benchmark or us displacing anti-VEGF. That's not what we're doing. Anti-VEGF will be there. What we're looking to do is to fill in the two voids that currently exist in the market where we can play, but no one else will be able to. That is one area, and I think appreciation for that has gotten traction. For privosegtor and licaminlimab, we have registrational trials ongoing.
Each of these are first-in-class with very strong historical clinical results, and we're looking to replicate. We also have very positive discussions with the FDA on each of those programs and recently received the Breakthrough Therapy designation and PRIME designation from FDA and EMA, respectively, for privosegtor. We're very excited to be delivering multiple registrational trial readouts starting this quarter in a couple of months and through 2027. We're in a good position and happy to update you and the rest of the community on our progress in the coming months.
Great. Well, thanks for spending time with us this morning. We appreciate the overview. I think there aren't many companies that I cover that offer three late-stage assets like Oculis does, and two of them are going to have phase III readouts in 2026, so definitely an exciting time for the company.
Thank you.
Thanks, Sylvia.
Thank you very much, Serge.