Welcome to the H.C. Wainwright 28th Annual Global Investment Conference. My name is Yi Chen. I am an equity research analyst at H.C. Wainwright. For this session, we will have a fireside chat with Dr. Riad Sherif, Chief Executive Officer of Oculis. Welcome, Riad.
Thank you, Yi.
My first question is, following the DIAMOND trial in DME, has the company changed the objective clinical and financial criteria used to decide which program should advance or be redesigned or discontinued? Should investors believe that the current programs of Privosegtor and Licaminlimab have lower phase II to phase III translation risk?
Thank you for your question. In this question, you have two types of question. One is if you change something, you will change something in terms of selection and execution. The good news is when we see the execution of DIAMOND-1 and 2, actually it was better execution than phase II. We have KPIs, the typical KPIs we have. Therefore, nothing really to say about execution, and we just need to continue to focus really to be obsessed about execution. In terms of profile, Licaminlimab and Privosegtor are really different biologists. One is a TNF inhibitor, which is a validated biology on inflammation, and we know inflammation is a core component of dry eye. Furthermore, we are doing enrichment with the TNFR1 biomarker.
Privosegtor is a new molecular entity. The result in a phase II were very strong, 18 letters difference, and we are really in both trial. Good news, I would say, really in both trial with Licaminlimab with PREDICT-1 and with PIONEER-1, we are in fact repeating exactly the same thing, the same study we did in a phase II.
Okay.
Therefore, I would say, no, it looks good now. Drug development is always risky, but we are doing everything possible to reduce this risk and drive probability of success in both trials.
Okay, got it. I understand the next upcoming catalyst is the PREDICT-1 trial readout in dry eye disease. What treatment difference in global ocular discomfort at day 29 would be both clinically meaningful and also persuasive to the regulatory agencies in your view?
Yeah. So b asically, if I take the result we had in a phase II-
We had four point in a VAS score. We had four-point difference in Oculomics between the active versus placebo, and we had 28-point difference in a TNFR1 positive patient. I would say four point is similar to what any other product approved is in the market.
Therefore, I would say if we achieve the double, 8-point difference is already meaningful. But more importantly than meaningful, is meaningful and very competitive vis-à-vis the rest.
Remember, we achieved 28 points.
Therefore, this biomarker truly help us to address TNFR1 positive patient in dry eye. We think about it not as dry eye product.
We think about it as TNFR1 positive patient in dry eye. This is our population.
Okay.
We are really focusing on this population. In fact, in PREDICT-1, the study in alignment with FDA's enriched two-third of patient are TNFR1 positive patient. We're focusing on this. Really the aim is to have a precision medicine for TNFR1 positive patient in dry eye.
Got it. Okay. I understand the TNFR1 biomarker emerged in a symptoms trial, right, and was subsequently supported in a signs study. Is there enough evidence to give you confidence that it is generally predictive of the Licaminlimab response rates instead of rather than just prognostic marker?
The evidence are pretty solid. The evidence came from multiple other publications in other inflammatory diseases such as Crohn's disease, that this genotype showed a very high correlation between high response and the presence of this genotype.
In our own studies, we did two studies. One was exploratory and the second one pre-specified. In both trials, this TNFR1 positive patient showed very high response between the presence of this genotype and the response.
Okay, got it. If the PREDICT-1 is positive in the genotype-positive population, what exactly remains before a potential NDA submission? Could it be another fully powered pivotal trial, longer safety extension, or additional signs data?
Basically, this is the first phase III, and this phase III is on symptoms only.
Yeah.
Therefore, we need to do another trial on signs. We always said that we will do two trials in symptoms, two trials in signs. If the FDA really executes this change about one trial, then we will need to do at least one trial in signs.
Okay. Got it. Do you currently expect the indication to be restricted to this biomarker positive population?
It might be counterintuitive, but I would say restrictive is an upside. Is an upside in a way that it makes your product true personalized medicine.
I would welcome restrictive.
Because it will deliver revenues which are actually potentially higher than Oculis.
Okay.
Therefore, now regardless of the labor, restrictive or no, our commercial strategy is really to drive precision medicine.
Because we believe we can do a huge difference for this patient, we believe we can drive value, we will have better pricing, better access, and better reach to this population.
Got it. Thanks. Could you clarify the validation status of the saliva-based qPCR assay used to identify TNFR1 genotype positive patients?
Yeah. This is the qPCR test.
It's like a COVID test, so it's a saliva swab. It's a genetic test.
Therefore, it's binary. We have it or no.
Yeah.
It's very simple. The turnaround in the clinical trial is around 48 hours because we have very few certified labs.
In clinical practice, it will be broader, so therefore it can be even in a day potentially. If positive, the patient goes to the pharmacy and gets his or her treatment. So it's pretty easy, simple, and I would say cheap test.
Okay.
Because this qPCR is very well-established technology.
Would the FDA require approval of a companion diagnostic for this therapy?
FDA does not require a companion diagnostic. Now, we will need to continue to do the same test and validate the test in all phase III to have it as a validated test for the future clinical practice.
Okay. Thank you. Switching to the PIONEER-1 study
Yep.
In optic neuritis. I know it requires acute optic neuritis patients to be identified and treated within a window of 12 days.
Yes.
Right? Followed by five daily IV infusions. What have you learned from the first treated patients in the study about the referral pathway? What are the principal bottlenecks connecting emergency departments, neurologists, and ophthalmologists?
Yeah. As you are perfectly describing, this study is a unique trial because it is not like a disease managed by one patient, and it is chronic disease, you call the patient, you say, "I have a new drug. Come, and if you are willing to being included in a clinical trial," then the patient is included. Here, really the site is an ecosystem between three specialists. First is the ER.
The ER plays a really key role here because if you lose your sight and it's painful, you go to the ER.
The ER will do the first exam. The ER calls the neuro-ophtha who will do the OCT and the visual exam. The neuro-ophtha will call the neurologist who will do MRI and the neurological exam. Therefore, it's really a TRIAD or a triangle.
This is why we took the time to activate the centers because we wanted to do it right from the beginning, and based on our learning from the phase II, to have this triangle in place.
This is the first one. What we learn is really consistent with the phase II. You need to act fast, you need to be able to inform the patient, explain to the patient, and really trigger the system where the three doctors are working together.
Mm-hmm. Okay. In the phase II trial, ACUITY trial, which enrolled 36 patients and 15 patients at the selected 3 milligram per kilogram dose, and also a post hoc responder analysis that shows the proportion of participants achieving at least 15 letter gain in LC, low contrast visual acuity, and that later become the PIONEER-1's primary endpoint, correct? What placebo response and treatment effect have you assumed for the PIONEER-1 study, and how sensitive is this study to a small number of unexpected responders?
I would say if you repeat what we saw in ACUITY trial, the probability of success is higher than 95%.
Okay.
These are really the assumptions we have.
Okay.
Yeah. It is much higher, actually.
Okay. The ACUITY trial shows signals across improvement in low contrast vision, preservation of ganglion cell in a plexiform layer, and also retinal nerve fiber layer, as well as suppression of serum neurofilaments. Which measure must replicate in PIONEER-1 to validate neuroprotection?
I would say there are two questions here. On the regulatory point of view, the only thing which matters for FDA is LCVA. That's it.
Okay, LCVA.
This is it. They don't need OCT, they don't need neurofilament. Now, for our own, like building the dataset for prevention, for preventing or being neuroprotective, having a positive signal, again, in GCIPL and positive signal, again, in neurofilament, will just strengthen the file for future neuroprotective applications.
Okay.
But really for the optic neuritis, the only regulatory endpoint and the only needed endpoint to be achieved is LCVA.
Okay. But the neuroprotection will strengthen the drug's profile for commercial. Yeah.
It will strengthen the drug profile for the future clinical applications.
Okay.
Absolutely.
Okay. How do you interpret a trial in which the functional endpoint succeeds but the structural biological marker do not, or vice versa? Is that possible?
We saw it at least in ophthalmology where we see the image and we don't see the function and vice versa. I would say if we take the FDA position, it's the function which is the most important, for good reasons. Therefore, I would say the most important stays the function.
Okay. With respect to PIONEER 2, can you clarify how it differs from PIONEER 1, and also how PIONEER 3 in NAION will be designed?
Yeah. PIONEER 1 is similar to ACUITY.
It's really similar to ACUITY. For PIONEER 2, we are planning an upcoming R&D day where we will be discussing about it. But really the aim conceptually, if I explain, is we have optic neuritis, which is inflammation of the optic nerve. And in the inflammation of the optic nerve, we have patients who are MS patients and non-MS patients.
These patients who are MS, the optic neuritis is like an acute relapse of MS or exacerbation.
It can be inaugural, or it can be exacerbation of MS. This is one part. If you see all acute MS relapses, you have three types. You have optic neuritis. You have ambulatory.
Like patients who are not able to walk, and they might end up in a wheelchair after. And you have sensorial. Like you lose sensitivity in your fingers and so on. Our aim is to bring this product to any acute MS relapse.
Which will actually increase our reach in terms of patients from around 30,000 patients to more than 150,000 patients, 170,000 patients.
The way to do it is we want to do it step by step.
PIONEER 1 is optic neuritis, all comers.
Yeah.
PIONEER 2, we would like to make sure that the MS group is big enough to show statistical significance, which will be the first pillar for another indication in acute optic neuritis.
Sorry, in acute MS relapse.
Yeah. Okay.
Therefore, it will be similar. We will go through the details when we have this R&D day.
Okay.
But it will be very similar, actually.
Okay. Got it. In terms of acute MS relapses, how much of PIONEER-1 safety and efficacy package can be leveraged to support that?
The safety will be leveraged because as you know, FDA need 300 patients receiving the same dose, the same regimen. Therefore, this will be part of the 300 patient of the safety database. So it will be leveraged. Absolutely.
Okay. Does the-
Sorry, but just to complete and why it will be leveraged, because the good news is we got a very positive feedback from FDA about acute MS relapse, where we can use the same dose, the same regimen.
Therefore, it is exactly the same in terms of at least some safety point of view.
Yeah. You will be running the programs kind of simultaneously, right?
Yeah. Phased, but at one point of time, they will be parallel. Yes.
Yeah. But the first indication potential to approval is still PIONEER-1, correct?
It is still PIONEER-1 and 2.
1 and 2.
Yeah.
Okay, got it. I look at your presentation. Your market estimates include 30,000 annual U.S. patients in each of optic neuritis and also NAION. What proportion of those patients can be realistically diagnosed and treated within the required window?
The required window is 12 days for the treatment. It's not that short.
It's not very long, but it's not short. I mean, for optic neuritis at least, this disease is acute.
By definition, it's painful, and you lose vision. It's not impossible at all to get these patients.
Okay.
At all.
Once there is a treatment available, then people will know, and therefore, it will not be difficult to get and to reach the treatment. NAION is slightly different. It's not painful. It's painless. But still, the average age, we are talking about 52 years average age. Patient lose vision. It's rapid.
NAION might take more time than optic neuritis.
Okay.
We are talking about 12 days.
Can the five-day IV regimen be administered outside specialized centers?
Currently, the way it is administered is done in the infusion center.
Yeah.
Outpatient infusion center. Neurologists, they have MS treatment, they are mainly injectables. They have their own infusion centers, and this is what is being leveraged for the study, but most probably later on in the clinical practice.
Okay.
It's pretty simple.
What milestone and royalty obligations are eliminated by the recent acquisition of Accure's rights to Privosegtor?
The contract we had with Accure was a typical licensing contract with milestones, like regulatory milestones and sales milestones, and then royalties. The royalties were double-digit type of royalties. Very happy actually that we reached this agreement with them because it's eliminated a lot of cost around this product. Pleased with what we were able to eliminate. The second just gives us the flexibility and the freedom to leverage at max this asset.
Okay. What closing conditions remain for this deal?
I don't know if we disclose them, but I would say as a public company, I should say I am concerned, but I'm not concerned.
Okay.
Administrative and process-driven. Hopefully we will be able to close. Let's see. But we are working on it. There is a very good collaboration between both parties, and we are working on it. Let's see.
Okay.
Yeah.
Accure has a preclinical program called ACT-02. Is that strategically important for Oculis?
I think it fits in terms of portfolio. It fits well with OCS-01. We are having it into the basket.
Yes.
We will see the first data and see what to do with it. I would say the focus is really today is Privosegtor. Firstly, Licaminlimab with really the first precision medicine coming in a business which is huge business, which is still extremely unsatisfied with Licaminlimab in the TNFR1-positive patient with TRIAD. This is the first goal. The second goal is to execute perfectly well PIONEER-1, PIONEER-2, PIONEER-3, and PIONEER 4 with the acute MS, and this is really the focus.
Got it. I understand Oculis last reported cash position was $282 million, which provides a runway into second half of 2029. Does that runway fully fund PREDICT-1's follow-on study, all three PIONEER trials, and also initial acute MS program, as well as pre-commercial activities?
Yeah. So what is being funded with this is all what we announced in term PREDICT-1, PIONEER-1, 2, 3.
Yeah.
What is not funded yet is the rest of PREDICT and if there is any other PIONEER.
Okay.
Yeah.
I see. If Privosegtor succeeds in optic neuritis and that expands into broader neurology, the opportunity could potentially exceed Oculis current commercial infrastructure. Is that right? At what clinical or regulatory milestone would you consider a partnership and which indication or geographies will Oculis intend to keep for yourself?
Yeah. Optic neuritis is an orphan indication. Our aim strategically, and we always say the same thing, we will launch in the U.S. only and we will partner ex-U.S., and this will not change with PREDICT or PIONEER or whatever.
This is what we really believe we can do successfully, and we keep the same strategy.
In terms of commercial infrastructure, starting with optic neuritis is an orphan indication. We are talking basically about 450 neuro-ophtha in the U.S.
It's super small audience to visit and work with. Therefore, as a small company, we saw many startups being super successful in this type of orphan indications. This will give us the size and will allow us to expand later on. But the focus is very specific, is this population for now.
Thank you. Any questions from the audience?