Good afternoon. Welcome to the HCVY CERT annual CloudConnect Investor Conference and NASDAQ. For this session, we will have a fireside chat with Dr. Pravin Dugel, Executive Chairman, President, and CEO of Ocular Therapeutix. Thank you for joining us.
Thank you for having us. Honored to be here.
I understand that the Special Protocol Agreement for the SOL-1 trial was recently amended to incorporate redosing, right? In what NDA? Was the reason that you believe either the FDA or ophthalmologists or retina specialists will like to see redosing being evaluated in two pivotal trials instead of one?
No, actually, it's got nothing to do with that whatsoever. I think that, look, let me sort of take a little bit of time in describing the amendment because it's extremely important to us. Let me just get to the bottom line. I think there are two take-home messages from this. The first take-home message is that we gave up absolutely nothing. This is a huge win for us because it allows us to get to the finish line faster and cheaper. That's number 1. Number 2 is it really speaks to the relationship that we have with the FDA. I believe the relationship is there because we've done everything exactly the way they wanted us to do it that resulted in the SPA, as well as the trial designs that we have. Let me back up a little bit and tell you what happened.
There are really 3 things. The first is that the team before us really deserves the credit for getting the SPA. The SPA agreement, it was such that the trial, the primary endpoint was at month nine. The trial ended exactly there. There was nothing after that. The trial simply ended. There are two consequences of that. The first consequence is that, look, the FDA requires of everybody, not just us, that there are a certain number of patients that be followed for 2 years for safety purposes. Has nothing to do with efficacy, but just for safety purposes. Obviously, with the trial ending at month 9, we could not satisfy that with SOL-1. We had to way overload SOL-R with 825 patients to be able to satisfy that requirement. The 2nd consequence is really our PIs.
Our PIs came to us and said, "Look, you're putting us at a really difficult position because once the study is successful at month nine, there's nothing we can do for the patients. They're done. They've got to wait until the drug is approved." They're right. I've been in that situation before, and it's not pleasant. The second thing that happened was that we saw the Vabysmo label. They got a four-month label, but in actuality, there are very few patients that actually made it to the four-month mark. The threshold for getting it on the label apparently is really quite low. We were convinced, we are convinced, that there will be many more patients who will be able to make the 12-month mark with AXPAXLI.
The third thing that happened, and this is really the gating event because people ask us, "Why didn't you do this right away when you came in?" This is really significant because this speaks to the quality of patients that we've recruited in SOL1. As you know, in our company, we're very fortunate to have a bunch of really, really experienced, world-class retina people. All of us have practiced for 20, 30 years. We sat down on a table, and think about this. All of us looked at each other and said, "We have never in our entire career seen patient retention that is this good." That was the gating factor. When you put all those three things together, we contacted the FDA and said, "Look, can we have a second year?
We do not want to disturb the SPA at all, but can we have a second year for SOL-1 where we treat every six months so we maximize the drug exposure?" They said, "Yes." We said, "Can we then add that with this every six months in SOL-R so that there will be enough patients that will satisfy your safety requirements?" They said, "Yes." We said, "If we can do that, then can we reduce the number for SOL-R from 825 to 555 by a third?" They said, "Yes." At the same time, we could also keep the masking so that we would mask until month 12, so we would potentially get month 12 on the label. It is an absolute win for us. We gave up absolutely nothing. The primary endpoint is exactly the same.
The power ring is the same. We satisfy the FDA's requirements for safety. We potentially have a phenomenal label, the best ever, with superiority on the label, with dosing flexibility from every 12 months to every six months with repeatability. Remember, in our back pocket, we will have our own data, and this is numeric analysis, not strategic analysis, versus high-dose Eylea for our commercial leverage. It is a great win for us, but that is the reason we did what we did. It is a lot of stuff, I know, but at the end of the day, it just simply allows us to get to the finish line faster and cheaper.
Got it. Got it. SOL-1 trial has now completed enrollment, right? When do you expect to report top-line data and what's your expectations for the readout?
It's for SOL-1, right? Yeah. SOL-1 has completed randomization, right? We announced that. What we said was because we're going to do the masking till month 12 to potentially get that on the label, our readout date now is the first quarter of next year, 2026.
For retinal specialists with real-world practice, would you say the SOL-R trial showing non-inferiority of AXPAXLI compared to Eylea would be more meaningful?
Look, it's an appropriate question, but what I want to emphasize here, and I didn't do this, so I'm not taking the credit for this, is that we've got an absolutely revolutionary trial design in each of these two trials that confirms and is completely in line with what the FDA wants. More importantly, we've got two complementary trial designs, right? What everybody expected is for us to have a second trial that's exactly the same as the first trial because that's what everybody does. You look at, I know, View 1, View 2, Hawk Harrier, Anchor Marina. It's the same thing that's done twice. When you think about it, the second trial will validate the first trial, and it's a no-brainer. It's a knee-jerk, but it's a lost opportunity because it adds absolutely no information. That's not what we did.
This has been, again, validated by the FDA. We had two complementary trial designs. We're all retina physicians that have practiced for decades and decades. The reason we did that is because both trials should be looked at together, and it affords us huge advantages from a logistic, regulatory, and also a patient-physician point of view. To answer your question specifically, never should one trial be considered alone. Okay? Let me answer that. If I just showed you SOL-1, you would say, "Well, how does it do against Eylea?" If I just showed you SOL-R, you would say, "Well, how long does it last?" When you look at it together, every question is answered. The doctor will know exactly how long the drug lasts based on SOL-1. The doctor will know exactly what the drug does versus regular Eylea based on SOL-R.
The doctor will know exactly what the drug does versus high-dose Eylea based on the numeric analysis that we'll have in our masking arm. Every question that's relevant that the physician, the clinician will want will be answered by a combination of those two trials.
Is SOL-R currently enrolling both treatment naive and treatment experienced patients?
Yeah, it's a great question. The answer is it really is treatment naive patients only with a tiny asterisk. Let me just explain. As you know, it's designed to have a long ramp deliberately because we want to only enroll patients that are as stable as possible. That is true of both trials where we've de-risked the patient population. If there's a patient, for instance, that you may have that you say, "Look, I've already treated this patient twice with Eylea per the label, and I can document the OCTs and everything else. Can I enroll this patient?" As long as the documentation is there and it's been properly treated, we will allow that patient to come in. Technically, that may be a previously treated patient, but that's going to be a very small special group. Otherwise, it's treatment naive patients.
Based on the current enrollment speed, when do you expect to complete enrollment for SOL-R?
That's a great question. What we said in January is that we had 311 patients in SOLR in various stages of loading and randomization that were enrolled. The reason we gave that number is that we wanted to show people that, look, our trial design works in a logistic advantage because all the patients that were in SOL1 now were bolused into SOLR. It worked perfectly. We suddenly got 311 patients. Since then, we haven't given you any updates. We will when appropriate. We're thrilled with not just the speed of enrollment of SOLR, but the quality of the patients that we're enrolling. The reason it takes a little bit of time is twofold. One is because we want to give you accurate numbers. The other is because to get accurate numbers, we've got to go through the ramp process.
The ramp process by design is quite long.
Based on existing clinical data, what percentage of patients do you expect in the SOL-R trial to remain rescue-free during the six-month period after AXPAXLI treatment?
Yeah, so that's a great question. The answer is that we're very, very confident, right, with a positive—again, all these two studies have to be taken together, right? Nobody's going to see a SOL-R study without a positive SOL-1 study, right? Think about the question that you asked in the context of a positive SOL-1 study, right? The question to be asked is, knowing that this drug lasts for nine months in one study, what are the chances this drug will last for six months in another study? It's pretty damn good.
How likely do you think the FDA will require a second SOL-R trial?
I don't see why they should. I mean, I see absolutely no reason. Let me just tell you what happened last week. There was a major conference called the Retina World Congress. Bill Boyd, who's taken over Wiley Chambers' position, as you know, was the keynote speaker. He was asked a few questions, right? One of the questions that he was asked was about sham. We've been saying all along that we've been following the FDA guidelines perfectly. We do not have sham in any of our trials whatsoever. Bill reiterated exactly that. He said, "Sham is not recommended. Sham is not proper masking." He even went so far as to say, "Why it's not proper masking?" Because it forces him to cross-trial compare with a study that's properly masked, which is not scientific.
He was also asked if a sponsor like us follows his guidelines, the FDA guidelines, are two studies that are complementary allowed, which is a superiority study and a non-inferiority study. The answer was, "Yes, of course." They've never, ever required the two studies to be exactly the same. They actually like it when the two studies are not the same. Because remember, the job of the FDA at the end of the day is to make sure that something did not occur by accident, right? That it was not done just by accident. If you've got two different study designs that come to the same conclusion, there's a lot more power that that didn't arrive by accident. That was a real result. I don't see why another study would be required at all.
I don't think there's any notion of that whatsoever given the feedback that we've gotten. Remember, we've got a SPA agreement, and we've got a written type C approval validating that these studies are phase three studies. By the way, we also have a written validated letter from them saying that that is all that's required for approval, these two studies and nothing else.
Got it. Thanks. Do you believe that the first drug on the market with a six-month treatment duration for wet AMD could have a significant advantage in terms of market prospects?
Yeah, you should ask Genentech that. I'm old enough to remember this, Yi. Not many people, I'm a lot older than you, but not many people here may be old enough. I say you should ask Genentech that because, look, I lived through this. You're asking about a six-month advantage. Okay, what about a seven-year advantage, right? You think about where we were with wet macular degeneration. Genentech, a phenomenal company, one of the greatest companies in the world, came up with a miraculous drug named Lucentis. It actually not only preserved vision, it improved vision. What we saw, that graph, was absolutely miraculous. Genentech had a seven-year head start, not six months, seven years. Then came a company that nobody knew about that was struggling and about to go bankrupt named Regeneron. They came up with a drug that wasn't safer, right?
It wasn't stronger. It simply lasted very arguably one week longer. And guess what happened after seven years? You're talking about six months, seven years. Totally dominated. Now, what else has happened recently? You look at Vabysmo, right? There comes Vabysmo. Vabysmo is not safer. It's not stronger. It may last two weeks longer. And guess what that's done? Phenomenal revenues, overtaking the market. So when you're asking me whether six months matters, you know what? The better drug always wins. And there's a huge appetite for anything that is more sustainable, even incrementally more sustainable. Even a week buys you a huge market opportunity. We're not coming in with an extra week or 2. We're coming in, we're in a different orbit. We're coming in with 9-12 months. So do I care about another drug that's six months? Absolutely not.
If that should happen, history proves me correct, it's the better drug that always wins.
What's your development plan for diabetic retinopathy? Do you expect AXPAXLI to perform equally well in DR?
Yeah. Let me tell you what the Helio study shows. This was a study that was done by the team before us. We discovered this study and we said, "Oh my goodness, it's a pure safety study." Nothing else. The patients were not super selected or carefully selected at all. It was all comers. It was basically what would happen when this drug got placed in a diabetic eye. That's it. I knew there were no safety signals, by the way, under masking. There never have been, there's never been a safety issue with this drug whatsoever. We unmasked the study because it reaches primary endpoint. I knew that people would extrapolate this into efficacy.
I knew that in the most variable disease we treat, we had simply got a bunch of patients together and just put the drug in the eye that the efficacy was going to be all over the place, right? It wasn't. What's absolutely remarkable is that every single parameter that we looked at, I mean, every single parameter was in favor of the drug. You know, the most important thing we do in diabetic retinopathy is realize that the natural history of these patients, and these patients are young people in the workforce, they may be mail carriers, they may be lawyers, they may be doctors, they may be accountants, they're completely asymptomatic in the most productive period of their life. We know that every year, year upon year, 30-40% of them will have vision-threatening complications. Just think about that. 30-40%.
You know how many are being treated? Nobody. I mean, nobody's coming in every month to get a needle in the eye with Lucentis or Eylea when they're asymptomatic. Nobody. Nobody's being treated. What do we see in this small study? We saw that in the control arm, 37.5% of patients had vision-threatening complications, which is exactly in line with the natural history. When you look at the treatment arm, with one injection, one injection of AXPAXLI, at week 48, vision-threatening complications, zero. Absolutely zero. As a clinician, that's remarkable. That means I can sit with a patient and say, "Mr. Smith, your chance of having a blinding complication year upon year is 30-40%. If you come to see me but once a year, like you go to your dentist for teeth cleaning, I can reduce that chance to zero." That's pretty impactful.
Yes, we're going to do diabetic retinopathy. We have no competition or whatsoever. What we committed to is to go to the FDA and figure out a path forward. We've had great, great, great discussions with the FDA. Fantastic discussions. We will detail that publicly when the time is appropriate. If you and I were sitting here 6 months ago, I promise you we would be talking about already having started diabetic retinopathy. The only thing that gives me pause at this point, and the reason that there is a little bit of pause, is the macro environment. We're in a situation where my job, my only boss other than my wife, are the shareholders, right? At the end of the day, I've got to protect the shareholders. I've got to do what's financially responsible.
To launch a large phase three study in an unstable environment, especially when you have absolutely no competition and there's no rush, may not be the most financially responsible thing to do. We will do it when it's a little bit more stable because we've got a clear path forward and we've got great results and there's no competition and we will take that market.
What about diabetic macular edema?
Same thing. Thank you for asking because when I say diabetic macular, non-proliferative diabetic retinopathy, I should be saying non-proliferative diabetic retinopathy and diabetic macular edema. The reason for that is that in this study, there were patients with non-center-involving diabetic macular edema. Every single patient in the treatment arm improved. Every single patient in the control arm got worse.
Got it. That's very exciting. Is AXPAXLI protected by any issued patents?
Yeah. So we have two components here, right? One is the drug itself. It's an FDA-approved drug. One is the actual hydrogel. And it's an FDA-approved hydrogel. Remember, this hydrogel is being used on the eye right now with Dextenza. Over 5 million patients have been exposed systemically. It's been used in neurosurgery, urology, etc. Yes, the patents are well protected. This is done entirely in-house. The patents not only apply to the composition of matter, but also apply to the entire process, which is in-house and proprietary. All the materials, as well as the IP, are in the US. The IP runs till 2041. We do have methods that are currently pending for patents that will take us to 2044.
I guess the company currently has sufficient capital to complete ongoing pivotal trials, right?
Yes. What we've announced in our last earnings call is that we are capitalized into 2028. It's important to note that that does not include the diabetic retinopathy, diabetic macular edema trial, because at this point, we don't know, we haven't announced what that's going to look like, all right? We are capitalized enough to go ahead and complete the SOL programs, which is to see the card turn of SOL-1 as well as SOL-R.
Could you comment on the commercial approach for wet AMD?
Yeah. You know, there are two things that are really important that I have in this company that I'm very fortunate to have that I did not have in the last company in Iveric Bio. The first thing is that I don't have to convince anybody that there's a market out there, right? With geographic atrophy, I have to tell people there's a market out there. Here, we've got 40 years of experience in knowing that there's a huge market there. That market actually is very much underestimated because remember, there's a 40% patient dropout in the first year. We're seeing just the tip of the iceberg. It's a huge market that I don't have to convince anybody about. The second thing that I have that I didn't have there is a mature, well-developed, proven commercial team because remember, we're commercializing and selling Dextenza.
Given that and given our knowledge of retina, we are in a great position to go ahead and take this product and commercialize not just in the U.S., but globally. That is what we intend to do. That is where a lot of our effort is going in right now.
Great. Really looking forward to the SOL-1 trial data first. Any questions from the audience?
Do you see any competitive pressure coming from the genetic therapy arena?
Look, I'll tell you what I think in as diplomatic a way as I can, but I will be fairly opinionated, so I apologize. I think gene therapy is great for inherited retinal diseases when there's a gene that needs to be replaced, etc. I think gene therapy is extraordinarily challenging when you're talking about infecting a gene as a factory that just pumps out protein. I think it's very, very problematic in terms of safety, in terms of efficacy, and in terms of logistics. I really don't view that as competition. You know, look, what we have that I'm very excited about is that this drug is going to be adopted the very next day that it's out there. The reason is because nothing has to change.
From an economic point of view, the doctors are going to be in great shape because the payers are going to save a lot of money because we're going to have fewer people drop out and fewer people go blind. The ASP is going to be higher. They're going to get paid more for every injection. There's going to be a much larger patient pool to inject, not just the same patient over and over again because the dropout rate is less and the encashment is going to be much, much bigger. In doing all of this and seeing more patients and happier patients and getting paid more for it, nothing has to change. They don't have to buy a single piece of new equipment. The workflow doesn't change 1 bit. The experience doesn't change one bit. They simply get a better product.
It is a win-win-win situation from an adoptability point of view.
Okay. Great. Thank you very much.
Thank you very much.