Good afternoon. Now, welcome to the HC Wainwright Fifth Annual Ophthalmology Virtual Conference. For this session, we'll have a fireside chat with Dr. Pravin U. Dugel, Executive Chairman, President, and CEO of Ocular Therapeutix. Welcome, Dr. Dugel.
Thank you so much. An honor to be here. Thank you for including us.
I understand Ocular recently amended the Phase III SO-1 trial protocol. I think it was in the first quarter, and also amended the rescue criteria in the Phase III SO-R trial. Could you tell us the rationales behind these amendments, whether all amendments are in alignment with the FDA, and what impacts would these amendments have on the pivotal program and the regulatory pathway?
Thank you for having us here, and thank you for the questions. The one thing that you need to know is that I totally understand that whenever there are any kind of changes, it causes anxiety. What's really the question to be asked is what you just asked, which is, are these changes done in alignment with the regulatory agencies? What I will tell you is, look back at our behavior, look back at our pattern. We don't do anything, I mean anything, without absolute alignment with the regulatory agencies. You just saw yesterday that we announced a SPA for a nonproliferative diabetic retinopathy study. I don't know that there's any group of our size or a company of our size that has more alignment with regulatory agencies than we do. We don't move without regulatory blessings.
Every single thing that we do, including everything that you mentioned, is with regulatory blessings. If you'd like, I'm happy to go through the two amendments or modifications that we have, again, entirely in line with the FDA's collaboration. The first one that we had that we announced a few months ago was that of the SO-1 and SO-R. What we announced at that time was that we have agreement with the FDA that we can extend SO-1 to its second year with dosing every six months. What that allows us to do is to use those patients to satisfy the FDA safety requirements. What it also allows us to do is to reduce the size of SO-R by a third, from 825 patients to 555 patients.
With the FDA's blessing, we've also said that we're going to keep the data masked for 12 months, allowing us the possibility of including 12-month data in our label. We have now the possibility of having what I really consider the holy grail of labels, which is a superiority label with the flexibility of dosing of every 6 - 12 months. That's the strategy. Not only that, but with the FDA's guidance, we are now in a position to get to filing faster and cheaper, because remember, you need two studies. We've now reduced the size of SO-R by a third. We get to the finish line faster and cheaper. The way you know that we have complete FDA alignment is that we've done all this while maintaining the SPA. Just think about that.
That's how you know we have total FDA alignment, because we've maintained the SPA and doing all this. It's a win-win-win for us. Now, moving to the most recent announcement, what we said was we've changed the rescue criteria or modified the rescue criteria. Let me explain what that's not due to, because I just want to make sure that the counter-narratives are addressed. It is not due to anything that we see in SO-R. It's way too early to see anything in SO-R. As you recall, SO-R has a very long ramp, intentionally so. It's not like we saw something in SO-R and made this change. There's really nothing to be seen in SO-R. The second thing to realize is that, yes, the U.S. Food and Drug Administration (FDA) is completely aware of these changes. We're in total collaboration with the FDA.
This was done by us for strategic reasons only. I'll explain that. The third thing that I'll tell you is that this in no way jeopardizes the integrity of the SO-R data. No way jeopardizes the integrity of the SO-R data. I would not assume that anybody has been rescued in SO-R. We never said anything about that. It doesn't jeopardize anything. Why did we do this? There are three reasons. The first reason is when we designed this study, we wanted this study to be in several countries and several regions, and people in different areas feel comfortable about rescue with different formats. We wanted to go out of our way to provide a study that would be acceptable to all regions, where rescue would be acceptable to all regions. We included a number of rescue criteria. We announced one, which is a 10-letter loss.
We didn't announce the rest. It just became way too complicated and unnecessary. Our PI said this is just not necessary to have all these rescue criteria. At the end of the day, what we're convinced is that the criteria that we have now is really going to be no different than what we had before. We don't expect a single more or less rescue based on this change. That's one reason. The second reason is very simple. We have a patient selection that is second to none, a six-month ramp with a total of five loading phases or loading injections, two opportunities to observe the patient for any kind of instability before randomization. These are the most stable patients possible that you can randomize. In a non-inferiority study, that's exactly what we want.
We came to the conclusion that we want comparisons with other studies, either ongoing or those that have already been concluded. We invite those comparisons, because in a non-inferiority study, what happens is people look at the visual acuity and they look at the number of rescues. Because we're randomizing these rock-solid patients, we believe we will beat all rescues. We want that comparison. We wanted an apples-to-apples comparison with previous studies and ongoing studies. We invite that comparison because we're so confident that we will do better. The third reason is simply that we wanted to be aligned with OUS regulatory agencies. We didn't need to have an unnecessary conversation based on rescue criteria that they hadn't seen before. We said, look, we'll use the same rescue criteria that you already are familiar with, that you've approved products with, and we're happy to do that.
For those reasons, we made this change. It was a strategic change. I think that now that's been well recognized by the street.
Thank you. That's very helpful. If I understand correctly, the current expectation is to report top-line data from SO-1 in the first quarter of 2026, and then top-line data from SO-R in the first half of 2027. Could you remind us the primary endpoints of each trial and your expectations for the data readout based on existing clinical evidence of Axpaxli?
Yeah, thank you. Again, for SO-1, you're exactly right. We're expecting the CART turned in the first quarter of 2026. As you know, the primary endpoint is at month 9. These modifications that we just discussed have not changed anything, have not changed the primary endpoint, have not changed the powering. The SPA still remains. Evidence of FDA blessing here. The SPA still remains. The primary endpoint is the proportion of patients who maintain vision at month 9, loss of vision or rescue per criteria defined as 15 letters or more. Fifteen letters traditionally with the FDA because that represents doubling of the visual aim. As far as SO-R is concerned, SO-R is a non-inferiority study. We did give ourselves quite a bit of leeway and said the first half of 2027, you're absolutely correct.
It is a non-inferiority study with a non-inferiority margin that is the largest that the FDA allows, which is 4.5 letters of vision. What's very, very important also is the primary endpoint. The primary endpoint is a single primary endpoint. It is not, again, I repeat, it is not blended. It's at 56 weeks. That is two months after the last Axpaxli injection and the last Eylea injection. We believe that this is an optimal singular primary endpoint for us. I ask you to look not just at the patients who are randomizing, because I don't think that there's any study that I know of where patients have been so super selected to be de-risked as this study. I also ask people to look at the primary endpoint, which I think is very favorable to us and a very important de-risking factor.
Has the data and safety monitoring committee reviewed the masked data from both trials?
The data safety monitoring committee exists in both studies, and they constantly, on a regular basis, review safety data. I want to add that there's absolutely no safety issue with this drug. I want to repeat that. There's absolutely been no safety issue with this drug, none whatsoever. There still hasn't been. There have been no indications from the data safety monitoring committee whatsoever regarding safety, and we don't expect any safety issues whatsoever, period.
Is the rescue rate in SO-1 trial in line with expectations?
Yes, it is. I've said this over and over again that what we look at in a masked fashion, and I want to emphasize that we are completely and totally masked to protect the integrity of the data. We're looking at patterns, right? There are three things that we're looking at carefully: under-masking. One is the number of rescues. That's what you're referring to. The second is the cadence or the pattern of rescues, which is also very important. Are the rescues occurring when we expect them to occur? The third is, are the rescues being done on protocol? I've said this over and over again from, I think, from January onwards, which is to say that when we look at these three parameters, we are absolutely thrilled with what we see.
The answer to your question is, it's not just that the number of rescues are within expectation or according to our expectations, which is important, but I'm going further than that and telling you that the pattern of rescues, as well as the fact that the rescues are on protocol, are also something that gives us a great deal of confidence.
Got it. Thank you. Could you tell us whether both trials have only enrolled treatment-naive patients?
Yes, it's treatment-naive patients. It's for a simple reason. We want to have as pure a sample size as we possibly can. It's not just that it's treatment-naive patients, but it's also, and we've talked about this earlier on, I'm happy to talk about this. I think this is something that I talk about all the time, but I still think is very underappreciated. I think when people look back at these two trials, they'll look at these trials as really trials that set the trend for future trials for thoughtful sponsors, not only because of the way they're designed in terms of having complementary trials, not repetitive trials, but also in terms of the patient selection, the patient selection being bespoke for each trial. One for a superiority trial with patients that are anti-VEGF dependent and designed to fail once, right, as a superiority trial in SO-1.
The other is patients that are specifically selected for stability, which is what would be de-risking in a non-inferiority trial. I think those things have been done more thoughtfully in these two studies than any study that I've been associated in the last 30 years that I've been doing this.
Thank you. I'm curious, when you report data from SO-R trial, will you report data from the aflibercept 8 milligram arm as well, or does that arm only exist for masking purposes?
Yeah, I have the same question to you. The answer is, I don't know. It's a little bit early. I appreciate your question. What we have done is to do everything according to the FDA's guidelines. When people talk about risks, people talk about risks when we change things or we modify things, they kind of miss the forest for the trees. The question to be asked is, are you doing everything per the FDA guidelines? If we're modifying something with the FDA's blessing, there's really very little risk or no risk at all. We're doing it according to the FDA's guidelines, period. Just like that, we've done every single thing in both trials according to the FDA's guidelines. That is why we have such great collaboration. You've seen that over and over again, even to studies that we have yet to begin, such as the nonproliferative diabetic retinopathy study.
To answer your question directly, the third arm, the high-dose Eylea arm, per the FDA's guidelines, is a masking arm. We don't have any sham, per the FDA's suggestions and requirements for proper masking. That is a pure numeric analysis. The FDA doesn't really care. It's not a statistical analysis. It can't be, because the randomization ratio is two, two, and one. It is a numeric analysis that we will have and we will use for strategic advantage in terms of commercializing our product. I believe that that will be a very big and unique advantage for us.
Got it. Got it. So Axpaxli is based on the hydrogel technology, also utilized for the commercialized Dextenza product. Is that correct?
That is correct.
Okay. Is there any safety concern associated with the hydrogel for re-dosing at six months?
Yeah, I'm glad you've asked that, because the fact of it is, there's absolutely none. We have experience with that in our earlier phase studies. This hydrogel has been used systemically, is being used systemically in over 5 million patients or so. There's just no safety issue, period. I don't know how else to say it. This is the reason why, because is this a reason why we can confidently say that safety is just not a concern for us? As far as doubling up this concern in terms of re-dosing, we've done that in our previous studies. We've seen absolutely no concerns. We expect zero concerns. Please realize it's not just that there's no safety issue, but there's nothing left behind. There are no carcasses floating around. When the drug is gone, the hydrogel is gone. There's simply nothing left behind.
Got it. Can you tell us your estimated timeline for NDA submission and whether the 505(b)(2) pathway is applicable in this case?
As you know, the FDA has traditionally stated that they require two studies that hit the primary endpoint that are well masked. We will provide that, and we will submit when we get positive results at week 56 in SO-R, which is our second non-inferiority study. We expect to submit at that time. We believe that our submission will be very efficient based on several things. One of them you referred to, which is that we'll be able to submit through the 505(b)(2) pathway because we have a known molecular entity in our TKI. Also, remember that we have a SPA. With a SPA, as I learned in my last company, Iveric Bio , that submission is extremely efficient because most of the work has already been done in issuing the SPA. The statistical analysis and all of that has already been approved and already been done.
We expect our submission to be very efficient indeed.
How do you expect Axpaxli to be used in the real-world practice among existing anti-VEGF therapies, including Lucentis, Eylea, both of which now have biosimilars on the market, and also Vabysmo, Susvimo, as well as the off-label use of Avastin?
It's a great question, Ian. Thank you for that. What we intend to do is to have a superiority label, period. That will set us apart. There is no superiority label in this field. There is not an active trial that I know of or even one that's planned for superiority. If we have a superiority label, we will be, in our opinion, immune from all the pricing pressures that exist right now. Right now, what you see is a morass of drugs that are me-too drugs that may be incrementally this way or that way, but they're pretty much all the same. When that happens, as you know, there's a race to the bottom. It's a pricing pressure. It's step therapy, all those things.
What I will tell you is that with a superiority label, what you will see is that we will be in a different orbit where we will have premium pricing with the potential for premium pricing with absolutely no such pressure whatsoever. If you ask your KOLs, does a superiority label mean anything to you? I guarantee you they will say, you know, I never look at a label before I inject. That's what I used to say too. They're right. That's the wrong question to ask your KOLs. The question to ask your KOLs is, does it matter to you that you, as a doctor, get to decide what drug your patient gets?
Does it matter to you, you as a doctor, that you can start your patient on the drug that you want right away without having to wait until the patient fails on a lesser drug and perhaps has irreversible loss of vision? Every single KOL will say yes. The fact of it is, they get that because of a superiority label, because they don't have the pressures of step therapy. They can choose the drug. They can go to a premium product. For those who look at our company and value our company, believe me, a superiority label, the only one in sight and the only one of its kind, matters a lot in terms of the valuation of our company.
Got it. Can you talk about your current manufacturing capacity for Axpaxli?
Yeah, one of the things that I'm very proud of in this company, which I didn't have in the last company, is that, look, we have a closed loop where we manufacture, where we have a commercial team. We've proven that we can scale up, right? We manufacture ourselves. It's done in Bedford, Massachusetts. We've scaled up before. We've demonstrated that we can do that with Dextenza. I'm grateful to you that you've asked that question, because the fact of it is, we're investing a great deal in terms of real estate, in terms of automation, in terms of the manufacturing. We're absolutely geared up to scale up for the demand that will be there for Axpaxli.
How receptive do you expect the payers to be for a six-month TKI treatment for wet age-related macular degeneration?
Yeah, again, a great question. This is one of those drugs that's a win-win-win for everybody. If you look at the payers, think about the fact that in this country, and that's in the U.S., right? I mean, maybe the best health care anywhere, 40% of patients drop out in the first year. 40% of patients, almost half, now they drop out of coming to get treated. They don't drop out of the health care plan. They go blind. Having been on boards of a couple of payer companies, I'll tell you, the most costly patients are patients who are blind. It's because their mortality doesn't change, but their use of resources skyrockets, right?
If we can go to the payers, as we are doing now in terms of the SABs and our payer advisory boards, and say, if we can reduce the dropout rate by even 10% and have a quarter million less patients go blind in this country alone, a quarter million, is that interesting to you? Of course, it is. The savings that they will have is enormous. Patients will win. Payers will win. What does that mean? That means that we can price the drug at a premium. It also means that doctors will benefit, because now doctors will have a better drug with a greater encapsulation of patients. They can inject as much as they want. More patients will benefit. It's not just the same patient. It'll just have a greater encapsulation of patients. They won't have to buy a single piece of new equipment.
Their workflow doesn't change at all. They'll simply reach out their hand and get a better drug and have a higher ASP. Economically, again, it's a win-win-win for payers, for doctors, and it's a better outcome for patients.
Got it. You mentioned for the NPDR indication, there is another SPA, Special Protocol Assessment with the FDA . What about the diabetic macular edema indication? Do you plan to pursue both indications concurrently in the future?
I go back to this. I think the question to be asked is, why did you get an SPA, right? I mean, I think we made all the record of companies in the size of our companies with the number of SPAs and FDA collaborations. It's simply because of that. People have these false narratives of, wow, they're changing stuff in the middle of this. Are they going off the reservation? I want to make sure I mention this. We don't do anything, anything without the FDA's blessing. We seek the FDA's blessing. We seek their collaboration. This is why we got an SPA for a study that we haven't even started yet. We won't do it without an SPA, right? This is how dedicated we are to working closely with the FDA with every single thing we do. We don't do anything at risk.
The answer to your question is, when we look at the Helios study, the results were absolutely remarkable. I mean, absolutely remarkable. Every single parameter was in favor of the drug. The more and more we look in, with the studies that Justis Ehlers has done in the Cleveland Clinic and others, the more confidence we get in a single injection of this drug having remarkably beneficial effects after 48 weeks, to the point where if you look at the control, they behaved exactly as you would expect them to behave, right? What you expect with the natural history is that 30% - 40% of patients will have vision-threatening complications year upon year. Sure enough, in the control arm, it was 37.5%, exactly what you would expect. With a single injection of Axpaxli at week 48, it was literally zero, zero. I mean, literally zero. We're clinicians here.
When we looked at this and said, holy cow, what we can do is to have a conversation with our patient and say, if you come to see me once a year, I can reduce your vision-threatening complication, your blinding complications from 30% - 40% year- upon- year to literally 0%. I mean, that's like going to the dentist for teeth cleaning every year. That is remarkably powerful. We have to do this study. It's there sitting for us. Now we have an SPA. This study is going to be fantastic, from our perspective, for patients, for us. The other part to your question is that, yes, we have patients with diabetic macular edema, non-center-involving diabetic macular edema. Every single one of those patients, every single one of those patients improved. Yes, we intend to study that as well. We haven't detailed the study design, but we will.
In our Investor Day, I hope all of you will come. It's on September 30. You can register on our website and you'll see the details. Yes, we intend to study not only nonproliferative diabetic retinopathy, but also diabetic macular edema.
Got it. Thank you. Does Ocular have enough capital to complete the pivotal program in wet age-related macular degeneration, obtain regulatory approval, and commercially launch Axpaxli?
What we've said is that our cash guidance runs into 2028. We've been very conservative in saying that with additional monies that we got in from the ATM, we have not changed our guidance because we're ultra, ultra conservative. We've also made it a point of saying that that does not take into account the OLE or the NPDR program that we will outline in our Investor Day.
Got it. We are getting to the end of the chat. Could you provide a summary of the upcoming catalyst and maybe some closing remarks for our audience?
Absolutely. Upcoming catalyst, you know, look, what you'll see, again, I hope in Investor Day is, and I hope, again, all of you attend either in person or virtually, I think you will see a very, very enthusiastic, and I emphasize enthusiastic, and detailed outline for our program in diabetic eye disease. I think that you will see a number of other cuts that we will see from our previous studies coming up. Obviously, the big catalyst that everybody's waiting for is the CART turn for SO-1 and then SO-R. There's a lot to come. Mainly what you will see, and this is really the closing part that I would tell you, is that we are now in a position of confidence based on what we see on a mass basis in SO-1.
We're in the process very deliberately of positioning this drug to be dominant in the market, not just in wet macular degeneration with a superiority label that nobody else is going to have and nobody else will have in the foreseeable future, where it'll be in a different orbit for years, if not a decade or more. We're also positioning this drug very deliberately in diabetic eye disease. Together, what I think that will do is increase the value of our company greatly.
Got it. That's very helpful. Thank you very much, Dr. Dugel, for participating in our conference. Best wishes for your clinical development.
Thank you very much. I really am grateful for the opportunity to tell our story and for your invitation. It's an honor to be here. Thank you.
Thank you.