Good afternoon, everyone. Thanks for being with us for the Baird Global Healthcare Conference. My name is Colleen Cousy. I'm one of the Senior Analysts covering biotech, and I'm very pleased to have with us today Ocular Therapeutix, including Dr. Pravin U. Dugel, President, CEO, and Executive Chairman.
Thank you, Colleen. It's an honor to be here, and thank you for having us here.
Wonderful. Maybe if you can kick things off, Pravin, with just a brief company overview and the current state of affairs at Ocular Therapeutix.
We are doing very well. I'm thrilled with how things are going. As you know, we have two Phase III studies, SOL1 and SOLR. We have mentioned that the car turn for SOL1 is going to be in the first quarter of 2026, and that still stands. SOLR, we've mentioned that it's going to be, we gave ourselves a fair amount of leeway, the first half of 2027. I am absolutely thrilled with the trial conduct, and we can get into detail about that as well. I think things are going really well. Most recently, we had a press release that we had another SPA in nonproliferative diabetic retinopathy, and we'll be discussing that more in our Investor Day, which is on the 30th of September.
Fantastic. Maybe a topical question to start. We did get a rumor on Friday of a potential acquisition. Any color you can share on that dynamic?
Obviously, I can't respond to specific rumors and so on and so forth. Look, it's my job to make sure dialogue is open, you know, for this company. I'm very, very grateful for the attention. We have a lot more attention now, which is terrific, and I'm grateful for that. Look, I talk to everybody. That's all I can tell you. Here's what I want to make really clear. I've said from the very beginning that the value of this company is not going to be realized until the car turn, and I stand by that. I just want to also make this very clear. I personally want to see the car turn. I am very confident about it. Again, I reiterate this. I personally want to see the car turn, and so does everybody in the company.
Having said that, if people want information, I'm grateful that they're looking at us, and I'll talk to them.
Great. When you reported earnings in early August, there were kind of three pieces of the refined messaging that I think it's worth talking through to start. I think those were, and correct me if I'm wrong, kind of more of a focus on getting superiority on the label, the newly announced open-label extension study, and then thirdly, the changes to the rescue criteria for SOLR. Let's maybe walk through each of those. On the superiority point, kind of who cares about superiority?
It's a great question. You're right. Those are the three things, and not only were they the three things, they were in that order of importance, at least in my mind. Unfortunately, it was the reverse order that got the attention. Superiority on a label is absolutely a holy grail, and that is the intent of SOL1. That is the most important thing we can do. Having said that, when you said who cares, the people that actually value our company care. I realize that where my challenge lies is in talking to the street about this, and I think that's starting to change. Certainly, the strategics get it, and they get it right away.
What typically happens is that people call their KOLs after something like this, and they call 10 KOLs, and they say, "Hey, does the superiority in the label matter?" All 10 of them will say, "Absolutely not. I never look at a label. It doesn't mean a darn thing to me," which is what I would have said too. They're right.
I've heard Pravin U. Dugel say it, and I've never looked at a label.
Exactly. That's the wrong question. The question to ask the 10 KOLs is, "Hey, does it matter to you if you get to choose what drug you want to give your patient? Does it matter to you if you're not forced to start with a lesser drug and wait for it to fail and then petition for a better drug?" All 10 will say yes. That's what superiority label will get you. Every drug right now, every single drug in this morass of anti-VEGFs is as a result of a non-inferiority study. There's a race to the bottom in terms of pricing. There's step therapy, all those things. Now, potentially, with a superiority label, we will be immune from all of that. We will be just in an entirely separate orbit. Nobody has achieved it. There's no active study that is a superiority study that I know of.
There's not one even being planned. We will be in an entirely separate orbit, and we may be protected for years, if not decades. Certainly, the strategics understand the value of that. Superiority to us is extremely important.
OK. Makes a lot of sense. For the open-label extension study, do you think you'd be able to see separation in the two years between original treatment group and the crossover patients?
Absolutely. That's also part of the superiority strategy. OK. What we announced was that we're going to have an open-label extension that involves treatment every six months, which will satisfy the FDA's requirements for safety. They don't require that for efficacy, but for safety. We'll look at many things, but the most important thing that we'll look at with the open-label extension are the crossover patients. We don't believe the crossover patients will ever catch up. The reason for that is that we know that with pulsatile treatment, because the back of the eye gets thicker and thinner and thicker and thinner, there's great evidence that that causes more fibrosis, scarring, and that will actually be seen in the OCT within 90 days. Not vision affecting, but seen in the OCT within 90 days.
It will certainly be vision affecting, we believe, after two years of pulsatile therapy before these patients cross over. For that reason, we don't think they'll ever catch up. What does that all mean? That means that we will have a drug with a superiority label, with premium pricing, and with data, very convincing data, that shows that for the best result, you've got to start on this drug right away. That all is part of the strategy of placing this drug in a premium position.
Great. The third piece of it, as you mentioned, kind of got the most attention following the quarterly update on the updated rescue criteria. What does this updated rescue criteria get you, and what's the operational impact to the ongoing trial?
The operational impact is zero. Let me just describe to you why we did what we did. Going back to when this team first came here, this team was not the one that got the SPA for SOL1. It was the team before, and they deserve the credit for that. Once you get a SPA, you want to protect that SPA against all costs. Obviously, you don't want to break the SPA at all. The SPA was for nine months. That's it. There was nothing else after that, period. What we had to do in order to satisfy the FDA's requirements was that we had to have a massive study as a second study, not for powering, but to satisfy the FDA's requirements. As you remember, the SOLR study was 825 patients. When we looked at the SOLR study, we said, "Holy cow.
We'll have to go to a whole bunch of places to do this study." What we did was we wanted to satisfy everybody, so they would be in the clinical trials. We had three different sets of rescue criteria that would satisfy the entire world. Because we recruited so efficiently, our PIs came to us and said, "Look, these rescue criteria are overly complicated and really amount to something that would have been OK if it was just very simple anyway, and it's just not necessary." That was one reason. The second reason was if you look at the patient selection that we have, we are randomizing rock-solid patients. We've got a six-month ramp. We've got three loading doses. We've got two opportunities to observe the patients and two more loading doses so that we're randomizing absolutely stable patients. We're inviting comparison with other studies, active or previously done.
We want that. For any non-inferiority study, what people do is they look at the vision, and they look at the number of rescues. We believe we will win based on both, especially the number of rescues because of these patients. We wanted to make the rescue criteria such that people could look at this and have an apples-to-apples comparison. Thirdly, you know that we're having discussions with OUS regulatory agencies, and having such a complex rescue criteria, sets of rescue criteria, was just not necessary. It just complicated the conversation. We wanted to then pick a rescue criteria that would be easy for them to understand, one that they were familiar with, and one by which they'd approved other drugs. Now we're entirely aligned with OUS regulatory agencies, and the conversation is much easier. Those are the three reasons we changed the criteria.
Great. Maybe I'll ask you a quick follow-up on that last point. Where are you in terms of agreement with EU regulators on the path to approval there?
Yeah. Where we are right now is that we're completely aligned based on all of these things. We haven't guided you as to the formal discussions. We will when appropriate. We feel that we're in very good shape with European, as well as other regulators. As I say, we're completely aligned with this. The last thing that I wanted to add in terms of the rescue was there was also a question asked about, "Look, is this going to jeopardize the data at all in any way?" We never said there were any rescues when we made that announcement. This will have absolutely no impact whatsoever on data integrity. I mean, none. In terms of the number of rescues, we don't expect it to change by even one this way or that way.
OK. Helpful. On SOL1, your superiority study, enrollment wrapped up last December. In your Q2 call, you highlighted strong retention and rescues in line with protocol and at the cadence you would expect. What kind of blinded data are you seeing from that trial to inform this view?
Yeah. It's population-based masked data. We always say masked. We don't say blinded. The masked data we're seeing is population-based, right? That's all we're seeing. What we're looking for is to see if there's something we're seeing that we don't want to see, something alarming. The first thing we want to see is to make sure there are the number of rescues that we would expect. We need rescues to show a delta, and there are. We're very happy with the number of rescues there are. The second is the cadence of rescues. We would be alarmed, for instance, if all the rescues were occurring very early or very late or in areas that we didn't expect. We don't see that at all. We're very, very happy with the pattern or the cadence of rescues. The third thing is we want to deliver the FDA a clean package, right?
It's very important for us to make sure that the rescues are on protocol, and that's exactly what we're seeing. I've said this before. The vast, vast, vast majority of rescues are on protocol. That's what we're seeing under masking. We're not seeing anything more than that. We don't want to jeopardize the data whatsoever. It's population-based. We don't know who's who, but we're very, very happy with those three parameters.
Great. Based on this masked data, we're talking in off-the-terms here. Based on the masked data you're seeing in this study, what do you see as the biggest risk to this study?
We're seeing masked data, right? We're seeing patterns. We don't know who's who, and even if we wanted to, we couldn't tell because there's no telltale sign. The receptor that's being blocked is the same anyway. We could be completely wrong. It could be a complete confirmation bias. Those things are always possible. All we can do is look at the masked data and say we love the pattern, we love the numbers, and we love the fact that they're on protocol.
To me, going into this study design, one of the biggest questions operationally for me was, will the Eylea-controlled patients lose 15 letters by nine months, or would they lose something less than 15 letters? I don't know that there's a great recent data set to show what would happen to these patients. What gives you confidence that these patients coming in with high vision, or that were at least induced into high vision, will indeed lose 15 letters?
Yeah. Colleen, look, that's a very appropriate and fair question. You're right. The fact of it is that this study has never been done before. It's not like I can point to another study and say, look, there's the control arm and see what they did there. You're absolutely right in saying that there's been no precedence. This study is the first time it's being done, admittedly so. What gives us confidence? There are several things. There's a whole bunch of clinicians in this company, and they're very experienced clinicians. When we look at each other, we know that we've used Eylea for almost three decades. How many patients have we actually treated that were treatment naive, that after three injections required no other treatment? The answer is I don't know of any. Zero. That's one.
The other thing is, we've talked about the modeling, which I still stand by, which is the best that we can do. We look at the Talent study, for instance. There was a treatment, a patient population in a treat-and-extend study that had treatment on board. Even so, 20% of patients made it. That's the other part. Thirdly, what I said earlier on, we look at the patterns that I just told you about. If we didn't see many rescues at all, or if we saw very few rescues, that would worry us. We're seeing the number of rescues that we expect, which gives us great confidence.
Great. Maybe if you can just remind us the delta that you need to show to be stat-sig, and what your current expectations are for the study.
Yeah. The delta that we need to see is 15%. Right? As far as my expectations are concerned, look, I stand by what I said earlier on in the models. We've talked about that. We are overpowered. I said, look, we believe that we're powered for 50% delta. At the end of the day, I want to be very, very clear about this. I realize what I have to do here, right, in terms of how this data is released. I totally understand that, and I totally get that. We have a study in SOL1 that, from a regulatory point of view, for us, is fantastic. It allows us a path, a clear path to a superiority label, which is the holy grail, as long as we hit stat-sig. That's what we've got to do. We've got to hit stat-sig.
However, from a clinical relevance point of view, I also completely appreciate the fact that it's not entirely clinically relevant because people really don't wait for a 15-letter loss. I realize that. What I need to do is to pivot the results of that study and give you and everybody else in this room and everybody else outside confidence, even more confidence, that SOLR will be positive. I totally get that. We will have a lot of data. My goal will be to go ahead and show the data in such a way that people will look at this and say, wow, they hit stat-sig. They have a clear path to a superiority label, the holy grail. They showed me data to make me absolutely confident that SOLR is going to work. We will do our best to show that data with that narrative in mind.
Is it the six-month ECVA data that you think will help give us confidence, or what do you think?
I think there's a whole bunch of things. At this point, we haven't publicly guided you as to what cuts we will show. I'm just letting you know that I hear you. I hear everybody. It's an appropriate question to ask. In the beginning, I could also say, and I'm not saying this, that the drug is the same, but the patient population is completely different. And the patient population.
SOL1 and SOLR.
Yeah, between SOL1 and SOLR, the patient population is appropriate de-risk for each study in a bespoke manner. That’s true. The patient population is completely different, which makes this a little bit more challenging. I’m not running away from it. I realize that that’s what we have to do as a company, and we will do our best to answer that question and show that data.
Great. Earlier this year, you had made some changes that you alluded to previously, Pravin, about now including re-dosing at 12 months in the SOL1 study. Walk us through those changes, and then what would be required for you to show in order to get a Q12 month label?
Yeah. What we did, and there are a lot of conclusions to be drawn from this, is, as I said earlier on, the previous group deserves credit for getting the SPA. We wanted to preserve the SPA at all costs. The SPA went to month nine. The FDA's requirement is 300 patients or so for two years for safety purposes only, not for efficacy, for safety. That's for all studies. We had to completely overload SOLR with 825 patients to satisfy that. What we noticed, and the reason for the gating item was that in SOL1, we were so happy with the trial conduct. As we sat around a table, and all of us have had 20, 30 years of experience doing clinical trials, and think about this, we said we've never seen a clinical trial where patient retention is this good.
The patient retention in SOL1 is fantastic, and we expect the same thing in SOLR. At that point, we went to the FDA, and we said, look, is it possible for us to have an extension of SOL1? We don't want to jeopardize the SPA. We want to treat these patients every six months in the second year. They said yes. They said, if that's the case, can we reduce SOLR from 825 to 555 patients? Because now we can have both those patients together. They said yes. Then we said, can we have alpha-protected data for 12 months with the possibility of getting that in the label? They said yes. All of that was done while the SPA was protected. What that means for us is we gave up absolutely nothing. The primary endpoint remains the same at month nine. The powering remains the same.
It means that we're potentially going to get a better, more flexible label. Most importantly, it means that we'll get to the finish line faster and cheaper. It's an absolute win-win-win. I think the main takeaway from this is not just that, but it should also tell you the kind of relationship and collaboration we have with the FDA. I don't know how many studies you know of where in the middle of a Phase III study, somebody's been able to change the study to that degree, preserving the SPA with the support of the FDA. We're thrilled with the collaboration, and we believe that that's there because we've done every single thing they've asked us to do and followed their guidelines to a T.
Great. These top-line data for SOL1 are expected in Q1 2026, so really not that far from now.
That's correct.
Are there any more data you'd expect to share ahead of the top-line data, such as patient demographics or any sort of masked safety update prior to your data?
The safety updates are very simple. There are no safety issues, period. I don't know how else to say that. This drug has been used quite a bit in other studies. There's been no safety issues before. There are no safety issues now. The Data Safety Monitoring Committee is very active. They have never raised anything at all. That one I can answer immediately, saying that there are no safety issues. As far as the other things are concerned, we're very, very careful about making sure the data remains masked. At this point, I don't anticipate doing anything to jeopardize the masking whatsoever.
Understood. Moving to SOLR, the study recently wrapped up enrollment just in June. Prior to the change in rescue criteria shared in the 2Q call, you had decreased the size. Maybe talk to us about the specific entry criteria for this study.
One of the things that we've done, which is very thoughtful, I think, and very important, and my colleagues deserve credit for this, is to choose the appropriate patients for the appropriate study and de-risk the patient population. Very few people realize how variable macular degeneration is. I mean, patients sometimes need treatment every two weeks, others every six months. In trials of this size, you certainly don't want to have unintended biases derailing your trial. Patient selection is super, super, super important. What we've done in SOL1 is to select patients that are VEGF dependent. We've tested them to make sure that they increase by 10 letters or more or get to 20/20. We load them up and let them fail once. In a non-inferiority study, what wins is absolute stability. Here, what we've done is to take patients, have three loading doses.
If you look at any anti-VEGF study, after two or three loading doses, the curves all look the same. The curves go like this. Right? The patients stabilize. Now, three loading doses in and of itself should be enough to say, look, we've already hit that curve. We're stable. We're doing more. What we're doing is we've got two periods of observation. We have two opportunities to observe the patient two months apart. Right? What are we observing for? We're observing for any kind of fluctuation. Patients that fluctuate vision or anatomy, we have another opportunity two times to weed them out, to absolutely guarantee stability. Then there are two more loading doses, and only then do we randomize. That patient selection I think is absolutely perfect for this study, which is a non-inferiority study.
That's why I said early on, the patient selection is very different in SOL1 than SOLR, appropriately so and bespoke and appropriate and de-risked for each study design.
Great. It just feels to me that when I look at this SOLR study design, so much is stacked in your favor. You just talked about the super stable patients you're selecting. I think about the endpoint measured at a single time point at week 56, which is two months after your third dose and two months after the Eylea dose. Third is this 4.5 letter non-inferiority margin you've been able to secure with the FDA, which you're already catching the flat part of the curve. I think that should be helpful to you. Am I missing anything? What do you think really stands out to you about stacking the deck for SOLR?
I prefer to call it de-risking. I believe we de-risk the trial as much as we can in a very thoughtful manner.
These data are expected first to have 2027. You would plan to file shortly thereafter?
Yes. As you correctly pointed out, we have what I think is a very favorable optimized endpoint. It is not blended. I just want to repeat that. It is not blended. It's at week 56, which is two months after the last dose. The other thing also to mention, Colleen, is that we have the maximum non-inferiority margin allowed by the FDA, which is 4.5 letters. All of these things, I believe, de-risk the trial. Our intention is to file for approval upon hitting the primary endpoint at week 56. We believe that our filing will be very efficient, both in the front end and the back end. We'll be filing a 505B2 because each of these components has been previously approved, the TKI as well as the hydrogel itself. That'll save us at least a couple of months in the front end.
On the back end, because we have a SPA in one of our studies and because of the collaboration we have with the FDA, we believe that on the back end, it'll also be very efficient. We expect our filing to be very efficient.
Great. In terms of the required safety follow-up, you can do that. You can satisfy that requirement after that.
Oh, absolutely. Because remember, the SOL1 study would be concluded. If you just do the mathematics of the SOL1 study being concluded, meaning the primary endpoint, the second year will still go on. We can certainly use those patients and satisfy the FDA requirements. No problem at all.
Great. Maybe just kind of taking a step back, how do you see AXPAXLI™ being used in the wet AMD market if it's approved?
Yeah, it's a great question. Look, I think what's going to happen in the very beginning is that we're so used to doing treat-and-extend. I think that's what we'll do. What people don't realize is that treat-and-extend is just fairly unscientific. I mean, if you ask five doctors what treat-and-extend means, you'll get five different answers. It's just not done in medicine. I mean, you don't go to an oncologist and say, look, I'll treat you when the bladder cancer comes back, right? I mean, we're waiting for disease to recur, which is not a good thing. We're used to doing that. In the beginning, we may still do that. It's also a scheduling nightmare for patients and for doctors and for payers, by the way.
I think what will happen is that eventually, people will look at this drug and say, wow, this drug is safe, and it lasts for nine to 10 months, right, or nine to 12 months in this case. Our comfort level of seeing chronic patients is every six months. For a drug that lasts for nine to 10 months, you're very comfortable treating every six months, right? I think what will happen is that we'll quickly transition into fixed dosing when we see the patient every six months.
Great. What sort of patients do you think would be the first patients that would go on?
Look, this will be eligible for everybody. I mean, this is the most adoptable drug there is. There's not a single piece of new equipment to buy. There's no change in the workflow. It's a known target. It's a known receptor. It's a 25-gauge needle that's going to be self-sealing. I think this will be, I don't think there will be a sector of patients that will be used in it. I think it's familiar to everybody in terms of what response to get in the OCT, what will happen to the patient. I think it will be used ubiquitously in all patients, and I think it'll be very, very, very easily adopted.
I know the company has spoken to this before, but just the incremental days you get with some of the more newly approved Vabysmo, Eylea, high dose, it's pretty incremental, and you're still seeing huge uptake for those drugs. Just the hunger for longer durability.
You can just start with Lucentis and Eylea, right? I mean, you look at Lucentis, a miraculous drug with a seven-year head start. Here comes Eylea from a company at that time that nobody had heard of. It's not safer. It's not more efficacious. It arguably gives you another extra week, and they totally dominated the market. More recently, you're right, with Vabysmo, HD is a little different, but with Vabysmo at least you get two extra weeks, perhaps. Again, it's not safer. It's not more efficacious, and it's dominated the market. We're just in a completely different orbit, potentially with a superiority label.
Fantastic. Now we'll move on to the SPA that you mentioned earlier for the NPDR and DME program. What were the takeaways from your FDA meeting there, and what color could you provide on the trial?
We may have a record for the most amount of SPAs per capita in a study, which is great. Because look, we want to collaborate with the FDA. We want to do exactly what they want. We have a novel endpoint. Now, we haven't announced the primary endpoint. We will in our Investor Day at the end of the month. Again, look, we will go back to the HELIOS study. We looked at the HELIOS study, which is a small study looking primarily at safety initially. What we saw as clinicians in the result of the HELIOS study was staggering. I really mean staggering. I mean, every single parameter was in favor of the drug. We've never seen that before. From a clinical relevance point of view, you want to stop patients from going blind.
What we know from the natural history is that there's a 30% to 40% risk of vision-threatening complications year upon year upon year. In the control arm, it was 37.5%, exactly what you would expect. With a single injection of AXPAXLI™ at week 48, a single injection, that rate was reduced to zero. That's staggering. That's astonishing. What does that mean clinically? It means that I can sit there with a patient and say, you know, Ms. Smith, your chance of having a blinding complication is 30% to 40% year upon year. If you come to see me but once a year, like you go to your dentist for teeth cleaning, I can reduce that risk literally to zero. That's extremely powerful. The market is enormous. It's 3.5 times as big as wet AMD. We wanted to have a novel primary endpoint that would be very favorable for us.
We applied for a SPA. We got a SPA very, very quickly. You will hear about the study. You'll hear about the endpoints. You'll hear about the SPA at the end of this month in our Investor Day. We're very excited about it.
there anything else at the September 30th meeting we can expect to be discussed?
The main thing that you'll hear about more is why we believe that the superiority label is so important. You'll also hear some very novel ideas regarding the market size for wet AMD, as well as NPDR. We've done some really important studies. We believe that the market size right now is actually undervalued because of attrition, dropout, and so forth, the way it's calculated. You'll see the market size and the market opportunity for this drug, which we think is immense. Finally, you'll hear everything you want to hear about NPDR and DME trials.
Great. I wish we had more time, but we have just about a minute left. Maybe just in this last minute here to wrap up, why do you view Ocular as differentiated, and why should investors be interested in the Ocular story over the next 6 to 12 months?
Very rarely do you have a drug that truly will have an opportunity to redefine an entire field. That's this drug. I mean, I've been in this business. I've been a physician for 30 years. The last time this happened was with Lucentis. Then came Eylea, then came everybody else with the anti-VEGF. It's time for the next step, and this is the next step. We're talking about wet macular degeneration now, and we're talking about NPDR and DME. We know that in this validated target, if it works in wet AMD, it's going to work in NPDR. It's going to work in DME. It's going to work in retinal vein occlusion. It's going to work in ROP and everything else. The market size is massive, and it will truly redefine the entire field. That's why you should pay attention.
Fantastic. With that, we're out of time. Thank you so much for being with us, Pravin.
Thank you so much. Thanks for having me.