Well, good morning, everybody and welcome to day two of the Citizens Life Sciences Conference. I'm very pleased to have Ocular Therapeutix here to kick off at least my day and CEO, Pravin U. Dugel. Pravin, thanks so much for coming and joining us today.
John, thank you. Thanks for the opportunity and thanks for all the coverage and support. I'm very grateful to be here.
Well, you guys have had an exciting month to say the least and we're pleased to kind of dig into some of the details. But maybe for those who haven't been paying attention, Ocular Therapeutix, what are you guys working on? And then we can jump off into some of the more recent details. But big picture-wise, what are you guys doing?
Yeah, I mean it starts really with where we are with wet macular degeneration. I'm old enough that I remember when I was in training and early in practice when with people with wet macular degeneration, which is the leading cause of blindness in the elderly in this country, there was really no treatment at all. We'd just watch and, you know, people would predict when people would go blind. You know, then came the anti-VEGFs which were nearly miraculous, you know, drugs like Lucentis and Eylea, et cetera, that you know of. The tragedy though is that even now, more than three decades after those drugs, in this country alone in the first year, 40% of patients drop out.
We have a known target that's validated, that's extraordinarily effective but yet 40%, almost half the patients in this country alone drop out. I mean, just think about that. That's after more than three decades and that's absolutely tragic. Even if patients do stay, after about three-five years, inevitably those patients start losing vision and getting worse than baseline and the reason for that is because of the way we treat, which is the pulsatile nature of treatment, so the back of the eye gets thick and thin and thick and thin. It's neural tissue, so it's akin to having multiple concussions and you get scarring and patients lose vision. We have a validated target but the way we give the medicines right now is simply not effective.
It's not sustainable and in the long term it causes loss of vision. We're trying to solve both those problems. We have a drug called AXPAXLI that has just shown for the first time ever a superiority result in a phase III study. We're very proud of that. It's the first time a drug has ever been shown to be superior to an anti-VEGF. The problems that we hope to solve are that of sustainability as well as better long-term outcomes.
What's the target profile for AXPAXLI?
AXPAXLI's a TKI, tyrosine kinase inhibitor and it does the same it's the same target as with the anti-VEGFs, VEGF is the target. The difference is that it inhibits intracellularly as opposed to extracellularly. We believe that the inhibition is actually much more selective and stronger and we believe that the disease control that we're able to show in our phase III study that we just did called SOL-1 demonstrates that.
You mentioned SOL-1, I think it might have been about a month ago. You probably remember the dates better than me. You guys put out the top line results, before getting the data, maybe let's talk about the design and goal of the trial, 'cause I think that's important context.
Yeah. John, thank you for that. It's you know, one of the things that we've really suffered from is the fact that we've got a very unusual trial design and it wasn't us that designed the trial, it's the FDA. What I mean by that is the FDA issued guidelines that were very, very clear, it's in their website, as to what trial design they would accept without regulatory risk for a superiority path and for a non-inferiority path. It's very, very, very clear and it starts out with the premise that they do not believe that sham injections are proper masking. For those of you who don't know, sham injections is actually just touching the side of the eye with the hub of a syringe. There is no needle, there's no penetration involved.
When you inject in the eye, what you do is you numb the outside part of the eye, the white part, so it doesn't hurt when you put the injection in there. Very importantly, what you don't do is you don't numb the optic nerve and I say that because your vision doesn't change. Your vision is exactly the same. We've known for decades that, especially for an endpoint that's subjective, which is visual acuity, sham injections really aren't proper masking because patients can see whether you put the drug in or not. That happens all the time. Patients look at this and go, "Wow, doc, I saw that drug come in." That happens all the time. Or say, "Doctor, you didn't do anything." Right?
That has a profound impact on how hard patients try for a subjective visual acuity endpoint. The FDA has known that and they came out with an edict in February 2023 saying sham is not proper masking and we will not consider that proper masking. That's why they set up these guidelines that we followed to a T. Now it is the first time this study has been done. We have a SPA that validates the design of the study. It's exactly according to what the FDA has required. It does take a little bit of time to understand what the study's all about. Basically, it's a very simple one-on-one, head-to-head design. It's an injection of AXPAXLI versus an injection of Eylea and the FDA always requires a 15-letter difference to show superiority. Why 15 letters?
Because that's doubling of the visual angle and they're not gonna change from that. That's the design of the study. It's a single injection versus a single injection and the primary endpoint is the percentage of patients who maintain vision and the delta is what's statistically significant. In our results, we were statistically significant with the p- value of 0.0006. Every sensitivity analysis was statistically significant for superiority.
The trial was a statistical success and then there was a lot of confusion about the control arm still and the separation between the two treatment groups. You know, walk us through what you saw in the data that gives you confidence that the drug is working as you expected and should be, you know, used. Because that's the other thing we should touch on, is the clinical relevance of the trial.
Absolutely. Great question. You're exactly right, John. I mean, to be perfectly transparent for those of you who don't know that there was an initial confusion as to what all this meant, right? The initial pushback was, wow, the control arm really outperformed. Although it was statistically significant, although the trial was a success, the pushback was the control arm really did well. I won't push back at that. I mean, you know. I'm not sure that that really explains everything. The way to look at the trial really is, first of all, we start out with the premise that it's a SPA, that it has a SPA, that regulatory-wise, we don't think there's any regulatory risk because it's per the FDA. The second thing to look at.
Second or the third thing to remember really is that it hit the primary endpoint with a p-value of 0.0006 with sensitivity analyses all being statistically significant. It did what it's supposed to do. Let's break that down because your question is a good question. If you look at just the drug and we'll talk about the control arm in just a little bit, if you look at just the drug, the drug way outperformed anything that we had modeled. The drug did phenomenally well in every which way in terms of the OCT, which is the objective measure of control, in terms of the maintenance-free, the number of patients who are maintenance-free. All of that, I think anybody would agree the drug completely outperformed what we had modeled. Now let's look at the control arm, right?
The lesson that I learned from this is that because this had never been done before. Nobody had ever given a single injection of an anti-VEGF and just watched the patient lose 15 letters of vision. The lesson that I learned from this is that it takes a heck of a long time to lose 15 letters of vision. That's really the lesson. What does that mean? That means that fluid has to gather, it's gotta be intraretinal, then it's gotta be subretinal, then it's gotta be sub-RPE, then it's gotta migrate to the fovea, damage the fovea and allow you to lose not just a few letters but 15 letters of vision, which is three lines of vision. For the reasons that I mentioned, the FDA is not gonna sway from that. It just takes a long time.
What supports this? Well, what supports this is that the delta gets bigger and bigger. The delta was bigger in one-year mark than it was in the nine-month mark, right? If you look at the earlier indicators, such as OCT, et cetera, the disease control was phenomenal by the drug. It's disease control that's never been seen before. That's the lesson to be learned. The other part is, look, what are the consequences of that lesson? Well, the consequence of that lesson is, first of all, nobody's ever gonna do a superiority trial again, period. We're the first and only to be able to be on path to get a superiority label. Nobody's gonna do a superiority trial because it's simply too hard.
They'll have to do it against us and that 15-letter delta will always be there and nobody's gonna dare do that. When people look at us, they see that not only are we in a different orbit with a superiority label, the first and only of its kind on the planet but it's completely protected for decades and decades because nobody's gonna dare do a superiority trial. The second thing to be said here is that it's fine to talk about the control arm but it's really only of academic interest. I mean, it has no practical or clinical value whatsoever. Nobody's gonna change their minds about how they use Eylea or any other anti-VEGF because of these trial results. It is interesting. It does require explanation but it doesn't take away from the effectiveness of this drug.
It doesn't take away from the superiority label and it doesn't take away from the fact that this is a drug. It will absolutely get approved.
To that point, I want to talk about how kind of this might fit into adoption and use but before that, we got to get it approved. You guys are also doing a novel regulatory strategy and you guys, I think, were the first public company publicly to say, "Hey, we're gonna go with a single pivotal trial." FDA kind of talked about that, then they put out a position paper in the New England Journal saying, "Hey, our new default is single pivotal trial," but it also sounded like they want to raise that bar on the single pivotal trial to make sure that, you know, things aren't skirting by. When did you guys start thinking about this strategy and then how do you get from SOL-1 to an approval?
Yeah, great questions again. Look, we had thought about this and we knew there was a path forward from the very beginning, from the time that we got the SPA. This is not a new thing. When it was announced by Dr. Califf, we had. We did our homework, we talked to our FDA, meaning the ophthalmic division, to make sure that they were aligned. We're confident that they were. Based on that, we put out an 8-K and a press release saying we're gonna go with a single trial submission. From that point on, we've become even more confident than ever. You've seen the New England Journal of Medicine editorial that was written. There are a couple of things about this that are really important. First of all, it says right there in the headlines of that editorial.
It doesn't say this is an option or even an opening. This says it, this is a default position. Just think about it. It says a default position. The agency is extremely confident and aggressive about making sure that this happens. It's a default position. The second that's really important is the agency does not see this as a lowering of their standards. In fact, it's raising their standards. They require a perfect study, one that is properly masked, properly powered, et cetera. We've already checked all those boxes because we have a SPA. That's already been done. Not only that but we've done exactly what the FDA asked us to do without any regulatory risk. We're more confident than ever that we will indeed be approved with a single trial.
We've announced a couple of weeks ago from the podium that that process has already begun and indeed it has. We are very pleased with the interaction and the collaboration we're getting with the FDA. It's also important for you to know that we have a non-inferiority study called SOLAR. Nothing is changing with that study. That study is moving very rapidly, very efficiently and the readout is expected in the first quarter of 2027. Now, there are several questions that have been asked, John and this is probably in your mind as well, which is do you have enough safety?
Make it easy for me. Just keep going.
Yeah. Exactly. Do you have enough safety patients? Do you have enough redosing patients?
That's what I was gonna ask. Yeah.
You're about to ask that appropriately. The answer is of course we do. You recall that every single patient in at week 52 in SOL-1 is re-dosed. Within SOL-1 itself, we have a lot of redosing experience. As I just said, we aren't changing SOLAR at all. The FDA has the flexibility of saying, "Look, we wanna look at SOLAR under masking," or they may say, "Open up SOLAR, unmask and we'll look at that." We have that flexibility as well. The bottom line is, look, we're going all the way forward, pedal to the metal with submission for approval with one study alone.
Do you have a meeting scheduled with FDA to discuss this some more or do you just have the submission coming? Have you talked about timing of those elements?
We haven't disclosed the details of our interactions with the FDA. We've said that they have already started. We're very, very happy with the interactions. We've always had a very close relationship with the FDA and when appropriate, we'll certainly guide you.
'Cause it's not gonna be a small data package, to your point and if we're talking a submission second half of the year, you have SOLAR reading out first quarter of 2027, I could see FDA saying, like, "Eh, we don't wanna do all this work twice. Let's just wait till SOLAR." Do you think that's a potential outcome?
You know what? I don't think so and I'll tell you why. The submission actually is gonna be very efficient in my opinion for many reasons. Remember, this is a 505 submission. All right? AXPAXLI consists of two components, each of which have been individually already FDA approved. The TKI as well as the hydrogel have been FDA approved. We actually save a lot of time in the front end because of the 505. We also feel that we'll save a lot of time on the back end because we already have a SPA. You know, just because you have a quarter turn doesn't mean that you can put a whole package together. We feel that with one submission alone, we'll probably save over a year in terms of getting this to the market.
You mentioned the safety database but can we talk about some of the safety details out of SOL-1? What'd you guys learn? Because I think there's also some confusion or understanding needed on the safety profile of AXPAXLI.
Yeah. You know, part of it was due to some confusion and some maybe some nefarious messaging but here's. Let me just tell you what was said and let me just tell you how we refute it. How about that? What we did show was a floater rate that was imbalanced as well as a cataract rate that was imbalanced on the other side. There were more retinal hemorrhages on the Eylea side. Everything there that I just said was well within limits of any other study that has been done. Nothing rose to a level that was higher than studies done for decades in this patient population. However, there was a lot made out of the floaters, right? Saying, "Oh, my goodness, there are these floaters.
The floaters must be attaching to the back of the lens causing the cataracts," you know, which is illogical and insane anyway because there are no VEGF receptors in the back of the lens, so it couldn't possibly happen. It did require an explanation of what those floaters were, so let me just tell you that. We had 10 days after all, taking all these shots, we had a large symposium at the Macula Society where. Please do go to our website. You can download all the 129 slides that answers all of these questions as well as listen to the entire symposium unedited. Here's what we had done. We had asked the PIs to specifically look for the drug with an indirect and that's really important to know.
An indirect ophthalmoscope, for those of you that don't know, involves putting this thing on the head and looking with a lens and the reason I say this is because it requires looking very, very far away in the periphery, get way off the patient's visual axis. This is where you look for retinal tears and things like that. We asked them to put on an indirect to look and look for the drug when we expected the drug to be eluted from the hydrogel, so around month nine. Right? If they saw it and they did, which is great that means it's working the way it should, they were to code it. Now, when we code for our clinical trials, we code through what's called the MedDRA coding system.
That's the only thing that exists and that's the way we have to code. I wanna make this very clear. There is no code for drug particles. That code doesn't exist. We asked the PIs to code for floaters because that's the closest thing to drug particles. We had no idea we're gonna get sideswiped with this. Had we known, we'd probably had some, you know, secret code like, you know, hair growth or something like that but we asked them to code for floaters because that code didn't exist. Simple as that. The code now will exist after the summer because of our petition for MedDRA but the code didn't exist and this was the closest code. What we showed in that Macula Society symposium was, first of all, patients didn't see this.
This was all reported by the physician with an indirect ophthalmoscope as they were instructed to do. Had nothing to do with vision at all. We showed the vision. There was no change in vision whatsoever. The drug was seen exactly when it was supposed to be seen. We showed you the cluster of when these drugs were seen. It was around nine months. It's all in the slides. If you're interested and I hope you are, please go ahead to the website and you'll see it.
Well, to your point about the drug working as it should, what is also interesting is if you superimpose kind of the timing of the floaters as the drug is released from the hydrogel, superimpose it on the OCT scans, you actually see a dip in, retinal fluid. The drug's getting exposed. You're seeing another drug effect. On the curve, which was actually, you know, made me feel better about the drug, you know, working well as well.
Yeah. Thank you for mentioning that. You know, the other part that I also wanted to say and I'll move on to what you just said, which is really important, is the patients who had these floaters were not the same patients that had the cataracts, right? The cataracts, which you should ask is were they within what you would expect for a patient population of this age? The answer is yes. Were they aging cataracts, such as nuclear sclerotic cataracts? The answer is yes. They were completely separate patients. One had nothing to do with the other. Now, to your point, there was another imbalance, right? The imbalance was in retinal hemorrhages and that's really important because now we should switch and talk about the efficacy of this drug.
The take home message is that we've never seen a drug in my field that has more disease control on a constant basis than this drug, period. I mean, that's an absolute factual statement. Why do I say that? Because if you look, for instance, at the imbalance of retinal hemorrhages, you end up with more retinal hemorrhages in the Eylea group, all of them in the Eylea group, as opposed to the AXPAXLI group. Now, nobody is saying that Eylea caused a retinal hemorrhage. Interestingly, if you look at the baseline, about half the patients had a retinal hemorrhage, right? Retinal hemorrhage to us represents an aggressive form of choroidal neovascularization, of wet macular degeneration and about half the patients had retinal hemorrhages because of that aggressive form of this disease. Interestingly, it was imbalanced.
There were more in the AXPAXLI group than in the Eylea group at baseline, right? Now, at the very end, it was actually all in the Eylea group. There were none in the AXPAXLI group. They were gone. Again, to me, that's a clear clinical validation of disease control. The AXPAXLI group controlled the disease a lot better, despite the fact that most of the retinal hemorrhages were actually in the AXPAXLI group. That's a really important piece of finding. The other thing also, which is what doctors use to assess the effectiveness of a drug, as you know, is OCT. It's not vision, it's OCT. If you look at the OCT, there's never been a drug with better OCT control, period.
What we showed that is that with a single injection at week 36, the majority of patients were within 30 microns of fluctuation by the OCT and that's unheard of. 30 microns is minuscule. That's the best disease control that we've ever seen in this field, period.
Jumping from SOL-1, the other important takeaway is you have the SOLAR study going on as well but different design. You know, it's usually nice in wet AMD where you have two identical trials. You run one, you feel good about the other one but you have two different designs, two different populations. Can you talk through why SOLAR should work?
Yep. One of the goals was to show that you could kind of have a positive read-through to SOLAR and gain even more confidence that SOLAR, which is a non-inferiority study, would work, right? What we're able to extract is just that with the SOLAR rescue criteria, almost 80% of patients would have been rescue-free. Now, that in and of itself should give you a lot of confidence in SOLAR but that's only the tip of the iceberg because the patient population is entirely different. In fact, it's opposite. In SOL-1 what we did, because we wanted patients to lose vision, was pick the most anti-VEGF dependent patients we could find and take away the anti-VEGF and allow them to lose vision, right? A whole bunch of instability.
This is exactly the opposite of what we're doing in a non-inferiority study with SOLAR. Here we specifically picked a patient population to be completely stable. In fact, no anti-VEGF dependence whatsoever. We've got a six-month ramp. We've got two months where we simply observe the patient and weed them out if there's any instability. My point here is that if it's almost an 80% rescue-free rate in the most challenging patient population for a non-inferiority study, that rate will confidently be much higher in the most stable patient population we can find and the most appropriate patient population for the non-inferiority study.
We got a couple minutes here, so I want to make sure we touch on how do you think AXPAXLI gets used in the real world? If this gets across the goal line, what's, you know, how does this get implemented?
Yeah, it's a great question. Look, it's going to be used. Again, I've practiced for 30 years before coming to industry. It's going to be used the very next day and the reason for that is very simple. Nothing changes for the doctor. The doctor doesn't have to buy a single piece of new equipment. The workflow doesn't change. Nothing changes. It's just a better drug with a higher price point and a higher ASP, period. Now, how will it be used? Right now, what we're doing is something called treat and extend, which I'm not sure you're familiar with and in fact, nobody's familiar with, because if you ask 10 KOLs what treat and extend means, you'll get 10 different answers.
There's not a single scientific study, it's not in any label and it's not aligned with anything we do in medicine. Nobody waits for disease to come back to figure out when to see the patient, right? No cardiologist, no oncologist ever does that. We do that because we don't have a drug that's going to reliably last for the amount of time we want it to last, until now. What's that timeframe? It's every six months. That's our comfort zone and that's the comfort zone for patients as well. This is a perfect drug to use as fixed treatment every six months.
It's going to be great for the patients, it's going to be great for the doctors and eventually, maybe through an extension of treat and extend because we're so familiar with that, this drug is going to be used and aligned with all of medicine, in being fixed dosing every six months. If it lasts for nine to 10 months, as it does, it's a perfect drug in case the patient gets ill, the doctor's on vacation, what have you. There's a safety net that's built in.
We talked a little bit about these when we were having the conversation but can you remind us the kind of news flow the next 12, 18 months and remind us balance sheet? Because I remember you guys had a really strong position but just so the audience has an idea of kind of runway you have.
Well, what we certainly will do is to update you when appropriate regarding our FDA interactions. As I say, we feel very confident about the single trial. We'll update you on SOLAR, which is continuing as well. We haven't had a chance to touch on this but we're very excited about our non-proliferative diabetic retinopathy program. That's running very well. We'll update you on that as well. There's a lot of catalysts to come. As far as our finances are concerned, we're very well capitalized. I think in our last earnings call, the amount of cash and cash equivalents we had was about $739 million or so. We are, you know, we are capitalized till 2028. We've said that publicly.
Perfect. Well, Pravin, it's been a busy month for you. Appreciate you freeing up the time to come and talk to us today.
John, thank you for the opportunity and most grateful to all of you for being here. Thank you.