Ocular Therapeutix. Presenting for Ocular today and sitting up on stage with me is Dr. Pravin Dugel, who is of course, CEO of the company. Dr. Dugel, I call you Pravin, thank you for making the trip out here.
Tazeen, thank you. Thanks for having us here. It's always a wonderful meeting, and really appreciate the opportunity to speak with you and to be in this meeting. Thank you.
I should actually refer to you as Dr. Dugel because-
No, you should refer to me as Pravin.
Okay. For those who might not be as familiar with Ocular, can you give us an overview of the company, the platform, and we can go into the specifics of AXPAXLI right after that?
We have two targets. One is wet macular degeneration, the other is diabetic retinopathy. There is a receptor that called VEGF that is inhibited, that we know is effective in both wet macular degeneration and diabetic retinopathy. The need that we've known about for almost four decades is that though we have a receptor that we know works almost miraculously well, take wet macular degeneration for instance, after four decades in this country alone, 40% of patients drop out in the first year, which is not just a tragedy from a human point of view, but also has enormous social impact. We also know that even those patients who continue treatment, after about two-five years, inevitably, they end up losing vision and getting worse than baseline.
They get worse than baseline, not because of rebleeding, which is what we thought would happen, but because of fibrosis and atrophy. We know now from a lot of evidence that that fibrosis and atrophy occurs because of the pulsatile nature of our treatment, which is when we give these injections monthly or bimonthly, there's a lot of the medication, so the macula at the back of the eye gets thick and thin and thick and thin, and that's akin to having multiple concussions, which leads to fibrosis and atrophy. Although we know the target and although we know the target works very, very well, there's a tremendous need in terms of sustainability as well as long-term outcomes.
The purpose of Ocular Therapeutix is to go ahead and put a tyrosine kinase inhibitor in a proprietary hydrogel format to address both of these problems, which is that of sustainability as well as long-term outcomes.
Okay. Can you just remind us of the recent, fairly recently released SOL-1 results?
Yeah.
Which is one of the two pivotals.
Absolutely.
Let's assume it's the pivotal.
Yes. Let's assume it's the pivotal. The SOL-1 study is the first study that has ever been successful against the anti-VEGF for superiority. A lot have failed. This study has a SPA, and we hit the primary endpoint with a p-value of 0.0006, so a very robust p-value. The way to look at this study is in two different ways. This study was really designed in many ways and certainly validated by the FDA because this was a known track that the FDA validated with a SPA for a superiority label potentially. From a, from a regulatory point of view, we hit the primary endpoint the first time ever for a superiority primary endpoint with a very robust p-value. The primary endpoint was the percentage of patients, who maintained vision, and vision loss was described as 15 letters or more.
From a clinical standpoint, one can look at that endpoint and say that's not what is done normally from a clinical standpoint, which is to wait until a patient loses 15 letters or more. That's very understandable. What we've gone out of our way to do is to address the clinical value of this product, which is disease control. The way we measure disease control is by OCT. What we've shown, we believe, with the SOL-1 data addressing specifically the clinicians in terms of disease control, is really quite spectacular. What we've been able to show is that with a single injection, in nine months, 75% of patients are rescue-free, and in 12 months, 66% of patients are rescue-free. That's never been done before.
Perhaps more impressively, what we've been able to show is that with a single injection at month nine, by the OCT, which is the ultimate barometer of disease control, that a majority of patients are within 30 microns of fluctuation by OCT. And that's audacious. That's unheard of to have that kind of disease control. The way to look at the results of SOL-1 from a regulatory point of view is that we hit the primary endpoint, which is a superiority primary endpoint for the first time ever with a robust p-value. From a clinician's point of view, it is unprecedented disease control and durability.
Okay. On the point of durability, what do you think any average dosing frequency will be in a real world setting? Do we need to see SOL-R for that?
Yeah. That is a great question. And let me answer it this way. What we do right now is something called treat and extend.
Mm-hmm.
What that means is that we have a patient come in, knowing that a patient can't come in per label because nobody treats per label, which is either every month or every other month, saying, "Look, I have no idea how often I need to treat you." Because we have no genetic biomarkers, we have no anatomic biomarkers. We're 75 years behind oncology and rheumatology. We do it by trial and error. We say, "Look, let me just give you an injection and then have you come back at a certain point and see if your disease has come back or not."
The way we treat is misaligned with every discipline in medicine. I mean, you don't see a oncology doctor saying, "Let me just wait for your bladder cancer to come back to figure out when to treat you," or you don't see a cardiologist saying, "Let me wait for your first heart attack to figure out when to treat you." We also have really no evidence for treat and extend, and it means different things to different people. Ultimately, I think what's gonna happen is that we're gonna be aligned with the rest of medicine in having fixed dosing.
And ideally, the comfort level that we have and the patients have is seeing a doctor with a chronic disease every six months. Right. For a drug to be effective every six months, that drug has to last for nine to 10 months in case the patient gets sick, the doctor's not there, et cetera. That's exactly what this drug is designed for. Ultimately, I think what's gonna happen is that this is gonna be the ideal drug to be given on a fixed basis every six months. Doctors will get to that in different ways.
Some people may look at this and say, "Wow, I've got enough evidence, I'll dive right down to every six months on a fixed basis." Others may look at this and say, "You know what? I'm very comfortable with treat and extend. I'll just keep on extending until I'm comfortable with every six months. However, they get there. My prediction is that doctors will get to every six months fixed dosing, and this will be the ideal drug for that.
Okay. How important will it be to overlay SOL-R, and maybe we can talk about what SOL-R is, on top of SOL-1 for real-world usage?
It's a great question. It depends on who you're asking that about, right? So, just so that everybody knows, SOL-1 is a superiority study that has succeeded. Our intention is to file with SOL-1 alone. SOL-R is the second phase III study. It's a non-inferiority study that is still ongoing. We have no intentions of changing SOL-R. SOL-R is going to be running as efficiently as it is. If you're asking from a clinician point of view, I don't think there's a single clinician that's going to say, "Look, I really like this drug. I love the results of SOL-1. I'm not going to use it until I see SOL-R." I don't think that ever happens.
Okay.
You know, there's not a single drug, and I've challenged people you know, with this, I don't think there's a single drug in my field in retina that is used per label or per clinical trial, period. I mean, everybody does treat and extend, as we discussed, and treat and extend has never been done in a phase III study. It's not in any label, but yet we do that. Doctors will figure out how to use this drug. This drug just needs to be in their hands, and they'll figure it out. I think SOL-R is a nice-to-have. I don't think that it's a gating item for doctors to use this drug whatsoever.
Okay, so. At the beginning of the conversation, we talked about SOL-1 being the pivotal study that you'll plan on using for applying for approval. Can you talk to us about how discussions with FDA are going on that particular topic, to the extent that you can? You know, the update that we're seeing today that Dr. Makary is no longer gonna be head of FDA, he co-authored an editorial in The New England Journal of Medicine with Dr. Prasad, who is also now no longer there. The second part of the question is being that the two authors of the editorial who suggest that for most indications you only need one study, no longer there, how does that impact your view of being able to apply with one study?
Yeah. Let me answer the second one first, and then talk to you about our discussions with the FDA. Look, I don't think what is happening with the FDA is dependent on one person or two people. The change that has gone on in the FDA in the last year or so has been tremendous, and it's got bipartisan support, and the bipartisan support is to get innovation to patients as quickly as possible, and that's really what drives it. If people are wondering whether this is simply lip service or this is really happening, one ought only to look at press releases that were there maybe about a few weeks ago for AstraZeneca, as well as Amgen. What's happening with AstraZeneca and Amgen is that there are real-time clinical trials that are being conducted.
To me, having worked with the FDA for 30 years, that's mind-blowing. What that means is that CRO is uploading information to the sponsor at the same time that they're uploading information to the FDA. Theoretically, the time to approval is zero. It's real time, and that's mind-blowing. That's already ongoing. The other thing that's already happening are things such as digital twins. The FDA is making use of AI to not make control and a control arm necessary based on disease stratification, where a digital twin can be used instead of a control arm.
Mm-hmm.
Those things are already ongoing, and that's not something that's gonna turn back. I don't think the toothpaste is gonna be put back in the tube. That momentum already exists. It's not dependent on one or two people, and that's consistent with our discussions with the FDA. We've been very, very blessed to have the ophthalmic division of the FDA that we have. We have a SPA for both our targets, for both wet AMD as well as for diabetic retinopathy. We have a novel primary endpoint for diabetic retinopathy.
Everything that we have done, including major modifications in our trials, have been supported by the FDA, and we're completely aligned with the FDA in our discussions. Look, we've been saying this from day one, which is our intention is to go ahead, and discuss with them the potential to file with a single study, and that's what we've been doing, and we're more confident than ever that we'll be able to do that.
Okay. Thank you for all that color. If you think about between now and the end of the year, what are the important updates to be expecting? Can you maybe walk us through both expectations for, let's say, additional data at a medical meeting from SOL-1, when to expect feedback from FDA on your discussions? You've announced an analyst day as well, so there's a lot going on. Maybe kind of frame the importance of each of those, I think.
Yeah, there indeed is a lot going on, and to take it one by one, look, we certainly will give you updates on the clinical trials, both in wet macular degeneration as well as in diabetic retinopathy. We have a lot more data from SOL-1 that'll be particularly clinically relevant that we think is very exciting that we'll show you as well. We will also show you our commercial plan, which we haven't done before. Look, we're building a standalone company. We're scaling up. We haven't talked about that a lot, both in terms of hardware, and I'm talking about buildings as well as automation, et cetera. We're doing that all in the U.S. in Bedford. We manufacture the hydrogel ourselves, and that's all being scaled up very, very well. We'll discuss that.
As far as the regulatory part is concerned, look, the cadence of how and when we discuss that is really needs to be aligned with the FDA, and we will let you know when appropriate. Look, what we have said, and this is very important, in the press release as well as in our discussion in the earnings call, is that we have ongoing formal discussions. These aren't informal discussions. These are formal discussions, those formal discussions are continuing, we are very, very happy with the direction that they're going, and we will continue to inform you as appropriate.
Okay. Let's talk about the market data research maybe that you've collected so far. wet AMD is an established market. Yep, right? You're a retinal surgeon, you already know what options are available for patients. We live in a world now where there are generics of the VEGFs, and the VEGFs were transformational in their time. And now we have longer-acting versions of those VEGFs. Where in the treatment landscape do you think, based on what you're hearing from physicians, AXPAXLI could fit in?
Is there a particular subgroup of wet AMD that might be more willing to, like, you know, to be treated with less frequent injections than, let's say, the rest of the population if for whatever reason they're just comfortable with whatever they have?
Willing is a weird word. I mean, I think everybody will want to be treated less frequently. I'm not sure who wouldn't want to be treated less frequently, right, as a patient. Here's what I would say. Look, let's look at the historic data and see what thirst there is, you know, for anything that's incrementally longer-lasting, and history will tell us. I'm old enough that I remember Lucentis as a miraculous drug, and it really is a miraculous drug, and Genentech as one of the finest scientific companies ever, right? Genentech and Lucentis had a seven-year head start on Eylea and Regeneron. Regeneron was a unknown company at that time. A seven-year head start in our field is infinity, and Eylea is not safer. It's not stronger. It may last a week longer. Based on that incremental durability, it dominated the field.
We see history repeated again with Vabysmo, for instance. Vabysmo is not safer. It's not stronger. It may arguably last for another couple of weeks, and it's doing great. That's the thirst that exists for sustainability, let alone long-term better outcomes. We're not talking about weeks. We're talking about a drug where in 66% of patients, they're rescue free for a year. We're in a different orbit altogether. The thirst for a drug like this is enormous, and it's completely de-risked because what we're targeting is a receptor that has been known for 40 years to work. We're not reinventing the wheel. We haven't really even talked about the long-term outcomes, you know, which is the other part of this, which is the second goal that we're trying to reach.
What we have is something called a SOL-X study, which is an extension study. The most important part about SOL-X is going to be the crossover patients. These patients are gonna be crossed over to AXPAXLI after two years of pulsatile treatment. We don't think those patients are ever gonna catch up. We know that in 90 days by OCT, you can see changes With atrophy and fibrosis. After two years of pulsatile therapy, we don't think those patients will catch up. Now, not only will we have a drug with greater sustainability, but we will have evidence to show that this drug should be started from day one for the best long-term outcomes. I think everybody will want to be on this drug.
I don't think there's a subgroup of patients.
Mm-hmm.
I think the question that is appropriate to be asked is to say, "Look, is this a first-line drug, or is this a maintenance drug?" I think that's an appropriate question. We're not answering that, quite honestly. I can give you my opinion, but it's just an opinion.
Mm-hmm.
My opinion is, look, this, I believe, is a first-line drug based on a few patients, and admittedly a few patients in our study in Australia, where this was used as a first-line agent in treatment-naive patients, and they did as well as one would expect from commercial-grade Lucentis or Eylea. But quite honestly, it really doesn't matter if it's a first-line agent or a maintenance drug because the projection of this won't change. It'll still be the most impactful drug that we've ever had if it does what we think it'll do. That will be answered, that amongst other questions, by the community when this drug goes out there. My job is to make sure this drug gets approved as quickly as possible.
I asked that specific question because just given how big the Eylea market itself is, even if Ocular were to penetrate a small portion of that market, the dollar value of that is meaningful, right? For whatever reason, there's going to be patients, we see this all across all therapeutic categories, that even if there's a less frequently dosed version available, either insurance pushes back on it or doctors are more comfortable because they know it for a long time. Whatever the reason is, you don't get necessarily 100% conversion.
I don't think, and you can feel free to disagree with me, I don't think you need to have 100% conversion in order for AXPAXLI to have a really strong launch. I guess I'm asking, is there in your market data research, obviously nobody wants to be injected in the eye frequently, but is there within that group of patients a subgroup that you think would be lower- hanging fruit, easier to get to, at least initially?
Look, it's a great question. In the 30 years that I've been on the other side doing hundreds of clinical trials, there hasn't been a single drug that has done better in the community than it did in the phase III trial. That's logical.
Mm-hmm.
I mean, you want to have the best performing patients in your phase III trial. Almost, you know, expectedly, the drug is not going to perform as well when it goes out in a much more heterogeneous patient population in the community. This is going to be the first drug where it's going to be the opposite.
Mm-hmm.
What we did in this study in SOL-1 was arguably to test this in the hardest patients there are. These patients, as you know, Tazeen, were specifically designed to lose vision. That's not necessarily what exists every day in the community. How is this drug going to be used? Well, as soon as the drug is available, I believe it'll be adopted like this because there's nothing new to be done. There's no equipment to be bought. The workflow doesn't change. Everything is exactly the same. If you look at a given doctor, they may see 50 patients in a day. Of those 50 patients, two may be new patients. The other 48 are patients that this doctor's been seeing over and over again. The conversation is going to go like this.
The doctor's going to sit there with Mrs. Jones and say, "Mrs. Jones, you know, I've been treating you with Eylea every eight weeks for three years now. I know you don't like that. I know you're frustrated. What I think I have here is a better drug that has more durability, but I've never used it before, so let me go ahead and try that out. I still want you to come back in eight weeks." They come back and go, "Wow, Mrs. Jones, you're doing great. Well, let's make it 12 weeks." They'll extend and extend and extend. Mrs. Jones or a patient like Mrs. Jones is going to be the easiest one to make happy because it's all a durability play.
For someone that's been on Eylea and stuck on Eylea every eight weeks for three years, just a little bit more durability is going to make her thrilled, and it's going to make the doctor thrilled. This is going to actually perform far better in the community than it even did as impressive as it was in the phase III study. It's going to be adopted seamlessly, and I think it's going to be adopted ubiquitously in all patients. I don't think there's a particular patient subtype.
Okay.
Who wouldn't want a more sustainable drug that has better long-term outcomes?
Now on the point of physician preference, how are you envisioning that doctors would prefer something that's less frequently dosed given that they're paid per injection? Is the price point going to be a little bit reflective of that?
It's a great question again, but this is one of those rare things that's a win-win-win. Okay, let me just step back and talk about payers and doctors and patients. I really think it's a win-win-win for all three. As far as payers are concerned, and by the way, we've done a lot of research on this, still continuing. We have lots of payer boards, and I've been on two payer boards. The most expensive disease to treat, and payers are actuaries, but the most expensive disease by far is blindness. It's not cancer, it's not strokes, it's not heart attacks, it's blindness.
The reason for that is because the mortality doesn't change. The use of resources go sky high, but the mortality doesn't change. Each blind patient in this country costs over $66,000 a year. You know that in this country, despite having these fantastic drugs, 40 patients, 40% of patients drop out in the first year. All of those patients go blind. The cost for the payers is enormous. If we reduce that dropout rate by even 10%, which we can easily do, that's a quarter of a million fewer patients in this country every year that will not go blind. It's not just the human impact, but the cost savings of that for the payers is tremendous. The payers love this drug.
Mm-hmm.
Which will allow us a higher pricing point, a greater ASP, which will be now translated to the doctor. If you talk to the doctors, they may say, "Look, you know, I make my money out of injecting, and I may make less because I'm injecting less." At the end of the day, there are far more patients that they can inject with potentially a higher ASP. The patients will be a lot happier because they don't have to keep coming back as often as they do. Everything we're talking about, Tazeen, is just wet macular degeneration, right?
This doesn't even include diabetic retinopathy, which I think is a completely untouched field that's 3.5 times greater than wet macular degeneration. To answer your question, look, this is a win-win-win situation. With a superiority label, there's a potential. It's not automatic, but there's a potential to bypass step therapy because we will have the first and only superiority label. If you ask the doctor whether they'd want to have a drug that they want in the first place without watching a patient fail, everybody would want that. It has great benefits in terms of a superiority label, in terms of not having pricing pressures, and also in terms of patient satisfaction.
Okay. How should we be thinking about the investment in infrastructure that's going to be needed vis-à-vis marketing and sales, as you get ready to potentially launch next year?
Yeah. I think one of the things that people don't realize is what a small community retina is. It's a huge market, but the community itself-
Mm-hmm.
is small. I remind people, and they're shocked when I tell them that, you know, when Lucentis was selling at its peak, there were only 55 reps.
Mm-hmm.
It's not thousands and thousands. There's 55 reps. Every one of those has to be, like, really connected and really good. We already have that. We already have a commercial arm, and we've recently hired David Robinson, and David is the architect of the most successful launch in the history of our industry, which is Eylea. We've got everything in place already. We are scaling up in terms of our production. We've increased our hardware, the buildings, the automation. We obviously have IP that goes till 2044, but we are increasing our additional IPs with materials and methods, et cetera. That scale-up is already going on. We're ready for the launch, and, you know, we're building a standalone company, and we're ready for that.
Okay. In the few minutes that we have, let's talk about diabetic retinopathy.
Yep.
Which is also a sizable opportunity. We spent, rightfully so, most of our time on the upcoming launch. You know, you aren't just trying to just launch this one indication and this one product. You've got plans for a whole pipeline. Maybe let's start with that. Where are you in development with diabetic retinopathy? Can you just remind us of the sizing relative to what AMD, for example?
Diabetic retinopathy, the field is at 3.5 times bigger.
Mm-hmm.
The tragedy of this is that there is nobody's being treated, although we know of a de-risked receptor. It's the same receptor as VEGF. Right? The reason that nobody's being treated is because patients who are asymptomatic have to come in every month or every other month to get injections. Nobody's gonna do that. If they don't come in, there's a potential of a rebound effect. What we have shown in our HELIOS study is that with a single injection, the risk of vision-threatening complications year upon year go from 30%-40% to literally zero. I mean, that is phenomenal.
We as clinicians saw that data, and we said, "Holy cow, we would use it today if we had it." That's absolutely doable. It's a de-risked receptor. We already know it works as VEGF. It's a single injection. It's once a year. The conversation would be you'd be sitting with a young person who's either, you know, in their workforce. They may be a lawyer. They may be a physician. They may be a mail carrier. They may be a truck driver. You say, "You know, if you come to see me but once a year, like you go to your dentist for teeth cleaning."
Mm-hmm.
"I can reduce your risk of a blinding complication," which currently is 30%-40% year upon year, to literally zero. That's sustainable. That market is enormous, and we're really excited to go ahead and investigate that, and we believe that we will be absolutely successful. What we've done is launched a HELIOS program with two studies. We have a SPA-
Mm-hmm.
in one of the studies. Very importantly, we have a primary endpoint that is novel and that is validated by SPA. It's an ordinal endpoint. Without getting too technical, what it basically does is to allow us to be credited for patients regardless of whether they improve or don't get worse or maintain. We think it's very clinically relevant. It's a novel endpoint. Again, it's validated with a SPA.
When should we expect to see data?
We haven't guided you to when the cartridge will be, but what we have said is that that study is recruiting.
Mm-hmm.
The physicians are thrilled to do that because there's no one else doing this. Based on the HELIOS results, which we think are spectacular, physicians are very excited to enroll their patients in this study.
Okay. Last question really quickly is cash position and balance sheet strength.
We are in a great position. Very conservatively, we've said that we have cash to go into 2028. In our last announcement on the earnings call, we said that we had a cash and cash equivalents position of over $666 million.
Okay. Perfect. With that, we are just about out of time. Thank you, Pravin, for spending the last 30 minutes with us. Thanks, everybody, for listening.
Thank you, Tazeen, for having me.