A wesome. Thank you all for taking the time to join us today. For those unfamiliar, my name is Jack Allen, and for this session at the Baird Healthcare Conference, we have the Ocular Therapeutix team, and we have Pravin Dugel, the CEO. Thank you so much for taking the time to join us, Pravin.
Jack, thank you for having us here.
I'd like to kick it off with a brief overview of the company, but the CEO tends to do a better job than the analysts. I'll send it over to you for a couple of minutes on Ocular, and then we'll jump into some news. You had some updates this morning.
Ocular Therapeutix is a company based in Bedford, Massachusetts. What we have is a TKI or a tyrosine kinase inhibitor on a proprietary hydrogel platform. The idea is to block a receptor, VEGF, which we know works very well in diseases such as wet macular degeneration and diabetic retinopathy. There's more than 40 years of data showing that, and tries to solve two problems. The first problem is that of sustainability. We know that despite having a very effective treatment in this country alone, more than 40% of patients drop out in the first year. That's the more obvious problem that we're trying to solve.
The second problem that we're trying to solve is that even in those patients who continue to get treated and happen to be able to come back, after about two to five years, they inevitably lose vision, and this is probably because of the pulsatile nature of treatment where we give injections every month or every other month, and that causes a thickening and thinning in the back of the eye. Much like a concussion in your brain, which causes scarring and fibrosis. We're trying to achieve a greater degree of sustainability as well as a better long-term outcome by suppressing a known and validated target.
Got it. That's a great overview, and we'll get into the data and all of the background surrounding AXPAXLI. It would be remiss if I didn't jump in with the press release this morning. You're looking to bring AXPAXLI to market in 2027 and file the BLA or NDA by the end of this year. You had a positive meeting with FDA that you put out some news before market open today. Maybe could you just overview the updates and your confidence in the ability to file by the end of the year?
Sure. What we've done from the time that this team came in about 2.5 years ago, is we've been in constant touch with the FDA. Everything we've done is exactly according to FDA guidelines. That's why for SOL-1, our successful phase III study, we have a SPA, a Special Protocol Assessment. From the very beginning, we have discussed with them the possibility of a single trial approval. What they've said has been very clear and very consistent, which is that you need two evidentiary standards before the CHART turn and two evidentiary standards after the CHART turn to allow for a single trial submission. Those evidentiary standards have never changed in the last few decades. First, you need to have a study. This is before the CHART turn that is properly masked. That means no sham.
It doesn't mean that sham can't get approved, but just not with one trial. So properly masked. The second one is that it has to be properly powered. Now, both of those boxes have been checked officially because we have a SPA, obviously. After the CHART turn, the two boxes are, one, the P value has to be less than 0.001, and ours is less than 0.0006. The second is that you have to be able to supply the FDA at the time of the submission with at least 300 patients who've been exposed to the drug for safety reasons only, and we're able to do that. So we checked all the boxes. We are in line with all the evidentiary standards, and in a Type C meeting, we have official confirmation by the FDA that we're able to submit with a single trial.
Part of that process was a pre-NDA meeting, which is really an operational meeting that we said that we would get completed by the third quarter of this year. The press release this morning shows not only that we're doing it in time, but that we're completely aligned with the FDA in order to have our complete submission in the fourth quarter of this year.
That's great context. You touched on the submission. It seems like it's going to be supported by the efficacy data from SOL-1 and then some safety data from SOL-R. Could you just talk a little more about the mechanistic aspects of SOL-1's a closed, maybe there's a long-term follow-up, but the primary evidence from SOL-1 has been unmasked and unblinded, and that's your evidence of efficacy. But then there is a dynamic where you're taking data from an ongoing study with SOL-R.
That's correct.
How are you protecting the integrity of that study as you accrue that safety data?
Yeah. That's a fantastic question. Look, SOL-R, the second study, the non-inferiority study, is very important for us for OUS regulatory agencies. As you mentioned, it's vital for us to protect the integrity of SOL-R. The FDA simply wants 300 patients that have been exposed to the drug, and that's true of any study. It doesn't have to be the same target. It could be any other target, any other disease target. It doesn't even have to be the same dose. It can't be a lower dose, but it can be a higher dose. What we needed to do was to get the safety data from approximately 130 patients from SOL-R. Now, we wanted to do that but protect the integrity of the study.
What we're going to be doing is having only the safety data go to a third party who is then going to go ahead and transfer that to the FDA. We'll not be in that chain whatsoever. We'll also take an alpha spending. Arguably, we don't have to take an alpha spending because it's only safety data and it'll be a third party, but we'll take a very small alpha spending anyway to again, protect the integrity of SOL-R. We're doing absolutely everything possible to protect the integrity of SOL-R, not because SOL-R is necessary for FDA approval in the U.S. But we believe that protecting the integrity of SOL-R will be very important for regulatory agencies outside the U.S.
Yeah. Is that process and the mechanisms there something that the FDA is familiar with and that you've already discussed with them and all agreed to? Or
They're-
how far extent?
Certainly very familiar with that. Again, we typically don't get into discussions and the details of our discussions with the FDA. But suffice it to say that there is really nothing that we do that the FDA is not aware of. We do it with complete alignment and collaboration with the FDA.
Great. Anything else to dive into as it relates to the more recent update, or should we step back and talk about AXPAXLI, the SOL-1 data, and familiarize some people with the effect that you have seen with the drug?
Yeah, I think the important point here, Jack, is that there is obviously been other news, not from our company, but from others, which have maybe muddied the water a little bit in general. And there was some question, I think, as to whether that has changed anything in terms of our determination to go forward with this trial and anything with the FDA, and I think today's press release answers that. Nothing has changed whatsoever.
Yeah.
Certainly our alignment with the FDA remains absolutely intact, and what the FDA has told us has not changed one bit, and our pace has not changed, and really nothing has changed. I think the takeaway from the press release today is that we're hitting every single target that we said we would hit.
Yeah. I guess maybe we can compare and contrast versus the competitor. You have single-agent efficacy data in SOL-1 that is pretty undisputable, versus the competitor designed a non-inferiority study, and unfortunately their results did not bear out as they had hoped. The strength of the data package that you have with SOL-1 is differentiated from that. Can you just dive in a little bit more as it relates to the SOL-1 data, what we saw, and how you designed that trial to show the undisputed effect of AXPAXLI relative to the standard of care, EYLEA?
Jack, I don't know what there is to compare. We have a successful study, and they've got a failed study.
Yeah.
That's the end of the story. I don't know what else there is to say. Again, I don't take any kind of joy whatsoever in seeing failure. As I said many times, I'm grateful for the fact that when a study fails, somebody stands up and says, "Yes, the study failed." Whatever was done after that is something that, to me, is quite confusing. I think we need to protect the integrity of science. I think we need to be honest. I think we need to be truthful. I think there's a certain sanctity in making sure that what we're talking about is scientifically valid. I think it's a service that we do to our patients to make sure that we tell the truth and not spin things. Look, I've been part of many failures in my life and in biotech.
For 30 years, as you know, I was on the other side doing clinical trials, and most of them frankly failed, and most of them do fail. Nine out of 10 of them fail. When that happens, no matter how hard you compete, you stand up and say, "We missed the primary endpoint. We failed," and that's it. The story ends at that point, then you move on to other things. That's what keeps the science going, and that's what keeps us educated. At the end of the day, that's what's best for patients.
Yeah. Let's make it more about Ocular and the data there. Can you just level set what you saw with SOL-1, the positive study that you showed an undisputed effect as compared to EYLEA and the rescue rates in that trial?
The first thing to say is what we have done is in very close collaboration with the FDA. What the FDA has stated in February of 2023 is to say we will not allow sponsors to do a study against a label that nobody uses. I think everybody knows that as good as the anti-VEGFs are, there's not a single human being in this planet who is treated per label, whether it be EYLEA or LUCENTIS or VABYSMO or high-dose EYLEA.
It is simply not possible, and nobody does that. Everybody does treat and extend. The FDA knows that. We know that. They made it very clear that if you want to do a study that is risk-free in terms of the regulatory purposes, here are the guidelines. They clearly laid out the guidelines for a superiority study and a non-inferiority study, and it started with making sure that it is properly masked, in other words, not having a sham arm. We followed those guidelines exactly, and we were rewarded with a SPA, and the SPA validates that.
Yeah.
What we did, as I said, is we met the two evidentiary standards prior to the CHART turn. Immediately after the CHART turn, we hit a superiority endpoint that nobody else has before. There is not a single study in my field that has hit a superiority endpoint versus an anti-VEGF. We did, with a P value of less than 0.0006. Now being able to supply the 300 patients for safety purposes allows us to check all the boxes to provide a complete submission to the FDA.
Yeah. For those less familiar, though, with SOL-1, can you just talk about the design of that study and what you showed as it relates to superiority versus EYLEA?
Yep. What we showed there is, again, designed as per the FDA's requirements, which is as pure as it can possibly get, a single injection of EYLEA versus a single injection of AXPAXLI.
Yeah
After the loading phase, the primary endpoint was the percentage of patients who lost vision, and that vision that was the threshold the FDA has always said is going to be 15 letters. Why 15 letters? Because that represents a doubling of the visual angle. We showed that to a statistically significant degree. There were far fewer patients that lost that amount of vision with AXPAXLI than with EYLEA. Now, that was the primary endpoint. One may look at the primary endpoint and say, "Wait a minute, is this really going clinically relevant," and that's not an unfair statement.
What I can tell you is that from FDA's point of view, I do not mean to talk for the FDA, but from what I understand from the FDA's point of view, this is about as pure a comparison, as transparent a comparison as you can possibly get. From their point of view, it is akin to a single cycle of treat and extend. We do that all the time. We give an injection, and we allow the injection to wear off, then we adjust the frequency based on that. That is what treat and extend is. The retort may be, but we do not wait for 15 letters of failure, and that is absolutely true. But from FDA's point of view, the OCT, which is what we use clinically, is not something that is approvable for this disease.
From their point of view, the 15 letter threshold is a line in the sand. They are not going to change that. They did not change that because that represents a doubling of the visual angle. We abided by all of their guidelines. However, the clinical part of this is that it was important for us to be able to show clinicians, look, the primary endpoint may be something that you are not familiar with. The study design may be something that you are not familiar with. But look at the endpoints that we have achieved, the secondary endpoints.
After achieving the primary endpoint. Again, you have to achieve the primary endpoint first to talk about the secondary endpoints. But look at those endpoints. Those are all absolutely clinically relevant. What do I mean by that? There are three things clinicians want to know. The first thing is they want to know if your drug is safe, because the anti-VEGFs are remarkably safe. We showed safety data to the patient level right off the bat. Nobody does that. There is nothing more to show. We showed patient-level safety data because we are so proud of the safety profile. The second thing that we did, the question is really going to be how well does this drug control disease? What we are able to show is that with a single injection at nine months, there was OCT control within 30 microns. That is unheard of with a single injection.
The third question is how long does this drug last? We are able to show that after one year with a single injection, 2/3 of the patients were rescue free. All of those questions that clinicians want to know have been absolutely answered within the SOL-1 study alone.
Yeah. It is both a regulatory pertinent data set and also a clinically pertinent data set.
Exactly.
For both aspects of that. Then the other data set that you are driving now towards is SOL-R. I think you have thoughtfully designed, this is the non-inferiority study.
Correct.
You have thoughtfully designed the trial to have a run-in period where you are identifying patients that are not going to see substantial differentiation post the run-in period. Can you just talk a little bit about that run-in period and how you have designed the trial to select for patients that are well, I guess, predisposed to be in a non-inferiority study in that way?
Yeah. I think it's a really good question, and patient selection is extraordinarily important in our field. Let me kind of step back a little bit. All of you are used to oncology and immunology, et cetera. Those fields are at least 75 years more advanced than our field. We have no disease stratification whatsoever. If I were to go to you, Jack, and say, "Look, I've got a drug for colon cancer," I mean, you'd just kind of look at me or laugh at me. You'd say, "What kind of colon cancer? What stage? What grade?" Yet I can go to many of you and say, "Look, I've got a drug for wet macular degeneration," and you're okay with it, right?
I mean, but the fact of it is, look, we have patients with wet macular degeneration that require LUCENTIS sometimes every two weeks, sometimes every six months. They all look exactly the same. That's why we have treat and extend because we have absolutely no disease stratification. When you're doing massive studies like ANCHOR and MARINA or HAWK and HARRIER, those factors may balance out. But when you're doing smaller studies like we're doing, patient selection and de-risking the patient population is terribly important, and we've done that in a custom way and a bespoke way for each study. For SOL-1, we specifically needed patients who are going to lose vision, who are anti-VEGF dependent.
So we tested them. We gave two injections of EYLEA. We wanted to make sure that they improved by 10 letters or got to 20/20. Then we allowed them to fail, meaning lose vision, once, just once before they were rescued. That was the purpose, right? On the other hand, with SOL-R, because it's a non-inferiority study, that's not what we want. We want actually the opposite kind of patients. So we want rock solid, stable patients.
What we're doing there is we're going ahead and loading with three doses, and one could say that after three doses, you're sort of reached a plateau in every anti-VEGF study where patients are stable, but we're not satisfied with that. Now we've got two additional periods of simply observing the patient. What we're observing for is any kind of fluctuation whatsoever. If they have any fluctuations, they're weeded out. If they're rock solid stable, then they get two more loading doses, and only then are they randomized.
It's a very long ramp. It's a very thoughtful ramp. What we're ensuring is that the patients that are randomized are patients that are as stable as we can make them before they're randomized, and that increases the risk of success of this non-inferiority study by de-risking the patient population.
Yeah. This non-inferiority study, as you say, is primarily for OUS approval, but it is one of the studies that is going to drive the multi-dose kind of treatment effect as well. I think in the release this morning as it relates to the U.S. approval, you alluded to including some repeat dose data there. How do you think about the read across from the SOL-R data to the U.S. NDA from the multi-dose perspective?
Yeah. Let me just make it very clear. Our expectation, again, we haven't had labeling discussions with the FDA, I want to make that very clear. It's obviously premature to do that. Our expectation and our hope is that our label will be the best label in this field ever, which is the first and only superiority label that allows for flexibility of dosing from 6- 12 months with repeatability. You asked about repeatability. Well, realize that every patient in SOL-1 has had to repeat dosing, right? At week 52, every patient in SOL-1 was redosed.
What we'll be giving the FDA is a lot of redosing data from SOL-1, as well as every patient from SOL-R. I think it's legitimate to have the expectation and the hope that we will have redosing in our label. As I say, realize that every patient that we will be submitting is going to have been redosed.
Yeah. Do you have any expectation for SOL-R data ever making it to the FDA as it relates to a label amendment as well? I'm just curious. I know it's crucial for the OUS approvals, but could it also help expand the label as well in the U.S., or is that-
It certainly can. We haven't publicly discussed the details of that, but what's important to realize is that the SOL-R CHART turn is now at week 96. As you know, that study is going to be masked all the way till that point.
Yep.
The reason for that is not just de-risking SOL-R, but also because we want to have a possibility at a superiority result versus high-dose EYLEA. That superiority result can take a number of parameters, right? It could be visual acuity and/or something like number of injections, OCT thickness, a trophy, fibrosis, et cetera. Depending on those results, we'll have further discussions, I'm sure, but at this point, it'll be a little premature to predict that.
Got it. A very thoughtfully designed program in wet AMD. Can we step back now and talk about the commercial opportunity?
Sure.
We've talked about EYLEA high dose, VABYSMO, Susvimo. What do you see as the best commercial comp here, and where do you think AXPAXLI plays in the long term in the commercial landscape in wet AMD?
Yeah. Let's just talk about the commercial thirst, first of all. In terms of a drug like this that has increased durability, right?
Okay.
What I will tell you is I'm old enough that I was part of the entire anti-VEGF process. We first had ANCHOR and MARINA. We had no other treatment. Phenomenal studies that a phenomenally good company, Genentech, did. Just pristine studies. They had a seven-year head start with LUCENTIS. Then came a company that we'd never heard of called Regeneron, and then came EYLEA. EYLEA's not safer, it's not stronger, but EYLEA may arguably last a week or so longer. And after seven years, which is really infinity in our field.
EYLEA absolutely dominated. You can see that happening now as well, with VABYSMO. It's not safer, it's not necessarily stronger, but it may last a couple of weeks longer, and it's dominating the market. There's a great thirst to have something there that will allow more sustainability because it's tragic to see that 40% of patients in this country are going blind and dropping out, or dropping out and then going blind. We're in a different orbit altogether. We're not expanding by a week or two. Two-thirds of our patients are rescue free at month 12, and that's remarkable. We've never seen a drug that's able to control disease and give us the durability that this drug has. As far as adoptability goes, it'll be adopted, in my opinion, immediately. There's no overhead to this. There's not a single piece of new equipment to buy.
The workflow doesn't change. We expect to have very favorable pricing, although we're not in any pricing discussions at this point. But this will be, in my opinion, very easily and very, very quickly adopted. As far as the launch process is concerned, as you know, we have a commercial team already that's selling DEXTENZA.
We have enhanced that team. We're ready to launch. We have a fantastic leader in David Robinson who launched EYLEA, which is the most successful launch in our field. That team is already set. As far as the scaling up of manufacturing is concerned, as you know, in September, we did a raise. We used that largely to scale up our production. We've done that. It is all done internally. There are really no tariff issues or anything like that. Internally meaning in Bedford, Massachusetts. We're ready for the launch. We have more than enough inventory. Our scale up at this point really is not so much just for wet AMD. We're already set for that. Our scale up at this point is in anticipation of diabetic retinopathy, which is 3.5x as big as wet macular degeneration.
I want to touch on that, but briefly on the commercial opportunity in wet AMD, there are a lot of large companies with massive marketing teams in wet AMD. How do you think about competing against that as a smaller, earlier stage biotech?
Well, again, it is important to shift a little bit from what the audience and you may be used to.
Which is oncology and immunology and so forth. Realize that in the height of LUCENTIS sales, Genentech had, I think, 55 sales reps. That is not a lot. So it is not like we need hundreds and hundreds of sales reps, but those sales reps have to be really, really good and really well-networked. This is why we kept the DEXTENZA team, right? This is why we have a commercial team. This is why we have worked so hard to make sure that we enhance the commercial team from the very, very beginning. By the way, retina is a very networked field. We know everybody. This company has more retina talent per capita than any other company in the planet. We say that we are for retina by retina.
We know everybody. We have trained a lot of people, and the PIs are also our customers, and look how we recruited. I am very, very much looking forward to the launch. I think it will be seamless. We are ready to do it. We couldn't have a better team, and I couldn't be more excited.
It is becoming an increasingly concentrated space, too, as the retina clinics kind of consolidate and drive their purchasing power towards single contract deals, right? As you say, LUCENTIS launching with 55 reps. I am sure there are more reps now with these companies, but it could be a situation where you have a concentrated set of buyers that you have to approach and you have existing relationships with already.
Yeah. Again, it's not just me, obviously. We have a great team of extremely well-established retina physicians. That kind of inside baseball knowledge, if you will, is extraordinarily valuable in retina more than anything else. We're well designed for the launch.
Great. You alluded to diabetic retinopathy. This is a space that maybe people are a little less familiar with given the pharmaceutical landscape there, but could you just level set as it relates to bringing AXPAXLI into diabetic retinopathy when we could get the data from those ongoing phase III studies?
First, what I would say is, look, if you, as a physician, have ever injected an anti-VEGF in a patient with diabetic retinopathy, what you see is nearly miraculous. It works extraordinarily well. It works fairly quickly. But it works phenomenally well. On the other hand, if you look at patients with diabetic retinopathy, that is also a tragedy. They are young people. They are people that are in the workforce. They may be accountants, they may be lawyers, they may be car drivers, but they are working, and their risk of having a blinding or vision-threatening complication is about 30%-40% year upon year. I mean, just think about that. It is like having a ticking time bomb in your eye.
One naturally would wonder, well, if you have got a drug that works so well, how come nobody is getting treated in a disease where apparently there is a ticking time bomb in your eye, right? Nobody is getting treated.
The reason for that is because these patients who are asymptomatic simply cannot come in on a monthly or bi-monthly basis to get these injections. What we saw in the HELIOS study is that with a single injection, when we looked at patients at month 12 in the control arm, approximately 27% of patients had a vision-threatening complication, which is well in line with what you would expect. So it is actually a representative patient population. That is the control arm.
Yeah.
In the study arm, with AXPAXLI, with a single injection, after a year, the rate of vision-threatening complications was literally zero. When we, as clinicians, looked at that, we said, "Wow, that is phenomenal." That's absolutely doable. I mean, the conversation would be, "Miss Jones, you have a 30%-40% chance of having a vision-threatening complication year upon year. Right now you're seeing 20/20, but there's a ticking time bomb in your eye. If you come to see me but once a year, much like you go to your dentist for your teeth cleaning, I can reduce that risk literally to zero.
Once a year, t hat's doable. The patient population for that is 3.5x bigger than wet macular degeneration. By the way, it's not just diabetic retinopathy, it's also diabetic macular edema because in this HELIOS study, the registrational study, we're also including patients with non-center involving diabetic macular edema. The results of our original study for diabetic macular edema was also absolutely remarkable. They all improved.
Our expectation, again, we haven't had labeling discussions obviously with the FDA, but our expectation is that we will never have to do another diabetic retinopathy study again, and the label will allow physicians to treat all of diabetic retinopathy, including diabetic macular edema.
When should we expect the data from the pivotal program there?
Yeah. That's recruiting extremely well right now. It's a global study. We haven't guided you as to the milestones as yet, but we will when it's appropriate.
Great. No, it seems like a great pitch, not only for the patient, but also from a healthcare system perspective. I would imagine there's quite a bit of cost saving.
Absolutely.
Getting rid of those catastrophic events.
Absolutely. I guarantee it'll be the payers that will actually drive this process. Years and years ago, I was on the board of a big payer company called Banner Health. What we had was we had these non-mydriatic cameras in all the Primary Care Physicians office, and the pictures would come to my office, and we'd say, "Come back in six months or come back right away." The cost savings is not just the human factor, but the cost savings of someone being treated prior to getting diabetic macular edema or prior to getting a vitreous hemorrhage or prior to getting a traction retinal detachment is enormous. Absolutely the payers will want this, and they'll actually drive the patients to get these injections.
That's great. Hopefully then the study enrolls in good pace, and we can get to that data set and bring that to market as well. Pravin, I think we're coming up on time here, but maybe the last question I had was what catalyst should we look for in the next 6- 12 months? I think part of that's going to be the NDA submission and regulatory discussions. Then how is the company positioned from a cash balance perspective in funding the business over the next couple years?
Yeah. In our last earnings report, we said that our cash balance was approximately $666 million. We're funded into 2028, and very conservatively, and that has not changed. As far as catalysts are concerned, look, you saw one today. Obviously, we look forward, and we all look forward to the full NDA submission. We've said that that's going to be in the fourth quarter of this year. We're on target for that. We will also have numerous other catalysts that will be announced. One of the things that I'll tell you is, at this point, I very much look forward to talking about diabetic retinopathy and showing you more data on diabetic retinopathy. We're not really getting any credit for diabetic retinopathy. It's a huge field. You should look forward to getting more catalysts in that regard as well.
That sounds good. We'll have to keep an eye out for that. Thank you so much for joining us.
Fantastic. Thank you, Jack. Thanks for having me.
Thank you.