Clearside Biomedical, Inc. (NASDAQ:CLSD) Q1 2024 Earnings Call Transcript

Clearside Biomedical, Inc. (NASDAQ:CLSD) Q1 2024 Earnings Call Transcript May 9, 2024

Clearside Biomedical, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Greetings, and welcome to the Clearside Biomedical First Quarter 2024 Financial Results and Corporate Update Conference Call. As a reminder, this conference call is being recorded. I would now like to introduce your host, Remy Bernarda, Clearside Investor Relations. Please go ahead.

Remy Bernarda: Good afternoon, everyone, and thank you for joining us on the call today. Before we begin, I would like to remind you that during today’s call, we will be making certain forward-looking statements. Various remarks that we make during this call about the company’s future expectations, plans and prospects constitute forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the Risk Factors section of our annual report on Form 10-K for the year ended December 31, 2023, that was filed March 12, 2024, and our other SEC filings available on our website.

In addition, any forward-looking statements represent our views as of today and should not be relied upon as representing our views as of any subsequent date. While we may elect to update these forward-looking statements in the future, we specifically disclaim any obligation to do so even if our views change. On today’s call, we have George Lasezkay, our Chief Executive Officer; Dr. Victor Chong, our Chief Medical Officer; and Charlie Deignan, our Chief Financial Officer. After our formal remarks, we will open the call for questions. I would now like to turn the call over to George.

George Lasezkay: Thank you, Remy, and good afternoon, everyone. As we near the midpoint of 2024, I’m excited with the progress we have made to date, which has positioned Clearside for an important year. Recently, we added two key positions to our team, who are having an immediate and meaningful impact on our organization. In March, we welcomed Dr. Victor Chong as our Chief Medical Officer. Victor is a well-respected board-certified retinal specialist with more than 25 years of experience advancing drug candidates through all stages of development including the development of ranibizumab and aflibercept for wet AMD. Most recently, Victor served as Global Head of Retina at Johnson & Johnson. And prior to that, he was Global Head of Medicine in Retinal Health at Boehringer Ingelheim.

Victor’s extensive experience is extremely valuable as he spearheads our product development activities, led by the upcoming ODYSSEY data analysis and the planning for our CLS-AX Phase 3 program. Victor will be discussing these shortly. Last month, we also added seasoned biotech executive, Tony Gibney, to our Board of Directors. Tony has a deep understanding of the biotechnology business and combined with recent and relevant ophthalmology experience at Iveric Bio, where he was Chief Business and Strategy Officer. Tony has broad expertise in collaborations, finance and M&A that will help guide our strategic and business development initiatives as we explore future value-creating opportunities at Clearside. These personnel additions are important as we continue to build on our leadership position in suprachoroidal delivery.

Our SCS Microinjector technology has been used in thousands of injections in the clinic and continues to demonstrate a strong safety record that includes no cases of endophthalmitis to date. As the pioneers in delivery to the suprachoroidal space, we are proud of the breadth and depth of our pipeline. That includes our internally developed assets as well as those from our collaborators in a broad range of retinal diseases. With that, I’d like to now introduce our new Chief Medical Officer, Victor Chong, who will provide his perspectives on joining Clearside and our programs. Victor?

Victor Chong: Thank you, George, and good afternoon, everyone. Let me begin by saying it is a pleasure to speak with all of you today as a member of the Clearside team. I have been on board for almost two months now, and I’m extremely excited by the prospect of our drug device technology as well as our broader pipeline. I wanted to share some of the reasons I chose to join Clearside from J&J. First, I believe the suprachoroidal platform is an important but undervalued approach to treat retinal diseases. Clearside is leading the way in the suprachoroidal delivery by a very big margin, including having the only FDA-approved product for suprachoroidal use. With my background as a physician scientist, combined with almost a decade in large pharma, I look forward to leading our team as we approach our ODYSSEY data readout and begin planning our Phase 3 program for CLS-AX.

And finally, I can utilize my translational expertise in advancing new molecules into the clinic and see many opportunities to see our company’s device and formulation platform to potentially expand our pipeline into areas such as geographic atrophy. Today, I want to focus on CLS-AX and the differentiators for the drug and the ODYSSEY clinical trial. The current wet AMD market is driving more than $12 billion annually in sales, while the existing approved therapy are effective, including faricimab and high-dose aflibercept, they are delivered individually and only lasts up to four months in some patients. We believe CLS-AX may extend the time between doses for up to six months for most patients, which could meaningfully reduce the treatment burden for patients, caregivers and payers.

I find the ODYSSEY trial to be a compelling design that is differentiated from many of the other mixed phase wet AMD study. First, the trial was designed to allow retreatment with our own drug candidate, if needed five to six months, which is similar to the anti-VEGF currently on the market. In addition, the protocol mandate participants in the CLS-AX arm to be redosed at month six, if not previously retreated. Wet AMD is a chronic disease and retreatment is essential. This multi-dosing data will help inform our CLS-AX Phase 3 development program. Second, the trial duration of 36 weeks allow us to follow patients beyond six months. This is close to the duration required for primary endpoint by the FDA for Phase 3 trial in wet AMD. It allows us to translate our CLS-AX Phase 2b results to Phase 3 trial design more easily.

And finally, ODYSSEY is treating patients with confirmed active disease, so we will have a dataset on patients, who definitely need retreatment. I’m pleased to report that ODYSSEY is progressing as planned, and we expect to have top-line results at the end of the third quarter of this year. Our target profile for CLS-AX is to maintain visual acuity without the need for retreatment for potentially up to six months. We expect that the final Phase 2b data will provide important insights to create a robust Phase 3 development program for CLS-AX. I’m looking forward to this journey at Clearside and will now turn the call over to our CFO, Charlie Deignan to provide a financial update.

Charlie Deignan: Thank you, Victor, and good afternoon, everyone. Our financial results for the first quarter 2024 were published earlier in our press release and are available on our website. Therefore, I will just provide a summary of our financial status on today’s call. As of March 31, 2024, our cash and cash equivalents totaled approximately $35 million. We believe we have sufficient resources to fund our planned operations into the third quarter of 2025. This takes us through the anticipated data readout for the ODYSSEY trial this year and supports planning our CLS-AX Phase 3 program. We will be participating in the Citizen’s JMP Securities Life Sciences Conference next week, and we look forward to keeping you updated on our progress. I will now turn the call over to George for his closing remarks.

George Lasezkay: Thank you, Charlie. We expect 2024 will be a transformative year for Clearside. We are committed to maintaining our leadership role in the suprachoroidal space as we and our partners generate additional clinical data, demonstrating the potential benefits of drug delivery with our SCS Microinjector. We believe that the data readout from ODYSSEY later this year will demonstrate that CLS-AX could be a valuable addition to the treatment regimen in the multibillion-dollar wet AMD market. Our efforts in developing suprachoroidal drug delivery have the potential to change the treatment paradigm for serious retinal diseases and provide a lasting positive impact for patients, physicians and our shareholders. I would now like to ask the operator to open the call up for questions.

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Q&A Session

Operator: At this time we will conduct the question-and-answer session. [Operator Instructions] Your first question comes from Jon Wolleben with JMP Securities. Your line is open.

Jon Wolleben: Hi, good afternoon. Thanks for taking my question.

George Lasezkay: Hi, Jon.

Jon Wolleben: Again — hi, George. I was hoping to just get a reminder on what constitutes active disease as the inclusion criteria for ODYSSEY and how that differs from other mid-stage wet AMD trials?

George Lasezkay: Okay. I think — Victor, I think that’s a great question for you. So why don’t you take that one?

Victor Chong: Yes, Jon. How are you? On the protocol that we would require the patients that still have subretinal fluid or intraretinal fluid or the fluorescein angiography is showing leakage. So that is what we would define as still remain to have active disease because some patients would have been treated and then they were already derived and might not be further treated.

Jon Wolleben: Okay. And can you talk a little bit about how you think about CLS-AX in comparison to the other TKIs in development? And then, also, what is — we talk a lot about durability, but how do you feel about the data package you’ll provide? And what is most important for investors to keep in mind as they’re interpreting the readout in 3Q?

Victor Chong: Yes. So when you say comparing different companies that two TKIs are in play, axitinib is the one that we have sharing with Ocular Therapeutics and then EyePoint have another TKI. And in terms of that we believe that anti-VEGF is most important. And among the entire anti-VEGF IC50 is significantly lower in axitinib and in other words that they are much more potent. In terms of — I am sorry, I missed the second question. Can you just quickly repeat that?

Jon Wolleben: We talk about durability as a key thing to look at in these late-stage trials last year we’d worry more about BCVA, burden of treatment? What — if you had to think about the endpoints, you’ll be giving us, what should we focus on?

Victor Chong: Yes. So I think that — that’s a very good question. But I think that at the moment, we are still waiting for our Phase 2 results. At the same time, that would help us to inform our Phase 3 design. But I think that, as I mentioned in my webcast that discussion earlier already, that at least that we have data that have retreatment. So every patient in ODYSSEY will be at least retreated ones, even if they have been doing okay up until six months. So that retreatment data will get up us to nine months and longer and also our trial is also nine months. So again, that’s closer to the FDA requirement for the primary endpoint. I would say visual acuity at the end of the day is the most important. And I think that will be something that we were focusing on how that we can measure the visual acuity that will require — that will meet the requirement of the FDA as well as other agency around the world.

Jon Wolleben: Okay, that’s helpful. Thanks. Thanks again for taking my questions.

Victor Chong: Thank you, Jon.

Operator: [Operator Instructions] Your next question comes from [indiscernible] with Stifel. Your line is open.

Unidentified Analyst: This is Jack and I’m calling in for Annabel.

George Lasezkay: Hi.

Unidentified Analyst: I have two questions for you. First question, realizing that you’re still in Phase 2 trials with CLS-AX, have you given any further thought to the Phase 3 design in light of some of your competitors funding superiority trials to standard of care?

George Lasezkay: Well, let me say first that what we’re doing now, while we’re waiting for our Phase 2b data to come in is we are undergoing internal planning for Phase 3, depending on how the data comes out. So we’re already looking at that. We’re discussing Phase 3 trial designs with our consultants. And that’s all under evaluation at this time. But Victor, do you want to add anything to that?

Victor Chong: Yes. I think that, as I mentioned earlier, that we are still working on it. And there is a number of options that we are considering. But the end of the day that the key difference for us to somewhat is that we can retreatment based on our own drug. So that could be a major difference in the study design that some other TKI companies might not be able to do. So again, surrounding that is something that we will see how that we can maximize our advantage at the same time providing future retinal specialists in the future to use our drug more easily.

Unidentified Analyst: Great. Thank you…

George Lasezkay: You had a second question?

Unidentified Analyst: Yes, I did. Thank you. The second question was in regards to the FDA, are they coming closer to establishing new clinical trial guidelines based on the shifting treatment paradigm, namely [indiscernible]?

George Lasezkay: You mean have they started to plan come close to finalizing — or come closer to finalizing their draft guidance, their previous draft guidance that was like over a year ago for wet AMD tiles. Is that what you’re talking about? Victor, you might be more up to date on where you think the FDA is based on our recent conversations.