EyePoint, Inc. (EYPT) Earnings Call Transcript & Summary

Good afternoon, everyone. I'm Ellie Merle. I'm one of the biotech analyst here at UBS. Welcome to the UBS Healthcare Conference. Very happy to have EyePoint Pharma here with us today for a fireside chat. Joining us from EyePoint is Jay Duker, CEO; and George Elston, the Chief Financial Officer. Thank you guys so much for joining us. Maybe just to start off with, can you give us an overview of the company, some of your recent updates and progress?

Sure. I'd be happy to. Thank you very much for inviting us. So EyePoint Pharmaceuticals is a drug delivery company to the back of the eye. Our lead product is called DURAVYU. DURAVYU is currently in Phase III trials in wet age-related macular degeneration and in a Phase II trial for diabetic macular edema. DURAVYU is the small molecule tyrosine kinase inhibitor vorolanib that is put into our sustained release platform, which allows drug release for between 6 to 9 months of the human eye. We had excellent wet AMD data last December. And then we followed this up with some top line data from the DME trial just several weeks ago. And so yes, we had a very busy week. We were just talking about how it doesn't really get much better than that. Within 6 days, we had the first patient in, in our first wet AMD trial and an announcement that we will start the second wet AMD trial before the end of the year, followed by a really exciting investigator meeting. And then we had this new data from DME followed the next day by a capital raise of $161 million. And then the day after that, we had a ribbon cutting on our new commercial manufacturing facility. So it was a busy end of October for us.

Congratulations.

Thank you.

Yes, let's start with DME. Can you tell us a little bit about the design of the VERONA trial?

Happy to. So yes, so the Phase II trial was called the VERONA trial. We enrolled 27 patients, and they were randomized to either a high dose of our drug of 2.7 milligrams, a low dose of 1.34 milligrams or to an EYLEA control and the randomization was 221. The patients all had active diabetic macular edema. So what that meant is they all had to have fluid over 325 microns at least. They all had to have decreased vision, and all had been previously treated. This was the first trial that we did, where all the participants in the trial had active disease with wet maculus. The trial was designed really as what I'd refer to as a PRN trial. So on day 1, everybody got a shot of EYLEA. And then 30 minutes later, they either got a dose of DURAVYU, their signed dose, or they got a sham. And then they came in monthly, and there were no other assigned treatments unless they met criteria for supplement. So the supplement criteria was very similar to what we used in wet AMD in the W2 trial with one exception. We added a fifth supplement criteria for the VERONA trial, which was if a patient hadn't had an improvement of 10% or more in their OCT from day 1 by week 12, then they got supplemented. And the reason we added that is we knew these patients had severe disease going to the trials. And we really thought it was -- wouldn't be fair to the patient to keep them with a wet macular decreased vision for all 6 months. So this was always an open-label trial that the patients were masked, but we were not nor were the investigators. And we made a decision to take a look at the data early. And what we found was really so positive and, I won't say, surprising. We had every confidence we were going to do well in DME but, frankly, did better than expected. And again, to summarize, at week 4, both of our doses had a substantially better vision improvement than did the EYLEA arm and substantially dryer maculus. So what that showed us was something that we believed all along is that our drug is immediately bioavailable and that improvement at week 4 could only be explained by our drug. Interestingly, that improvement continued in the high dose through the data that we released week 16. And at week 16, those eyes up to 2.7 dose had improved 9 letters, and they had dropped their thickness on OCT by 70 microns, substantially better than the EYLEA control. It couldn't be explained by supplements because 82% of the high dose were still unsupplemented at that visit, whereas 60% were unsupplemented in the control arm. So this really was an exciting result for several reasons. First of all, as I said, this is the first time we took a wet population. We dried them. And we dried them immediately, and we dried them better than EYLEA did. So this gives us a lot of confidence that entering a pivotal trial in DME that we could do quite well. Once again, there was -- because of our NPDR data which, again, was directionally positive and safe, but a little disappointing. There was some talk out there that our drug wasn't that strong. Well, at -- our results in DME show, it's quite strong and works right away. There was talk that we wouldn't work in diabetic eye disease. Clearly, we do. There was also a discussion that we needed to do a load in everybody to work. We never believe that because we knew our drug was immediately bioavailable. And again, these eyes were not fully loaded yet. We had a great result. So what also brings up a possibility that if we're 9 letters better that we may think about in a pivotal trial, doing a superiority study. And so we're going to wait until the full 6-month data is available, and then we're going to analyze it and internally, make some decisions about what our program is going to look like. And then, of course, we want to align with the FDA but we are very excited to be entering DME as another potential $1 billion space. And right now, we are the only company, TKI company, in DME. And so I'd like to think with all these accomplishments that, I believe, we are the leader in sustained release right now. Of all the TKI companies and the gene therapy companies, we've got the best Phase II data. We've got a delivery system that's been FDA approved and other -- 4 other products. And we believe we're going to be first to market. So overall, I think we are in terrific shape.

Great. Maybe sort of what contributed to the decision to take, I guess, the earlier interim look on the study?

Well, some of it was just, frankly, the data was so positive in that it was very clear, it was our drug alone. And very clear through month 4 that, that data was really held up by DURAVYU and nothing else. And secondly, there was this persistent, I would say, negativity due to our NPDR data, and we felt this was a great opportunity to show just how good our drug did in active wet DME patients.

Great. And as we look to the 6-month data, you mentioned that you're going to be analyzing that in terms of thinking about a potential superiority study.

Correct.

What should we be looking for this data?

Well, again, I think the case has been made. The data, we think, is really, really strong. And we announced -- when we did announce the PR on this that about 2/3 of the patients at that time had completed the trial. And directionally, things were holding vis-a-vis visual acuity, OCT, safety and rescue free rates. So I don't think the -- externally, the case has been made of how powerful DURAVYU is in DME. I think for us, internally, we're anxious to see what is the difference and how much improvement did we get. And statistically, while this study certainly wasn't powered to show statistics, we're going to run various models to make that decision about what is the best way for us to go forward in pivotal trials.

Makes sense. And how should we think about the timelines for when you might speak to the FDA, say more about next step?

Yes. So the time lines are still, I would say, a bit nebulous. First of all, with the recent raise, we are now able to start some of the things that we need to do to gear up for DME pivotals. There's a lot of work that goes into a pivotal trial, including picking the drug, getting the right people in the clinical trial area to make sure that we'll do it successfully. And we're going to -- we've started that process already. On the other hand, deciding what the pivotal problem is going to look like and asking the agency some really important questions in particular, can we do one trial? Do we have to run 2? That's very big for us, obviously. And so I would say the top line and all the data that's been checked for the top line is first quarter of next year. And then 60 days to get a type C in the Phase II meeting with the FDA. So I think we're probably talking about sometime mid next year before we're going to be able to be publicly talked about what we're doing and when we're doing it.

Understood. Hence, all the investigator meetings, I assume?

For DME?

Yes.

Oh, yes, that's -- typically, what we're doing for wet AMD, I mentioned that already. We had our first investigator meeting for the wet AMD trials third week of October, and we're having actually great timing. Our second meeting in San Diego in 2 days. And we have about 160 people coming to that investigator meeting. I've been to a lot of investigator meetings. I've never been to ones that are this large. A lot of enthusiasm. Yes, that's part of the process. And I think we'll be able, for DME, to improve on some of the process because we have a CRO that we like. We may use them again, that shortens the process. The clinical team knows what to do, the sites in the IRBs know about our product. So that streamlines some of what we're going to need to do. But yes, we -- there's a process that needs to run itself out to make sure you're doing this the right way.

Absolutely. And I want to talk through wet AMD and the trial designs. But before we get there, just especially in light of the recent DME data. Just taking a step back, I mean, these are both very competitive spaces, both in terms of the number of drugs on the market and in development. Can you frame for us maybe just how you see yourself fitting in the DME space as well as in the wet AMD space?

Sure. Well, I think the way to think about it is all the ligand blockers are short-acting. We're a long-acting option in that that's something that we can offer to patients and practitioners and payers, frankly, that they really can't. That if our wet AMD data holds, about 2/3 of the patients should be able to go 6 months or longer with our drug alone. But even the 1/3 of patients that had a supplement in the Phase II trial, when you go back and look at the reduction in treatment burden even with the supplement, it was still substantially better than what they were getting leading into the trial. So remember, a patient doesn't really care what they get as an injection. And doctors all want the same thing, is a great result, but the ability to safely go longer if they can. So that paradigm of more ligand blockers available, and it really shouldn't affect our market at all because we can do something that none of them can do, which is go 6 months or longer in what looks like the majority of patients. Now it may turn out that we have additional benefit. We gained 9 letters in 4 months in DME. So that type of benefit where it's not just longevity, but it's potentially visual acuity benefit. And there's several reasons why that may be true, one of which may just be using 2 methods of action. That's true in a lot of diseases. When you combine 2 MOAs, you get an additive effect. It could be that we block VEGF C and D, which may or may not be advantageous. So if we can show visual acuity improvement in wet AMD and/or DME, then our market gets even bigger. Of course, we have some preclinical data that suggests we're neuroprotective. If we can show that in the pivotal trials or we show there were antifibrotic due to the anti-PDGF effect. Those are all reasons that doctors will want to use us to perhaps the majority, if not all of their patients because they don't want to have the -- leave visual acuity on the table, so to speak. If there's a safe, effective, tolerable solution that allows their patients to gain more vision, they'll choose it. And lastly, I like to talk about what I call the insurance policy. Now these are elderly patients. And in DME, these are patients who miss visits and don't want to come back because they're younger and they're working, and they have a lot of doctors' appointments to go to. They want to come back and get a shot in the eye every month for years. So the ability to have sustained release over 6 months or longer is really advantageous. And it's what I call the insurance policy. If I have an elderly patient, who I've treat and extended out to 3 or 4 months and I have running a really busy clinic with 80 patients a day and that patient misses a visit, they're going to be running 3, 4, 5 months with no drug in their eye. And we really don't like them to recur in wet AMD. Having the confidence of a sustained-release option that's biorotable in every 6 months, I think, will be very attractive to doctors to be able to be more confident to run patients longer interval.

Absolutely. Talking more about some of the wet AMD data. Can you give us kind of an overview of the Phase III program?

Sure. So first of all, we -- in 2022, we're contemplating going directly to pivotal from our Phase I. And so we had a type C meeting with the FDA back in 2022, and we reached alignment on the pivotal trial structure. We obviously decided not to do that, and we did a more traditional Phase II, the DAVIO 2 trial. But we based the DAVIO 2 trial on what the FDA had really -- the alignment we had reached with the FDA in how a pivotal trial should look. So there aren't a lot of differences between the Phase II DAVIO 2 trial and the Phase III. Some of them are obvious. We had an 8-month end point for efficacy in DAVIO 2 and it's a 1-year endpoint in the pivotal trials, and that is FDA [ binding ], perfectly fine with us. They are 2-year trials, but the second year is safety only. Another difference is we are reinjecting DURAVYU every 6 months and that we plan and hope to get a label for every 6 months, and we will do that through the second year of the trial also. One other difference is that we are now going to be enrolling both treatment-naive and treatment-experienced patients. In DAVIO 2, it was only previously treated patients that we enrolled. I have to add, we did quite well with them. But as we analyze the data, what we came to realize is we had enrolled a very tough-to-treat population. On average, in the Phase II, the patients required 10 injections per year in the year leading into the trial. In the United States, on average, doctors give about 6 injections a year. So it was a tough to treat population. We did really well with them. But we also reached the conclusion, if we had some of those easier to treat patients, the patients who could be treat and extended to 10 weeks or 12 weeks, we would do really well with them. And the only way to really do that would be to enroll some naive patients because the naive patients have automatically within that naive population, depends who you talk to, 20%, 25%, maybe up to 30% of patients who are able to be, out of the gate, treat and extend it out that long and we think our drug will do very well with them. It also mimics the real population in wet AMD. It's not taking a subgroup of tough-to-treat populations. So we think it will not only help recruitment in the Phase III to have both the pivotals to have both treatment experience and treatment naive. But we also think it will help us with the label and help us from a regulatory perspective. I think that's about it. I mean, there are minor little tweaks that are probably, again, not the outcome related, but those are the big differences. And I will add -- I will keep saying we did very well in DAVIO 2. And several months ago, we showed the 12-month data from DAVIO 2. And in the high dose, which is the dose we're going forward with in the pivotal trial, we had the exact same visual acuity at month 12 that the EYLEA control one had. I should say there is one more difference, and it is -- we've been able to change the payload of the inserts. We've tested 440-microgram inserts. We tested 1 milligram inserts. In DAVIO 2, they were 1 milligram inserts. The high dose was 3 inserts, 3 milligrams. Low dose was 2 inserts, 2 milligrams. We can now put 1.34 milligrams of VERONA to the insert. So the inserts are now 94% drug, only 6% matrix. And that's actually inserts we used in the VERONA trial. That was the first time we used them in humans and performed admirably, as expected. But we -- that's the high dose that we're using in the pivotal trials will be 2.7 milligrams, 2 inserts, and we're only using 1 arm. We're not dosing with 2 arms in the pivotal trial.

Interesting. Does that composition, do you think, affect the efficacy?

No, not at all. If you look at the way the 2-milligram and 3-milligram arms performed in DAVIO 2, they were almost identical in every way except there was a consistent dry -- better drying effect with a higher dose really throughout the study. And also, I will note that there does appear to be a dose response in the VERONA trial also with the 2.7-milligram doing better. The 2.7 and 3 milligrams from the perspective of how much drug is released on a daily basis, they're almost identical. And so there's really not a big difference, but the advantage again is, first of all, 2 inserts versus 3, lower COGS. Secondly, the fact that you're left from the 6% matrix, the drug completely elutes in 9 months in humans. And so at 9 months, there's just a little nub in the matrix that's left that should go away over several more months. But the previous iterations of the inserts were about 75% drug, 25% matrix. So at 9 months, there was clearly more matrix left. Now I have to add, from a safety perspective, we haven't really talked about safety, nice segue, if you don't mind. From a safety perspective, we've never had a safety issue. We've had 3 inserts in the eyes of almost 100 patients. We've dosed DURAVYU in over 190 patients, and there really has been a very, very clean safety record. That was also true in VERONA, no ocular or systemic SAEs. And at the time of -- when we had the data cut October 1, there were only 3 TEAEs in the study eye. Three. Subconjunctival hemorrhage, elevated IOP, and floaters. That was it. So -- and by the way, the elevated IOP was in the control arm. So this is shaking out right now is a very, very safe alternative. And so from the perspective of going forward with 2 inserts, we're very, very comfortable in that.

Great. In terms of the powering for the Phase III program, can you walk us through the details of that and kind of the minimum threshold that you need to see for non-inferiority? Any testing for non-inferiority?

Yes. So first of all, the non-inferiority margin that the FDA granted this is minus 4.5 letters, which is standard. We haven't really talked publicly about powering. We have 400 approximately patients in each study in the Lugano and Lucia study are going to be near simultaneous studies. So there'll be approximately 200 in the control arm and 200 in the treatment arm. We learned how our drug did very nicely in a tough-to-treat population in DAVIO 2. And despite the fact that it was not powered necessarily show a result we were statistically non-inferior to the EYLEA control to a 97.5% probability. And the lower limit of the non-inferiority margin in DAVIO 2 was minus 2.6 letters. The margin we have is minus 4.5 letters. We have a long -- that's, as I like to say, a mile away in statistics. So we're comfortable very much so with the statistics, as have been laid out. And one of the decisions we made not to go with a 1.3 dose as well as the 2.7 dose, which we were able to power the study more in the higher dose. And of course, as we look at the VERONA data, I think we made the right choice.

Okay. And I guess, what was sort of the rationale for including the sham injections and the design of the pivotal?

Sham injection is what everybody does. So from a rationale perspective, wouldn't make sense not to use sham. It may not be perfect masking, but it does provide some masking. And that every trial since Lucentis was approved use sham. And we are as well. And by the way, I mentioned we had a Type C meeting with the FDA in 2022, where they said sham was acceptable. They reiterated that at our end of Phase II meeting, they told us that our masking was acceptable. So yes, sham is -- I know there's some noise out there about it. But we are not the only company going forward in pivotal trials using sham and of course, [ Vabysmo ] used it. There are other companies that use it when the dosing interval is not exactly the same. So yes, we're certainly comfortable using sham.

Yes, makes sense. And I guess, just how are you thinking about enrollment time lines here and when we could see that?

So we dosed our first patient approximately 3 weeks ago. And we have, at this point, about 40 sites up and running with -- it looks like in the next 6 weeks, we'll probably at least double that. So we plan on having, at the end, up to 150 sites in each trial. And we are so far exceeding expectations with enrollment. We have guided that we believe we will have the last patient enrolled sometime in the middle of 2025 with top line data about a year later, sometime in the middle of 2026.

Great. And just going back to the powering for a second. We talked about non-inferiority. Will there also be a test for superiority?

There will, yes. So in a non-inferiority trial, if you meet your non-inferiority margin, you can then test for superiority without penalty. And we will be doing that. So we think there's a chance we could be superior. Certainly, the DME data gives us a lot of encouragement that if after the load is given in a wet AMD population, there's still eyes that have fluid, we may do better in controlling in those eyes. And if you look at the Phase II data, we looked at a subgroup, which was the eyes that received no supplement, there have been some pushback at the beginning that, oh, maybe your great result in DAVIO 2 was because of the supplements. The supplements is what gave you the better vision. And in the end, it was the opposite. The unsupplemented eyes numerically had better vision than the EYLEA unsupplemented eyes. I think, again, perhaps in a population that is more indicative of the broad wet AMD population, it's possible we may do even better.

Interesting. And if you can, any color on when you get to that secondary test superiority, the powering assumptions?

I don't have that off the top of my head. I know that from DAVIO 2 that had we been about 1.4 letters, 1.5 letters better than EYLEA, that would have met the criteria as superiority. But some of that also depends on the standard deviation. Obviously, the broader the standard deviation, the broader the potential there. So let me say this, it's not unachievable.

Great. Exciting. Maybe just one last one on the design. Just can you walk us through the rescue criteria in the Phase III studies relative to the Phase II?

Yes. So that is a difference also. I'm glad you pointed it out. Ramiro Ribeiro, who is our Chief Medical Officer, went back and did a very nice analysis of reasons for rescue in DAVIO 2 and did the rescues matter. So first of all, 20% of the rescues in the DURAVYU arms in DAVIO 2 did not meet any criteria. And so one of the things we're doing in the Phase III is we're not allowing physician discretion. The #1 rescue criteria that mattered was a drop in 5 letters from best on study accompanied by 75 microns of new fluid. And that one we kept in the pivotals because we want to protect the patient's vision, and we want to protect, frankly, minus 4.5 margin. But the other ones that we had used, including rescue criteria around drop in vision that didn't include fluid or fluid that didn't include drop a vision, it turned out those didn't matter because when a rescue was given, it didn't affect -- didn't change the vision in any of those patients. So we eliminated those. The second criteria we have is site-threatening hemorrhage. In DAVIO 2, in all 3 groups, there were 9 rescues given due to hemorrhage. And we went back and looked and we had our KOLs look. And 6 out of those 9 either didn't have a hemorrhage on [ funds ] photographs or the hemorrhage wasn't due to wet AMD, due to something else. So what we've also instituted in the pivotal trials is if the doctor wants to rescue for hemorrhage, we have monitors who are peers who are -- they're going to be contacted a peer to go over the case with them to discuss whether or not to rescue or not. But for that first criteria that I talked about, we want them to rescue with that criteria. They don't have to go through any hoop to rescue. So that's the criteria we simplified it for the doctors and the patients.

Great. Well, taking a step back, you have a lot of exciting programs and studies going on. Where do you stand currently from a cash runway perspective?

George?

Thank you for that question. So as Jay mentioned, we raised $161 million and a follow-on offering just a few weeks ago now, which puts cash runway into 2027, which is about a year, 9 months to a year on the other side of the wet AMD Phase III readout. And it also allows us to continue to fund some of the early work to prepare for a Phase III in DME. So we're in a great place on our cash position. We also did a ribbon cutting on our facility in Northbridge, Massachusetts, which will be our commercial manufacturing facility. And while that's always been baked into our cash runway, what that does is it gives us the ability to ultimately produce millions of inserts for commercial launch and complete the registration studies over the next year or so to be ready for our filing.

What's your perspective on potential partnerships or collaborations? And what might be the value inflection points to consider those?

Yes. So we've talked publicly about certainly interest in ex U.S. We're a small company, and for our ability to commercialize outside of the U.S. is probably one step too far, at least where we sit today. And so we are certainly interested in OUS partnership. Although the nice thing about our cash position and our runway is we're not in a hurry to do it. We'll ultimately do the right deal should that appear. If someone wants the U.S., that's a very different conversation. And I think where we sit today, we don't need to enter into those discussions. I think we're all in execution mode, but certainly open to partnerships as potential to expand the program and get it to patients beyond the U.S. near term.

Great. And then in terms of the pipeline and broader portfolio, can you tell us a little bit about 2301 and how you're thinking about the potential opportunity for an extended release Type 2 agonist?

Sure. So by agonizing Type 2, you downregulate angiopoetin2 and upregulate angiopoetin1. As you may be aware and others may be aware of [ Vabysmo ], one of the reasons that they've been successful is that they are bispecific that only blocks VEGF, but blocks angiopoetin2. By doing it at the Type 2 receptor level, however, you really should have a more beneficial effect because you also have the stabilizing effect of upregulating angiopoet1. So we were able to gain the assets of a company that had studied this drug, AKB-9778, in diabetic retinopathy and diabetic macular edema, some years ago as a subcutaneous injection. And so the molecule, which is called razuprotafib actually performed really well from an anatomic perspective better than an anti-VEGF alone. When they combined it with anti-VEGF, they had some benefit, but it really wasn't enough statistically to go forward as a superiority trial. We believe some of that was just the fact that it was being delivered systemically and not locally. And so that we've been able to reformulate razuprotafib into a drug that will now work in sustained release, and we believe we can get levels of 6 months or longer with a single injection. So we're still preclinical there, and we're still honing the formulation. But we really hope to start IND-enabling trials this year and then perhaps as soon as next year, maybe late getting into units.

Interesting. Maybe just to recap and take a step back. Maybe just what are the key catalysts that we can expect over the next 12 to 18 months?

So first patient did in our second trial by the end of the year, the Lucia trial. And again, I'd like to remind everybody, first patient is a great step but what really matters is last patient in the second trial. That's the rate limiting step to get your 1-year data and submit the NDA. So we think we're going to be well on our way, hopefully, by the end of the year with that second trial. First quarter, we will have the full results of DME. And I've already talked about that directionally, we would expect it to be in the same direction. But our case has been proven already by the 4-month data. Next year, we will have last patient in both trials at some point. We're confident of that. And then we'll have an announcement about the DME program some time around mid next year and hopefully, start it either the end of next year, beginning of the year after.

Great. Well, thank you both so much for joining us. We appreciate all the color.

Great.

Thanks so much. Appreciate your time.

Thank you.