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

[Audio Gap] with EyePoint. [Operator Instructions] and welcome as well to those listening on the webcast. I'm Yigal Nochomovitz, biotech analyst here at Citi. So I have the pleasure to introduce senior management from EyePoint Pharmaceuticals, Jay Duker, CEO; George Elston, CFO. Welcome, both of you. Thank you very much for making the time to chat.

So obviously, a very busy time for the company and for the wet AMD space. So I think just to start out, why don't you -- Jay, if you could spend just a few minutes just introducing the company, the therapy you're advancing, the key trials, obviously, in Phase III trials in wet AMD, and then we can get into a lot more detail from there.

Sure. Thank you, and thanks, everybody, for coming. EyePoint does drug delivery to the back of the eye. We've had 4 FDA-approved products with our technology. The latest technology is a fully bioerodible insert that contains vorolanib, which is a small molecule tyrosine kinase inhibitor that has activity against all the VEGF receptors. We're in Phase III in 2 trials for wet age-related macular degeneration, which is the largest market of all the retinal vascular diseases, about $10 billion a year in the United States alone. We recently announced that we are fully enrolled in both of those trials. They are identical trials, which primary endpoint is noninferiority change in visual acuity against on-label aflibercept control. So we are very excited generally where we are right now. As I said to many people, if we had mapped it out 4 years ago, when I first joined the company full time that this is where we would be. At this point, I would have said very low probability success. But here we are, and that's because we really had a great, great group of -- who are able to execute on all these milestones that we've achieved, including this enrollment for these 2 trials. Each of the trials enrolled at approximately 7 months, which are the fastest enrolling wet AMD trials on record. One of the reasons, of course, is that we had really good Phase II data in wet AMD, which was helpful for the sites to convince patients that this is a trial that they might want to enroll in. And of course, it also, I think, speaks very well for our potential commercial success and that a sustained release insert that releases drug therapeutically for 6 months or longer with a single injection is something that's very attractive to both patients and practitioners.

Well, I was going to ask what you attribute to the speed of enrollment. You sort of sort of got to that already?

I did. Sorry, I should have paused until you asked your question.

No problem.

There are other reasons though and our Chief Medical Officer, Ramiro Ribeiro, who's here, I need to give him and his team full credit here. Ramiro's experience, he's run Phase III retina trials internationally before his experience and his ability to lead a team, I think, has been very helpful in our success. But the fact that we did run a Phase II trial and we learned a lot of lessons from the Phase II, not just got great results, top line and safety. But we learned about how our drug works. We learned about the statistics of the trial. And I have to say, at the beginning, especially, we made a few mistakes, and we learned from the mistakes. And towards the end of the enrollment in the Phase II, we were enrolling very rapidly. And we took those lessons and applied them to the Phase III. Our Phase III program, again, we took a derisked view of this, meaning we did a noninferiority type trial design, which is how the last 4 approvals in wet AMD were structured. And we were able to really connect with the retina community based on our data and based on our personnel and based on what we call the patient-centric focus of the trials. Everybody in the trial gets treated. We have rescue criteria or supplemental injection criteria, which means if a patient was losing vision in either arm, either the treatment arm or the Eylea arm, they could get a supplement injection to help ensure that they don't lose vision in the long term. These are the type of things that doctors and patients are very appreciative of.

Speaking of the rescue criteria, just if you could go into a little bit more detail on how those rescue criteria sync up with how one would behave with a patient in a real-world setting and how closely that aligns?

So let me start by saying that the idea of a rescue criteria, supplement criteria is relatively new. The sustained release treatments, all of them, which started to be studied several years ago in the Phase I contained supplement or rescue criteria, meaning if a patient wasn't doing well by some measure, they could receive an extra injection. The problem, as you point out, Yigal, indirectly there is, if you say, how does that correspond to the real world? It doesn't. None of us, and I am still a practicing retina specialist, none of us use strict criteria in deciding whether to either give a patient an extra injection or shorten the interval between injections. And the reason is we individualize therapy. And we have a patient sitting in front of us depending on whether their vision is good or bad, whether the other eye is involved, whether they perceive a problem or not, there are social issues around intervals. Some patients just cannot get treated every month even if they need it. So that idea of a supplemental injection or rescue injection is not something we use in the real world. But it is something that you need to ascribe in order to get these trials done and have them given the FDA sign off. Interestingly, if you look at these trials, you'll realize that the supplement criteria is different with different trials and with different companies. That is because at this point, the FDA acknowledges that there's not a standard out there and allows sponsors to determine their rescue criteria. So a little more detail around that. In the Phase II, we had a lot of different rescue criteria, and Ramiro and his team took a look at the Phase II data and asked the question, which of the rescues actually made a difference and improved the visual acuity? And it came down to just one, 5-letter loss from best on-study associated with 75 microns of new fluid on OCT. That was the single important rescue criteria we came out with for the Phase III. In addition, in the Phase II, we allow doctors discretion to do a rescue and about 20% of the rescues in the Phase II didn't meet any of the criteria. Doctors just decided they wanted to do another injection. We're not allowing that in the Phase III. We also have a rescue criteria for new hemorrhage in an eye that is site-threatening due to wet AMD. That, however, we like the sites to adjudicate with a rescue monitor, meaning if they see a new hemorrhage, we'd like them to take a picture of it, and we have rescue monitors on call to talk to them within minutes about whether or not it's an appropriate rescue. And we'd say, well, why did you do it that way? Simple. When Ramiro's team took a look at the rescues in the Phase II due to hemorrhage, there were 9 of them in all 3 arms total, 6 of them either didn't have a hemorrhage or the hemorrhage wasn't site-threatening or the hemorrhage wasn't due to wet AMD. So again, we'd like to minimize the number of rescues in the Phase III while not sacrificing vision and hence, the changes that I just spoke about.

So there are 2 Phase III trials, and they're kind of almost concurrent essentially, one in the readout. So just remind us when the readouts are expected?

So the first trial is called Lugano. We announced last patient in the end of May. We expect the top line data release to be sometime mid-summer 2026. The Lucia trial was several months later. We announced last patient in, in the end of July. So we should have about approximately 2 months between the top line from the 2 trials, both in 2026 in approximately 1 year or less.

And as you pointed out, it's a non-inferiority study, both are, and there's a margin, which you've talked about before. So obviously, you have to achieve that. What else, though, besides just hitting on the primary endpoint would kind of capture success for you for these studies?

Yes. In the end, I think it is rather simple. We need to be statistically noninferior to the Eylea control arm and the non-inferior margin that we were given is minus 4.5 letters. In the Phase II, the lower limit of the non-inferiority margin for both study arms was around 2.6 letters. So we were very far from the minus 4.5 letters. In addition, we need to show continued safety, and that's one other big advantage that we've had. We've treated over 190 patients with our drug between 1 Phase I and 3 Phase II trials, and we've had no ocular or systemic SAEs attributable to the drug or the insert, and we've had no safety signals attributable to the drug or the insert. So we're quite pleased with the safety. We did make an announcement just recently that our Data Safety Monitoring Committee had met in the Phase IIIs and recommended no change in the protocol. And at the same time, taking a look at the masked data from both trials, there doesn't appear to be any safety issue that would not be expected in a typical wet AMD trial. So that's the second thing, continued safety, which we're optimistic. And in addition, we need to show a reduction in treatment burden. In other words, compared to the Eylea control arm, how many injections did the study arms get, and we need to show a reduction in that. In the Phase II, the reduction in treatment burden was measured in several ways, and it was about an 80% reduction. That's really good. And if you ask KOLs, what type of reduction they'd like to see from a sustained release insert that's bioerodible, they'll tell you around 50% is good. We certainly hope to do better than that. But we think if we're non-inferior, safe and we have at least a 50% reduction in treatment burden, then we will have a very successful commercial drug.

So that sort of gets into how this would be deployed in the real world. What are you thinking in terms of the expected interval whether it's, as you point out, the reduction in the background use of one of the anti-VEGFs or if it turns out that you could even go as long as 6 months between the Duravyu administration? How -- another way of asking it is just how do you see this being integrated into the management of wet AMD? I mean, we've talked about this before. There's many ways that could be done and different retina physicians are going to take maybe different philosophies. But so if you could kind of talk through that, that would be really good?

So I think, again, to get to review the data, we had about 2/3 of eyes make it 6 months -- up to 6 months after our insert went into Phase II without supplement. And with just one injection, we didn't repeat the injection of Duravyu in the Phase II, 50% went a full year. So we know in a tough-to-treat wet AMD population, probably 50% of the eyes or maybe greater could go a full year with our drug. But we chose a 6-month interval for several reasons. First of all, we're pretty confident that in humans based on animal data, that we will have a therapeutic level of vorolanib for at least 6 months in virtually everybody. We also believe by 9 months, the drug should be pretty much fully alluded in just about everybody. That 6-month interval gives doctors more flexibility. For example, if I have a patient who I am treating with Duravyu, and I'm watching them and at month 7, they get fluid. If we have a 6-month label, obviously, they can retreat with their Duravyu. If we had a 9-month label or 12-month label, they couldn't. They wouldn't get paid to do it, be off label and the payers wouldn't pay for it. So how it's going to get integrated into practice? I think at a high level, you can think about the same way that doctors treat wet AMD now. There's basically 3 strategies. The most overwhelming strategy right now is what's called treat and extend, which means you get the patient as dry as you can get them and you then try to extend out the interval between shots until you see fluid again and then you back off and that's called the fluid-free interval, and you pretty much stick with it. And most patients, at least in the short term, will -- can be adequately treated using that method. The problem is in the long term, patients still lose vision. They miss visits. They're probably still undertreated despite our belief in this strategy. And so if you look at the long-term visual acuity results, the #1 reason why patients lose vision in wet AMD is undertreatment. So that's one strategy. The other strategy, which is rarely used now is called PRN or as needed, which means you see that patient every month, but you only treat them when you see fluid. The problem with that is you're essentially letting the eyes recur. And in wet AMD, recurrences are bad. We believe that if you continue to let fluid come back, patients lose vision. So unless the patient requests it, most doctors don't treat that way. And then the third way is put them on a schedule. I think the pharma companies realized at the beginning that retina specialists like to individualize therapy and they don't read labels. And so it's very few who right now automatically use Lucentis every month or use Eylea every other month automatically or Vabysmo and high-dose Eylea have 4-month labels. I don't think there's anybody that I know of who automatically goes 4 months. They need to -- the patient needs to prove that they can get out that long. And if you look at the trials and look at the real world, 50% of patients on even Vabysmo or high-dose Eylea still need treatment more frequently than every 8 weeks. So it's probably a patient-specific thing, not a treatment-specific thing. So putting someone on a schedule in that sense may not make sense. But I actually think that may be the way we do get used more than the other 2 methods. So if you look at our data from the Phase II and you ask the question, what percentage of patients could be treated with just our drug or 1 or 2 Eyleas for a year. Now again, we need to extrapolate because obviously, we didn't reinject in the Phase II. But if that data holds, you could treat 90% of patients a priority by altering your treatment every 3 months with 2-milligram Eylea and Duravyu. Make it really simple, just put everybody on a schedule. You know exactly when they're going to come in, you might be overtreating some patients, but I think they're using the 2 MOAs in this fashion because vorolanib does have a different MOA, I think that would be advantageous. So I think going back, it's a long answer to your question. You're going to see all 3 of those methods used till doctors get comfortable with how our drug works in the real world.

And another important real world question is a pharmacoeconomic one, obviously, which is price. So anything you want to comment on that? Or is it a bit too early to say much?

Maybe a little too early to say much, but I think the simple way if you're modeling the pharmacoeconomics is to think about if the studies hold. One Duravyu is approximately equivalent to 3 Eyleas. And we would expect that, that's a model that could be used as a baseline to model the cost. If we have additional benefit and the additional benefit would be, we hope, better treatment outcomes in the long term, we may also see additional benefit. We've got some preclinical data that suggests that our drug is neuroprotective. It may also be antifibrotic because we block PDGF. And it also may lead to less atrophy, which all of these 3 things we're going to be looking at in the pivotal trials. So if we can show any of those things, I think that we would be able to price it even more of a premium.

By the way, I should have clarified before. Those 2 studies, Lugano and Lucia, they're essentially identical trials, correct?

They are essentially identical. I think the only difference is PK sampling from the serum. That's it.

Okay. Okay. And of course, you -- I think you've made the statement in the last several quarters that you now expect to be -- you expect to be first to file amongst the other companies that are developing these long-acting inserts. Is that sort of still an accurate statement?

I think it's quite accurate. And every day that passes increases my confidence in that statement. To go back in time, we dosed the first patient with Duravyu a little over 4.5 years ago in a Phase I. So we've subsequently done 1 Phase I, 3 Phase IIs and fully enrolled 2 Phase IIIs in about 4.5 years. So we've executed really well. But going back 4.5 years ago, we were in last place. There was a race of multiple companies trying to do sustained release in wet AMD. We're now lapped the field, and we strongly believe we're in the first place. Why? Because we're going to have last patient out of next summer. And we should be able to file, we hope, by the end of next year. And even with a standard type of review, which we hope will be eligible for a quicker review, we're optimistic that we should be able to launch this drug, if approved, by the end of 2027. Our nearest competitor, they're all still enrolling their Phase III. And so when you do the math on when they're likely to finish their second trials, we think we're at least 6 months, if not a year ahead of the nearest competitor.

Let's talk a little bit about another sort of commercial topic, which is super important, and your manufacturing facility is just down the street figuratively speaking...

Not in a high-rent district here. No, we're not on Newbury street. It's a little more than down the street. It's in Massachusetts.

So tell us about the CGMP facility and what the capacity is there? And how much of the market you could supply?

So first of all, we don't believe we have any exposure to tariffs. We manufacture this here in the United States. As Yigal said, it is not right down the street. But if you drive an hour west of here, you'll see a very nice bucolic town called Northbridge, Massachusetts, and that's where our facility for manufacture is. Our API is also, by the way, made in the United States. Northbridge was conceived about 4 years ago when we realized that if we were going to be successful, we would need a commercial facility dedicated to making these inserts. It's 41,000 square feet CGMP for both Europe and the United States, 8 large clean rooms. And at capacity, we believe we should be able to make close to 1 million inserts a year in this facility. That should be able to supply even -- well, maybe not our wildest expectations, but let's call, above our base case expectations, should easily be able to supply the entire world with these inserts. We are in the midst of preparing for a potential launch by upgrading the facility, getting it ready to go 5 or even 7 days a week with 2 shifts. We are in the midst of doing registration batches there now and preparing, of course, for the FDA inspection for preapproval. So all of this, again, is all mapped out and so far on target, and we're quite optimistic that not only will the facility be acceptable to the FDA, but it will be able to supply us and the world with enough of these inserts to be quite successful.