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

Thank you. EyePoint team. I'm joined here by EyePoint President and CEO Jay Duker, CFO George Elston, and Chief Commercial Officer Romero Ribero. So thank you, all three of you, for joining us early on a Tuesday morning. Just a quick note on our research disclaimer. Please feel free to visit Morgan Stanley.com/research disclosures for our disclaimer. So let's get into it. It's been an eventful few months for the EyePoint team. Maybe we can start on the recent Lugano trial readout, the Phase 3 readout, the first of two Phase 3s that you're going to have this year. When we look at the data headline, the study didn't technically meet the primary endpoint in the full intent to treat population, but there were a number of encouraging findings underneath that headline. So, we'd love to hear you guys walk through your interpretation of the data and importantly, what may have the market missed?

Sure. Thank you very much for the invitation. Thank you for the question. So the Lugano trial was a Phase 3 trial, which studied our vorolanib intravitreal insert, 2.7 milligrams per dose. Vorolanib is a small molecule tyrosine kinase inhibitor that has activity against the VEGF receptors, PDGF, and JAK1. The control arm in this study was on label 2 milligram of aflibercept, studying it in wet age-related macular degeneration. And the patient population, 75% of them were treatment naive, and 25% had been previously treated. The primary endpoint of the study was non-inferiority change in visual acuity from day one to the average between week 52 and week 56. So as you mentioned, in the full analysis set, we did not meet the primary endpoint. But there was some really encouraging data that came out of the study, including the important secondary endpoints. First of all, safety. In the prior Phase 2, Phase 1 trials that we've run with the insert, we really had no safety concerns, and that was really in the Phase 3, the safety looked quite clean. We also showed really good anatomic control of wet AMD. That's measured in the office by an instrument called optical coherence tomography or OCT. And at the end of the trial, there was only a negligible difference in retinal thickening between the study arm and the control arm. We were able to reduce the treatment burden by over 40%, which if approved and in the real world, could mean two fewer injections per year on average. And over half of the wet AMD patients went the full year control with our drug alone. And in that group of patients, we were statistically not inferior in change in visual acuity. In the overall population, however, one of the things that really stood out as highly unusual is the number of eyes in the control arm that lost 15 or more letters. Historically, that occurs because some eyes just don't respond to anti-VEGFs. And remember, this is an elderly population, so some of these patients will lose vision for other reasons, like cataract or glaucoma or dry AMD. Typically, in the 2 milligram Eylea arm, at the end of a 1-year trial, you expect between 4% and 5% of the eyes to lose 15 or more letters. In the Lugano trial, it was only a half a percent, and that, again, is statistically highly unusual. And we believe that was the primary reason for the miss. It certainly wasn't that our drug wasn't active. Again, looking at the secondary endpoints, our drug was durable and potent and safe, but there appeared to be a significant mismatch in these 15-letter losers. And if you go back and look at our Phase 2 trial, the TOPAZ 2 trial, 7.7% of the control arm, the same control arm, 2 mg Eylea, lost 15 or more letters. So it went from 7.7% to a half a percent. And in the Phase 2, in our high-dose arm, it was under 4% lost 15 or more letters. When we really broke it down, we ended up with 9 patients in the DURAVUE arm that lost 15 or more letters for something other than wet AMD. In those eyes, when we looked at the visual acuities and, of course, the anatomic control and the overall clinical findings, 6 of them lost vision due to geographic atrophy, the severe form of dry AMD, versus none in the control arm. Again, highly asymmetric and unusual. 2 lost vision due to glaucoma, and 1 from successfully repaired retinal detachment, where the patient developed a severe cataract after the successful surgery. So we believe that this asymmetry in the 15-letter losers was the primary reason that we missed the endpoint.

Okay, that's really clear. I mean, it sounds like you know, the control arm simply just performed a lot better than you would have expected based on historical trials. In terms of the 9 DURAVUE patients that actually experienced a 15-letter or greater vision loss, can you help us understand what you think happened in those 9 patients? I know you mentioned geographic atrophy.

So the geographic atrophy patients, I think, again, at the end of the trial, if you looked at their anatomic control of their wet AMD, it was quite good. And in fact, of those 9 patients, 3 of them never received a supplemental injection. And the reason they didn't receive it is the treating physician felt that there was no active wet AMD and there was no reason to give them another anti-VEGF. So we then did some further analysis to look at the possibility of our drug speeding the growth of geographic atrophy. Now, we certainly hadn't seen that in any of the prior studies, and there's no preclinical data to suggest that. And in fact, the analysis that we've done... I think pretty shows I think quite clear that not only do we not cause new geographic atrophy but in pre-existing geographic atrophy the rate of progression was no different than the fellow eye for example which is a nice internal control and was actually less than what's been reported as the usual progression of geographic atrophy. What we did find is the eyes in the DURAVUE arm started with geographic atrophy closer to the center of the fovea and that means that even if they progress at the same rate obviously if you start closer more likely to have visual loss from that. So we think, again, it was just an asymmetric distribution. The 2 patients that had loss from glaucoma. 1 of them, unfortunately, every time they got an Eylea shot, which was part of the trial for them to get Eylea at the beginning, they spiked their pressure very high due to the Eylea shot. And clearly, if that patient had been randomized into the other arm, they would have received Eylea and had the same pressure spikes. So, again, it appears so, certainly just a little bit of bad luck with the randomization in those cases. So I think, again, overall, the physician.

Okay, that's helpful context. And then when you think about the 42% reduction in the treatment burden that you highlighted, how do physicians think about that magnitude of reduction in the context of real-world treatment burden in the disease?

We spoke to and we've spoken to a lot of retinal specialists and shown them the data. They're quite enthusiastic about the secondary endpoints, including that reduction in treatment burden. The expectation or hope going into the trial from retinal specialists was that we would have at least a 20% reduction in treatment burden. And when you look at the real world analysis of medications like high-dose Eylea and Vabysmo, which have been very successful, these second generation. They appear to reduce treatment burden less than 20%, about 1 injection less per year on average, yet they're quite successful. So we think that that overall success of the reduction in treatment burden, if approved, would be very enthusiastically accepted by the retinal community.

Okay. And then just going back to the safety profile for a moment, it looked quite clean, as you mentioned, including after repeat dosing. So no meaningful imbalance in interocular inflammation, no observed retinal vasculitis or severe IOI. So how important is the repeat dosing safety experience when you think about the differentiation of your drug?

Well, again, these patients on average who are diagnosed with wet AMD live for over another 10 years. And so you want to be able to treat them successfully and safely for the rest of their lives. So the important thing in wet AMD when you look at the long-term success, patients, despite our very good short-acting anti-VEGF, still lose vision. And so the ability to retreat and have long-term suppression of VEGF appears to be associated with much better outcomes in the long term. So obviously you have to show the safety and efficacy in your trials, so we're certainly able to show safety with repeat dosing, and again, we expected that animal data in the previous safety from single injection really gave us confidence that we would be safe. But if a drug can't be repeated, and obviously if it's even a long acting that might last 6 months or a year, it doesn't really help us retina specialists treat patients in the long term. You need to have repeat dosing.

Okay. And then is there, just thinking about the takeaways from the study, I mean, is there anything you learned from Lugano about sort of patient selection or baseline patient characteristics that could influence how patients would use, or how physicians, rather, would use DURAVUE commercially?

Yes. So we've looked quite a bit at the outcomes today to see if there was any indication that, for example, the drug worked better in eyes that were previously treated or eyes that were treatment naive, and we didn't find a difference. We've broken it down by some other parameters, and we'll continue to do that, certainly, because that's something, if approved, is very important. You want to be able to tell the treating physicians which are the eyes that are going to do really well. And especially that 54% that went the full year with our drug alone. As I think I've emphasized over and over, we have these supplement criteria in the trial, but that's not how doctors treat in the real world. They don't supplement per se, but given that we're a different mechanism of action, I think in the real world, if we're approved, doctors wouldn't hesitate to use both a biologic a long acting TKI together to get, hopefully, a synergistic effect. So, again, when we look at those eyes that were made it through the full year stable on our drug alone, we're hoping to find some biologic marker early on that might indicate that subgroup of patients. But as of yet, when we looked in the Phase 2, we were not able to discern it, and we'll be doing further studies to try to elucidate that.

Okay, great. Just given the totality of the data and the outcome, what conversations have you had or are you expecting to have with the FDA around this study?

So I think, again, putting it in context, the FDA has seen a lot of aflibercept 2 milligram arms and how they do. And I think we have a very solid clinical explanation as to why we missed the primary endpoint. And there are certainly examples in retina of drugs that hit 1 Phase 3 and missed a second Phase 3 being approved, and there are plenty of examples outside of ophthalmology of that as well. And so if the second trial, the Lucia trial is positive, we're quite optimistic that the FDA will accept our NDA and review it.

Okay, that's a good segue to Lucia, which I know is coming up next quarter. On Q4, you've guided the street. This is obviously an extremely important readout for the company. So can you remind us how similar the trial is to Lugano and whether there are any meaningful differences in sort of the patient population that we should be thinking about? Romero, do you want to answer that?

Yes. So in terms of study design, Lugano and Lucia are identical, exactly the same type of study design. In terms of the patient population, the only difference is that Lugano was 100% U.S. patients, and Lucia is 80% U.S., 20% international. We published the MAST baseline characteristics earlier this year in a medical conference, and the baseline characteristics on a mask fashion was pretty similar. The way that we are analyzing the data also, of course, pretty similar. We are amending the analysis plan for Lucia based on the learnings from Lugano. So 1 new analysis that we're going to be doing is looking at patients that lost 15 letters for reasons not related to wet MD. And similar to what we did for Lugano on a post-hoc matter removing those patients, in Lucia, we're going to pre-specify that and has a pre-specified sensitivity analysis. The primary endpoint, it's still the same, takes into account to all the patients. But for the sensitivity analysis, we will remove those patients.

Okay. Ramiro, just going a little bit further on the geographic mix, how do you think that could influence either the control arm performance in Lucia or maybe just the underlying variability in visual acuity outcomes?

Yes, I think if you look at recent Phase 3 studies in wet AMD and when they broke down by geographic region, there was no meaningful difference between U.S. and international patients. In the end of the day, wet AMD is a relatively genetic disease, so you see mainly Caucasian patients. The sites that we use outside of the U.S., of course, are sites that have experience in Phase 3 studies. They are located in big cities. So we should not expect any difference in terms of geographic region between U.S. patients and international patients.

Okay. So the timeline you've outlined is Q4 for Lucia data and then potential NDA filing in the first half of '27, right? So what would you really need to see in Lucia to feel comfortable moving forward with the planned NDA?

I think it's it's actually quite binary. If we have a positive primary endpoint, with intend to move forward with the NDA filing in the first half of next year. From the perspective of acceptance in the retina community and use, I don't think the retinal physicians will care very much about the actual numerical difference, if there is 1, between our drug and the control arm, as long as we're approved and safe. So we would expect to see similar secondary endpoints in Lucia that we saw. And if we do and we hit the primary endpoint, then I think we intend to file, and I think we'll have a good chance of having the drug accepted.

In your conversations with retinal specialists, do you feel like there's still a lot of enthusiasm around the program and kind of belief that you guys have an active drug here?

Oh, I think there's a lot of enthusiasm, yes. In that, again, when they look at the secondary endpoints, in particular the anatomic control, which is what retinal physicians use on a daily basis to decide how well their drug of choice or their interval is working, I think they're very enthusiastic about it. What a drug like the vorolanib insert can do for them and their patients is, first of all, the most important thing is it will really help long-term visual acuity. Because in the long term right now, patients are undertreated. And by having an insert that lasts 6 months or longer, the ability to treat in the long term and have patients come back for visits, I think is going to improve. And retina specialists clearly understand that. It also gives them flexibility to change their dosing frequency longer if they choose to, and depending on the patient in this situation. And so I think the enthusiasm is there, and I think that in general, the secondary endpoints, we did better than expected in the retina community. And that's what's really going to make us commercially successful. We have a hurdle we need to get over, which is we need to hit the primary endpoint.