Ocular Therapeutix, Inc. (OCUL) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the Ocular Therapeutix Announces Top Line Results of Phase III Clinical Trial of DEXTENZA for the Treatment of Allergic Conjunctivitis Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today, Mr. Donald Notman, Chief Financial Officer. Thank you. Please go ahead, sir.

Thank you, Dilem. Good morning, everyone, and thank you for joining us to discuss the top line results from our Phase III clinical trial of DEXTENZA for the treatment of allergic conjunctivitis. The press release and a copy of today's presentation can be accessed on the Investors portion of our website at investors.ocutx.com. Leading the call today will be Antony Mattessich, our President and Chief Executive Officer, who will provide a summary. Also speaking on the call today will be Dr. Michael Goldstein, our Chief Medical Officer, who will give an update on the data. Following Michael's remarks, we will turn the call back over to the operator for your questions. As a reminder, on today's call, we will be making forward-looking statements regarding our regulatory, product development and commercialization plans as well as our research activities. These statements are subject to risks and uncertainties that may cause actual results to differ from those forecasted. A description of these risks can be found in our most recent Form 10-K on file with the SEC. I will now turn the call over to Antony.

Thank you, Donald. I'll just set a little bit of context before I hand it off to Mike Goldstein, who is the person who drove this study, he and his team. But I wanted to give a larger context of what this means and where we are from a company standpoint in our overriding goals. The largest goal -- the primary goal that we started with the intracanalicular inserts was with the concept that we wanted to one day obsolete eye drop therapies. As many of you have probably heard me say many times before, eye drop therapies were invented in 1860. With the advent of plastics in 1930, they were improved, but there hasn't been much technology that supplanted eye drops in that time. The intracanalicular insert, the intracanalicular route administration, which was invented by Ocular Therapeutix, was one of the primary areas of real estate and body where we hope to be able to obviate the need for people to take eye drops in the future. Our first entry into this field was in probably one of the smallest segments, which is the surgical segment for the prevention of postsurgical pain and inflammation with DEXTENZA, but that was always meant to be our first entry into the space. And as many of you know, there is always the risk in that space that it's time bound. The reimbursement, the pass-through payment status, if you are intrinsically linked with the cataract procedure, has a risk of being bundled after a 3-year period. So in essence, you lose your reimbursement. The most important objective that we had with DEXTENZA after we got the initial indications of pain and inflammation was actually to ensure that we had evergreen light for DEXTENZA. And 2 things needed to be in place in order for that to happen. The first was we needed a J code, which we got last October. The J code is permanent coding, and it's usable across all sites of care, so in the ASCs, in the hospitals, as well as in the office setting, which is vital to our future. The second thing we needed was an indication, an office-based indication that would help not only talk with payers about being able to be reimbursed in the office environment, but also to be able to distinguish our procedure, 356T, from any other procedure. So it becomes a fully independent procedure. I can say with great joy that it is -- well, obviously, pending a discussion with the FDA, it is mission accomplished with this Phase IIIc study. We believe that we can file an sNDA in October and then be able to get an additional indication. And what's very important about this is it's an office-based indication. So we have those 2 elements that we needed to both give DEXTENZA external and internal life and also to be able to give 356T a separate payment status as an independent procedure. That not only gives life to DEXTENZA across all settings of care, potentially gives life evergreen reimbursement in the hospital and surgical setting, but it also provides a platform for all of the other intracanalicular insertions that we may bring in the future. So this is a very, very important moment for us. Obviously, pending discussions with the FDA about the suitability of this for an sNDA. But it is very hard to understate the strategic importance of what this allergic conjunctivitis potential indication may give us. So without much further ado, I will hand it over to the man who actually brought this trial. He and his team brought this trial to a conclusion. An extremely well-run trial, with very compelling data. And I want Mike to be able to reveal the walk-through, which is why you're on the call today. So Mike, do you want to take over?

Yes. Thanks, Antony. So thank you all for joining this morning. It's my pleasure to be able to present to you the top line data from the DEXTENZA allergic conjunctivitis Phase III trial. Hopefully, you all have access to the slides, and I will call them out as we go through them. So we move to Slide 2. Allergic conjunctivitis is a very common problem, both in the -- that we see in the offices as well as in the OTC setting. Most -- there are a number of antihistamines and mast cell stabilizers out there that will treat most patients. But a number of patients need more than that. Those include the patients with seasonal and perennial allergies that need more than that as well as patients with other types of allergic conjunctivitis such as atopic disease and vernal diseases. And for many of these patients, we commonly use steroids. The issue with steroids is while they work, there's the risk that they can be misused because they work so well, which can lead to long-term side effects such as elevated intraocular pressure and cataracts. So one of the solutions -- one of the things that DEXTENZA solves is that it is administered by the physician. It goes away on its own and it releases drug for approximately 30 days. So it eliminates the ability -- it eliminates the potential to abuse the medication. In addition, patients with allergic conjunctivitis often need to touch their eyes to administer the eye drops. And so coming up with a treatment that can keep people's hands away from the eyes, i.e., a hands-free option, would be a huge advance. This is obviously particularly important in the current era that we're in. So you might say, well, there are oral antihistamines, and those also serve to keep people's hands away from their eyes, and that's true. The problem with oral antihistamines is they don't get to this late phase inflammatory response that's important for treating when you have -- and you can do that with steroids. The other issue with oral antihistamines is that they will actually worsen people dry eye. And it's important to know that many patients with allergic conjunctivitis also have dry eye disease. So as cornea specialists, as ophthalmologists, we often tell people not to use oral antihistamines because of the risk of exacerbating their dry eye signs and symptoms. So moving to the next slide, Slide 3. This is the study design. And I will sort of walk through the study design. I know it's a busy slide, but I think it's important to understand how the study was set up. There are 2 main pathways to get approval for allergic conjunctivitis drugs. So you might think about the typical environmental study. So that will be studying patients and they -- as they move around in their communities and come in contact with different allergens. That is a pathway, but it's not a very highly used pathway, mainly because there's high variability in terms of when a particular patient comes in contact with the allergen. And that leads to a lot of challenges in terms of being able to see differences in drug therapy. So to get around this challenge, a number of different models have been developed, and these include putting patients in the room and subjecting them to allergens repetitively over a period of time. But the most common model that's been used for approval, it's been the basis of approval of almost all the medications that are currently available in the United States is called the Conjunctival Allergen Challenge model. So in this model, in its most simplistic state, the allergen is placed directly on to the eye. And so therefore, you know the patient is coming in contact with the allergen. And there's been a number of refinements to this model. And essentially, what happens is the patient who has a history of allergic conjunctivitis comes in. They're skin tested for a variety of allergens. And they then take the allergen of interest. You place it directly onto the eye, and you look for the inflammatory response. So you're looking at how symptomatic are they and how much readiness do they have. The allergen -- the quantity is then increased until you get to a prespecified threshold. You then let the patient wash out, and the patients then brought back to confirm that the level of allergen that you placed on the eye will consistently lead to a consistent response in terms of redness and itching. And that's the dose you then challenge the patients with throughout the trial. So in the typical model, patients come in, they get one allergen challenge. They get the drug of interest. And then you measure signs and -- you measure the ability to prevent itching and redness from the model. So that's a great model for studying drugs that look at anti -- look at that prevent histamine release. Because as soon as you put that allergen in the eye, the cells immediately express the histamine. And so you're seeing you can prevent that. But the trick is, within the anti-inflammatory drug, you want to get beyond the histamine response and you want to get to the late phase inflammatory response. So to do that, you challenge patients multiple times in a closely spaced together with this allergen. And by doing that, you're essentially draining all the cells of the histamine so you can get to this late phase inflammatory response with recruitments of the inflammatory mediators. So in this trial design, patients to the -- and if you look at sort of the time line, patients in every place that says CAC is where they got the challenge. So there's a number of challenges that happened before they were randomized and received the insertion, and that was to establish what the appropriate dose was. On day 1, they received the inserts. A week later, there was a series of 3 challenges, and the primary endpoint was at the end of those 3 challenges. And then a week later, that he received another series of 3 challenges, and then we followed them again for another 2 weeks for safety. So the primary endpoint in this study is looking at ocular itching scores after the 1/3 of the 3 challenges at 1 week, and then we look at different time points. So the prespecified time points that we look at were 3 minutes, 5 minutes and 7 minutes after the challenge. These are the typical time points that have been used as the basis of FDA approval for, again, almost every anti-allergy drop on the market in the United States currently. So moving to the next slide. Slide 4 is the high level patient disposition. We screened 316 subjects. We randomized 96. Screen failure rate was just under 75%, and that is consistent with other studies and how the model works. The subjects are randomized to receive DEXTENZA or vehicle in both eyes. And the randomization in this case was 50-50. And then the study populations we looked at or the intent-to-treat population is what the primary endpoint is based upon, and that included all 96 subjects. So moving to the next slide. Slide 5 is the demographic data, which were, as expected, subjects who are in their 40s. So it's a younger population than we've studied in the cataract market. Slightly more females than males. Approximately 10% were Hispanic or Latino and approximately 30% were African-American. Moving to the next slide. Slide 6 gives you an idea of the allergens that were used in the trial. So again, each patient is exposed to the allergen that they are sensitive to. The key point here is that we looked at a whole bunch of different allergens in this trial, and there's a variety of both seasonal allergens and perennial allergens. So the next slide is the primary endpoint, so as released in the press release this morning. So the left side shows you the mean values at 3 months -- 3 minutes -- not 3 months, 3 minutes, 5 minutes and 7 minutes. This is all on day 8, which is 1 week after insertion. The green are the DEXTENZA group. The blue is the vehicle group. And you want lower scores. So a score of 0 would be no itching, 4 would be very severe. And so the lower the score, the better. And you can see the separation between the drug-treated group and the vehicle group -- vehicle-treated group. This difference was statistically significant with a p-value of less than 0.0001. On the right part of the screen, you can see what the deltas are. And so the separation between drug and vehicle at 3 minutes was 0.86 units, at 5 minutes was 0.98 units and at 7 minutes was 0.96 units. So that's the data for the primary endpoint. You may wonder what does the data look like in all the other time points that we looked at. So I will show you that on the next slide, Slide 8. So this is all the data for every time point that we looked at throughout the trial. And again, as you're looking at ocular itching scores, the first cluster, so visit 5, visit 6A and visit 8b were all in the first week. Visit 7, visit 8A, visit 8B were all in the second week. And again, green is the DEXTENZA-treated group, blue is the vehicle-treated group. And you can see the separation between the drug-treated group and the vehicle-treated group starting at 1 week and continuing through 2 weeks. You may notice that we also have a 10-minute time point, so that was not part of the primary endpoint. It was a secondary endpoint, but just seeing how people -- how patients stood as we looked further. And then just beneath where it talks about -- where it shows the different time points, those values represent the delta. And you can see there's a nice -- you can do the math yourself when you look at the mean values, but you can see there's a nice separation, which is right around the 1 unit number, starting at visit 6A and going all the way through to visit 8B. All these values had a p-value of less than 0.05, with the exception of the very first value at visit 5 at 3 minutes. And again, if we think about the very first challenge really is more about histamine than late phase inflammatory response. So the more interesting time points are really these later time points, starting at visit 6A and moving beyond that. So the other side, the other thing that the study obviously was designed to look at is safety. And in this trial and consistent with all the previous trials we've had, DEXTENZA was extremely well tolerated. There were 16 treatment-emergent events in the DEXTENZA group and 14 in the vehicle group. There were 2 ocular treatment-emergent events in the DEXTENZA group and 6 in the vehicle group. There were no serious adverse events, ocular or nonocular. There was one subject who did withdraw from the trial due to a treatment-emergent adverse event. This happened -- the subject was withdrawn in the first 4 days of the trial. It was a subject where the insert was not placed beneath the punctal opening, and it was slightly exposed. Patient can feel and it was removed for that purpose. There were -- in terms of treatment-related adverse events that were suspected to be related to the -- with the IP, there were 2 in the DEXTENZA group and 3 in the vehicle group, and there were no severe adverse events. So the next slide, we'll show you all the ocular treatment-emergent adverse events. This is Slide 10. So again, there were 2 ocular treatment-emergent adverse events in the DEXTENZA group and 6 in the vehicle group. And you can see the listing of all of them. Those involved for those that were suspected to be related to the study drug. Importantly, there were no cases of elevated intraocular pressure that were reported in either group. So in conclusion, from an efficacy perspective, the primary endpoint of the trial was successfully met. The primary endpoint at visit 6B, which was on day 8 or a week after insertion, demonstrated a statistically significant with a p-value of less than 0.0001, difference favoring subjects who received DEXTENZA for lowering itch scores compared to those subjects who received vehicle at all-time points, 3, 5 and 7 minutes. And the separation was 0.86 units at 3 minutes, 0.98 units at 5 minutes and 0.96 units at 7 minutes. These data are consistent with what we've observed in prior Phase II and the Phase IIIa allergic conjunctivitis studies using a similar repeat conjunctival allergen challenge model. And for the secondary end points at all the other visits, including at visit 6B 10 minutes, subjects treated with DEXTENZA did better than vehicle for ocular itching scores at 3 minutes, 5 minutes, 7 minutes and 10 minutes, which are all the time points that we looked at, with a p-value of less than 0.05 for all these time points, except for the very first 1 at visit 5. We did look at seasonal and perennial allergens, and there are a number of secondary endpoints that we will be looking at as we go through the data. This is the top line data, but we'll be reporting on other endpoints as we look through other secondary endpoints, including ocular redness and nasal symptoms. And from a safety perspective, DEXTENZA was generally safe and well tolerated in the study. There were no serious adverse events. No subjects required rescue medication, and there were no studies who had any adverse events related to elevated intraocular pressure. So we're very excited about this study. As Antony mentioned, we plan to file an sNDA by the end of the year to expand the label for DEXTENZA to include ocular itching related to allergic conjunctivitis. And with that, I will stop, and I think we have some time for Q&A.

[Operator Instructions] I show our first question comes from Yi Chen from H.C. Wainwright.

My first question is, how long is a typical treatment course for AC using the current standard topical antihistamine or mast cell stabilizer? And how likely do you think physicians will adopt DEXTENZA, if approved, to use for AC patients as the first-line treatment?

I'll let Mike answer the first part of that. And then the second part, I think, pretty confidently, the ophthalmologists will love to use it. The question is going to be, can we get people to pay for it? Can we get the payers to be excited about it? And can we get, in some cases, maybe get individual or personal payment? So that really becomes the issue on that side. But I'll let Mike take over the question about the treatment time and the -- probably also just comment on the general understanding of how ophthalmologists will see this. Mike?

Yes. Yes. Yi, thanks for the question. So there's a whole variety of patients with allergic conjunctivitis. And there'll be a number of patients who can treat at home or who respond very quickly to an antihistamine mast cell stabilizer. And so those are generally pretty quick, like a week. But there are a number of patients who -- that's not enough. And those patients end up finding their way to a physician's office and require more treatment. And so in the current paradigm, some of those patients will also need steroids. And I would say a typical steroid course for a patient like this would be approximately 1 month, which lines up with the product profile of DEXTENZA. Now we know that steroids work for allergic conjunctivitis. But our fear as physicians is that you're taking a disease that's got intermittent flares, but it's really a chronic recurring disease. And if they use steroids repetitively, there is a risk of developing side effects like elevated intraocular pressure or even cataracts. And so what's really interesting about this product is that it really can't be abused. It's placed by the physician. It biodegrades, goes away on its own. And so when you think about that, it really puts the control of the treatment back into the physician's hands. And so therefore, I think what will happen initially is that, again, people will use it for the more severe patients, for the patients that aren't responding to antihistamines. But given its product profile and given its safety, I could see it moving earlier in the sort of treatment algorithm.

Got it. And to follow up on the potential reimbursement for this indication. So DEXTENZA, if approved, will be priced at the same as it's currently used for post-ocular surgery pain and formation. Is that correct?

Well, the current filing strategy, we'll do an sNDA. So that wouldn't lend itself to a separate pricing strategy. So we do have to look at the opportunities of what a roughly $500 insert would be in the allergic conjunctivitis market. So that's work yet to be done to see exactly the types of receptivity we would have from payers and from -- also from private payers, as I mentioned. But there is a population of people that is not insignificant, of people who cannot or will not take drops. The people who are -- might be -- or have a hypersensitivity to BAK, to the preservatives that are in drops. People who have issues with dexterity, people who might also have conditions like a Down Syndrome where they don't like anything near their eyes. So there's a number of conditions where drops are just not reasonable forms of therapy. And this would be really the only other option other than systemic therapy, which as Mike mentioned, would be -- would have no real therapeutic window to be able to treat some systemically in this environment. So there will be a captive population. The size of that population is still in question in terms of what the payers would be willing to pay for, but it's not insignificant.

Okay. Got it. My last question is, is conjunctival redness a secondary endpoint measured in this trial?

It is. It is. So this is -- in this indication -- I'll just add. In this indication, unlike, for example, a dry eye indication, you can get an indication for a sign or a symptom, so itching or redness. Most drugs, almost all the drugs in this space with allergic conjunctivitis have an indication for itching. Very few actually have an indication for ocular redness.

We'll be filing a report on secondary endpoint. We'll be -- there's also nasal symptoms as another key driver of efficacy in the AC space. So we'll be following up with the data that we have on the trials for both redness and for nasal symptoms.

Our next question comes from Joe Catanzaro from Piper Sandler.

This is Charles on for Joe. I know we've talked about this in the past. But could you just remind us what the FDA's definition is for clinical meaningfulness in the CAC model and whether or not this trial had a prospectively defined definition for clinical meaningfulness?

Mike?

Yes. Thanks, Charles. So this trial did not have a prospective definition of clinical meaningfulness. The ophthalmic solution of the FDA is great to work with. They have been very clear on a few points. So when they make these decisions, it's really a balance of the benefits of the drug compared to the risks of the drug looking at the totality of the data. I would say, in terms of guidelines, you need to show a half unit separation at all the prespecified time points. So in this case, the visit 6B, 3 minutes, 5 minutes and 7 minutes. And you want to be around 1 unit separation at a majority of the time points. So we were right there with this trial.

Sure. Yes. I mean 0.98 and 0.96 are close to 1, and it looks like all the confidence intervals cross 1. And I guess I'm just wondering, in your opinion, do you -- the fact that those time points sort of reach 1 or around 1 satisfy the FDA's definition. And would you anticipate any sticking point there due to the fact that there are like a couple of hundreds of units short of that 1 unit separation?

Yes. It's a great question. And you never know. So again, I think that those are sort of general guidelines. But I think the key is really looking at the totality of the data. So looking at that in the context of all the other data points, all the other endpoints we looked at. So clearly, this wasn't a fluke. And we're right at the 1 unit sort of threshold, and many of the time points are above it. So putting in the context of this trial, it's putting in the context of the previous trials, and then it's looking at the safety profile. And that safety profile is based on the strong safety profile that we've shown in this trial, in prior trials in allergic conjunctivitis, and then looking at the broader safety profile of DEXTENZA in the cataract patients.

Okay. And my other question is just around timing. I know you mentioned that the plan is to file an sNDA in October. Just wondering if you had a sense for when a pre-NDA meeting might take place and whether or not you would anticipate providing us with an update after that meeting.

So it'd be nice to file in October. I think our target is end of the year for the filing. And between now and then, we obviously will have conversations with the FDA. Unless there was something material, I don't think we'd be talking about the results of those meetings. Obviously, if there's something material, we would come back to you.

Yes. The expectation is that we have a sufficient filing for an sNDA. If that view changes at any point, then we will definitely inform the market.

[Operator Instructions] I show no further questions in the queue at this time. You may continue.

All right. Well, I guess, thanks, everyone, for getting on the call. And we will update as necessary. As soon as we bring in additional endpoints in redness and nasal symptoms, there will likely be additional 8-Ks on this particular trial. And obviously, if there's anything that is -- that changes our view that this is sufficient for an sNDA filing, then we will inform the market immediately. Thank you very much.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.