Opthea Limited (OPT) Earnings Call Transcript & Summary

Hey. Good afternoon. It's Wednesday at 5 o'clock, so this is the most exciting time of the conference. Thank you all for being here. My name is Raji Gunasekera. I'm a Vice President on the health care team at JPMorgan. Very excited today to introduce Opthea and their CEO, Fred Guerard. Thank you.

Thank you, Raji, and good evening, everyone. Thank you very much to JPMorgan for inviting us to present the story of Opthea. We are a publicly listed company on NASDAQ and ASX, and I will be making some forward-looking statements. So you can find our disclaimer on our website under the Investors section. So we are working on a molecule called sozinibercept and we have the potential to become the first medicine in the last 20 years to deliver superior vision outcomes for patients suffering from retinal diseases. Despite fantastic drugs that have been on the market for 20 years in a class called anti-VEGF-A, the majority of wet AMD patients do not recover fully the vision they've lost when they have this disease and they experience loss of vision long term. We are working on the first-in-class VEGF-C and D trap, which is intended to be used in combination with standard of care anti-VEGF-A. We have strong composition of matter IP running all the way to 2034 and beyond. And we have demonstrated superiority in a well-powered Phase IIb trial showing that in combination with standard of care, we're better than standard of care alone. We have the potential to improve the quality of -- quantity of life potentially of patients around the world suffering from vision loss. We're currently in the middle of our pivotal program. We're expecting the top line data of our first pivotal trial in the early second quarter of this year and the second pivotal trial result in the middle of this year, and we have enough cash to fund the operations until the top line data. This market is extremely large and we have the opportunity to grow significant share in this market. We are the only drug being designed to be used in combination in this market. And as you've seen here, it grew from being a rare disease with no drug to being now a $15 billion market worldwide. Our drug is intended to be used in combination with any anti-VEGF-A. We are really fitting seamlessly in a system that has been put in place over the last 20 years of retina clinics using injectables in intravitreal -- with intravitreal injections. We will not be disrupting any of that care whether it's for the patients, for the physicians or the practice managers. And finally, as I said before, it's a very large opportunity. We built a team of experienced retina leaders. We all worked in companies having retina products. We've worked, many of us on retina launches over the years and we are advised by a panel of very esteemed retina experts around the world. We've managed to reignite interest behind vision. After 20 years of a number of drugs being launched, all being noninferior to each other, all being noninferior to the original drug called Lucentis, interest behind better vision outcome was kind of lost because no drug was available to deliver these better visual outcomes. But since we've been around and showing this Phase IIb data, we've now -- it resulted in vision gain being the #1 need -- medical need as shown here in that survey run every year by the American Society of Retina Specialists and now the need for better vision outcomes ranks #1 among retina experts in that society. Anti-VEGF-As were a revolution 20 years ago. Patients at that time, the only hope they had was to stabilize the vision at whatever level they had when they were diagnosed. And anti-VEGF-As allow some patients at least to recover some vision and hope not to go blind pretty quickly. But 20 years later, you can see that the outcomes are quite suboptimal. The majority of patients do not go back to driving level of vision, which is [ 20 40 ] in most countries. Almost half of patients do not achieve significant vision gain despite getting regular intravitreal injections. 60% of them still have fluid in the back of the eye. The healthy retina is dry. When your retina is wet, it's not a good sign. And 25% of patients will experience further vision loss despite being treated with these drugs in the first year after diagnosis. So there is clearly the need for -- to do better. What we also know is vision loss is not only associated with loss of quality of life, it's also associated with loss of quantity of life. And you can see here the mortality risk almost doubles when you're legally blind versus being mildly visually impaired. A loss of one vision in this -- we measure vision on the vision chart, a loss of 1 letter per year over 7 years is associated to an increase of 16% of mortality over time. So clearly, we are not only solving for quality of life, but also quantity of life here. When we ask retina experts, our drug is administered at the same time on the same day as anti-VEGF-A, so second injection. When we ask them how willing they will be to inject their patients twice on the same day, the answers are, as you can see on the chart here, range from 1/4 of the patients to almost 1/2 of the patients, depending on how many letters of additional vision benefit we produce on top of standard of care. Just for getting an idea of the scale of the market, the market in wet AMD alone is around $10 billion a year around the world. The percentage of share -- 1% of share is around $100 million a year of sales. So we are first-in-class VEGF-C and D trap. As you can see here, we're not inventing a new pathway, we're just blocking better pathway that has been identified and characterized decades ago as being the main driver of the disease. The disease characterizes by this abnormal blood vessel creation and this vascular permeability resulting in fluid accumulation in the back of the eye. All drugs on the market today are anti-VEGF-A or A or B and PLGF. But basically, they leave wide open VEGF-C and D to bind to the second and third receptor of the VEGF pathway. Combining these drugs with sozinibercept could allow this complete blockage of the VEGF pathway and a better efficacy. This has been very well documented in animal models over the years. You can see that the VEGF-C stimulation or production stimulates these abnormal blood vessels proliferation. You have the opening of the vascular membrane happening when you have presence of VEGF-A, but also VEGF-C. When you have the disease, when you have AMD, you have a natural upregulation of production of VEGF-C, but it gets even worse when you get treated with an anti-VEGF-A. You get this further elevation of C. So basically, when you control one part of the pathway, you have this upregulation of the other part. So we believe the secret is actually to block everything. And you can see on the right-hand side on the panel here, our drug works as a stand-alone, but it's clearly the synergistic effect when combined with an anti-VEGF-A. Here, it was Eylea, aflibercept, you see the synergistic effect of -- on this animal model mimicking the disease. We have a better reduction of the disease activity when you inject the 2 drugs together. No progress has been made over 20 years in terms of efficacy on vision outcomes. Some drugs came to the market. Other drugs are being developed all in a non-inferiority manner to standard of care. The new drugs on the market allowed the patients to be injected less frequently by around 10 days. So the first-generation anti-VEGF-As are on average in the U.S. injected around every 50 days, the new generation agents every 60 days. So not really a revolution and certainly not a revolution on efficacy. There has been no superiority data ever generated in this market compared to Lucentis. It is still the benchmark. So we were the first company working on delivering better vision outcomes. Outside of wet AMD, and I'm going to detail the data, we are working on a diabetic macular edema program, which is a natural second indication and life cycle management for the program. All drugs that work in wet AMD work in DME. It's actually likely our drug could have additional further benefits beyond the vascular proliferation and vascular permeability because VEGF-C is associated to inflammatory disorders. And there is a strong inflammatory component to diabetic macular edema. So we're very excited to be ready. We want to be ready by the time of top line data to initiate the program. And then finally, we're working on co-formulating our drug with an anti VEGF-A, just to simplify the administration of the drug. And we are now in stability studies on the bench. So we fully enrolled the trials, obviously, because they're reading out very soon. We have around 2,000 patients enrolled in these 2 studies. The time lines were already discussed. We also on the CMC side, very happy to report that we completed all the drug substance work we have to do for the BLA submission. So we released out our drug substance PPQ campaign in September of last year. We're now in the drug product manufacturing phase and that should be completed in the first half of this year. Then we are allowed to file CMC module because we have a Fast Track designation with the FDA and we can file the modules as they are ready. So that will be the first module to come in. We anticipate the BLA approval around the end of 2026. And we've built a team of experts able to not only deliver the programs but also prepare for commercial launch. So the Phase II data was very robust. It was a very large Phase II trial of 360 patients. The trial -- the patients were naive as it is the standard in wet AMD. The inclusion/exclusion criteria were very standard for wet AMD trials. The patients just needed to have a baseline best corrected visual acuity between 25 and 60 letters at baseline. All the patients were receiving Lucentis every 4 weeks or 6 months. And then on top, they were randomized to receive either a sham injection or a low-dose sozinibercept or 2-milligram sozinibercept. And the primary endpoint was an approvable endpoint validated by the FDA of a mean change from baseline in BCVA. In that case, it was at week 24. We had the traditional secondary endpoints, a mix of anatomical and functional endpoints. What was interesting is the prespecified subgroups of patients. It's been known since the development of Lucentis 20 years ago that some lesion types respond better to anti-VEGF-A than others. So it was actually quite interesting to prespecify the patient populations getting into the Phase IIb, just to understand where was the combination more beneficial among this very different lesion type. The disease is named by one name, but actually the lesions present in multiple different ways. The baseline characteristics of the patients in the Phase IIb were extremely well balanced across the arms. The patients had clearly lost vision, clearly had disease activity as shown here with elevated central subfield thickness and presence of fluid intraretinally and subretinally. And you can see here the breakdown of the different lesion types. They were a pretty standard wet AMD patient population. So the primary endpoint was met. So our drug was statistically superior to standard of care with the 2 milligram dose of sozinibercept. The 0.5 milligram, the low dose was not statistically different to standard of care. It was a dose-ranging trial. So we found the dose and we are now pursuing with the 2-milligram only in the pivotal program. More interestingly, in this harder-to-treat patient population, occult and minimally classic lesions, which are around 3/4 of the patient population in wet AMD. You could see here, we had a larger benefit of the combination of a standard of care of 5.7 letters, which is beyond 50% improvement of efficacy compared to standard of care at week 24. This will be the first population we test statistically in our pivotal program. But on all-comers, when you exclude these RAP lesions, which did not benefit from the combination in the Phase IIb and that all-comer population is around 90% of the patient population. In wet AMD, you see a 4.4 letter benefit of the combination treatment versus standard of care. That will be the second population we statistically test in the pivotal program. So we have very strong data to justify moving into Phase III. Here in that harder-to-treat patient population, every bar on the graph represents one patient. On the top, you have the population in the combination arm with sozinibercept 2 milligram. At the bottom, you have the standard of care alone. And as you can see, every color is a bucket of line of vision gain in green, blue and beyond or vision loss in yellow, orange and red. And you can see the entire patient population was moved to vision gain. We had a lot less patients experiencing vision loss, which is staggering is in the control arm you could see that despite getting standard of care every 4 weeks, still 13% of patients in our trial lost up to over 3 lines of vision during the trial. So clearly, anti-VEGF-As do not work for everybody. But when you see the combination arm, you can see that basically you had very few vision loss. It was very limited in magnitude. We had a lot more patients having extreme level of vision gains. So clearly moving the entire population to the right. We had a 42% increase in the proportion of patients going back to driving level of vision in the combination arm versus monotherapy. So clearly, an impact on the quality of life of patients here. Looking at the anatomy, we had a trend of better improvement on every single anatomical parameter for the combination versus standard of care, whether it was a central subfield thickness, the presence of fluid in the retina, the lesion area or the CNV area, all got significantly improved versus standard of care. An extremely difficult type of lesion is called PCV. This is a lesion that is not rare in Caucasians. Around 15% to 20% of Caucasian patients have these hard-to-treat lesions. And you can see here in our trial, the standard of care arm only had a 6.9 letter improvement in this patient population as opposed to 10 letters for all comers. But the combination almost doubled the efficacy of the therapy, delivering an additional 6.7 letter of vision on this hard-to-treat patient population. Now this is a very important subgroup because in Asia, the majority of patients have these PCV lesions. So we have Asian patients in the Phase III. So we should be able to demonstrate again statistical superiority in that very hard-to-treat patient population. Not much to say on safety. The safety was very similar to anti-VEGF-A therapy, whether it's systemic or ocular safety. Even in zooming in inflammation, which is always something we look at in the eye, you can see here the rate of inflammation was consistent with other injections approved already in -- for IVT injections. So we have 2 -- these 2 large trials are currently ongoing. They are global trials, 33 countries, 400 clinical sites. And they are basically very similar to the Phase IIb enrollment criteria with the exception of the RAP lesions, which we excluded in the Phase III trial to maximize the probability of success. Otherwise, the trials are -- the patient population is similar. We enroll all comers. As you can see, we are using 2 different drugs as comparator in this trial. The first one, COAST, which reads in Q2 of this year, uses Eylea as a comparator. Shore uses Lucentis, both drugs used as per label in all cases. And here is the trial design. So we are using the comparators as they're label, as I said before. And then the patients are -- so everyone gets a standard of care. On top, you either get a sham or you get a sozinibercept 2-milligram injection every 4 weeks or a sozinibercept 2-milligram injection every 8 weeks after a loading phase of 3 loading doses at the beginning, like Eylea basically where we are doing the same thing. So we're going to get a sense of can we replicate the statistical superiority we have demonstrated in Phase IIb on efficacy and can we see some data on duration? Can we space out the injections to every 8 weeks as opposed to every 4 weeks? The primary endpoint is the same as in Phase IIb, mean change in best corrected visual acuity from baseline to week 52. The secondary endpoints are just the same. We have a mix of functional and anatomical endpoint in the secondaries. The top line data is at week 52. The patients stay on the same regimen for 3 years and we collect the second year data for safety purposes. But we can file with the 1-year data. We can get approved with the 1-year data and then we do a supplementary filing for the second year. We reported on Monday this week the baseline characteristics of these patients in Phase III and we -- the data is masked and pooled. And you can see that the patient population is extremely similar to the Phase IIb patients, increasing our confidence that we enrolled the right patients. They have the same type of visual acuity at baseline, the same lesion area at baseline. But we have a couple of big differences, which I will highlight a bit later. As you can see, RAP lesions are absent in Phase III because we excluded these patients from the baseline. They're also a little bit wetter. So they have a slightly higher disease activity with a higher level of central subfield thickness as well as more fluid intraretinally and subretinally, which will give us an opportunity to show the benefit of sozinibercept in these patients. The 2 patient populations that are really interesting for us were the ones on which we had the best impact in the Phase IIb, the greatest benefit in combination. The first one was the occult lesion patients. And you can see here in Phase IIb, we had 44% of the population had occult lesions. In Phase III, we have more than 10% more. Around 55%, 56% of patients have these lesions. And in Phase IIb, we reported a statistically significant 6.5 letter improvement in these patients. The other type was PCV, as I mentioned before, very important in the rest of the world, but also in Asia. And you can see here we had -- we go from 17% in Phase IIb to over 20%, around 25% in Phase III. So we're very, very happy to have enriched our patient population to potentially have a better mix of patients, allowing us to demonstrate, again, statistical superiority versus standard of care. We reported our cash position as of end of December. Our unaudited cash balance was around $130 million in December, which is enough for us to get to top line data. We also have an agreement with Carlyle and Abingworth, which provided us with $170 million to fund this development program. So just to recap the time lines. So we are expecting the top line data of COAST in the second quarter of this year, ShORe in the middle of the year. We would -- we plan to submit the BLA in the first half of 2026 with a potential BLA approval end of 2026 because of this Fast Track designation we have with the FDA. Finally, to conclude, before thanking you, we are going to hold a series of Investor Days. The first one will be in New York on the 28th of January. We invite you to come in-person or join our webcast. We're going to also hold a couple of these events in Australia the week after. So thank you very much for your time.

Thank you. We'll now open up to questions, if any, from the audience. There's a mic in the back. We have a gentleman in the middle.

Do you have any other products or things in the pipeline? Or is it just only this one that you have?

No, that's the only molecule we have. So pipeline will be DME indication and co-formulation.

Are there any -- is there any data with higher doses of Eylea? Or is it only the low dose?

Yes. So it's only on with the -- so we don't have wet AMD data with Eylea. This Phase III pivotal program will be the first set of data we have in wet AMD. And as you know, the high-dose Eylea does not provide more efficacy than the low-dose Eylea. So we conducted the trial with a low dose.

Okay. And any intentions then to go into other indications beyond just the wet AMD and DME, so say, diabetic retinopathy?

So we could because indeed these drugs work in RVO as well, for instance. RVO is a smaller indication and the cost return might not be there for a small biotech company to explore RVO as opposed to DME, which, as you know, is 50% to 60% of the size of wet AMD. So DME is clearly for us a better place to go next. But potentially it could work also in RVO.

Thank you so much for your presentation. In the U.S., how concentrated is the wet AMD market? And can you discuss a little bit about the accessibility within the payer dynamics, please?

So it's a very good question. So in the U.S., the market is extremely concentrated in retina clinics, which have developed massively over the last 20 years. We estimate around 500 clinics to make half of the market in volume. We have also now in the U.S. concentration with private equity firms buying retina clinics and 4 private equity groups basically own 25% of the market. So for a biotech company like ours, it's actually a very easy-to-access market opportunity. That's why we are preparing the commercial launch. It's a business-to-business model. It's a Medicare Part B model where the clinics buy the drugs and bill the insurance companies with a markup. So very elegant model for a biotech company. Payers around the world pay all for visual outcomes. They don't pay for intervals of injections. They only pay for visual outcomes. So our primary endpoint is exactly what they want to see. So we do not expect any issue in terms of coverage from payers.