Outlook Therapeutics, Inc. (OTLK) Earnings Call Transcript & Summary

Hello, and welcome to the Outlook Therapeutics NORSE TWO Top Line Results Conference Call and Webcast. [Operator Instructions] Note that this webcast is being recorded at the company's request and a replay will be made available on the company's website following the end of the event. At this time, I'd like to remind our listeners that remarks made during this webcast may state management's intentions, beliefs, expectations or future projections. These are forward-looking statements and involve risks and uncertainties. Forward-looking statements on this call are made pursuant to the safe harbor provisions of the federal securities laws and are based on Outlook Therapeutics' current expectations, and actual results could differ materially. As a result, you should not place undue reliance on any forward-looking statements. Some of the factors that could cause actual results to differ materially from these contemplated by such forward-looking statements are discussed in the periodic reports Outlook Therapeutics filed with the Securities and Exchange Commission. These documents are available in the Investors section of the company's website and on the Securities and Exchange Commission's website. We encourage you to review these documents carefully. Joining us on the call today from the Outlook Therapeutics' senior leadership team are Russell Trenary, President and Chief Executive Officer; Terry Dagnon, Chief Operating Officer; Lawrence Kenyon, Chief Financial Officer; and Jeff Evanson, Chief Commercial Officer. I would now like to turn the call over to Mr. Trenary, President and Chief Executive Officer of Outlook Therapeutics. Please proceed.

Good morning, everybody, and thanks so much for joining us. While this is an incredible day for us at LTK (sic) [OTLK]. Hopefully, you're looking at our agenda slide. Today, we'll be talking about the NORSE TWO study design and demographics, followed by the amazing top line efficacy and safety results. We'll touch a little bit about the wet AMD market overview. I'm sure many of you are already familiar with that. And then a few comments about our commercial strategy and next steps now that we have these data before us that you will see. Next slide, please. So the star of the show is right in the middle of this page, the NORSE TWO pivotal trial, which was our second registration trial, and Terry Dagnon will be going through the details of that. But the top line data that came out of that were data that we just could not have been more pleased with. As a reminder, you probably all remember or might know that in advance of this study, NORSE ONE was conducted. It was a clinical experience trial, had dozens of patients associated with that treated in Australia. That was our first registration trial, had really, really good results coming out of that. And in addition to that, NORSE THREE was an open-label safety study that has been completed in the past and did provide the kind of data that the company was looking for to support the BLA requirements. But today, the star of the show is NORSE TWO. Next slide, please. The NORSE TWO pivotal trial, which, again, was our second registration trial was a randomized mass-controlled trial, and it featured ONS-5010 in one of the arms, our bevacizumab-vikg versus LUCENTIS, ranibizumab. There were 228 patients that were enrolled. The trial was conducted entirely in the United States. And in the trial arms, these patients were essentially treatment naive. Over 95% of the patients had not received any kind of treatment previously. The safety and efficacy data that came out of this support our planned U.S. BLA submission. We're aiming for calendar 1, 2022. And now to give you some of the remarkable highlights from this, I'll turn to Terry Dagnon, Chief Operating Officer. Terry?

Thank you, Russ. So on Slide 7, our NORSE TWO innovative pivotal trial design, as Russ said, we randomized -- it was a randomized mass-controlled trial. We enrolled 228 subjects. It was ONS-5010 or bevacizumab-vikg administered monthly versus LUCENTIS, dosed via the peer dosing regimen, which is 3 initial monthly injections, followed by quarterly dosing, which many forget is also one of the approved alternate dosing regimens in the LUCENTIS labeling. The primary endpoint was a different in proportion of subjects gaining at least 15 letters of best corrected visual acuity at Day 330 or also known as Month 11. Next slide, please. Study disposition, we are very quite pleased with. We ran this study. Obviously, during the COVID epidemic, 378 subjects were screened. We randomized in the ONS-5010 where 113 randomized to LUCENTIS 115. We had 103 complete, the ONS-5010 arm and 96 complete the LUCENTIS treatment arm. The ITT population was 113; ONS-5010, 115; LUCENTIS, for protocol, 85 and 78, respectively. The safety population was, of course, the same as the ITT population. Next slide. On Slide 8, you can see our top line results. We believe that the results were unprecedented as seen in registration trials. 41% with ONS-5010 were 3 line gainers. We were very excited to see that. We saw -- in our intent-to-treat population, the priority endpoint subjects who gained at least 15 letters, 41%, ONS-5010; 23%, LUCENTIS with a highly significant p-value of p0052. This was also confirmed in the secondary per protocol data set with almost exactly the same numbers, 41% and 24%, respectively, with a p-value of 0.04. Our key secondary endpoint mean change in visual acuity through Month 11 from baseline change intend to treat 11.2 letters for ONS-5010, 5.8 letters for LUCENTIS, again, with a highly significant p-value of 0.0043. This was also confirmed in the secondary per-protocol data set, 11.1 letters in 7 letters with a p-value of 0.05. Next slide, please. The safety results that we saw reported in NORSE TWO are consistent with our previously reported safety results from NORSE ONE and NORSE THREE trials. There was only one subject in all 3 trials at this point. You had ocular inflammation which we've been tracking very closely because some of the other potential therapies coming to market have had a problem in that area. In NORSE TWO, we also only had 1 serious adverse event that was reported in the bevacizumab--vikg treatment arm, which was resolved and no sequela. There were no unanticipated safety signals that were detected. The most common ocular adverse event was conjunctival hemorrhage, which is associated with the injection procedure that is that thin layer on top of the eye and just hemorrhage blood vessels due to the needle penetration. So we're very excited about the safety database in the combination of the safety population from NORSE ONE, TWO and THREE supporting our trial and that we've seen it similar -- very similar to what's been previously published for bevacizumab in trials such as the CATT trial and other trials. So we're very excited about our NORSE TWO safety results and moving forward with filing. Russ, that's all I have. Turning back over to you.

Thank you, Terry. So hopefully, the slide that's in front of you now is the summary of the NORSE TWO results. And again, we just could not be more pleased with what came out of that. It demonstrated statistical significance across the primary and key secondary end points. And in this trial, ONS-5010 was demonstrated to be safe and well tolerated. This is the final step we needed in order to prepare to have what we need to prepare and move forward with our U.S. FDA BLA preparation, which, again, is targeted for calendar Q1 2022. This next slide -- you all have seen these market size slides before, but [ ]again on the edge of you're seeing for these next 2 because it really does begin to really spell out the opportunity that's in front of us. We're sitting on top of a $13 billion marketplace currently. And as you can see from the slide, the vast majority of this marketplace is: A, in the United States, it's $9 billion of it; and B, it's wet AMD, which is the condition that we were studying in this trial. That marketplace is estimated to be growing at a compounded annual growth rate of over 4%, which means, by 2030, this will be approximately a $20 billion space with again -- most of -- a huge chunk of it in the United States, and most of it, the vast majority still being wet AMD. Next slide, please. So take a look at this. 50% of the treatments that occur in the United States are with a product that's not approved by the FDA for ophthalmology use for the treatment of wet AMD. That's the space that we're stepping into. And so what does it mean for a doctor when we come out with a -- and payers and patients when we come out with an FDA approval for something that charges into this space. For me, a couple of things. And I'd ask you to consider why is it 50% now? Is that the top end? Can that number go up? Can that share for this bevacizumab molecule go up? Well, think about this. If you survey doctors and you ask them, why do you not write for off-label Avastin? A lot of them will say, "Look, I want to take the best care of my patients that I possibly can, and I rely on FDA-approved products to do that." And why do they rely upon this? Part of it is because there are vast requirements associated with, first of all, getting an FDA approval and secondly, keeping it. And there are vast requirements and specifications associated with getting products out of a GMP-approved facility. When you have products that come out of such a factory, what you are assuring the doctor, the payer and the patient is that you're living with to the standards that will ensure that the identity, the strength, the quality and the purity of that product, which has been studied and manufactured for this condition, which is FDA approved that those requirements have been met. So it's a big deal to bring an FDA-approved product to this space. In addition to that, we all know that there are some malpractice insurance entities that are happy to or willing to cover the first eye of a patient who receives an off-label product, but not necessarily the second eye. So again, that's a market expanding -- a market segment expanding opportunity for us because we are going to have an FDA-approved product for this space. Next slide, please. As we look at the commercial planning activities that are underway, there's been a lot of work done with physicians, patient outreach will -- a lot of work will be done there. There's been work, but there will be an expanded effort aligning with key opinion leaders. And the company has done some really excellent work reaching out to the payer community to understand what their needs are. We believe that our bevacizumab-vikg, when FDA approved, with a cost-effective profile will be widely -- potentially widely adopted by payers and clinicians worldwide as a potential first-line drug of choice, especially for payer mandated step edit in the United States. Again, one of the things that holds this notion back is the fact that there has not been a cost-effective FDA opportunity in this segment, in this space. So by winning on this big idea of getting an FDA approval here, we believe that that's going to have market-moving capability. Next slide, please. And we're not going it alone. We have partners on the manufacturing side and on the product development side that the company has been dealing with and working with and we'll continue to do so. FUJIFILM Diosynth and Aji Biopharma are both excellent partners that the company has been working with out of manufacturing standpoint, and we'll continue to do so. And in addition to that, the company has a product line research and development depth associated with new delivery systems. This is a device that ends up being put in the hands of retinal surgeons and yet for the segment that we're stepping into the syringes and needles were not specifically designed and tested and FDA approved for use and treatment of wet macular degeneration in the retinal space. We will step in with a product ultimately that does include a prefilled syringe with materials, needles, et cetera, that are all specified and designed specifically for these treatments. So again, it's not just the FDA approval, but we are also bringing high-quality partners and a product development effort that we believe will enhance the quality of care and has the potential to enhance the quality of care in this space. Next slide, please. So the next steps for us, simply, again, to get this U.S. FDA BLA submission into FDA in the first quarter, at least, in the first quarter of 2022 and then to continue to accelerate the pre-commercial planning and activities and now toward execution in the United States, especially for manufacturing, distribution, sales force planning, a continuation of the great work that's been done by Jeff Evanson and working with the physician and payer advisory boards and now a real live ability to have some meaningful conversations with key opinion leaders. Before, the company had a good story. It had some big dreams. Now we have data. We have facts. And these facts will lend themselves, I think, to some very fruitful conversations with key opinion leaders in this space. Next slide, please. So people -- I got a lot of friends who asked me, why outlook? We didn't see this coming for you. And when I look back in the first 40 years that I have spent in the ophthalmic space, the most fruitful moments and the most rewarding moments have been opportunities that I've had to participate in being able to change or enhance the standard of care. We have that opportunity to do this with this product, this indication in this retinal space. So I could not be more happy to be here. We've got a wonderful team that's engaged in some excellent planning. We've got some great execution opportunities in front of us now and really looking forward to moving this forward and creating great opportunities for patients, doctors and payers alike as well as our shareholders. And with that, we'll open it up to questions.

[Operator Instructions] Our first question comes from Douglas Tsao with H.C. Wainright.

Congratulations on the data. Just to help clarify, if you could provide some background on the sort of differences between the ITT and the per protocol group. Also, Russ, you mentioned the prefilled syringe. Just curious what you need to accomplish to get that to market? And how quickly just the bio presentation will come to market? Do you expect it to be commercializing the prefilled syringe?

Yes. Great. Thank you, Doug. I'm going to pass the first question to Dr. Dagnon to talk through the differences between our ITT and our per protocol group. And then, Jeff, we'll hand it over to you on the work that's been going on in the prefilled. I know you're proud of the work that's been accomplished and that -- which is to come. Terry, you...

Yes, this is Terry. So Doug, the difference in the ITT and per protocol populations, the number of patients that were in the ITT population where people that were consented, enrolled and got at least 1 dose. The per protocol were patients that obviously had completed the study and completed it as absolutely as per protocol. The ITT for superiority study designs is always the primary data set for registration. So that's why in the slides, we called the ITT, the primary and secondary. The good news is we saw -- there's always a difference in a number of subjects between those databases, but we saw remarkably similar results in both the IT and per protocol and all for both the primary and the secondary were significant. And in the case of the ITT data set in both cases, highly significant.

And then, Jeff, I know that any time there's -- there are products under development, there are always -- there are time lines to goals and time lines to a reality. I think there's been tremendous work that's been done in this area. So if you could address that next question, please.

Yes. Thank you, Russ. And Doug, thanks for the question. So we are very excited, as we have shared previously about our prefilled syringe and the development plans there. Our plans are to, of course, get to market as soon as possible with the work that we're doing. But at this point, we've talked about this being a follow-on post-approval supplement. And that -- those time lines we are finalizing in the coming months about when exactly that will occur, but it would be very near term from a vial presentation. But I think on that point, what we feel is critical is to first get the FDA-approved bevicizib, our product, ONS-5010 on the market, whether it's a vial or a prefilled syringe. We are, though, very excited about the work of this type of both in polymer syringe and the advantages it brings not only against compounding options, which are non-ophthalmic syringes, as Russ referred to earlier of insulin and tuberculin syringes who have still had a tremendous number of issues in the market, but even against in-line approved FDA options of glass syringes. We're in non-glass syringe, and so we're working hard. The team is fully integrated and under -- a lot of that under Terry's leadership, and just couldn't be more excited about that. But it will be as soon as we can get there, Doug, it's really the answer. And I think we'll be sharing dates as we get through probably later this year about the timing more specifically.

[Operator Instructions] Our next question comes from Kumar Raja with Brookline Capital Markets.

Congratulations on the positive data. First, with regard to baseline visual activity -- acuity, what can you tell us with regard to the both arms? And then with regard to plans for filing in Europe, what needs to be done there before you can file and what kind of interactions have you had with the European authorities? And maybe you can talk a little bit about plans in RVO and DME?

Thanks. That sounds like 3 pitches right at you, Terry.

Yes, absolutely. So good questions. The first one on best corrected visual acuity. Obviously, that was a key secondary end point. And the intent to treat, we saw the 11.2 and 5.8 letter difference, highly significant. And the secondary per protocol data set, again, with a p-value of 0.05. The -- obviously, on clintrials.gov, we've posted the inclusion/exclusion criteria. So baseline visual acuity was between 2050 and 2320. In regards to the second question, we've -- our rapporteur and co-rapporteur have been assigned in the European Union. We're working with the small business office and directly with the CHMP project manager. We're in the process of scheduling a pre-submission meeting at this time. We're super excited to be able to go into that meeting with these results and the other things that we've done and coordinate the actual submission date and what's going to be in the filing for the MAA in Europe. Hopefully, that answers your 3 questions.

Yes, I had a question on plans for DME and RVO, like how are you guys planning there?

Yes. So that's on track. As we previously stated that we have FDA-approved spas for what we call NORSE FOUR, FIVE and SIX. We only need to do -- assuming wet AMD is already approved, we only need to do 1 study -- 1 further study in BRVO and 2 studies in DME, that's NORSE FOUR, FIVE and SIX. And we plan on starting enrolling patients at the end of first quarter next year for those, and that's what we've said. Nothing has changed on that. That's what we've said previously publicly.

Our next question comes from Doug Tsao with H.C. Wainright.

Sorry, I put myself on you. Just given the strength of the results, does this change how you're thinking about the opportunity in terms from a business development standpoint?

So Doug, I think the company has always been optimistic that the results would be good. I think the p-values that have been -- that came out of this study give us tremendous confidence that in going through regulatory bodies, any potential for hesitation from them due to the data should or could have been erased now. As it pertains to business development opportunities, I guess, if there were people that were on the outside looking in at what the company was attempting to do, maybe they would have thought it would be successful, maybe not. But I got to think that this is going to wake up a lot of people. It really doesn't change how we think about things, though. We've always planned on -- well, at least since I've been here, and it's almost been a month, we've always planned on going direct in the United States. I've been involved in 4 very large launches during my career, some of them with sales in excess of $50 million in the first year of sales. And I think the -- obviously, no hesitation. We're full speed ahead. All hands on deck to be in a position to go and execute in the United States, if, as we engage in partnering activities and that engagement has been going on for a little bit of time. But I guess if anybody was wondering, can the company -- and this bevacizumab-vikg pull off compelling results, they need not wonder any longer. So we don't think about it any differently, but maybe others are -- might be a little bit more encouraged to want to be able to do something with us if we're willing to do so.

Thank you. There are no further questions at this time. I'll turn it back to Russell Trenary for closing remarks.

Well, again, thank you, everybody. This is -- again, it's a great day to be at OTLK, and the data where the stars of the show today. We believe that our desire to be able to be a potential player in enhancing the standard of care is now even clearer. We now have facts instead of just a story, and we look forward to meeting you all down the road as we execute on our plan. Thank you all for coming.

Thank you. This concludes today's conference. All parties may disconnect. Have a great day.