Clearside Biomedical, Inc.

Greetings and welcome to the Clearside Biomedical first quarter 2024 financial results and corporate update conference call. As a reminder, this conference call is being recorded. I would now like to introduce your host, Remy Bernarda, Clearside Investor Relations. Please go ahead.

Good afternoon, everyone, and thank you for joining us on the call today. Before we begin, I would like to remind you that during today's call, we will be making certain forward-looking statements. Various remarks that we make during this call about the company's future expectations, plans, and prospects constitute forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the risk factors section of our annual report on Form 10-K for the year ended December 31st, 2023 that was filed March 12th, 2024 and our other SEC filings available on our website. In addition, any forward-looking statements represent our views as of today. and should not be relied upon as representing our views as of any subsequent date. While we may elect to update these forward-looking statements in the future, we specifically disclaim any obligation to do so even if our views change. On today's call, we have George Lozesky, our Chief Executive Officer, Dr. Victor Chong, our Chief Medical Officer, and Charlie Dannen, our Chief Financial Officer. After our formal remarks, we will open the call for questions. I would now like to turn the call over to George.

Thank you, Remy, and good afternoon, everyone. As we near the midpoint of 2024, I'm excited with the progress we have made to date, which has positioned ClearSight for an important year. Recently, we added two key positions to our team who are having an immediate and meaningful impact on our organization. In March, we welcomed Dr. Victor Chong as our Chief Medical Officer. Victor is a well-respected, board-certified retinal specialist with more than 25 years of experience advancing drug candidates through all stages of development, including the development of ranamizabab and aflibirzeb for wet AMD. Most recently, Victor served as Global Head of Retina at Johnson & Johnson, and prior to that, he was Global Head of Medicine in Retinal Health at Boehringer Ingelheim. Victor's extensive experience is extremely valuable as he spearheads our product development activities led by the upcoming Odyssey data analysis and the planning for our CLSAX Phase 3 program. Victor will be discussing these shortly. Last month, we also added seasoned biotech executive Tony Gibney to our board of directors. Tony has a deep understanding of the biotechnology business and combined with recent and relevant ophthalmology experience at IbericBio, where he was Chief Business and Strategy Officer. Tony has broad expertise in collaborations, finance, and M&A that will help guide our strategic and business development initiatives as we explore future value-creating opportunities at ClearSight. These personnel additions are important as we continue to build on our leadership position in supercoroidal delivery. Our SES microinjector technology has been used in thousands of injections in the clinic, and continues to demonstrate a strong safety record that includes no cases of endophthalmitis to date. As the pioneers in delivery to the supracoroidal space, we are proud of the breadth and depth of our pipeline that includes our internally developed assets as well as those from our collaborators in a broad range of retinal diseases. With that, I'd like to now introduce our new Chief Medical Officer, Victor Chong, who will provide his perspectives on joining ClearSide and our programs. Victor?

Thank you, George, and good afternoon, everyone. Let me begin by saying it is a pleasure to speak with all of you today as a member of the ClearSight team. I have been on board for almost two months now, and I'm extremely excited by the prospect of our drug device technology, as well as our border pipeline. I wanted to share some of the reasons I chose to join ClearSight from J&J. First, I believe the SuperCoroidal platform is an important but undervalued approach to treat retinal diseases. ClearSight is leading the way in the superchloroidal delivery by a very big margin, including having the only FDA-approved product for superchloroidal use. With my background as a physician-scientist combined with almost a decade in large pharma, I look forward to leading our team as we approach our Odyssey data readout and begin planning our Phase III program for CLS-AX. And finally, I can utilize my translational expertise in advancing new molecules into the clinic. I see many opportunities to see our company's device and formulation platform to potentially expand our pipeline into areas such as geographic atrophy. Today, I want to focus on CLS-AX and the differentiators for the drug and the Odyssey clinical trial. The current wet AMD market is driving more than $12 billion annually in sales. While the existing approved therapies are effective, including florescumab and high-dose afibazep, they are delivered intravitrally and only last up to four months in some patients. We believe CLS-AX may extend the time between doses for up to six months for most patients, which could meaningfully reduce the treatment burden for patients, caregivers, and payers. I found the ODYSSEY trial to be a compelling design that is differentiated from many of the other mixed-phase WebAMD studies. First, the trial was designed to allow retreatment with our own drug candidate if needed prior to six months, which is similar to the anti-VEGF currently on the market. In addition, the protocol mandates participants in the CLS-AX arm to be redosed at month six, if not previously retreated. Well, AMD is a chronic disease and retreatment is essential. This multi-dosing data will help inform our CLS-AX phase three development program. Second, The trial duration of 36 weeks allow us to follow patient beyond six months. This is close to the duration required for primary endpoint by the FDA for phase three trial in wet AMD. It allow us to translate our CLS88 phase two B results to phase three trial design more easily. And finally, Odyssey is treating patients with confirmed active disease, so we will have a data set on patients who definitely need retreatment. I'm pleased to report that Odyssey is progressing as planned, and we expect to have top-line results at the end of the third quarter of this year. Our target profile for CLS AX is to maintain virtual security without the need for retreatment for potentially up to six months. We expect that the final Phase 2B data will provide important insight to create a robust Phase 3 development program for CLS AX. I am looking forward to this journey at TSI and will now turn the call over to our CFO, Charlie Dickens, to provide a financial update.

Thank you, Victor, and good afternoon, everyone. Our financial results for the first quarter of 2024 were published earlier in our press release, and they are available on our website. Therefore, I will just provide a summary of our financial status on today's call. As of March 31, 2024, our cash and cash equivalents total approximately $35 million. We believe we have sufficient resources to fund our planned operations into the third quarter of 2025. This takes us through the anticipated data readout for the Odyssey trial this year and supports planning our CLSA Act Phase 3 program. We will be participating in the Citizens J&P Securities Life Sciences Conference next week, and we look forward to keeping you updated on our progress. I will now turn the call over to George for his closing remarks.

Thank you, Charlie. We expect 2024 will be a transformative year for ClearScience. We are committed to maintaining our leadership role in the superchoroidal space as we and our partners generate additional clinical data demonstrating the potential benefits of drug delivery with our SCS microinjector. We believe that the data readout from Odyssey later this year will demonstrate that CLSAx could be a valuable addition to the treatment regimen in the multibillion-dollar wet AMD market. Our efforts in developing superchoroidal drug delivery have the potential to change the treatment paradigm for serious retinal diseases and provide a lasting positive impact for patients, physicians, and our shareholders. I would now like to ask the operator to open the call up for questions.

At this time, we will conduct the question and answer session. If you have a question at this time, please press star, then the number one on your telephone keypad, and you will be placed in the queue in the order received. Once again, to ask a question, please press star, then the number one on your telephone keypad now. Your first question comes from John Wollobin with JMP Securities. Your line is open.

Hey, good afternoon, and thanks for taking the questions. Hi, John. Hey, George. I was hoping to just get a reminder on what constitutes active disease as the inclusion criteria for Odyssey and how that differs from other mid-stage wet A&B trials.

Okay, I think, Victor, I think that's a great question for you. So, why don't you take that one?

Yeah, John, how are you? On the protocol that we would require the patient that still have subretinal fluid or intraretinal fluid or the fluid in the endogram showing leakage. So, that is what we would define as still remain have active disease because some patient would have been treated and then they will already dry and might not be further treatment.

Okay. And can you talk a little bit about how you think about scale say X in comparison to the other TKIs in development? And then also what is the, you know, we talk a lot about durability, but how do you feel about the data package you'll provide and what is most important for investors to keep in mind as they're interpreting the readout in 3Q?

Yeah. When you think comparing different companies that there's two TKI in play, Exisnab is the one that we have sharing with Ocarina Therapeutics, and then iPod have another TKI. And in terms of that we believe that anti-vax jab is most important, and among the anti-vax jab, the IC50 is significantly lower in Exisnab. And in other words, that they are much more potent. In terms of – sorry, I missed the second question. Can you just quickly repeat that?

We talk about durability as a key thing to look at in these late-stage trials. Should we worry more about BCGA, burden of treatment? If you had to think about the endpoints you'll be giving us, what should we focus on?

Yeah, so I think that, you know, that's a very good question. But I think that at the moment, we are still waiting for our Phase 2 results. At the same time, that would help us to inform our Phase 3 design. But I think that, as I mentioned in my webcast discussion earlier already, that at least that we have data that have been treated. So every patient in Odyssey will be at least retreated once, even if they have been doing okay up until six months. So that retreatment data will get us to nine months and longer, and also our trial is also nine months. So again, that's closer to the FDA requirement for the timely endpoint. I would say visual acuity, end of the day, is the most important, and I think that would be something that we were focusing on, how we can measure the visual acuity that will meet the requirements of FDA, as well as other agencies around the world.

Okay, that's helpful. Thanks again for taking the questions.

Thank you, John. Once again, to ask a question at this time, please press star, then the number one button, on your telephone keypad. Your next question comes from Jayamum with Stifel. Your line is open.

Hi, thanks. This is Jayat. I'm calling in for Annabel. I have two questions for you. First question, realizing that you're still in Phase II trials with CLS-AX, have you given any further thought to the Phase III design in light of some of your competitors funding superiority trials to centers of care?

Well, let me say first that what we're doing now while we're waiting for our Phase 2b data to come in is we are undergoing internal planning for Phase 3, depending on how the data comes out. So, we're already looking at that. We're discussing Phase 3 trial designs with our consultants. And that's all under evaluation at this time. But Victor, do you want to add anything to that?

Yes, I think that, you know, as I mentioned earlier, that we are still working on it. And there is a number of options that we are considering. But at the end of the day, the key difference for us to somewhat is that we can retreatment based on our own drug. So, that could be a major difference in the study design that some other TKI company might not be able to do. So, again, surrounding that is something that we would see how that we can maximize our advantage at the same time providing future retinal specialist in the future to use our drug more easily.

Great. Thank you.

And just the 2nd question.

Yeah, I did. Thank you. The 2nd question was. In regards to the FDA, have they come any closer to. Establishing new clinical trial guidelines based on the shifting treatment paradigm mainly.

You mean have they come close to finalizing their draft guidance, their previous draft guidance that was like over a year ago for wet AMD trials? Is that what you're talking about? Victor, you might be more up to date on where you think the FDA is based on our recent conversations.

Yeah, I think that when the guideline – more than a year old, and it is still not finalized, and obviously that the community has some potential concern. But yes, that is not unusual for FDA to have a draft guideline for a long time as well. So it's hard to predict, but that suggests that some of the points on the guideline was inconsistent. with practice. So again, that is something that I think everyone is discussing in multiple different conferences in multiple different platforms. But again, exactly when that draft timeline becomes finalized or even moving to interim, it's still difficult to to be sure, and especially as you know that there is a recent agency change in FDA as well, whether there might be late things as well.

And obviously, as we go forward, before we announce any Phase 3 plans, we will have been engaged at least once, if not multiple times, with the agency to discuss Phase 3 trial design. We'll get the most up-to-date reading from the agency and our conversations with them as our planning continues.

Got it. Thank you. Thank you for your thoughtful answers.

Okay. I would now like to turn the call back to George Lazeski for any further remarks.

Well, I want to thank everybody for being on the call today. We look forward to keeping you apprised of our progress. And with that, I would say that the operator, you can end the call.

This concludes today's Clearside Biomedical first quarter 2024 financial results and corporate update call. Thank you for attending and have a wonderful rest of your day.