Ocular Therapeutix, Inc.

Good day and thank you for standing by. Welcome to the Ocular Therapeutics first quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Donald Dottman, Chief Financial Officer. Please go ahead.

Thank you, Julia. Good afternoon, everyone, and thank you for joining us on our first quarter of 2023 Financial Results and Business Update conference call. This afternoon after the close, we issued a press release providing an update on the company's product development programs and details of the company's financial results for the first quarter ended March 31, 2023. The press release can be accessed on the investor's portion of our website at investors.ocutx.com. Leading the call today will be Anthony Malasich, our President and Chief Executive Officer, who will provide an update on our pipeline developments and the commercial progress of Dextenza. Also speaking on the call today will be Dr. Rabia Austin, our chief medical officer, and Steve Myers, our senior vice president commercial. Following their remarks, I will provide an overview of the financial highlights for the quarter before turning the call back over to Anthony for a summary and questions. For Q&A, we'll be joined by Chris White, our chief business officer, and Dr. Peter Kaiser, our chief medical advisor retina. As a reminder on today's call, certain statements we will be making may be considered forward-looking for the purposes of the Private Securities Litigation Reform Act of 1995. In particular, any statements regarding our regulatory and product development plans, as well as our research activities, are forward-looking statements. These statements are subject to a variety of risks and uncertainties that may cause actual results to differ from those forecasted. including those risks described in our Form 10-Q filed this afternoon with the SEC and our most recent annual report on Form 10-K filed March 6, 2023. I will now turn the call over to Anthony.

Thanks, Donald, and welcome everyone to the Ocular Therapeutics first quarter 2023 update. We're very pleased with our progress in the quarter, both on the development of our pipeline and the commercial side of the business. Importantly, on the heels of an ARVO meeting last month that highlighted the emergence of TKIs as an exciting new potential option for the treatment of retinal diseases, we thought it would be a good idea to reintroduce OTX TKI to the many new investors who have recently become interested in the space. We started on our OTX TKI program because we believe there is a desperate need for novel MOAs that enable new treatment paradigms for VEGF-mediated retinal diseases, like wet AMD, diabetic macular edema, diabetic retinopathy, and retinal vein occlusion. Despite the emergence of antibody treatments that have the ability to quickly reduce fluid in the retina, the problem is far from solved, and the constraints of current treatment paradigms result in many patients with a wet AMD remaining untreated. For those who are lucky enough to get treatment, real-world studies have demonstrated that the initial vision gains from treatment are not maintained. As a result, VEGF-mediated retinal diseases remain a leading cause of blindness. So why is there such a need despite seemingly effective therapies? We believe it has to do with deficiencies inherent in those therapies, deficiencies that OTX TKI is designed to overcome. Fundamentally, VEGF-mediated retinal disease is caused by cellular dysfunction that results in chronic disease. Existing antibody treatments, like ILEA, Lucentis, and Vivizimo, are only effective in binding to proangiogenic ligands in the extracellular space. Additionally, existing treatment affects only specific ligands, mainly VEGFR2, while data demonstrates that the presence of all the isoforms of VEGF, as well as PDGF, play a role in the disease process through other types of receptors. Most important of all, current therapies are delivered as bolus injections into the eye. This results in a period where drug levels are briefly thousands of folds above the IC50 and then quickly fall below therapeutic levels, which may leave the retina unprotected and exposed to disease reactivation. Because of the rapid elimination of these antibody therapies from the eye, there is a need for frequent injections, Frequent injections lead to poor compliance. Poor compliance leads to loss of vision. To reduce the real-world vision loss caused by the burden of frequent injections, retina specialists have created a new paradigm of treatment called Treat and Extend. Treat and Extend is an involved process with the goal of establishing individualized dosing intervals for each patient. It is analogous to a game of chicken with a disease process where the retina is left unprotected without therapeutic levels of medication, and the provider tries to time reinjection as closely as possible to disease reactivation. Treatment extend is also an imperfect process given the natural variability of the disease in a patient and the need for perfectly timed visits to be maintained, which is difficult to achieve in the real world. However, it is the best that can be done with the current treatment, and it is a testament to the inventiveness and patient centricity of the retina community. We believe the world needs a treatment that works inside the cell, binding at the receptor level, one that covers all the isoforms of VEGF and PDGF, and most importantly, one that can be delivered at a steady state over a long period of time with minimal injections so patients and providers can move beyond the current treat and extend approach. With OTX TKI, we are developing a therapy designed to treat VEGF-mediated retinal disease like a chronic disease, like the chronic disease that it is, with a baseline maintenance therapy that stays above therapeutic levels to avoid disease reactivation. Most importantly, it is possible that vision gains may be maintained in the real world with the easier compliance regimens of a long-acting maintenance therapy. In this new treatment paradigm, which we like to call Treat to Maintain, the antibody therapies would be reserved to do what they do best, removed extracellular fluid quickly, and would be reserved in the occasional circumstances when fluid might break through the maintenance therapy, much like a rescue hailer in the treatment of asthma. OTX TKI is designed to have all of the properties above, Exitinib, the active ingredient in Otek TKI, is highly selective for the VEGFR2 receptor, which we believe to be the most important contributor to retinal disease, and covers all the different types of VEGF and PDGF receptors, with negligible affinity to any other receptor. As a TKI, its mechanism of action is working inside the cell. Most importantly, its potency and solubility profile lends itself to formulation with Aralutix technology, allowing for the development of formulations that can deliver continuous therapy for 9 to 12 months from a single injection. In designing OTX TKI, the challenge to our formulers was to develop a product that could deliver 9 to 12 months of a continuous dose of exitinib with a single implant. We additionally challenged the team to deliver the implant through a 25-gauge or narrower needle and required that a retreatment window be created where an effective dose of exitinib is still getting to the target tissues after full bioresorption of the initial implant. This would ensure that the vitreous would never have more than one implant at any one time and that the patient would have leeway in scheduling an appointment to be redosed. From the data we observe in our clinical, preclinical trials, and in vitro trials, the formulations for OTX TKI appear to be supportive of this target product profile. It is worth saying something about our Alutix technology. The hydrogel technology that underpins Alutix has been used in the human body since 1992 and has demonstrated safety and effectiveness in over 5 million patients across 5 FDA-approved devices since that time. Our own approved product, Dextenza, has been used in nearly 300,000 eyes since launch with reported adverse events in less than 1 in 10,000 patients. The only factors that regulate the bioresorption of our elutrix polymers are temperature and pH of the aqueous environment. Since the human vitreous does not vary significantly in temperature and pH, and there's enough water in every retina to saturate our polymer matrix. We believe we can program the time to bioresorption so that the implant will be intact long enough to deliver the desired dose and duration of exitinib, and then be fully bioresorbed when it's time to redose. The added benefits of not creating an acidic microenvironment, easy elimination from the vitreous, leaving behind no harmful byproducts, and soft gel properties give us added comforts regarding the safety profile. This technology would potentially provide solutions not only for the durable therapies for wet AMD to decrease the injection burden, but also for other retinal indications which need frequent injections, like the new therapies treating geographic atrophy. However, no matter how ideal the formulation and active ingredient, OTXTKI needs to perform in the clinic, which it has. We put OTXTKI in a very challenging situation in its initial clinical trial in Australia by testing it as monotherapy in patients with uncontrolled disease in wet AMD. We saw in that trial that OTX TKI was able to eliminate fluid as monotherapy in some patients in a dose-dependent fashion, something that no other TKI development program has done. In a second trial, our current U.S.-based trial, we are evaluating OTX TKI to assess the durability benefits of continuous dosing in patients with controlled retinas, that is, retinas in a dry state. Interim data has shown that 73% of patients were maintained rescue-free for up to 10 months and the injection burden was reduced by 92%. These data were recently presented as an encore presentation by Dr. Andrew Moshfeghi at the 2023 ARVO meeting held in New Orleans. We augmented the results from this ongoing clinical trial with pharmacokinetics data from two animal models showing the uptake of axitinib from our hydrogel implant in the choroid and RPE cells where axitinib acts intracellularly to exert its VEGF receptor inhibiting effect. The data showed that clinically representative formulations of OTX TKI delivered sustained excitinib concentrations through 12 months that were well above the IC50 for VEGFR2 in phyno-monkey retina tissue and in choroid retinal pigment epithelium tissues. This excellent preclinical pharmacokinetics data aligns with the pharmacodynamics data we have observed in our ongoing U.S. clinical trial, namely that the high proportion of rescue-free subjects up to at least 10 months and suggests continuous VEGF receptor inhibition, which in turn would support this new treatment paradigm, treat to maintain in wet AMD care. As a note, we expect to release our 12-month data for the US-based trial of OTX TKI for the treatment of wet AMD at the clinical trial at the summit conference on June 10th. We anticipate seeing a reactivation of disease in some patients, which we believe would indicate OTX TKI continues to function as designed with accitinib concentrations beginning to fall below therapeutic levels as we approach and exceed one year of treatment. We believe the next steps with OTX TKI will be to prepare to commence our first pivotal trial in wet AMD as early as third quarter of this year, and our first pivotal trial in diabetic retinopathy as early as the first quarter of 2024. Our confidence in entering pivotal programs is based on the clinical program to date that ticks nearly all the boxes one would require from a robust Phase II program. First and foremost, we have proof of concept as monotherapy in uncontrolled retinas in the Australia study and in controlled retinas with anti-VEGF antibody induction in the U.S. trial. We were able to demonstrate a dose response in Australia and have settled on an optimal dose per day. We have comparative data from a mass trial comparing OTX TKI to ilea given every eight weekly. We also have at least 60, we will have at least 60 patients dosed with OTX-DKI prior to the commencement of our first pivotal, some of whom have had follow-up for nearly four years. As we continue to evaluate funding alternatives, including collaborative partnerships and finalized trial protocols, we hope to be able to give concrete guidance on precise plans in the near future. I would like to now hand the call over to Rabia, who will explain our ongoing clinical trials. where we are with our planned pivotal clinical trials in wet AMD and diabetic retinopathy, and our next steps for our OTX TIC and dry eye programs. She will then hand over the call to Steve Myers, our Senior Vice President Commercial, who will recap our commercial business, which is currently experiencing exciting in-market growth. But I hope you don't mind me giving a bigger picture overview of our elite technology and our OTX TKI story. It is increasingly clear, especially since ARVO, that the longer-acting antibodies are not going to solve the problems of the current therapy, and the gene therapy approaches to VEGF-mediated diseases are unlikely to replace current standard of care in any near-term horizon. We believe TKIs are really the most promising new therapies that will allow patients and providers to evolve beyond the imperfect and onerous treat-and-extend into a new area of treat-and-maintain, enabled by pan-VEGF receptor inhibition intracellular therapies like OTX TKI. Rabia?