Ocular Therapeutix, Inc.

Good morning, and welcome to the Ocular Therapeutics Fourth Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the prepared remarks, we'll conduct a question-and-answer session. To ask a question, please press star 1. As a reminder, this conference call is being recorded and will be available for replay on the Investor Relations section of the Ocular Therapeutics website. I would now like to turn the call over to Ocular's Vice President of Investor Relations, Bill Slattery, Jr. Please go ahead, Mr. Slattery.

Good morning, everyone, and thank you for joining us today. Earlier this morning, we issued a press release and filed our annual report on Form 10-K, outlining our financial results and business updates for the fourth quarter and full year of 2024, along with several updates to our registrational program for Xpaxly and WET-AMD. Ocular's Executive Chairman, President, and CEO, Dr. Praveen Dougal, We'll summarize recent business highlights before we move to our question and answer session. Joining Dr. Dougal for the Q&A portion of the call will be Donald Notman, Chief Financial Officer and Chief Operating Officer, Sanjay Nayak, Chief Strategy Officer, and Steve Myers, Chief Commercial Officer. We refer everyone to this morning's press release and our Form 10-K for a comprehensive update of fourth quarter and full year 2024 financial and business results. During today's call, certain statements we will be making constitute forward-looking statements under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially as a result of a variety of factors including risks and uncertainties identified in the risk factors section of our annual report on Form 10-K and our other SEC filings. With that, I'd like to hand the call over to Dr. Praveen Dougal to review our recent updates. Praveen?

Thank you, Bill. And thank you to everyone for joining us today. 2024 was a transformational year for oculotherapeutics. We sharpened our focus and embraced a single bold mission to redefine the retina experience. Today, disrupting the treatment paradigm in wet AMD is our top priority, and we are executing with speed, precision, and confidence to bring Xpaxly to patients who need a more sustainable and effective treatment option. Despite established and effective treatments for wet AMD, the burden of frequent dosing leads up to a 40% of patients discontinuing treatment in the first year alone, effectively allowing themselves to go blind. Patients deserve better, and Paxly has the potential to become the standard of care by offering a long-lasting, flexible treatment option. And wet AMD is just the beginning. With compelling early clinical results in non-proliferative diabetic retinopathy and diabetic macular edema, we see a significant opportunity to expand into these and other highly prevalent retinal indications where millions of patients remain untreated. This morning, we announced several exciting updates that enhance and accelerate our registrational program for Rax-Paxley. positioning us incredibly well as we move toward clinical data and a potential NDA submission. Let's get right to it. First, we recently received FDA approval for an amendment to our special protocol agreement for SOL1 that incorporates redosing in all patients at week 52 and week 76. we believe this amendment unlocks the potential for exactly to secure an unprecedented six to 12 month dosing label in wet amd showcasing what we believe to be best in class durability the impact of this cannot be overstated the most recent approvals in this indication extend durability by about two weeks in most patients yet They have rapidly gained market share and generated significant revenues in a very short period of time. With Xpaxly, we're talking about a different orbit altogether, with the potential to extend durability by months. As part of this amendment, the 36-week primary endpoint for SOL1 remains unchanged, but we're required to maintain masking until week 52 to provide additional information on durability up to and to allow potential label permitting redosing at 12 months. As a result, we now expect to report top line data in the first quarter of 2026. While this slightly shifts the timeline for SOL1 top line data, we believe the long-term benefits of this strategy are tremendous and will be abundantly clear at the end of this call. Most importantly, This strategy should allow us to accelerate our timeline for a comprehensive regulatory submission for Xpaxly and wet AMD, as I will describe. Moreover, we expect the additional data for repeat dosing will provide valuable insights into Xpaxly's extended durability, potentially supporting even greater flexibility on the product label. SOLE 1, a trial that many thought would never be enrolled, completed randomization in December 2024, well ahead of expectations, with 344 subjects randomized across more than 100 clinical sites in the US and Argentina. Trial conduct is now our top priority. We are thrilled to report that subject retention has been exceptional to date. and the vast majority of rescue treatments, as we have reviewed on a mass basis, remain in line with the pre-specified criteria established in the SOL1 protocol. We have also optimized SOLAR, our non-inferiority study, to align with the changes in SOL1. Because redosing is now incorporated in SOL1, and retention in the trial is exceptional to date. We are reducing the size of SOLAR from 825 subjects to approximately 555 subjects randomized, while maintaining robust statistical power of 90% to evaluate a primary endpoint based on our expectations of how Xpaxly will perform. SOLAR was initially designed to include 825 subjects to meet the minimum FDA requirements to receive an unrestricted label for redosing. Now that subjects in SOL1 are also being redosed, we're afforded the flexibility to reduce the number of subjects in SOL-R. This reduction should accelerate the SOL-R timeline for reporting data, enhance capital efficiency, and maintain the scientific rigor needed for regulatory approval. Remember that SOLAR is a non-inferiority trial comparing exactly administered every 24 weeks against two milligram of Fliberset administered every eight weeks. The primary endpoint is the mean change in best corrected visual acuity or BCVA at week 56. And patients will be followed until week 104 for safety. Importantly, As per the protocol agreed to by the FDA, the non-inferiority margin for the expaxly arm at the lower bound is minus 4.5 letters of mean BCVA when compared to two milligram of Fliberset dose every eight weeks. This is also in line with the FDA's draft guidance. which we are adhering to by incorporating an 8-milligram of Fliberset masking comparator arm with the exact same dosing frequency as the Expaxly arm. Additionally, our pre-specified supplemental injection criteria are strategically designed to ensure trial integrity and preserve clinical relevance. These criteria are consistent with previous non-inferiority studies and include a combination of vision loss and OCT changes. By aligning these standard non-inferiority trial rescue protocols, we believe the SOLAR study remains well positioned to demonstrate Xpaxley's durability and effectiveness in a repeat dosing setting. SOLAR enrollment continues to be strong. We previously announced 311 subjects enrolled across various stages of loading and randomization as of January 10th, 2025. This momentum puts us in a great position to advance our registrational program efficiently and effectively. Here at OCTULAR, Our clinical trial design strategy using the loading phase to select patients for randomization and thereby potentially de-risking our patient populations has been a key differentiator. We designed SOL1 and SOLR to work together with each trial seeking to answer critical questions about X-PAX leads durability, repeatability, and flexibility. These studies were developed to be complementary and not redundant, ensuring that together they provide a robust clinical data set that could support both regulatory approval and commercial adoption. So one is focused on durability, evaluating whether a single dose of X-Pax3 can maintain vision for 36 weeks compared to a single two milligram of Fliberset injections. This study was designed to establish superiority and to set a new benchmark for long-term efficacy in wet AMD treatment. With the recent SPA amendment incorporating 52-week and 76-week redosing, SOL1 now also provides important insights into extended treatment intervals and long-term redosing potential. SOLAR, on the other hand, is designed to address more frequent repeat dosing and potential real-world applicability. By comparing expaxily every 24 weeks to two milligram of FliberSET every eight weeks, SOLAR evaluates how expaxily performs relative to a common but burdensome treatment regimen. The study is structured to provide critical evidence supporting the feasibility of an every-six-month treatment paradigm, one that we believe is aligned to preferences of retinal specialists and that could dramatically reduce the burden of care for patients and caregivers alike. Both studies were thoughtfully aligned with regulatory guidance. so one supported by SPA and so LAR validated by type C written response received from the FDA in August 2024, along with a subsequent written response received from the FDA in December 2024. Importantly, neither study utilizes sham for masking, adhering to the FDA's clear stance that sham can introduce bias expressed through the agency's written feedback and public comments. The FDA previously agreed that together, SOL-1 and SOL-R could constitute two adequate and well-controlled trials to support a potential NDA and label for Xpaxilin in wet AMD. Pending a successful outcome, we intend to submit our NDA after the SOLAR 56-week primary endpoint is reached. By integrating these complementary approaches, seeking to demonstrate both best-in-class durability in SOL1 and sustained repeat dosing in SOLAR, We believe we are enhancing the potential for successful trials that support a differentiated, commercially attractive label. The dual nature of these trials allow us to generate a comprehensive clinical data set that has the potential to support a strong regulatory submission and a compelling value proposition for patients, retina specialists, and payers. Beyond wet AMD, we see a tremendous opportunity for expaxly in non-proliferative diabetic retinopathy or NPDR and diabetic macular edema or DME. Diabetic retinopathy is the leading cause of blindness in the working age population in the U.S. Despite the availability of anti-VEGF therapies, fewer than 1% of the 6.3 million NPDR patients in the U.S. receive treatment today. largely due to the burden of frequent injections. Expaxly has the potential to transform this landscape. Our proof-of-concept Helios trial demonstrated compelling results for Expaxly in both NPDR and DME. In this trial, we showed that a single Expaxly injection may prevent vision-threatening complications for up to 12 months. Additionally, all patients in the Expaxly arm that had DME saw improvement at week 48. So what does this mean? That means that I as a retina physician can say to a patient, your risk with diabetic retinopathy of developing vision threatening complication year upon year is 30 to 40%. However, if you come to see me just once or twice a year, much like you go to a dentist for teeth cleaning, I may be able to reduce that risk to almost zero. That is a powerful message. I'm happy to inform you today that we expect to receive FDA feedback on our clinical trial design for NPDR and DME in the first half of this year, paving the way for our next steps in these important indications. Following receipt of the FDA feedback, we look forward to sharing with you our clinical trial design for these underserved, vision-threatening indications. We continue to operate from a position of financial strength, with a cash balance of $392 million as of December 31, 2024. We remain laser-focused on execution of Sol1 and Solar. Our disciplined and prudent approach means that we are well financed and believe we have sufficient cash to fund our planned operating expenses, debt service obligations, and capital expenditures into 2028, fully funding our registrational trials in WET-AMD and leaving us well positioned to execute on our broader strategic objectives. Our current cash projections do not factor in the impact of clinical trial activities in NPDR and DME, as the scope of that program is dependent on FDA feedback. That said, and to be very clear, we do not currently intend to raise additional capital this year. 2024 was a year of transformation for oculotherapeutics, and 2025 is shaping up to be even more impactful. What differentiates us is not just the speed and intensity, but also the precision and exceptionally high quality of our execution. In less than one year, we have built a world-class team, advanced a groundbreaking asset, and executed a Registrational Program that puts us in a position of strength as we move toward top-line data and a potential regulatory submission and approval. Today, we shared several updates designed to enhance and accelerate the XPACSLE Registrational Program, further de-risking our path to approval. To summarize, first, The FDA approved an amendment to the sole one spot to incorporate redosing at weeks 52 and 76, increasing potential label flexibility to every 6 to 12 months. Second, due to the requirement to maintain masking until redosing at 52 weeks, We now expect top line data for so one, including the 36 week primary endpoint, will be released in the first quarter of 2026. Third, so one retention has been outstanding to date and the vast majority of rescue treatments reviewed on a mass basis have been in accordance with the pre-specified criteria of the protocol. Fourth, As a result of our updated SOL1 strategy for redosing, SOLAR has been streamlined with a target randomization reduced from 825 to 555 subjects. This should accelerate the time to both SOLAR data and regulatory filings for XPACSLE and WET-AMD, all the while maintaining strong statistical powering of 90% based on our expectations of how ExPaxely will perform. Fifth, the non-inferiority margin for SOLAR is set at 4.5 letters. And standard rescue criteria have been pre-specified to align with regulatory guidance. Sixth, enrollment has been excellent across both trials. SOLE 1 completed randomization ahead of schedule in December, and we previously announced SOLAR enrollment of 311 subjects across various stages of loading and randomization as of January 10, 2025. Seventh, X-PAX Lease Opportunity extends beyond wet AMD, and we expect FDA feedback on the clinical trial design for NPDR and DME in the first half of this year. And eighth, Ocular Therapeutics is well financed and has cash runway into 2028. We do not intend to finance this year. We're maintaining strong capital efficiency as we advance toward key clinical readouts and a potential NDA submission in wet AMD. We are redefining the retina experience, setting a new standard in treatment durability, flexibility, and long-term outcomes. With strong execution, regulatory alignment, and clinical momentum, we're well-positioned to become a leading retina company.