Executives
Karen Peterson – Investor Relations Specialist
Bob Butchofsky – President and Chief Executive Officer
Suzanne Cadden – Vice President, Regulatory and Clinical Affairs
Analysts
Scott Henry – Roth Capital
Steve Yoo – Leerink Swann
Jeffrey Cohen – Ladenburg Thalmann
Seth Hamot – RRH
Doug Miehm – RBC Capital
Pascal Besman – JMP Securities
QLT Inc. (QLTI) Latanoprost Punctal Plug Delivery System Conference Call August 29, 2011 8:30 AM ET
Operator
At this time, I’d like to turn the conference over to Karen Peterson, Investor Relations Specialist. Please go ahead.
Karen Peterson – Investor Relations Specialist
Good morning everyone and welcome to QLT’s conference call. Today’s call will review QLT’s Phase II study for glaucoma using the Latanoprost Punctal Plug Delivery System. If you have not yet received a copy of our press release, you can find it by visiting our website at www.qltinc.com. We’ve also posted to the website a PDF file of the PowerPoint presentation that will be used during today’s call.
Conference call is being webcast live and will be available on our website for the next 30 days. Presenting today is Bob Butchofsky, our President and CEO and Suzanne Cadden, Vice President, Regulatory and Clinical Affairs.
Before I turn the call over to Bob, let me review the Safe Harbor statement. On behalf of the speakers who follow, we caution investors that certain statements in this conference call are forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and constitute forward-looking information within the meaning of Canadian securities laws. The purposes of this caution we refer to such statements as forward-looking statements. Forward-looking statements are predictions only which involve known and unknown risks and uncertainties and undue reliance should not be placed on such statements.
Certain material factors or assumptions are applied in making forward-looking statements and actual results may differ materially from those expressed or implied in such statements. For additional information about the material factors or assumptions underlying such statements and about the material factors that may cause actual results to vary from those expressed or implied in such statements, please consult our press release sent out earlier this morning and available on our corporate website as well as our filings with the U.S. Securities Exchange Commission and the Canadian Securities Regulatory Authorities including the Risk Factors detailed in the most recently filed Annual Report on Form 10-K and quarterly reports on Form 10-Q. QLT undertakes no obligation to update such information to reflect later events or developments except as required by law.
And with that, I will turn the call over to Bob.
Bob Butchofsky – President and Chief Executive Officer
All right. Thanks Karen and good morning everyone. It’s really a pleasure to be able to present some positive data, especially from the study that clearly met the objectives that we were trying to achieve with that. So, I am going to walk through a slide deck that’s available on our website today.
Turning to slide two, you can see our forward-looking statements, but on slide three, you can see the top-line study highlights and essentially broadly the Latanoprost Punctal Plug Delivery System as the first minimally invasive drug delivery device that’s been shown effective a decrease in intraocular pressure at clinically significant levels for four weeks. And the two most relevant data points that I will highlight are the change from baseline or reduction from baseline and intraocular pressure and at two weeks that number was 6.2 millimeters of mercury and at four weeks the number was 5.7 millimeters of mercury.
And we call them, we started this study, the goal was to demonstrate a 5 millimeter or greater reduction in intraocular pressure and we have clearly achieved that goal. The mean percentage change in intraocular pressure from baseline at two and four weeks was 24.3% and 22.3% respectively and that’s very closely aligned with the 25% decrease that’s recommended by the American Academy of Ophthalmology’s preferred practice pattern. So, we are extremely excited with the overall results.
On slide four, let me give you a little bit of background on the Latanoprost Punctal Plug Delivery System and this trial in particular. This was a Phase II study looking at latanoprost delivered through our proprietary punctal plug. We did simultaneous placement of plugs in both the upper and lower puncta and as a reminder this is the first trial in which we have done that procedure.
Again, the development objective was to get a mean reduction and pressure of 5 millimeters or greater. The primary endpoint and this was modified in the April timeframe when we did the study design change was mean change from baseline at two weeks secondary endpoint, was mean change and pressure from baseline at four weeks. We also look at a number of other parameters.
In terms of review on slide five, for those of you who are not familiar with this, this is a combination drug device taking advantage of a device called the punctal plug in the top middle frame, that’s combined with the drug-eluting core in the upper left. And then when you marry the two in the top right, it’s a small device that’s designed to be placed in the tear duct of the eye or punctum of the eye using a insertion tool that we have developed and then it’s designed to stay there for up to 90 days and basically take the patient out of the drug administration game. These things are fairly simply inserted either by an ophthalmologist or optometrist in an office-based procedure.
On slide six, more details around the clinical study. We used both the upper and lower plugs in the combined drug load that we administered in the study it was 141 micrograms of latanoprost. Keep in mind in previous studies the highest drug load that we have been able to administer was 95 micrograms and again that was using only a lower plug placement.
In the study we continue to evolve the plug that we placed in the lower punctum, it's a proprietary plug. But the plug that was placed in the upper punctum it was essentially modified commercially available plug. Each subject in the trial was fitted with the total of four plugs so two in the upper and two in the lower. So, two plugs in each eye and then the objective of the double plugging was basically to enable us to deliver a daily drug load that is comparable to that administered by Xalatan eye drops.
On slide seven, the main study assessments are listed for you including tear production, tear comfort adverse events, best corrected visual acuity and some of the perimetry. But essentially the main focus of the study was to look at change from baseline and intraocular pressure IOP. The study design is listed for you on slide eight.
There was screening visit then including trial fitting with plugs, and then for patients that were on prostaglandins a washout period that extended four to six weeks and that was followed by a screening for intraocular pressure, make sure that patients had adequate intraocular pressures so it had to be within certain ranges and then once they were screened and included in the study punctum of plugs were inserted and they were followed for four weeks with intraocular pressure basically measured weekly.
On slide eight, really gives you the heart of the data. You see the change from baseline and intraocular pressure and week one we had a 6.77 decrease in pressure. The week two the primary endpoint was minus 6.2; and then out four weeks it was changed from baseline of minus 5.7. And you see the confidence intervals listed on the slide as well.
The mean baseline intraocular pressure was just under 26 millimeters of mercury, which is pretty much in line with other glaucoma studies and so no real surprises here. We were clearly within the drop that we had anticipated and hoped for meaning greater than 5 millimeters in all the time points where intraocular pressure was measured.
Turning to slide 10 now, this is an interesting graph looking at mean IOP change from baseline by category. So, the pink bars essentially looking at patients it had a 5 millimeter or greater decrease from baseline. So, week two that percentage was 73%, but also importantly we looked at patient that had a 6 millimeter or greater decrease in pressure from baseline, also the two week time point that was 51%.
At week four they greater equal to 5 was at 60% as well as the greater equal to 6 group was at 47%. So, we had really outstanding glaucoma control over the course of the study.
On slide 11, we try and highlight for you the difference that we have seen in the Glau 11 study compared to two of our previous trials, looking at different drug loads. You can see the change from baseline and these are the ranges that were available per each of the different drug loads. So, the 95 microgram drug load from the Glau 7 study had a change from baseline 3.5 to 4.2 in one of the formulations and then 3.9 to 4.7 in the other. You see a declining somewhat change for the 81 microgram between 3 and 3.4 and then the 44 microgram and 3.5 to 3.6.
When you compare that to the Glau 11 table you see a dramatic increase in the drop from baseline. We ranged from 5.7 to 6.8 in the current study, which is greater than 50% increase in the mean IOP change from baseline. So, when you start to compare the study do start to see a dose response as you get up potentially to the higher 95 microgram. The clearly to 141 we had a dramatic increase in efficacy from the current formulation.
Turning to slide 12, this slide again tries the highlight our data compared to other studies in which looked at this plug device system. So, this is IOP changes in percentage of subject. So, we are looking at two week at those patients that are greater equal to 5, g greater equal to 6 or greater equal to 7. You can see the greater equal to 5 in Glau 11 study we achieved 73% of patients achieving that at the week 2 time point. When you compare to the other trials that we have run, it looks like the mean is around 25%. Patients with greater or equal to 6 was 51% at two weeks and then basically 36% of patients had a greater or equal to 7 millimeter reduction in pressure at the week 2 time point.
In week 4, those same figures are 60% greater or equal to 5, about half patients greater or equal to 6, and still about a third of patients with the greater or equal to 7 reduction in pressure. And dramatic increases compared to where we were with our other clinical studies.
On slide 13, just want to highlight what this patient population look like and essentially it was consistent with the glaucoma patient population overall, mean age around 66. Slight preponderance of females over males, 63% of our patients were Caucasian, importantly 26% Black, 7% Hispanic. As many of you know, glaucoma is the second leading cause of blindness in the Caucasian population behind age-related macular degeneration, but glaucoma is the leading cause of blindness among the Black and Hispanic patient populations in the Western world and so this is a really important treatment aspect for them. Punctal size, something we haven’t really talked about previously, but the mean and the lower was about 0.7, the upper slightly lower than that, and then I have previously mentioned that baseline IOP just under 26 millimeters of mercury in the ranges given.
Slide 14 talks about the subject disposition. We originally enrolled 98 subjects in this trial. We had three subjects that discontinued before any scheduled efficacy follow-up, so we had 95 patients in the intent to treat at Day 0. We had 70 subjects at the week 2 time point and that was down to 53 subjects at week 4. We’ve planned to get at least 50 subjects in the intent to treat analysis for efficacy, so we were successful in doing that. We had a total of 42 subjects that were non-included in the intent to treat at week 4. The overwhelming majority of that was because of plug loss. We had 34 subjects with bilateral plug loss. We had five subjects discontinued due to adverse events and then three subjects discontinued for other reasons.
On slide 15, the overall punctual plug retention rates in the lower punctual plug, and again, this was a proprietary plug developed by QLT. It was retained in 95% of subjects at week 4. We want to highlight subjects here because previously when we’ve been talking about plug retention rates, we’ve always referred just to eyes. So the 95% of subjects refers to both eyes within the subject. In previous studies those rates have improved, continuously over the past few years. They’ve ranged from about 50% to 90% at four weeks in our other study. So we continue to make advances in terms of improving overall retention in our proprietary plug.
Now for the upper plug and I can remember this was a modified commercial plug. We expect it to get relatively poor retention and that is exactly what happened. The plugs were retained and only about 45% of subjects at the week 4 time point.
How was safety, turning to slide 16, the main safety issue that we dealt with was reports of tearing, which again was not a surprise as going into this study. The ratings were Occasional at 22%, Mild at 31% of patients and moderate at 32% of patients and that’s at the four week time point.
However the plugs were very comfortable. Most plug subjects either had no awareness of plugs, which was 51% or Mild awareness at 36% at four weeks. So, essentially 87% of patients had very good tolerability for the plugs himself. These subjects bring any discomfort related to the plugs at all. In terms of other types of adverse events there were no serious ocular adverse events and there were three non-ocular related significant adverse events.
On slide 17, what are the potential advantages over this type of delivery system, well, it’s minimal invasive then it provides convenience in that sustained delivery fashion. Essentially takes administration of glaucoma medications out of the patients hand and puts in the hand of the physician. We know that’s important because 50% of patients discontinued their eye drop meds within six months that’s for eye drops and greater than 90% of patients, or 90% of the drug that you administer from an eye drop is lost before making it past the tear film. So, we think that the punctal plug delivery system is a more effective and efficient way of potentially delivering these drugs long-term because of the poor compliance rates that are associated and particular with glaucoma. We also think there is a potential medical benefit where we might be able to deliver a more consistent amount of drug and help reduce or eliminate the peak or trough effects that are common among all patients, but in particular glaucoma patients were those peak pressure effects are associated with loss of vision.
In conclusion on slide 18, this is the first drug delivery device effective at decreasing intraocular pressure are clinically significant levels since the Ocusert device was developed years ago. Our mean change from baseline shows change of 5.7 millimeters of mercury at four weeks so, we clearly met our objective of greater than 5 millimeter decrease in pressure. This is minimally invasive system does not require any incisions or injections and can be easily incorporated into physician current practice patterns. The insertion of the device is relatively easy to learn and it’s important to highlight you had a number of inexperienced investigators in this trial we’re placing these devices for the first time and that was a good real role test to see how that went and then went exceptionally well.
The plug system was well-tolerated in the study with adverse events similar to commercial plugs and so the focus of our ongoing development is really going to be to continue to enhance retention in particular of the upper plugs and to look to enable longer duration of sustained release and second objective is to get an idea of whether or not the double plug approach is necessary or whether or not we can get buy with a single plug approach with a higher drug concentration.
So with that brief overview, I’ll open the call up for questions and again Suzanne is here to address any specific questions you have about the study protocol or design.
Question-and-Answer Session
Operator
Thank you, sir. (Operator Instructions) The first question today comes from Scott Henry of Roth Capital. Please go ahead.
Scott Henry – Roth Capital
Thank you and good morning. Just a couple of questions just to get my arms around this at first, I guess, the study started with 95 patients and ended with 53. What do you make of – that’s a pretty significant drop-out almost half the patients. And in the data that you cite the lowering in ocular pressure, is that only in patients that completed the study with plugs still in both the upper and lower punctum?
Bob Butchofsky
Yeah, that’s right Scott and Suzanne you want to add anything else?
Suzanne Cadden
I think it’s important to note that the numbers in a diagram are not dropout in the study so those are strictly on the efficacy intend to treat and recall as Bob mentioned we had a target statistically of having at least 50 patients at those time points. So what happen was the patients lost the plug and it was predominately almost exclusively the upper plug that was lost across the four-week period. If someone lost two upper plugs they were not included in the efficacy tend to treat analysis so the goal was to have at least one eye that maintain one lower and one upper plug and so again I would stress those are in dropouts and that one might typically seen in a diagram like this. That’s strictly efficacy intent to treat. But all subjects were included in the safety database so that again that just to get the efficacy read on the trial.
Scott Henry – Roth Capital
Now, Bob, has that always been the case with the clinical data that you only evaluated patients that completed with the plugs intact?
Bob Butchofsky
Yeah, that’s correct, Scott. So, it’s still an apples-to-apples comparison versus the data we’ve generated and just one other point on this, this is the first study we see after plug, we knew and expected to have about 50% failure rate so that is one reason why we incorporated the larger number of patients in terms of enrolling in baseline because we had no other expectations. So the study – or the number of patients who were discontinued from the intent to treat analysis is pretty much in line with our expectations.
Scott Henry – Roth Capital
Okay. Now if you had to do a pivotal trial, you probably wouldn’t get that luxury, would you, of getting to strip out patients where the plug didn’t work?
Bob Butchofsky
Well, I think before we enter a pivotal, Scott, we’ve got to fix the upper plug issue effects something is going to be required. So, keep in mind we haven’t really put any effort towards fixing this problem until we got through this trial. And so the sequence of the events was to see if we can generate the efficacy from double plugging. And if we did that which we were successful in doing then go back and trying resolve the upper plug issue.
And so I do believe that we are going to do another Phase II, I’ve been saying that with this if we’re successful. And the focus of the Phase II will be to answer a couple of questions to see whether or not we need to do upper plugging, whether or not we can get a higher drug load in the lower plug to be successful. And then also if we do need to ultimately do upper plugging we’ve got to improve the overall retention rate of the upper plug.
Scott Henry – Roth Capital
Now, I mean I was also led to believe that at least I was under the impression that if this data would lead to clarity going forward for the program. And to hear that you may or may not still need the upper plug is not very clear in my opinion. I'd kind of like to get your thoughts on that, Bob, because I think at this stage you'd want to know if you're going to need the upper plug or not. I mean hasn't there always been a limitation in how much drug you could load into the lower plug?
Bob Butchofsky
Yeah, and we’ve been working on ways to get more drug into the lower plug system. And so I think the study design of the next Phase II probably includes with and without upper plugging. And I think from a clarity standpoint Scott, I think that study will lead us into our Phase III design.
And I think it was certainly be an advantage from my perspective if we don’t need upper plugging if we can accomplish the same level of efficacy with the lower plug that we’ve already demonstrated has a 95% retention profile at one month. Then I think that reduces some of the risk I think in the profile going forward.
Scott Henry – Roth Capital
Okay. Yes, because it would seem to me that you're not really sure if it's a drug loading dose or it’s whether in fact you do need an upper plug to get to the efficacy. So, I mean it does seem like we're kind of going in circles here, but.
Bob Butchofsky
But I’d say that we have shown that we can get an efficacy response that is very much in line with eye drops. And that is a huge victory in my opinion as well as the opinion of the investigators that we spoken to at our ad board and the data safety monitoring committee over the weekend. So, there is tremendous excitement from the ophthalmology community around these results.
And having one more Phase II to put in front of us before we go into pivotal I think is exciting and puts us in a mode, where we hope to be in a Phase III study, you know, no later than the first part of 2013. So, it’s to me a very exciting result and I couldn’t be more please with the data we’ve generated.
Scott Henry – Roth Capital
Okay. So,, I guess based on that last comment, Phase III in 2013, you would complete another Phase II in 2012. And I guess leading into the question, would you consider partnering this program at some point along this process, would it be after the Phase, the next Phase II or how do you think about that or possibly monetizing international rights?
Bob Butchofsky
Yeah, we definitely our business model is to keep this molecule and commercialize it ourselves in North America, but we would actively look for partnerships for Europe and Asia. I think the appropriate time to do that is sometime in the 2012 window. So, probably before we get started on our Phase III program would be something that we’d look to accomplish next year.
Scott Henry – Roth Capital
Okay. And do you expect the Phase III program would be a four-week trial? What would the expected duration be?
Bob Butchofsky
No, I think it was probably more in the line of 12 months study with multiple insertions over time. The optimal product, we believe is a 90-day product and that’s what we’re striving for, so that would put us with the four cycles over the course of the year.
Scott Henry – Roth Capital
Okay.
Bob Butchofsky
Four treatment cycles.
Scott Henry – Roth Capital
And then just a final question, Bob, I notice efficacy did trail off slightly over time, still staying above that important 5 milligram reduction. Why do you think it is trailing off since my original take was that perhaps it was the upper plug falling out, but since we've excluded that data even in responders, if you want to call them responders, it did trail off. Any thoughts on that or is that typical?
Bob Butchofsky
Yeah, I mean from the confidence internals it’s difficult to really show that it’s trailing off. My own hypothesis on this and Suzanne can chime in if she feels differently, but to me it kind of looks very similar to our elution curves. And we have slight decline over time in the drug, that’s being alluded on a daily basis out of the plug. And I think that, that is to me looking more like a real dose response, which means the challenges going be to continue to try and push the drug load for this system to achieve our goal of a 90-day delivery device. So, I think it’s probably really just driven by the amount of drug load, which is somewhat comforting given the lack of dose response we have seen in some of the other studies prior to this one.
Scott Henry – Roth Capital Partners
Okay. Thank you for taking the questions, Bob.
Bob Butchofsky
You bet.
Operator
The next question comes from Steve Yoo of Leerink Swann. Please go ahead.
Steve Yoo – Leerink Swann
Thanks for taking the question and congratulations on the results.
Bob Butchofsky
Thanks Steve.
Steve Yoo – Leerink Swann
So, the question that I had was you mentioned that there was a slight trial design amendment in April, could you walk me through the – what the amendment was and the rationale for it?
Bob Butchofsky
Sure. Suzzane, you want to do that?
Suzanne Cadden
Sure. So, originally when the study began last fall, the original design had a two treatment arm study and the original goal of the study was, of course, always to look at the difference of four weeks of treatment of the L-PPDS versus baseline. We know a lot in the industry and historically about Xalatan, there is many studies published about that in terms of what the pressure lowering effect is. So, technically we started out with a Xalatan arm as well as an L-PPDS arm. But in reality, what that did was push out the length of time, the patients would be off medication, so that would be eight weeks.
For a patient to be off in IOP lowering medication for eight weeks is a considerable commitment. They get quite nervous as well as their physicians. And so what we were finding was that the original design had two treatment arms that required this eight-week period when a subject would be without drug. And that was becoming an issue for enrollment over time. So, again how that original design looked was we had two arms, patients came in, they were randomized to either receiving a placebo punctal plug with a daily placebo eye drop for four weeks, followed immediately by an L-PPDS treatment. So, these were not separate randomized cohorts that just flowed from one to the next.
The second arm was a sham plug procedure followed by sham plug and daily Xalatan eye drops. It was a very complicated ambitious study design, but as we went on what we found was that we really needed to focus on the key scientific question of the study, which again was does the L-PPDS lower IOP at least 5 millimeters of mercury from baseline. And that can be answered simply by comparison against baseline with the same rigorous statistical criteria in terms of the 95% confidence interval.
So, essentially, what we did when we are seeing that enrollment was being impacted patients for just concerned about being off study or off treatment actually for eight weeks. We eliminated some of these on complicating groups in terms of the placebo punctal plug as well as the sham plug procedure. We do have some of those patients within the study, but found that they had actually no treatment difference compared to people who just been on the L-PPDS. So, we essentially just simplify the design and again that was at the recommendation of many of our clinical advisors in April, and so we took that advice and enrollment just really improved considerably since then.
Steve Yoo – Leerink Swann
Can you tell me how many patients are under the original trial design and how many were in the revised?
Suzanne Cadden
It’s about 45 were under the L-PPDS arm and the remainder are under the previous amendment.
Steve Yoo – Leerink Swann
Okay. And it seems like there were quite a few patients that lost their upper plug, can you give us what the efficacy were in those patients?
Suzanne Cadden
Well, if they lost an upper punctal plug, essentially then they would be receiving a much lower dose of latanoprost. And so again the goal of the study, a really critical question was to see does higher dose latanoprost achieve an IOP lowering effect. So, we couldn’t actually take those patients into analysis.
I’d also like to stress that with regard to the upper plug in terms of the retention, it is the commercially, modified commercially available plug and certainly the feedback we’ve had from many of our advisors who use these upper and lower plugs for dry eye is this loss rate is consistent with what they see when the plugs are used for dry eyes. So, there is nothing unusual about the study. We went in knowing that there would be a plug loss. But again, in order to enable this higher dose question to be answered that was the approach.
Steve Yoo – Leerink Swann
Okay. And one last question is I remember previously you guys looked at allergic conjunctivitis, is that something that you are going to look at again? Now that it seems like the plug seems to be working better or are you thinking other indications next beyond glaucoma?
Bob Butchofsky
Yeah, we are still evaluating that Steve and we haven’t made the decision yet. We have got a number of other formulations that are going to testing now and I expect that we will be making that decision around year end. But the goal will be to get another program into clinical studies in 2012.
Steve Yoo – Leerink Swann
All right, thank you very much for taking my questions.
Bob Butchofsky
Thanks Steve.
Operator
The next question comes from Jeffrey Cohen of Ladenburg Thalmann. Please go ahead.
Jeffrey Cohen – Ladenburg Thalmann
Hi, thanks for taking my questions. Could you talk a little bit about IOP and if you looked at that out further weeks? Have there been other studies out there? What has Xalatan done as far as data showing pressure decreases past week four perhaps out through eight or 12?
Bob Butchofsky
Yeah, so I think their pivotal data goes to one year for advocacy. Suzanne, is that true? Or is it two years? So, six-month potential for them, but they have long-term efficacy data. Recall, Jeff, in our initial study the core study, we did 90 day follow-up in patients and we showed that we can deliver drug consistently over a 90 day period. We didn’t see the efficacy we would hope for, but we did show that we can deliver medication over 90-day period. So, we have already shown with this delivery system, we can go out to 90 days.
Jeffrey Cohen – Ladenburg Thalmann
Okay, got it. As far as the, I guess the 34 enrollees that lost both plugs, did you provide datas breakdown of both or one or pretty much a loss of one that got pulled out of the data set?
Bob Butchofsky
Essentially what we do for efficacy is we average the IOP for the patients' two eyes. So you could potentially still have a unilateral loss of plugs and still be included in the efficacy analysis only were just be one eye included in that data point. Is that makes sense Jeff?
Jeffrey Cohen – Ladenburg Thalmann
Yeah. Were there many of those or any of those?
Suzanne Cadden
It was essentially a mix, but predominately it was again as I mentioned the upper plug was essentially no loss of the lower plug.
Jeffrey Cohen – Ladenburg Thalmann
Got it, okay. And generally speaking, Bob, the loss on the uppers versus the lowers is a larger range of motion?
Bob Butchofsky
Yeah, I think when you mechanically blink your eyes, the upper lid is doing most of the movement and because of that also just because gravity is working against you in that case. They have a higher preponderance for falling out. Now I don't think this is a huge challenge to overcome. Recall, when we first started this program, our initial compliance rate or retention rate in our proprietary plug was around 50% and over the course of last couple of years, we have driven that up into the 90s. So, I do believe this is an engineering challenge that is something that we have got a lot of experience and successfully addressing and something I think we can address going forward.
Jeffrey Cohen – Ladenburg Thalmann
Okay, but the 90% reference was your proprietary design for the lower punctum?
Bob Butchofsky
That’s correct.
Jeffrey Cohen – Ladenburg Thalmann
Okay, so will you be developing a design for the upper punctum?
Bob Butchofsky
Yes, that is already started and we have already started placing few of those plugs in patients.
Jeffrey Cohen – Ladenburg Thalmann
Okay, got it. And you had made some comment about a Phase III perhaps starting in 2013 if you're probably working on a design for a Phase II and what might the time line look like over the next 12 months?
Bob Butchofsky
I think by the time we get our next earnings call, we should have a pretty good idea what that looks like and so I would like to hold off until then Jeff and just talk about it at their next earnings call, which should be after the end of the quarter.
Jeffrey Cohen – Ladenburg Thalmann
Okay. Could you remind me what the enrollment period was for this trial, approximately?
Bob Butchofsky
Well, we started in the end of year timeframe last year and then we did the amendment in the April timeframe and following that amendment we basically enrolled about half the subjects in the April to end of June or early July timeframe. So, once we made the amendment it went very quickly and as Suzanne mentioned it was really due to the prolonged duration of placebo exposure that patients had and I think that was really concerning the both physicians and patients.
Jeffrey Cohen – Ladenburg Thalmann
Okay, perfect. Thank you for answering my questions.
Bob Butchofsky
You bet.
Operator
The next question comes from Seth Hamot of RRH. Please go ahead.
Seth Hamot – RRH
Hi, guys, how are you?
Bob Butchofsky
Good, Seth. How are you?
Seth Hamot – RRH
Super. So, I was just on slide 14 here.
Bob Butchofsky
Okay.
Seth Hamot – RRH
When you give efficacy at two weeks is using that over 70 or the final 53?
Bob Butchofsky
That’s 70.
Seth Hamot – RRH
Okay fine. So, and then just as stated, just to make sure I understand it, between the two weeks and the four weeks theoretically in general 17 top plugs fell out or?
Suzanne Cadden
That’s right.
Bob Butchofsky
That’s right.
Seth Hamot – RRH
Okay. So, if we go to – at the moment wouldn’t the Phase III given the dropout rate, wouldn’t the Phase III initiation number be tremendous given that you are going to three or four cycles over the course of a year and you have to start with to get like 53 at the end of that, which is a much less number than you want, you have to start with some humongous number?
Bob Butchofsky
Well, we are not going to be starting it with the plug that’s got only 50% retention.
Seth Hamot – RRH
Okay, so…
Bob Butchofsky
That’s the first point.
Seth Hamot – RRH
So, right. And so the Phase II that you are doing is going to require what kind of commitment monetarily to building upper plug that is retained?
Bob Butchofsky
Well, we have given you R&D guidance for the remainder of this year.
Seth Hamot – RRH
Does that change at all?
Bob Butchofsky
Does that what?
Seth Hamot - RRH
Does it change at all with today’s news?
Bob Butchofsky
Well, we just gave it in the press release today. So, we said the total R&D spend for this year is going to be 44 to 46.
Seth Hamot – RRH
And that’s up from what number?
Bob Butchofsky
We did 21 in the first half. So, we have got about a $2 million increase in the run rate in the second half for the lower end of our guidance.
Seth Hamot – RRH
Okay. And I didn’t see the press release today fully, so what about next year? What about the guidance for next year, was there anything in there?
Bob Butchofsky
We haven’t given guidance yet Seth. We’ll be working through the plan. We’ll be sharing that with the board in the budget. And then we will plan on giving R&D guidance either late this year or early next year.
Seth Hamot – RRH
All right, thanks a lot.
Bob Butchofsky
You bet.
Operator
The next question comes from Doug Miehm of RBC Capital. Please go ahead.
Doug Miehm – RBC Capital
Yeah, thanks. Bob, with respect to pressure that you observed, was there a correlation between the level of baseline and the amount of reduction you were able to see in the 53?
Bob Butchofsky
The baseline numbers were pretty similar. The range was given in the presentation that is about 8 or 9 millimeter range with the mean being around 26. And when we look at trying to piece that out there really doesn’t look to be any correlations. So, there is a pretty consistent response across all those IOP ranges from baseline.
Doug Miehm – RBC Capital
Okay. And then just so I am perfectly clear here, for each subject you had four upper punctal plugs. If only one fell out that eye was excluded?
Bob Butchofsky
Yes, just to be clear, it’s four plugs, two upper and two lower.
Doug Miehm – RBC Capital
Yeah, understand. But if one of the upper fell out that eye was excluded, but not the patient?
Bob Butchofsky
That’s correct, that’s correct.
Doug Miehm – RBC Capital
Okay. And then as we go ahead then and we think about this Phase II trial, it could be extremely complicated. Are you going to be using a slightly changed form of the lower punctal plug for the upper punctual or does that have to be significantly different given the physics of the upper punctal versus lower?
Bob Butchofsky
Tough question to answer. I think in general there is a couple of comment I can make. The upper punctum is generally smaller than the lower. And that’s the reason why we ended up with the lower drug load coming out of the upper punctum, because the diameter and that really correlates well with the amount of drug that we can deliver in our drug eluting core. It is just smaller in the upper lid than it is in the lower lid. So, we always think we can probably get higher drug loads coming out of the lower punctum, but what the study does not answer is whether or not that upper lid and the blink response whether that helps spread the drug over the eye and whether that is what’s leading to the increased efficacy or whether it’s just a function of the increase in drug load.
My own perspective is that the slight decrease you see in pressures is to me looks like a very direct correlation with the declining drug load over time that happens with our elution rate. So, I think it’s probably more related to just the absolute drug load than it is to upper plug, but I can’t eliminate that. And that’s what I think one of the focuses of the next trial will be.
Douglas Miehm – RBC Capital
Okay, well I think this question was sort of asked earlier, But I think it's important. And that is, in those patients where you had one plug drop out of the upper but they were able to keep one, did you measure the pressure in those eyes when they were withdrawn?
Bob Butchofsky
Well, we didn’t call it out. But I think it’s inline with the overall efficacy data because, I just don’t know what else to say about it.
Suzanne Cadden
So, one of the challenge is to if the plug is lost you don’t know when it’s lost, so it’s very difficult to do a direct correlation on what was the IOP at the time of loss, but again this is something that we can look out in future studies, but essentially if you lost the plug you are out of the efficacy, ITT. And again, when you look at the pace of the study, the fact that we did the ITT is the critical decision point and not valuable. It means that we had a higher bar, because these valuable patients of course not all inclusion criteria. ITT reflects more than the real world that you’d get in the Phase III study. So we used actually a Phase III type of statistical criteria.
Douglas Miehm – RBC Capital
I guess at the end of the day, then is one Phase II going to be enough next year to give you the information you need to run the Phase III in '13? Or do you think you're going to have to run more than one Phase II?
Bob Butchofsky
Well, so we’re doing a non-drug study now. It’s up in running, putting a new proprietary upper plug into the eye. So that is running now. What I am referring about in the Phase II would be a drug study that would essentially be looking at efficacy with and without upper plug placement.
Douglas Miehm – RBC Capital
Okay. So you are not going to run that until you have the retention rate you want though?
Bob Butchofsky
No, that’s certainly an option, but the retention rate is going to be ongoing over the course of the next 6 to 12 months, so, but that work has already started.
Douglas Miehm – RBC Capital
Okay. Okay, great. Thanks.
Bob Butchofsky
Thanks Doug.
Operator
(Operator Instructions) Our next question comes from Pascal Besman of JMP. Please go ahead.
Pascal Besman – JMP Securities
Hi, morning, thanks for the question. Just a quick one. Is there a way for the patient to know if the plug has dropped out?
Bob Butchofsky
Yeah, it’s tough Pascal. These are 66-year-old patients and so they don’t always know if it’s falling out. In the current study there were seen weekly, so they never went longer than a week. And to address this risk long-term, in the real world we’re developing or have developed a prototype device, it’s a plug detection system, and that’s something that we’re continuing to work out and that we’re starting to use in patients. So it’s very difficult for the elderly patient population to know if the plug has fallen out. So we think the detection system is something that will help reduce that risk over time, once we are successful bringing this to market.
Pascal Besman – JMP Securities
All right, thanks.
Bob Butchofsky
Thank you.
Operator
There are no further questions. At this time, I’ll turn the conference back to Bob Butchofsky for any closing comments.
Bob Butchofsky – President and Chief Executive Officer
All right, well thank you for joining us on the call today. Again we view this as a big victory with a 5.7 millimeter decrease in pressure, first time that’s ever been done with this type of delivery system and again a non-invasive type of delivery system. So, we look forward to talking to you again in late October, early November at our Q3 call. Thanks for joining the call today. Bye-bye.
Operator
Ladies and gentlemen, the conference is now concluded. You may disconnect your lines. Thank you for participating and have a pleasant day.
Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.
THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.
If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!