Ophthotech's (OPHT) CEO David Guyer on Q2 2016 Results - Earnings Call Transcript

| About: Ophthotech Corporation (OPHT)

Ophthotech Corporation (NASDAQ:OPHT)

Q2 2016 Results Earnings Conference Call

August 03, 2016, 08:00 AM ET

Executives

Kathy Galante - Vice President, Investor Relations and Corporate Communications

David Guyer - Chairman and Chief Executive Officer

Samir Patel - President and Vice Chairman

Glenn Sblendorio - Executive Vice President, Chief Operating Officer and Chief Financial Officer

Analysts

Vikram Ashoka - Morgan Stanley

Tyler Van Buren - Cowen and Company

Anupam Rama - JPMorgan

Brett Larson - Leerink Partners

Yigal Nochomovitz - Citi

Yatin Suneja - SunTrust

Gbola Amusa - Chardan Capital

Stephen Willey - Stifel

Evan Seigerman - Barclays

Operator

Good day everyone and welcome to the Ophthotech Corporation Second Quarter 2016 Earnings Results Conference Call. Today’s conference is being recorded. And at this time, I would like to turn the call over to Kathy Galante. Please go ahead.

Kathy Galante

Good morning and welcome to our second quarter 2016 earnings call. Joining me today, I have Dr. David Guyer, Chief Executive Officer and Chairman of Ophthotech; Dr. Samir Patel, President and Vice Chairman; and Mr. Glenn Sblendorio, Executive Vice President, and Chief Operating Officer and Chief Financial Officer.

Before we begin, I would like to remind you that today we will be making statements relating to Ophthotech’s future expectations regarding its financial results, potential receipt of milestone payments, clinical and regulatory developments, and commercialization plans. These statements constitute forward-looking statements for purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. These statements cover many events and matters that are subject to various risks that could cause actual results to differ materially from those expressed in any forward-looking statement. I refer you to our SEC filings and in particular to the Risk Factors section in our quarterly report on Form 10-K filed on May 9, 2016 for a detailed description of the risk factors affecting our business.

In addition, any forward-looking statements represent our views only 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 at some point in the future, we disclaim any obligation to do so, even if our views do change.

I would now like to turn the call over to David.

David Guyer

Thanks, Cassie and thank you to everyone for joining us on the call this morning. During the second quarter, we reached a significant mile stone in our focused program. In June we completed patient recruitment in our Phase 3 trial of Fovista in combination with Eylea or Avastin, which triggered achievement of the final $30 million milestone of the 130 million aggregate enrollment-based - milestone payments under the ex-U.S. licensing and commercialization agreement with Novartis Pharma.

Additionally Ophthotech is eligible to receive up to an aggregate of 300 million upon achievement of specified regulatory milestones, including marketing approval and reimbursement approval in certain ex-U.S. territories and ex-U.S. sales milestones up to $400 million.

In addition, we will receive royalties at a mid 30s percentages of net sales of standalone Fovista products and a royalty of approximately equal value for sales of combination Fovista products.

I'm extremely pleased to announce that even Ian Smith, has joined our Board of Directors as of August 2nd. He will also serve as Chair of the company's audit committee. Ian is Executive Vice President and Chief Financial Officer of Vertex Pharmaceuticals, a global biotechnology company that discovers, develops and commercializes innovative medicines for serious disease.

Ian holds responsibility for core functions at Vertex, including Finance and Accounting, Investor Relations, Corporate and Business Development, Global Information Systems, and Worldwide Operations, and he is a member of Vertex's Executive team.

We are confident that Ian's outstanding and proven track record at Vertex and his financial operations in commercial expertise will be beneficial to Ophthotech's future growth.

We've also brought together a very seasoned management team, including most recently a distinguish leader in the development and commercialization of Retinol products, Dr. Carmen Puliafito, former Dean of the Keck School of Medicine of the University of Southern California. Carmen has joined Ophthotech as Chief Strategic Development. Dr. Puliafito is on leave from his position as Professor of Ophthalmology and Health Management at the USC Roski Eye Institute.

Earlier this year, Glenn Sblendorio, a leading industry veteran with more than 30 years of experience in the biotechnology and pharmaceutical sector joined Ophthotech as Chief Operating Officer and Chief Financial Officer, while Carmen and Glenn bring a tremendous wealth of knowledge and expertise to Ophthotech.

We look forward to reporting initial top line data for both of pivotal Phase 3 trials of Fovista in combination with Lucentis in wet age-related macular degeneration in the fourth quarter of this year.

Our key objective and plan is to make Fovista commercially available to physicians with for their patients with wet AMG as quickly as possible, assuming positive data outcome for the Phase 3 program with regulatory approval.

Between now and data, we are focused on compiling a new drug application shell in an effort to ensure efficiency for an optimized NDA submission to the FDA, following the potential positive outcome of the Phase 3 trials.

As you will recall, the FDA granted fast track status for Fovista for the treatment of wet AMD in September of 2013. We believe Fovista is the most advanced anti-PDGF agent in development for the treatment of wet AMD. And if approved, it’s expected to be first to market in this class of novel therapies for wet AMD.

I will now turn the call over to Samir.

Samir Patel

Thank you, David. Thank you, everyone for joining us this morning. As David stated, we are actively engaged in working towards generation of a new drug application shell, assuming positive outcome of the Phase 3 trial.

The Fovista expansion studies are designed to further evaluate the potential of Fovista in addressing a variety of unmet needs in wet AMD, including investigating the potential role of Fovista in combination with multiple anti-VEGF agents to reduce sub-retinal fibrosis and investigating the potential role of Fovista combination therapy to reduce the treatment burden for wet AMD patients. Recruitment has been completed in two of the studies.

Further two additional Fovista expansion studies which initiated at the end of 2015. One, a pilot study to investigate the role of multimodal imaging and the other a study to investigate the potential role of Fovista in combination with Avastin with a discontinuous regimen during the maintenance phase continues to recruit payments.

We continue to enroll patients in these Phase 2/3 trial of Zimura in patients with geographical atrophy an advanced form of dry AMD. In addition, the Phase 2 trial evaluating the potential role of Zimura when administered in combination with anti-VEGF drugs for the treatment of wet AMD has been activated.

I will now turn the call over to Glenn.

Glenn Sblendorio

Thank you, Samir and good morning everyone. This morning, I'll present a brief update on our results of operations. For the quarter ended June 30th, 2016, we recognize 28.2 million of collaboration revenues, represented an increase of $26.6 million versus the same period in 2015.

Collaboration revenue for the six months ended June 30, 2016 was $43.9 million, an increase of 0.6 versus the same period in 2015. As we look further into 2016, we expect to recognize revenue from additional shipments of focused API to our partner Novartis.

Research and development expenses were $48.3 million for the quarter ended June 30, 2016, compared to $32.1 million for the same period in 2015. Research and development expenses were $86 million for the six months period ended June 30, 2016, compared to $56.6 million for the same period in 2015.

The increase in R&D expense in both the current quarter and six-month period ended June 30, 2016 was relates to increase cost associated with Fovista manufacturing activities, our Phase 3 clinical programs and Fovista Expansion Studies, Samir just discussed, as well as higher clinical trial cost due to a larger number of patients enrolled in these studies, as well as increased compensation expenses associated with additional research and development staffing.

As we look to the second half of 2016, we anticipate R&D expenses to increase as we continue our Fovista Phase 3 trials, also continue the enrollment in the Fovista Expansion Studies continued enrollment into some more studies and the ongoing manufacturing expense which includes validation.

As we mentioned in previous calls, our R&D expense may fluctuate from quarter-to-quarter based on manufacturing schedules, as we validate our Fovista manufacturing process and begin to produce commercial grade Fovista API.

Moving on to general and administrative expenses, they were $10.5 million for the quarter ended June 30th, compared to $12 million for the same period in 2015. This represented a decrease in the second quarter of this year. This decrease related primarily to costs associated with professional services and consulting fees during the period.

G&A expenses were $25.2 million for the six month period ended June 30th, 2016, compared to $21.5 million the same period 2015. This overall increase for the six month relates to expansion of the company's operations, the hiring of additional management and corporate staffing, professional services and consulting fees, and increased share based compensation.

The company report a net loss for the quarter ended June 30, 2016 of $29.9 million or $0.85 per diluted share. This compared a net loss of $37.1 million a $1.08 loss per diluted share for the same period of 2015.

The company reported a loss for the six-month period ended June 30, 2016 of $66.2 million or $1.88 per diluted share, this compared to a net loss of $30.5 million, or $0.89 [ph] per diluted share for the same period in 2015. Fully diluted weighted average common shares outstanding for the quarter ended June 30, 2016, was 35.4million.

Now turning to the balance sheet. Our cash, cash equivalents and available for sales securities totaled $325.7 million at June 30. This does not include the 30 million milestone triggered in the second quarter. This payment has now been received in the third quarter.

Now I'll turn the call over to David.

David Guyer

Thank you, Glenn. Thank you for your time this morning and for your continued support. I will now turn the call over to the operator, so we can open up the lines for any questions.

Question-and-Answer Session

Operator

Thank you, sir. [Operator Instructions] Our first question comes from Matthew Harrison with Morgan Stanley.

Vikram Ashoka

Hi. This is Vikram on for Matthew. Just two quick questions from our side. First, could you provide any updates on timing for when Phase 2 results might be published? And second, maybe you touched on this during the call, but do you have any updated guidance on your filing strategy with regards to whether or not you'll wait for the – the Avastin study to readout or do you plan on filing with just assuming it positive that the two Phase 2 data readouts for Q4 this year with Lucentis?

Samir Patel

Hi. This is Samir. Thank you for your question. With respect to the publication on Phase 2, really it's not in our hands. It's a bit to reviewers, so we can't really comment on the timing or the outcome.

As far as the second question, I think you asked if we'll include any data, did I hear correctly? Yes, go ahead.

David Guyer

I think as we said before, our goal is to get Fovista available to physicians and patients as soon as possible, which means we'll use the two Fovista in combination with Lucentis trials for our NDA filing and we'll either supplement or amend with Avastin at later data as we feel is most appropriate as we're in a review period.

Vikram Ashoka

Okay. Understood. Thank you.

Operator

Our next question comes from Tyler Van Buren with Cowen and Company.

Tyler Van Buren

Hi, good morning. And thanks so much for taking my questions. My first question was with respect to potential granularity of timing within Q4, we obviously know what the treatment period will be.

But perhaps you could give us some input on some of the less obvious timelines with respect to reviewing the data once the last patient has had its last treatment? Thank you.

David Guyer

So as we've said, data is on track for the initial top line Phase 3 pivotal data in the fourth quarter. Now, we know from the press release last year, approximately November 1st, that that was when the last patient was enrolled in the second Fovista in combination with Lucentis trials.

And so with a one year follow up point and then I think one can extrapolate in general that it usually takes somewhere four to six weeks, up to six weeks to have independent statisticians analyze the data, do quality control.

This is all before we at the company see any data. And then after that, four to six week period we see it for the first time and since you said material event we likely will disclose it within a few days of us first seeing that.

And it most likely will include - it will include the primary end point of each of the trials independently with the independent P value. So hopefully that gives a little more granularity.

Tyler Van Buren

Yes. That’s really helpful. Thank you. And just the last question was with respect to the trial outcomes, obviously there is some very binary outcomes where both trials reached statistical significance with very clinically relevant outcomes or they either don't.

But kind of in between with mixed outcomes, if one trial is hugely successful, statistical significant results very clinically, meaningful benefit and the other perhaps has a less clinically meaningful benefit or for whatever reason doesn't reach statistics. How do you think about that situation, is it possible that you would be able to pull the results or what would be a potential pathway for there in a worst case?

Samir Patel

Yes, hi. This is Samir. Thanks for your question. So if I understood your question correctly is you have a - one of the trials being highly statistically significant and when you say that is very clinically meaningful and the other one perhaps not as clinically meaningful, but I didn't hear you whether you said if it was statistically significant value, is a presumption the other ones also statistically significant, but perhaps not as clinically meaningful?

Tyler Van Buren

I guess it would be interesting to hear your response in a situation that it is statistically significant and then potentially not as well?

Samir Patel

Okay. So, typically and you know, if you have statistical significance, I think it's a bit – it's a complex situation if one is so called clinically meaningful. In itself the determination of clinically meaningful is quite subjective in many respects.

And just to give you some type of granularity, you could be at situation, for example, where you have - you may not have the portion of patients gaining a lot of vision for example, yet, you can have a significant benefit on proportion of patients who are losing vision.

The other set and it could be the other way around. That obviously is a two very different situations. But both are clinically meaningful, depending on you know, where you started out.

So there's a lot of complexity in making that determination. And so, you know, I think I can't really comment on how the FDA will look at it. They'll look at the totality of the data to reach that assessment.

The issue is a bit more complex when you have one trial that is statistically significant and the other isn't. In general, I think it's safe to say that that would mean one trial failed and the other didn't.

But there are - to the best of my knowledge, there are situations where you have one trial being extremely positive in terms of the P value, being let's say something in the range of .001 and the other one barely missing it.

You know, I think there are some situations where if you can explain that there was a confounder that was present and that could explain why the trial is in that fashion. Then I think a case can be made for an approval in that and believe that sort of in led to believe by statisticians just you know, informal conversations. I hope that answers your question.

Tyler Van Buren

Yeah. That's super helpful. Thank you so much.

Operator

Our next question comes from Anupam Rama with JPMorgan.

Anupam Rama

Hey, guys. Thanks so much for taking the question. Maybe just quick one from me on the statistical analysis plan on the pool secondary, just quickly maybe you could remind us what those secondary you'll be looking at and is there a hierarchy to those secondary end points, if there is a hierarchy how would you rank the endpoints, secondary end points in this statistical analysis plan? Thanks so much.

David Guyer

Sure. I don’t think we've disclosed that level of granularity. But I think general looking through the Phase 2 that you know, its reasonable way to think about it, which is we had the descriptive type of endpoints, secondary endpoints.

Our thinking on that is in general I think the type of hierarchal treatment is mostly done for labeling purposes. But you know, we just feel in this type of situation as I'd mentioned on the previous question, the determination of clinically meaningfulness really requires to look at some of the binary endpoints or discontinuous endpoints and its totality where as the primary endpoints for continuous variable.

So we think the clinical meaningfulness in that situation requires to look at the broad range of secondary endpoints. And as far as additional color into what are the secondary endpoints, its safe to say they are mostly functional endpoints and that’s how you determine the clinical meaningfulness and are fairly similar to what one would expect in most trials where we're looking at proportion of patients with improved vision.

Anupam Rama

Thank you so much for taking the question.

Operator

Our next question comes from Joseph Schwartz with Leerink Partners.

Brett Larson

Morning, everyone. This is Brett Larson dialing in for Joe. Quick questions on both programs. First on Fovista, when considering the Phase 2b results, to asses you know, what results we expect from these upcoming Phase 3 studies?

We've heard consistently from investors and clinicians that they recognize there are two key characteristic that one providing tailwind, one the other headwinds to achieving [indiscernible] the patient showed lower visual acuity gains in Lucentis arms the Phase 2 study than one might have expected compared to other studies if they can talk a bit. But on the other hand now you have a trial implant that is one year versus six months previously

So I'd love to hear your thoughts on how significant the driver, one of these factors is versus another and if there are any other key characteristics that have changed leading to these Phase 3 results that you'd like to highlight, that increased your temper, the confidence?

Samir Patel

Yes, hi. It’s Samir. I don’t think I heard the full question, but I'll take a stab, what I think I heard, and feel – please feel free to correct me. As far as the issue I think the question is – it’s related to what instances we may make from the Phase 2b to the fleet - to the Phase 3 trial, and two issues, one is the duration is greater than the Phase 2 and it – I think that was your second question.

So in connection to that I think that we just have to wait for the data. We don’t have that much experience on what happens from six months, 12 months. But you know, we addressed in patients in our Fovista expansion studies during our Investor Day that we presented, which we'll have to about year and there was continued benefit in those patients based on the treatment regimen of course, which was correlate, so that was very encouraging.

In general, if you were to look at anti-VEGF studies, in general what you typically see at three to six months is what you really end up with at months 12 and that’s been consistent phenomenon with the anti-VEGF, since here you are talking about synergism in many respects, if it was to work, we would think it would continue.

But one encouraging data point that we add in the Phase 2 study was, you know, between three and six months there was relative expansion of the curve. So the combination was doing – performing better than monotheraphy and it’s possible that that’s going to continue. But given - I think regardless of that I think the robust efficacy in Phase 2b, confirmed in this Phase 3, we believe quite significant and clinically meaningful.

So the underperformance which is what you're referring to, we think that’s quite irrational. First cross trial comparisons are not scientifically valid. So that in it itself is you know, we think not really valid.

Secondly, I think to say that one arm underperformed, but some how magically the combination arm wouldn’t in a very large trial, but its randomization and based on variables are similar that would be quite irrational.

And then even if you [indiscernible] both of those off, I don’t see how Lucentis underperformed if you look at six months, I mean, that’s where CAT and IVAN trials performed roughly at the same level, in the VU trial, I think it was its likely higher at six months timeframe.

But you know, these patients whether you look at CAT and VU the presence of classic lesions typically have worse outcome if you look at the CAT data and increasing to loss vision I believe in VU trial. We expect rather if you're looking at anchor for example which is trial down you know, over nine or 10 years really its not greater was a different time point than I can tell you roughly 50% of the patients weren’t even qualified from that study and this study. So to do any cross trial comparison it’s also irrational, but having said that, we see no evidence that Lucentis underperformed.

Brett Larson

Okay. Well, thank you for the color there. And on Zimura, can you remind us what the duration treatment is for the primary endpoint in the wet AMD, anti-VEGF combo trial and any update on how far along enrollment is in the geographic atrophy study?

Samir Patel

There are not many updates to give on the enrollment. But I believe in the Zimura, wet AMD, I think its – I don’t want to speculate, but I think it’s probably there.

Brett Larson

Okay. Great. Thank you very much.

Operator

Our next question comes from Yigal Nochomovitz with Citi.

Yigal Nochomovitz

Hi, guys. Thanks for taking the questions. Just first of all a quick on what the label might look like initially, is the plan to construct the label with Lucentis, plus Fovista with the first two or will you argue for anti-VEGF plus Fovista?

David Guyer

Yes. That’s something that has to be obviously negotiated with regulatory agency. So obviously our goal is to eventually get the label with any anti-VEGF drug or our mission is to be anti-VEGF agonistic, whether that stage or whether that’s all at once really it depends upon negotiations with the regulatory authorities and how they look at it. So really can’t comment until we have the data and have discussions with them.

Yigal Nochomovitz

All right. Thanks, David. And then can you provide any more granularity on the timing of data for the Avastin, Eylea or with Phase 3?

David Guyer

Yes, I can, we haven’t publicly said it. But again, in general, if things went according to plan or just you know, usually they do. But one always never knows. We announced that recruitment was complete in June of this year. So very similar to before, it takes through one year for last patient visit. And remember we have very senior experienced team that is very comprehensive of making sure that that last few patients are and on time or even early, so that we hit that one year deadline, I have that question asked before, that we really do look at the last patients coming in and try to get them in on time or earlier. So that is a solid one year and doesn’t go over.

So we keep adding year to that and again as I said traditionally company is assuming everything goes smoothly with the independence status physician, with quality control et cetera, take some where from our four to up to six week period of which getting the company does not have any knowledge of the data at that conclusion of that period where the statisticians or quality control teams work, we see the data and again because its material event within a few days we would report. So you can probably construct a approximate timeline that way, so it’s similar looking.

David Guyer

Okay. Got you. And then David you mentioned at the beginning you have a shell NDA under construction so to speak, is there anything going on in that shell with respect to and that blinded analysis of the first Phase 3 trial that obviously is ready and finish the first station, primary endpoint ended back in May?

David Guyer

No, no, the – again the, the two Phase 3 trials are focused with Lucentis are being claim masked and will be annualized at the same time by the statisticians and will be given to us, again at the same time period after the four to six week period of statistical analysis and quality control.

The shell refers to basically things such as preclinical, manufacturing putting in clinical and medical information with blanks, where so that it’s much easier later to just fill in the information once you have it– later on. So that’s really when we like constructing a shell.

There are some components of the data one can pretty much do almost to completion again more in preclinical and manufacturing, but clearly the least developed will be clinical. Although we believe we – to put a shell together where a lot of it is fill in the blanks, but then of course some of that will depend on the actual data and we'll have to be added it after we get it.

David Guyer

Great. Thanks very much.

Operator

We'll take our next question from Yatin Suneja with SunTrust.

Yatin Suneja

Hi, guys. Congrats on the all the progress and thanks for taking my question. Couple of questions, again on the data, I mean, we understand its going to take four to six weeks, for statisticians to analyze the data.

But on a blinded basis, have you able to se or you have able to look at the baseline characteristics and any differences from the Phase 2b that you saw and I think you could share there? And then I follow up?

David Guyer

I want to strongly emphasize the Phase 3, we have seen nothing, including any of - anything at all and that all be seized and that the cleansing and quality control period. So we will be seeing everything in that one, so then you will be seeing that shortly if you days likely after.

Yatin Suneja

Okay. That’s helpful. And then a question on injection burden, we get this question a lot from investor. I mean, could you maybe talk about your comfort to injection versus one, I mean, what you sort of work you have done that gives you confidence that two injection would be – would not be an issue, I mean, have you done any patient survey anything you could share with us?

Samir Patel

Yes. This is Samir. Do you mean from a scientific perspective or commercial perspective?

Yatin Suneja

More from commercial perspective.

Samir Patel

Yes, you know, I think in general, you are not increasing the treatment burden for the patients as far as the frequency visit. When one talks about treatment burden, it’s the number of visits patients has to make, and you're going to have same exact number of visits because they are coming for the anti-VEGF injection anyway.

As far as the prep time concerned and things of that sort, I think we've had – to me science days and its represented by just some amount of practices I'll say, we had a large practice at United States and this is been cognizant.

I think the answer sort of has been consistent how long that the two injections is not really an issue for them. And I think we would agree with that, because patient obviously the way it’s administered with the NH it’s a very common procedure and its really no pain involved - discomfort on patients given, the type of anesthetics that given, the morbidity isn’t really there with these injections that they are very, very safe.

And so I think with form of practice managements standpoint, the adoption is not going to be an issue there. So on the scientific side I mean, I think that total volume that’s being administered here, it’s a large amount of data base and roughly more amount of volume over 24 months trial than previously with the MacKeigan trial and there was material issue there as well. So we're fairly confident that from a safety perspective and from a commercial adoption perspective it’s not going to be any issues.

Yatin Suneja

Okay. Very helpful. Just a very quick question for Glenn on the P&L side, Glenn could you help us model the SG&A for the remainder of this year.

I mean, obviously this quarter was a bit lower than we anticipated, but just give us the direction how should we model for the remainder? Thank you.

Glenn Sblendorio

That’s a good question. And I know you probably looking at the slight decrease from the third quarter. We will continue to build infrastructure across. I think if you look at the first six months of the year you should anticipate that that will increase, so those focus just on the second quarter and try to project out.

I think more importantly I'd take the six months and but a slight increase on that for the latter of the year. We haven’t given specific guidance, I don’t want to give specific numbers, but it will increase.

Yatin Suneja

All right. Thank you, guys.

Operator

Our next question comes from Joe Amusa with Chardan Capital

Gbola Amusa

Hi. Its, Gbola Amusa, Chardan Capital. Thanks for taking my call. Just a have a couple of questions. First of all are you able to comment roughly on what proportion of your $48 million of R&D expense comes from Fovista programs versus Zimura programs.

And then secondly, by my count your partners Novartis and Roche have at least a few potentially longer acting anticipate-VEGFs in Phase 2 or 3 developments. So wondering if its part of your longer term strategy develop Fovista in combo with those products as soon as reasonably possible?

Glenn Sblendorio

Its Glenn, I'll answer the first question on the $48 million and the percentage as far as the progress there. It’s a significant majority of that because you have three components in that. One is the ongoing Phase 3 trial, the second are the Fovista expansion trials and the third which we referenced in the discussion are manufacturing activities which obviously at this point all expense. So it’s a larger part of that number.

A – David Guyer

I think that’s fair.

Gbola Amusa

Okay. Thank you.

A – Samir Patel

Sure. And on the second question and before I address that, I same corrected on the previous question related to the duration of the Zimura combination study in wet AMD, its not a year, it’s a 18 month duration. And related to your question about other anti-VEGF agents, will they come down in the future and development of those in combination with Fovista.

Well, we're hopeful that the data are going to be confirmatory and our Phase 3 trial and generalizable across all anti-VEGF agents and if that’s the case as we expect, we believe that the efficacy of Fovista when added to anti regimen is agonistic to which ever anti-VEGF agents is utilized.

So in that setting should the other anti-VEGF agents, regardless of who the sponsor is that come forth in the future they will have to prove the non-inferiority to the other anti-VEGF agents as part. And then we believe that the label is hopefully and again if the data are cooperative will then encompass all future anti-VEGF agents in that setting.

Gbola Amusa

Sorry, just to be clear, Samir, are you saying that potential for a label to be encompassing for anti-VEGF or do you believe that you have to test Fovista with each agent after those agents are approved?

A – Samir Patel

I think you know, this presence obviously in other settings as well, like protease inhibitors where if you are able to show efficacy and a rough equivalent which we are doing with three of them, that that you know would bode very strong for a label that would state Fovista in combination with anti-VEGF.

And that general label would encompass future anti-VEGF agents provided that they've shown efficacy for the same indication and it would be more of class like, that we wouldn’t have to do another study in that setting with every new anti-VEGF that comes forth.

Gbola Amusa

Great. Thank you.

Operator

Our next question comes from Stephen Willey with Stifel.

Stephen Willey

Thanks for taking the questions. I guess may be a follow up to the last question, I guess where expecting to see pivotal data from Novartis's, bevacizumab in the first half of next yea rand obviously they have option to develop a fixed combo with VEGF agent of their choice.

So just wondering you know how you guys are to the decisions making process that’s going on at Novartis and how open are the lines of communications just regarding strategic intent?

David Guyer

Okay. It’s at discussion active work, but not something that Novartis has made public nor complete. But its certainly I think major initiative on their part and we are working very closely with their senior team on that.

Stephen Willey

And then maybe just to clarify, I guess, again part of the last question, there would be potentially the opportunities I guess based on the other Phase 3 that’s looking at both Eylea and Avastin that you could perhaps generalize to all VEGF and that Novartis could potentially pursue some come kind of fixed combination shortly there after?

David Guyer

Yes, we can't comment on the agent they are looking at or the work they are doing, as they have not made that public and that speak directly by them.

Stephen Willey

Okay. And then maybe just one housekeeping question on the P&L side, just the breakdown of the recognized milestone revenue versus some of the collaborative revenue for ATI [ph] I think historically there is been some amortization of received milestone payment just wondering if that’s applicable here as well? Thanks.

Glenn Sblendorio

So we'll focus on the current quarter and go deeper to like if you'd like, so it was 28.4 in the current period and we did received or earned $30 million, so I breakdown that 28 there is actually four components and a majority applies to the license and also the R&D effort.

So of the 28.4, 27 million was part of the 30, which means we deferred three. So very small portion is deferred, so you don’t see a direct match up of 30 in 30 on the revenue and the balance was the deferral of previous deferred revenue that we have on come. So our practice, our accounting has been to take the majority of the turned milestones recognized in deferred piece over the balance of the enrollment period.

Stephen Willey

All right. Thanks for the color. That’s helpful. Thank you.

Operator

Our next question comes from Evan Seigerman with Barclays.

Evan Seigerman

Hey, guys. Thanks for the taking the questions. Can you just step a back to Zimura, kind of remind us of the rational to use to target C5a and wet AMD? And with this are you - just remind me are you anti-VEGF and agonistic, are you specifically looking at Lucentis in this Phase 2 trial?

Samir Patel

This is Samir. So the rational is that if you look at some of the immunologic studies that are patients who have – in the human subjects that have neovascular AMD, you see [indiscernible] involving the complement activated fragments. So I think its reason that coupled with some of the genetic study, linked studies and also histopathology studies in animals are all very consistent that there is a significantly growth complement immediate information not only in dry AMD, but also in wet AMD

So - and then in addition to that I think it’s been shown that complement activation leads to upper regulation of some key mediators of pathologic neovascularization, such as VEFF and PDGF as well.

So one can - one has a strong rational that in patients who fail anti-VEGF, for example that part of that resistance is from complement immediate information that’s not addressed by anti-VEGF strategy.

Evan Seigerman

Okay. Great. And then just the other one about the Phase 2, is there preferred type of effects, something I should know about, is it Lucentis or are you agonistic?

Samir Patel

Can you repeat the question please…

Evan Seigerman

Sorry, with the Phase 2 you're looking at it increase combination with an anti-VEGF, is it specifically Lucentis or are you do you agonistic when it come to the other agent issues?

Samir Patel

I mean, agnostic, and just sort a big color on that, in general our anti-VEGF agents for the safety, efficacy which is really roughly has been show n in some of the [indiscernible] trials. So we would think of any of the combination even to this - is bit addressing a issue with the class, it shouldn’t make a difference, they may have some durability differences, but I don think in respect safety, efficacy or that the type of rational we want to study would make a difference.

Evan Seigerman

Okay. Great. And then also what other milestones you know, can we expect towards the end of the year, especially with the top line readouts towards fourth quarter? Have you given any guidance on that or how should we be thinking about that?

Glenn Sblendorio

I think we should look at that by product the biggest milestone and something as close to that from with the fourth quarter data.

Evan Seigerman

Okay. Thank you.

Operator

Our next question comes from Terence Flynn with Goldman Sachs.

Unidentified Analyst

Hi, this is Kevin, filling in for Terence. Thank you for taking the question. Can you remind us of the potential size of your potential US commercial team for Fovista and then also do you plan to make contingent offers throughout ahead of the Phase 3 data or wait until you have the Phase 3 data in hand? Thanks.

David Guyer

Yes, so the answer to first question is we will commercialize the United States by ourselves and we prudently said that. The sales and marketing team of total 100 people or less with the sales force we can do that. We probably - this we've done before at I-Tech launching the first anti-VEGF and [indiscernible] outside the United States.

Unidentified Analyst

Thanks.

Operator

And that concludes today’s conference. Thank you or your participation. I'll turn the call back over to Dr. David Guyer.

David Guyer

Great. I just want to thank everyone again for their attention and interest. Thanks very much. Bye-bye.

Operator

And that does conclude today’s conference. Thank you for your participation and you m may now disconnect.

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