Clearside Biomedical Clears Hurdle For Late-Stage Eye Disease Study

Summary

• Clearside Biomedical reports positive phase 3 results in patients with macular edema associated with non-infectious uveitis.
• Suprachoroidal CLS-TA beat out placebo in best corrected visual acuity observed in 47% of patients versus 16% for the placebo group.
• Another catalyst for the macular edema program would be the upcoming medical presentation with results, in addition to the the NDA filing in Q4 2018.
• Positive results for the initial indication in macular edema should bode well for the other two programs of retinal vein occlusion and diabetic macular edema.
• The financials need to be spruced up slightly, therefore I expect dilution to occur in the coming months.

On Monday, Clearside Biomedical (NASDAQ:CLSD) announced positive results for its late-stage study treating patients with macular edema associated with non-infectious uveitis. The company noted that the trial had met both the primary and secondary endpoints of the study. Besides the positive results, it is worth noting that this study in itself was a huge breakthrough. That reason being because it was the first pivotal phase 3 study for uveitic macular edema in which Best Corrected Visual Acuity (BCVA) was used as the primary endpoint. Clearside's suprachoroidal CLS-TA passed the primary endpoint with flying colors.

Phase 3 Data

The phase 3 trial was known as PEACHTREE, and it recruited a total of 160 patients. These were patients who had macular edema associated with non-infectious uveitis. The primary endpoint was looking for a proportion of patients that would achieve a change from baseline for at least 15 letters in best corrected visual acuity for a 24-week period using a scale known as ETDRS. That's exactly what happened. It was shown that treatment with suprachoroidal CLS-TA was able to beat out placebo by a huge margin. It was shown that at least 47% of patients that were treated with suprachoroidal CLS-TA were able to see at a minimum 15 letters. This compares to the placebo group which only had 16% of patients observe that many letters in the same time period. Thus, the reason why the stock traded higher by as much as 53% in pre-market trading. In my opinion, these results demonstrate efficacy for the company's suprachoroidal CLS-TA treatment. That is a good thing, because Clearside is also testing the same form of treatment in two other eye diseases. These are diabetic macular edema and retinal vein occlusion. With the mechanism of action proven, there is a high probability that the other studies could also come out positive as well.

FDA Push

With the phase 3 data on hand Clearside Biomedical can now push to potentially file for approval of suprachoroidal CLS-TA by Q4 of 2018. That would mean that should the FDA accept the application, there could be a PDUFA date set sometime in 2019. The potential approval for this is more than a year away, but that doesn't change the fact that the phase 3 trial achieved amazing data. This data is also expected to be presented at an upcoming medical conference, which could be seen as another bullish event. In addition to filing for approval in the United States, the company is evaluating the possibility to submit approval for the treatment in other territories. It is estimated that there are about 350,000 patients in the United States with Uveitis. Macular edema occurs in about one-third in all non-infectious uveitis cases.

Financials

According to the 10-Q SEC filing, Clearside Biomedical has cash and cash equivalents of $52.6 million as of September 30, 2017. It stated that its cash would be sufficient to fund operations until Q4 of 2018. That means on the back of these results I expect the company to raise cash in the near-term. That's because biotech companies with less than one years worth of cash don't wait until the end to do a raise. The only way I can see this being avoided is if it can find a partner for the commercialization of suprachoroidal CLS-TA. If that was to happen, then a cash raise may be avoidable.

Conclusion

Clearside Biomedical presents a good buying opportunity. That's because it has just passed a phase 3 study treating patients with macular edema associated with non-infectious uveitis. With the company presenting this data at an upcoming medical conference that could act as a potential catalyst to push the stock higher. The most important event for this program will be when the company files its NDA application to the FDA in Q4 2018. There is still plenty of room for share price appreciation. There is a data readout for the phase 2 diabetic macular edema program expected in the first half of 2018 as well. In addition, top-line results from the phase 3 SAPPHIRE study treating patients with retinal vein occlusion are expected by early 2019. There is still risk involved because of the potential of dilution in the coming months. On top of that, the FDA still has to review the data and determine if it is sufficient enough for marketing approval. There is no guarantee that the FDA will approve suprachoroidal CLS-TA in its current form in patients with macular edema associated with non-infectious uveitis. The good news is that the results are strong because placebo was beaten by a huge margin. I'm confident that the FDA will likely approve this treatment for these patients.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Comments

[Agnee Tips]

Terry, what is the market potential of this drug? You can be glamorous in your writings, but as an investor this is most important. You have not address this question. Thanks

[Moonfever]

more like raise at $13, yikes. haha think she's going drop hard possibly.

[culleraa]

WEll there's something fishy about this trial. These should be patients with the worst kind of chronic uveitis? Normally all these patients have to be treated with a dolop of steroids for flares every now and again... whatever the background treatment. From that they get IOP spikes. But in this trial the "sham" arm - and sham means the bolus steroid would always be given anyway cos they get flares. Except here! There were zero IOP events!! ... the ae is usually a 2mm rise. "Through 24 weeks, corticosteroid-related elevated intraocular pressure adverse events were reported for approximately 11.5% of patients in the CLS-TA treatment group, compared to no patients in the sham group."
So does this mean that the study group was not that bad.... change in bcva was good though...

[AnalystRipper]

How is this better than PSDV which already filed NDA and is waiting acceptance and eventual approval. CLSD is way overvalued compared to PSDV. Not a buy in my opinion, PSDV a better bet with 3 approved products and forth on the way.

[IlliniJ]

Apparently the market does not agree based on market cap - PSDV $52mm to CLSD $328mm.

[IcebergsInc]

Good summary and I agree they will likely use this opportunity to raise money around the $7 mark

[Terry Chrisomalis]

yes all biotechs go through dilution, but it is just a temporary headwind. If the company has something good on its hands, like Clearside does then it will trade higher regardless.

[Agnee Tips]

Sir, what is the market potential of this drug? No one addresses this. I am thinking about buying tomorrow if it dips. I am eagerly awaiting your response.