IVERIC bio, Inc. (ISEE) CEO Glenn Sblendorio on Q1 2021 Results - Earnings Call Transcript

IVERIC bio, Inc. (NASDAQ:ISEE) Q1 2021 Earnings Conference Call May 5, 2021 8:00 AM ET

Company Participants

Kathy Galante - Senior Vice President-Investor Relations

Glenn Sblendorio - Chief Executive Officer

Keith Westby - Chief Operating Officer

Pravin Dugel - President

David Carroll - Chief Financial Officer

Conference Call Participants

Tiago Fauth - Credit Suisse

Stacy Ku - Cowen

David Nierengarten - Wedbush Securities

Operator

Good morning and welcome to the IVERIC bio First Quarter 2021 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. Please note this call is being recorded.

I would now like to turn the conference over to Kathy Galante, Senior Vice President, Investor Relations. Please go ahead.

Kathy Galante

Good morning, and welcome to IVERIC bio's conference call. Representing IVERIC bio today are Glenn Sblendorio, Chief Executive Officer; Pravin Dugel, President; David Carroll, Chief Financial Officer; Dhaval Desai, Chief Development Officer; Abraham Scaria, Chief Scientific Officer; and Keith Westby, Chief Operating Officer

I would like to remind you that today we will be making statements relating to IVERIC bio's future expectations regarding operational, financial and research and development matters, including statements regarding our expectation for patient enrollment and patient retention in GATHER2, our second Phase 3 clinical trial evaluating Zimura for the treatment of geographic atrophy secondary to age-related macular degeneration; our expectations to use GATHER1, our previously announced clinical trial of Zimura for the treatment of GA secondary to AMD as a Phase 3 clinical trial; our development and regulatory strategy for Zimura; and our other product candidates, including our expectations for additional indications for which we may pursue the development of Zimura and IC-500, our hypothesis regarding complement inhibition and HtrA1 inhibition as mechanism of action for the treatment of GA and potentially other stages of AMD; our projected use of cash and cash balances; the timing, progress and results of clinical trials and other research and development activities and regulatory submission; the potential utility and development potential of our product candidates; and the potential for our business development strategy and our personnel advisory committee members and human capital resources.

These statements constitute forward-looking statements for the purposes of the Safe Harbor provision 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, including risks related to the future progression of the COVID-19 pandemic; responsive measures to the pandemic and their impact on our research and development programs; operations and financial position; initiation and the progress of research and development programs and clinical trials, including enrollment and retention in clinical trials; availability of data from these programs; reliance on contract development and manufacturing organizations; university collaborators and other third parties; establishment of manufacturing capabilities; expectations for regulatory matters; development from our competitors and the marketplace for our products; need for additional financing and negotiation; and consummation of business development transactions and other risk factors.

I refer you to our SEC filings and, in particular, to the risk factors included in our Annual Report on Form 10-Q filed on March 4, 2021, 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 as required by law.

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

Glenn Sblendorio

Thanks, Kathy, and good morning everybody. And thank you for joining us for our first quarter conference call. The first quarter of 2021 has been very productive for us and IVERIC bio. I'm pleased to share that we are excited to be executing and moving towards completing enrollment in the GATHER2 clinical trial. Our second Phase 3 clinical trial for Zimura, a novel complement C5 inhibitor for the treatment of geographic atrophy or GA, secondary to age-related macular degeneration. We expect to complete this trial in the third quarter of this year. To-date both recruitment and retention of patients in GATHER2 are exceeding our expectations. We are on track for initial top line data from GATHER2 to be available approximately one year after the enrollment of the last patient in the GATHER2 clinical trial.

Of course you have to add some time for database closure and analysis of the initial top line data. If the 12-month results from GATHER2 are positive, we plan to file applications with the US FDA and the European Medicines Agency for marketing approval of Zimura for GA.

We also wanted to mention some organizational changes that further strengthen our management team. I am thrilled to announce that Dr. Pravin Dugel has been promoted to President effective May 1. Pravin has played a critical role in our execution of strategy. He's been a key part of the executive management team, leaving the company’s strategy and I want to also congratulate Kathy Galante on her well deserved promotion to Senior Vice President, Investor Relations. I look forward to continuing to work with both of them at this exciting time in our company.

Finally, I want to acknowledge David Guyer, my friend, who will be stepping down from our Board after 14 years for his leadership as Co-Founder and Executive Chairman. I sincerely thank David for his hard work and significant contributions to the company. We wish David well has rejoined SV Health Investors as a Venture Partner.

I would now like to turn the call over to Keith who will review enrollment and retention for GATHER2 and update you on our gene therapy pipeline in orphan inherited retinal diseases. Following key, Pravin will discuss our strategy in AMD and the formation of our gene therapy inherited retinal disease Scientific Advisory Committee, Keith.

Keith Westby

Thank you, Glenn, and good morning, everyone. As Glenn mentioned, our main priority is to aggressively drive patient recruitment and retention in the GATHER2 clinical trial. The enthusiasm, resiliency and dedication of patients, physicians and their staff are exceeding our expectations. With the reduction in the mean rate of GA growth over 12 months at 27.38%, a P-value of 0.0072 for the Zimura 2-milligram group as compared to the corresponding sham control group in the GATHER1 clinical trial.

We believe many principal investigators are enthusiastic about enrolling patients for the GATHER2 clinical trial. Leveraging the quality of the positive GATHER1 results to maximize both patient recruitment and retention for GATHER2. These positive 12 months data are further supported by positive 18-month efficacy results and a favorable safety profile that was maintained throughout the 18 months trial. Further, we believe that the early and continuous treatment effect demonstrated in GATHER1 is a key motivator for patient retention in GATHER2.

In total, we are planning to enroll approximately 400 patients in the GATHER2 clinical trial. We continue to be on track and look forward to completing enrollment in GATHER2 in the third quarter of this year.

Our Phase 2b screening clinical trial of Zimura for the treatment of autosomal recessive Stargardt disease, referred to as the STAR trial, is ongoing with the goal of enrolling approximately 120 patients. Results from this clinical trial are expected after the 12 month initial top line data from GATHER2. There are currently no therapies approved for Stargardt disease in either the US or the European Union.

Turning toward gene therapy programs. We are excited about the progress in the development of our product candidate for the treatment of BEST1-related inherited retinal diseases or IRDs, IC-200. We are completing a toxicology study in the naturally occurring canine model of Best disease.

As a reminder, we have data demonstrating long term rescue in this model following a single sub-retinal injection. We are on track to release the recently manufactured GMP batch of IC-200 in preparation for the planned IND filing and plans to move IC-200 into a Phase 1/2 clinical trial in the second half of 2021. We are not aware of any ongoing competitive programs for BEST1-related IRDs and believe IC-200 has the potential to be both first and best-in-class.

Regarding IC-100, our product candidate for the treatment of rhodopsin-mediated autosomal dominant retinitis pigmentosa, the company continues to evaluate the results from its preclinical toxicology studies. In our preclinical efficacy and toxicology study in a naturally occurring canine model of RHO-adRP, efficacy was demonstrated at all three doses tested.

We also tested the same three doses in a GLP toxicology study in non-human primates. Ocular inflammation on clinical exam was observed in the high dose group in canines and to varying degrees at different dosing levels tested in non-human primates. Due to the different findings in the two different species, and our high commitment to the safety of its patients, we are planning to discuss the design of our planned first-in-human clinical trial with regulators prior to submitting an IND. We now believe that IC-100 will likely be delayed from entering into a Phase 1/2 clinical trial this year.

We are thrilled about the progress of our minigene programs, in collaboration with the University of Massachusetts Medical School. We are pleased to report that we have recently identified a lead construct for our Leber Congenital Amaurosis Type 10, or LCA10, miniCEP290 program and currently considering development plans for this program.

Also during the second quarter, we expect to obtain additional results from our Stargardt disease, miniABCA4 program and we expect to obtain preliminary results from our USH2A related IRD program during the second half of this year. We will continue to keep you updated on our minigene programs.

Thank you for your time. I will now turn the call over to Praveen.

Pravin Dugel

Thank you, Keith. Thank you all for joining the call this morning. I hope that you're all well. A key goal of ours is to expand and advance our footprint in multiple stages and types of AMD. We intend to execute a development strategy that will involve both Zimura and IC-500 in a complimentary fashion to impact multiple forms and stages of AMD.

I would like to let everyone know that we are planning to host a dry AMD virtual symposium for investors and analysts on Friday, June 18th, from 10am to noon, Eastern time. The event will include presentations and discussions with retinal specialists and key opinion leaders on Zimura and IC-500 and the dry AMD landscape.

Guest speakers will include, Dr. Frank Holt, University of Bonn, Dr. Peter Kaiser, Cleveland Clinic Lerner College of Medicine Cole Eye Institute, Dr. Yousef Kanani, The Erra Eye Associates and University of Nevada Reno.

Dr. Anat Loewenstein, Sackler Faculty of Medicine at the Tel Aviv University and Tel Aviv Medical Centre, Dr. Charles Wykoff, Retina Consultants of Texas and Blanton Eye Institute, Houston Methodist Hospital, and Dr. Trent Woodruff, the University of Queensland.

We hope you will be able to join us, at our virtual Symposium on June 18. Please reach out to Kathy, if you have any questions.

Earning to Burning to IC-500, we announced in March 2021, that we revised our development plans for IC-500 to include the investigation of multiple dosing schedules for our product candidates.

In April 2021, we commenced our first pre-clinical tolerability study. And we're currently planning additional pre-clinical studies, including Funko kinetic and target engagement studies. Formulation, optimization and other manufacturing activities are also ongoing.

We continue to remain excited about, the development potential of IC-500 and expect to submit an IND to the FDA for IC-500 NGA, secondary to AMD in the second half of 22. As a reminder, we believe, IC-500 has the potential to be best in class, as it inhibits HtrA one both intra and extra similarly.

As Keith mentioned, while IC-100 is delayed, our IC-200 and minigene programs are progressing well. We are excited to announce today, that in addition to our visionary steering and imaging advisory committees, the formation of an IVERIC bio gene therapy inherited retinal disease Scientific Advisory Committee, which brings to together a renowned group of thought leaders, who bring extensive clinical experience and a deep understanding of gene therapy to treat inherited retinal diseases.

The advisory committee will work closely with senior management. As we advance our gene therapy IRB programs. advisory committee members include, Dr. Elias Traboulsi, Cole Eye Institute, Cleveland Clinic Lerner College of Medicine, Dr. Andreas Lauer, Casey Eye Institute, University of Oregon, Dr. Bart Leroy, Ghent University Hospital, and Children's Hospital of Philadelphia, Dr. Mark Pennesi, Casey Eye Institute, University of Oregon, and Dr. Eleonora Lad, DUKE READING CENTRE, Duke University Medical Centre.

We remain committed to our mission statement to develop transformative therapies in retinal diseases. We look forward to keeping you updated on our progress in the months to come.

Thank you for your time. I will now turn the call over to Dave.

David Carroll

Thank you, Pravin and good morning, everyone. I'd like to highlight a few items from our press releases this morning, and update our expected year-end cash balance and confirm our expected cash runway.

For the quarter, our net loss totaled $26.8 million or $0.29 per share compared to a net loss of $15.1 million or $0.28 per share for Q1 2020. This increase in net loss was driven primarily by increases in both R&D and G&A expenses and the Q1 2020 impact of a favorable settlement of the state corporate tax audit.

R&D expenses increased due to the progress of our Zimura clinical programs and the progression of our preclinical gene therapy and IC-500 programs. During the quarter, we continued our recruitment and retention activities for GATHER2 and continued our Zimura manufacturing scale up activities. G&A expenses increased, primarily due to an increase in legal costs associated with our ongoing litigation.

Turning to our expected year-end cash balance and cash runway. As Keith and Glenn have described, we are aggressively driving GATHER2, recruitment and retention. We're also investing in the manufacturer Zimura drug substance and drug products, including required sorting materials, as we aim to scale up and validate the manufacturing process.

As expected, both of these activities have impacted our Q1 cash burn. However, we expect our quarterly cash burn to decrease as the year progresses. We now expect our year-end cash balance range between $125 million and $135 million. Our long term cash forecast is unchanged. We estimate that our cash will be sufficient to fund our capital expenditures and operating expenses as currently planned into 2024, excluding any potential approval or sales milestones payable to Archemix or any commercialization expenses for Zimura.

These estimates are based on our current business plan, which includes the continuation of our ongoing clinical development programs for Zimura, the progression of our IC-100 and 200 programs into the clinic and the advancement of our IC-500 development program.

These estimates also assume that we will enroll approximately 400 patients in the GATHER2 trial. These estimates do not reflect any additional expenditures related to potentially setting Zimura in any other indications or resulting from the potential in-licensing or acquisition of additional product candidates or technologies or commencement of any new sponsored research programs or any associated development that we may pursue.

I'll now turn the call back over to Glenn. Thank you for your time.

Glenn Sblendorio

So, thanks, Dave. And thank you, everyone for your time this morning. And your continued support. I’ll now ask the operator, if he can open up the line for questions. Thank you.

Question-and-Answer Session

Operator

We will now begin the question-and-answer session [Operator Instructions] The first question comes from Tiago Fauth with Credit Suisse. Please go ahead.

Tiago Fauth

Hi. Thanks for taking the question. So just a quick confirmation here. So GATHER1

data is the 12-month GATHER2 data sufficient to support the filing from a safety or exposure perspective, or do you need any additional follow up there? And another follow up on the broader competitive landscape in GA, so again, there's a lot of focus on C3 and C5 inhibition because there is clinical data for those approaches.

But curious about your thoughts on longer-term potential approaches like gene therapy targeting [indiscernible] factor age proteins and other emerging therapies out there? What are some pros and cons? Thank you.

Glenn Sblendorio

Tiago, thank you. It's Glenn. And thank you for the question. So I'll take the first question on the GATHER1 trial and I’ll ask Pravin to take the second question. Yes, we believe the combination of GATHER1 and GATHER2 will be sufficient for a regulatory filing. I think as we have said in the past, we've seen in our disclosures, we've had numerous conversations and formal conversations with the FDA that has given us comfort in the in our strategy with the two trials. So yes, we're comfortable. And as I said today, on completion of GATHER2, our intent is to analyze top level data and if it's sufficient, we would file for regulatory approval. Pravin?

Pravin Dugel

Thank you, Glenn. And good morning, Tiago. And thank you for the question. what I would say is we're delighted that there's so many companies that are looking at the complement pathway because it validates the target. We remain quite convinced that our target has a great deal of scientific backing and scientific evidence. In fact, we feel that our results reflect what would be consistent with previously a known science and previously published science.

In terms of gene therapy, I think it's important to understand that there's a different challenge to gene therapy for chronic disease as opposed to an orphan disease. Gene therapy is very exciting. But given again, the challenges remain for a chronic disease, which may be more different than orphan diseases as we've seen, so we support all of these companies. We're delighted that there are more people that are in the complement pathway, as I say because it validates the target. However, we remain convinced that science stands with our target selection in the inhibition of C5.

Tiago Fauth

Got it. Understood. All right. Thank you very much.

Operator

The next question comes from Stacy Ku with Cowen. Please go ahead.

Stacy Ku

Good morning. Thanks for taking my questions. And congratulations on the continued progress at this year. So first, wondering if you guys would be willing to provide any additional commentary on retention or enrollment? For instance, have you seen an even greater acceleration in the past few months or should be fixed back kind of a study addition patients?

And then my second question, is another competitive one. As the approach the policies data read out? Can you remind us main differences in study design, and specifically the reasoning behind the key inclusion criteria for Astraphobia lesions? Thank you.

Glenn Sblendorio

Stacy, thanks for the compliment on execution. Thanks for the questions. So on the first retention and updates on that and color, I’ll ask Keith to do that and on the second question, Pravin will take that.

Keith Westby

Thanks, Glenn. Thanks, Stacy. So yes, the enrollment was good from the onset. So it's been continued to be quite -- we're quite happy with that. And I think there's a number of things that really drives that one is the results from the GATHER1, which were published the 12-month results as well as the 18-month follow-on results from GATHER1, which really helped drive the enrollment and as well as the retention in GATHER2. So, we're quite pleased with that and very much on track for the third quarter to complete that.

Glenn Sblendorio

Hey Stacy, the only thing I did in terms of color, I think it goes back to a lot what we said in the past on the preparation in this COVID environment. And Keith and his team worked very closely, not only with the sites, but took into account also the impact potentially on patients and how do we keep them safe.

So, I think that early planning, and if you recall, we did delay the trial in early 2020 until we can better understand what was happening with the pandemic and that was about a three, four month delay and that allowed us really to take a step back, analyze what was happening with the docs, plan well, and I think we're seeing the fruits of that planning and the execution now.

And as you know we said at the end of the year that we did move up the completion date from the end of the year or closer to fourth quarter to the third quarter. So, that may be a little bit more color for you at this point in time. So, Pravin, I'll give you the second question.

Pravin Dugel

Thank you, Glenn. And Stacy, thank you for your question. So, what has been known for quite a long time, more than half a century is that there's a very stereotypic way that geographic atrophy advances and what it does is that it advances fairly rapidly in a circumferential fashion. And by rapidly I mean in a matter of several months and you can see this in the excellent studies that Genentech has published in regards to their Itolizumab program.

And then once it advances relatively rapidly circumferentially, once the foveal is involved, the geographic atrophy tends to slow down once the foveal is involved. So, the bottom-line is that there are lots and lots of patients out there with excellent visual acuity -- a visual acuity may be retractable to 2020. But they're visually dysfunctional, because of the geographic atrophy, that they have this extrafoveal that may not allow them to function, may not allow -- may not be able to see a straight line if you're an architect, or certainly an engineer.

They may not be able to finish reading a spreadsheet or a sentence if you're an accountant or a lawyer. So, there are lots of those patients out there and the logic behind the selection of extrafoveal geographic atrophy is not only to address this enormous unmet need, but also to be able to note that if we're able to slow down the fastest growing geographic atrophy, we've met a higher bar of scrutiny, then slowing down a slower growing geographic atrophy.

And finally, what I'd also say is that the ability to protect the foveal from being affected by geographic atrophy is terribly valuable. And we believe that we'll be able to demonstrate that as well.

So, for all of those reasons, important to understand why we selected this patient population and also, as you've noticed, Stacy, important to note that our patient population is quite different than the Apollo's patient population and should be regarded that way as well when you analyze the data. But thank you for your question.

Stacy Ku

Thank you.

Operator

The next question comes from David Nierengarten with Wedbush Securities. Please go ahead.

Mr. Nierengarten, your line is open, please go ahead with your question. Thanks.

David Nierengarten

Oh, the old mute button. I'll gene therapy questions today. On the two programs, are there any differences in manufacturing or anything else that would lead to differences in the animal outcomes, or, you know, obviously, the gene being inserted is different. So, essentially, do you think it's isolated to maybe inflammation caused by the gene product, or, again, are there differences in manufacturing or other things that might – might be leading to those cases of inflammation in the animals? Thanks.

Glenn Sblendorio

David, thank you for your question. Keith?

Keith Westby

Sure. Thanks, David. Very good question. So in terms of the manufacturing, we feel confident that we did produce good quality material for these. It's a similar manufacturing process for both. I think, looking at the data, we see the discrepancy in two different species. So we just thought, it would be prudent to take us a step back and really analyze that data, and have some discussions with regulators prior to initiating the IND-filing for the program, that's for IC-100. For IC-200, we are very much on track. We've completed the manufacturing of the GMP batch for the clinical trial. And that's in the process of being released now.

David Nierengarten

And could you remind us on the rhodopsin protein being delivered by the vector, is it what species is that coming from in those studies? Is it coming? Is it the human rhodopsin protein or a different source? Thanks.

Keith Westby

It is – so that's a great question. It is the human rhodopsin that's being used for both the non-human primate studies as well as the canine study, which is the same material we've planned to move forward into a clinical trial.

David Nierengarten

Got it. Thank you.

Operator

There are no other questions. I would like to turn the conference back over to Glenn Sblendorio for any closing remarks.

Glenn Sblendorio

Thank you, Operator, and we're very happy to have the opportunity to update you this morning on our continued execution and progress. And I'd like to wish everybody good morning, and thanks for listening. Bye-bye.

Operator

The conference has now concluded Thank you for attending today's presentation. You may now disconnect.