EyePoint Pharmaceuticals Inc
NASDAQ:EYPT
Earnings Call Analysis
Q3-2023 Analysis
EyePoint Pharmaceuticals Inc
EyePoint Pharmaceuticals is on the cusp of revealing pivotal Phase II clinical trial outcomes for their lead product candidate, EYP-1901. This candidate is notably delivered via a single intravitreal injection, poised to offer a sustained near constant drug release for about 9 months, which could significantly ease the treatment burden for the majority of wet age-related macular degeneration (wet AMD) patients by maintaining stable vision and retinal anatomy.
The company's efforts are geared towards delivering innovative treatments for serious retinal diseases. A promising milestone is the expected filing of an IND for a new treatment, EYP-2301, in early next year, as well as the anticipation of releasing top line data from the ongoing Phase II PAVIA clinical trial in the second quarter of 2024. Furthermore, approximately 170 patients have been treated with EYP-1901 with at least a 4-month post-injection follow-up, signaling a significant advancement in their clinical trials.
EyePoint Pharmaceuticals reported an operating expense of $29.6 million for the third quarter ended September 30, 2023, compared to $28.4 million in the previous year, with the spike attributed mainly to increased R&D spending on EYP-1901 clinical trials. Despite the increased expenses, the company has a healthy financial runway, with sufficient cash and investments to fund current and planned operations into 2025.
If EYP-1901 clinical data proves positive, EyePoint aims to initiate its first Phase III trial in the latter half of the next year. The company is considering going ahead with the 2-milligram dose for pivotal trials if both the 2-milligram and 3-milligram doses yield essentially the same efficacy, as this could result in fewer inserts in the eye and reduced costs.
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Good morning. My name is Liway, and I'll be your conference operator today. At this time, I would like to welcome everyone to the EyePoint Pharmaceuticals Third Quarter 2023 Financial Results and Recent Corporate Development Conference Call. There will be a question-and-answer session to follow at the completion of the prepared remarks. Please be advised that this call is being recorded at the company's request.I would now like to turn the call over to George Elston, Executive Vice President and Chief Financial Officer of the EyePoint Pharmaceuticals. Please go ahead.
Thank you, and thank you all for joining us on today's conference call to discuss EyePoint Pharmaceuticals' third quarter 2023 financial results and recent corporate developments. With me today is Dr. Jay Duker, President and Chief Executive Officer. Jay will begin with a review of recent corporate updates and discuss the ongoing Phase II clinical trials for EYP-1901. I will close with commentary on the third quarter 2023 financial results, and we will then open the call for your questions.Earlier this morning, we issued a press release detailing our financial results and recent operational developments. A copy of the release can be found in the Investors tab on the corporate website, www.eyepointpharma.com. Before we begin our formal comments, I'll remind you that various remarks we will make today constitute forward-looking statements for the purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. These include statements about our future expectations, clinical developments and regulatory matters and time lines, the potential success of our products and product candidates, financial projections and our plans and prospects.Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the Risk Factors section on our most recent annual report on Form 10-K, which is on file with the SEC and in other filings that we may make with the SEC in the future. Any forward-looking statements represent our views as of today only. While we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so even if our views change. Therefore, you should not rely on these forward-looking statements as representing our views as of any date subsequent to today.I'll now turn the call over to Dr. Jay Duker, President and Chief Executive Officer of EyePoint Pharmaceuticals.
Thank you, George. Good morning, everyone, and thank you for joining us to discuss EyePoint's continued execution toward our milestones as we work to bring first-in-class therapeutics and delivery technologies to patients suffering from serious retinal diseases. In the third quarter, we both advanced and expanded our product pipeline with the announcement of positive masked safety data in our ongoing DAVIO 2 and PAVIA Phase II clinical trials for our lead product candidate, EYP-1901, which is the small molecule vorolanib and our proprietary bioerodible Durasert E technology, as well as the unveiling of a new preclinical program, EYP-2301. EYP-2301 delivers a promising Tie-2 activator, razuprotafib, formerly known as AKB-9778 formulated in Durasert E to potentially improve outcomes in wet age-related macular degeneration or wet AMD and diabetic eye disease. It's an exciting time at EyePoint as our EYP-1901 clinical trials approach key data events with top line Phase II DAVIO 2 trial results anticipated in early December and PAVIA results in Q2 of next year, and as we plan to initiate a third Phase II trial in diabetic macular edema or DME in Q1 of 2024.I'll now review our recent program and corporate updates and give an overview of upcoming catalysts. Turning to our lead program. EYP-1901 is being advanced as a potentially paradigm-shifting treatment for patients suffering from VEGF-mediated retinal diseases. EYP-1901 is delivered with a single intravitreal injection in the physician's office similar to the current FDA-approved anti-VEGF biologic treatments. EYP-1901 is immediately bioavailable, featuring an initial burst of drug, followed by near constant zero-order kinetic release for approximately 9 months.EYP-1901 delivers vorolanib, a selective and patent-protected tyrosine kinase inhibitor formulated in a solid insert using our proprietary sustained-release bioerodible Durasert E technology. Vorolanib brings a new mechanistic approach to the treatment of VEGF-mediated retinal diseases by acting as a pan-VEGF receptor blocker, blocking all VEGF isoforms. We expect EYP-1901 with its new MOA and sustained drug delivery for up to 9 months to meaningfully reduce treatment burden in the majority of wet AMD patients while keeping vision and retinal anatomy stable.Vorolanib features reduced off-target binding and at clinically relevant doses does not inhibit Tie-2, a critical pathway associated with vascular stability, which may result in an improved efficacy. In a rodent model of retinal detachment, vorolanib demonstrated neuroprotection and because it blocks PDGF may also have antifibrotic benefits. We were pleased to present preclinical and clinical data at multiple medical meetings that underscore the promising profile of EYP-1901. One highlight was at last month's Retina Society Meeting, where a comparison of the anti-angiogenic profile of 3 TKIs, vorolanib, axitinib and [ sunitinib ] validated vorolanib as a pan-VEGF receptor inhibitor that effectively blocks the critical pathways of pathologic angiogenesis.Importantly, the data showed that vorolanib is differentiated from the other TKIs tested in retinal disease. Unlike sunitinib, vorolanib does not bind to melanin. And unlike axitinib, vorolanib is not expected to have a physiologic impact on normal Tie-2 function. As a reminder, the fully enrolled DAVIO 2 trial is evaluating EYP-1901 in 160 subjects with previously treated wet AMD as a maintenance therapy with a goal to maintain stable vision and retinal anatomy for the majority of wet AMD patients for 6 months or longer following a single injection of EYP-1901. This could represent a significant improvement compared to the current anti-VEGF treatments that are dosed on average every 2 months in the United States under a treat-and-extend protocol. This lifetime of frequent treatment represents a tremendous burden for patients, physicians and the health care system in general.EYP-1901 has the potential to change this treatment paradigm into a treat to maintain model by providing sustained delivery of vorolanib for approximately 9 months following induction treatment with a large molecule anti-VEGF ligand blocker. This may allow patients and practitioners the flexibility to reduce the number of visits without sacrificing visual outcomes. The subjects in the DAVIO 2 trial were randomized to 2 treatment arms, approximately 2 milligrams or approximately 3 milligrams of EYP-1901 or on-label aflibercept as a control.All subjects of the trial received 3 loading doses of aflibercept on day 1, month 1 and month 2, followed by dosing of EYP-1901 or a sham injection 30 minutes after the last loading dose. The FDA approval pathway for this program and the primary endpoint for DAVIO 2 is noninferiority in the change of best corrected visual acuity or BCVA for each of the EYP-1901 arms versus the aflibercept control arm. The lower limit of noninferiority margin is defined as minus 4.5 letter loss by the FDA. For a perspective, patients do not generally notice a change in vision until they lose 5 or more letters, which is the equivalent of one line on an eye chart.I'd like to share our perspective in terms of targeted outcomes for the noninferiority BCVA as there are both numerical and statistical considerations for this outcome. First, a very successful outcome in DAVIO 2 would be to mirror the Phase I DAVIO BCVA results that showed an average of 2.5 letter loss 6 months after EYP-1901 was injected. Recall that DAVIO was an all-comers open-label, nonrandomized Phase I trial. Based on learnings from that Phase I trial, we modified inclusion and exclusion criteria for the DAVIO 2 trial in an effort to exclude eyes that were not responding to standard of care therapy. We presented masked patient demographic data last quarter that reflects the fact that we enrolled a more controlled patient population in DAVIO 2 than in the Phase I trial.Generally, an outcome of minus 3 letters or better would be a very strong numerical outcome and possibly statistically noninferior even in this relatively small trial. If the EYP-1901 arms match or better the minus 1.4 letters difference versus the 2-milligram aflibercept control, which was what was seen in the 16-week 8-milligram EYLEA arm in the PULSAR trial. This would represent an outstanding outcome from a single injection of EYP-1901. In addition to stable BCVA, it is critical that the EYP-1901 continues to show a favorable safety profile consistent with the interim masked safety update through October 1, 2023 across all of the EYP-1901 clinical trials. As of October 1, approximately 170 patients have received EYP-1901 with a minimum of 4 months follow-up post injection from the ongoing Phase II PAVIA and DAVIO 2 clinical trials and the completed DAVIO Phase I trial with no reported drug-related ocular SAEs and no reported drug-related systemic SAEs. This continues to give us confidence in the results of this crucial endpoint.Although change in best corrected visual acuity is the primary endpoint, reduction in treatment burden will also be a critical secondary outcome to consider given the unmet need in this patient population for more durable therapies. For a clinically meaningful outcome, we believe that one or both EYP-1901 arms need to result in a reduction in treatment burden of a minimum of 50% or better for the 6 months following EYP-1901 injection at week 8. In addition, we also believe that 50% or greater of the EYP-1901 treated eyes should be supplement free up to the week 32 visit, along with a relatively stable anatomy as measured by OCT. Based on our market research and KOL interactions, these endpoints will be meaningful to retina specialists who treat wet AMD patients. We plan to host a virtual call with renowned retinal specialists, Dr. David Boyer and Dr. David Lally on November 9 at 8 a.m. Eastern Time to discuss their perspectives on the current treatment landscape and the DAVIO 2 outcome considerations that I just reviewed. We hope that you will all join us for this informative presentation and Q&A, and you can find the link to that call in the Investor tab of our website.Looking ahead to the potential Phase III pivotal trials for EYP-1901 as maintenance therapy and wet AMD, our current plan is to initiate the first trial by the fourth quarter of 2024. This initial trial will be largely in the U.S. and Canada. We hope to initiate a second pivotal trial several months later. The second Phase III trial will be largely outside of the U.S. The Phase II DAVIO 2 trial of EYP-1901 was designed to mirror the anticipated design of the Phase III trials based on our Type C meeting with the FDA and other interactions with the agency. The key differences are that the Phase III trials will feature redosing of EYP-1901 every 6 months, and the primary efficacy endpoint will be noninferior change in visual acuity to approximately 1 year instead of 8 months as it is in DAVIO 2. We expect to share more details about this trial in the coming months.Now let me turn to our second indication, NPDR. In June, we reported that enrollment of the Phase II PAVIA clinical trial was complete. PAVIA is a randomized controlled Phase II trial evaluating EYP-1901 as a potential 9-month treatment for moderate to severe NPDR. Similar to the DAVIO 2 trial, our PAVIA trial saw significant investigator and patient interest during enrollment. The trial enrolled 77 patients exceeding the 60 patient target. Patients who were randomly assigned to 1 of 2 doses of EYP-1901, approximately 2 milligrams or approximately 3 milligrams or to the control group that received a sham injection.As in the wet AMD trials, EYP-1901 is delivered with a single intravitreal injection in the physician's office. As a reminder, NPDR is a very common retinal disease that affects almost 1/3 of diabetic adults over the age of 40 and it's projected to impact over 14 million Americans by 2050. In NPDR, blood vessels are weakened, potentially leading to swelling of the macula, which is called diabetic macular edema or DME, and may eventually result in abnormal blood vessel growth, which is called proliferative diabetic retinopathy or PDR. Both DME and PDR could ultimately result in severe visual loss. It's important to note that there remains a great unmet need for a safe, efficacious and convenient treatment for NPDR that proactively reduces the risk of progressing to a site threatening complication over the long-term.Approximately 90% of patients with NPDR currently receive no course of therapy apart from observation by their eye doctor until their disease progresses to DME and/or PDR. EYP-1901 in our Phase II PAVIA trial could potentially reduce the risk of progressing to these complications with a less intrusive treatment protocol. Recently, we reported an interim analysis of masked safety data from the Phase II PAVIA clinical trial in NPDR, which showed that as of October 1, 2023, EYP-1901 was well tolerated with no reported drug-related ocular or drug-related systemic SAEs, demonstrating EYP-1901's excellent safety profile in NPDR for the first time. Top line data from the PAVIA trial remains on track for the second quarter of 2024.As mentioned earlier, we plan to initiate a Phase II trial evaluating EYP-1901 in DME in the first quarter of 2024, which we are calling the VERONA trial. We will share details of that trial at a future date. The goal of the VERONA trial is to gain experience with EYP-1901 in this potentially large indication. In September, we disclosed a new preclinical program called EYP-2301. EYP-2301 is tied to agonist, razuprotafib, formerly known as AKB-9778, which we have formulated to work in Durasert E. This has the potential to provide intravitreal sustained delivery over 6 months or longer to improve the treatment of wet AMD and diabetic eye disease. Previous preclinical and clinical studies show that razuprotafib delivered subcutaneously, demonstrated proof-of-concept in diabetic eye disease. And we believe that delivering EYP-2301 intravitreally has the potential to offer new site-saving treatment for patients with severe retinal disease, either alone or in combination with anti-VEGFs.Finally, we were delighted to announce that EyePoint expanded its Board of Directors with the appointment of Stuart Duty, a seasoned biopharmaceutical financial executive who brings more than 25 years of experience to the role. We also strengthened our executive leadership team with the promotion of our CFO, George Elston, to the additional role of Executive Vice President. George's wealth of experience, financial acumen and strategic guidance has been a tremendous asset to our EyePoint team.On behalf of the entire leadership team, we welcome Stuart and congratulate George, and we are grateful for their valuable leadership at EyePoint as we continue to build value for our shareholders during this active time in the company's growth. I'd like to thank the entire EyePoint team for an incredibly productive quarter, and I will now turn the call over to George to review the financials. George?
Thank you, Jay. As the financial results for the [ 3 ] months ended September 30, 2023 were included in the press release issued this morning, my comments today will be focused on a high-level review for the quarter. For the third quarter ended September 30, 2023, total net revenue was $15.2 million compared to $10 million for the quarter ended September 30, 2022. Net product revenue for the third quarter was $0.8 million compared to net product revenues for the third quarter ended September 30, 2022 of $9.7 million. Consistent with the exit from the commercial business, the decline in revenue resulted from the sale of the YUTIQ franchise in May 2023, along with the discontinuation of marketing activity for the DEXYCU franchise this year due to the loss of pass-through reimbursement by CMS effective 1/1/23.Net revenue from royalties and collaborations for the third quarter ended September 30, 2023, totaled $14.4 million compared to $0.3 million in the corresponding period in 2022. The increase was primarily due to a recognition of deferred revenue from the sale of YUTIQ, which will be recognized over a 2-year period, which began in Q2 of this year. Operating expenses for the third quarter ended September 30, 2023, totaled $29.6 million versus $28.4 million in the prior year period. This increase was primarily driven by higher R&D spending on EYP-1901 clinical trials, partially offset by lower sales and marketing expense.Nonoperating expense net totaled $1.8 million and net loss was $12.6 million or $0.33 per share compared to a net loss of $18.4 million or $0.49 per share in the prior year period. Cash and investments at September 30, 2023, totaled $136 million compared to $144.6 million at December 31, 2022. We expect the cash, cash equivalents and investments on September 30, 2023, will enable us to fund our current and planned operations into 2025. In conclusion, we are pleased with EyePoint's progress in the third quarter and year-to-date and are well capitalized to advance our product pipeline to key value inflection points.I will now turn the call back over to Jay for closing remarks.
Thank you, George. We believe EYP-1901 is a potentially paradigm-shifting treatment for patients suffering from serious retinal diseases, providing unique benefits that may include delivery of vorolanib consistently over approximately 9 months. a new mechanism of action to treat retinal disease beyond anti-VEGF ligand blockade, the potential for neuroprotection and antifibrosis and a proven delivery technology with a positive safety profile.I will close by recapping key upcoming catalysts, including the top line data from our Phase II DAVIO 2 clinical trial anticipated in early December, the dosing of the first patient in the Phase II VERONA clinical trial of EYP-1901 in DME in the first quarter of next year and top line data release from our Phase II PAVIA clinical trial in the second quarter of 2024. This remains an incredibly exciting time for EyePoint as we are well positioned to execute on our upcoming milestones and continue to transform the treatment landscape with innovative long-term solutions to improve both the vision and the lives of patients with serious retinal diseases.Thank you all very much for listening this morning. I will now turn it over to the operator for questions.
Thank you so much presenters. Our first question comes from the line of Tyler Van Buren of TD Cowen.
Congrats on the progress. I have a couple of questions for you. First one is, I appreciate how transparent you guys have been with respect to your BCVA outcome scenario ranges for the DAVIO 2 trial ahead of the data. But were these constructed in accordance with KOLs? And can you elaborate on what the KOL feedback has been regarding what they need to see from the trial, perhaps a preview of sorts of the upcoming KOL event? And then the second question is, upon positive data, can you talk about how quickly you would be able to start the Phase III program? And is it possible to get the top line data in an accelerated fashion or should we think of it being a more traditional wet AMD Phase III program time line?
Thanks, Tyler. I appreciate the questions and your interest. First of all, with respect to the BCVA ranges, so there's really kind of 3 ways to look at this. And the first way is what does the FDA want? And that's pretty clear, the noninferiority margins got to be minus 4.5 letters. You can't cross it with your confidence intervals. And depending on your end of your study and your standard deviation, you could come pretty close to 4.5 and get it resolved. But the second part of what you asked is what does the KOLs want. And interestingly, when you ask them, and I'm sure you have, they're generally fine with a good efficacy profile, a good safety profile as long as the numerical change is in the range of 3 letters to 4 letters.It's interesting that I think that they believe in general that, that type of change in vision is not noticeable to the patient. On the other hand, we, as a company, look at it as a combination of both of those. And so that kind of minus 3 range or better. I think based on what we anticipate the standard deviation of the trial might be in a pivotal trial would likely be noninferior and meet the KOLs' expectations. Of course, we don't know what the results are yet. We'll know in approximately a month, but there's reasons to believe that we could do considerably better than that.Second question was on the start of the Phase III. With good to great data, we believe we can start the first Phase III trial in the second half of next year. It may be closer to the fourth quarter. We haven't really zeroed in on that. Suffice it to stay, the company has been really focused on Phase III prep for basically the last 9 months. And there's a lot to do to get ready, and we continue to be on track for our goal to start it in the second half of next year. From an accelerated perspective, I think the trouble with unmasking early is you penalize yourself with a higher end. And cost and speed is critical here.And if our statistics suggest we can do the Phase IIIs with relatively low ends, I think it's best to get them done right and get them done fast as opposed to be penalized for an early [ look ]. I hope that was sufficient. Anything else?
No, that's clear.
Your next question comes from the line of Yatin Suneja of Guggenheim.
So Jay, you just mentioned that you're focused on obviously delivering these data, but also in the Phase III. So my question to you is, and it also has to do with the competitor is how does the EYLEA induction relate to the mechanism of TKIs in wet AMD? And then can you maybe just talk about why you think it is necessary for patients to do that induction when your competitors are doing a superiority study with just a single dose aflibercept as a comparison? I would love to get your thoughts there.
Thanks, Yatin. Those are 2 great questions. Let me start with the induction. First of all, from a scientific perspective, it's unclear if the induction offers anything to the patients treated with EYP-1901. We have pretty good preclinical data that shows that our drug is bioavailable in the cohort of animals within minutes of injection and reaches therapeutic levels in hours. On the other hand, we've set out from the beginning to use EYP-1901 as a maintenance therapy for previously treated wet AMD patients. The decision to do the reinduction is something that came up with our discussions with the FDA around the structure of the Phase III pivotal trials.When we had our Type C meeting, the FDA was certainly agreeable to us using EYLEA as our control in the Phase III. And when we discussed on-label EYLEA, the FDA's response was, yes, after you reinduce the patients, you can go to every other month on-label EYLEA. And the rationale was the patients you enroll in that trial may be undertreated. And therefore, before you allow them to go to every other month, you've got to reinduce them. Makes sense. And then we had to reengage the FDA and said, well, if we're going to make an assumption that some of these eyes are undertreated in the real world, which we think is probably true, we'd like to reinduce all the patients in the study.And they were agreeable to that. What that did, however, as you may be aware, you can have a 9-month efficacy endpoint in the wet AMD study. But our 9 months doesn't start ticking until after the reload of EYLEA. So what it was, the trade-off here was we needed to do in our pivotal trial, the efficacy endpoint out approximately 1 year. We thought that was a fair trade-off to be able to level the playing field and make sure that we weren't allowing relatively undertreated patients to flood the EYP-1901 arms. So it really isn't a scientific reason. I'd say it's a regulatory reason and a derisking reason that we're reinducing.So that, I think, gets into the second question, why induction? Again, I think I've covered that. The -- our decision to do this, I think, more typical noninferiority Phase III is, again, comes out of our discussions with the FDA and a derisking. We think that this is the fastest and least risky pathway to FDA approval.
I'll remind you that, remember, we had a Type C meeting with FDA laying out the Phase II plans, which would inform Phase III. And so that's also a big driver of focus going into the Phase IIIs next year.
Got it. Very helpful. Just one more question, if I may. Could you talk about the dose response? There are 2 doses in this study. So just curious what would you expect? Should we expect any dose response? And then if, let's say, if there is no dose response, just curious like how you will decide on the dose to take forward.
Yes. That's another great question, Yatin. And we really don't know if there will be a dose response because it's certainly possible that our 2-milligram dose will work efficiently to shut down the receptor for up to 9 months. And therefore, any additional drug may not give you additional benefit. So I would say we're, as a company, a little bit agnostic to that. I mean it's nice to show a dose response. And there's some validation to that understandably.On the other hand, if both our 2-milligram dose and our 3-milligram dose worked great, and they're essentially the same, we would opt to go with the 2-milligram dose approximately in our pivotal trial against a lower dose, most likely around 1 milligrams. What that would do, of course, is enable us, if successful, to have fewer inserts in the eye and lower the [ cost ].
Your next question comes from the line of Jennifer Kim of Cantor Fitzgerald.
I have 2. The first is just touching on the BCVA question, Jay, I think in your prepared remarks, you said a BCVA letter change difference of 3 letters or better would be good. And I think investors are generally aligned with that. The most pushback I've gotten is on the minus 3 to minus 4 letter scenario. So I was curious to see if you have any thoughts on that scenario? Is the base case or the hope that it will be better than that? And similar to that, in this scenario where you get a minus 3 letter difference, would [ statistic ] have to assume a standard deviation better than what we've seen with, say, PDS?
Sure. Great questions. Jennifer, thanks. So the best corrected visual acuity of 3 or less difference really would be, I think kind of a clear pathway in everybody's mind if we can replicate that in the pivotal trials. Minus 3 to minus 4 is kind of a theoretical range where one could argue that with a minus, let's say, 3.5 letter difference in a large enough and a small enough standard deviation that, that could be statistically non-inferior. But then you're getting into a point here where would it be commercially successful. So while it would meet that first bar of FDA approval, it may not meet the second bar of what the KOLs want, and perhaps, as you say, what the investment community might want to see as a result.So I would say, again, centering on the 3 letters or better, I think that meets everybody's test for success here. I'd remind everyone that we were minus 2.5 letters in the Phase I at 6 months after the EYP-1901 was injected. And one would expect -- and of course, we don't know this yet, but one would expect the EYLEA control arm to be relatively stable after the load between weeks 8 and week 32. And if it is, and we can replicate minus 2.5 again, I think that, that would be really an outstanding result. So the words again, base case, and it's again, I think a lot of this depends on what the view of what the -- what we need to do to advance the drug into pivotal trials. And one could see with a very tight standard deviation that even minus 3 letters would be statistically significant.So you mentioned the PDS standard deviations, and again, if you go back and look at the pivotal trials and wet AMD, I think basically, everyone since EYLEA was approved was done on an noninferiority basis in treatment-naive patients and generally had standard deviation to the change in visual acuity of around 12 letters. That's because they're treatment-naive. Some eyes respond, some eyes don't. The PDS Phase III enrolled previously treated patients like we did, but they limited the length of time to diagnosis to 9 months prior. So some of those eyes were still relatively early in their treatment and still perhaps being treatment extended. They weren't at a stable kind of pace of their -- of their disease yet.They had 7.1 letter standard deviation. So we have reasons to believe that because of our enrollment of eyes that had the disease longer than 9 months are suggesting they'd be more stable, but our standard deviation could be lower than that. That answer the questions?
Yes, it does. If I could, one more.
[ Go ahead ].
Your competitor received -- or announced that they received an agreement under their superiority trial design this morning. Net-net, this seems like good news for the overall space given the post draft guidance world we're in. But I'm wondering if you have any takes on that?
Well, yes. And again, that was just announced this morning with no details. But at a high level, this is great news. It's great news for all of the TKI companies because it shows that the FDA is willing to work with us to advance this new paradigm into the clinic. And as we know, it's great for the space. When investors see that there's a clear pathway to approval, then things are derisked. From our perspective, we are very comfortable with our Phase II design. And if we get good to great results at this point, I think our Phase III design, which the FDA has already seen and commented on and through our Type C meeting, I think that still would represent the fastest, least risky way to get approval for our drug.Again, the last comment about this, though, is once we are able to see the details of the [ spot ] that Oculus received, we will, like any company should do is take a look at our program and see if there's any learnings from what they're doing. But I have to, again, state, we're very comfortable with our approach to the pivotal trials and pathway to approval.
Your next question comes from the line of Colleen Kusy of Baird. Colleen, your line is now open. You may ask your question.
Maybe we could go back to Colleen after the next one.
All right. Your next question comes from the line of Daniil Gataulin of Chardan.
I couldn't hear. I thought that was my name that was called. Yes. I have a quick one on EYP-2301. I wanted to ask for the rationale for this product. And specifically, how does it fit with EYP-1901 strategy given that there could be some overlapping indications?
Thanks, Daniil. That's a great question. EYP-2301 is based around a molecule that's been studied into Phase II by a company called Aerpio. We've acquired their assets and their lead product, AKB-9778 was delivered subcutaneously for diabetic macular edema and for diabetic retinopathy. And it showed really promising anatomic results, although the visual results did not enable the company to really go forward into pivotal trials. This drug activates Tie-2. And by activating Tie-2, you stabilize blood vessels and you down-regulate angiopoietin-2 or Ang-2.And you may be aware that VABYSMO is a bispecific that blocks VEGF and blocks Ang-2. So that pathway of Ang-2 blockage is validated. And we believe that AKB-9778, now, EYP-2301 may be a better way to block that pathway by activating Tie-2. Secondly, we can now deliver at sustained-release. So these bispecific molecules still require relatively frequent injections. And we believe we can deliver at therapeutic levels for over 6 months with a single injection of EYP-2301. So how does it fit in? Well, that remains to be seen. I think that we could develop it and test it in a noninferiority fashion to get a label against the standard of care for either wet AMD or DME or both or we could choose to go for a superiority trial using it in conjunction with an anti-VEGF. That, of course, would be perhaps riskier because the anti-VEGFs are so effective, it sets a really high ceiling. On the other hand, if one is successful with that approach, you would likely have a multibillion dollar product because doctors would relish the opportunity to do even better than anti-VEGF alone.How would it fit into EYP-1901, you can -- it's highly speculative, because we've got a long pathway to go with EYP-2301, shorter pathway with EYP-1901, but you could envision a day when both have approval as stand-alone and as combo and one could do it one of each in a single injection. Obviously, there's a long pathway to that and a lot of permutations that we're going to look at. But in a nutshell, what we believe we can do with EYP-2301 is activate the Tie-2 pathway, secondarily inactivate Ang-2 and to do it in a sustained-release fashion with a derisked molecule.
Your next question comes from the line of Sean Kim of JonesTrading.
I just have a couple of quick ones. So I guess for the wet AMD program, following the DAVIO 2 readout, would you be requesting an end of Phase II trial with the FDA to further guide the Phase III trial design?
That's our plan. In fact, we would plan currently on having both a clinical end of Phase II and a CMC end of Phase II to gain alignment in both those areas.
Okay. Got you. And the potential timing of that meeting?
I would say late in the first quarter of next year, may bleed into early second quarter of next year, depending again how soon we can get all the clinical tables from DAVIO 2 in a format that we can submit.
Okay. Great. And I guess...
That's really the limiting step here.
Okay. Got you. And what the Rallybio complement inhibitor collaboration, what updates should we be expecting from that program in 2024?
Thanks for that question, Sean. It's a good question. And the answer is, as we've kind of said before, we're really excited about the collaboration. We're really excited about the molecule. Getting complement inhibitors to last several months at therapeutic levels in the eye is a challenge. If it wasn't a challenge, you'd see them already. However, we've made great progress, and we remain optimistic that we will be able to sustain release a complement inhibitor. But until we have -- really are confident in our formulation and our ability to do this consistently, we're not going to make any public statements around that. So I would say that, again, we're still working on it. We have made great progress. We have some really great scientists working on this, but it's not an easy task to accomplish.
Yes, Sean, maybe I can add to that because if you look at how we -- our cadence on disclosure, we've just disclosed EYP-2301 this past quarter because we've gotten it to a point where it formulates and we're in a position to move it into those preclinical programs. And I think you should think the same for the complement space as well. Once we get that formulation that we know works and has the right window, we'll start talking about it a little more publicly on what that pathway looks like.
Okay. I got you. And last one from me is that about the cash runway into 2025. Does that include potential pivotal III -- Phase III trials in wet AMD as well now that you're looking to start in the second half?
Yes, thanks for that question, Sean. So our Phase -- I'm sorry, our cash guidance into 2025 includes the ongoing Phase IIs. The planned Phase [Technical Difficulty] in DME, which is the VERONA trial, which will -- we expect to start in Q1, along with a significant amount of Phase III prep to start -- to be in a position to start the trials sometime second half of next year. It does not include the actual clinical trial cost for the pivotals. And as we've talked previously, that's something that we're going to look to a range of options to fund, which includes potential equity raise. We've got strong strategic partner interest and some other levers that we can pull, and we'll be talking about that over the coming months on our plans to fund that really after the Phase II results.
Okay.
Good question. Thank you.
Your next question comes from the line of Yale Jen of Laidlaw & Company.
[Technical Difficulty] And my question probably will be focusing on the potential future Phase III study. The first one is that in the -- one of your latest presentations, you have laid out 4 scenarios in terms of the Phase III of different BCVA outcomes. I'm just curious, based on those assumptions, what might be your thoughts in terms under each scenario, what the Phase III study size might be? Then I have a follow-up.
Are you talking about on the BCVA measures? Is that...
Right. From 1.0 all the way to minus 4.
Yale, if I may, that -- so, actually, we're -- our interpretation of the Phase II outcomes of where they might land and what they might mean for those outcomes, without knowing the standard deviation of the change in visual acuity, we can't predict the size of the trials. But you can run it into a statistics package, and we've certainly done that. If we're minus 1 letter worse than the EYLEA control and the standard deviation is 7 or less, we could do pivotal trials that might involve as few as 250 to 300 patients. So it's fluid because we don't know those results yet.But there's a second consideration, I think, for most of these trials that when you're doing treatment-naive patients when the standard deviation is larger, companies end up doing 500, 600, 700 patient trials. But that's because not only the standard deviation because the FDA requires a certain number of patients for safety. So the FDA requires that you submit and you're able to submit with 1-year efficacy data of your second trial, you don't need a 2-year safety to submit. But at the 1-year, you need to have 300 patients treated with your go-to-market dose or higher. Ultimately, you need approximately 400 patients treated with your go-to-market dose or higher for safety. So that's another consideration for the end of the trial.And that might suggest that we would maybe not do a 1:1:1 randomization in the pivotals and have more patients in the higher dose to reach those safety measures knowing that the statistics would allow a smaller number. As I've said already, our view is to do this as quickly, as safely as derisked and is less expensive as possible. And that's how we are going to view all the options in the pivotal trials.
Okay. Great. That's very, very helpful. And you mentioned earlier that the Phase III also incorporates the retreatment options or the cost. Could you elaborate a little bit more in terms of at least what you proposed, the retreatment, any details on that?
Sure. Yes. Thanks. And we've been -- I think we've been very consistent from the start. Even though we have in vivo and in vitro evidence that these EYP-1901 inserts will release the therapeutic levels for approximately 9 months, we've done enough tox studies to show that even if we reinject earlier than that, we're in a very safe area for toxicity of vorolanib and number of inserts. In fact, we have not found the maximally tolerated level of vorolanib with animal eyes. So from a safety perspective, it's not a problem.Why did we choose 6 months? I think it's simple. That's what retina specialists want. They want flexibility to dose drugs when they want to dose them. And while it's clear that some eyes can go longer than 6 months, remember, in our pivotal -- in our Phase I trial rather, we had 1/3 of the eyes made it a year without supplement. We're going for the label of every 6 months because we want to give the doctors flexibility to dose that often should they choose to.
Okay. Great. That's helpful. And maybe just add one more that regarding spots from the competitor's news this morning, was that something you guys also consider or it still depends?
Yale, again, I think I did address this earlier, but I'll reiterate. We have what we believe is an agreement with the FDA that's in writing that we have an acceptable protocol for our pivotal trials. If that is the fastest, least risky way to proceed, that's our plan. And we've seen nothing at this point to alter that. Obviously, it's dependent on good to great data from DAVIO 2. But there may be learnings from other companies' approach, and we'll be studying that to see if there are any learnings for us. So until the details are out, I really can't make any comment on that, except to reiterate once more, we are very comfortable with where our program is at right now.
Okay. Great. And congrats on the other progress and look forward in early December.
Your next question comes from the line of Yi Chen of H.C. Wainwright & Company.
So my question is by positioning EYP-1901 as a maintenance therapy, while your competitor seems to target treatment-naive patients in their Phase III trial. Does that mean you could potentially lose part of the market in the future? I mean, could you use EYP-1901 for treatment-naive patients as well?
So if we get a label for maintenance therapy and the label includes follow the use of EYP-1901 after induction with EYLEA or any anti-VEGF, let's say, hypothetically, I think doctors knowing the retina specialist community the way I do, I think doctors will try it earlier than after 3 induction doses in some cases. If we're safe, effective and tolerable, I think the argument might be why not use it after a second induction or first induction dose.Will it be used as solo therapy initially, I think data needs to be shown that, that it's effective that way. So again, the market share depends on a lot of things. And once again, one of the things we just talked about was reinjection. And the hope and expectation is we would get a label for every 6 months reinjection. The FDA was clear that if we wanted a label for reinjection, we needed to test reinjection in the pivotal trials. And so I think that if that is the way our label reads eventually, I think that will have an advantage also. So it's hard to predict. I would certainly admit that. But once again, we are very comfortable with where our program is at and the approach that we're taking. And the retina community that we've talked to, I think is in favor of the approach that we're taking. And if we get that label, I think retina specialists will figure it out.
Yes. And Yi, maybe if I can add to that, just keep in mind, the vast majority of the market is previously treated patients and the fact that we are going to be able to redose every 6 months is going to be meaningful on our label. And I think ultimately, physicians will have the opportunity to use it sooner. But as we think about our approach and the market approach, we're addressing a very significant portion of a $10 billion-plus market. So we're comfortable with our pathway.
And I could add one more, George. That was an excellent point you made about for every newly diagnosed patient, a retina specialist probably has a dozen or more previously treated patients in their practice. So once again, from a recruitment perspective and from speed to filling a trial, there's a lot more maintenance therapy patients out there than there is newly diagnosed, and that's one of the many reasons why we've chosen this pathway, speed to approval. Is -- could we see if Colleen is still on the line and wants to ask a question?
Yes, she responded, she's having issues on a number of calls this morning. So we'll find her later.
Right.
All right. And we actually don't have any further questions in the queue at this time. So ladies and gentlemen, thank you for participating in today's conference. This does conclude your webcast and your program. You may now disconnect. Everyone have a great day.
Thanks, everybody.