Opus Genetics Inc

NASDAQ:IRD

Earnings Call Transcript

[Operator]

Greetings. Welcome to Occupier Pharma, Inc. Corporate Update Call with CEO, Dr. George Magrath. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to Michael Wood of LifeSci Advisors. Thank you. You may begin.

[Michael Wood]

Thank you. Before we begin, we want to draw your attention to the legal disclosures regarding forward-looking statements. During the course of this conference call or website, the company will make forward-looking statements regarding future events, including statements about financial business, clinical milestones, potential future milestone payments and commercialization and plans and strategies anticipated in the remainder of 2023 and beyond. We encourage you to review the company's past and future filings with the SEC, which identify specific factors that may cause the actual results or events to differ materially from those described in the forward-looking statements. You can find the SEC filings in the [ EDGAR database ] at sec.gov or on the Investor Relations section of Ocuphire’s corporate website at Ocuphire .com. Please note that any comments made on today's call may speak only as of today's date, December 5, 2023, and may not be accurate at the time of any replay or transoperating. I'll now turn the call over to Dr. Magrath. Please go ahead.

[George Magrath, executive]

Thank you, Michael, for the introduction. Good morning, everyone, and thank you for joining. I'm very pleased to address you today as the recently appointed CEO of Ocuphire. It's a great excitement and his deep sense the responsibility that I step into this role. Also on the call today are Charlie Hoffmann, our Senior Vice President of Corporate Development; and Ronil Patel, our Chief Business Officer. Both will be available to answer questions during the Q&A session.I have experience as both an eye care professional and in senior leadership roles within the health care industry. Before I discuss our plans at Ocuphire, let me spend a few minutes on my background. I received my medical degree from the Medical University of South Carolina, where also complete a residency and ophthalmology. I then completed a fellowship at the Wills Eye Hospital in Philadelphia. I also have an MBA from the federal in Charleston, South Carolina and a Masters of Science and Applied economics for Johns Hopkins University. Awards in numerous corporate roles within the health care industry, including as an equity analyst and in drug development and pharmaceutical services. Most recently, I had the privilege to serve as CEO of Lexitas Pharma Services and ophthalmology contract research organization that provided a clinical trial and medical strategy services are to both large pharma and biotech and ophthalmology. At Lexitas elite team that was responsible for growing annual revenues for folded 2 years. I managed the growth of the company from 5 employees to almost 200, broadened the number of business lines and tripled the number of trials we had under management. 75% of those were in the retina space. I was successful in negotiating a favorable exit through an acquisition with QHP Capital, a transaction that realized significant returns for investors. I gave a lot of thought in my next career move and took the time to carefully evaluate a number of options since the transaction was completed. When the opportunity at Ocuphire was presented to me, it immediately stood out as a company I saw as already on the path to becoming one of the leaders in the opthaology space. There aren't too many small biotech companies that have succeeded in achieving FDA approval for their first NDA and also executed clinical trials with the efficiency that I witnessed at Ocuphire. I was very impressed by how [indiscernible] had advanced through both clinical development and the FDA approval process in a relatively short time frame. I saw this as a demonstration of the capabilities of a very competent organization. Furthermore, the company's lead ophthalmic asset, ATX 3330 represents an even more exciting commercial opportunity. If approved, this is a drug that could truly change the treatment paradigm for diabetic rydnopathy, which is the leading call of the blindness in working age Americans. The other key factor for my decision to join Ocuphire is the existing management team. As investors, you will understand that the fortunes of every biotech company are determined to a large extent by the people who are running the business. So I'm very pleased to be working with a group of very capable individuals who have proven themselves in the ability to execute on drug development and strategic licensing efficiently and effectively. In all, I see a fantastic opportunity to leverage my business and medical backgrounds to help build out an already exceptional organization that is committed to helping patients and creating value through innovation. Ocuphire is now in an exciting stage and my immediate priority as CEO is to develop and implement a strategy to take the company to the methological phase of maturation in order to maximize value for shareholders. We have the good fortune of owning 2 important ophthalmic assets, but we intend to focus our resources on the retina program, APX3330, [indiscernible] RYZUMVI is now in the very capable hands of our partners at Viatris. The FDA approval of RYZUMVI this past September was an important milestone for Ocuphire. We see this product and other phentolamine programs as being valuable assets and a source of future cash flow. As you know, the phentolamine products were licensed to Viatris under a global agreement signed with Ocuphire in 2022, and these programs are now essentially in their hands. We have a very strong relationship with Viatris and continue to work with them as they direct their clinical development for treatment of presbyopia and dim light disturbances. Now moving on to APX3330 which is clearly the future of Ocuphire. No one would disagree there's a vast opportunity for a drug that could effectively and safely treat nonproliferative diabetic renopathy with the convenience of an oral tablet. The positive outcome of our recent end of Phase II meeting means that Ocuphire has a clear path to develop a truly game changing drug, and I'm excited by the opportunity to lead this effort. I know from my own practice about the challenges of treating diabetic retinopathy and the devastating impact that it can have on patients. It's the #1 cause of blindness in working age adults and frequently affects people in their working years, particularly in the 30s and 40s. Patients who progressed to advanced disease are left with a disability for the rest of their lives. I also know all too well that there are currently no suitable treatments being used in the segment of population that has been diagnosed with more moderate disease. APX3330 offers the promise of an oral agent that can slow the progression of nonproliferate diabetic retinopathy to proliferate diabetic no. It has a unique mechanism of action that reduces both abnormal angiogenesis and inflammation. It does not deplete the VEGF, but instead, it reduces VEGF to normal physiologic levels. If we can confirm the results from the [ Z-1 ] Phase II study in our Phase III program and iF APX3330 is subsequently approved, it would provide positions with a valuable new preventive therapeutic option. It would potentially be the first product that could be widely used in a large number of patients who are earlier in the course of disease and hostiasyptomatic. This would offer a completely new paradigm and potentially reduce the number of patients who eventually progress to devastating complications and [indiscernible]. The analogy I like to use is in cardiovascular disease, where it's a lot more effective to treat patients who have high blood pressure or high cholesterol rather than waiting for someone to have one of the devastating downstream effects, such as a heart attack or strike. The commercial opportunity in diabetic inept is compelling. There are estimated 8 million patients in the U.S. who have progressive disease that are asymptomatic. Being any VEGF agents are efficacious, but the majority of moderate to severe patients with ER are not treated with anti-VEGF due to the injection burden and the lack of benefit on immediate visual acuity. As a result, the standard of care is watch and wait, physicians do not have a noninvasive option. Our game plan over the next 12 months is to prepare for and initiate registrational Phase III trials to support an NDA for APX3330/nDR. The team here at Ocuphire recently has held a successful into Phase II meeting with the FDA, during which they reached agreement on the primary endpoint for the Phase III, which will be a 3-step worsening on a binocular diabetic renopathy severity scale. As the next step, we plan to submit a special protocol assessment to formalize our agreement with the FDA on the clinical trial protocol and statistical analysis plan for the Phase III program. This will show that we are in sync with the agency on the key elements of the trial, and we believe that will reduce uncertainty and derisk the regulatory aspects of the program. We hope to have the spa in place early next year, and we'll share specifics on the study design parameters and timing once agreed upon with the FDA. Our goal is to begin the clinical study in the second half of 2024. The other important area I intend to focus on in the near term is management. As I said, there is an existing team here that's very capable, but there are a few key positions that we need to fill. Very recently, we hired Joe Schachle as Chief Operating Officer, who is an industry veteran with extensive operational and transactional experience. We also plan to hire a Chief Medical Officer and a Chief Financial Officer to round out the skill set of our senior team. Ocuphire has a strong balance sheet. We had just over $42 million in cash on hand and no debt at September 30 and received a $10 million milestone payment from [ DHS ] in October. Based on our current projections, we estimate that this will give us runway into 2025. We are continuing to look at all options to finance the next stage of development of 333. And we are very active on the business development front as well. We have ongoing dialogue with a number of large pharma companies for interested in APX3330 for all the reasons I mentioned upon. In conclusion, I'm excited about the future of Occupy in my new role here. We are dedicated to developing pharmaceutical products that are designed to improve standard of care and ophthalmology. The planned advancement of APX3330 into registrational trial marks an exciting new chapter. Our strategy is rooted in rigorous scientific research and deep understanding of patient needs. And we are building a team with the capabilities to execute and create value. I look forward to meeting many of you in person as we continue to engage with the investment community over the coming weeks and months. At this point, I will open it up to questions. Operator?

[Operator]

[Operator Instructions] Our first question is from Kristen Kluska with Cantor Fitzgerald.

[Kristen Kluska, analyst]

Dr. Magrath congrats on your appointment. Looking forward to working with you more closely now. So the first question I had was around APX3330. It's interesting because we've seen a lot of examples in the ophthalmology space where, in some instances, patients are a lot more reluctant to get injections if they're not seeing a benefit right away. And in some situations, particular dry AMD, we're seeing that, that's not necessarily the case. So I wanted to see if you could talk a little bit more about your market research there and particularly how much the injection burden is the factor for patients not taking these therapies and also openness to taking an oral therapy, assuming that the safety profile remains robust.

[George Magrath, executive]

And as you correctly pointed out, that the 4 people with advanced nonproliferative diabetic retinopathy, there is Eylea or Lucentis or others that may be used, right, as intravitreal injections. However, the uptake has not been great because these patients are asymptomatic. It goes back to the analogy I gave about treating high blood pressure. People typically don't know they have it until they go to their doctor and get it treated, and that's much better than waiting until you get -- until you have one of the side effects of it, right, like a heart attack or stroke. We think that an oral will be well tolerated for this. And I think that the reason for that is because of -- because of the stage of these patients in life, right? So in dry AMD and in geographic atrophy in particular, where we've seen good uptake in what is in what is a disease where you don't see an immediate sort of dramatic impact like you do in wet AMD or in diabetic macular edema. These patients are older. They do at baseline have geographic atrophy. So they do have areas where their vision is blurred out. And so they -- and so they understand because they have started to have the side effects of the progressive vision loss. Those patients are honestly pretty terrified, right? They are patients that that have already started to lose vision, and they don't want it to continue, right? They get these little spots of blurred. And in that disease, what happens is a spot of blur area in the center vision, gradually get bigger until it's the entire area. And so they actually see something. In diabetic retinopathy, you don't see anything. Those patients are walking around with typically very good vision. They don't realize they really have the disease until they're told they haven't. Now the reason that they don't -- the why an oral is appropriate here and not an intravitreal injection like they do for geographic atrophy or for wet AMD or for DME or for PDR is because when you are asymptomatic, it is a way bigger issue to convince someone to let you poke a needle in their eye every 1 to 2 months for the rest of the line. So like I said, is the stage of life. Typically, these are working-age people like they're typically 20, 30, 40 years old. They have families, they have jobs, and it's really a big ask for someone assay go to the eye doctor every 1 to 2 months to get a needle booked in their eyes. And so taking a pill every day is very acceptable for this patient population. And typically, they are on multiple therapies for the other potential complications of diabetes. And so our market research is showing that this should be well received by the community and that this is the correct indication for an oral.One, I would point you to a couple of things for this. Number one is look at the uptake of AREDS vitamins, right? The AREDS vitamins are used for people who have intermediate dry AMD. These are patients who are asymptomatic as well, and this is an oral tablet that's given to these patients. And it is -- it has -- it is the standard of care in all patients with intermediate dry AMD get put on AREDS, right? And it's universally used for these patients well tolerated and nobody questions. And so I can't imagine that in the future, it's going to be -- whether it's APX or something else, we're going to have something similar for diabetic retinopathy, where we can treat it with an oral that is generally accepted by the patient community. The second thing I'd point you to is we were at the Ophthalmology Innovation Source meeting, the OIS meeting this past weekend in San Diego, and they held their first section on oral therapies in ophthalmology and they had a number of companies that are presented. And I can tell you -- and it's available, you can see the summit through their website. But it -- there was a lot of excitement from the community about different oral therapies for DR in particular, and other indications in ophthalmology for exactly the reasons that we mentioned. So I hope that answers your question. It's a really good question.

[Kristen Kluska, analyst]

And then thinking about the commercial opportunity in the comments you mentioned 8 million patients with advanced disease. Wondering of that segment, if you think there's an initial patient profile that you think is most likely to be on this therapy initially and how expansion might look after that?

[George Magrath, executive]

Yes. It's a good question. So the way I'm envisioning this happening to all diabetics, it's part of the HHS and the CMS initiatives for quality and health care and primary care is that all diabetics should be -- are recommended to get a yearly exam, right? It's part of their -- it's just like you check the kidneys and stuff like that, too. So these patients are getting eye exams. And so I think that -- it's pretty straightforward at an eye exam to diagnose mild, moderate, severe NPDR. And so I envision that these patients are going to be identified. And I think that it will become sort of the standard of care that when a patient has mild-moderate or severe NPDR, they are preventatively treated once we have good products out there. So I think that it's up in the air, whether or not it will be prescribed by the ophthalmologists, the optometrists, the primary care doctors, the unocrinologists or somewhere all of the above. But I do think that I do think that the market uptake will be significant. And really, one of the important aspects about an oral therapy for this is that truly you are treating the eyes, and that is the indication we're after. But is it possible that it might help with diabetic mediated diseases elsewhere in the body at the same time? So is there a potential for a systemic benefit as well? And we don't know that yet, right? We don't know that in our program. But I think that that's an advantage of having an oral over over an intravitreal injection or topical. And the other thing I would stress about the commercial uptake is really the tolerability and safety profile that's going to be super important. And so far, ours has been favorable. I think part of the reason that's favorable is because, as you guys know, the Ref-1 modulation that APX does actually reduces in VEGF levels back to a physiologic level. It doesn't completely deplete them like you would get with [ NEYLEA ] or an Avastin or the others with Sentis the others. And that's why I think that, that's part of the reason why we do have a favorable safety and tolerability profile is because we aren't completely decimating the systemic VEGF levels. We're actually reducing them to physiologic levels. So there's a real mechanism advantage to the APX modulation of angiogenesis that's quite elegant and quite favorable for patients.

[Kristen Kluska, analyst]

If I could squeeze in just one last question. We've seen in the space, there's obviously been a lot of excitement around GLP-1 and obesity and diabetes. So I'm wondering, as you have these conversations with pharma and more companies are becoming engaged in that space, do you think it's more appropriate to target a partner potentially if you pursue that route that has expertise in diabetes or ophthalmology or perhaps you're open to speaking with both at this time.

[George Magrath, executive]

[indiscernible] you're hitting on a key strategic point that we are very thoroughly evaluating right now. And I think that's incredibly insightful, right? Because diabetes is a metabolic disease, and we are treating system manifestation. We are treating the eye, but there are also systemic ramifications of Ref-1 in the body. And so we are very closely looking at that right now. We don't know yet, right? So I think that's the answer. So we're in those discussions. We're having those discussions, and hopefully, we'll be able to guide you guys in the future on our appropriateness as a metabolic treatment. So that's a -- it's a very exciting time in metabolic disease right now and great things are happening for patients. So it's something we're evaluating very closely.

[Operator]

Our next is from John Newman with Canaccord Genuity.

[John Newman, analyst]

I just had a couple, mainly around the potential path forward in design for the Phase III study for APX3330. What I'm curious about is, I know that the study design is still being debated and planned, but would you expect that you would be looking at the same endpoint at 24 weeks as you did in the Phase II? And then I'm also curious, what are some of the key aspects that you're looking to clarify or finalize in the SPA? I'm just wondering, for example, will you be able to look at 3-step worsening on a monocular basis in addition to binocular.

[George Magrath, executive]

John, it's a great question. I'll answer the first part, and then I'll let Ron take the second part. So I'll answer the part around the scales and how -- and the endpoint that we are proposing for the Phase III and that has been agreed with FDA in the Phase II meeting. And then I'll let Ron talk about the SPA itself and some of the aspects of that, that we're working through. So for my -- for the aspect of the endpoints that you mentioned. So we will be looking at a 48-week endpoint. So we're going to be looking at a 1-year endpoint, which is the appropriate thing to do in diabetic eye disease because the event rates will be at an appropriate size for a clinical trial at that point, right? And what we've agreed upon with the FDA, and this is quite interesting. And I mentioned the OIS Summit this weekend, and it really was very, very interesting to hear the panelists talk there about how these endpoints are evolving in diabetic retinopathy because there is a move towards looking at patients who are truly worsening. So if you look at some of the prior studies that were done with the intravitreal injections, they came at the approach of improving very advanced disease, right? So they were looking at 2-step improvement on a monocular DRSS. We're coming at it from the other angle, right, where we're trying to prevent progression in patients that are still in the asymptomatic portion of their disease and haven't become having gotten to that level yet. And when you do that, what you care about is not whether or not you improve what they have, but whether or not you prevent them from moving on to a 3-step worsening, which is -- which gives you the logical step from that is if they're worsening about 3 steps. Then they're going to have an event like PDR and then they're going to have vision loss. And actually, what we saw in the Phase II data when we looked at the binocular 3-step worsening was exactly that. We were looking at trends towards 3-step worsening being less than the APX arm 14% in the [indiscernible] 4% in the APX arm, then we were looking at the PDR rates being lower, trending lower in the APX arm. And then we were looking at vision loss trending lower in the APX arm. So it makes a real logical kind of walk towards something that the patients really care about, right, which is am I going to lose vision. So I think that it's a great endpoint because the -- because it truly does identify patients that are at risk for the clinically meaningful endpoint, which is vision loss. It's a very objective endpoint that's done on photographs. And the FDA is is advantageous towards it at the end of Phase II meeting. So this is a great step forward for ophthalmology in general, to really look at diabetic retinopathy in this manner. And so I think this is a wonderful thing. You can look at it in a monocular way, but when you're treating systemically, it makes a lot more sense to look at both eyes. And that's what we're going to focus in on is those eyes. But to answer the last part of your question, which was about monocular. And so I think what we need to do is -- the Phase II study wasn't powered for a 3-step worsening or for PDR or for vision loss. So in the Phase III, when we power it for that, if we can replicate those, I think we have a very, very meaningful story for not just the FDA, but also for patients. Ronil, I'll turn it over to you to talk about the SPA a little bit.

[Ronil Patel, executive]

Yes. Sure. Thanks, John. So I just want to remind that we had already agreed on the primary endpoint for our pivotal Phase III trial, which is a 3-step worsening on the binocular DRSS scale. We will need the standard 2 pivotal placebo-controlled Phase III trials with a 1-year efficacy endpoint. The SPA is really to solidify the exact language in the protocol and agree on the statistical analysis plan. We're collaborating with the FDA on how to handle certain aspects of the statistical analysis plan, in particular, the hierarchy of the secondary endpoints, the statistical powering, exact number of patients with the ultimate goal of having the broadest and the best label possible. So that's really the purpose of the SPA job.

[Operator]

[Operator Instructions] There are no further questions at this time. I would like to turn the conference back over to management for closing comments.

[George Magrath, executive]

So I would like to thank everybody for joining us today, and we look forward to interacting with you guys in the future and being able to provide more updates as we progress pretty rapidly through the development program here.

[Operator]

Thank you. This will conclude today's conference. You may disconnect your lines at this time, and thank you for your participation.