Princeton Feb 28, 2020 (Thomson StreetEvents) -- Edited Transcript of IVERIC bio Inc earnings conference call or presentation Thursday, February 27, 2020 at 1:00:00pm GMT

* David F. Carroll

IVERIC bio, Inc. - Senior VP, CFO & Treasurer

* Glenn P. Sblendorio

IVERIC bio, Inc. - CEO, President & Director

IVERIC bio, Inc. - VP of IR & Corporate Communications

* Kourous A. Rezaei

IVERIC bio, Inc. - Senior VP & Chief Medical Officer

Good day, and welcome to IVERIC bio Fourth Quarter and Year-End 2019 Results Conference Call. Today's conference is being recorded.

At this time, I would like to turn the conference over to Kathy Galante. Please go ahead.

Kathy Galante, IVERIC bio, Inc. - VP of IR & Corporate Communications [2]

Good morning, and welcome to IVERIC bio's conference call. Representing IVERIC bio today are Mr. Glenn Sblendorio, Chief Executive Officer and President; Dr. David Guyer, Executive Chairman; Dr. Kourous Rezaei, Chief Medical Officer; Mr. Dave Carroll, Chief Financial Officer; and Mr. 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 expectations to use our previously announced clinical trial of Zimura for the treatment of geographic atrophy as a pivotal trial; our development strategy for Zimura, including our plans and expectations for our second pivotal clinical trial evaluating Zimura for the treatment of geographic atrophy; our hypothesis regarding complement inhibition as a mechanism of action for the treatment of geographic atrophy; our projected use of cash and cash balances; the timing, the progress and results of clinical trials and other research and development activities; the potential utility and development potential for our product candidates; the size of the potential market indications our product candidates are intended to treat; and the potential for our business development strategy.

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 initiation and the progress of research and development programs and the clinical trials; availability of data from these programs; reliance on university collaborators and other third parties; establishment of manufacturing capabilities; expectations for regulatory matters; need for additional financing and negotiation and consummation of business development transactions and other risks. I refer you to our SEC filings and in particular to the Risk Factors section in our quarterly report on Form 10-Q filed on November 12, 2019, 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.

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Glenn P. Sblendorio, IVERIC bio, Inc. - CEO, President & Director [3]

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Thanks, Kathy, and good morning, everyone. As always, we appreciate you joining our call this morning. We made tremendous progress last year, as we continue to build a diversified portfolio in retinal diseases that include both therapeutics and gene therapy, setting the stage for IVERIC bio to be a leader in developing transformative therapies to treat retinal diseases.

At the end of October last year, we achieved a major milestone with positive Zimura clinical trial date in geographic atrophy or GA, secondary to age-related macular degeneration or AMD. These positive results position IVERIC bio as a late-stage clinical company, with Zimura as a potential treatment option for geographic atrophy, secondary to dry AMD, a potential multibillion dollar market, for which there are currently no FDA- or EMA-approved treatments available. I'd like to review some of the characteristics and results of this trial with you.

As reported in October 2019, individual administration of both Zimura 2-milligram and 4-milligram dose met the prespecified primary efficacy endpoint reached statistical significance in our international, multicenter, randomized, double-masked, sham-controlled clinical trial for GA secondary to dry, showing a 27% reduction in GA growth over a 12-month period in both the 2-milligram and 4-milligram treatment groups.

Based on our recent FDA guidance, we believe that this reduction in growth is not only statistically significant, but also clinically meaningful.

Zimura was well tolerated in this trial. And based on the potentially superior safety profile of Zimura observed to date, we believe that Zimura may potentially differentiate itself in the field of complement inhibitors for the treatment of GA secondary to dry AMD in elderly patients that we are seeking to treat.

Based on the prespecified screening trial design, robust masking, detailed statistical analysis with a prespecified statistical analysis plan and an independent and masked imaging analysis performed by one of the leading imaging centers in the world for retinal imaging, we believe that this clinical trial may serve as 1 of 2 pivotal trials typically required for marketing approval.

We are leveraging our deep expertise and efficient execution in retinal drug development, with the goal of bringing Zimura to patients with GA secondary to dry as soon as possible. We are in the process of initiating the second Zimura pivotal trial called ISEE2008 and are planning to enroll the first patient next month. As we initiate ISEE2008, we will seek to leverage our global network of top clinical trial sites for retinal diseases to assist with our plan to enroll approximately 400 patients. Kourous will review the design of ISEE2008 in more detail in a moment.

The results from OPH2003 Zimura pivotal trial have already been presented or planned to be presented at several prestigious retinal meetings around the world, including the Macula Society in San Diego; Angiogenesis, Exudation, and Degeneration Meeting in Miami; the Association for Research in Vision and Ophthalmology, the ARVO meeting in Baltimore; the American Society of Retinal Specialists, ASRS, that's going to be held in Seattle; the International Symposium on Ocular Pharmacology and Therapeutics in Spain; the Retina 2020: New Trends conference in Italy; and the Asia-Pacific Vitreo-retina Society meeting in China.

The safety and efficacy of Zimura is being assessed in an ongoing Phase IIb randomized, double-masked, sham-controlled screening trial in patients with autosomal recessive Stargardt disease. This is an orphan inherited retinal degeneration disease. Although autosomal recessive Stargardt disease is a monogenic retinal disease caused by genetic mutations to the ABCA4G, complement activation may play a role in this rare disease. In 2019, we completed the enrollment of 95 patients in this trial, and the trial is on track with initial top line data expected during the second half of 2020.

Although bringing Zimura to patients is our top priority, we continue to advance our gene therapy portfolio in orphan inherited retinal diseases.

Natural history studies and IND-enabling activities for IC-100, which is intended to treat with rhodopsin-Mediated adRP; and IC-200, which is intended to treat BEST1-related retinal diseases are both on track, and we expect to identify the lead minigene construct for LCA10 by midyear.

Over the past several months, we hosted 3 research and development symposium with panelists that include top retinal specialists from the U.S. and around the world, gene therapy scientists and KOLs, providing their insight, ensuring their expertise and feedback in regard to our Zimura and gene therapy programs.

We hope that these R&D symposium provided a deep understanding of our programs and want to thank all the investors and analysts who attended these meetings or listened to the corresponding webcast. These symposiums are currently posted on our website, and we'd like to invite you to participate. For those that did not participate live can listen to them online.

In November, we had the privilege of announcing Dr. Guangping Gao as our Chief Strategist, Gene Therapy at IVERIC bio. Guangping has deep gene therapy expertise with over 30 years of scientific research experience in AAV vectors and gene-based treatments.

As one of the world's leading gene therapy experts, Guangping's highly distinguished career includes his major contributions to the development of the adeno-associated virus gene delivery technology. Guangping is currently President of the American Society of Gene and Cell Therapy. He's also a Director of the Horae Gene Therapy Center, Co-Director of the Research Institute for Rare Diseases, and Professor of Microbiology and Physiological Systems at the University of Massachusetts Medical School.

Our goal is to combine Guangping's deep expertise in gene therapy and advisory capacity together with our expertise in drug development for retinal diseases to shape IVERIC bio's gene therapy strategy in the coming years.

We're also happy to welcome Dr. Abraham Scaria to the position of Chief Scientific Officer. He joined us in October. Abraham leads the company's research and preclinical gene therapy activities. His extensive experience includes positions at Genzyme, Sanofi, and most recently, Casebia Therapeutics, leading multiple ocular gene therapy programs. Extremely happy and pleased to be working with both Guangping and Abraham.

On the financial front, we continue to build our financial position and completed a successful follow-on public offering of our common stock and prefunded warrants, resulting in net proceeds for the company of approximately $42.6 million in December 2019. This transaction resulted in the company finishing 2019 with approximately $126 million in cash and cash equivalents. With the addition of this capital, we expect that we will have sufficient cash and cash equivalents to fund our operations and capital expenditures as currently planned into the beginning of 2022.

We are currently -- we are continuing to explore all options for future development and potential commercialization of Zimura, including plans for potential partnering.

We are pleased about the excitement generated by Zimura data and the progress in our gene therapy programs. We are excited about Zimura's potential to positively impact and transform the lives of the many patients with GA, who currently do not have any treatment options available to them and are potentially confronted with irreversible bilateral vision loss as well as the potential to bring our gene therapy to patients with orphan inherited retinal disease, who also do not have any treatment options available to them.

I'll now turn the call over to Kourous.

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Kourous A. Rezaei, IVERIC bio, Inc. - Senior VP & Chief Medical Officer [4]

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Thank you, Glenn, and good morning, everyone. Age-related macular degeneration is characteristically a disease of the elderly and is the leading cause of visual loss in individuals of 50 years of age or older in developed countries.

In the United States, it is estimated that approximately 11 million individuals are affected with AMD, with a reported global prevalence of approximately 170 million individuals. Because of increasing life expectancies in developed and developing countries, the elderly sector of the general population is expected to continue to increase in the coming decades. While 1 in 8 Americans was considered to be elderly in 1994, it is expected that the 1 in 5 will fall into this category by 2030.

As AMD progresses with age, it generally progresses to either the nanovascular or the atrophic dry form of AMD or the neurovascular form of the disease or wet AMD. In the dry atrophic form, the loss of photoreceptors, these are the cells that perceive light; RPE cells, these are the cells that support the photoreceptors; and associated choriocapillaries, which is the blood supply, leads to the formation of the geographic atrophy.

Currently, approximately 1.5 million individuals are reported to have geographic atrophy in the United States, with an incidence of approximately 159,000 patients per year, which is even slightly higher than what is reported for annual incidents for wet AMD.

Furthermore, development or progression of geographic atrophy over time is the common cause of vision loss in patients diagnosed with the wet form of AMD. For generally treated with anti-VEGF therapy, indicating that in many patients, regardless of whether they have the dry or wet form of AMD, the final anatomic outcome leading to loss of vision is geographic atrophy. Currently, there are no FDA- or EMA-approved treatment for GA, which leads to bilateral irreversible loss of vision in this large group of patients.

As Glenn pointed out, we are excited about the results of our first pivotal trial for Zimura in geographic atrophy, secondary to AMD, indicating that Zimura was well tolerated over 12 months and was able to slow down the growth of GA over the 12-month period in a statistically significant degree. Following these results, we immediately started a process to initiate our second pivotal trial in GA, ISEE2008, with the goal of enrolling our first patient next month. And we believe that we are on track.

ISEE2008 is an international, randomized, double-masked, sham-controlled, multicenter pivotal clinical trial evaluating the safety and efficacy of Zimura 2-milligram in patients with geographic atrophies secondary to dry AMD. As you may recall, in the first pivotal clinical trial, both Zimura 2-milligram and Zimura 4-milligram cohorts demonstrated a statistically significant reduction in the mean rate of GA growth over 12 months when compared to the corresponding sham-controlled cohorts with a similar 27% reduction. And since Zimura 2-milligram is administered as a single intravitreal injection, whereas the Zimura 4-milligram requires 2 intravitreal injections, we selected the Zimura 2-milligram dose for evaluation in the ISEE2008 clinical trial.

Our understanding from the FDA is that regarding the Zimura 2-milligram dose, for marketing approval purposes, from a safety perspective, at least 300 patients need to be treated with monthly Zimura 2-milligram or at a higher dose for a duration of at least 12 months, with a portion of these patients treated for 24 months. Therefore, we are planning to enroll approximately 400 patients in the ISEE2008 trial. These patients will be randomized 1:1 into 2 cohorts, the first cohort receiving monthly administration of Zimura 2-milligram for 12 months and a second cohort receiving monthly administration of sham.

The prespecified primary efficacy endpoint will be the same as our first pivotal trial and is the mean rate of change in geographic atrophy growth over 12 months measured by fundus autofluorescence at 3 time points: baseline, month 6 and month 12.

If we receive positive 12-month data from ISEE2008, we plan to file for marketing approval for Zimura for the treatment of GA with the FDA and EMA. At month 12, we plan to re-randomize patients in the Zimura 2-milligram arm to receive either monthly or every other month administration of Zimura 2-milligram. All patients will initially receive monthly administrations of sham, will continue to receive monthly administrations of sham. We intend to treat and follow our patients for 24 months.

The inclusion and exclusion criteria for ISEE2008 are similar to our first Zimura pivotal trial. However, in the first trial, when patients were reported to have developed choroidal neovascularization or CNV in the study eye during the trial, they got excluded from further participation in the study, because we were concerned that fundus autofluorescence images could not be reliably evaluated in the presence of CNV in the study eye. After discussions with our independent reading center who have reviewed the images from our ongoing Zimura GA trial, we believe that many of these images could potentially be reliably assessed by fundus autofluorescence.

Therefore, in the upcoming ISEE2008 trial, we are planning to keep patients who develop CNV in the study eye in the trial. And the measurement of these patient GA size will be included in the primary efficacy analysis as well as their fundus autofluorescence images can be reliably assessed by the masked reading center.

As Glenn mentioned earlier, Zimura met its prespecified primary endpoint in the first pivotal trial by reducing the rate of GA growth in patients with dry AMD in an international, multicenter, randomized, double-masked, sham-controlled clinical trial. The reduction in the mean rate of GA growth over 12 months was 27.38%, with a P-value of 0.0072 for the Zimura 2-milligram group as compared to the corresponding sham-controlled group and 27.81% with a P-value of 0.0051 for the Zimura 4-milligram group as compared to the corresponding sham-controlled group.

These data for both those groups were statistically significant. And based on the recent FDA guidance, we consider them to be clinically meaningful. Most importantly, based on our preliminary review of the safety data today, Zimura was generally well tolerated over 12 months of administration. Over this 12-month period, there were no investigator-related -- investigator-reported Zimura-related adverse events, no cases of Zimura-related interocular inflammation, no ocular serious adverse events, no cases of Zimura-related increase in intraocular pressure, no cases of end of endophthalmitis and no discontinuations attributed by investigator to Zimura.

Further, the investigator-reported rate of choroidal neovascular membrane incidents appears to be lower than what has been reported in literature for complement inhibition in GA. Based on recent literature, this may potentially be to Zimura blocking the complement cascade downstream at the level of C5 and not blocking the cleavage of C3. We believe that potentially superior safety profile of Zimura today could potentially differentiate Zimura in the field of complement inhibitors for the treatment of GA in these elderly patients.

The design of our first pivotal clinical trial for Zimura in patients with GA, secondary to dry AMD, possessed a few important characteristics that differentiated from other Phase IIb trials done in the field and we believe supported to qualify as a pivotal trial. I would like to go over some of these important differentiating factors.

This trial was designed as a Phase IIb screening trial, which means that it's designed and conducted as a Phase III trial with all necessary Phase III requirements, but with a smaller number of patients. The prespecified design of a screening trial provided if the study drug is efficacious enough to reach statistical significance with a smaller sample size, then trial could qualify as a pivotal clinical trial. As reported earlier, the reduction of GA growth reached statistical significance for both the Zimura 2-milligram dose and the 4-milligram doses, with compared to the corresponding sham-controlled arms at month 12, fulfilling this important criteria.

To minimize bias in this trial, patients, evaluating physicians, IVERIC bio as a sponsor and the independent reading center were all masked to the treatment that the individual patients were receiving throughout the trial.

A prespecified statistical analysis plan or SAP was used for statistical analysis. Based on the prespecified criteria in this SAP, a dose of Zimura would be statistically significantly more effective than the sham-control is the strength of evidence met the standard requirement of a 0.0125 one-sided false-positive error rate, incorporating an adjustment for multiplicity arising from comparing each dose with a sham control. Further, robust prespecified density analysis was planned and performed, which indicated the analysis results were robust to missing data.

For the assessment of the primary endpoint, the images were evaluated by a leading independent masked reading center. The reviewers were completely masked, and its visit -- and each visit was evaluated independently.

As indicated earlier, our first Zimura pivotal trial is still ongoing and patients continue to be treated and followed until they reach the month 18 time point. Patients, evaluating physicians, the independent reading center and we, as a sponsor, continues to be masked regarding the 2 main groups, in which each individual patient was randomized and expect to remain masked until the patients reach month 18. It is important to point out that this trial was not designed to assess statistical significance between individual cohorts at month 18 and any month 18 results will be descriptive only. We expect to report month 18 data by the end of second quarter.

To conclude, GA is a significant cause of bilateral, irreversible and severe loss of functional vision with a major impact on the quality of life and independence of our elderly patients. Although anti-VEGF therapy is available for treatment of wet AMD, no FDA- or EMA-approved treatments are currently available for geographic atrophy.

Further, development or progression of geographic atrophy over time is a common cause of vision loss in patient diagnosed with wet AMD or being treated with anti-VEGF therapy, indicating that regardless of whether patients have the dry or the wet form of AMD, the final anatomic outcome leading to loss of vision in many patients is geographic atrophy.

The absence of treatment options for geographic atrophy represents an area of urgent unmet medical need and a major public health concern for the expanding elderly population. We look forward to keeping you updated regarding the progress of our Zimura program and to potentially help these patients.

I would now like to turn the call over to Dave. Dave?

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David F. Carroll, IVERIC bio, Inc. - Senior VP, CFO & Treasurer [5]

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Thank you, Kourous, and good morning, everyone. I'd like to highlight a few items from our press release of this morning and provide some guidance on our expected year-end 2020 cash balance and cash runway.

For the quarter, our net loss totaled $17.5 million or $0.39 per share compared to a net income of $104.1 million or $2.62 per share for Q4 2018, as Q4 2018 reflects $125 million gain on extinguishment of a royalty purchase liability payable to Novo Holdings.

Our net loss for 2019 totaled $58.9 million or $1.39 per share compared to a net income of $63.1 million or $1.70 per share for 2018, as 2018 reflects the impact of the aforementioned gain on extinguishment of a royalty purchase liability.

Turning to our expected year-end cash balance and cash runway. As we previously announced, our cash balance at December 31 was approximately $126 million. We now estimate our year-end 2020 cash balance will range between $60 million and $70 million. We also estimate that our available cash will be sufficient to fund our operations and capital expenditures as currently planned into the beginning of 2022.

These estimates are based on our current business plan, which includes the initiation of our ISEE2008 trial and the continuation of our other R&D programs. Of course, these estimates don't reflect any additional expenses resulting from the potential in-licensing or acquisition of additional product candidates or technologies or any associated development the company may pursue.

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

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Glenn P. Sblendorio, IVERIC bio, Inc. - CEO, President & Director [6]

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Well, thank you, everybody, for listening this morning. And we're focused on execution over the next few months. The first, obviously, is to get patients into our second pivotal trial next month. And obviously, we're looking forward to the 18-month data that will come in the second quarter. So it's a focus on execution, working with our collaborators to move these programs forward.

So thanks again. Thanks for your continued support. And operator, would you please open the line for some questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) We'll now take our first question, it comes from Ken Cacciatore of Cowen and Company.

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Kenneth Charles Cacciatore, Cowen and Company, LLC, Research Division - MD & Senior Research Analyst [2]

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Just congratulations on all the progress you've been making. Just a few questions here. First, just wondering if you've actually been thinking about or entered into any ex U.S. partnering discussions and trying to think of nondilutive ways you may be looking to bolster your cash position? And then secondly, I know it's difficult to do, and you're just going to get going here on enrollment. But can you give us some thoughts or ways of putting perspective around the timing to complete enrollment for the Phase III program? And then lastly, Apellis is clearly running a program as well, and we understand they're doing 2 studies versus your 1, given you already have a pivotal completed. But can you talk about any subtleties and differences between the 2 programs that you'd like to share?

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Glenn P. Sblendorio, IVERIC bio, Inc. - CEO, President & Director [3]

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Yes. Thank you, Ken, for those 3 questions. I'll take the first 2. On the partnering, we had a very good JPMorgan, and we had an opportunity to talk with a number of potential partners. We're going to continue to speak to those partners. What I was encouraged by was sort of the strength of the data, obviously, attracts some people that have interest. So as you know, these are -- and we've been saying that we're committed to exploring partnering. And we'll keep you updated over the coming months if those discussions progress. Obviously, I don't want to put any time lines or commitments on that. But your thought about ways to further strengthen the company, not only in terms of collaboration, but also nondilutive financing is something we're thinking about as well.

On the topic of enrollment, let us get started first. Obviously, those are always very competitive questions as to enrollment. I'll just focus -- in my summary, I talked about our focus on execution. I think you'll see the same intensity once we get the trial up and going. And as we move forward, if possible, we'll update the community. But right now, that's something we want to hold a little close. You know that we can do this based on our past track record, so stay tuned on that too. And I'm sorry for not being more specific. Kourous, do you want to take the third question about differences in the trial?

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Kourous A. Rezaei, IVERIC bio, Inc. - Senior VP & Chief Medical Officer [4]

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Edited Transcript of OPHT earnings conference call or presentation 27-Feb-20 1:00pm GMT - Yahoo Finance

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