IVERIC bio, Inc. (ISEE) Q4 2020 Earnings Call Transcript

IVERIC bio, Inc. (ISEE)
Q4 2020 Earnings Call
Mar 03, 2021, 8:00 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Please stand by. We're about to begin. Good day, and welcome to the IVERIC bio fourth-quarter and year-end 2020 results conference call. Today's conference is being recorded.

At this time, I'd like to turn the conference over to Kathy Galante of investor relations. Please go ahead.

Kathy Galante -- Investor Relations

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; Mr.

David Carroll, chief financial officer; Dr. Pravin Dugel, chief strategy and business officer; Dr. Abraham Scaria, chief scientific 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 for patient enrollment and patient retention in GATHER2, our second Phase 3 clinical trial evaluating Zimura for the treatment of geographic atrophy secondary to age-related macular degeneration. Our expectation is to use GATHER1, our previously announced clinical trial of Zimura for the treatment of GA secondary to AMD as a Phase 3 clinical trial, our development and regulatory strategy for Zimura and our other product candidates, including our expectations for additional indications for which we may pursue the development of Zimura and IC-500, our hypothesis regarding complement inhibition and HtrA1 inhibition as mechanism of action for the treatment of GA and potentially other stages of AMD, our projected use of cash and cash balances, the timing, progress, and results of clinical trials and other research and development activities, and regulatory submissions, the potential utility and development potential of our product candidates, and the potential for our business development strategy and our personnel and human capital resources. These statements constitute forward-looking statements for the purposes of the safe harbor provision under the Private Securities Litigation Reform Act of 1995. These statements cover many events and matters that are subject to various risks that could cause actual results to differ materially from those expressed in any forward-looking statement, including risks related to the future progression of the COVID-19 pandemic, responsive measures to the pandemic and their impact on our research and development program, operations and financial position, initiation and the progress of research and development programs and clinical trials, including enrollment and retention in clinical trials, availability of data from this program, reliance on contract, development and manufacturing organizations, university collaborators and other third parties, establishment of manufacturing capabilities, expectations for regulatory matters, development from our competitors and the marketplace for our products, need for additional financing and negotiation, and consummation of business development transaction and other risk factors.

I refer you to our SEC filings and, in particular, to the risk factors included in our quarterly report on Form 10-Q filed on November 3, 2020 for a detailed description of the risk factors affecting our business. In addition, any forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. While we may elect to update these forward-looking statements at some point in the future, we disclaim any obligation to do so as required by law. I would now like to turn the call over to Glenn.

Glenn Sblendorio -- Chief Executive Officer and President

Thanks, Kathy, and good morning. everyone. And thank you for joining us for our fourth-quarter and year-end conference call. I hope you and your families are well as we get closer to turning the corner on this COVID-19 pandemic.

We start 2021 with significant momentum as we are excited to share that patient enrollment and retention for GATHER2, our second Phase 3 clinical trial for Zimura for the treatment of geographic atrophy, or GA, secondary to age-related macular degeneration, or AMD, is progressing well with enrollment trending ahead of schedule. We are accelerating our timeline for complete -- completing enrollment in GATHER2 to the third quarter of 2021. If the 12-month results from GATHER2 are positive, we plan to file applications with the results from GATHER1, our first Phase 3 clinical trial for ZImura and GA, and GATHER2 with the U.S. Food and Drug Administration and the European Medicines Agency for marketing approval of Zimura for GA.

We are extremely encouraged by the progress of enrollment in GATHER2. We believe patient retention is an important and -- and patient retention is as important as patient recruitment and are encouraged by the early impact of the programs we have put in place to retain patients in GATHER2. Since the initiation of GATHER2 in June 2020, our team has been proactive and creative and put in place multiple initiatives to tackle the many challenges that the COVID-19 pandemic has brought to conducting clinical trials. These initiatives are designed to reduce the risk and exposure of COVID to patients and the staff treating them.

Kieth will review the details of our programs in more detail in a few moments. 2020 was a transformative year for IVERIC bio. PLease let me briefly re -- recap some of the highlights from 2020 that we're most excited about. First, we reported positive 18-month results from GATHER1.

These data support our previously announced 12-month data from this trial, at which time point, Zimura met the prespecified primary efficacy endpoint with statistical significance. Importantly, we believe GATHER1 is currently the only com -- completed Phase 3 clinical trial showing suppression of GA growth with con treatment -- continuous treatment effect over time. We dosed our first patient in GATHER2 clinical trial. We consider this an important step to potentially delivering a clinically meaningful therapy safely to patients with GA.

The 12-month results from our GATHER1 clinical trial were published in the highly respected journal, Ophthalmology, the official journal of the American Academy of Ophthalmology. Over the course of the year, a number of leading KOLs presented the GATHER1 data at numerous medical conferences. Most recently, Pravin presented the GATHER1 results at the Bascom Palmer Angiogenesis, an exudation meeting last month. The FDA -- the U.S.

FDA granted fast-track designation for Zimura for the treatment of GA secondary to AMD. We also increased the enrollment target -- target in our ongoing Phase 2b screening trial of Zimura for the treatment of autosomal recessive Stargardt disease. We plan to enroll an additional 25 patients, consistent with our original goal of enrolling a total of 120 patients. In our IC-500 program, we are pursuing HtrA1 inhibition as an important target in the treatment of GA and potentially earlier stages of AMD.

Pravin will provide our plans for IC-500 in a few moments. In our gene therapy programs, we are progressing to finalize the dosing levels for IC-100, our product candidate for the treatment of Rhodopsin-mediated autosomal dominant retinitis pigmentosa. The plans to file an IND and move it into the clinic with a Phase 1/2 trial beginning in the second half of 2021. We are also progressing the development of IC-200, our product candidate for the treatment of BEST1-related IRDs, with plans to file an IND and move it into the clinic with a Phase 1/2 trial also beginning in the second half of 2021.

Keith will provide more details for both programs in a few moments. On the financial front, in 2020, we strengthen our balance sheet with an underwritten public offering and a concurrent private placement with Vivo Capital and Samsara BioCapital, raising approximately $160 million in gross proceeds. On the corporate front, in 2020, we expanded our board of directors and executive management team by adding three leading industry experts: Dr. Mark Blumenkranz to our board and doctors Pravin Dugel and Dhaval Desai to our management team.

And we continue to selectively expand our workforce and the expertise in retina, CMC, and regulatory. I will now turn the call over to Keith who will review GATHER1 and GATHER2 clinical trials and update you on our gene therapy pipeline in orphan inherited retinal diseases. Keith.

Keith Westby -- Chief Operating Officer

Thank you, Glenn, and good morning, everyone. We are extremely pleased to accelerate our timeline for completing enrollment in GATHER2 to the third quarter of 2021. We are in an unusually fortunate position of having already published a positive Phase 3 study GATHER1 in a major peer-reviewed journal. We believe this is our most impactful recruitment tool with investigators in GATHER2.

Further, the early and continuous treatment effect demonstrated in the GATHER1 trial, along with Zimura's well-tolerated safety profile that was maintained throughout the 18-month trial, are key motivators for patient retention in the GATHER2 trial. We continue to work with our investigators to provide a safe environment for patients, which we believe increases the patient's comfort and confidence to participate in the GATHER2 clinical trial during the COVID pandemic. We implemented a number of initiatives to reduce the risk and exposure to COVID for our patients and the staff treating them. We are committed to continuing patient enrollment and retention aggressively in the GATHER2 clinical trial while prioritizing patient safety. I would like to outline some of the steps our clinical operations team has taken to drive recruitment and retain patients.

throughout the trial. We increased the number of clinical trial sites participating in GATHER2 as compared to GATHER1. We are providing private transportation for patients to and from their scheduled office visits. Lights are set up for social distancing and we are providing PPE to patients and site personnel.

As Glenn mentioned earlier, retention is as important as patient recruitment. We are proactively monitoring visits scheduling and patient follow-through to ensure scheduled treatments are maintained. We also continue to monitor the COVID-19 situation closely and explore additional ways we can support our patients and clinical trial sites. In total, we are planning to enroll approximately 400 patients in the GATHER2 clinical trial.

Patients are randomized 1:1 into 2 cohorts. The first cohort receiving monthly administration of Zimura 2 mg for 12 months and the second cohort receiving monthly administration of sham. Similar to the GATHER1 clinical trial, the pre-specified primary efficacy endpoint will be the mean rate of change in GA growth over 12 months measured by fundus autofluorescence at three time points: baseline, month 6, and month 12 by square root transformation. If the pre-specified primary efficacy endpoint is met at month 12, we plan to file for marketing approval of Zimura for the treatment of GA secondary to AMD with the FDA and EMA.

At month 12, we plan to rerandomized patients in the Zimura 2 mg arm to receive either monthly or every-other-month administration of Zimura 2 mg. The patients in the sham cohort will continue to receive monthly sham administration. The final safety evaluation will be performed at month 24 for all patients. As previously reported, in the GATHER1 clinical trial, Zimura met its pre-specified primary efficacy endpoint at 12 months with statistical significance.

GATHER1 was an international multi-center, randomized, double-masked, sham-controlled Phase 1II clinical trial for GA secondary to AMD. The reduction in the mean rate of GA growth over 12 months was 27.38%, a p-value of 0.00072 for the Zimura 2 mg group as compared to the corresponding sham-controlled group and 27.81%, a p-value of 0.0051 for the Zimura 4 mg group as compared to the corresponding sham-controlled group. These data for both dose groups were statistically significant. These positive 12-month data are further supported by the 18-month results which we reported in June 2020.

Zimura's favorable safety profile was maintained throughout the 18-month trial. Regarding our gene therapy programs, we continue to advance our IC-100 and IC-200 programs for RHO-adRP and BEST1-Related Inherited Retinal Diseases, respectively. We have engaged a gene therapy CDMO who has completed GMP manufacturing for Phase 1/2 clinical supply of both ICI-100 and IC-200. IND-enabling toxicology studies of IC-100 are complete and are currently ongoing for IC-200.

We are planning for a Phase 1/2 clinical trial for ICI-100 including IND offering, site selection, and other start-up activities. We plan to meet with regulatory authorities to discuss our selected doses for our first in-human clinical trial before filing the IND for IC-100. Based on this, we anticipate filing the IND and initiating the clinical study in the second half of 2021. For IC-200, we plan to file the IND and initiate a Phase 1/2 clinical trial in the second half of 2021.

Our minigene programs in collaboration with the University of Massachusetts Medical School continue to progress. We are optimizing the minigene constructs for our miniCEP290 program and plan to select the lead contract in the second quarter of 2021. Thank you for your time and I would now turn the call over to Pravin.

Pravin Dugel -- Executive Vice President and Chief Strategy and Business Officer

Thank you, Keith. Thank you all for joining the call this morning. I hope that you are all well. Looking ahead, we plan on building upon our position in GA by exploring the potential development of Zimura and IC-500 for other forms and stages of AMD.

We expect that our strategy will involve both C5 and HtrA1 inhibition in a complementary fashion. Let me provide some further details. Clearly, our lead asset is Zimura. However, our intention is to potentially expand the reach of Zimura beyond GA to earlier stages of AMD, as well as neovascular macular degeneration or wet AMD.

And then potentially pair that development with the development of our HtrA1 inhibitor, IC-500. We expect that our HtrA1 inhibitor can be used to target select patients with genotypes that are particularly at risk to develop a AMD. HtrA1 is a trimeric serine protease that is widely expressed in the retina and the ARMS2/HTRA1 locus has a compelling genetic association with AMD. HtrA1 expression is quite far upstream in the pathogenesis of AMD.

We anticipate these at-risk patients may be identified and treated earlier to potentially prevent vision loss. Zimura on the other hand targets C5 which is further downstream in the pathogenesis of AMD. In hypothesis for C5 inhibition, in the context of AMD, it's gene agnostic. Therefore, these two assets have the potential of being complementary.

With these two assets, we may have the ability to treat specific genotypes or to treat AMD more broadly, independent of genetics and potentially in both earlier and later stages of AMD. This fits nicely with our vision for IVERIC bio to not just develop products but to build franchises for treating retinal diseases. Early in 2021, we completed a review of our HtrA1 inhibitor IC-500 development program. We believe that IC-500 may have the potential for less frequent dosing than other competitive assets currently in development.

In other words, we believe IC-500 has the potential to be best in class. As a result, we have revised our development plans and timelines for IC-500. Currently, we're conducting additional formulation activities and planning for CGMP manufacturing activities for IC-500, while planning to initiate a number of pre-clinical safety and pharmacology studies. Based on our current timelines and subject to successful pre-clinical development and CGMP manufacturing, we expect to file an IND for IC-500 during the second half of 2022.

We look forward to keeping you updated on our progress as we continue to move our pipeline of therapeutics and gene therapy product candidates forward. We appreciate the support of our shareholders. Thank you for your time. I will now turn the call over to Dave.

Dave Carroll -- Senior Vice President and Treasurer

Thank you, Pravin, 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 cash balance and our expected cash runway. For the quarter, our net loss totaled $25.4million or $0.27 per share, compared to a net loss of $17.5 million or $0.39 per share for Q4 2019. This increase in net loss was driven primarily by an increase in R&D expenses associated with our Zimura clinical programs and manufacturing activities, our gene therapy programs, and the progression of our IC-500 program.

During the quarter, we continued our start-up and recruitment activities for GATHER2 and continued our manufacturing scale-up. Our net loss for 2020 totaled $84.5 million, $1.14 per share, compared to a net loss of $58.9 million or $1.39 per share for 2019, again primarily due to an increase in R&D expenses. Turning to our expected year-end cash balance and cash runway. We estimate our year-end cash balance will range between $130 million and $140 million.

We also estimate that our cash will be sufficient to fund our capital expenditures and operating expenses as currently planned into 2024. Excluding any potential approval or sales milestones payable to Archemix or any commercialization expenses for Zimura. These estimates are based on our current business plan which includes the continuation of our ongoing clinical development programs for Zimura, the progression of our IC-100 and IC-200 programs into the clinic, any advancement of our IC-100 development program. These estimates also assume that we will enroll approximately 400 patients in the GATHER2 trial.

These estimates do not reflect additional expenditures related to potentially setting Zimura in any other indications resulting from the potential in-licensing or acquisition of additional product candidates or technologies, the commencement of any new sponsored research programs, or any associate development that we may pursue. I'll now turn the call back over to Glenn. Thank you for your time.

Glenn Sblendorio -- Chief Executive Officer and President

Thank you, Dave. 2021 will be another important year for Iveric Bio. It's all about continued execution to finalize enrollment in the March GATHER2 trial in Q3. And also importantly, as we've talked about a lot today to retain these patients in the trial.

So, thanks for your time this morning and your continued support. We now turn the call over to the operator so that we can open up the line for any questions. Operator?

Questions & Answers:

Operator

Thank you. [Operator instructions] We'll go first to Tiago Fauth with Credit Suisse.

Tiago Fauth -- Credit Suisse -- Analyst

Thank you and congrats on all the progress. So, I just have one on Zimura. So, as we're thinking about the potential safety differentiation relative to what other complement approaches, can you help us contextualize the CMB rate scene in GATHER1 and potential baseline characteristics of the population involved that might have influence that somehow? And -- and, perhaps, how that could look like in GATHER2? Also wondering if there are any relevant protocols in this validate -- that valid changes and how investigators report the events or how the event is confirmed, that could also result in differences between GATHER1 and GATHER2 on the safety as -- as we're talking about CMB rates? Thanks.

Glenn Sblendorio -- Chief Executive Officer and President

Tiago, thanks for the question. Pravin, I think that's one for you.

Pravin Dugel -- Executive Vice President and Chief Strategy and Business Officer

Sure. Thank you, Glenn. And Tiago, thank you for the question. A lot of questions within that but very important questions.

But let's just talk about the fellow CNV in eye first. The first thing I'd like to share with you is why we excluded patients with CNV in the fellow eyes. It was entirely due to concern about compliance and protection of the integrity of the data. Such a patient would have likely had to return to our clinic multiple times for more than a month, more than a year, for full -- at multiple times a month for more than a year.

And we thought that was unreasonable especially in elderly patients. We wanted to minimize the patient dropout and protect the integrity of the data. And that's the reason that we excluded patients with CNV in the -- in the fellow eye. In regards to conversion to wet macular degeneration, we are starting to learn about the risk factors.

There are many such risk factors, we know that. And having a CNV in the fellow eye made you one of many risk factors. However, having geographic atrophy that has a higher rate of metabolism because it grows faster and recall that we recruited patients with extrafoveal geographic atrophy, the fastest-growing geographic atrophy may also be theoretically a greater risk factor. So, it's important to recognize, as you well know, the limitations of comparing results across trials when the patient populations are different.

But it's also important to remember the magnitude of difference. For instance, the ratio of conversion between drug and sham in gather one was about four times. However, with C3 inhibition, there are reported rates of 17 times. So, comparing the magnitude is also important.

So, as we've mentioned many times before, we believe that there are solid signs to support the beneficial efficacy and safety profiles that we have demonstrated with C5 inhibition to date. Now, your question regarding GATHER1 and GATHER2, the inclusion criteria are exactly the same. We are also studying patients with extrafoveal geographic atrophy. The only difference is in the exclusion criteria as you'll recall is that we are continuing to follow those few patients who develop any neovascular membrane for the entirety of the study.

Recall that in GATHER1, the Duke Reading Center was not certain whether those patients could have an adequate measurement of their geographic atrophy growth. And in looking back at the GATHER1 study, they're confident that those patients can be accurately measured. So, we will continue to follow those patients for the entirety of the study, and hopefully, Tiago, that answers your question but thank you for the question.

Tiago Fauth -- Credit Suisse -- Analyst

Thank you very much.

Operator

We'll go to the next to Stacy Ku with Cowen and Company.

Stacy Ku -- Cowen and Company -- Analyst

Good morning. Thanks for taking my question. Great to hear about the enrollment and retention progress. I have just one.

We're wondering if there's any reason that Zimura can't be formulated in an extended-release formulation. We've been seeing a number of different extended-release technologies for wet AMD, DME. Just curious about any progress here. Thanks.

Glenn Sblendorio -- Chief Executive Officer and President

Thank you for that question. Keith, do you want to take that question?

Keith Westby -- Chief Operating Officer

Sure. Happy to do that. Thank you. Great question.

No, to answer your question, no. There's no reason why we actually think that the properties of Zimura which is an aptamer chemically synthesized aptamer, lends itself quite well to those types of technologies. And of course, we are always looking at -- at those types of technologies in the background.

Glenn Sblendorio -- Chief Executive Officer and President

But I'll just add that, you know, its early days are -- are focuses on getting the trial completed and hopefully being able to file with the regulatory agencies for the approval of this product that's greatly needed by patients. Clearly, extended-release is a key part of the lifecycle. I think we have mentioned that the lifecycle is in the plan for Zimura. We're looking at a number of things but more to come on that in the future.

But thank you for the question.

Stacy Ku -- Cowen and Company -- Analyst

Thanks.

Operator

With the next to David Nierengarten with Wedbush Securities.

David Nierengarten -- Wedbush Securities -- Analyst

Hey, just a quick question from me. Maybe I missed it earlier but do you attribute, you know, the enrollments, you know, the positive trends in enrollment. Is it purely enrollment and patient recruitment or, you know, how is the dropout rates looking compared to your expectations? In other words, is the dropout rate better than what you had anticipated? And then on IC-100, again, maybe I missed this but, you know, that's a little bit of a push out from the IND filing. Is it manufacturing-related or -- or, you know, wrapping up preclinical data assays or kind of what -- what's the cost there? Thanks.

Glenn Sblendorio -- Chief Executive Officer and President

Yeah. David, it's quiet, and thank you for the two questions. I'll take the first one and I'll ask Keith to take the second one. As we said on the call, very happy with the enrollment in the trial.

It's trending ahead of schedule early days so as it relates to dropouts that's not something we would talk about but I think the important point is that we also spoke about retention and that retention was just important and keep cover the number of the initiatives there. So, we have thought about retention right from the beginning. If you remember, we had deferred the start of this trial which was -- was a difficult decision at the beginning of COVID and try to pick the -- the right point. So, obviously, our efforts around retention is to minimize missed visits, etc.

But those types of metrics -- it's early to report those. I think you should take away from this at -- at this point that we're --we're happy with the progress of the trial. Keith, do you want to take the second question on IC-100?

Keith Westby -- Chief Operating Officer

Sure. Thanks, Glenn. So, we had provided general guidelines initially as we complete our preclinical development for our first gene therapy asset to hopefully enter the clinic. We just want to be sure that we're bringing forward a plan that has a high probability of success in an area with significant unmet medical needs.

So, we remain very excited about the collaboration with the University of Penn and the University of Florida and we'll continue to develop the unique retinal asset that's capable of simultaneously knocking down and replacing the toxic mutant gene. So, as we discussed, we would be wrapping up the -- we completed the non-clinical studies and we're in the process of sites elections and starting up to -- starting up activities. We'll plan to meet with the regulatory act -- authorities to discuss the selected doses for this first in-human trial before we filed the IND. And then, that -- that's why the IND is now in the second half as opposed to the first half.

Glenn Sblendorio -- Chief Executive Officer and President

David, I think, you know, this will be our first clinical trial in gene therapy. So, we want to be sure that we're taking all the right steps and doing all the right things. Importantly, as Keith said, the preclinical top's work done. I do want to mention and -- and congratulate our operations team on the work they've done with our outside CMO on -- on manufacturing for the materials are there.

But, you know, I think, since this will be our first gene therapy program, we want to be sure that we're taking all the right steps.

David Nierengarten -- Wedbush Securities -- Analyst

Thank you.

Operator

At this time there are no further questions. I will turn the call back to Glenn for closing remarks.

Glenn Sblendorio -- Chief Executive Officer and President

Operator, thank you for hosting the call, and again thank you to everybody for listening today. We look forward to we'll continue the dialogue from the -- from the third -- second quarter. Thank you. Goodbye.

Operator

[Operator signoff]

Duration: 36 minutes

Call participants:

Kathy Galante -- Investor Relations

Glenn Sblendorio -- Chief Executive Officer and President

Keith Westby -- Chief Operating Officer

Pravin Dugel -- Executive Vice President and Chief Strategy and Business Officer

Dave Carroll -- Senior Vice President and Treasurer

Tiago Fauth -- Credit Suisse -- Analyst

Stacy Ku -- Cowen and Company -- Analyst

David Nierengarten -- Wedbush Securities -- Analyst

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