IVERIC bio, Inc. (ISEE) Q1 2021 Earnings Call Transcript

IVERIC bio, Inc. (ISEE)
Q1 2021 Earnings Call
May 05, 2021, 8:00 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good morning, and welcome to the Iveric Bio first-quarter 2021 earnings conference call. [Operator instructions] Please note this call is being recorded. I would now like to turn the conference over to Kathy Galante, senior vice president, investor relations. Please go ahead.

Kathy Galante -- Senior Vice President, Investor Relations

Good morning, and welcome to Iveric Bio's conference call. Representing Iveric Bio today are Glenn Sblendorio, chief executive officer; Pravin Dugel, president; David Carroll, chief financial officer; Dhaval Desai, chief development officer; Abraham Scaria, chief scientific officer; and Keith Westby, chief operating officer. I would like to remind you that today, we will be making statements relating to Iveric Bio's future expectations regarding operational, financial and research and development matters, including statements regarding our 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 expectations to use GATHER1, our previously announced clinical trial of Zimura for the treatment of GA secondary to AMD as a Phase 3 clinical trial; our development and regulatory strategy for Zimura and now 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 advisory committee members and human capital resources. These statements constitute forward-looking statements for the purposes of the safe harbor provision under the Private Securities Litigation Reform Act of 1995.

These statements cover many events in matters that are subject to various risks that could cause actual results to differ materially from those expressed in any forward-looking statement, including risks related to the future progression of the COVID 19 pandemic, responsive measures to the pandemic, and their impact on our research and development programs, operations and financial position, initiation of the progress of research and development programs and clinical trials, including enrollment and retention in clinical trials, availability of data from these programs, reliance on contract development and manufacturing organizations, universities, collaborators, and other third parties, the establishment of manufacturing capabilities, expectations for regulatory matters, developments from our competitors and the marketplace for our products, 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 included in our annual report on Form 10K filed on March 4, 2021, for a detailed description of the risk factors affecting our business. In addition, any forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. While we may elect to update these forward-looking statements at some point in the future, we disclaim any obligation to do so as required by law.

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

Glenn Sblendorio -- Chief Executive Officer

Thanks, Kathy, and good morning everybody. I thank you for joining us for our first-quarter conference call. The first quarter of 2021 has been very productive for us at Iveric Bio. I am pleased to share that we are excited to be executing and moving toward completing enrollment in the GATHER2 clinical trial.

Our second Phase 3 clinical trial for Zimura, a novel complement C5 inhibitor for the treatment of geographic atrophy or GA, secondary to age-related macular degeneration. We expect to complete this trial in the third quarter of this year. To date, both recruitment and retention of patients in GATHER2 are exceeding our expectations. We are on track for initial top-line data from GATHER2 to be available approximately one year after the enrollment of the last patient in the GATHER2 clinical trial.

Of course, we have to add some time for database closure and analysis of the initial top-line data. If the 12-month results from GATHER2 are positive, we've planned to file applications with the U.S. FDA and the European Medicines Agency for marketing approval of Zimura for GA. I also wanted to mention some organizational changes that further strengthen our management team.

I am thrilled to announce that Dr. Pravin Dugel has been promoted to president, effective May 1. Pravin has played a critical role in our execution of strategy. He's been a key part of the executive management team leading the company strategy and I want to also congratulate Kathy Galante on her well-deserved promotion to senior vice president, investor relations.

I look forward to continuing to work with both of them at this exciting time in our company. Finally, I want to acknowledge David Guyer, my friend, who will be stepping down from our board after 14 years, for his leadership as co-founder and executive chairman. I sincerely thank David for his hard work and significant contributions to the company. We wish David well, as he rejoins SV Health Investors as a venture partner.

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

Keith Westby -- Chief Operating Officer

Thank you, Glenn, and good morning, everyone. As Glenn mentioned, our main priority is to aggressively drive patient recruitment and retention in the GATHER2 clinical trial, the enthusiasm, resiliency, and dedication of patients, physicians, and their staff are exceeding our expectations. With the reduction in the mean rate of GA growth over 12 months at 27.38%, a p-value of 0.0072, for the Zimura 2 milligram group as compared to the corresponding sham control group in the GATHER1 clinical trial. We believe many principal investigators are enthusiastic about enrolling patients for the GATHER2 clinical trial, leveraging the quality of the positive GATHER1 results to maximize both patient recruitment and retention for GATHER2.

These positive 12-month data are further supported by positive 18-month efficacy results and a favorable safety profile that was maintained throughout the 18-month trial. Further, we believe that the early and continuous treatment effect demonstrated in GATHER1 is a key motivator for patient retention in GATHER2. In total, we are planning to enroll approximately 400 patients in the GATHER2. We are planning to enroll approximately 400 patients in the GATHER2 clinical trial.

We continue to be on track and look forward to completing enrollment in GATHER2 in the third quarter of this year. Our Phase IIb screening clinical trial of Zimura for the treatment of autosomal recessive Stargardt disease referred to as the STAR trial is ongoing with the goal of enrolling approximately 120 patients. Results from this clinical trial are expected after the 12-month initial top-line data from GATHER2. There are currently no therapies approved for Stargardt disease in either the U.S.

or the European Union. Turning to our gene therapy programs, we are excited about the progress in the development of our product candidate for the treatment of BEST1-related inherited retinal diseases, or IRDs, IC-200. We are completing a toxicology study in the naturally occurring canine model of BEST disease. As a reminder, we have data demonstrating long-term rescue in this model following a single subretinal injection.

We are on track to release the recently manufactured GMP batch of IC-200 in preparation for the planned INB filing and plan to move IC-200 into a Phase 1/2 clinical trial in the second half of 2021. We are not aware of any ongoing competitive programs for BEST1-related IRDs and believe IC-200 has the potential to be both first and best in class. Regarding IC-100, our product candidate for the treatment of Rhodopsin-mediated autosomal dominant retinitis pigmentosa, the company continues to evaluate the results from its preclinical toxicology studies. In our preclinical efficacy and toxicology study in a naturally occurring canine model of RHO-adRP, efficacy was demonstrated at all three doses tested.

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

We are thrilled about the progress of our mini-gene programs in collaboration with the University of Massachusetts Medical School. We are pleased to report that we have recently identified a lead construct for our Leber congenital amaurosis type 10 or LCA 10 mini CEP290 program, and currently considering development plans for this program. Also during the second quarter, we expect to obtain additional results from our Stargardt disease mini ABCA4 program. And we expect to obtain preliminary results from our USH2A-related IRD program during the second half of this year.

We will continue to keep you updated on our mini-gene programs. Thank you for your time. I will now turn the call over to Pravin.

Pravin Dugel -- President

Thank you, Keith. Thank you all for joining the call this morning. I hope that you're all well. A key goal of ours is to expand and advance our footprint in multiple stages and types of AMD.

We intend to execute a development strategy that will involve both Zimura and IC-500 in a complementary fashion to impact multiple forms and stages of AMD. I would like to let everyone know that we are planning to host a dry AMD virtual symposium for investors and analysts on Friday, June 18 from 10:00 a.m. to noon Eastern Time. The event will include presentations and discussions with retinal specialists and key opinion leaders on Zimura and IC-500 and the dry AMD landscape.

Guest speakers will include Dr. Frank Holz, University of Bonn; Dr. Peter Kaiser, Cleveland Clinic Lerner College of Medicine, Cole Eye Institute; Dr. Arshad Khanani, Sierra Eye Associates and University of Nevada, Reno; Dr.

Anat Loewenstein, Sackler Faculty of Medicine at the Tel Aviv University and Tel Aviv Medical Center; Dr. Charles Wykoff, Retina Consultants of Texas and Blanton Eye Institute, Houston Methodist Hospital; and Dr. Trent Woodruff, the University of Queensland. We hope you will be able to join us at our virtual symposium on June 18.

Please reach out to Kathy if you have any questions. Turning to IC-500. We announced in March 2021 that we revised our development plans for IC-500 to include the investigation of multiple dosing schedules for our product candidates. In April 2021, we commenced our first preclinical tolerability study, and we're currently planning additional preclinical studies including pharmacokinetic and target engagement studies.

Formulation optimization and other manufacturing activities are also ongoing. We continue to remain excited about the development potential of IC-500 and expect to submit an IND to the FDA for IC-500 NGA secondary to AMD in the second half of 2022. As a reminder, we believe IC-500 has the potential to be best in class as it inhibits HTRA1, both intra and extra-cellularly. As Keith mentioned, while IC-100 is delayed, our IC-200 and mini-gene programs are progressing well.

We are excited to announce today that in addition to our visionary steering and imaging advisory committees, the formation of an Iveric Bio Gene Therapy Inherited Retina Disease Scientific Advisory Committee, which brings together a renowned group of thought leaders who bring extensive clinical experience and a deep understanding of gene therapy to treat inherited retinal diseases. The advisory committee will work closely with senior management as we advance our gene therapy IRD programs. Advisory committee members include Dr. Elias Traboulsi, Cole Eye Institute, Cleveland Clinic Lerner College of Medicine; Dr.

Andreas Lauer, Casey Eye Institute, University of Oregon; Dr. Bart Leroy, Ghent University Hospital and Children's Hospital of Philadelphia; Dr. Mark Pennesi, Casey Eye Institute, University of Oregon; and Dr. Eleonora Lad, Duke Reading Center, Duke University Medical Center.

We remain committed to our mission statement, to develop transformative therapies. We look forward to keeping you updated on our progress in the months to come. Thank you for your time. I will now turn the call over to Dave.

Dave Carroll -- Chief Financial Officer

Thank you, Pravin, and good morning, everyone. I'd like to highlight a few items from our press release of this morning and update our expected year-end cash balance and confirm our expected cash runway. For the quarter, our net loss totaled $26.8 million with $0.29 per share, compared to a net loss of $15.1 million or $0.28 per share for Q1 2020. This increase in net loss was driven primarily by increases in both R&D and G&A expenses and the Q1 2020 impact of a favorable settlement of the state corporate tax audit.

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

As Keith and Glenn have described, we are aggressively driving GATHER2 recruitment and retention. We're also investing in the manufacture of Zimura drug substance drug products, including required starting materials, as we aim to scale up and validate the manufacturing process. As expected, both of these activities have impacted our Q1 cash burn. However, we expect our quarterly cash burn to decrease as the year progresses.

We now expect our year-end cash balance will range between 125 million and 135 million. Our long-term cash forecast is unchanged. We estimate that our cash will be sufficient to fund our capital expenditures and operating expenses as currently planned into 2024, excluding any potential approval or sales milestones payable to Archemix or any commercialization expenses for Zimura. These estimates are based on our current business plan, which includes the continuation of our ongoing clinical development programs for Zimura, the progression of our IC 100 and 200 programs into the clinic, and the advancement of our IC 500 development program.

These estimates also assume that we will enroll approximately 400 patients in the GATHER2 trial. These estimates do not reflect any additional expenditures related to potentially studying Zimura in other indications, resulting from the potential in-licensing or acquisition of additional product candidates or technologies or commencement of any new sponsored research programs or any associate development that we may pursue. And I'll now turn the call back over to Glenn. Thank you for your time.

Glenn Sblendorio -- Chief Executive Officer

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

Questions & Answers:

Operator

[Operator instructions] The first question comes from Tiago Fauth with Credit Suisse. Please go ahead.

Tiago Fauth -- Credit Suisse -- Analyst

Hi. Thanks for taking the question. So just a quick confirmation here. In addition to GATHER1 data, is the 12th month GATHER2 data sufficient to support the filing from a safety or exposure perspective, or do you need any additional follow-up there? And another follow-up on the broader competitive landscape NGA? So again, there's a lot of focus on C3 and C5 inhibition because there is clinical data for those approaches.

But curious about your thoughts on longer-term potential of approaches like gene therapy targeting CD59 or recombinant Complement factor H proteins, and other emerging therapies out there? What are some pros and cons? Thank you.

Glenn Sblendorio -- Chief Executive Officer

Tiago, thank you. It's Glenn, and thank you for the question. So I'll take the first question on the GATHER1 trial and I'll ask Pravin to take the second question. Yes.

We believe the combination of GATHER1 and GATHER2 will be sufficient for a regulatory filing. I think as we have said in the past, and we've seen in our disclosures, we've had numerous conversations, informal conversations with the FDA that has given us comfort in our strategy with the two trials. So, yes, we're comfortable. And as I said today on completion of GATHER2 our intent is to analyze top-level data and if it's sufficient, we would file for regulatory approval.

Pravin?

Pravin Dugel -- President

Thank you, Glenn, and good morning, Tiago. Thank you for the question. What I would say is, we're delighted that there are so many companies that are looking at the complement pathway because it validates the target. We remain quite convinced that our target has a great deal of scientific backing and scientific evidence.

In fact, we feel that our results reflect what would be consistent with previously known science and previously published science. In terms of gene therapy, I think it's important to understand that there's a different challenge to gene therapy for chronic disease, as opposed to an orphan disease. Gene therapy is very exciting, but again, the challenges remain for a chronic disease, which may be more different than orphan diseases we've seen. So we support all of these companies.

We're delighted that there are more people that are in the complement pathway, as I say, because it validates the target. However, we remain convinced that science stands with our target selection and the inhibition of C5.

Tiago Fauth -- Credit Suisse -- Analyst

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

Operator

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

Stacy Ku -- Cowen and Company -- Analyst

Good morning. Thanks for taking my questions, and congratulations on the continued progress. I have a few. So, first, wondering if you guys would be willing to provide any additional commentary on retention or enrollment? For instance, have you seen an even greater acceleration in the past few months, or should we just expect a steady addition of patients? And then my second question is another competitive one, as the approach, Apellis' data read-out, can you remind us main differences in study design and specifically the reasoning behind the key inclusion criteria for extrafoveal lesions? Thank you.

Glenn Sblendorio -- Chief Executive Officer

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

Keith Westby -- Chief Operating Officer

Thanks, Glenn. Thanks, Stacy. So, yes, the enrollment was good from the onset. So it's been continued to be quite -- we're quite happy with that.

And I think there's a number of things that really drive that. One is the results from the GATHER1, which were published, the 12-month results as well as the 18-month follow-on results from GATHER1, which really helped drive the enrollment, and as well as the retention in GATHER2. So we're quite pleased with that, and pretty much on track for the third quarter to complete that.

Glenn Sblendorio -- Chief Executive Officer

Yes. Hey, Stacy. The only thing I'd add in terms of color, I think it goes back to a lot of what we said in the past on the preparation in this COVID environment, but took into account also the impact potentially on patients, and how do we keep them safe. So I think that early planning, and if you recall, we did delay the trial in early 2020 until we can better understand what was happening with the pandemic.

And that was about a three, four-month delay. And that allowed us really to take a step back, analyze what was happening with the docs, plan well, and I think we're seeing the fruits of that planning and the execution now. And as you know, we said at the end of the year that we did move up the completion date from the end of the year or closer to the fourth quarter, to the third quarter. So that may be a little bit more color for you at this point in time.

So, Pravin, I'll give you the second question.

Pravin Dugel -- President

Yes. Thank you, Glenn. And, Stacy, thank you for your question. So what has been known for quite a long time, more than half a century, is that there's a very stereotypic way that geographic atrophy advances.

And what it does is that it advances fairly rapidly in a circumferential fashion. And by rapidly I mean in a matter of several months, and you can see this in the excellent studies that Genentech has published in regards to their Lampalizumab program. And then once it advances relatively rapidly circumferentially, once the fovea is involved, the geographic atrophy tends to slow down, once the fovea is involved. So the bottom line is that there are lots and lots of patients out there with excellent visual acuity.

The visual acuity may be refractable to 2020, but they're visually dysfunctional because of the geographic atrophy that they have this extrafoveal that may not allow them to function. They may not be able to see a straight line if you're an architect, or certainly if you're an engineer. They may not be able to finish reading a spreadsheet or a sentence if you're an accountant or a lawyer. So there are lots of those patients out there and the logic behind the selection of extrafoveal geographic atrophy is not only to address this enormous unmet need but also to be able to note that if we're able to slow down the fastest growth in geographic atrophy, we've met a higher bar of scrutiny then slowing down a slower-growing geographic atrophy.

And finally, what I'd say is that the ability to protect the fovea from being affected by geographic atrophy is terribly valuable. And we believe that we'll be able to demonstrate that as well. So for all of those reasons, important to understand why we selected this patient population. And also as you've noticed, Stacy, important to note that our patient population is quite different than the Apellis patient population, and should be regarded that way as well when you analyze the data.

But thank you for your question.

Stacy Ku -- Cowen and Company -- Analyst

Thank you.

Operator

The next question comes from David Nierengarten with Wedbush Securities. Please go ahead. Mr. Nierengarten, your line is open.

Please go ahead with your question. Thanks.

David Nierengarten -- Wedbush Securities -- Analyst

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

Glenn Sblendorio -- Chief Executive Officer

David, thank you for your question. Keith?

Keith Westby -- Chief Operating Officer

Sure. Thanks, David. Very good question. So in terms of the manufacturing, we feel confident that we did produce good quality material for these, and it's a similar manufacturing process for both.

I think looking at the data, we see the discrepancy in the two different species. So we just thought it would be prudent to take us a step back and really analyze that data and have some discussions with regulators prior to initiating the IND filing for the program. That's for IC 100. For IC 200 we are very much on track.

We've completed the manufacturing of the GMP batch for the clinical trial, and that's in the process of being released now.

David Nierengarten -- Wedbush Securities -- Analyst

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

Keith Westby -- Chief Operating Officer

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

David Nierengarten -- Wedbush Securities -- Analyst

Got it. Thank you.

Operator

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

Glenn Sblendorio -- Chief Executive Officer

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

Operator

[Operator signoff]

Duration: 31 minutes

Call participants:

Kathy Galante -- Senior Vice President, Investor Relations

Glenn Sblendorio -- Chief Executive Officer

Keith Westby -- Chief Operating Officer

Pravin Dugel -- President

Dave Carroll -- Chief Financial Officer

Tiago Fauth -- Credit Suisse -- Analyst

Stacy Ku -- Cowen and Company -- Analyst

David Nierengarten -- Wedbush Securities -- Analyst

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