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IVERIC bio, Inc. (ISEE) Q3 2021 Earnings Call Transcript

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ISEE earnings call for the period ending September 30, 2021.

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IVERIC bio, Inc. (ISEE -1.08%)
Q3 2021 Earnings Call
Nov 09, 2021, 8:00 a.m. ET


  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:


Good morning, and welcome to the IVERIC bio third quarter 2021 conference call. [Operator instructions] Please note, this event 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 Mr. Glenn Sblendorio, chief executive officer; Dr. Pravin Dugel, president; Mr.

Keith Westby, chief operating officer; Mr. David Carroll, chief financial officer; Dr. Dhaval Desai, chief development officer; and Mr. Chris Simms, chief commercial officer.

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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. 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. I refer you to our SEC filings and, in particular, to the risk factors included in our current report on Form 8-K filed on October 21, 2021, for a detailed description of the risk factors affecting our business that could cause actual results or events to differ materially from the forward-looking statements that we make.

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, except as required by law. I will now turn the call over to Glenn.

Glenn Sblendorio -- Chief Executive Officer

Thanks, Kathy, and good morning, everyone. Thank you for joining us for our third quarter conference call. 2021 has been a pivotal year for IVERIC bio as we set in motion our plans to accelerate the opportunity for Zimura to be first-in-class and best-in-class for the treatment of geographic atrophy, or GA, secondary to age-related macular degeneration, or AMD. In GATHER2, our second pivotal clinical trial of Zimura in GA secondary to AMD, patient retention continues to exceed our expectations.

We are targeting the 12-month injection fidelity rate to be greater than 90%. We are entirely committed to maintaining patient retention in the GATHER2 clinical trial, which Keith will discuss in a few moments. In parallel, preparations of a New Drug Application, or NDA, and building a commercial infrastructure are well underway for the potential launch of Zimura for the treatment of GA secondary to AMD, if approved. We're also in the process of assembling a seasoned commercial team with experience launching retina drugs with blockbuster potential.

In August, we welcomed Christopher Simms as Senior Vice President and Chief Commercial Officer, and the hiring of the commercial leadership team has already begun. Chris is an accomplished healthcare leader with more than 20 years of diverse commercial experience, leadership experience, and Chris joins us from Novartis, where he successfully managed commercial operations for the U.S. ophthalmic franchise, launching Beovu for wet AMD. Before Novartis, he served as marketing lead for Genentech's ophthalmic business, which included creating a new brand positioning and launching a new campaign for Lucentis.

We are thrilled to have achieved several major milestones regarding the execution of our Zimura pivotal program. First, in July, we completed patient enrollment in GATHER2 four months ahead of our original schedule. We are on track for initial top-line data from GATHER2 to be available during the second half of 2022, approximately one year after the enrollment of the last patient plus time needed for database closure and analysis. Second, we received a written agreement from the FDA under a Special Protocol Assessment, or SPA, for the overall design of GATHER2.

We believe that this is the first and only SPA NGA. For those who are not familiar, the SPA process is a procedure by which the FDA provides the clinical trial sponsor with an official evaluation and written guidance on the design of a proposed protocol intended to form the basis for an NDA. Pravin will provide additional details on the SPA in a moment. And third, we did a post-hoc analysis of the GATHER1 trial, where we looked at drusen and nascent GA, which showed that Zimura has the potential to impact earlier stages of AMD.

Based on these analyses, we plan to accelerate development of Zimura in intermediate AMD by initiating a Phase 3 clinical trial in 2022. Pravin will also provide more details on this trial in a few moments. We also strengthened our balance sheet by raising approximately $108 million and $163 million in net proceeds with public offerings in July and October 2021, respectively. Dave will cover our cash runway later in this call.

We believe these fundraises enable us to prepare Zimura for what could be first-to-market and best-in-class opportunity, also accelerate our preparations for potential commercial launch of Zimura, and continue to invest in manufacturing capacity. In addition, we plan to invest in additional lifecycle initiatives for Zimura in order to expand the patient population with additional indications, such as accelerating our plans for intermediate AMD and investing in multiple sustained-release delivery technologies for Zimura. The main priorities for us today are the retention of patients in GATHER2 and preparing for the potential commercialization of Zimura in the U.S. This is an exciting time for the company as we continue to execute on our Zimura pivotal program with the potential to create long-term shareholder value.

I will now turn the call over to Keith. 

Keith Westby -- Chief Operating Officer

Thank you, Glenn, and good morning, everyone. As Glenn mentioned, we completed patient enrollment in GATHER2 in July 2021 with 448 patients enrolled, four months ahead of our original schedule. Based on this time line, we expect top-line GATHER2 data to be available in the second half of 2022, approximately one year after the enrollment of the last patient, plus the time needed for database lock and analysis. If the 12-month results are positive, we plan to file applications with the U.S.

FDA and the European Medicines Agency for marketing approval of Zimura for GA secondary to AMD. A major priority for us is to aggressively drive patient retention and thereby further de-risk the GATHER2 clinical trial. We are targeting patient retention for the GATHER2 clinical trial as measured by injection fidelity rate through month 12 of greater than 90%. We are thrilled with the enthusiasm, resiliency, and dedication of patients, physicians, and their staffs as they are far exceeding our expectations.

As of today, we continue to maintain an injection fidelity rate of greater than 95%, clearly exceeding our goal of greater than 90%. As a comparison, the 12-month injection fidelity rate for our GATHER1 trial, which show a statistically significant reduction in GA progression at 12 months with 87%. Injection fidelity is calculated by dividing the total number of actual injections, drug and sham, by the total number of expected injections, drug and sham. We consider injection fidelity to be the most important and stringent measure of patient retention because it reflects the timely administration of drug or sham into the patient's eye.

We continue to focus on injection fidelity not only to protect the integrity of our data but also to potentially observe the early and increasing treatment effect we previously observed in GATHER1. 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 two-milligram group as compared to the corresponding sham control group in GATHER1 clinical trial, we believe many principal investigators are enthusiastic and committed to participating in the GATHER2 clinical trial, leveraging the quality of the positive GATHER1 results and maximize patient retention for GATHER2. These positive 12-month data are further supported by positive 18-month efficacy results and the safety profile that was maintained throughout the 18-month trial. Further, we believe that the early and increasing treatment effect observed in GATHER1 is a key motivator for retention in GATHER2.

There are currently no therapies approved for GA secondary to AMD in either the U.S. or EU. Turning to Stargardt disease. Patient enrollment in our Phase 2b screening trial of Zimura for the treatment of autosomal recessive Stargardt disease, referred to as the STAR trial, is ongoing.

We plan to enroll approximately 25 additional patients for a total of approximately 120 patients. If the results are positive and statistically significant, we believe this clinical trial could potentially support an application for marketing approval. Results from this clinical trial are expected after the 12-month initial top-line results from GATHER2. There are currently no therapies approved for Stargardt disease in either the U.S.

or EU. 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 are all well. The SPA, which Glenn highlighted earlier, marks a significant development for Zimura as it underscores our alignment with the FDA in a formal agreement for the overall design of GATHER2, which we believe reflects the FDA's current thinking.

The SPA agreement further solidifies our plans to file an application with the FDA for marketing approval of Zimura for GA secondary to AMD if the ongoing gather to clinical trial meets its primary endpoint at twelve months. Zimura met its prespecified primary efficacy endpoint at 12 months with statistical significance in the previously completed GATHER1 pivotal clinical trial. In parallel discussions with those for the GATHER2 SPA, the FDA indicated to us that, as part of a future NDA submission for Zimura, the GATHER1 results will be considered using the original prespecified primary efficacy endpoint analysis together with a post-hoc analysis using the same FDA preferred method that will be used for the GATHER2 trial, mean rate of growth or slope estimated based on GA area measured by fundus autofluorescence in the relevant time points. The GATHER1 results, when analyzed using the FDA preferred analysis, are highly consistent with and strongly supportive of the results from the original prespecified analysis.

We believe that a positive 12-month result in GATHER2 would allow us to file an NDA with the FDA and an MAA with the EMA. We also believe, subject to obtaining the GATHER2 results, that Zimura has the potential to be a safe and effective therapy for GA, which is the leading cause of blindness in this country for which there are no approved treatments available for patients. In our GATHER clinical program, our inclusion criteria specified patients with extrafoveal GA, and we excluded patients with foveal involving GA. As part of the GATHER program, in addition to evaluating the overall rate of GA growth, we look forward to investigating through supportive analyses whether Zimura has the potential to slow down the progression of GA into the fovea, thereby preserving central vision, which would otherwise be lost in this relently progressive blinding disease.

As Glenn mentioned, we're also accelerating the development plan for Zimura in patients with intermediate AMD, a stage prior to the occurrence of GA, with plans to initiate a Phase 3 clinical trial in 2022. We believe that a competitor's recently reported results, in which a greater difference in rates of progression for patients with extrafoveal versus fovea-affecting GA was observed, support our assertion that complement inhibition is more important in earlier stages of GA. We believe that these results potentially de-risk our GATHER2 clinical trial by further validating the selection of our target patient population only extrafoveal GA. We also believe that these results further support our hypothesis for studying Zimura in intermediate AMD before GA even occurs, where we believe complement activation may be driving disease progression.

We plan to initiate a Phase 3 trial in intermediate AMD in 2022. We are fully committed to delivering treatments for AMD, including early stages of AMD, such as intermediate AMD. In post-hoc analysis of GATHER1, Dr. Vas Sadda of the Doheny Eye Institute of UCLA reported that Zimura two-milligram was associated with slowing the progression of intermediate GA with decreased rate of progression of iRORA or incomplete RPE and outer retinal atrophy to cRORA, or complete RPE and outer retinal atrophy at a decreased rate of progression of drusen to iRORA and/or cRORA being observed.

In both analyses, an increasing difference between the Zimura two-milligram group and the sham group was observed over time, consistent with the results we observed with the prespecified analysis in GATHER1. Therefore, we believe Zimura may have the potential to not only slow down the progression of GA but also to prevent or slow down the progression of GA altogether by changing the course of the disease. These post-hoc analyses should be considered hypothesis-seeking. Nonetheless, if these results are substantiated with prospective randomized studies, the potentially sight-saving impact of Zimura on high-risk AMD patients could be a significant leap forward in treating this disease.

We estimate that, by 2039, there will be approximately 6 million individuals with drusen in the United States and 8 million individuals with chosen in the EU five countries: France, Germany, Italy, Spain, and United Kingdom. The population we would look to enroll from for the intermediate AMD trial is a subset of the prevalent drusen population. We expect this intermediate AMD trial to be an international randomized, double-masked, sham-controlled multicenter trial with approximately 200 patients per treatment group. We expect to treat and follow all patients for 24 months.

We expect that data from this trial if positive, together with other supportive data, may be sufficient to file a Supplemental New Drug Application with the U.S. FDA and supplemental marketing authorization application with the European Medicines Agency. The positive GATHER1 data and post-hoc analyses of GATHER1 data in earlier stages of AMD were recently presented at major medical conferences around the world, including the annual meeting of EURETINA, the Retina Society, and the American Society of Retina Specialists. We have previously stated that 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.

We have initiated a number of preclinical tolerability and pharmacokinetic and target engagement studies for IC-500 and are planning additional preclinical studies. We expect to submit an Investigational New Drug Application, or IND, to the FDA for IC-500 in GA secondary to AMD in the second half of 2022. On the business development front, we plan to continue to evaluate on a selective and targeted basis opportunities to potentially obtain rights to additional product candidates and technologies for retinal diseases with a focus on sustained release delivery technologies for Zimura. We believe that we are well-positioned to expand Zimura's indications, build an AMD franchise; and, subject to regulatory approval, commercialize Zimura for GA as a market leader.

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 our expected cash runway. For the quarter, our net loss totaled $24.6 million, or $0.23 per share, compared to a net loss of $25.5 million, or $0.27 per share, for Q3 2020. This decrease in net loss was driven primarily by a decrease in R&D expenses.

Our R&D expenses decreased due to a reduction in gene therapy expenses, offset by the commencement and progression of patient enrollment in our ongoing GATHER2 trial, increased manufacturing activities for Zimura, and increases in additional R&D personnel. Turning to our expected year-end cash balance and cash runway. In October, we raised approximately $163 million in net proceeds in the underwritten public offering. We now estimate our year-end cash to range between $375 million and $385 million.

We also estimate that our cash will be sufficient to fund our planned capital expenditures and operating expenses through at least mid-2024. These estimates are based on our current business plan, including the continuation of our ongoing clinical development programs for Zimura in GA and Stargardt's, the initiation of intermediate AMD clinical trial, preparation of potential filing of an NDA and MAA for Zimura in GA, continuing preparations for the potential commercial launch of Zimura in GA, investing in sustained-release delivery technologies for Zimura, and the advancement of our IC-500 development program. Excluded from these estimates are any potential approval or sales milestones payable to the Archemix Corporation or potential expenses for the actual launch of Zimura, such as salesforce expenses, any additional expenditures related to potentially studying Zimura in indications outside of GA, Stargardt disease, and intermediate AMD, or resulting from the potential in-licensing or acquisition of additional product candidates or technologies and any associated 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

Well, thank you, Dave. As the year comes to a close, we're excited with the progress we made in 2021. As we look ahead to 2022, we will continue to focus on the execution of the GATHER2 trial with retention of patients and also preparing for the potential commercialization of Zimura in the U.S. These two will be our top priorities.

We're also accelerating development plan for Zimura in patients with intermediate AMD and investing in additional lifecycle initiatives, such as sustained-release delivery technologies for Zimura. I want to thank you for your time this morning and your continued support. We look forward to providing you with updates as we progress. I will now turn the call over to the operator so we can open up the lines for any questions.


Questions & Answers:


[Operator instructions] The first question comes from Annabel Samimy with Stifel. Please go ahead.

Annabel Samimy -- Stifel Financial Corp. -- Analyst

Hi, guys. Thanks for taking my questions, and congratulations on the progress. I have a quick question on the fidelity rate. So obviously, it remains very high, greater than 95%, and I know how that compares to GATHER1.

Maybe you can help us understand how that changes your powering for GATHER2, I guess technically how powerful that is for your statistical analysis that it's so high? And second, how does it compare to the fidelity rate of competing programs you've seen if they've reported the data? And if I could ask a similar question, how many patients from GATHER1 have moved into GATHER2? And is there a way to see how these patients have progressed from one study into the next, if there are, in fact, patients from GATHER1?

Glenn Sblendorio -- Chief Executive Officer

It's Glenn. So three questions. I think we'll deal with the powering question first. Keith, do you want to take that for Annabel?

Keith Westby -- Chief Operating Officer

So the power of GATHER2 is actually based on safety, so we're overpowered for efficacy. If you look at the results from our GATHER1 clinical study, we're actually overpowered for efficacy, and they're based on safety. So the FDA requires at least 300 subjects treated for at least one year at the dose we plan to commercialize or a higher dose, and we would have sufficient patients based on the numbers enrolled in GATHER2, as well as GATHER1. So it continues to shore up our assumptions on GATHER2.

So that's how we're powered for GATHER2.

Annabel Samimy -- Stifel Financial Corp. -- Analyst

And do you have any sense of how it compares to other trials that were conducted in GA?

Glenn Sblendorio -- Chief Executive Officer

The question compared to other trials, you had asked about the injection fidelity. Is that correct?

Annabel Samimy -- Stifel Financial Corp. -- Analyst


Glenn Sblendorio -- Chief Executive Officer

I'm going to let Pravin answer that. But I think, since this is something actually Pravin had come up with in terms of a metric, I'll let him provide some color for you in terms of how we look at it and also the comparison to others.

Pravin Dugel -- President

So I don't know that this parameter, Annabel, has ever been provided before, at least in the 26 years or so that I've been a PI in various studies. This has never been provided, certainly not in an ongoing study. And the reason for us providing this is really very straightforward. There were concerns regarding the global epidemic, or the pandemic, where patients may come in and then may not be able to come in for a while, and injections would be missed, and then patients may come back.

And those patients, despite the gap in treatment, would be technically counted as being retained. And that was good enough, but we really wanted to give a parameter that was as transparent and as stringent as possible. So we really came up with what we believe is the most stringent and transparent parameter in injection fidelity, which is the number of injections, be it therapeutic or sham, that's given divided by the actual number that would be expected in active patients. And that's about as transparent as you can possibly get.

I don't know that that parameter has ever been used before. However, I'm hoping that others will use it for the same reasons that we have and provide that information simply because it really is the best measure of the drug or the sham actually being utilized in the patient's eye.

Annabel Samimy -- Stifel Financial Corp. -- Analyst

And then, the last question about any patients from GATHER1 moving into GATHER2, or if these are fresh patients in GATHER2?

Glenn Sblendorio -- Chief Executive Officer

They're all new patients. Keith, I believe that's correct. I don't think we had anybody move from GATHER1 to GATHER2.

Keith Westby -- Chief Operating Officer

That's correct, Glenn, all new begins.

Annabel Samimy -- Stifel Financial Corp. -- Analyst

OK. Thanks, all. I'll get back in the line.

Glenn Sblendorio -- Chief Executive Officer

Thank you, Annabel.


[Operator instructions] The next question comes from Georgi Yordanov with Cowen and Company. Please go ahead.

Georgi Yordanov -- Cowen and Company -- Analyst

Thanks so much for taking our questions, and congratulations on all the progress. As you mentioned in your prepared remarks, your competitors' results really showed the dramatic impact complement inhibition could have on extrafoveal lesion growth. Could you maybe talk about what percentage of GA patients have extrafoveal lesions? How easy is it to diagnose these patients, just given that the lesions don't impact the fovea? And do you expect at all your label to be limited to only patients with extrafoveal lesions if GATHER2 is successful?

Glenn Sblendorio -- Chief Executive Officer

Pravin, you want to take that one?

Pravin Dugel -- President

So they're clearly exponentially greater number of patients with extrafoveal lesions than patients that have end-stage fovea-involving lesions. I mean, there's no doubt about that. The estimates range much, much higher. Now, the bigger question really is where are those patients.

And those patients really are not so much in the retina specialist's office because those patients are not necessarily referred in unless they're quite severe. The patients really are right now in the general ophthalmologist's office and in the optometrist's office. And this is very much like a movie we've seen before, which is with the anti-VEGFs. Patients with neovascular AMD, when I started practice, really weren't in the retina specialist's office.

They were really at the general ophthalmologist's and the optometrist's office, and those patients had no treatment. That's why they were not referred in. And as soon as there is treatment, the same thing that happened with neovascular macular degeneration were convinced will happen with dry macular degeneration, which is that those patients will be referred into the retina specialist. Now, as far as making a diagnosis is concerned, it's fairly straightforward.

One can look at the fundus. One can see geographic atrophy occurring. These are patients with symptoms. Their vision may be 2020, but there are patients who are usually in the workforce in earlier stages of disease that may not be able to see a straight line or may not be able to finish reading a sentence because there's a blind spot.

And as far as the labeling questions are concerned, I want to make it very clear that we haven't had any formal labeling discussions with the FDA. It would be premature to have that. But it's clear from our results, as well as from our competitors' results, that the earlier you treat in this disease, because at the end of the day, it is a chronic inflammatory process, the better the results. And what we've done here with extrafoveal patients is not only targeted the proper patient population, we believe, to show that the complement inhibitor has a delta, but we've also slowed down the fastest-growing geographic atrophy very safely.

And if we're able to slow down the fastest-growing geographic atrophy, which is the extrafoveal type, we believe there's no reason that we wouldn't get approval for slowing down a slower-growing geographic atrophy, which is the fovea-affecting geographic atrophy. So I emphasize again that we haven't had any formal discussions with the FDA regarding labeling. It would be premature to do so. But our expectation is that we would have a broad label. 

Georgi Yordanov -- Cowen and Company -- Analyst

And then, from a strategic perspective, any updates for potential European or Asia partnerships? And can you remind us, do you expect the regulatory requirements differ ex U.S. versus U.S?

Glenn Sblendorio -- Chief Executive Officer

Yes. As I mentioned in the prepared remarks, the focus right now is really to complete GATHER2 and prepare our commercial infrastructure and strategy. So that's our priorities right now. I think we're in a very good position at the right time to talk about partnering outside the U.S., but still a small organization, aggressively hiring.

The team is working diligently on getting GATHER2 completed. So I think, at the right time, we will look to partner ex U.S., and we'll let you know what that right time is. Keith, you want to talk about the second part of the question?

Keith Westby -- Chief Operating Officer

So I think the question was related to ex U.S. regulatory. And I'll just preface this with we haven't had formal discussions with ex U.S. regulators at this point, but we do believe that the GATHER2 study design would be sufficient for approval ex U.S.

Georgi Yordanov -- Cowen and Company -- Analyst

This is great. Thank you so much. And again, congratulations on all the progress.

Glenn Sblendorio -- Chief Executive Officer

Yes. And thank you for the questions.


This concludes our question-and-answer session. 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 thank you, everyone, for listening in today. As you've heard from the team, we remain focused on execution, and we look forward to speaking to you throughout the rest of the year and early next year. Bye-bye.


[Operator signoff]

Duration: 34 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

Annabel Samimy -- Stifel Financial Corp. -- Analyst

Georgi Yordanov -- Cowen and Company -- Analyst

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