EYPT - NASDAQ

Good morning. My name is Antoine, and I will be your conference operator today. At this time, I would like to welcome everyone to the EyePoint Third Quarter 2025 Financial Results and Recent Corporate Developments Conference Call. Please be advised that this call is being recorded at the company's request. I would now like to turn the call over to George Elston, Executive Vice President and Chief Financial Officer of EyePoint. Please go ahead.

Thank you, and thank you all for joining us on today's conference call to discuss EyePoint's third quarter 2025 financial results and recent corporate developments. With me today is Dr. Jay Duker, President and Chief Executive Officer of EyePoint. Jay will begin with a review of recent corporate updates and discuss our clinical programs for DURAVYU in wet AMD and DME. I will close with commentary on the third quarter 2025 financial results. We will then open the call for your questions where we will be joined by Dr. Ramiro Ribeiro, our Chief Medical Officer. Earlier this morning, we issued a press release detailing our financial results and recent corporate developments. A copy of this release can be found in the Investor Relations tab on the company website, www.eyepointpharma.com. Before we begin our formal comments, I'll remind you that various remarks we will make today constitute forward-looking statements for the purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. These include statements about our future expectations, clinical developments and regulatory matters and time lines, the potential success of our products and product candidates, financial projections and our plans and prospects. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the Risk Factors section of our most recent annual report on Form 10-K, which is on file with the SEC and in other filings that we have made or may make with the SEC in the future. Any forward-looking statements represent our views as of today only. While we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so even if our views change. Therefore, you should not rely on these forward-looking statements as representing our views as of any date subsequent to today. I'll now turn the call over to Dr. Jay Duker, President and Chief Executive Officer of EyePoint.

Thank you, George. Good morning, everyone, and thank you for joining us. I am pleased to discuss with you today the tremendous progress we've made during the past quarter, continuing our strong track record of execution. As you will hear, our momentum underscores our confidence in the differentiated clinical profile of DURAVYU, our lead program and its potential to transform the treatment paradigm in the 2 largest retinal disease markets, wet Age-related Macular Degeneration or wet AMD and Diabetic Macular Edema, or DME. I'd like to start with a brief overview of our recent highlights. DURAVYU is on track to be the first to file and first to market among all current investigational sustained delivery wet AMD and DME programs, positioning DURAVYU at the forefront of the treatment landscape with potential first-mover advantage. We completed enrollment of the LUCIA trial, the second Phase III trial for DURAVYU in wet AMD in July. Both trials, LUGANO and LUCIA were enrolled in 7 months and together recruited over 900 patients, making them among the fastest enrolling wet AMD pivotal programs to date. Top line data for DURAVYU and wet AMD is expected in mid-2026. Following the positive end of Phase II meeting in July for DME, we were pleased to align with the FDA on a non-inferiority trial design that we believe is clinically rigorous, efficient and derisked. As a reminder, DURAVYU is the only tyrosine kinase inhibitor or TKI in development for DME. We are rapidly moving forward with a pivotal Phase III DME program with first patient dosing expected in Q1 2026. The Phase III DME trials, COMO and CAPRI will leverage our existing wet AMD clinical trial infrastructure and our enthusiastic network of investigators. We announced new preclinical data showing that vorolanib, the active drug in DURAVYU, is unique among TKIs being tested in retinal diseases as it inhibits both [ VEGF ]-mediated vascular permeability and interleukin-6 or IL-6 mediated inflammation. This multi-mechanism of action has the potential to be particularly effective in the treatment of multifactorial diseases such as wet AMD and DME. These new data underscore the impressive Phase II results of the VERONA trial in DME and strengthened our confidence in our clinical programs. Finally, our path to potential success in Phase III is supported by our strong balance sheet. We ended September 2025 with over $200 million in cash and equivalents and closed a $172 million follow-on offering in October. Our cash is now expected to fund operations into Q4 2027, well beyond Phase III wet AMD data anticipated in 2026. With this continued exceptional track record, EyePoint will enter an eventful 2026 from a position of strength. Now I'd like to take a closer look at the current market landscape for wet AMD and DME. With a combined current global market of $10 billion and growing, these indications make up the vast majority of the global branded retinal disease market. Despite the size and scale of these diseases, they are dominated by a single treatment modality, monotherapy anti-VEGF biologics. Due to the high burden of frequent injections, many patients remain undertreated, even with the addition of recently approved extended duration options. Additionally, these current standard of care anti-VEGFs demonstrate subpar real-world efficacy in DME with growing literature supporting the role of not only VEGF activation, but also IL-6 signaling and inflammation driving disease severity. We believe our lead product candidate, DURAVYU, is well positioned to deliver much needed innovation in both wet AMD and DME. As a differentiated sustained-release TKI, DURAVYU is designed to improve the current standard of care by providing durable disease control while reducing the treatment burden. Further, DURAVYU's potential multi-MOA blocking VEGF, PDGF and IL-6 signaling may be uniquely suited to effectively address multifactorial retinal diseases such as DME and wet AMD. Beyond its unique MOA, DURAVYU offers a compelling product profile that supports strong competitive positioning in both wet AMD and DME. Unlike other sustained release options in development, DURAVYU is formulated in our Durasert E technology. a biodegradable sustained release insert specifically designed to prevent free floating drug particles. Additionally, DURAVYU is shipped and stored at ambient temperature and administered via a standard intravitreal injection. DURAVYU features the most robust clinical data package among all investigational sustained release programs. This includes Phase II wet AMD and DME data, demonstrating meaningful visual and anatomic improvements from a single DURAVYU dose and a consistent and favorable safety and tolerability profile with no safety signals observed in over 190 patients across 4 completed clinical trials. Given its advantageous clinical profile, multi-target MOA and unique storage and administration conveniences, we are confident that DURAVYU offers a differentiated value proposition that is meaningful to physicians and patients. And if approved, would present a compelling option within the current and future landscape for retinal disease treatment. Let me now walk through recent updates for our Phase III programs, beginning with wet AMD. Our fully enrolled Phase III pivotal program remains on track to deliver top line data starting in mid-2026. As a reminder, in July, we completed enrollment of the Phase III program with over 900 patients randomized across the 2 trials. To ensure we are positioned for commercialization, we are highly focused on our manufacturing capability and CMC submission for an [ NBA ]. We have already produced DURAVYU registration batches at our state-of-the-art GMP-compliant manufacturing facility in Northbridge, Massachusetts. The 41,000 square foot facility was built to both U.S. FDA and EMA standards and will have capacity to support the commercial launch. Moving on to the recently initiated Phase III program in DME. Our program consists of 2 non-inferiority trials, COMO and CAPRI, evaluating DURAVYU 2.7 milligrams versus on-label aflibercept control. Each trial will enroll approximately 240 patients. Additionally, given the established non-inferiority pathway as well as our ability to leverage our existing Phase III clinical trial infrastructure, we believe the program is significantly derisked. We look forward to dosing our first patient in Q1 2026. As I mentioned earlier, there is growing clinical evidence supporting the multifactorial nature of retinal vascular diseases with both VEGF-mediated vascular leakage and inflammation contributing to disease pathogenesis. IL-6, a pro-inflammatory cytokine is a key driver of this inflammation and is found at significantly higher levels in DME and wet AMD patients versus healthy individuals. Recent preclinical findings, which we presented at the American Academy of Ophthalmology meeting in October, demonstrate that vorolanib, the active ingredient in DURAVYU, inhibits IL-6 signaling through [ JAK1 ] receptor blockage in addition to its known inhibition of PDGF and all VEGF receptors. In vitro data shows a meaningful reduction in IL-6 activity of more than 50% with vorolanib, suggesting a multi-MOA capability. This data may explain the rapid fluid reduction and vision improvements observed as early as week 4 in the DURAVYU arms in the Phase II VERONA trial. In summary, we are well positioned to extend our clinical leadership in sustained release therapy for the 2 largest retinal disease markets. We remain focused on reporting top line Phase III data for both LUGANO and LUCIA starting mid next year, positioning DURAVYU to be the first to file and potentially first to market among all investigational sustained release programs in wet AMD. Our Phase III DME program is now underway, and we expect first patient dosed during the first quarter of 2026. We are moving swiftly and confidently to bring DURAVYU to patients in need while continuing to ensure our progress follows a derisked, clinically rigorous and patient-centric approach. Before passing it over to George to review our financials, I want to thank the entire EyePoint team for your dedication to improving patients' lives through better vision as well as the patients, study coordinators and clinical investigators outside of our organization who enable our clinical research. We are grateful for your confidence, and we are proud to advance our therapeutics for the benefit of the entire retina community. We look forward to continued progress towards our upcoming milestones as we further our leadership in sustained ocular drug delivery. I will now turn the call over to George. George?

Thank you, Jay. To begin, we continue disciplined financial management and good stewardship of our resources, ending the third quarter with $204 million in cash and investments. As Jay mentioned, in October, we completed a $150 million follow-on financing plus the exercise of the underwriter's greenshoe option on October 29 for a total of approximately $172 million in gross proceeds, adding to our cash position and enabling the execution of the Phase III DME program. We expect that cash and investments as of September 30, along with net proceeds of the financing will support our operations into the fourth quarter of 2027, well beyond key data readouts from the Phase III LUGANO and LUCIA pivotal trials anticipated in mid-2026. As the results for the 3 months ended September 30, 2025, were included in the press release issued this morning, my comments today will be focused on a high-level review for the quarter. For the quarter ended September 30, 2025, total net revenue was $1 million compared to $10.5 million for the quarter ended September 30, 2024. This decrease was primarily driven by the recognition of deferred revenue related to the company's 2023 agreement for the license of YUTIQ product rights in the prior year period. Operating expenses for the quarter ended September 30, 2025, totaled $63 million compared to $43.3 million in the prior year period. This increase was primarily driven by clinical trial costs related to the ongoing Phase III LUGANO and LUCIA clinical trials of DURAVYU for wet AMD. Net nonoperating income totaled $2.3 million and net loss was $59.7 million or $0.85 per share compared to a total net loss of $29.4 million or $0.54 per share in the prior year period. As I noted earlier, cash and investments on September 30, 2025, totaled $204 million compared to $371 million as of December 31, 2024, which, along with net proceeds from the October financing, we expect will enable operations into Q4 2027. In conclusion, we are very pleased with our progress and continued execution in 2025 and are well capitalized to deliver DURAVYU Phase III wet AMD data in 2026, while advancing our Phase III DME program with the COMO and CAPRI clinical trials. I will now turn the call back over to Jay for closing remarks.

Thank you, George. As you've heard this morning, EyePoint is on the cusp of a milestone year in 2026. Our decades of drug development experience, clinical track record, next-generation technology and blockbuster potential of our DURAVYU franchise underscore our exciting growth story. With our strong balance sheet and disciplined cash management, along with our thoughtful derisked development strategy, we are prepared to execute through our key upcoming milestones, including top line data for the Phase III LUGANO trial anticipated in mid-2026 with LUCIA data to closely follow, positioning us for a potential MDA submission for DURAVYU in wet AMD and the first patient dosing in our pivotal Phase III DME program anticipated in Q1 2026, with full enrollment expected in the second half of 2026. Thank you all for your attention this morning. I will now turn the call over to the operator for your questions.

[Operator Instructions] Our first question comes from Tess Romero from JPMorgan.

I wanted to ask a market sizing question today. Can you just refresh us for the wet AMD population overall here in the U.S.? What percent of patients are treated every 4 weeks, every 6 weeks, every 8 weeks or longer? And what is your latest view on how the doctors will use DURAVYU, if available in that context?

Thanks for the question. It is insightful. And as you may surmise, the data is not strong to give exact numbers for each of those intervals. What we do know is approximately 20% of wet AMD patients have to be treated monthly regardless of the drug that they're using. If you look at the clinical trial data, even with the newer extended duration agents, 50% of the eyes can't go longer than every 8 weeks. Depending on a doctor's toleration for fluid, some patients can certainly go 3 and 4 months in between injections. But again, it's individualized to the patient and oftentimes individualized to the doctor's tolerance of fluid and adherence to the label. So I don't, off the top of my head, have exact numbers to give you for those other percentages. And I'll pause and see if Ramiro has any other insight.

Yes. No, thanks, [ Tessa ], for the question. I think when we think about DURAVYU, in our Phase II data, we showed that after dosing DURAVYU, about 65% of patients did not require any supplemental injection with anti-VEGF. And even when we look at 0 or 1 injection over that 6-month period, then the number is about 90%. So we believe that DURAVYU is really well positioned if we see the results in the Phase III study being replicated to bring the market for wet AMD patients.

And to answer the second part of your question, Tess, I don't think you can look at it as an either/or, meaning if DURAVYU is approved, doctors will be limited to just using one agent. We're a different MOA. And clearly, the more recent data with IL-6 inhibition suggests that we may offer an MOA that the [ ligand ] blockers cannot. That would open up market tremendously to us. And as Ramiro just explained, physicians, I'm sure, would be willing to take advantage of 2 MOAs. We do that in chronic diseases all the time. And therefore, the market share for DURAVYU, when you speak to some of the KOLs on the podium even recently have said up to 80% of their patients would be eligible. So we're really optimistic that the acceptance of a multi-MOA TKI with sustained release in both wet AMD and DME is going to be high.

Our next question comes from Yigal Nochomovitz from Citi.

This is [ Jen Kim ] on for Yigal. Regarding DME, can you provide any additional color on how you're structuring your enrollment criteria to provide the broadest reach in the DME marketplace relative to competitors in the long-acting TKI space?

Sure. I'll let Ramiro answer that question. Thank you very much for it. And again, I can quickly answer the second part of the question. We're the only TKI sustained release that has a DME program. So that part is easy. But Ramiro, why don't you talk a little bit about how we've designed the trial?

Yes. So first, to give an overview on our Phase III DME program, CAPRI. So we are going to be enrolling patients with active DME, both treatment naive and previously treated. as a control arm, we're going to use aflibercept on label and then DURAVYU is going to be being dosed every 6 months. We are very fortunate to have a strong infrastructure here at EyePoint as we conducted our wet AMD study. We have also a very strong relationship with investigators. So for our DME program, we're going to be able to leverage those strengths into a hopefully rapid enrollment for the DME program. I think it's our understanding that we might be the only Phase III program enrolling patients next year for this indication. So again, I think we expect to see a rapid enrollment, similar strength that we did for the [ wet AMD ] program.

And regarding enrollment, just for clarification, I believe I heard you say second half ' 26. Is that for both COMO and CAPRI?

So I think what we're guiding now is that both studies are going to be starting Q1 of next year, 2026.

Our next question comes from Tyler Van Buren from TD Cowen.

This is Sam on for Tyler. I wanted to ask about the use of the blended endpoint, which you guys have remained consistent on with the pivotal wet AMD and DME trials. We have seen the FDA greenlight a single endpoint more recently. So curious if you thought about using a single endpoint at all for the DME studies and why you believe the blended endpoint is the best approach?

Thanks, Sam. I appreciate the question. And I'll let Ramiro go into the details. But to answer quite simply, did you think about a single endpoint, quick answer is no. Ramiro, why don't you talk a little bit about our interactions with the FDA over endpoint and why the blended endpoint is actually derisking?

Yes. Thanks, Sam, for the question. So for both our wet AMD program and our DME program, we are using blended endpoint, meaning that for the primary endpoint, we're counting 2 visits. The benefit of that is that we prevent missing data. So in this type of study, it is not uncommon to see patients missing the visit because they have medical appointments or they're in the hospital for some [ systemic ] disease. So by having 2 visits, we reduce the amount of missing data. And also very important, if a patient has, for any reason, a loss in vision in one of the visits, they have the ability to capture the recovery of that vision in the next visit. The use of blended endpoint has been common in clinical trials for retinal disease for the past few years with the main goal of decreasing the variability and increasing the power of the study. And that's why we feel confident on using the blended endpoint for both wet AMD and DME. And of course, we have the green light from the FDA to do so.

Our next question comes from Claire Dong from Jefferies.

This is Jenna on for Clara. Could you talk about the differentiation in IL-6 inhibition? And could you help us kind of elaborate on how that could translate into clinical benefit in DME versus an anti-VEGF only approach?

Thanks for the question, Jenna. And this is really timely because you may be aware, there's some recent data from Genentech who used an IL-6 blocker in a DME trial combined with an anti-VEGF. Both were delivered monthly and the arm with the IL-6 blocker along with the anti-VEGF had better vision as early as week 4 and sustained through the trial. We were able to show a very similar vision improvement and course of improvement in our VERONA trial using just 2 injections over 6 months as opposed to 12 injections over 6 months. And when we looked into it more closely, we discovered that, in fact, vorolanib is a potent inhibitor of IL-6 pathway by blocking the JAK1 receptor. There is substantial evidence in both wet AMD and DME that IL-6 plays a pathogenic role, especially in eyes that are not responding. And therefore, the ability to block both VEGF pathway and inflammatory IL-6 pathway could be a significant improvement over what we have now, especially coupled with sustained release. so that you're not having to give 2 biologics on a monthly basis.

Our next question comes from Yatin Suneja from Guggenheim.

Maybe 2 questions from me. One is on the mechanism regarding the IL-6. Jay, if you can comment on the relevance of it in one disease versus the other? Do you think there is more relevance in DME versus AMD? So that's one. And then the second question is now more around the expectation now that the studies -- wet AMD expectations, right. Now the studies are enrolled, I think our investors are sort of beginning to think about what we should be expecting from the data. And I think there is focus on 3 things. One is the BCV and noninferiority, what sort of injection burden you can produce? And how should we think about rescue rate? So if you can comment on that, that would be very helpful.

Thanks, Yatin. Two great questions. Let me start with the IL-6 question. IL-6 has been implicated in inflammatory macular edema for well over a decade. And additional data suggests that IL-6 levels in the vitreous are much higher in DME patients than in diabetics with no diabetic retinopathy. In addition, there's data that suggests high IL-6 levels in aqueous humor portend a worse outcome in both DME and wet AMD. So overall, the evidence for a role of IL-6 as an inflammatory pathway in DME is very strong. And while it's there in wet AMD as well, it appears to be a prognostic factor in the percentage of eyes that aren't doing well with VEGF blockage alone. We believe that if the preclinical data we have shown and the rapid and early and sustained response in our VERONA DME trial can be shown in Phase III. This would be an exceptional result, which would put us at the forefront of both wet AMD and DME therapies. As for the clinical trial results, which we expect, again, the first trial, LUGANO mid next year, second trial LUCIA soon to follow. Based on our strong Phase II data, we would expect non-inferiority to the on-label Eylea control with continued safety. And again, safety is of paramount importance here, as I'm sure you all know. But based on the ongoing mask safety that we've seen in these 2 Phase III trials as well as the extensive safety database we have for both DURAVYU and vorolanib. we're confident that the safety will be quite good. As for reduction in treatment burden, again, that's important. There's no specific cutoff that says it has to be above or below a certain level. And based on our discussions with KOLs and the design of the trials, we think a 50% reduction in treatment burden will, again, put us into the forefront of therapies for wet AMD.

Our next question comes from Debanjana Chatterjee from Jones.

Congrats on all the progress. So assuming LUGANO and LUCIA meets its, the non-inferiority endpoint, does your statistical analysis plan allow for testing superiority? And if so, how do you expect clinicians to interpret those data related to on-label Eylea compared to potential competitors pursuing superiority claims based on like less frequent dosing?

So Ramiro, why don't you answer that? Thanks, Debanjana. I appreciate the question.

Yes. Thanks for the great question. So our -- as you mentioned, our analysis plan does allow for testing superiority again, aflibercept if our noninferiority is met. So it's a hierarchical testing. So we have the ability to test for that. Of course, if we see that DURAVYU produce superior visual outcomes compared to on-label aflibercept, then, of course, I think it will be an outstanding results for the retina community and wet AMD patients and would allow us to position DURAVYU as a premium medication. Of course, having a superiority claim against on-label aflibercept, I think from a retina specialty perspective is much more relevant than having a superiority versus a single dose of aflibercept. So we are -- we continue to be optimistic with our LUGANO and LUCIA study. We were very fortunate to have the [ DABE2 ], our Phase II study to support the design of the Phase III programs, a lot of the learnings coming from there, and we're looking forward to see the results mid next year.

This concludes the question-and-answer session. I will now turn it over to Jay Duker for closing remarks.

Thanks very much. Before we close, I do want to mention a tremendous honor that EyePoint received this week. We were voted a 2026 Best Places to Work by BioSpace. In fact, we were in the top 5 best biotech companies nationally. This is a testament to the incredible team and culture we built here at EyePoint. Exceptional execution does not come in a vacuum. I want to thank all of our amazing team for this honor, but especially our human resources group led by our Chief People Officer, Jen Leonard. Thank you all for your time and attention this morning.