Stephen Kilmer - IR Daniel White - CEO Richard Beckman - Chief Medical Officer Glen Noronha - Chief Scientific Officer Charles Deignan - CFO.

Boris Peaker - Cowen & Co Eric Joseph - JP Morgan Serge Belanger - Needham & Company.

Good morning, ladies and gentlemen and welcome to the Clearside Biomedical Third Quarter 2017 Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time.

[Operator Instructions] I would now like to turn the call over to your host for today’s conference Mr. Steve Kilmer, Investor Relations for Clearside Biomedical. Please go ahead..

Thanks, Operator. Good morning, everyone, and thank you for joining us. Before we begin, I would like to remind you that during today’s call, we will be making certain forward-looking statements.

Various remarks that we make during this call about the company’s future expectations, plans and prospects, constitute forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995.

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 annual report on Form 10-K for the year ended December 31, 2016 and filed with the SEC, which can be accessed on the Edgar database at www.sec.gov and the other filings we make with the SEC from time to time.

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 future point, we specifically disclaim any obligation to do so, even if our views change.

These forward-looking statements should not be relied upon as representing our views as of any date subsequent to today. On the call today representing Clearside are Daniel White, Our President and Chief Executive Officer; Charlie Deignan, our Chief Financial Officer; Glen Noronha, our Chief Scientific Officer; and Dr.

Richard Beckman, our Chief Medical Officer. With that said, I’ll now turn the call over to Daniel..

Thank you, Steve. Good morning, everyone and thank you all for joining us for the call today. For the benefit of those who are new to Clearside Biomedical story, I’d like to take a moment to highlight our company’s mission. Clearside is developing transformative elegant precise solutions to restore and preserve vision.

We focus on treatments for diseases affecting the retina and the choroid of the eye; especially diseases were Macular Edema as resulting complication.

Our lead program using triamcinolone acetonide, a well characterized corticosteroid; the drug is injected into the suprachoroidal space or SCS of the eye, using our proprietary SCS microinjector by leveraging exclusive access to suprachoroidal space and proprietary technology for suprachoroidal injection of CLS-TA access the retina choroid.

We believe we can provide greater bioavailability to the disease tissue and the drug may last more than 90 days in the eye.

Accordingly clinicians are more effectively treat - can more effectively treat sight threatening diseases like uveitis, Retinal Vein Occlusion or RVO, Diabetic Macular Edema or DME with less instance of side effects than the traditional routes of administration.

I’d like to begin with the brief update where we currently stand with our clinical development programs.

Given the awareness of our procedure and our clinical outcomes in our Phase 2 studies, the investigators in our clinical programs continue to be very supportive and we now enrolled over 300 patients to treatment minimum who have received multiple injections of CLS-TA led any procedural that is serious adverse events or discontinuations from any study getting treatment.

I’m proud of our team as we currently are undertaking are initiating three, Phase 3 and one large Phase 2 clinical trial. Later Rick and Glen will dive deeper into the clinical trials.

So, let’s start with our first and most advanced program with late stage testing CLS-TA, the suprachoroidal administration for the treatment of Macular Edema associated with non-infectious uveitis. CLS-TA is our proprietary suspension formulation of the corticosteroid triamcinolone acetonide.

Non-infectious uveitis is a set of inflammatory conditions affecting the eye as well as the world’s leading causes of blindness. Uveitis has a problem over 350,000 in the U.S.

alone, Macular Edema occurs in approximately one-third of all non-infectious uveitis cases, and is the dominant contributor to vision impairment and vision loss in these patients. At August 2017, we completed enrolment in the pivotal Phase 3 PEACHTREE trial. Patient follow-up in the PEACHTREE trial is six months after initial treatment.

Accordingly, we currently expect to report top-line results from the trial in the first quarter of 2018. Our second most advanced program is suprachoroidal CLS-TA used together with intravitreal administered afilbercept trade name Eylea for the treatment of Retinal Vein Occlusion.

Our objective is to show that suprachoroidal CLS-TA used together with intravitreal Eylea, it’s a superior visual acuity outcome as compared to monthly injections which Eylea alone a newly diagnosed RVO patients.

As RVO is one of the most aggressive retinal vascular diseases that can lead to vision impairment and potential permanent vision loss, there was a strong need to develop new treatment approaches that are both effective and more durable than currently approved therapies.

To that end, we are continuing to experience strong enrolment of patients in the Phase 3 clinical trial SAPPHIRE which we initiated late in the first quarter of 2017. We’re also making preparation to initiate a second multicenter, randomized, masked, controlled Phase 3 clinical trial TOPAZ.

Suprachoroidal CLS-TA used along with anti-VEGF agent for the treatment of RVO. We anticipated enrolment in the first patient in the TOPAZ trial in the first quarter of 2018.

Our work in RVO in part has also laid the groundwork for us to expand our development programs for CLS-TA to include another retinal vascular condition, Diabetic Macular Edema or DME. DME is the most common cause of vision loss in people with diabetes mellitus.

It effects that the 30% of people who have had diabetes for 20 years or more, and if untreated, approximately 20% to 30% of these patients will experience moderate vision loss.

While the current standard of care for treating patients with DME is through the use of intravitreal anti-VEGF agents, there is still significant unmet need in this large patient population.

We believe that eye complication associated with diabetes are caused by multiple pathways, and even with repeated monthly intravitreal injections of VEGF inhibitors for six months approximately 40% of DME patients have had an insufficient response to treatment.

With particular to access the retinal and choroid in high amount, we believe that we can improve outcomes for newly diagnosed DME patients by administering suprachoroidal CLS-TA together with intravitreal anti-VEGF inhibitor, because both corticosteroids and anti-VEGF agents have been showing to be effective in the treatment of DME.

In the second quarter of 2017, we announced the completion of enrolment and exploratory open label multicenter Phase 1, 2 Study HULK, Suprachoroidal CLS-TA with or without intravitreal Eylea for the treatment of DME. We anticipate that preliminary results from HULK we’ll present at AAO which has started this Friday in New Orleans.

And, we’ll issue a press release as soon as practical as those details after those data are presented. A couple of weeks ago, we’re also pleased to announce completion of patient enrolment in the Phase 2 clinical trial in DME called TYBEE. Patient follow up in the TYBEE trial is six months.

I’ll now turn the call over to Rick Beckman, our CMO to lead up more in depth update and discussion in our pipeline.

Rick?.

Thank you, Daniel. With the preliminary data readout from the pivotal Phase 3 PEACHTREE trial of suprachoroidal CLS-TA for the treatment of Macular Edema associated with non-infectious uveitis that’s expected in the first quarter of 2018. I would like to briefly refresh everyone on the details of that trial.

This Phase 3 trial is controlled randomized mass multicenter trial to evaluate the safety and efficacy of suprachoroidal injected CLS-TA in patients with Macular Edema associated with non-infectious uveitis. This two-arm trial compares to treatment arm to a share arm where no treatment is given.

The primary outcome will be a comparison of the portion occasion showing three line improvement of best corrected visual acuity between the two arms of six months follow-up after initial treatment.

In our previously reported Phase 2 Dogwood trial of suprachoroidal CLS-TA in patients with non-infectious uveitis, we observed statistically significant improvements from baseline month to in both Macular Edema and best corrected visual acuity.

Based on the feedback from the end of Phase 2 meeting with the FDA, we believe our pivotal PEACHTREE trial will be the only Phase 3 clinical study required to support the potential filling of the new drug application.

I would also like to take this opportunity to comment on the safety profile that has emerged so far in our testing the patients who have received 4 milligrams of suprachoroidal CLS-TA across all of our completed and ongoing clinical trials.

As Daniel mentioned, so far more than 300 subjects have been treated and the drug and injection procedures have been well tolerated. Up-to-date there have been no serious adverse events in any of our studies that have been considered to be related to either the drug or to the injection procedure.

Furthermore, in our completed studies, no patients have had to discontinue the trial on the basis of a drug or procedure related adverse event. Since safety data from ongoing clinical trials has masked, it will be sometime before it can provide more detail on that front.

However, we remain optimistic that the safety profile observed in the early phase studies will continue to the course of the pivotal trials moving forward. With that, I will turn the call over to Glen to discuss Clearside’s RVO and DME programs..

Thank you, Rich. As Daniel and Rick have detailed in addition to our use of suprachoroidal CLS-TA as monotherapy patient with non-infectious uveitis.

In RVO, we are exploring whether suprachoroidal CLS-TA along with intravitreal Eylea as a combination therapy can provide improved visual acuity, reduced Macular Edema and reduced treatment frequency as compared to administration of intravitreal Eylea alone.

The medical literature provides evidence that corticosteroids and anti-VEGF agents each have known advantages in the treatment RVO when used intravitreal. We have initiated our first randomized, controlled, double, masked, multicenter, multi-country Phase 3 clinical trial for the potential treatment of patients with RVO.

This trial called SAPPHIRE is being conducted at approximately 150 investigational sites across approximately 18 countries. Patients will be randomized due to a combination on which they will receive suprachoroidal CLS-TA together with intravitreal Eylea, auto control arm in which patients will receive intravitreal Eylea alone.

That primary objective of the SAPPHIRE trial is to determine the proportion of patients in each arm with the best corrected visual acuity, improvement of greater than or equal to 15 early treatment diabetic retinopathy study or ETDRS letters from baseline at eight weeks after initial treatment.

As a point of reference in the previously reported TANZANITE Phase 2 trial and treatment naive patients with RVO, where additional treatments were on an as needed basis after initial randomization, 61% of patients would receive the suprachoroidal injection of CLS-TA along with an intravitreal injection of Eylea at baseline achieved a greater than or equal to 15 ETDRS letter improvement in BCVA at eight weeks.

While 39% of patients had received only an intravitreal injection of Eylea baseline showed a greater than or equal to 15 ETDRS letter improvement in BCVA at eight weeks.

Further, in this Phase 2 trial, improvements in visual acuity and Macular Edema seen at month one at the combination with suprachoroidal CLS-TA and intravitreal Eylea were maintained with an aggregate of 60% fewer additional Eylea treatments with a significant value of 0.013 compared to improvement seen from the monetherapy Eylea along through the three months observation period of the trial.

The SAPPHIRE study is enrolling and as mentioned in the press release earlier today. Preliminary results are expected in the first quarter of 2019. As Daniel mentioned, we’re also planning on enrolling the first patient in our plan second Phase 3 RVO study TOPAZ in the first quarter of 2018.

And, now I want to turn our attention to the other major retinal vascular condition we are seeking to treat DME in which we have our third clinical program. In our DME program, we have an ongoing Phase 1, 2 clinical trial; the HULK trial where patient enrolment was completed in April this year.

In this trial, we are evaluating suprachoroidal CLS-TA with or without intravitreal Eylea and patients with DME. While safety is the primary outcome from this open label study, we’ll also be evaluating changes in best corrected visual acuity and in Macular Edema over the six-month evaluation period.

Initial results suggest causing efficacy with trend toward durability particularly in the combination treatment on. As Daniel mentioned we expect to report preliminary results from this HULK trial at the upcoming American Academy of Ophthalmology Annual Meeting starting this Friday.

Further and as Daniel mentioned, in October this year, we announced the completion of patient enrolment in a multicenter, randomized, masked, controlled Phase 2 trial named TYBEE to evaluate suprachoroidal CLS-TA along with intravitreal Eylea compared to intravitreal monotherapy in patients with DME over a six-month evaluation period.

In this Phase 2 trial, patients with DME will be assigned in one-to-one fashion to a combination on with suprachoroidal CLS-TA and intravitreal Eylea or to a control arm with only intravitreal Eylea. The trial will have a fixed treatment portion for the first three months followed by an as needed portion for the next three months.

While safety and efficacy will be evaluated in this trial, the primary outcome measure will be best corrected visual acuity where the combination treatment data will be compared to the monotherapy data. Patient follow up in the TYBEE trial is six months.

Our development teams have had a busy introductive third quarter in 2017 and we really appreciate all of their efforts. I’ll now turn the call over to our Chief Financial Officer, Charlie, to review our third quarter 2017 financial results.

Charlie?.

Thanks, Glen. As we reported this morning, our research and development expenses were $16.1 million for Q3 2017, compared to $3.7 million for the same period in 2016. We mentioned on our Q2 call that an increase in R&D cost associated with clinical development programs in uveitis, RVO and DME was expected.

As Daniel, Rick, and Glen highlighted in their opening remarks today. We have been advancing our development programs with the completion of patient enrolment of Phase 3 trial for non-infectious uveitis in the third quarter.

The continuing enrolment of patients in Phase 3 trial for RVO, the continued preparations for initiation of a second Phase 3 RVO trial and the completion of enrolment in both Phase 1, 2 study and Phase 2 study trial for DME in April and October 2017 respectively.

General and administrative expenses in the third quarter of 2017 were $2.3 million, which is unchanged from our last quarter in compared to $1.6 million in the 2016 third quarter. The year-over-year increase was primarily due to higher employee related costs, marketing expenses and pattern related cost.

The third quarter net loss was $18.3 million or $0.72 per share, compared to $5.6 million or $0.28 per share for the same period in 2016. Cash use and operating activities for the 2017 third quarter was approximately $13.4 million.

As of September 30, cash equivalents in short-term investments totaled $52.6 million which we continue to believe it’s sufficient to fund operations into the fourth quarter of 2018. And, with that, I’ll turn the call back over to Daniel for his closing remarks.

Daniel?.

Thank you, Charlie. This concludes our prepared remarks for today. Before I open the call to questions, I’d like to express my thanks to the entire Clearside team for the significant progress we’ve made during the third quarter of 2017.

We have a strong and highly capable team of professionals that have consistently delivered on our key goals and we appreciate their commitment to our mission. With that, we will now open up the call for questions.

Operator?.

[Operator Instructions] Our first question comes from of the line of Boris Peaker with Cowen. Your line is open..

Good morning and congratulations on making progress in multiple studies..

Thanks Morris..

So, my first question is for the PEACHTREE trial, I’m just curious, what would you consider the minimal signal on the primary end point to call the study a success, I mean, from the regulatory and the commercial perspective? And, is the Dogwood data kind of good enough if that holds up to six months or you think that with the longer follow up you would expect stronger signal between the drug and placebo arms?.

Thanks for the question, Boris. And, I’ll let Rick Beckman answer that he’s leading our team in the uveitis..

So, the study was designed that statistical significance will be achieved when there is a differentiation between the treatment arm and the control arm, and that was based on some evaluations that were done both on our earlier study and also looking to compare those out in the community because if this has never done before.

Our best anticipation is that - the best way of really saying it is the study is adequately powered to show a difference between the treatment group and the placebo group and based on the results that we have from the Dogwood study, we think that there is high likelihood that we are going to achieve that.

The exact number is something that people can talk about its 33% difference in Dogwood study, but that’s not really the important point.

The important point is that it’s been powered adequately to show a difference between the placebo arm and we feel very confident in this disease process based on the fact that corticosteroids are very successful in treating Macular Edema that we will show that. I would ask if Glen has any further comments that he might be able to help with that..

Thank you, Rick. I think Rick had quickly described what we are doing, meeting the primary end point is the key regulatory end point - is the key regulatory goal post for this particular study..

What about from the commercial perspective, I just want to understand - one thing as I understand just to get - of the drug, but since the control is placebo, what do you think it’s minimally required signal at six months to commercially market this drug?.

There are two things uveitis experts look at, one is the change in Edema by 20% which they consider as clinically significant. And, from our prior studies we have shown that over 50% to 60% of patients at least from the Dogwood study achieve a greater than 20% reduction in Macular Edema.

And, this was established in the scientific medical literature in a publication based on the analysis of mass study. So, we have always done quite well in this for the majority of patients in our studies, we expect the same to be true in this particular study.

The second thing is, while FDA looks at 15 letter improvement, most practicing physicians don’t look at that higher bar, they look at more than one line, more than two lines, more than 5 letters and 10 letters. Again we have done significantly well in that.

And, if you look at our prior studies, we’ve always had greater than 50% people doing better than one and two lines of improvement.

So, I think both the Macular Edema reductions that are considered clinically significant and what’s used in practice by physicians, in both of those yardsticks I think will be helpful doing practices uveitis and retinal people who are treating Macular Edema this associate with this disease..

One other comment - Dr. Beckman, I want to make one other comment. So, the efficacy in terms of commercialization is important and that is where our primary end point is, but we also believe that’s very important in our commercialization effort will be the safety profile.

Our early study suggests that our safety profile is a corticosteroid for treating eye disease. There is a trend towards being better than what’s currently available out there.

And, as we know steroids work very well for Macular Edema, the problem is that the side effect associated with them cataracts and elevations and intraocular pressure limit their use. And, so we believe that the safety profile that we establish in addition to the efficacy is what’s going to make this very commercially viable product..

Great, thanks for additional comments. And, my last question is in RVO.

I was just curious, are there specific differences between the SAPPHIRE and TOPAZ studies or they’re simply just duplicates of each other for regulatory purposes? And, also as part of that is secure - can leverage the existing SAPPHIRE centres to enrol TOPAZ faster than SAPPHIRE enrolled from scratch?.

So, that’s a great question. Let me try to tackle some of that question. So, the TOPAZ, we are just having some discussions with FDA regarding how we can make the most of the label going into the marketplace. So, I would not predict TOPAZ to be a duplicate of SAPPHIRE.

We predicted we will look for the best commercial label we can possible get to, and what study we can achieve to do that. So, that’s what we’ve been doing in the last couple of months around TOPAZ.

Your second question was, can we leverage the site? I’m extraordinarily pleased with way the sites have accepted this procedure and protocol and as we continue to open sides outside United States we predicted we will have enrolment where we continue, as well as that’s been going, so I think we can leverage that into TOPAZ as well..

Great, thanks again for taking my questions..

Sure..

Our next question is from Anupam Rama with JPMorgan. Your line is open..

Hey guys, its Eric in for Anupam this morning. Thanks for taking the question. I guess just looking ahead to AAO way this week the initial data from the HULK study, maybe you can help us find the expectations in the data and what would be viewed as it went over the Eylea control arm release sort of what dealt in visual acuity [indiscernible]? Thanks..

Great, Eric, thank you so much for that. Let me let Glen comment on the HULK study and what we predict to share there..

Thank you, Daniel. Eric, the HULK studies and open label study was designed for us to get some preliminary information. The data we are seeing are highly encouraging. Charlie Wykoff is going to be presenting the data.

We saw really encouraging efficacy output, as well as encouraging output in terms of durability of how long the treatment lasted in the combination on which was in treatment naive patients. The data will be detailed on Friday late in the afternoon by Charlie Wykoff.

The trial was not powered, it’s an open label study, and the trial was not control, so that’s not Eylea control within that particular study for us to be able to make that kind of comparison, those kinds of data will be coming out in TYBEE where you will be able to see a control study with head-to-head against intravitreal Eylea..

Got it, thanks for clarifying, I guess maybe just a follow up on Boris’s question regarding - assuming positive data and first quarter, maybe kind of walk us through getting factors to NDA falling thereafter, is FDA looking for anything in particular in terms of suggestion, patient exposure to the product or follow up there that kind of you need to walk through in order of prior to submission? Thanks..

Right, this is Daniel. I’ll let Glen answer that one as well, he’s been dealing with the FDA on this project..

So, our agreement with the FDA is 125 exposures, we’ll have far more than that in terms of the safety, outside of that we’ll be submitting our complete data from the PEACHTREE trial, our earlier Phase 1, 2, Phase 2 and the whole gamut of things that are required for NDA submission..

Eric, this is Daniel again. So, I just want to remind you about that trial. So, the clinical trial is very first Macular Edema study in non-infectious uveitis where we are looking at best corrected visual acuity compared to no treatment arm.

And, so in that study, we have patients who have an auto immune condition that with the resulting in Macular Edema that would have the ability to gain three lines, they have severe Macular Edema. And, given this treatment, we are comparing with that no treatment control.

So, we’ve taken much of the risk out of that possible in the non-infectious uveitis study. What it’s exciting about this particular trial is that it gives us an opportunity to look at - further look at multiple injections, we see that in HULK, we see multiple injections in HULK and that gives us some visibility in that.

But all these patients we’ve been referred too early over 300 patients, most of them have had multiple injections.

So, I think we have reached an achievement to show that the procedure is consistent and it’s working great that the use of triamcinolone has been seen across multiple indications and further we think we’ll be in a position to begin the process of cleaning up the data post first quarter and hopefully filing in the sometime late in 2018..

Great, that’s very helpful. Thanks for taking the question..

Thank you..

And, our next question comes from the line of Serge Belanger with Needham & Company. Your line is open..

Hi, good morning. Thanks for taking questions. First, one on DME, so we’ll see, I guess, the whole trial later this week, and then the TYBEE trial reports results in the second quarter of 2018.

At this point, do you expect the DME program to kind of mere what you have done in RVO in terms of the end points and the two pivotal studies?.

So, yes, thanks for the question. So, we are comparing in TYBEE, we are comparing the combination of the suprachoroidal triamcinolone with intravitreal, anti-VEGF like Eylea compared to monthly Eylea injections in TYBEE.

So, there’s quite difference between that and TANZANITE, TANZANITE we were comparing the suprachoroidal triamcinolone verse intravitreal Eylea and TANZANITE. But we are looking at reducing the number of treatments over that period of time. In TYBEE, we are looking at comparing best corrected visual acuity and comparing suprachoroidal triamcinolone.

What we did find in and what we believe the foundation of what we see with TANZANITE that if we can have better outcomes early in these patients, we hope that we can improve that on the early outcomes, the way you see better outcomes long-term.

So, with that, I’ll turn it over to - to let Glen to kind of comment on specifically TYBEE, as it relates to what we anticipate the outcomes might look like..

Thank you, Daniel. The fundamental difference is that they have different diseases.

And, so even from the logistical point of view of the kinds of studies that are usually done, there are really different types of studies, RVO studies are usually a year-long for safety, in terms of registration studies six months for efficacy, whereas DME studies are three years long for safety and two years long for efficacy.

And, so what we are doing in DME will be different from what we are doing in RVO, and as we get our data you will see how our plans will unfold will be dictated both by the data and will let the data inform how we can best optimize what Daniel had pointed out, which how best we can show that our treatment approach can provide an advantage to patient care..

Okay, and then besides results from the HULK trial at AAO.

You are planning on presenting any additional data from other programs?.

So, thanks for the question. We are not planning on it, but we are hearing to great, but many of the KOLs are using our information in some other talks.

I can let Rick Beckman maybe highlight a couple of places where we’re seeing other folks talk about it, but hopefully plan and information that we plan on delivering the [high bricks]?.

So, I know that some of our data and information is going to be discussed at the OIS meeting by one of our Key Opinion Leaders Dr. Duble [ph] will address this meeting that will be on Thursday. I also know that Dr. Duble is going to be talking a little bit about the TYBEE study during Subspecialty day on Saturday. Those are the ones that I know of.

And, I also believe Cummins Ham [ph] who is the head of OIS who is going to be doing a yearly update, he’ll be talking a little bit about our ongoing clinical programs, but no particular data is going to be new except for the TYBEE that’s going to be discussed on Friday, excuse me, not the TYBEE, the HULK..

All right, thanks for the question..

[Operator Instructions] All right, I’m not showing any further questions..

Thank you once again for joining the call today. We appreciate your continued interest in Clearside and we look forward to updating you on our progress in the months ahead. Operator you may now disconnect. Thank you..

Ladies and gentlemen, this does conclude the program. You may now disconnect. Everyone have a great day..