Good day and thank you for standing by. Welcome to the Clearside Biomedical First Quarter 2022 Financial Results and Corporate Update Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-Answer session.

Now, it is my pleasure to hand the conference over to your first speaker today, Jenny Kobin, Clearside Investor Relations. Thank you, please go ahead..

Good afternoon everyone and thank you for joining us on the call today. 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, 2021, and our other SEC filings available on our website.

In addition, any forward-looking statements represent our views 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 in the future, we specifically disclaim any obligation to do so even if our views change.

On today's call, we have George Lasezkay, our Chief Executive Officer; Dr. Thomas Ciulla, our Chief Medical Officer and Chief Development Officer; and Charlie Deignan, our Chief Financial Officer. After our formal remarks, we will open the call for your questions. I would now like to turn the call over to George..

Thank you, Jenny. We continued to make steady progress in 2022. In March we were pleased that Bausch + Lomb announced their U.S. launch of XIPERE in the United States as the first therapy approved for macular edema associated with uveitis, a potentially blinding.

Ahead of the official launch, Bausch worked closely with 100s of retinal specialists throughout the country, to train them on the use of our SCS Microinjector and to build interest in using XIPERE to treat the uvitic macular edema patients.

Bausch is very active with medical meetings with both commercial and medical presence at the events including five presentations at Arbor last week. Bausch continues to be a thoughtful and progressive partner and we are confident in the strength and capabilities of their commercial team to advance this suprachoroidal therapy to patients in need.

Our China based development and commercialization partner, Arctic Vision also continues to progress in its development of XIPERE, which they refer to as ARVN001 and the brand name Arcadis.

They are currently enrolling two trials in China, a confirmatory Phase 3 trial in macular edema associated with uveitis and a Phase 1 clinical trial for the treatment of diabetic macular edema. We look forward to their continued progress in these two programs. The approval of XIPERE in the U.S.

validates delivery into the suprachoroidal space by our proprietary SCS Microinjector, and supports our strategy to focus on small molecule suspensions.

Our lead internal suprachoroidal pipeline product candidate, CLS-AX combines our proprietary small molecule suspension of the tyrosine kinase inhibitor axitinib with delivery by our SCS Microinjector. As Tom will discuss in more detail, we continue to make progress on our Phase 1/2a OASIS clinical trial targeting patients with wet AMD.

OASIS is a single-dose escalating study to explore the safety and tolerability from 30 micrograms to 1 milligram, which is an over 30-fold range of doses. Our Safety Monitoring Committee reviewed one month initial safety data from cohort 3, and we are pleased to report that there were no dose limiting toxicities observed at the 0.5 milligram dose.

As a result, we are now enrolling patients in cohort 4 at a higher dose of 1 milligram, while simultaneously continuing our cohort 3 enrollment. We are targeting up to 25 patients in total from all four OASIS cohorts.

This expanded enrollment of cohort 3, and the addition of cohort 4 will allow us to collect more CLS-AX patient data in order to help guide our selection of the most appropriate dosing Protocol for our planned Phase 2b clinical trial. We now expect to report safety and tolerability data from both cohorts 3 and 4 in the fourth quarter of this year.

This will allow us to report a more comprehensive set of patient data, as we will be able to include the complete analysis from all four dosing cohorts of the OASIS trial, in addition to the detailed individual patient data from the final two cohorts. I will now turn the call over to Dr.

Tom Ciulla Tula, our Chief Medical Officer and Chief Development Officer to discuss our research and development update. Tom will provide more details on the OASIS study and address the progress made by our partners.

Tom?.

Thank you, George and good afternoon everyone. For my segment of today's call, I'm going to focus primarily on our progress with CLS-AX and on our OASIS clinical trial, and highlight the programs by our development partners.

As a reminder, CLS-AX is our proprietary suspension of axitinib for suprachoroidal injection, and is currently being studied for the treatment of patients with wet AMD. Our approach combines two key differentiators.

First, axitinib is a tyrosine kinase inhibitor with broad VEGF blockade that we believe may have efficacy advantages over existing VEGF focused therapies due to its high potency and pan VEGF inhibition.

Second, delivery via our office based SCS Microinjector expands the suprachoroidal space circumferentially and posteriorly to deliver drugs directly to the macula. This occurs since a natural pressure gradient drives injectate towards the lower pressured posterior suprachoroidal space.

In a way since the primary endpoints were met in cohorts 1 and 2, CLS-AX was well tolerated with no serious adverse events. There were no treatment emergent adverse events related to aflibercept, CLS-AX with a suprachoroidal injection procedure, and there was no dispersion of drug into the vitreous.

In addition, there were no adverse events related to intraocular pressure, inflammation or vasculitis. As George mentioned, we announced today that our Safety Monitoring Committee reviewed one month initial safety data from cohort 3.

The OASIS trial continues to demonstrate positive safety results with no dose limiting toxicities observed at the 0.5 milligram dose.

As a result, we are now enrolling patients in cohort 4 at the higher dose of 1 milligram, which is double the cohort 3 dose simultaneously, we're continuing our cohort 3 enrollment, and we are targeting up to 25 patients in total, from all four OASIS cohorts.

This expanded enrollment of cohort 3 and the addition of cohort 4 will allow us to collect more CLS-AX patient data in order to help guide our selection of the most appropriate dosing protocol for our plan phase to the clinical trial.

I'd like to note that we are encouraged by the growing interest in this trial and as a result we have recently doubled the number of clinical trials to 10. We now expect to report safety and tolerability data from both cohorts 3 and fou4 in the fourth quarter of this year.

This will allow us to report a more comprehensive set of patient data, as we'll be able to include the complete analysis from all four dosing cohorts of the OASIS trial in addition to the detailed individual patient data from the final two cohorts.

To wrap up the discussion on OASIS, I want to emphasize that we have established very stringent criteria in our protocol for patient enrollment that differs from many of our peers.

Unlike similar trials ongoing in the wet AMD space, particularly those assessing TKIs, we are only enrolling highly treatment experienced patients with active disease, verified by the independent rating center.

Although these persistently active cases represent more difficult to treat patients, we believe that by including only patients with persistent active disc disease, despite prior anti-VEGF therapy, we can better assess biologic effect of CLS-AX.

Importantly, this will facilitate dosing selection, and help de-risk our latest stage clinical trials for CLS-AX. Now the OASIS progresses, we are simultaneously in the initial planning stages for our Phase 2b clinical trial.

The OASIS data compilation will help finalize this trial design and protocol so that we can then proceed to this next clinical development stage. Next, I'd like to provide a partner update.

At ARVO REGENXBIO reported data from both of their Phase 2 gene therapy trials using our SCS Microinjector to deliver their product candidate RGX-314 into the suprachoroidal space. Both the AAVIATE study targeting wet AMD and the ALTITUDE study targeting diabetic retinopathy have generated promising results to date.

Last week REGENXBIO also announced timing and status updates on their trials. So AAVIATE enrollment is expected to be complete in the first half of 2022. Cohorts 4 and 5 were evaluating RGX-314 at a third dose level of one times 10 to the 12 genome copies per eye. Cohort 5 is evaluating RGX-314 in patients who are neutralizing antibody positives.

For ALTITUDE enrollment is now complete. Cohorts 2 and 3 evaluating RGX-314 at an increased dose level of five times 10 to 11 genome copies per eye with cohort 3 evaluating RGX-314 in patients who are neutralizing antibody positive. As a reminder, last msonth REGENXBIO presented positive interim data from the ALTITUDE trial.

As the patient's dose of RGX-314 in cohort 1 47% demonstrated a two-step or greater improvement from baseline on the ETDRS diabetic retinopathy severity scale at six months, compared to 0% in the observational control group. The continued progress by REGENXBIO was very encouraging, and we look forward to their ongoing clinical trial results.

Over the past two months, we've been very active at medical meetings, including presentations at Sonoma Eye, the Buckle Society, the wet AMD and DME drug development summit, ASCRS, and of course, ARVO last week. At ARVO Dr.

Viral Kansara presented an overview of our preclinical data, highlighting the targeting compartmentalization and durability of suprachoroidal injected small molecule suspensions, demonstrating the versatility of our technology platform. As George mentioned, Bausch + Lomb is also very active at these meetings with several data presentations on XIPERE.

At ARVO Bausch focused presentations on XIPERE's approved indication of macular edema associated with uveitis. And at the upcoming Retina World Congress, their presentations will focus on specifics around the XIPERE Phase 3 PEACHTREE trial. Bausch also continues to reach out broadly to train the U.S.

retina and uveitis specialists on the use of our technology platform. Tomorrow, I look forward to joining several of my retina physicians colleagues, to speak on a panel entitled New Pathways in Retinal Diseases at the Retina World Congress. With that, I'll now turn the call over to our CFO, Charlie Deignan to review our financial results..

Thank you, Tom. Our financial results for the first quarter were published this afternoon in our press release and are available on our website. Therefore, I will summarize our current financial status. We reported in March, XIPERE's approval provided significant non-diluted funding for Clearside.

We received a total of $20 million of revenues from Bausch + Lomb related to milestone payments. With the final $10 million of these payments received in the first quarter of 2022. Going forward, we will primarily receive payments related to sales based milestones and royalties.

As a reminder, for our room without us we do not receive any revenue for the first $45 million in product sales. Our cash and cash equivalents as of March 31, 2022, were approximately $34 million. This capital will be utilized to advance our clinical development pipeline anchored by CLS-AX.

With our current operations and planned spend on our broader R&D pipeline we expect to have sufficient resources to fund our operations for at least the next 12 months.

We continue to be involved within the investment community, and we look forward to participating in the upcoming GMP Healthcare Conference next month and keeping abreast of our progress. I will now turn the call back over to George for his closing remarks..

Thank you, Charlie. With the FDA approval of XIPERE last year, and the use of our SCS injection technology platform in six ongoing suprachoroidal clinical trials. We continue to solidify our position as the leader in delivering drugs into the suprachoroidal space.

Our technology platform which combines the SCS micro injector with a variety of therapeutic modalities is truly an innovative approach in treating retinal diseases by allowing unparalleled access to the back of the eye through the suprachoroidal space. We believe 2022 will be another year of advancement for Clearside.

We expect the final data readout of our OASIS clinical trial in Q4 of this year. This will position us to gear up the Phase 2b trial by the end of this year, and enable us to begin enrolling patients soon thereafter. We're excited to keep moving forward as we believe CLSA X may be a promising treatment option for patients suffering from wet AMD.

We also look forward to the additional progress and data readouts from all our clinical development and commercialization partners throughout the remainder of the year. I would now like to ask the operator to open the call for questions..

Thank you, sir. Your first question is from Zegbeh Jallah with ROTH Capital Partners. Please go ahead..

Thank you for taking my question, and congrats on the progress. I think the first question from me here is just about the expectations for efficacy in cohort 4.

I know you mentioned that you were essentially doubling the dose from cohort 3 to cohort 4 and so I was just wondering if we should expect some sort of efficacy from that cohort based on your preclinical studies?.

Tom, I think that's directed to you..

Sure. Thanks for the question Zegbeh. Well, as you know, our first priority in this Phase 1/2a study remains safety. As you know, axitinib is a well established small molecule and we don't expect inflammation based on our preclinical studies, as well as the fact that it's not a biologic.

And so far, as we reported in cohorts 1 and 2, there's been a very robust safety profile. And this allows us to continue to escalate, as we've announced up to 1 milligram in cohort 4.

As we've discussed in prior calls, it certainly has already been shown by independent labs to successfully inhibit corneal, retinal and choroidal angiogenesis in a variety of animal models, all published from a variety of labs.

And so basically, leveraging its highly potent pan VEGF effect, with our Microinjector to achieve very high immediate target level in the chorioretinal tissues while minimizing exposure to the front of the eye. So we think this has real potential to show efficacy. And as we escalate, we expect to start to see some biologic signals.

I also mentioned in my prepared remarks that our trials enrolling patients who are treatment experienced yet show some activity based on independent leading center confirmation.

So in essence, we are enrolling those difficult to treat refractory cases and this sets a little bit of a higher bar, but also allows us to assess for these biologic signals and make a better informed choice of dose in our upcoming Phase 2b trial..

Thanks, Tom.

And then as a follow up to that, I was just wondering, just given the evolving competitive landscape, have you guys decided to some degree if you'll be pursuing these pre-treated patients or treatment naive patients? And then the last bit here is, just if you can comment on what are some of the additional factors driving this growing interest in the program? I know you guys are doing a lot of things simultaneously, you're presenting at conferences, Bausch is training folks all across the country.

So I suppose, you can just comment on the plethora of activities that you think are kind of driving this growing interest in the CLS-AX program. Thanks again..

Sure. So with respect to your first question, whether this is primarily going to be used in treatment naive patients who aren’t treatment experienced patients, we're still working that out. It has potential to be used in both populations, but we're going to, we're still working out the best approach.

As we've discussed previously, accepting them as the TKI is very broad or pan VEGF inhibition. So it has potential to be more efficacious than current therapies and may actually have a role in treating these somewhat refractory patients. However, it also could potentially be used as primary monotherapy in the future and again we're working that out.

And then with respect to your second question, why the growing interest? And I think the answer is several fold. I think our approval of XIPERE helps to support our platform. There has been lots of interest in the retina community to be trained with the Microinjector. Bausch is planning to train all U.S.

retina and uveitis specialists and I think the adoption of training has gone well so far. Also REGENXBIO has reported some very encouraging results in both of their Phase 2 studies which has attracted a further interest especially because it's a gene therapy, which always attracts interest.

Aura has gone public, and there's a lot of interest in their Phase 2 trial using our SCS Microinjector to treat choroidal melanoma which is a most common intraocular malignancy in adults and that historically has had not very good treatment with radiation therapy. So I think all of those factors have generated interest.

And then finally, as you mentioned, we've been very active at a variety of retina congresses, and also in publications, which has furthered the interest..

Thanks again, Tom..

Your next question is from Jon Wolleben with JMP Securities. Please go ahead..

Hey, thanks for taking the question. Just wondering about what data we're going to get in the fourth quarter, I'm guessing it might be six-month follow up from cohort 3 and three months from cohort 4. I previously planned on starting that Phase 2b by year end.

So I was hoping to get an update on what data and follow up will get in the fourth quarter? And then, how much time will you need to make a decision? And is it going to be primarily based on that three month time point?.

Yes, so great question. As we discussed in our prepared remarks, we are enrolling cohorts, 3 and 4 simultaneously. So that data will be presented. At the same time, along with the totality of the data, including cohorts, 1 and 2. I believe at that time, we will be able to present the extension study from cohort 2.

But I don't think we'll have data from the extension study in cohorts 3 and 4. In terms of informing our Phase 2b study, we will have the three-month data from each of the cohorts which will help inform and we'll have some of the extension data. And so we'll use that to help inform the trial design for our Phase 2b study..

Got it. And Tom you talked little bit about the duration and the suspension is same as suprachoroidal space in your prepared remarks.

Wondering if with a higher dosing does that change the volume administered or the suspension any way that gives longer duration as well, just wondering how to think about how higher dosing way that gives longer duration as well as learning how to think about you know how higher dosing may affect duration of effect here?.

Yes, that's a great question. So we're injecting the same volume, but at higher concentration. And basically, you can think of the suprachoroidal space as nature's drug depot. And we're essentially loading it up with more drug.

And so it should provide more durability, and then also has potential to provide more efficacy, although it's not an efficacy study, we have a higher likelihood of seeing a biologic effect. And then with respect to safety, and of course this is a safety study, so the primary goal here, as I mentioned, we've had a very robust safety profile so far.

Our preclinical studies support this dose and again, since this is a small molecule and not a biologic, and a small molecule that's been well characterized. We don't anticipate major safety issues, but of course, we have to do a trial to prove that..

Very helpful. Thanks for taking the questions..

Your next question is from Yi Chen with H.C. Wainwright. Please go ahead..

Thank you for taking my questions. At this point, could you -- would you be able to comment on the initial commercial feedback for XIPERE and when do you expect the initial sales to exceed the $45 million mark so that the royalties can kick in? Thank you..

Thanks for the question. We've been very happy with what Bosch has been doing so far. They focused initially on training, which we agree with. They trained hundreds of retinal physicians so far, and will continue to train more. That's been, they've been doing a slow rollout on this, so we think that their approach, it makes perfect sense.

They've got this multi step approach to training and rolling it out, getting people used to the product, getting people used to using the product. And so we're very happy with what they've done so far and what we do know of their plans.

What we don't know is we have no insight into their forecasts, so it's very hard to answer the question that you asked about the $45 million cumulative sales.

Charlie, do you have anything more to add to that?.

Yes, I agree. Now, we can't get Bausch and we'll let them provide guidance for the products..

Okay.

When you start to receive the royalties do you expect the royalties to be based on the current quarter of XIPERE sales, or there will be a quarter or maybe two quarter lag?.

So we're still working through the accounting of that, but it mostly likely we'll receive what we will receive reports 60 days after the end of the quarter. So the question is, do we put an estimate in or use a quarter in arrears, but we're still working through that accounting..

Okay, thank you..

Your next question is from Serge Belanger with Needham. Please go ahead..

Hi, good afternoon. I guess a couple of questions for Tom first.

Based on the safety assessment of cohort 3, there was no dose limiting toxicity, so just curious how the 1 milligram dose was chosen, and whether there are any restrictions either from a volume perspective or formulation to go higher than that? And then secondly, there's been a change here in how you intend to report the data.

You want to report the both cohorts at the same time in the fourth quarter, just curious what that was driven by if it was slower enrollment or just to have a more substantial data read out at one time? Thanks..

Thanks for the question, Serge. The Safety Monitoring Committee only reviewed the one month safety data from cohort 3 and 4 dosing. And they determined that there was no dose limiting toxicity and they agreed that we could move forward to the higher dose of 1 milligram.

We chose the 1 milligram dose because of our preclinical studies support that dose with respect to safety and it seemed that doubling was an appropriate amount of increase. And since we are, since they assessed only the one month safety data, we decided to continue to advance and progress the program as fast as possible.

So we opened up recruitment to cohort 4. And so, since there's only a small gap between the end of cohort 3 and cohort 4, we thought it was prudent to report all the data at once..

And I think the next question..

Yes, just one more, I guess, with the launch of XIPERE, now the suprachoroidal injection platform goes a little more mainstream with the launch of the product, just curious if you think that could be the genesis of additional collaborations going forward?.

Well, go ahead Tom, you can weigh in if you want..

Well, I think clearly that helps support the platform. I think that these are eager to be trained to try that. I have gotten a lot of unsolicited emails from physicians who have tried XIPERE in their patients and are excited about the results. So certainly, it does help support the platform.

And, I think that would naturally tend to inspire collaboration. I am going to turn this back over to George..

Yes, the only thing I would add to what Tom was saying is that it has increased interest by other companies in and in considering collaborations with us.

I had mentioned on other calls that while partnering is not the lead concept in our strategy, we do have chats with a number of companies that are interested in potentially collaborating and that really focuses on the approach of gene therapy into the -- delivering gene therapy into the suprachoroidal space in areas not otherwise covered by the REGENXBIO agreement.

So we do have those conversations. It has sparked additional interest now that they've seen the injector system that's part of XIPERE is approved and that physicians, a wide variety of physicians are being trained. That's -- that has clearly made other companies interested in talking about potential partnerships with us..

Okay, thank you..

Your next question is from Annabel Samimy with Stifel. Please go ahead..

Hi, this is Stacey calling in for Annabel. Congrats on all the OASIS development and thanks for taking our question.

So on CLS-AX given that you have the opportunity to push the dose higher in the fourth cohort, can you tell us whether you will be seeking longer duration than three months? And I realized that that's how often people go in to see their retinal specialists, but the development market is pushing for six months or longer now.

And also now that you're working with a pan VEGF mechanism, is there any aspiration to have more efficacy than just a single anti VEGF target? Could there possibly be anticipation for security? Thank you..

Great question. So, you know, as we continue to escalate the dose, we would naturally expect additional durability. I think that there is interest in much longer duration, six months and longer. I think for the vast majority of what's approved and what's in development, that's a bit aspirational.

I think the reality is that most of these injectable therapies last on the order of three months. And so, it's possible that we may see more than that, and certainly, we're going to assess for that in our extension study. So that's, our thoughts around durability.

And with respect to efficacy, as you touched upon with the pan VEGF effect, we may actually have additional efficacy over a focused VEGF inhibitory strategy, and certainly, with the suprachoroidal injection platform, we can achieve very high levels in the targeted chorioretinal tissues very rapidly, and that may further leverage the sandwich effect to enhance efficacy.

But again, we're you know, I don't want to get ahead of myself. The study is really about safety. These patients, as I mentioned, are all patients who have been treated in the past and they have persistent active disease based on independent reading center. So these are, these are difficult to treat refractory cases.

And I just want to be cautious about putting guidance out there that we're going to see better efficacy in this in very small, first in man, single dose escalating trial, but certainly we're going to assess for all this and look for those signals..

Amazing. Thank you so much..

Your last question is from Julian Harrison with BTIG. Please go ahead..

Hi, congrats on all the recent progress. And thank you for taking my questions. Most of mine have already been asked.

And you've made some comments related to this topic already, but I just wondered if you can talk more about how important do you think brand recognition in general familiarity with your Microinjector device is among physicians across all your opportunities from XIPERE and beyond? Thanks..

Tom, do you want to comment on that first?.

Sure, I can start. I think when it comes to suprachoroidal delivery, obviously the first in class, best in class, we've been very, very active in all of the retina congresses for the last four years.

I think last year we had over 35 presentations at retina congresses, very active in publications and speaking and I think we are building up a very good brand recognition and certainly the approval of XIPERE and training along the U.S. retina and uveitis specialists enhances that.

As I mentioned earlier, there's always a lot of interest in gene therapy. So I think we can expect bio two Phase 2 studies have attracted a lot of interest and as has or studies in suprachoroidal melanoma.

So I think the brand recognition continues to develop, as George mentioned, we receive an increasing number of inbound calls and inquiries about, potentially working with other companies.

And I guess the last thing I want to say before turning over to George is right now, if you include Arctic Vision, which is assessing the USGA or were designed here.

In China, we currently have a clinical trials, a cortical steroid being assessed with our SCS Microinjector, tyrosine kinase inhibitor being assessed their SCS Microinjector gene therapy and a virus led drug conjugate. And I think that really enhances the brand that really showcases the versatility of the platform.

And it's really, I think, a very exciting time for supercoiled delivery. I wish I could add something to that time, but I can't I think that's I think that's the perfect answer to that. And that brand recognition will continue to grow, especially as those trials progress and especially as Bausch continues its training program to train.

The vast majority of retinal specialists in the United States, were going to have, will ended up with hundreds and hundreds, and if not, into over 1000 physicians, at least in the United States that have been exposed to it, they've been exposed to the training on it.

And when you talk to them, once they're trained, they're always amazed at the simplicity and the reliability of the delivery system. So and again, just emphasize what Tom said on the versatility, we've got four different therapeutic modalities and six different clinical trials right now.

So it really is demonstrating the versatility and the flexibility of the system as well as the reliability and ultimately the simplicity but the reliability of the system. So we're very excited about the growing awareness of the system and the approach, so it's very exciting for us, and very rewarding..

Exciting all around. Thank you very much..

Sure..

And that concludes the question-and-answer session. I will now turn the call back over to George Lasezkay, President and CEO for any final comments..

I just want to thank everybody for joining us on the call this afternoon. As always, we appreciate your continued interest in Clearside Biomedical and we look forward to updating you on our progress in the future. Operator, you may now disconnect the call and thank you again everyone..

Thank you, sir. Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect. Stay safe and well. Have a good day..