Hey everyone, thanks for joining us for day two of the Citizens JMP Life Sciences Conference. My name is Jon Wolleben. We're pleased to have the team from Clearside Biomedical joining us. We have newly appointed CMO, Victor Chong, and then George Lasezkay, CEO. This is a story we've been following for, I guess, maybe three or four years now. Really interesting platform that I think is really gaining momentum in the past two or three years. So maybe to kick it off, George, can you talk a little bit about your focus at Clearside and what you guys are doing? Sure. And thanks, Jon, for inviting us to participate today. Appreciate it very much. First of all, we remain our strategic focus has always had these two prongs to it. One, we're investing on internal development, and you'll ask plenty of questions of Victor about our CLS-AX program, our internally developed tyrosine kinase program. And secondly, partnering where it makes strategic sense. And we've had some good success with our partners. So we keep focusing on those two things, and right now we're really laser-focused on CLS-AX and bringing home that top-line data like we've promised by Q3 of this year. So, internal wet AMD CLS-AX, third quarter, top priority, that's laser-focused for this year. At a high level, can you talk a little bit about the suprachoroidal space? You guys are pioneering both the delivery and the functionality of getting drugs there. Can you talk a little bit why this is an attractive area? Sure. We've always believed that going into the suprachoroidal space could have a number of benefits. We're targeting the disease cells by injecting into the suprachoroidal space, so we put the drug very close to the affected cells. Number two, when we put the drug in the suprachoroidal space, it stays in that space. Now, why is that important? There's a couple of benefits there. One, since we're injecting behind the retina, it reduces any possibility of floaters or other objects in front of the eye that the patient can see. Number two, it gives us the ability because we're not putting implants or inserts in the eye, it gives us the ability to redose. And the redosing, which is an important part of our current phase II-B trial, is really important for potential extended durability. Thirdly, because we take this approach in the suprachoroidal space, we've had so far no cases of endophthalmitis, which has not been the case when drugs are injected into the vitreous. So if you look at that, we think it's a safe way to inject drugs. It makes sense from an efficacy point of view and from a redosing point of view. The overall preparation for the injection is very similar to intravitreal injections. There's just a couple of key things that need to be done. The injectate has to be injected slowly, and there's a certain angle that has to come in, has to be perpendicular to the eye. The overall time for the physician should be very similar to intravitreal. With little training, it's very easy for the physician to learn how to do this, and we think those benefits will really pay off in the long run. De-risk because it's already approved for a product. That's right. XIPERE was the first product approved by the FDA for suprachoroidal administration back in late 2021, currently being commercialized by Bausch + Lomb. So the route has been approved by the FDA. We know how to do the drug-device combination through the regulatory pathway. And so we're really excited about what we're going to see from CLS-AX later this year. One question we do get every so often is the belief that the eye is an immunoprivileged space where if you put something in the eye, it stays there, which is not necessarily always the case. But even suprachoroidally, have you guys seen anything with systemic circulation if you put drugs in the back of the eye versus inside the eye? I think that's a good time to transition to Victor. Well, I think two things. You asked two questions. I think one is the immunoprivilege. I think immunoprivilege is a relative thing, certainly that when you are going to the subretinal space, there is probably more immunoprivilege, and even that is debatable. The suprachoroidal space is not necessarily immunoprivileged in the same sense of without immune surveillance because you're next to the choroid, and the choroid would have its almost like a blood sponge, and then you would have the same immune cell. And in fact, we believe that might be the reason that we will not have any case of endophthalmitis because a small number of bugs contaminated through the needle gets into the space, and then those small number of bugs will be removed by the immune cell in the choroid because they are next to it. So slightly different from intravitreal because that is actually more immunoprivileged in that sense that there's no immune surveillance. So bugs are allowed to grow, and then unfortunately, in some cases, become endophthalmitis. Interesting. So actually, you think a potential safety advantage being in the choroid? Correct. In fact, that was one of the reasons I joined the company. I think that was something that we all fear. In fact, I am a retinal physician, and one of the things that you fear most in intravitreal injection is endophthalmitis. The reality is that although it is rare, but I can actually remember all three cases of my endophthalmitis in my career. I've done like 20,000 injections. And so it's something that you always fear about and you remember it because that is so important that you're blinding patients' eyes in some cases. Yeah. So we hear that word a lot. Can you tell us a little bit about why it's such a bad clinical presentation, endophthalmitis, and why do you want to avoid it? Yeah. So the endophthalmitis is relatively rare, any quoting from 1 in 2,000 to 1 in 10,000, roughly. But that is a bug that you get into the eye, it gets the whole eye infected. And again, even in the best scenario, I think Bascom Palmer has published a series that still a lot of patients will lose vision, and then some patients even lose their eye. So really, although it's rare, but I think it's a very important concern for most physicians. To the advantages, George, you mentioned, I think the proof is in the pudding, so to speak. You have several partnerships where people have looked at either intravitreal subretinal administration versus suprachoroidal, and it seems like almost all your partners are opting for suprachoroidal moving forward, which has got to be a good sign of things. Yeah. Well, I think there was from the REGENXBIO, I think subretinal was an interesting proof of concept, but had limited commercial appeal. So they had to go suprachoroidal. And Aura did the same thing. They were intravitreal, and there was just no contest once they were injecting their same compound into the suprachoroidal space. And particularly since they were going after choroidal melanoma, we really were putting a drug right where it needed to be. So the partnerships are working out great. We're very encouraged by the data that we see. Aura is in phase III. REGENXBIO just announced just recently that they expect to start phase III in DR next year. And our latest collaboration with BioCryst, they're very excited about the formulation they're putting together, and they could be in the clinic by the middle of next year. So things are going well. It's working out well. And the safety profile from not only our experience, but our collaborators' experience really backs up what Victor's saying about the safety aspects of the injection procedure itself. Then let's jump to CLS-AX, your program for wet AMD, because that's the key data that's coming third quarter. Wet AMD, I think, is a sexy area for investors. It's big revenue numbers from a few number of drugs, and there's apparently more unmet need because there's a lot of development programs. But can you talk a little bit about what you guys see as the unmet need in wet AMD today? Yeah. So I think that in wet AMD, that the current drug really works pretty well. I think that I was involved in some of the early development of Lucentis and Eylea way back many years ago. I think the bottom line is that the reality all of us know that in the real-world data, it's much worse. And the reality is that patients couldn't really come in every month or every second month. And even now that we have a newer approval, that is only extended to four months in a small number of patients, not even necessarily all of them. So I think the idea is that, well, whether that you want to extend a bit further, and in fact, when we see that Vabysmo, for instance, only extends a little bit, gives you a good commercial value. So we believe that if you're extending a bit further, there will be a lot of potential there. And again, that will be the time and place to think about that, well, if we can extend a little bit further, then what do you choose from? So whether you choose from something that's floating in your eye regularly, whether you choose from something that has even lower risk for endophthalmitis, or whether you want to choose from something that you might need to rescue by a biologic that you need to figure out how to find those patients in the clinic, or whether you can choose something that you can just redose, just like the current biologic. And so, something that might, as a retinal physician, I also think about that, how this can be implemented in my clinic in a way that something more flexible, something that you can use as one, something that you're more used to, and then have the additional benefit of the things that we talk about, that no endophthalmitis, et cetera, will really help physicians to make the right choice when the time comes. Can you tell us how CLS-AX works? So CLS-AX is what we call a TKI, and they're blocking the receptor rather than directly blocking the molecule. So indeed, you actually block more receptors than just VEGF. We tend to talk about blocking VEGF, the current anti-VEGF, blocking VEGF, and VEGF receptor one and receptor two. But potentially, you might have also heard some companies are looking at blocking VEGF-C and D, which is actually blocking receptor three. And TKI actually blocks all of them. And then also the one that TKI that we use is axitinib. It's extremely low IC50. In other words, it's very highly potent. So I think those are all reasons that that will be particularly helpful from that perspective. And so more receptors blocked. It seems like yourselves and the other TKI players are using induction doses with VEGF, though. Do you think that these could be used as a drying agent themselves or more maintenance? What do you think the use case is? Yeah. I think that certainly understanding the biology, when anti-VEGF biologic is used, you really kind of wipe out all the kind of VEGF already there. And so it's a bit more that, I mean, even biologic, you need to have the so-called loading phase. Because I think in the early stage of the disease, when it is relatively active, you want to calm things down. And indeed, I think that we thought that might be one reason that it actually makes more sense for TKI to go for maintenance. Now, what we never tested is whether we can actually do a loading phase or TKI. However, to a certain extent, the loading phase, sometimes people confuse, and the maintenance phase is only after the first three injections. And yes, it might be for diabetics, it might be after the first five injections. I think the way to think about it is that that could be another thing that TKI can try to do. However, what's more sensible, and as you discussed about the unmet need, the unmet need is on the maintenance. It really actually from month three onwards, and actually for a patient that will be going to use this for many, many, many, many years, then the first three months is less important. But since the biologic did such a great job, they should be used for that maintenance. And that's how we believe it makes sense that we hit the unmet need, which is the maintenance, which is the people can't do. Most people can do the first three injections. Yeah. That makes perfect sense. So you're not changing the paradigm. Even the anti-VEGFs today have that loading phase and then moving to. No. I don't think that's why. I think that I think that what we should do is load with biologic. And the reality is actually that out there, at least in the United States, that you might need to do step therapy anyway. So you might need to kind of assign that you want to start with biologic. And then somewhat it makes sense. I think that certainly the data to support that might be needed. Some of your peers developing TKIs are focusing on long-acting delivery mechanisms. You guys are delivering to the suprachoroidal space. Can you talk a little bit about why that might give a durability play here? Yeah. So TKI is a small molecule. In fact, that was why that if you TKI has been around for a long time for oncology. But if you're just injecting a small molecule in the vitreous, then you would expect that you just disperse and disappear very quickly in terms of even hours, not even days. We have history of that many, many years ago. In a way that the first kind of consideration of injecting small molecules in the eye has some success with triamcinolone as a suspension. Way back, that is what we used for that. Again, it seemed to stay in the eye for a little bit longer because they crystallize, and they kind of slowly release from the crystal. But the inconvenience and the patient don't like is actually this grow effect, that slow grow effect, that things floating around. But at that time, this is way before even anti-VEGF. When you have nothing, that will be fine. Our competitor tried to put those into a matrix, and that was initially successful. But you have seen something floating around. I think we have approved a product like Retisert and Iluvion. They are floating around, and people notice it. For three years. Yeah. Unless that you think about it that way. Iluvion, in particular, you mentioned about 2.5-3 years, but it's got a part that will never dissolve. So they will be permanently floating around. So limiting how many you can put in. Now, George is already starting to mention that our proof of principle using the triamcinolone as a suspension. But instead of putting it in the vitreous to put it in the suprachoroidal space, and it's kind of it's a very similar mechanism in a way that basically the crystal will be in the back of in the suprachoroidal space, and then that will slowly diffuse out. And that gives the difference. Now, to be fair, it's slightly more different. The formulation is actually more advanced than the original triamcinolone. And even our approved product is a much smoother crystal. So it's kind of like in the old day, you can actually see the crystal when you examine the patient's eye. But this is a much finer crystal. But the principle is the same, that you get into the space, those crystals stick in the space, and then gradually release the drug. And unlike in the past, that in injecting into the vitreous, that they're floating around. But then again, because it's kind of this crystal slowly released into the space. Okay. Let's jump to the phase II- B ODYSSEY trial, the study that's rolling out soon. Tell us about that design, because it seems like we have a lot of contentious debate these days about what AMD trials. You guys have a unique trial yourselves. Tell us about what you're looking at and what you hope to see. Yeah. So I think that we already George already mentioned, but we want to reinforce how important redosing is. I mean, drug development in general, that even for oral compound, you will have single rising dose and then have multi rising dose even you start a proper trial, right? So we're all standard about that. And we are the only company on the TKI area that we will have redosing. And in fact, you can argue that even when the patients are doing well, in other words, there's no need for redosing. But I think we redose at week 24 deliberately so as we can have redosing data. Now, again, that sometimes that might make us look like that we need to redose everyone on week 24. But that wasn't really the kind of you almost like you want to sacrifice that part so as we can redose everyone. At the end of the day, when we talk about maintenance therapy for wet AMD, this is almost a lifelong treatment. With a single dose, you don't know what's going to happen when you redose. In particular, that is everyone's concern. Again, you would have biologics, you have redosing. We have this redosing, which I think is one of the most important components that we can do that. We also have the flexibility. Not only that, if they are doing really well, they still get redosed at week 24. But from week 12, you can start redosing with our own drug rather than rescue. Again, allowing the potential for flexibility on our future phase III. In fact, when you're into the commercial space, how physicians can be adjusting easier from a biologic to us rather than, as I mentioned earlier, that if you are using an implant, you can only do every six months. But then you need to find the patient to be rescued. And again, it's not a pattern that physicians normally use. And as a physician, I don't particularly want to change the pattern of how I run my practice other than something that is easier to migrate to, have a much bigger potential. When we talk about long-acting drugs for wet AMD, if you have patients coming in, what frequency would you want to see them to feel safe that they're not losing control, but you're giving them a little bit more flexibility in the duration between doses? Yeah. So there's always a debate about how we look at things, right? So in the Lucentis, it's every four weeks. And then the Eylea, every eight weeks. And then now, the new approval is around every eight weeks to every 16 weeks. So that's like every two to four months currently. So again, what we are now thinking about, at least based on our potential protocol, is every 12 weeks to every 24 weeks. Now, obviously, every 12 weeks will probably be rare. But on the other hand, we give that physician that flexibility. Just like that, you might remember on the label of Eylea that you can actually give every four weeks. Despite the trial, it did not show any benefit. But for individual patients, some physicians feel that they need to have every four weeks of Eylea. So I think that flexibility is important for physicians. At the same time, although it's a small number of patients, but it's still important that you can give that in that way. So I was thinking a little bit more that the label that we will be going after might be a Q12 to Q24 label. Obviously, some patients might not even need to redose at week 24. But again, that will be something for the future. Yeah. When we talk to physicians, it seems like six months is the target sweet spot where anything, there's some products that might go longer. But at the end of the day, they still want people coming in at least twice a year to make sure that everything's okay to get treatment. Yeah. So I think that, as I mentioned earlier, I think that you need to think about that if you need to make a choice, and if everyone can be six months, that is a different story. Now, we've already seen that in all the different trials in wet AMD and in the modern biologic to gene therapy, there's a variability that patients differ. And actually, the question is really how to find the patient, what frequency for that particular patient with what particular drug. So I think that was something that some patients who are currently needing Q4 every four weeks of Eylea, that patient will not likely to make six months, no matter what you give to it. But for that patient, if you're extending to Q12, it's already a big relief. So I think from my experience, that is quite rare that people will not be able to come in kind of two-three times a year. So anything between four to six months, I think for the odd patient, four times a year because they need Q12 are still mostly doable. I think the question, as always currently, is to come in every four weeks or every eight weeks are not really doable in the majority of patients. So I think occasionally every three months for some patients, but that was the significant minority. And then really, the four to six months, it depends on the variability of the patient need. And in fact, I would probably argue that might be actually four to eight months when the time comes that some of the patients currently might be enjoying the so-called able to do every four months of biologic. Those patients might be actually doing every eight months. So again, to a certain extent, those are already doing every four months of current biologic might not necessarily be too worried about changing. But again, that is also a minority. And it's not reliably able to achieve that. Yeah. You can notice on the Vabysmo advertising that they say. Yeah. Up to. It's very clever. The potential to go up to. If you look at the label, it's 1-4 months on maintenance after 4 loading doses. It comes on TV every night too. Oh, yeah, yeah. We see it all the time. And High Dose Eylea started their counter-advertising. But we see that we just see that as the opportunity, is that all these are saying up to four. We think we can go beyond that and really offer a great benefit for both patient and physician. When you guys are in the protocol allowing for retreatment starting at every 12 weeks and then up to every 24 weeks, everybody gets redosed, based on the data you generated in your prior study, the patients you're enrolling, where do you think the response rate will fall on that spectrum? What do you guys want to hit? At the end of the day, people want to see something, I think, that's competitive with what they've seen before. But what's your target that you want to see? Yeah. So I think that when you're looking at the study inclusion criteria, it's slightly different. I think in our trial, that one criteria is the patient has to be still active. In other words, that they still have fluid. And I think some of the criticism from other trials is that if the retina is completely dry, people will say, oh, you don't need to treat those patients. And those patients would be able to leave it for six months with no treatment. But our patients all had to be actively have still have activity. So in other words, have got fluid or leakage. And so those patients would expect they need to be treated. So I think that we can actually look at that particular criteria. It will potentially make us look a little bit worse. I'm not saying that it will be, but I think that will be the so-called potentially. Harder population to treat, though. Right. But similarly, we will need to try to understand that there's a relatively small number of patients. And we were expecting the variability that some patients that might need get retreated at Q12, at week 12. But we were expecting the majority of patients would get to week 24, and then we then redose it with our own drug. So that will be our expectation. Majority will call 50% or more. You think we'll get to six months? Yeah. Okay. Then as we're bumping up on time, we keep talking about this is a really interesting area of drug development. But George, recent cash position. Then how are you thinking about phase three cost and design? Because we also have a lot of debate about what phase three's look like. And I guess that changes how much money you might need to move this forward. How do you think about? Well, currently, cash position's roughly $35 million, which on our projected spend will take us into Q3 of next year. But you've asked the right question. I don't have the right answer for you just yet. Victor and the team are working very hard on phase III planning. And there'll be conversations with the FDA, obviously. And that'll really dictate how much money needs to be raised based on the data that we're going to have at the end of Q3 of this year. So there's a big debate about the superiority approach that Ocular is taking. I think EyePoint may be rethinking their non-inferiority position, which would obviously dictate a larger trial. So there's a lot of factors that are going into this. Victor and the team are working very hard with outside consultants and with the FDA to come up with a plan that we think would be affordable and make sense to approach the trial in such a way as to get a label that makes sense. It's more than just getting a product approved. It's getting a product approved with a label that's useful. It's going to be a challenge. I'm confident that Victor and the team will give you more information and help answer that question a little bit later this year, Jon. Perfect. We're all looking forward to the 3Q data. Thanks again for joining us. Victor, welcome to the team. Thanks for joining us as well. All right. Thank you, Jon.