All right, good afternoon, everyone, and welcome back to the 24th Annual Needham Healthcare Conference. My name is John Gianco, and I'm a member of the Biotech Biopharma Research Team here at Needham. For our next session, I'm pleased to be joined by senior management of Clearside Biomedical, a late-stage BioPharma involved in treating retinal diseases via a proprietary delivery platform. Just as a quick reminder for the audience, if you would like to ask any questions, you may do so via the webcast player, and we'll address them throughout our Fireside Chat today. With me is Clearside CEO, George Lasezkay and CMO, Victor Chong. George and Victor, thank you very much for joining us. Thank you, John, for having us be part of the Needham Conference. Appreciate it. Great. George, yeah, maybe we'll start with you to kick things off with an overview of the company, and then we'll jump into some questions. Sure. Clearside has been focused on the delivery of drugs to the suprachoroidal space, which is a potential space behind the retina. We've been focusing on that since early 2016. We've developed one product already that's been approved and is being marketed currently in the United States as Xipere for uveitic macular edema. We have a second product that has just completed phase 2b. There's a phase three ready asset. It's CLS-AX, a tyrosine kinase inhibitor for wet AMD, also delivered to the suprachoroidal space. In addition, we've developed a number of partnerships with other companies that have their therapeutics that they want to deliver to this space: Regenxbio and AbbVie with their what used to be called RGX-314 gene-based therapy for wet AMD and diabetic retinopathy, Aura Biosciences with their viral-like gene drug conjugate for choroidal melanoma. They're also treating that in the suprachoroidal space. Our partner, BioCryst, that's developing a plasma kallikrein inhibitor for administration to the suprachoroidal space for the treatment of diabetic macular edema. Those are our partnerships in the suprachoroidal space and our partnership with Bausch + Lomb and Arctic Vision for our first product, Xipere. For uveitic macular edema, Bausch + Lomb is commercializing it in the United States, and Arctic Vision has the rights, along with Santen Pharmaceuticals in mainland China and the rest of Pan Asia. It is currently under review for approval in China. It has been approved in Australia and Singapore, and Santen is going to be the commercialization agent for the product in mainland China upon approval. We continue to work in the suprachoroidal area. It is an area that has been increasingly of interest to retinal physicians and academics in terms of ways to administer drugs. We are working on it, too. We have an early-stage pipeline and geographic atrophy that we want to bring along and take into the clinic in the next few years. We really believe that the suprachoroidal space has a lot of potential for the treatment of a variety of retinal diseases, and we are proud to be a pioneer and a leader in that space. Great. Thanks so much, George. Yeah, we'll definitely get to your programs in GA and your partnerships as well later in the discussion. Victor, you came to Clearside last year with a great deal of experience in this space. Just wanted to get your view on the use of suprachoroidal injections to treat back of the eye diseases. With that, where do you think this modality kind of provides the most benefit for patients and physicians? Maybe on the other side of the coin, what have been some of the hurdles Clearside's had to overcome as users and consumers get to know the product? Yeah, I think suprachoroidal space is slightly different, but not different enough, therefore, any physician who wants to learn to concern about it. We do have a training program. In fact, as long as the physician is willing to take a little bit of time to think this is a little bit different, and our experience is after two or three injections that they would become expert already. We have a recent publication to suggest that over 90% thought that was an easy procedure to perform. In terms of benefit, it's like the way to think about individual injections has been the norm, but they are injecting drugs into a space that has no immune surveillance. There's actually always a concern that the bugs can allow to grow in that space and then cause endophthalmitis even with a very small contamination. Luckily, that was actually quite rare. If it happens, it can easily blind the patient's eye. I think, again, that is an important, although rare, event. For suprachoroidal, we do not go all the way. We are injecting the drug in the coat of the eye, so to speak, that we do not go through. Also, the choroid is next to that space, so it is under immune surveillance. There we really have no risk of endophthalmitis. I think that is really a subtle but extremely important point for the advantage. I think that is a key comparing with intravitreal. Again, one additional advantage might be less relevant for wet AMD that our steroid products stay to the back of the eye. They don't have any concern about cataract or high pressure because when the drug is inside the eye, they can get to the lens, get to the ciliary body, and that causes those problems. I think that is a lot of additional benefit over an individual injection. Great. Yeah. As George mentioned, you've had the approval and commercialization of Xipere for a bit now. In your guys' perspective, has this kind of made SCS administration more mainstream, so to speak? I don't think it's necessarily mainstream right now because uveitic macular edema is a very small indication. Indeed, in the very beginning, Bausch + Lomb and us have trained a lot of physicians. When they don't use it, they seem to lose interest, which we can understand why. Even in my old practice, I may only have two or three a year. It's quite hard to kind of get good at it as such. It has become more focused on the uveitis specialist. Again, the uveitis specialist will do a lot more. That was where I was mentioning earlier. In a way, there is a bit of a boundary that those uveitis specialists are busy doing uveitis and don't tend to be doing the mainstream diabetic retinopathy and wet AMD. Those like me who are focusing more on wet AMD and diabetic retinopathy do not do that much uveitis. However, we believe that now that with AbbVie and Regenxbio are moving to phase three programs in diabetic retinopathy, and we are doing wet AMD, I think that in a few years' time, that will become the mainstream. I think that when I remember that when I started doing Lucentis clinical trial as an investigator, intravitreal injection was not the mainstream. Now, if you do not do intravitreal injection, then you are probably not a retinal specialist focusing on common disease. That is how we felt that the interest is there, the technology, that injection is not difficult. Therefore, once the indication opens up, everyone will learn how to do that. Just like intravitreal injection, it was a scary thing when you all first started. This is not even scary because it's safer than intravitreal injection that we do thousands of them. Great. Understood. Switching gears now to your lead program, CLS-AX in wet AMD. You recently unveiled the phase three trial design. First, last year in October, you guys read out the phase 2B Odyssey trial. Maybe we can start there with a summary of the top-line data as well as the subgroup analyses that you guys conducted and some of the learnings that you took when considering the design of the phase threes. Yeah. I think that we have chosen to do Odyssey study on patients that have needed a lot of injection and still remain active. I think that we learned on some of the criticism at the time when some other TKI competitor are chosing patients that will need a lot of injection, but they could be not active anymore. I think that some KOL have told us at the time that, well, they might just have a lot of injection, but they do not need the injection. Therefore, it does not mean anything. In our case, we deliberately chose patients who are still active despite a large number of injections. The second thing that we also do differently is we are re-dosing with our own drug. Other companies are focusing on rescuing and almost like testing how long the drug will last. Re-dosing is the way that we think is important. That is why we chose that even on our phase two, we can re-dose from month three. We also re-dose everyone by month six. I think that is a great learning for us that we know what happened when we're re-dosing our own drug. Again, we learned that by waiting until the retina is pretty swollen. Because that was the rescue criteria for some other company, I think we did learn that although we chose our dosing slightly easier to re-dose, to me, it might be a bit too late. I think that some KOI also comment on that those rescue criteria are rescuing a patient losing vision, and it should not be used in clinical practice. Again, we learned from our own data, but at the same time, we were able to adjust because we also know that when we're re-dosing with our own drug, what would happen. Those are key, important. Now, despite that, we have considered that some deficiency on our data, but the data looked not on the data, on the design, but the data looked still very good. You see, it still maintained the BCVA, maintained the vision, maintained the anatomy. I think that despite that, there were some design issues in my book, but that is a retrospective lens. I think that we learned through that. That is how we thought about two or three things. First of all, we think that our drug should be able to be used for everyone. I think that was really important that we think that because since we can re-dose, then we do not need to look at those who only dry up completely and then to potentially get to six months. Re-dosing with our own drugs is important. Another question is like, in our patients that who are re-dosing every six months in our phase two study, have we been undertreating them? That was our first question because you might be undertreating someone purely because you just give them six months because they did not meet your criteria. Again, with our subgroup analysis that we shared in our Genesis, we have demonstrated that was not the case. In fact, that group did very, very well. I think that was really a reassurance that every six months in our drug, in a significant proportion of patients, are completely doable. The second thing that we discovered is that there will be some patients who have very big visual acuity change, and yet there was no anatomy change. Again, KOL reported to us to say that certainly also my clinical experience that in the clinic, they do not even look at the vision normally, partly because their vision is not very reliable. Again, we actually looked at another subgroup analysis by eliminating some of these anomalies, and then we have an even better result. In our phase three design, we would design it to optimize by really taking out some of those patients that we think might be unreliable and then to optimize our study design. Those learnings are very helpful that we know when to re-dose and how to re-dose, and also that we would be able to re-dose. Furthermore, by optimizing our study design, we would not expect any rescue whatsoever, similar to Eylea high-dose and Vabysmo in the phase three study, but we were just adjusting the dosing. That is actually what physicians do every day anyway. I think that is what we believe, that we had a clear differentiation from other TKI. Right. Again, you have Eylea and Vabysmo currently on the market, ranging from monthly dosing to every three- to four-month dosing. Again, maybe give a little bit more color on where CLS-AX is going to fit within that and then compare it back to the other TKIs in development as well. Yeah. I think that when people talk about Vabysmo, they have that one to four months dosing. In real world, a lot of KOL told us that only a small number get to four months. It does happen, but not common. I think that what we were thinking about is that everyone will get to three months in our drug at minimum, but the majority will get to five to six months and some probably more than six months. Our flexible three to six-month dosing is that we believe that CLS-AX can at least for three months for everyone. Then what's likely is the majority will expect will be three to five or six months. Indeed, some will probably go beyond six months. We do not need a label to extend beyond six months. I think that our three to six-months label would make the most sense for physicians, which is, although it does not sound like much comparing to the one to four months on Vabysmo. However, we believe that even a small extension makes a compelling commercial story. I can see how well Vabysmo did in the last couple of years. We believe that this extension for another month or two to some people may not sound like much, but in reality, that is a lot. Great. Yeah. From a safety tolerability perspective in Odyssey, it was mostly pretty good, but there were a few occurrences of mild inflammation that resolved over time. Maybe can you provide just a little bit of color on these events and any mitigation strategies that you might be implementing moving forward? Yeah. Our re-dosing title and our reporting for adverse events is also very tight. I think that was something that we deliberately do and might give the wrong impression. Those inflammatory inflammation are really non-event. Most of the other companies would not even have reported them in the way that we did. We have full transparency to suggest that. We do learn that there was one or two cases that the procedure was not done correctly. They were the first time ever for that physician to do that procedure. Now that in the very early part of the study, now that we have our partner doing a lot more training for their gene therapy program, and we also done a lot more training on our own program. I think those are no longer likely to be any issue when we move to phase three. Just like everything, that phase two is a part of a learning. From our point of view, we learn and are aware and how to really make our phase three even more successful. Great. Understood. Again, just last month, you announced your official plans for your two phase three trials for CLS-AX, which I believe has some pretty interesting nuances that differentiate it from competitors in the space. Maybe provide just an overview of the design and big picture, like what do you want physicians and patients to take from these trials? I think that the first things that we do is we went for a non-inferiority design. That's the gold standard. Again, all the approval since idea, Lucentis is the only one using superiority design when there was no good treatment. Since then, everything is non-inferiority. We believe non-inferiority is the gold standard. We discussed with the agency, and they also confirmed that non-inferiority, true non-inferiority study is the gold standard. We started with treatment naive patients, but we are focusing on the maintenance phase. Everyone will be loaded with Eylea, which again, we believe that we might be able to load with our own drug. Again, we have never tested on the phase two, so we decided not to do that. Again, in a way that the maintenance market is actually the more important market, but also where most of my patients would not mind for the first few months to come every month. It is only once you drag on that you need to come every two months for the rest of their life, and that becomes a problem. I think that we believe that we do not want to change that part of the loading part. That is why we keep that. Then really basically that we then adjusting the dosing frequency very similar to Vabysmo and Eylea high dose, although our methodology is slightly tighter than them, I would say. In other words, that we can re-dose a little bit earlier, which is similar to what KOL have told us that in real life that they would re-dose much earlier or reducing the treatment extent period much earlier. Again, we are taking a lot of advice from that, and our study would be more real life. We are also trying to separate the so-called intraretinal fluid and subretinal fluid, the different biomarker. Again, it's a condition that we always think intraretinal fluid is more important. Although because of that, any recurrent of intraretinal fluid, then we would shorten the treatment interval. I think those are the kind of key plays that what it meant is that we have two non-inferiority styles, almost like reducing our regulatory risk. We are similar to recent approval, Eylea high dose and Vabysmo on the maintenance phase, and therefore also reduce our regulatory risk. We do not expect rescue. That is also reducing regulatory risk because rescue could become a treatment failure, and the agency is concerned about that. I think those are the key points that see how we want to how we get success. We do also optimize our population that we take out people that we think that will be our potential creating variability. In non-inferiority design, variability can cause problems. Because of that, by reducing variability, we can actually have a study size more reasonable and not only meeting the criteria for the agency, but we have a strong reason to believe that it will lead to a success because of all this optimization and improvement on the design learned from previous approved product. Right. Yeah. I think the overall design of the trials to reduce variability is one of the key aspects. Is there anything specific from the enrollment criteria within this treatment naive population that might have been different than other trials? Again, using that treatment naive versus treatment experienced, what are some of those differences there that you're trying to mitigate risk? Yeah. The treatment naive patient that we do exclude those patients who got poor vision and also those who had very thick retina. I was fortunate leading a study that in my academic career that we have looked at more than 2,000 patients or 2,000 eye, let's say, in the U.K. when they were treated with Eylea, how that behaved, called a precise study that we have multiple publications on that. In a way to think about it is that, when you got poor vision, you had high variability because it's difficult to see how much improvement that you can get. Also when you got very thick retina, also that there's a variability. We took them out. The agency said no problem with that because we really justified the reason we're taking them out is because those are the patients that have high variability. The agency understands that that is okay for us to do so. To reduce further variability, once you have three injections of monthly Eylea, you usually have a gap of eight weeks between the third and the fourth injection. Not only from previous clinical trial, but also from our data that I mentioned in the precise study, during those two time points, you don't expect to have much change. If you have a 10-letter change, it means that the patient might not be able to do the test very well. It's only a very small percentage. We have looked at it. It might be only 2% or 3%, but that 2% or 3% creating a huge amount of variability. Again, we take them out for that reason. Similarly, we also take out another few percent that suddenly between the third and fourth injection, the eyes seem to got worse a lot. Again, that got a patient that is very uncommon, but yet they might be different and for some reason they might be just not appropriate for anti-VEGF treatment. I think that we chose those small adjustments, taking out those patients. Although it only takes out a small percentage, it takes out a massive chunk of variability. Great. Yeah. Understood. Looking towards what your kind of bars of success are and how the trial is powered, maybe you can touch on that a little bit. Broadly speaking, if you could give any sort of rough timelines for a clinical program that's going to be roughly 900 patients in terms of how long you would expect for the trial to enroll and then time from initiation to trial readout. Yeah. I think of that. I think that all phase three trials, the most important success is the primary endpoint on safety and efficacy is met. I think it's as simple as that. The agency won't be BCVA, so it's very straightforward from that perspective. Also, because of that, we knew about what treatment naive patient would behave, what the variability is. We're actually using a pretty standard variability number that's similar to faricimab study. In fact, we believe that our variability will probably be smaller because of the optimization. In the Vabysmo study, they didn't really consider optimization. I think that was a kind of really standard 90% success and so on. The margin also differs. I think in some of the Vabysmo study, they're using four letters. Again, we have spoken to the agency. The agency think that four and a half letters is the gold standard now. Again, being four and a half letters, that we get able to reduce our study size a little bit comparing with previous study. Those are discussed with the agency as well as how did we optimize our study design to reducing our study size a little bit. In terms of recruitment, I think that we have seen that recruiting treatment naive patient was not difficult. It was very seemed to be everyone doing it even faster than they expected. Again, we believe that will be the case as well for us. In general, we talk about this roughly 12 months. It's kind of like a standard methodology, but we probably aim for around 10 months-12 months. In terms of the primary, and as you remember that phase three design, we have a loading phase. It is around 16 months from the last patient out. That will be roughly what we would expect on the first primary readout. Do not forget that we do progress to year two for safety data. When we are doing two concurrent phase three studies, we only need a certain number of patients to get through to year two, and then we can already file. The filing time is just shorter than the full last patient out per se. Great. Yeah. In the phase three, you're using the every three months to six months dosing. Based on the design, is this sort of the product label that you're shooting for? Maybe you can touch on what you might envision for that. Of course, duration is top of mind for everyone in the space. Just to get your idea on that would be good. Just generally speaking, where do you think you see CLS-AX fitting into the wet AMD treatment paradigm? Yeah, absolutely. The label will be three to six months. That is actually what we aim for. We have a brief discussion with the agency. Obviously, label discussion at this stage are probably inappropriate. That is what we aim for. Again, we saw Vabysmo and Eylea high dose label. We kind of understanding that if we went through our phase three the way that we went through, then we would get the three to six months label. As I mentioned earlier, we reinforced the message that CLS-AX can last at least three months in almost everyone. Therefore, that physician would like that flexibility that every three months would be good for everyone. Then physician can extend beyond six months if they wanted to. A label, say, longer than six months makes no sense. You can always do seven months, eight months if you wanted to. I think that flexibility allowing easier adoption. Great. Now looking beyond wet AMD, you guys briefly mentioned before your intentions to expand with geographic atrophy. Just wanted to see what kind of color you guys can provide regarding plans for these programs, considering they're still in the preclinical stage and how you see them fitting into your suprachoroidal portfolio. Yeah. I think first of all, CLS-AX is automatically the thing that we focus on in wet AMD purely because of the high commercial value and also most unmet need. Some people argue that the need for DR and DME is smaller, but I think that is debatable. We certainly will look into that. In particular, DR, diabetic retinopathy, that without the risk of endophthalmitis, without the risk of something floating around, that could be very compelling. That is something that we are certainly interested in. In terms of geographic atrophy, we really get excited that we had some approval a couple of years ago now. There are so many failures in geographic atrophy in the past and even for complement that there is a lot of uncertainty about how the complement will work or might not work. We decided looking into the space and say, well, that's great to have complement activation, but the efficacy is relatively poor despite a monthly injection. We think about two things. Number one thing is that while we certainly were super correlated, we can extend and easier to extend to three to six months like what we've done in wet AMD. It might be even more towards six months easily. That's certainly one thing that we can do. Second is say that, well, complement might be still used, and then you might get a second drug, then you might be able to get even better efficacy. Again, in wet AMD, it's unusual that anti-VEGF seems to be the only thing that worked best. Nothing improved the efficacy, including the recent failure. Even Vabysmo are so-called attacking two different areas, but they do not improve the efficacy. Again, look at glaucoma, look at oncology, look at virtually every other disease that I think a different pathway would improve efficacy. We picked two pathways. One is improving the choroidal perfusion, and one is improving or treating the protein inflammatory cell. The treating for perfusion has additional benefit that we understood that the cell might be a bit hypoxic, but improving the perfusion, the patient might actually see better, let alone slowing down the progression. Treating the protein inflammatory cell, treating the root cause of the complement in the first place because we have complement to slow down the progression. Those are kind of slightly different aspects of where we want to go. I think those are the two areas that we are interested to focus on. Indeed, that we find molecule that can actually do for us to formulate and put it into those space. Those are also important that not every drug can put into the space, and not everyone can put drug in the suprachoroidal space either. We have the expertise on the suprachoroidal device as well as the expertise of formulation this insoluble drug to get into the suprachoroidal space. We are actively pursuing that. We have animal data already, but we're going to share more as we go along, aiming hopefully that we get the IND opening soon. Okay. Great. Yeah. We definitely look forward to all the updates in that moving forward. Yeah, George, I guess maybe going back to you now, you had mentioned a couple of your partnerships a little earlier on in the call, but maybe if you just wanted to give a quick rundown on the progress that your partnerships have made in the recent year. Sure. I'll start with Aura Biosciences, which has this viral-like drug conjugate for treatment of choroidal melanoma. They're continuing to enroll their global phase three trial for choroidal melanoma, and they're doing very well. Very excited about the suprachoroidal space. It's made a big difference in their approach to treating choroidal melanoma. They're going to start with treating metastasis as well, choroidal metastasis. They've been very excited, been a very good partner of ours. Regenxbio, their product now is it's continuing in phase two. They've enrolled some additional cohorts in phase two in wet AMD. They announced earlier this year they plan to start a phase three trial with their RGX-314 gene therapy in diabetic retinopathy in conjunction with AbbVie. AbbVie and Regenxbio have partnered around RGX-314. We constantly are holding meetings with three-party meetings with Regenxbio, with AbbVie, and ourselves in order to help them train their trainers internally, AbbVie trainers, so they can go and expand their phase three trial. We are very excited about the fact that AbbVie is encouraged and wants to go into phase three for diabetic retinopathy using our SCS Microinjector to deliver RGX-314. They have had some really good success. Our Arctic Vision, our Pan-Asia partner for what we call XIPERE in the United States, but it is called Arcatis outside the United States, last year completed their phase three trial, and this year they have applied for approval in mainland China. That is exciting. The data for their phase three trial was very consistent with our phase three data for uveitic macular edema. It was more validation. What was interesting about the Arctic, we had to train their physicians during COVID. We couldn't go to China. They couldn't leave China. We had to train them remotely. We had a very successful ability to train remotely. It's really interesting, as Victor has pointed out, that the technique takes some practice, but it's actually fairly simple to learn. I think training the Arctic physicians remotely from Alpharetta, Georgia, to mainland China during COVID proved that it's something that's easy to learn, can be done remotely, doesn't take a lot of time to learn it, and their physicians applied it very successfully. Like I said, their data from their phase three trial was very similar to our phase three trials that we conducted. They are in the process of going through the regulatory approval process there in China. We're hopeful that they'll get that in the near future. BioCryst, I said, with their plasma kallikrein inhibitor, which is a very insoluble, water insoluble molecule for diabetic macular edema, they're hopeful to be in the clinic starting later this year. We've done a lot of formulation work with them and really kind of guided them through some of the ophthalmology hurdles that they need to understand as they start to conduct clinical trials, both here in the U.S. and then outside the U.S. as well. The partnerships have worked well for us. I'm always emphasizing to our team that we're going to be the best partner we can be. It's our job to really support those people that we decide to license our technology to, to make sure that it continues to work well. I mean, we've had over 15,000 suprachoroidal injections with our microinjector. It's got a very good, safe, and reliable track record for an in-office procedure to deliver drugs to the suprachoroidal space. Great. That's perfect. Yeah. As you said, just further validation of your technology platform. In the two minutes or so that we have remaining here, George, maybe you can just provide us with a little bit of a financial update in terms of cash runway. I know in your last earnings update, you had indicated potential intentions to partner the CLS-AX phase three program. Any further updates, although that was only a week or two ago? No, John, we continue to pursue all options to fund a phase three trial to make sure that the value that's been created by the company in CLS-AX continues to be magnified. It needs to be moved on. We think it's a phase three ready asset. We think it has a very good chance of being accepted and approved. With the kind of label that Victor has described, we think it could be a great commercial success. We are still actively pursuing multiple options to see that molecule move forward for wet AMD in the suprachoroidal space. I think at the end of last year in December, at the end of December, we had about $20 million in the bank. We think that provides us with sufficient resources to continue doing what we're doing through fourth quarter of this year. We're very active on the partnering side. We're very active on other options to see CLS-AX funded and get the phase three trial started later part of this year. Great. Perfect. George and Victor, thank you very much. I appreciate the time that you guys took to speak with us today and looking forward to all the updates coming up later in 2025. Thank you, John, for the time. Really appreciate it. Thank you for the time. Yep. Thank you. Yep. Thank you.