Welcome to Day One of the Citizens Life Sciences Conference. My name is Jon Wolleben, Senior Analyst here, and we're pleased to have Clearside Biomedical represented by CMO Victor Chong and CFO Charlie Deignan. Thanks for joining us, guys. Thank you. Great to be here. For those who may not be as familiar with the story, can you talk to us about what you're working on at Clearside? Yeah, I'll just give a quick overview. We're focused on delivering drugs to the back of the eye through the suprachoroidal space. We're the proven leader with this approach and have successfully navigated the drug and device regulatory pathway with the FDA. Our SCS Microinjector continues to provide safe and reliable delivery. We have now over 15,000 injections. From a strategy approach, we're focused on our internal pipeline and supporting our external collaborators. We have a small molecule pipeline. Victor will go into more detail on that, I'm sure, in this chat. CLS-AX is our phase III ready asset in wet AMD, and we have preclinical candidates for geographic atrophy. We've demonstrated flexibility of our suprachoroidal technology with established partners using our SCS Microinjector, and we're real pleased with the progress our partners are making. B&L is commercializing Zupelia, our first product for uveitic macular edema. AbbVie REGENX is going into phase III in diabetic retinopathy with gene therapy. Aura is in phase III for choroidal melanoma, and BioCrystal is getting ready to get into clinic for DME. So that's kind of a quick overview. Can we talk a little bit about the suprachoroidal space, just big picture-wise? What are the potential advantages? Any drawbacks? We still hear some pushback from people not understanding why you do this, and then also that physicians do not like it, but it is kind of newer versus intravitreal injections, which everybody does all day, every day. Can you talk a little bit about the potential benefits and what you need to do to get more traction? As Charlie mentioned, there have been thousands of injections done, but there are thousands of injections done daily for intravitreal. Can you talk a little bit about that dynamic? Yeah, so I think that I was old enough to remember that doing intravitreal injection is a very big deal. I think that was the time that was the case, and obviously now it's not a big deal. I think the same thing with suprachoroidal, that it's slightly different. Just for those who are not familiar with intravitreal, you can imagine the eyeball, like a tennis ball, you go all the way in. You shut the whole thing in. Suprachoroidal is injecting that into the coat of the tennis ball or the coat of the eye. You do not go all the way in. By not going all the way in, one advantage is that going all the way in, that even you're injecting a small amount of bugs into the eye, that bugs will allow to grow because you don't expect bugs to be in the middle of the eye. In the coat of the eye, that is actually where the tissue is, and then under the normal surveillance, just like that, infection can easily get killed. One of the key advantages is actually less invasive because we didn't go all the way in, then without that, the risk of what we call endophthalmitis, which is a terrible thing, can happen to patients. I think those are two important benefits over the procedure that we're talking about, intravitreal that you've done millions of times already. I think it's just really a culture change. Just like before, intravitreal, it's an everyday thing. It's a big deal. Then suprachoroidal is actually not a big deal at all. It's a safer procedure. It's less invasive, easier to a certain extent. It's just something that if someone would say that I'm a surgeon, I would say that if someone says it's difficult, either they are not a very good surgeon or that they have never done it before. Anyone who's never done a procedure before obviously could find it challenging. I also think it's interesting that each one of your partnerships Charlie mentioned have looked at the more traditional approach, whether it's subretinal for gene therapy and suprachoroidal or with Aura's case, intravitreal versus suprachoroidal, have opted to go forward with suprachoroidal. It is showing that it has benefits that are manifesting in the clinical data. Right. So that's an additional benefit that intravitreal, the drug goes everywhere in a way, in the sense that you can induce more inflammation. Going to suprachoroidal space, that is more contained. Certainly for our partner in choroidal melanoma, they have tried intravitreal, and then it doesn't really be able to focus on the tumor. Gene therapy has a similar problem that either you do very invasive to do subretinal surgery, but intravitreal gene therapy also has some degree of inflammation. I think that's kind of like additional advantages. Again, for our internal pipeline, we had a proven FDA-approved product, we now have a phase III ready molecule. Those are an additional benefit over the intravitreal approach. Yeah, let's focus on CLS-AX. Tell us about that candidate and how it works, why is it different than what's out there, and how it fits into this broader class of drugs that are all coming in the late stage development. Yeah. I think that we are focusing on the ocular anti-VEGF area. I think one you mentioned about AMD in specific is one of the biggest parts of the market, more close to $10 billion. Currently, all the treatment is a biologic, and a biologic that gets into the intravitreal space, and then they kind of last potentially up to four months. I think they were always advertised that. Most physicians, including myself, would say that we're lucky to even get to three months. That is something that we are the center of care. Two of them have only been approved quite recently. This is not really something that no reason to approve for. Since some of them do extremely well, multibillion within one or two years. What we would like to do is to extend that from, say, one to four months to more three to six months. I think that sounds like a small incremental improvement, but just like that when people think about moving from two months to one to four months, what was the big deal, but it always seems to be quite a big deal. We think that is where the importance is. What we did differently is instead of using a biologic, we're using a TKI, basically blocking the slightly different further intracellular changes. They've been effective and shown that also in the oncology world as well. We're kind of understanding that the biology makes sense. They are a competitor. Two other companies are using a slightly different technology. They're using intravitreal. They need to put it into an implant before the drug can release. Obviously, because it's something that you need to get into inside the eye, that makes it difficult, and they can't kind of keep on putting more things inside the eye. They decided to go for the every six months strategy. A fantastic thing from our point of view is that we have all our biologic that we can just redosing on our own drug in a different time frame and different period. We do know that patients need different variability. We know that some patients will need the drug every four weeks. Some patients can go to 12 weeks and occasionally 16 weeks with the current standard of care. We chose the three to six months, every 12 weeks to every 24 weeks. I think that is a kind of schedule that most physicians also want to see the patient. It is really a perfect balance from our point of view that, yes, elderly patients may not want to come to the clinic every six weeks or so, but every three months is manageable. We believe that our drug can get most patients to the five to six-months. Can you talk a little bit about your phase II data that you reported last year? What did you show? What makes you excited? Yeah, so in our phase II, we first tried to do a proof of principle on those who have the very high need, almost the patient that more toward the four-weekly patient. On average, those patients had 10 injections over the preceding 12 months. Those are people that who need injection maybe every four to five weeks. Even in that population, we managed two-thirds or so to get to six months without any additional therapy. Again, we maintained the vision, maintained the anatomy, and I think that's what we expected a drug would do. I think most importantly for our phase II is we actually redosed with our own drug already. We tested that what we are going to redose with our own drug. I think that's very critically important that we do moving to phase III when you have never redosed your own drug, you don't know what happened when you redosed your own drug. We knew what happened, and we do learn from that, and then to design our phase III, our competitor that in their phase II or phase I, they have never even redosed the drug. They go straight to phase III. What did you see when you redosed, and then what would be the theoretical risk with redosing for others? Yeah, I think the redosing that we have found in our study, that if you are redosing a bit late, in other words, physicians always comment on the fact that some of the so-called, what we use are so-called redosing or rescue criteria, are people that we don't use in clinical practice. I think that we learned that when you're actually getting to that stage that you actually need a so-called rescue, and then you redose at that time, you might be taking a little bit longer for it to recover. It was just like that in a patient who had a problem, if you leave it too late, it might be actually more difficult to do so. We are adjusting on our phase III that we would be actually redosing a little bit earlier. We believe that would be the right things to do. Our competitors not necessarily have that opportunity to do that. It's an interesting dynamic because we hear from some of the louder leading KOLs that the criteria of these trials are criminal, that this isn't how we treat anyway. We treat way earlier than we do in clinical trials, and you guys are gaming the system. You're showing what you're showing in the trial, but then in the real world, you'd be treating earlier anyway, correct? Correct. I think that was what I think to me as a clinical trial specialist, I would say that phase II is to learn how to do your phase III properly. I think that from our point of view, we learn how our phase III will be able to deal with risk. Again, we are moving our phase III closer to the clinical practice. I think that a lot of KOL have told us about exactly what you just said. They say that we are going to be a responsible company to actually do something closer to what the physician wants to do in clinical practice. We believe that our phase III data will provide them even more information for physicians to use our drug in the future. When we look back at your phase II data and data for the field and for what's out there today, there's a lot of moving parts between rescue criteria, patient population, dosing. How do we go through all those nuances and try and figure out making heads or tails of what's going on? Yeah, so I think that from my perspective, that comparing phase II with different populations is always a little bit tricky. I think that we can think about that the simple variable or number one variable is that, well, there are three companies with two different TKIs. That's the first thing that you can talk about. Ocular, Pharvaris, and us are using axitinib as we do, the same TKI. Again, we believe that axitinib is a better TKI because the IC50 is lower. I think that is more effective in kind of a more powerful TKI from that perspective. The question then would be whether it's intravitreal or whether it's suprachoroidal. I think we already mentioned that intravitreal is implants, something floating inside your eye, slightly bigger injection needle, and you have other risks associated with intravitreal implant. Suprachoroidal does not have that problem. Also, as I mentioned earlier, we can redose. I think that if you do look at the relative data, the data look quite similar despite the populations being slightly different. Again, from our point of view, we have the most active patient, so-called the worst patient, and we also have the most lenient criteria for redosing. In a way, if you really want to say that we are the easiest to need to redose and we also have the most active patient, even if there are similar results, then basically we are better. Again, as I say, comparing core trials is always difficult, but at least we are in the same ballpark. I think the community sometimes misunderstood that when we want to do three to six months, they think that we don't last as long as our competitor because they go for six months. In fact, that was actually not true. In fact, that we probably last as long, if not even longer. However, that we chose to have flexibility because physician life has stability. I think that is really why that we do that. We can do it. Other people cannot have that flexibility. We actually heard recently from a physician that they think that Vabysmo is doing so well because they have the every four-week option and that payers are restricting high-dose Eylea for those more frequent patients. Do you think that's a real paradigm? Do you think that that matters? Also, are you losing anything on that early end too, earlier than three months? How do you think about how frequent is too frequent? Yeah. I think absolutely true. I think that I heard that certainly the same thing. Vabysmo did really well because it went to four months. Confirming that was true that Eylea high dose just went for the four-weekly label, do another study. Again, from our perspective, if I were Roche, I probably would like to do a four-weekly study as well to give us a one to six months label. Although we do not think we need it, I think that we are very confident even on the very kind of aggressive patient, I am sorry, aggressive is not the right word, heavily. Active. Every active patient. We can still manage three months pretty for everyone. I think that might be something that, and also that to moving to a monthly dosing with no data whatsoever, I think that would be a risky approach. I think we could be something that when we've done our three- to six-month dosing, and again, if the time might come that a follow-up study could be a monthly dosing to our drug. We believe that monthly dosing are completely doable with our drug. We just never have the data. Victor, you mentioned the big thing in phase II is learning for phase III. What are some of the learnings? How are you designing your phase III to maximize their potential? Yeah, so I think the one thing we already mentioned about that we might want to redose a little bit earlier. That is matching what the physician wants, that to be more real-world data. I think that's good for both sides, one of the learning as well as what the physician wants us to do. The second thing that we learned is that we do notice that some patients had a big visual acuity change with no anatomy change at all. Again, even the physician in the trial actually does not think that was wet AMD related. Those are still data. We were using looking at those data that can really confuse in a study. We talked to a lot of KOL, a lot of discussion about those things. In particular, on the non-inferiority study design, variability could cause a problem from a statistical standpoint. I think that we talked to the agency, and the agency is quite happy that we justify that we screen some of the patients out who are likely to have high variability. For instance, that patient got poor vision, patient got fair thick retina, patient who have 10 lesser swing with no reason for that. We actually screened them all out before randomization. The agency was pleased with the way that we explained why we wanted to do that, and they are completely accepting that way of taking it forward. How did you look at that in phase II? Because remind me, I think you did one loading dose of Eylea before, but you had a track record or you had records of people's fluctuations historically. Is that how you monitored that group? Sorry, I'm not quite on. You said in phase II, some patients had flexibility in the visual acuity without changes in the retina, but you did not have the same loading dose schedule that you have in phase III. How are you kind of? Yeah, so I think that you are right that this is changing, that what we learned, that patients have big variability. They did it so early. They didn't do what they did in the study. Yeah. I think that is a translation of what that was the case that we, I think that's very helpful to the logic, might need a step of adjustment. Got it. Okay. Got it. Okay. It's something that we noticed that some patients can do that. In fact, talking to KOL, in clinic, they don't even use vision to make any judgment call, partly because patients can do that. I think that we pick a time point that we don't expect a vision change. If they have vision change, then we take them out. Can you talk about that screening period and the loading doses and when you're ruling them out? Yeah, so what we have decided to do is that when you got a fair thick retina or fair poor vision, you would be rule out from the very beginning. Between the third and the fourth injection, in Eylea standard treatment, you do monthly injection or three injection, and then you then give eight weeks gap between that to the fourth injection. During that third to four weeks in our historic data, and fortunately in the academic part that we have looked at 2,000 eyes, and during that period, you should not have any visual acuity change, certainly not meaningfully. Any patient that who have more than 10 letter change, more letter than gain or loss, because some people say that, what happened if they increase 10 letter? The reality is actually increasing 10 letter during those three to four weeks that they should not true. They maybe just that day may have done something wrong as well. We believe that in a time point that we do not expect a visual acuity change, but they did have a visual acuity change, then we take them out. We are looking at our record that we are taking out only about 2%-3%, but that 2%-3% could be affecting the non-inferiority margin. Okay. That was my next question. Talk about your personalized treatment interval and how you guys are determining when someone needs to be redosed in phase III. Yeah, so that's another aspect that we have been able to incorporate, the more advanced imaging technology that we have now today. So far, when we're looking at anatomy, we just look at the whole overall thickness. Again, as a condition that we know, when you got fluid inside the retina, we call intraretinal fluid. The dose that fluid actually under the retina, we call subretinal fluid. They have different impact. To cut a long story short, intraretinal fluid is more serious because it's inside the retina. We would decide that using the modern technology, that if you got intraretinal fluid increase, then you will be redosed, which is actually much closer to what I do and a lot of KOL do in the clinical practice. Do you think that squeezes the effect size you saw in phase II then having a more stringent criteria? I think that is really why we moved to a general population. When we are looking at the post very active patient, still a lot of injection are still active, that in the real world are probably 5%-10% of the population. Even that 5-10% of the population, we're still managing so well. I think that by moving to a general population, we believe that we can achieve a very similar percentage. Again, obviously that is something that we need to. That's the trade-off. Based on. I see. Can you talk, you guys have been mentioning this more as of late, the difference between redosing and rescue? Yeah. Yeah, so rescue means that you use another drug. The agency really hated it because the whole idea is that if you're doing a new drug, it's your drug. If you really do rescue, as in taking it from another drug, then you can potentially not able to get approval. In fact, the agency have told us that if you have rescue requirement close to the primary endpoint, even a small percentage can lead to non-approval. That is why that we also chose the adjusting the frequency model, which the two drug that was recently approved are also using adjusting the frequency. They have virtually no rescue in their phase III. We believe that by adjusting the frequency and therefore that we will not expect any rescue and therefore that we are more secure to get approval. Giving patients what they need based on the biology. Do you have any idea how many patients you need to add to every six months regimen to get every six months included in a label? Is that written out? It's never been written out because I think that when you're looking at for resume approval, they got four months, they only got about 40-something percent. So not even half from that. I think it's something that we don't know. I think on label discussion, agency never finally talk about label discussion. Now, I could argue that if you turn out to be 1%, then you probably. Same question you want to ask either? Right. Right. On the other hand, I think based on what we see, we will still expect 50% or more will get to six months. Which is more than what they've shown and got. Correct. Got it. Maybe in the last minute, Charlie, if we could touch on cash where you guys are today, how are you thinking about the phase III starts and costs and how do you get from here to phase III data? We report earnings next week. I could tell you our cash at the end of last year was about $20 million. That allows us to have the resources to start up our phase III or plan for the phase III and keep our base company going through into Q4 of this year. We're out looking to fund the phase IIIs. Typically, based on Victor's design and the size, we're projecting around $55 million-$60 million per study. You're thinking identical rinse and repeat trials? Yes. Running in parallel? Slightly staggered. We're trying to get them as close together. Just so you'd have to have unique sites or how does that work? Just one site can't run both studies. No, correct. You could be at the same country, but there will be some country differences. Then within, say, the U.S., you will have some site doing, say, study A, study B, but they will not be doing both. Got it. Okay. All right. It is a very interesting time for the space. I think you guys have a very compelling asset and story. We are looking forward to seeing the phase III kicks off. Thanks again for coming and joining us today. Thanks for having us. Thank you very much. Thanks, everybody.