Great. Good afternoon, everybody. Thanks for joining us here at the Bank of America Healthcare Conference. I'm one of the senior mid-biotech analysts at the bank. I'm Tazeen Ahmad. Our next session is with Ocular Therapeutix. Sitting next to me is Executive Chairman, but President and CEO, Pravin U. Dugel. Dr. Dugel, thanks for making the trip over to Las Vegas. Tazeen, thank you. This is an honor to be here, and this has been a fantastic meeting. Thanks for including us. Of course. So, I'm hoping you can give a quick introduction about Ocular and what the platform of the company is. We can go then into specifics about upcoming catalysts, but I also wanted to get your view about what you liked about this company, because you do have experience in ophthalmology already, both as a practicing physician and helming a company that you sold not too long ago. And what was it about this particular company that you found appealing, given that you probably could have gone in many different directions? Yeah. So yeah, thanks for the question. So Ocular Therapeutix has been around for a while, and I knew about the technology some years ago. I was very impressed with the technology, but I really couldn't define what the company was. It really was a company that almost acted like a CRO, where the platform was being used to load drugs and so on and so forth. The next time I visited this was when some of my investor friends said, "Just take a look at this." And what I saw in Ocular was several things. First of all, was the data. When I dived into that, we had a collection of data that I looked at and said: Wow, this is really good data. There's very little doubt. We had a study in Australia that showed that with this drug, the TKI, AXPAXLI, as a monotherapy in treatment-naive patients, what we saw were results that one would expect to see with commercial-grade EYLEA or Lucentis. So I had no doubt that the drug worked. With the US study that we did, what I saw was that with a single injection, over 70% of patients were rescue-free after 10 months. So clearly there was durability, and based on that data, that translated into a regulatory pathway that was exactly as the FDA wanted, completely de-risked, and then an opportunity in the market size that was enormous. We talk about the market size just in wet AMD being what you would get with Lucentis plus EYLEA, and now Vabysmo and high-dose EYLEA, plus what Avastin would have been if it wasn't for Avastin. But that's only half the story because there's a 50% dropout rate. If you reduce the dropout rate by having a treatment regimen that's a little bit more sustainable, that market size is expansive, and that doesn't even include other retinal vascular diseases such as diabetic retinopathy, diabetic macular edema, retinal vein occlusion, et cetera. And it was completely undervalued, but that's why I'm here. Okay. So on the topic of wet AMD, there's entrenched therapies, obviously, that have been around for a long time. As a person who's treated many of these patients, what do you think, as a physician, you'd be looking for, from a product to impress you at this stage? So it's a great point. So when people look at our product and they say, "You know, what is the point of this?" They usually look at the sustainability issue, which is, which is very, very important, because, as I say, about 50% of the patients with an effective treatment simply cannot follow the regimen. A regimen is only going to be as effective as the patients that it can be treated, and over 50% drop out. They simply can't follow the regimen, although it's effective. The ability to reach that many more patients with a treatment that works, with a workflow that doesn't have to change at all for the ophthalmologist. We're not talking about gene therapy. We're not talking about something surgical. We're not talking about cell therapy. We're talking about doing exactly what retina specialists do on a daily basis. No change in workflow, but with a better, more efficient, more effective, more sustainable drug. And that in itself is a huge thing. But that's only half the story. The other half of the story that people rarely recognize is the outcome. I'm convinced that this will actually provide better chronic outcomes. And what I mean is this: there's great evidence now that the way that we're injecting patients in a pulsatile fashion, right? Is causing the retina in the back, in the fovea, to be thicker and thinner and thicker and thinner. It's like having a concussion over and over and over again. And even in those patients who actually are able to stay in the regimen, after five years, the vast majority get worse than baseline, and they get worse than baseline, not by rebleeding. Rebleeding is actually quite rare. They get worse than baseline by developing scarring, fibrosis, and atrophy. The reason for that is this pulsatile nature of thickening and thick, thinning and thickening and thick, thinning of the retina. If you're able to suppress in a much more efficient way that is constant, then you get rid of that pulsatile motion and the constant concussion. And we're convinced, based on the data, based on data that's out there, that the eventual outcome, the chronic outcome, will also be better. So two things: one is sustainability, and the other is better outcome. Okay. So on that point, can you just remind us of the efficacy data that's been shown to date for AXPAXLI and wet AMD? And then we can talk about the pivotal study design. Sure. So, so there are two main studies for wet AMD, and this is for wet AMD. One in Australia, and the significance of that is that that was the first time that I know of where a sustained delivery TKI was used as monotherapy in treatment-naive patients. So completely naked, there was nothing else. And what we showed were OCTs, and if you just look at the OCT and the vision as well, it would be no different than what I would expect for commercial-grade Lucentis or EYLEA. So clearly, there is an effect. The drug clearly works, and again, this is, this is the first time that I have seen it being used as monotherapy in treatment-naive patients, and that was the Australian study. We did another study in the U.S. that had a control arm, and the control arm was on-label EYLEA. What we're able to show there was that with AXPAXLI, with a single injection, at 10 months, over 70% of patients were rescue-free versus on-label EYLEA. So one study in Australia clearly showed an effect, and clearly showed the impact. The other study in the U.S. clearly showed durability. Now, the data, as you said, was impressive, but in the grand scheme of things, this not being a rare disease, it was a relatively small n of patients. So why not to risk mitigate, run a full phase II program before moving into pivotal? Yeah, so it's a great question. The fact of it is that if you look at the data, again, we call it a phase I/II study, but if you look at the data itself, I think the data is absolutely irrefutable in the sense that, of what I said. The drug works, the drug is durable, the drug suppresses VEGF, and there's historic evidence now for more than 30 years, that when you suppress VEGF, you're very effective in wet AMD, as well as a lot of retinal vascular diseases. It made complete sense to move to a pivotal study to get this drug out as quickly as possible. Okay. So with that in mind, can you walk us through... Oh, before we do that, given that it's an insert, how frequently do you think patients will need to visit their physicians? You talked about, you know, physicians not having an interruption in workflow, but how does that also potentially impact, looking further ahead, how these physicians are compensated? Because, you know, they're usually compensated per injection in the US, and how is that gonna work with this product, and does that have an effect on attractiveness? Yeah, it's a great question, and in fact, it's quite the opposite. I think it'll be extremely attractive, and here's the reason. Having practiced for over 30 years, I mean, you're right. We are reimbursed per injection. We're but we're also seeing patients that only half the patients, as I said, that actually need the treatment, and those patients aren't happy. It's not easy taking it for a physician. If you ask a physician, what is it like to give an injection? It's like, you know, it's 2 seconds, and I get that. For the patient, it's completely different. Patient has to come in, find parking in my office, be pre-checked, wait there to get dilated, you know, get an OCT, again, wait to get IOP checks, get consented for an injection, and then get an injection, and then wait, and then leave. It's a whole day, right? The impact of this is that physicians will actually see as many patients as they want, do as many injections as they want, except that it'll be with a better drug, and the number of patients that are actually sustained with this will be far greater. If that dropout rate goes from 50% and decreases even by 5% or 10%, that's an expansive market. So these patients aren't gonna come back every four weeks or every eight weeks. They'll come back every six months, and they'll be much, much happier, but there'll be many more patients coming back. Okay. So do you think it's gonna be about every six months that a person has to come in? The ideal treatment regimen for a retina specialist is gonna be six months, okay? If you ask anybody, they'll say, "I wanna see my chronic patients every six months. Mm-hmm. Not three years, not four months, but six months." To have a drug that's gonna allow you to see patients every six months, that drug has to last at least nine to 10 months. Patients can get sick, doctors can be on vacation, et cetera, et cetera. You want a safety net, and this drug lasts exactly the right amount of time. It's tunable, and it's nine to 10 months. Okay, so this is a naive question I'm gonna ask, but let's say the patient has an insert, and then he or she comes to see you at the six month timeframe. The insert is biodegradable, but it's not fully degraded at the time that the patient comes to see you. Then what happens? You remove the remainder of the insert and put a new one in, or do you ask them to make an appointment for another time? Yeah. So in all fairness, it's a great question. So in all fairness, we do not--we have not announced a repeat dosing study as yet, and so I can't speak to- Okay ... the data- Mm-hmm. Because we don't, we don't have that, to be perfectly honest. But we've got many models. We've got animal studies and so on and so forth that have been done. There's no reason to remove the implant at all. There's none. It's the safety profile is outstanding. We see no reason why another implant can just be given or injection can be given at the same time. This is one injection and one filament, one implant. That's it. There's no stacking issue because it's entirely biodegradable. The PK/PD are matched, so when the drug is gone, the hydrogel is gone. There's no shell that's remaining. Okay. There's no stacking issue whatsoever. Okay. I was always wondering about that, so I thought I'd ask you. So then now talk to us about the study design, 'cause it is a, a well-designed study, but one that I think folks would appreciate getting a little bit of color on, on why it makes sense to have chosen some of the parameters that, that the company did. Yeah. So I'll go back to the FDA. What the FDA has said, with no doubt whatsoever, is that they are not going to accept studies by sponsors that compare their drug to a label that's never used, and the EYLEA and Lucentis labels are never used, right? There's nobody on the planet that follows that label. Everybody does Treat and Extend. The FDA has also said very clearly that they don't consider sham injections to be properly masked, and it's simply not ethical to inject saline. So given that, the FDA has issued guidelines very clearly last year that says, "Okay, if you wanna do a non-inferiority study, this is the design we will accept. If you wanna do a superiority study, this is the design we'll accept." So we followed their guidelines to a T to design a superiority study. In fact, that's exactly what they designed. It's validated by a SPA, and our SPA amendment has been validated by the incoming, the same FDA agency right now. We are very, very confident that even up to date right now, that the SPA that we have is absolutely aligned with the FDA's current thinking. The FDA will allow people to do studies as long as it's not illegal or unethical. They'll not stop you from doing studies, but they'll tell you, "You're doing it at risk." If you ask them, "Can this be pivotal?" They'll say, "Yeah, at risk, under review." We try to avoid that. We've taken a track, we've taken a path from a regulatory point of view that is about as de-risked as possible with a SPA, so we're very, very confident, even up to the moment, that the SPA aligns with their current thinking. Okay. So understanding that, how are patients going to be dosed in the study? And, should we expect you to give updates as the study is enrolling? Yeah. So the study design is such that patients that are targeted who are 20/80 or better, so patients with good vision. And I mention that because we have no competition with any other trials. Most trials look for patients that have bad vision because of—they don't want a ceiling effect. But the vast majority of patients that come in de novo with wet AMD don't have 20/200 or 20/400 vision. They've got actually very good vision, and they'll say, "You know, I don't see the door being straight. I see a little bit of crookedness, or I see a little spot," and their vision may be 20/30, 20/20, 20/50, whatever it is. There is no study for them, right? There's no study for them, so there's no competition that we have in recruiting the majority of patients that retina specialists see de novo. So those patients are then enrolled. They're given two loading doses of EYLEA, and if their vision improves by 10 letters or more or gets to 20/20, they're then randomized to receive a single injection of EYLEA, which is a control, versus a single injection of AXPAXLI, which is the treatment arm. And then those patients are followed, and the primary endpoint is at 9 months. And the primary endpoint is the proportion of patients who maintain vision. And we're very, very confident that at that point, we will be in a position to have an excellent result based on this trial design, as well as based on the fact that we've chosen patients that we believe are enhanced for this trial as well. Okay, thanks for that. And then, you know, using aflibercept, why not use one of these newer agents that purport to be longer acting as your control to potentially be more impressive on the outcome? Yeah. So, you know, I don't know, quite honestly, Tazeen, there's a big difference in terms of the longevity. Maybe there's a slight difference, an incremental difference between the Vabysmos and the HD EYLEAs and so on and so forth. Mm-hmm. But frankly, when these kind of trials are designed and contemplated, and it takes quite a long time to actually have it come to fruition after many discussions with the FDA. I don't know that that was actually... I wasn't here in this company, but I don't know that that was actually even available at that point. Okay, that makes sense. How are you thinking about the pace of enrollment? Because that is a question that comes up frequently. Yeah, that's a great question. And when I did my due diligence on this company, it was clear to me that there was one challenge, and that one challenge is communication. Communication to my peer, to the PIs, in terms of why this trial was designed, it was the way it was done, and what it means. And what it means is that we're waiting for the patient once to lose a net of at most five letters of vision, because, remember, they've got to gain at least 10. So from baseline, at most five letters of vision. It's really what we do on, you know, when we do Treat and Extend, right? But we do it repeatedly. Here, we're doing it once, and if the patient is rescued, the patient is on-label EYLEA for the rest of the clinical trial. Once we're able to communicate that to my colleagues, then really, you know, they you know light pops up, and they go, "Wow, that actually makes a lot of sense." This is about as clean a study as you can possibly get. The best you know, the best service you can do to patients, for patients or to the community is to have an answer. The worst thing that can happen is when you have a trial, and it's ambiguous, and you're not really sure what it means. Does it work? Does it not work? You've got to do all these retrospective analyses and so on and so forth. None of that will happen here. This is about as clean as you can get. We'll have a binary answer in a relatively short period of time with a very simple, very clear trial design. Assuming that, you know, your colleagues in this space will listen to the pitch that you just made and recommend it to their patients, I'm curious as to what you think the patient's response will be. Maybe for the layperson, explain what does a five-letter loss in vision mean, and, you know, how do you think a patient would feel about potentially having to lose those level, that level of vision, fully knowing, though, that they can be rescued? Yeah. So, look, I have a family history of macular degeneration, and it's fair to ask me: would you allow your, your mother to lose 15 letters of vision? And the answer is absolutely not, but my mother's seen once every six months. These patients are seen at least every four weeks, and these are good seeing patients. Remember I said 20/20 or better. If they're gonna lose a net of five letters of vision- Mm-hmm. probably most of them will be asymptomatic if they're rescued. Because- Do they notice that they've lost that level of vision? Some might, but many won't. Mm-hmm. Again, they're seen every four weeks, and if there's any question whatsoever, the physician can go ahead and see the patient every day if they want, and it's limitless. We've got two world-renowned medical monitors that look after every single patient. These patients are watched more carefully than really any patient, probably in the history of clinical trials. This is not the typical clinical patient. This is a clinical trial patient that is monitored extremely carefully. What is the importance of needing to have this as part of the trial design? What makes this a trial design that's gonna be better than any other trial design? Yeah. So this is after... This, this is from the FDA, and I don't want to speak for the FDA, but what the FDA has clearly said is to say, "Look, if we're gonna go ahead and potentially change the standard of care, we need to have a head-to-head comparison."... It can't be a comparison against a phantom, against a, against a, as I said, a label that- Mm-hmm Nobody uses it. It's got to be a head-to-head comparison because it's that important, it's that impactful, and that's exactly what this is. From their point of view, it's not that different than doing what we do every day, which is Treat and Extend. It's an absolute head-to-head Treat and Extend comparison, but once. We do it often with and over and over again with Treat and Extend. Here, it's just once. So with that in mind, what is the ideal profile of patient that you would like to enroll in this study? It would be a patient, as I said, with good vision, 28/80 or better, that's able to improve... And again, this is a, the super-enhanced- Mm-hmm - patient that's able to improve at least 10 letters, if not more, vision. Okay. And on the metrics of BCVA and, you know, CST, what are you gonna be looking for in improvements? So from a regulatory point of view, the OCTs and so forth are not part of the regulatory equation. It's very simple. It's the proportion of patients who maintain vision, and that's really what it is. Mm-hmm. And this trial is very well-powered to show that. So it's all about BCVA. It's all about the proportion of patients who maintain vision. What is statistically significant? In our modeling, with a single injection of EYLEA, the proportion of patients who will likely maintain vision at nine months is gonna be about 20%. We know from our studies in the U.S. that with AXPAXLI, it's gonna be north of 70%, so that's a 50% delta. What we know we need to be statistically significant is a 15% delta. Mm-hmm. So this is really very well-powered. On top of that, what our SPA states is that every patient who is rescued, whether it's on protocol or off protocol, be counted as a failure and be counted in the primary analysis, and that's really important. These patients aren't censored, but they're counted as failures in the primary analysis, and presumably, there'll be many more of those in the EYLEA arm than in the AXPAXLI arm, so that also is in our favor. Okay. Now, when the data comes out, and presumably the study will be positive, and you apply for approval, and it gets approved, if you are a physician being pitched this product, you talked about, you know, the patients that, you know, for whatever reason, need to be on something other than Lucentis or EYLEA or Vabysmo, but what about patients that are doing okay on those products? Would you also think about pitching this drug to them? That's a great question. So, and I'll be a little facetious, which is, physicians will know how to use this, like, today. They'll want this today. And there's not a single drug that I can think of in my field that's used on label. And if you look at, for instance, well, I mean, Avastin doesn't even have a label. And if you look at, you know, treat and extend, there's not a single drug that has treat and extend on their label. Physicians will know exactly what to do with this. I mean, we're doing this trial for regulatory reasons. Mm-hmm. Yes, I believe everybody will be switching. Why would you not want to maintain somebody by having them come in every six months as opposed to every four weeks or six weeks? I mean, it and potentially, as I said earlier on, have better chronic results. Physicians understand that. Retina folks get that immediately, so that switch won't be hard. Again, there's no change in the workflow. You just have happier, better patients with better outcomes, and a much increased patient population that has a sustainable treatment. I'm curious about what your thoughts are on the evolution of treatments for wet AMD, not only for inserts, but, you know, there are gene therapy companies that are looking at wet AMD right now, for example. You know, as a physician who's had experience with treating so many patients, what do you think are the positives and negatives of pursuing that type of treatment? You mean gene therapy? Mm-hmm. I mean, look, I think it's fantastic that there are all kinds of options that are being explored, but quite honestly, you know, what we're doing is adaptable tomorrow. Nothing needs to change, as I keep on emphasizing over and over again. With a lot of these other things like gene therapy, cell therapy, and so on and so forth, we're talking about surgical approaches. We're talking about major surgery. We're, you know, talking about the challenge of inflammation, et cetera. You know, I think there's potential there, but there are many, many challenges, and I think that that's those are things that still have to be overcome with a lot of time. Okay. So maybe let's move on to NPDR. Yeah. Your company recently provided an update of, like, data for the real, you know, first time for investors to take a look at. It might have been misinterpreted about what it is that it was trying to be shown versus what is the takeaway. So could you just refresh us on what was shown and what that means for the, for the program? Yeah, thanks. And thanks for the opportunity to explain. So it's probably best described historically as to what happened. This is a new team that has come in. We said that we're gonna go silent and do a deep dive into the company and see what the company had and then come out with a plan. When we looked there, we saw that there were patients in a very, very small diabetic retinopathy study. Literally, 13 patients received the drug, and the study was designed entirely for safety. It was pretty much all comers, entirely for safety. We looked at the study in a masked fashion. There were no safety issues, and the protocol allowed for us to unmask the trial if the primary endpoint had been achieved, and it had. There were no safety issues, period. And my decision at that time, because this was not a study that my team would ever design, which is, you know, 13 patients, nobody designs a 13-patient study, was... And by the way, the other thing I was gonna say is that, the previous administration had promised already to go ahead and present this data in a major congress in the summer, and that was already in our filings. So as a public company, that's not something we could take back.... So my decision at that time was to rip the Band-Aid off immediately, go ahead and unmask the study, because there was nothing more we're going to learn. And my expectation in a all-comers, 13-patient study was that it was going to be all over the place. This is the one disease that is most systemically influenced and has the most variables, and we had 13 patients. And to my great surprise, in a positive way, what we found was that every single metric, every single metric was aligned in favor of the drug, which is remarkable. That doesn't happen accidentally. We actually were extremely pleased that that was the case in this, in a very, very small study. And, you know, I think the Street, you know, totally missed that point, compared us to Panorama, which is an over 400-patient study designed specifically to show, efficacy. That was not the study, and, I don't know how that's comparable. I mean, two patients this or that way changes the percentage entirely. And when people look at that a little bit more closely and come back to us, they've come back and said, "Wow, your data is actually pretty good." And what I've committed to is to say, "Look, we'll show you everything. We're not going to hide anything. We'll show you everything." And on June 13th, we're going to have an investor day. We'll show you all the metrics that we have, and I'm convinced that you'll be convinced that there's no doubt whatsoever that this drug is present and active at week 40 and beyond. And although the study wasn't designed to show that, there'll be irrefutable evidence that'll be presented that that is the case. This drug is active, and this drug is effective at week 40 and beyond. And that makes us even more excited than ever about entering diabetic retinopathy. And we will do what we said, which is to meet with the FDA, have a discussion with them, and then come out with a plan on how we develop diabetic retinopathy. This drug will be effective in diabetic retinopathy. This drug will show exactly what it's supposed to show in a well-designed, well-powered study. And again, remember, this is 13 patients. The take-home message: despite 13 patients, everything is aligned in favor of the drug. What particularly impressed you about the data? About the- About the 13 patients. About the 13 patients? Just the fact that they were aligned. I mean, look, you know, you don't have everything aligned in the same direction, and you don't have, you know, almost half the patients improve in this kind of a disease, by accident, right? Again, when we show you the metrics, the other metrics that we have, we're not going to shy away from it. We'd love to show it to you because we're that encouraged by diabetic retinopathy. There's a huge potential out there. There is no drug for these patients. I mean, none. There's not a single human being on this earth who is taking EYLEA or Lucentis per label with non-proliferative diabetic retinopathy, not a single human being. It does patients no good to have a label that nobody can use, and nobody is using Lucentis or EYLEA for non-proliferative diabetic retinopathy, and these patients are going to go blind. And my colleagues call me and say, "If I had this drug today, I could look at my patients and say, 'I can save you from going blind if you're willing to come in to see me with the same frequency that you see your dentist for tooth cleaning,' which is every six months," and that's sustainable. Okay, that's a good explanation for your level of excitement. What are patients currently receiving as standard of care right now for DR? For non-proliferative diabetic retinopathy, the answer is nothing. Right. So do you think that the bar for this is decently low, not just for regulatory purposes, but for what doctors would see as a reason to use it? Could it simply be that it's a labeled drug that would get approved for this indication? Yeah, from a regulatory point of view, look, that's a discussion to be had with the FDA. Mm-hmm. I can't comment on that. Sure. We haven't had that yet. From a physician point of view, there is no bar because- Right. These patients have nothing. You know, just so you know, look, I did a study when I was in practice, looking at the Medicare database, looking at how many doctor days patients with diabetic eye disease have. Look at the Medicare database. These are sick patients. The number of doctor days without eye appointments was 28. These are young patients in the workforce that spend a month, a month of their year in doctor's offices, and on top of that, we're asking them to come in when they have no symptoms, every four to six weeks, to get an injection in the eye? It's not going to happen. But we know it can save their vision, but they will come in every six months. Okay. So as you think about excitement level for wet AMD and upcoming updates for diabetic retinopathy, what do you think the Street might be missing about the story, just based on where the valuation of the company is right now? Yeah, you know, I think it's entirely based on the misunderstanding of diabetic retinopathy. I mean, at some point, I think people are coming around saying, "Wow, you know, especially with recent developments, your data is really very good." And what you will see on June thirteenth is more evidence of that. But look, it's very, very simple and very clear. This is a retina company now, right? This company is focused on one thing and one thing only, which is the recruitment of SOL-1. We will recruit SOL-1. We will do it effectively, we will do it efficiently, and we have every reason to believe that it'll be positive, and then this will go ahead and open up the doors for all the other retinal vascular diseases. Okay. So with that, we're just about out of time. So, I want to say thank you for joining us here on the podium, as well as making the trip to Vegas. And thanks, everybody in the room, for listening to the presentation. I hope everyone has a great rest of the session, and thanks again. Thank you very much, and thanks, everybody, for staying.