Tuesday, August 29, 2017 5:57:31 PM
Wet AMD call Ohrp featured prominently
Sam Slutsky, Research Analyst, LifeSci Capital
Dr. Peter Kaiser, Chaney Family Endowed Chair for Ophthalmology and Professor of Ophthalmology, Cleveland Clinic Lerner College of Medicine
Dr. David Brown, Ophthalmologist and Ophthalmic Surgeon, Retina Consultants of Houston
P R E S E N T A T I O N
Operator:
Good day and welcome to the LifeSci Capital KOL Series on the topic of wet AMD conference call. Today’s conference is being recorded. At this time I would like to turn the conference over to Mr. Sam Slutsky. Please go ahead, sir.
Sam Slutsky:
Thank you. Good morning everyone and thank you for dialing in. I’m Sam Slutsky, one of the research analysts at LifeSci Capital. On today’s call we’ll be discussing the current treatment landscape for wet AMD, how it may change with the recent data from Novartis’s RTH258, and promising drugs in development for the disease.
We’re lucky to have with us today two distinguished experts in the field. They are Dr. Peter Kaiser and Dr. David Brown. Dr. Kaiser is the Chaney Family Endowed Chair for Ophthalmology Research and a Professor of Ophthalmology at the Cleveland Clinic Lerner College in Medicine. Dr. Brown is a practicing ophthalmologist and ophthalmic surgeon at Retina Consultants of Houston. He’s a thought leader in this space and is extensively published on the topic of Wet AMD.
After the discussion, there will be an opportunity for live Q&A, but questions may also be submitted any time during the call to questions@lifescicapital.com.
So, thank you Dr. Kaiser and Dr. Brown for joining us. To start the call I would like to ask both of you to give our audience some background on yourselves, your practices and your research interest, and then after that we can dive into some deeper questions. We’ll start off with you, Dr. Kaiser.
Dr. Peter Kaiser:
Good morning everyone. I’m a vitreoretinal specialist. I practice at the Cole Eye Institute at the Cleveland Clinic. I’ve been very involved with clinical trial research for many years, having been one of the lead investigators on the Lucentis studies, the Eylea studies and some of the studies that are in current clinical trials, so I look forward to speaking with you.
Sam Slutsky:
Great, and you, Dr. Brown?
Dr. David Brown:
I’m David Brown. We’ve got a 12 retina surgeon group in Houston, Texas. That’s the largest on the Gulf Coast. We also have the largest clinical research center in the United States and we’re part of most of the major trials, if not all, and we take care of a lot of macular degeneration and give a lot of injections every day, so we’d love to have something that helps our patients.
Sam Slutsky:
Great. We’ll start off the call by discussing the current treatment landscape for wet AMD. Dr. Brown, can you give us an overview of how you are currently using the three main VEGF inhibitors, Avastin, Lucentis and Eylea for wet AMD, and if there are any changing trends that you’ve noticed?
Dr. David Brown:
Basically we’ve got three good options; they’re not equal but they’re good options. Avastin tends to be the drug of choice for all the Medicare Advantage plans, all the managed care plans. More and more, they’re pushing us or incentivizing us into giving Avastin, if not first line, exclusively. That being said, our main treatment paradigm is to treat until dry and then treat and extend, and so the best drying agent appears to be Eylea, and so patients that have persistent fluid on either Lucentis or Avastin get switched to Eylea. Typically they’re extended until the point where they have a fixed dosing regimen.
To be honest, we’re about a third of each drug. We would not use much Avastin if it wasn’t for the insurance incentives or pressures, but it’d be nice to have something that had better duration or better drying agents.
Sam Slutsky:
Got it. Are there any specific patient types that you prefer one of the VEGF inhibitors for over the others?
Dr. David Brown:
Not necessarily. I mean, it’s sort of an equal opportunity. You know, the drugs are all pretty darned good, which is amazing. Patients with large PEDs, pigment epithelial detachments, patients who for whatever reason can’t last as long on an anti-VEGF inhibitor, certainly we go with the longer agent or the more drying agent, which is typically Eylea.
Sam Slutsky:
Got it. Dr. Kaiser, is your experience consistent with that of Dr. Brown?
Dr. Peter Kaiser:
Yes, I agree. I think in macular degeneration there hasn’t been a study that shows a huge difference in efficacy between these drugs. They’ve all behaved (inaudible) very similarly, the difference being in longevity, and as David mentioned drying ability, but at the end of the day in all the studies, the visual results were all pretty similar. That’s not the same in all diseases but certainly in macular degeneration it is.
As such, we also start most patients, if not all patients on Avastin. Remember, my boss is Dan Martin who ran the C.A.T. study, and so we have a reason that we’re told everyday why we should use Avastin first, and I think it’s very reasonable because if we can find the patients who do well on Avastin, we’re certainly saving the healthcare system quite a bit of money. But, if they don’t—if they fail Avastin or if we’re trying to extend them for a period of time longer than we can go usually with Avastin, then I agree with Dave that many of our patients are switched to Eylea.
Sam Slutsky:
Okay, great. Thanks for that overview. Now, I wanted to turn to the recent data of RTH258. Novartis recently reported positive data from its Phase 3 studies using RTH258. This is a VEGF inhibitor for neovascular AMD. The study achieved the primary endpoint of non-inferiority compared to Eylea, however a little more than half the patients maintained dosing every 12 weeks which compares favorably to Eylea’s 8-week dosing regimen and Lucentis’s 4-week regimen.
Dr. Kaiser, I first wanted to get your impression of the data they presented so far.
Dr. Peter Kaiser:
So, on the face of it, it certainly looks exciting. Eylea is what we consider the gold standard drug in macular degeneration. It’s certainly in terms of efficacy being equal to Lucentis but having a longer duration. Now we have another drug in brolucizumab which is the generic name for RTH. In brolucizumab’s case, about half the patients were able to extend the interval to 12 weeks.
Now, what’s going to be important, because this is based on study design, is sort of how those patients did between the 12-weekers and the 8-weekers because the way the study was designed, once you switched from 12 weeks to 8 weeks, you couldn’t go back. Even if you were doing well at 8 weeks, it wasn’t like you were going back and forth and it wasn’t an average either. So, that means that there were patients who were dry after a certain number of injections and were able to then be put into the 12-week group and remain in that 12-week group doing very, very well. That means about half the patients were doing really, really well, and that doesn’t mean the other half weren’t doing well, it’s just the press release doesn’t really tell us how that other group, the more aggressive lesions required a little more aggressive treatment, how they did and if they were similar to the Eylea group, better or worse. So, there’s certainly a lot of data that we still need to see come out of the study. The top line results are encouraging but not the end-all.
Sam Slutsky:
Okay. In terms of the additional data that could be presented at an upcoming conference, which data points were you most focused on?
Dr. Peter Kaiser:
Myself? I really would like to know first of all if the 12-week data did better than Eylea and the 8-week data did worse, and so on average they did the same. That would be a very interesting finding. Alternatively, you know, whenever we have an average visual acuity difference, you want to know how many are winners and how many are losers, so what’s the range of the visual distribution? In other words, are you more likely to have a winner but just as likely have a loser with brolucizumab? With Eylea (inaudible) we know what it looks like, so is brolucizumab different?
Finally, I’d want to know if there were particular subsets of lesions that the patients will do better with one drug versus the other. Safety is going to be a big area that we’re all going to be looking at, and finally, we know that Eylea is the best drying agent so far. How exactly did brolucizumab match up in terms of its drying capability? Was it similar, better or worse?
Sam Slutsky:
Got it. Thanks for that. Dr. Brown, are there any additional data points that you’d like to see?
Dr. David Brown:
Yes, I think to us, I think in a treatment naïve population like we said, even Avastin, the weakest horse in this race does pretty good. In a treatment naïve population, I think you really—like Peter alluded to, the last comment, I think it’s really drying ability. I mean, if you’re drying out a higher percentage of Eylea, I think that is in the hearts and minds of retina surgeons, will think it’s a better drug.
Because the Eylea arm didn’t have a chance to extend to 12 weeks, it’s a little hard to make that comparison that says, “Hey, 52% or 53% can go to 12 weeks with brolucizumab.” They didn’t test and see how many of those Eylea patients could have done that, so to me it’s mainly drying ability.
In the clinic, once we get it in the clinic, it’s really these recalcitrant patients that don’t dry out on monthly Eylea, do they dry out on brolucizumab and can they be extended longer?
So, it’s drying ability to me until it gets in the clinic, and then it’s tough because we put new drugs against our toughest cases, and if this drug can really outperform, it’ll have a definite place in the market.
Sam Slutsky:
Okay. Dr. Brown, how do you …
Dr. Peter Kaiser:
I just wanted to add something to what Dave said, which is very, very important. The study being a non-inferiority study, the Eylea patients had to be dosed on label, which in this case was every other month, but recall that in the VIEW study second year, the patients were dosed with a capped prn dosing scheme and almost half the patients in the Eylea group were actually able to get out to three-month intervals. So, had the study been done differently, the results may have been different also.
This is also a criticism of VIEW where had the second year been done differently, maybe Lucentis would have been able to go longer than a month also.
Sam Slutsky:
Interesting. Thanks for that. Dr. Brown, how do you anticipate RTH258 will be used, assuming there’s nothing negatively surprising in the data when they present full data?
Dr. David Brown:
You know, a lot of it depends on the finances and how good the data is. Eylea, Regeneron has not been able to convince the Aetnas and the Blue Crosses of the world that they’re better, and so it’s not like they tier them and say, “You should use Eylea over Lucentis because we’re a better drying agent.” If the data is strong enough and they can convince payers and retina physicians that it’s better than Eylea, I think it will be the go-to drug after Avastin in those insurances, and potentially first line because why not—in our practice we have a lot of patients with really good insurance who have done well for themselves and they don’t want to start with generic corn flakes; they want to start with the branded drug. The question is how does it compare against what’s currently deemed to be the best drug, which is Eylea. If they win that in the hearts and minds of retina surgeons and even better in the hearts and minds of insurance providers, I think it’ll be used as either first line or as your go-to drug, as your clean-up batter.
Part of it’s going to be how they price it. If they come out and price this thing at double the price of Eylea, I think they’re going to have a much harder time convincing those insurance companies that they’re the go-to drug. If they price it comparatively better or perhaps even a discount, they might win more of that market. It’s different than every other field of medicine because nothing else has a 50 buck drug or a 75 buck drug that’s pretty good. So, the economics and the rationale of how you price the drug is very challenging when you have Avastin as your—lurking in the horse race.
Sam Slutsky:
Got it. In terms of first line use, too, you touched on this briefly but it seems like RTH258 won’t be launched possibly until 2019. So, in terms of the emergence of Avastin biosimilars, how do you think that will play in in terms of uptake?
Dr. David Brown:
I think it really depends on how those biosimilars are priced. If you look biosimilars, other biosimilars are typically priced 20%, 30% less than the branded drug. I don’t think that’s going to play well in this market. When you have 75 buck alternatives, I think they’re going to have to have a 50% discount or more to really chip away at the branded drug.
If the biosimilars come out at $1000 and really takes over a large part of the market, I think insurers may start to do more tiers where they say, “You got to use Avastin, and if not you use biosimilar this or that,” and then the third line would be that drug, and that’s certainly where RTH doesn’t want to be. You don’t want to be the third line drug in a drug tier.
Dr. Peter Kaiser:
I agree with Dave. This is one of those things where the price of the drug (inaudible).
Sam Slutsky:
Dr. Kaiser, we’re losing you. You’re breaking up a little. Are you there? All right, we’ll come back. Oh yes, yes. Now it’s good.
Dr. Peter Kaiser:
Sorry about that. I said the price is really going to play a large role, and I agree fully with what David said that these companies are not going to be able to (inaudible) this drug (inaudible). Can you hear me now?
Sam Slutsky:
Yes, yes, yes.
Dr. Peter Kaiser:
So, I’m saying that the $50 drug that we have really limits the biosimilar’s ability to (inaudible) have a high number. The biosimilars that are out there aren’t Avastin, they’re Lucentis. (Inaudible) Avastin biosimilar too.
Sam Slutsky:
You’re still breaking up a little bit but we’ll jump to the next question and come back. I wanted to now turn to other drugs in development and discuss programs targeting Ang2 calmodulin and VEGF. So, we know that there’s a lot of interest in Ang2 inhibitors such as Roche’s RG7716 and Regeneron’s nesvacumab which is in Phase 2 development. So, Dr. Brown, what do you see as the value of Ang2 inhibition and what are your expectations for this drug classes’ effect.
Dr. David Brown:
Ang2 is very interesting. It’s particularly interesting in the vascular diseases, retinal vein occlusion in diabetes because it looks to be a lot of Ang2 there and blocking of totally separate targets.
Wow, I’m getting a lot of feedback.
Blocking a totally separate target you hope would get better efficacy. In the early Phase 1s and 2s, it looked like we saw a duration effect. That’s what excited everybody. You’re going to have your data at the end of the year. If you really get a duration effect and hopefully can convince the FDA a way to prove on duration effect, that’d be great. Currently, the agency has only said they would approve a add-on drug if it improved visual acuity. For macular degeneration, we may be close to the top of where we can get with just an add-on drug with the one-time shot. Certainly if we get a sustained release device or a drug like Ohr’s that may potentially give you a steady state anti-VEGF by taking a pill every day or a drop every day, you may get more efficacy, but the devil’s in the—I guess we’re all waiting for the results and we should have that by the end of the year. We’re constantly optimistic.
Dr. Peter Kaiser:
(Inaudible).
Sam Slutsky:
You see its potential use though in some of the other neovascular indications such as DME and things like that moreso than AMD?
Dr. David Brown:
I think from a target perspective, yes. If you just look at the science, it makes more sense to me that those diseases have more Ang2 in the disease pathophysiology. That being said, we really didn’t think there was a whole lot of VEGF in macular degeneration and look how good it does with a VEGF blocker. So, there’s a distinct possibility that it could really help in macular degeneration, and we’ll see. We’ve got two major companies with two good drugs and we should have the data from both by the end of the year.
Sam Slutsky:
Okay, great. Dr. Kaiser, do you have anything to add to what Dr. Brown said?
Dr. Peter Kaiser:
Yes. Ang2 inhibition is something we’re all pretty excited about. We know that the tide 2 pathway which Ang2 works on is very involved in all these diseases, but I agree with David that it’s moreso in the retinal vascular diseases than macular degeneration. While it is involved in macular degeneration, we do expect the difference to be greater in diabetes.
The other interesting thing for me is the regulatory path that these two drugs are going to have to take are very different because the Regeneron product, which is used in combination with Eylea, has to show superiority in its Phase 3, if it gets there, whereas the Roche product being a biospecific molecule is actually a new drug. It’s not Lucentis-plus so its regulatory path is through a non-inferiority study, so that’ll definitely change the clinical trial design between the two drugs. It’ll be interesting.
Sam Slutsky:
Wow. Interesting. Thanks for that. Dr. Brown, you had touched on Ohr so we can discuss them right now. So, you’re both familiar with Ohr Pharmaceutical’s program of Squalamine, which his an antiangiogenic agent delivered as an eyedrop, inhibits a VEGF, PDGF and basic FGF through the inhibition of calmodulin, and its Phase 2 trial results from a prespecified analysis of patients within the (inaudible) CNB area of less than 10 millimeters squared, had particularly encouraging activity compared to Lucentis. The use of Squalamine led to a 5.3 letter improvement over Lucentis and mean change in visual acuity. The p value here is 0.03. Also that 40% of patients gained three or more lines of visual acuity versus around 25% for control, and based on the data and learnings of the drug’s mechanism of action or is enrolling the described patient population in its current large ongoing study.
So, Dr. Kaiser, can you discuss your impression on the company’s Phase 2 data and your thoughts on the rationale behind using the described enrollment criteria for the ongoing study?
Dr. Peter Kaiser:
Sure. I think one of the issues for Ohr was that many people, particularly people on Wall Street, bunched Ohr together with Fovista and other PDGF inhibitors because it does inhibit PDGF as one of its mechanisms of action, but what everybody—what all those people failed to realize is that as the molecule Squalamine doesn’t have any effect whatsoever on parasites. It’s effect is 100% on activated endothelial cells which is where the problem really lies, and so the Fovista drug and Regeneron’s PDGF inhibitor, both of which failed, were working an entirely different cell type, basically, than on parasites. That’s number one.
Number two, not only does it decrease these growth factors, it also specifically acts on these new endothelial cells. It changes the actin and filament within the cells which changes the structure of these new vessels, causing the vessels to block off, and that’s exactly what we want.
So, when you look at the Phase 2 data, unfortunately in the past everybody hoofed that horse, using Dave’s analogy, up to the buggy of all PDGF inhibitors and it was bunched together with them. Now, interestingly enough, the results of the study was actually very similar, however the similarity was not because it was working on PDGF; the similarity was that the combination of Squalamine as an eye drop together with Lucentis appeared to be working very well in Phase 2.
What I like about what Ohr did in Phase 3, unlike what Fovista did in its Phase 3 is that it basically Ohr took the patients who did well in Phase 2 and designed their Phase 3 clinical program on that, whereas Fovista and Ophthotech basically took their Phase 2 data where they did well and they changed it to include patients where their drug wouldn’t do well. So, one of the reasons why I think Fovista actually failed is they basically changed the study design between Phase 2 and Phase 3, which is a clinical trial no-no, and what Ohr did was the way that anybody who designs clinical trials would want to do which is take the learnings from Phase 2 and use that to design a rational Phase 3 that has an even higher chance of success than the Phase 2.
Sam Slutsky:
Got it. Thanks for that overview. Dr. Brown, wanted to get your view on the data and rationale for the patient enrollment in the current study.
Dr. David Brown:
First of all, on selecting patients that did better, I think it’s always good to enrich your effect. Certainly we do that in every clinical trial where we try to give a dose, you know, the month before the endpoint. It sounds like you wouldn’t want to restrict your label, but in today’s times where every optometrist has an OCT, most of the lesions we are catching are small lesions and most lesions are occult, and so this is the largest percentage of the lesions we get in the clinic these days.
I’m more excited about a continuous, ongoing anti-VEGF suppression. We basically give now pulsatile treatment where you give a big dose and most of the PK curves are linear, so when patients re-leak it’s typically when we think they get below a level of VEGF inhibition that would decrease leakage. If you could have ongoing VEGF suppression with something like an eyedrop, I think patients would love it. They’d definitely take their eyedrop and extend longer, and potentially get where they don’t have to have injections. I think that’s the most exciting part of this is a continuous anti-VEGF suppression along with some of the other cytokines that are blocked that we know from the Squalamine preclinical data.
Sam Slutsky:
Great. Thanks for that. Dr. Kaiser, in terms of the efficacy data for the control arm in Ohr’s study with Lucentis, do you think it was an accurate representation of what you would see in the real world?
Dr. Peter Kaiser:
Yes, it was. Obviously comparing across trials is an effort that you—fraught with error, however if you kind of look at the average of clinical studies where patients were enrolled all-comers, for instance the C.A.T. study or the IVAN study, the control group of Lucentis in the study performed almost identically to C.A.T., so it wasn’t that the control group was doing poorer and the combo group was doing normal. No, the monotherapy group was doing normal and the combo group was doing definitively better.
Sam Slutsky:
Okay, great. This question is for both doctors, but based on your extensive experience with clinical trials in the past and with Squalamine, what probability of success would you give this program in the current wet AMD trial? Dr. Brown, we can start with you.
Dr. David Brown:
I think that because of the continuous steady state suppression in multiple cytokines, I am on record as saying I thought the Fovista trial had a 10% chance of success and I think this one is much closer to 50/50.
It’s a well designed trial. They’ve got quite a bit of numbers. It seems like we’ve got quite a few patients in this trial and they’re not complaining that the eyedrop stings and it looks like their compliance is good. So, I’m optimistic that we got a horse race here. I hope we get visual acuity benefits. I think, to be honest, we may be close to the top of the curve, and so it may be that this is a drug that it does give you more duration or longer time between injections. We won’t see that in this first trial but hopefully there’s enough of a signal that they can go to a Phase 3. We’re in the second year. They’ve got where they stretch out the injections and you see duration. If we get visual acuity, that’s great, and I think that chance is about 50/50.
Sam Slutsky:
Great. Thanks for that. Dr. Kaiser, your thoughts?
Dr. Peter Kaiser:
Yes, I agree with Dave. I think when we look at some of the other combination studies, our probability of success that we were giving out was pretty low. Most companies will be pretty happy with 50/50; in fact, they would greenlight anything above probably about 30%.
I thinking maybe it’s a little higher. I’m going to go out on record and say 60% chance of success because I really think what the company has done in terms of honing in on the patients who did well in Phase 2 is going to bode well. They’ve eliminated the patients who may not do as well with the combination therapy from the enrollment, and to me this usually means that the success rate goes up from Phase 2.
So, you know, I’m pretty optimistic about this one. If it works, there’s a lot of other areas that an eyedrop can be used because remember now, the bar for a combo drop from a patient/physician standpoint—not from the FDA standpoint but from a patient/physician standpoint to add a drop is incredibly low versus another injection. The FDA, when you say combo to them, it doesn’t matter if it’s a drop or another injection, the bar is the same, but from a patient and a physician standpoint it’s a huge difference. An eyedrop, I don’t have to deliver it myself. I can write a prescription, the patient goes and gets it. The patient doesn’t mind taking an eyedrop, whereas if it’s another injection, here’s a whole nother worry about reimbursement, what’s going to happen with insurance companies’ coverage of that other injection. So, to me there’s a lot of reasons why I’m actually very bullish on this product and I’m optimistic to see the results in the future.
Dr. David Brown:
Yes, a lot of physicians that currently use Avastin, use Avastin because they’re worried about the financial implications, and what I mean by that is in a buy and bill scenario, when you give a $2,000 drug that you have to purchase from a drug distributor, you got to pay for that drug in 60 days. If your insurance company stiffs you once, and the margin’s 3%, 4% at the most, you got to do another 200 injections to make up for that one lost drug.
For this, physicians don’t have any financial risk by adding on the eyedrop with the prescription because it’s not a Part B drug.
Sam Slutsky:
Interesting. That’s going to be helpful for understanding the reimbursement landscape. Okay.
So, Dr. Brown, Dr. Kaiser had mentioned this briefly, but when thinking of some of the recent wet AMD failure’s such Ophthotech’s, Fovista, which had positive Phase 2 results, what do you think are the main contributors to the Phase 3 failing?
Dr. David Brown:
I think it’s the target. I mean, you had a very good study from Regeneron with potentially a better PDGF blocker that totally busted as well; the monotherapy did better than the combination therapy. If you look at Fovista’s Phase 2 data on lesion regression, which was the first thought, you strip the parasites, you get the anti-VEGF in there and it regresses more. If you go to the SEC (phon) filing, you see that monotherapy Lucentis caused more lesion regression than did combination therapy. So, if you’re premise is wrong, and I think it was tested well in both studies, both the Regeneron and the Fovista, and you put it up there and it loses, it loses.
Ang2 we hope has more of a potential of the combination, and again, anything that gives a steady state suppression like the sustained release device, like a gene therapy, if you can get enough product development, like an eyedrop from Ohr, I think that has the best chance of winning versus our paradigm of single injection high dose and then steady state linear decrease in PK.
Sam Slutsky:
Got it. Okay, thanks. Dr. Kaiser, in terms of combination approaches for wet AMD, do you think add-on therapies will be a one size fits all kind of like anti-VEGF, or do you think patient selection will be a key to truly recognizing the benefits of add-ons?
Dr. Peter Kaiser:
I think like everything, patient selection is going to be important. Certainly, for instance, with the Ohr product, very large occult lesions, probably not a good idea to be using the product unless we hear something differently. So yes, we are going to be using different add-ons for different reasons. The only other add-on that we probably will have is Ang2 in the near future—I should say anti-Ang2 in the form of Regeneron’s product which would be an add-on, but in that study we don’t know yet are there certain lesions that it works better on or is it a work on all comers? We don’t know yet.
Sam Slutsky:
Okay. In terms of the clinical pipeline, a bunch of companies are going after combination approaches on top of a VEGF inhibitor. So, Dr. Kaiser, in add-on works with one VEGF inhibitor in its study, do you think that can be extrapolated to use on top of the other anti-VEGF inhibitors as well?
Dr. Peter Kaiser:
As long as the mechanism of action is distinct, the answer should be yes. So, any add-on should work with any anti-VEGF agent, whether it be say a gene therapy anti-VEGF or a sustained release in the form of say an implant like the LADDER study from Genentech. It wouldn’t matter how the anti-VEGF is performed.
Now, if that add-on is another injection then the patient acceptance of it may be lower. If it’s an eyedrop like Squalamine, for instance, then that’s no big deal to add that on, and so it will be probably more likely for us to add on the ones that are easy to add on than the ones that are a little more difficult.
Dr. David Brown:
Yes, and that being said in an eyedrop, even if you have the world’s best injection—say RTH just kills it—there’s going to be very little uptake to that drug that’s a J code and that’s because of that buy and bill scenario I gave you. In other words, if I buy a $2,000, or a who knows, $3,000 RTH drug and there is no J code, you use an undefined code when you code it, which means that insurers always delay your payments. So that’s a six to eight-month delay typically after the drug comes out to get that J code.
With a prescription, I don’t care. I mean, it’s their problem if the patient’s insurance doesn’t cover it at the pharmacy. I think it’s much more likely to uptake an eyedrop quickly than it is another biologic injection.
Sam Slutsky:
Got it. Dr. Brown, can you discuss the potential challenges of combination therapy from a compliance and reimbursement standpoint when we have two products that are administered both as injection at different intervals?
Dr. David Brown:
Yes. So, even though the—Peter made a good point that the drugs are different, the Novartis and the Regeneron drug, but they’re still given as a single injection, so I think that’s okay. I think what would have been very challenging is something like Fovista where you had two injections, potentially the same day or close to each other. Currently we have both CMS Medicare and private insurers that do these overall big audits looking for an injection within 28 days of another, and that’s to say they don’t want me to give Avastin in between an Eylea injection. Anything within 28 days gets flagged. They typically deny the expensive drug; they’re not stupid. So, any time you have to give two injections that are expensive biologics within a similar time I think would be incredibly challenging unless you got the insurance companies to buy on that it was really that much better.
The two combinations, one, the BiFab from Novartis and the sort of like Tide where you’ve got the white little soaps and the blue little soaps together in the same injection, I don’t think is going to be as big of a deal for us because it’s just one injection code along with the price of the drug.
Sam Slutsky:
Interesting. Dr. Kaiser, you feel the same way about this or is there any differences from your practice?
Dr. Peter Kaiser:
I think David said it right, you know? What many on Wall Street don’t get is sort of the insurance aspects of what we do and how it guides so much of our practice of medicine, unfortunately, and the idea of having to do, like Fovista would have been, two injections, was really not going to be all that palatable to us with reimbursement. We’ll see what happens with the Ang2 inhibitors, where that plays out. It’s still an injection at the end of the day and when you have a new drug and a new injection, it’ll be a long uptake for us because of the worry about reimbursement.
Sam Slutsky:
(Inaudible). Got it. Thanks for that. I now wanted to turn to Regenxbio which is developing an AAV gene therapy technology that leads to the local production of an anti-VEGF antibody fragment. Dr. Kaiser, I wanted to get your view on the potential overall application of this technology and if it did work, how could it potentially interrupt the anti-VEGF market?
Dr. Peter Kaiser:
Well, let’s assume many things. One is that the vector that Regenxbio is using, so it’s its AAV vector, is correct to infect the cells we want and infect it in the retina. Let’s just assume that. Let’s also assume that the plasma they have packaged within the vector is correct also and will produce the anti-VEGF protein that will work. So, those are two big assumptions already. Then let’s assume that it actually transfects enough cells to produce enough protein for this to work in the eye.
Now, theoretically, it should, right? The Regenxbio IP is much stronger than say Avalanche’s old IP or some of the other gene therapy companies IP. It’s very strong and particular in the delivery of drug to the eye by an AAV vector. So, that part of the equation they’re at least as good as anybody else out there.
Let’s just assume that the drug completely works and produces long-term anti-VEGF protein within an eye. This is obviously an exciting thing, but it wouldn’t change any sort of the combo drugs that are individual. For instance, if Ohr worked, there’d be no reason to not combine that with a Regenxbio product because all you’re adding is an eyedrop. If there was another add-on that would require say an additional injection, then they’d be maybe a little less likely to be added on to a Regenxbio type situation.
So, I’m bullish on Regenxbio but it’s really early so there’s not too much to read into it because we have basically no data that really can guide us how that company is going to do just yet.
Sam Slutsky:
Okay. Great for that, thanks for that overview. Dr. Brown, just wanted to get your thoughts as well on the potential role of a gene therapy for wet AMD.
Dr. David Brown:
We’re excited about gene therapy. The difficulty is just as Peter alluded to, can you get enough product through your vector and your gene construct to actually give you a steady state drug? If you can, I think it would take over—it would be second line because you’d give injections for a while, and then people that knew they had to have injections more frequently than whatever it is, 8 weeks, 12 weeks, would say, “Hey, I’d love to have this operation.” There’s been two, I think, maybe three patients dosed in the U.S., so we’re going to have some data soon of whether it looks like this thing gives biologic activity. If it does, it will interrupt the landscape. Part of it’s going to be you’re going to have a surgery with a surgery center and a drug that’s probably got to be priced at 20 grand or more, so it’s going to take a while for insurance companies to swallow that, but I think it will be a major disruptor if, like Peter says, all the pieces fall into place and it really works.
Sam Slutsky:
Okay, thanks. Overall, Dr. Brown, from a prescribing standpoint, do you have any concerns with recommending gene therapy technologies for ophthalmology?
Dr. David Brown:
You know, we’re—AAV vector, the current vectors are not self-replicating. In other words, it’s not like something that can get in your system and go crazy and take over. That’s also a problem because those cells probably have less production of protein over time, which could limit potentially the use of this thing. Like it may not be a treatment that lasts 20 years, but we don’t know that. But, from a gene therapy perspective I think it’s a pretty safe bet with the current vectors.
Better vectors like the lentiviruses, the herpes, the AIDS viruses, etc., are much better at actually transfecting cells and turning your cells into doing what they want to do, but again, much scarier. A lentivirus is a much scarier virus that has much more potential for trouble, but yet it’s a better vector to actually do what you want to do. So, we hope that the AAV vectors work. If not, I think they’ll be pushing to stronger and potentially riskier vectors.
Sam Slutsky:
Oh, interesting. Thanks for that. Dr. Kaiser, do you have any additional potential concerns or thoughts on the overall application?
Dr. Peter Kaiser:
I don’t have a huge concern. One is more of a theoretical concern which is when we’re treating macular degeneration with anti-VEGF agents, there has been a suggestion that macular atrophy can occur. I’m on the camp that says I don’t really believe in it, but let’s just assume that there are some people who really believe in it and they’re right. In that situation, having chronic VEGF suppression for a disease like macular degeneration may not be a good idea.
Now, I say may not because all these things are theoretical and I’m still in the camp that says GA or macular atrophy is really not occurring in these patients; at least I haven’t seen it, so I think it’s more of a theoretical concern than a true concern at this point. Because once you turn on the gene production, you really can’t turn it off. Some of these gene therapy companies are saying you could turn it off by doing laser to the transfected cells. Well, that’s all said and good except you don’t know what the transfected cells are. So you can’t see it, so how are you supposed to laser it?
Sam Slutsky:
Got it. Got it, okay. Are there any other treatments in development that either of you are excited about for wet AMD that we haven’t discussed? Dr. Kaiser, we can start with you.
Dr. Peter Kaiser:
I think the other AMD product that has very strong data to date are the integrin inhibitors, in particular the one from Allegro Pharmaceuticals. That one has shown very good results in DME and some early results in AMD, and just by its mechanism of action would be distinct from anti-VEGF agents. What excites me is its possibility of it going—being used as monotherapy as well as combo therapy, but not having to do combo for the registration study, because I hate doing combo for registration if I can avoid it. It’s always easier to do monotherapy.
Sam Slutsky:
Got it. Do you think it’s magnitude of effect could go against VEGF?
Dr. Peter Kaiser:
It’s probably not going to be as strong as VEGF. It may last a little longer than anti-VEGFs, so that’s a plus, but because of its mechanism of action, it would be complementary to anti-VEGF. So, because of that, once we actually have it in market we would be able to use it in combo. Sort of like a lot of chemotherapy drugs are used now; they get approved mono but it turns out they work better together and they do that sort of post approval.
Sam Slutsky:
Okay, got it. Dr. Brown, are there any additional drugs in development that you want to discuss that we haven’t touched on?
Dr. David Brown:
It’s interesting. For years they kept looking for this magical factor, Factor X that became VEGF, and the VEGF blocker is amazing. We have equal scientific data on a bunch of other targets. CC3 chemokine receptors, tide agonists, Ang2 blockers, all of these things are a long ways away but potentially could be an additive agent or the magic bullet that really makes it where you turn off angiogenesis, neovascularization, and turn off the production of VEGF. Fortunately, there’s a lot of money in early drugs and so a lot of basic science been going on and preclinical data.
I don’t think we’ve found insulin. One of my partners keeps saying, “This is insulin, Dave. We’ll never have anything else. They’ve been using insulin since the ‘50s. They don’t have a second drug,” and they sort of do, but I’m hopeful that we will have something to decrease the treatment burden of the many, many, many patients I have that need injections every month to control their AMD, their DME or their RVO.
Sam Slutsky:
Okay.
Dr. Peter Kaiser:
I think the interesting thing about drug development in AMD is that many of the large pharma companies have offloaded the development onto the smaller companies. None of the large pharma companies—Regeneron excluded from that statement—really go out and develop in-house drugs and then take those drugs all the way throughout. They basically let somebody else do the development and then they buy them for large sums of money where it’s better to have a bird in hand than one in the bush, in other words. So, to me, companies like Allegro and like Ohr and some of these other smaller companies, once they show positive results in Phase 2, it’s very unlikely they’re going to stay alone at doing this. The pharma partner should be coming in very rapidly at that point.
I really wish also that these large pharma companies would spend some of that huge amounts of money they have on developing products because they have certainly much deeper pockets than the smaller companies.
Sam Slutsky:
Great. Yes, it seems like we’re seeing that approach throughout drug development overall in terms of partnerships and a lot of stuff being dumped onto the biotechs to do just because of the efficiency.
All right. I guess at this time, Operator, we’d like to open the line for questions. As a reminder, questions can also be submitted to questions@lifescicapital.com.
Operator:
Thank you. If you’d like to ask a question, please signal by pressing star, one on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, press star, one to ask a question. We’ll pause for just a moment to allow everyone an opportunity to signal for questions.
Sam Slutsky:
Great. While we wait for the queue to fill up, Dr. Brown, overall, could you provide us with a quick overview of the upcoming catalyst for wet AMD that you’re most excited about?
Dr. David Brown:
Like I said, end of the year we’re going to have our Ang2 combo results; we’re going to have some Ohr results here shortly thereafter. I think both are exciting.
Sam Slutsky:
Okay. Dr. Kaiser, any additional ones?
Dr. Peter Kaiser:
Those are the big ones. I think we’re all very excited about both these study results.
Dr. David Brown:
The RTH details obviously.
Dr. Peter Kaiser:
Yes, that’s for sure. We expect that probably like third quarter, around the AAO would be my guess. I’m actually surprised that you said that they’re not looking for approval for it until 2019. I would have thought they would be going earlier but you may be right.
Dr. David Brown:
Yes.
Operator:
Once again, if you’d like to ask a question, please press star, one.
Dr. David Brown:
Did they say why the delay? Is it production? That’s hard to believe. You would think that the second largest pharmaceutical company in the world could produce it.
Sam Slutsky:
Yes. I’m unclear (phon).
Dr. Peter Kaiser:
You would hope.
Sam Slutsky:
All right. At this time, it doesn’t seem like there are any questions in the queue, so wanted to thank both Dr. Kaiser and Dr. Brown for your time. Definitely a very insightful call, and thank you to everyone who tuned in.
Dr. Peter Kaiser:
Great.
Dr. David Brown:
Thanks, gentlemen.
Operator:
This conclude today’s call. Thank you for your participation. You may now disconnect.
Sam Slutsky, Research Analyst, LifeSci Capital
Dr. Peter Kaiser, Chaney Family Endowed Chair for Ophthalmology and Professor of Ophthalmology, Cleveland Clinic Lerner College of Medicine
Dr. David Brown, Ophthalmologist and Ophthalmic Surgeon, Retina Consultants of Houston
P R E S E N T A T I O N
Operator:
Good day and welcome to the LifeSci Capital KOL Series on the topic of wet AMD conference call. Today’s conference is being recorded. At this time I would like to turn the conference over to Mr. Sam Slutsky. Please go ahead, sir.
Sam Slutsky:
Thank you. Good morning everyone and thank you for dialing in. I’m Sam Slutsky, one of the research analysts at LifeSci Capital. On today’s call we’ll be discussing the current treatment landscape for wet AMD, how it may change with the recent data from Novartis’s RTH258, and promising drugs in development for the disease.
We’re lucky to have with us today two distinguished experts in the field. They are Dr. Peter Kaiser and Dr. David Brown. Dr. Kaiser is the Chaney Family Endowed Chair for Ophthalmology Research and a Professor of Ophthalmology at the Cleveland Clinic Lerner College in Medicine. Dr. Brown is a practicing ophthalmologist and ophthalmic surgeon at Retina Consultants of Houston. He’s a thought leader in this space and is extensively published on the topic of Wet AMD.
After the discussion, there will be an opportunity for live Q&A, but questions may also be submitted any time during the call to questions@lifescicapital.com.
So, thank you Dr. Kaiser and Dr. Brown for joining us. To start the call I would like to ask both of you to give our audience some background on yourselves, your practices and your research interest, and then after that we can dive into some deeper questions. We’ll start off with you, Dr. Kaiser.
Dr. Peter Kaiser:
Good morning everyone. I’m a vitreoretinal specialist. I practice at the Cole Eye Institute at the Cleveland Clinic. I’ve been very involved with clinical trial research for many years, having been one of the lead investigators on the Lucentis studies, the Eylea studies and some of the studies that are in current clinical trials, so I look forward to speaking with you.
Sam Slutsky:
Great, and you, Dr. Brown?
Dr. David Brown:
I’m David Brown. We’ve got a 12 retina surgeon group in Houston, Texas. That’s the largest on the Gulf Coast. We also have the largest clinical research center in the United States and we’re part of most of the major trials, if not all, and we take care of a lot of macular degeneration and give a lot of injections every day, so we’d love to have something that helps our patients.
Sam Slutsky:
Great. We’ll start off the call by discussing the current treatment landscape for wet AMD. Dr. Brown, can you give us an overview of how you are currently using the three main VEGF inhibitors, Avastin, Lucentis and Eylea for wet AMD, and if there are any changing trends that you’ve noticed?
Dr. David Brown:
Basically we’ve got three good options; they’re not equal but they’re good options. Avastin tends to be the drug of choice for all the Medicare Advantage plans, all the managed care plans. More and more, they’re pushing us or incentivizing us into giving Avastin, if not first line, exclusively. That being said, our main treatment paradigm is to treat until dry and then treat and extend, and so the best drying agent appears to be Eylea, and so patients that have persistent fluid on either Lucentis or Avastin get switched to Eylea. Typically they’re extended until the point where they have a fixed dosing regimen.
To be honest, we’re about a third of each drug. We would not use much Avastin if it wasn’t for the insurance incentives or pressures, but it’d be nice to have something that had better duration or better drying agents.
Sam Slutsky:
Got it. Are there any specific patient types that you prefer one of the VEGF inhibitors for over the others?
Dr. David Brown:
Not necessarily. I mean, it’s sort of an equal opportunity. You know, the drugs are all pretty darned good, which is amazing. Patients with large PEDs, pigment epithelial detachments, patients who for whatever reason can’t last as long on an anti-VEGF inhibitor, certainly we go with the longer agent or the more drying agent, which is typically Eylea.
Sam Slutsky:
Got it. Dr. Kaiser, is your experience consistent with that of Dr. Brown?
Dr. Peter Kaiser:
Yes, I agree. I think in macular degeneration there hasn’t been a study that shows a huge difference in efficacy between these drugs. They’ve all behaved (inaudible) very similarly, the difference being in longevity, and as David mentioned drying ability, but at the end of the day in all the studies, the visual results were all pretty similar. That’s not the same in all diseases but certainly in macular degeneration it is.
As such, we also start most patients, if not all patients on Avastin. Remember, my boss is Dan Martin who ran the C.A.T. study, and so we have a reason that we’re told everyday why we should use Avastin first, and I think it’s very reasonable because if we can find the patients who do well on Avastin, we’re certainly saving the healthcare system quite a bit of money. But, if they don’t—if they fail Avastin or if we’re trying to extend them for a period of time longer than we can go usually with Avastin, then I agree with Dave that many of our patients are switched to Eylea.
Sam Slutsky:
Okay, great. Thanks for that overview. Now, I wanted to turn to the recent data of RTH258. Novartis recently reported positive data from its Phase 3 studies using RTH258. This is a VEGF inhibitor for neovascular AMD. The study achieved the primary endpoint of non-inferiority compared to Eylea, however a little more than half the patients maintained dosing every 12 weeks which compares favorably to Eylea’s 8-week dosing regimen and Lucentis’s 4-week regimen.
Dr. Kaiser, I first wanted to get your impression of the data they presented so far.
Dr. Peter Kaiser:
So, on the face of it, it certainly looks exciting. Eylea is what we consider the gold standard drug in macular degeneration. It’s certainly in terms of efficacy being equal to Lucentis but having a longer duration. Now we have another drug in brolucizumab which is the generic name for RTH. In brolucizumab’s case, about half the patients were able to extend the interval to 12 weeks.
Now, what’s going to be important, because this is based on study design, is sort of how those patients did between the 12-weekers and the 8-weekers because the way the study was designed, once you switched from 12 weeks to 8 weeks, you couldn’t go back. Even if you were doing well at 8 weeks, it wasn’t like you were going back and forth and it wasn’t an average either. So, that means that there were patients who were dry after a certain number of injections and were able to then be put into the 12-week group and remain in that 12-week group doing very, very well. That means about half the patients were doing really, really well, and that doesn’t mean the other half weren’t doing well, it’s just the press release doesn’t really tell us how that other group, the more aggressive lesions required a little more aggressive treatment, how they did and if they were similar to the Eylea group, better or worse. So, there’s certainly a lot of data that we still need to see come out of the study. The top line results are encouraging but not the end-all.
Sam Slutsky:
Okay. In terms of the additional data that could be presented at an upcoming conference, which data points were you most focused on?
Dr. Peter Kaiser:
Myself? I really would like to know first of all if the 12-week data did better than Eylea and the 8-week data did worse, and so on average they did the same. That would be a very interesting finding. Alternatively, you know, whenever we have an average visual acuity difference, you want to know how many are winners and how many are losers, so what’s the range of the visual distribution? In other words, are you more likely to have a winner but just as likely have a loser with brolucizumab? With Eylea (inaudible) we know what it looks like, so is brolucizumab different?
Finally, I’d want to know if there were particular subsets of lesions that the patients will do better with one drug versus the other. Safety is going to be a big area that we’re all going to be looking at, and finally, we know that Eylea is the best drying agent so far. How exactly did brolucizumab match up in terms of its drying capability? Was it similar, better or worse?
Sam Slutsky:
Got it. Thanks for that. Dr. Brown, are there any additional data points that you’d like to see?
Dr. David Brown:
Yes, I think to us, I think in a treatment naïve population like we said, even Avastin, the weakest horse in this race does pretty good. In a treatment naïve population, I think you really—like Peter alluded to, the last comment, I think it’s really drying ability. I mean, if you’re drying out a higher percentage of Eylea, I think that is in the hearts and minds of retina surgeons, will think it’s a better drug.
Because the Eylea arm didn’t have a chance to extend to 12 weeks, it’s a little hard to make that comparison that says, “Hey, 52% or 53% can go to 12 weeks with brolucizumab.” They didn’t test and see how many of those Eylea patients could have done that, so to me it’s mainly drying ability.
In the clinic, once we get it in the clinic, it’s really these recalcitrant patients that don’t dry out on monthly Eylea, do they dry out on brolucizumab and can they be extended longer?
So, it’s drying ability to me until it gets in the clinic, and then it’s tough because we put new drugs against our toughest cases, and if this drug can really outperform, it’ll have a definite place in the market.
Sam Slutsky:
Okay. Dr. Brown, how do you …
Dr. Peter Kaiser:
I just wanted to add something to what Dave said, which is very, very important. The study being a non-inferiority study, the Eylea patients had to be dosed on label, which in this case was every other month, but recall that in the VIEW study second year, the patients were dosed with a capped prn dosing scheme and almost half the patients in the Eylea group were actually able to get out to three-month intervals. So, had the study been done differently, the results may have been different also.
This is also a criticism of VIEW where had the second year been done differently, maybe Lucentis would have been able to go longer than a month also.
Sam Slutsky:
Interesting. Thanks for that. Dr. Brown, how do you anticipate RTH258 will be used, assuming there’s nothing negatively surprising in the data when they present full data?
Dr. David Brown:
You know, a lot of it depends on the finances and how good the data is. Eylea, Regeneron has not been able to convince the Aetnas and the Blue Crosses of the world that they’re better, and so it’s not like they tier them and say, “You should use Eylea over Lucentis because we’re a better drying agent.” If the data is strong enough and they can convince payers and retina physicians that it’s better than Eylea, I think it will be the go-to drug after Avastin in those insurances, and potentially first line because why not—in our practice we have a lot of patients with really good insurance who have done well for themselves and they don’t want to start with generic corn flakes; they want to start with the branded drug. The question is how does it compare against what’s currently deemed to be the best drug, which is Eylea. If they win that in the hearts and minds of retina surgeons and even better in the hearts and minds of insurance providers, I think it’ll be used as either first line or as your go-to drug, as your clean-up batter.
Part of it’s going to be how they price it. If they come out and price this thing at double the price of Eylea, I think they’re going to have a much harder time convincing those insurance companies that they’re the go-to drug. If they price it comparatively better or perhaps even a discount, they might win more of that market. It’s different than every other field of medicine because nothing else has a 50 buck drug or a 75 buck drug that’s pretty good. So, the economics and the rationale of how you price the drug is very challenging when you have Avastin as your—lurking in the horse race.
Sam Slutsky:
Got it. In terms of first line use, too, you touched on this briefly but it seems like RTH258 won’t be launched possibly until 2019. So, in terms of the emergence of Avastin biosimilars, how do you think that will play in in terms of uptake?
Dr. David Brown:
I think it really depends on how those biosimilars are priced. If you look biosimilars, other biosimilars are typically priced 20%, 30% less than the branded drug. I don’t think that’s going to play well in this market. When you have 75 buck alternatives, I think they’re going to have to have a 50% discount or more to really chip away at the branded drug.
If the biosimilars come out at $1000 and really takes over a large part of the market, I think insurers may start to do more tiers where they say, “You got to use Avastin, and if not you use biosimilar this or that,” and then the third line would be that drug, and that’s certainly where RTH doesn’t want to be. You don’t want to be the third line drug in a drug tier.
Dr. Peter Kaiser:
I agree with Dave. This is one of those things where the price of the drug (inaudible).
Sam Slutsky:
Dr. Kaiser, we’re losing you. You’re breaking up a little. Are you there? All right, we’ll come back. Oh yes, yes. Now it’s good.
Dr. Peter Kaiser:
Sorry about that. I said the price is really going to play a large role, and I agree fully with what David said that these companies are not going to be able to (inaudible) this drug (inaudible). Can you hear me now?
Sam Slutsky:
Yes, yes, yes.
Dr. Peter Kaiser:
So, I’m saying that the $50 drug that we have really limits the biosimilar’s ability to (inaudible) have a high number. The biosimilars that are out there aren’t Avastin, they’re Lucentis. (Inaudible) Avastin biosimilar too.
Sam Slutsky:
You’re still breaking up a little bit but we’ll jump to the next question and come back. I wanted to now turn to other drugs in development and discuss programs targeting Ang2 calmodulin and VEGF. So, we know that there’s a lot of interest in Ang2 inhibitors such as Roche’s RG7716 and Regeneron’s nesvacumab which is in Phase 2 development. So, Dr. Brown, what do you see as the value of Ang2 inhibition and what are your expectations for this drug classes’ effect.
Dr. David Brown:
Ang2 is very interesting. It’s particularly interesting in the vascular diseases, retinal vein occlusion in diabetes because it looks to be a lot of Ang2 there and blocking of totally separate targets.
Wow, I’m getting a lot of feedback.
Blocking a totally separate target you hope would get better efficacy. In the early Phase 1s and 2s, it looked like we saw a duration effect. That’s what excited everybody. You’re going to have your data at the end of the year. If you really get a duration effect and hopefully can convince the FDA a way to prove on duration effect, that’d be great. Currently, the agency has only said they would approve a add-on drug if it improved visual acuity. For macular degeneration, we may be close to the top of where we can get with just an add-on drug with the one-time shot. Certainly if we get a sustained release device or a drug like Ohr’s that may potentially give you a steady state anti-VEGF by taking a pill every day or a drop every day, you may get more efficacy, but the devil’s in the—I guess we’re all waiting for the results and we should have that by the end of the year. We’re constantly optimistic.
Dr. Peter Kaiser:
(Inaudible).
Sam Slutsky:
You see its potential use though in some of the other neovascular indications such as DME and things like that moreso than AMD?
Dr. David Brown:
I think from a target perspective, yes. If you just look at the science, it makes more sense to me that those diseases have more Ang2 in the disease pathophysiology. That being said, we really didn’t think there was a whole lot of VEGF in macular degeneration and look how good it does with a VEGF blocker. So, there’s a distinct possibility that it could really help in macular degeneration, and we’ll see. We’ve got two major companies with two good drugs and we should have the data from both by the end of the year.
Sam Slutsky:
Okay, great. Dr. Kaiser, do you have anything to add to what Dr. Brown said?
Dr. Peter Kaiser:
Yes. Ang2 inhibition is something we’re all pretty excited about. We know that the tide 2 pathway which Ang2 works on is very involved in all these diseases, but I agree with David that it’s moreso in the retinal vascular diseases than macular degeneration. While it is involved in macular degeneration, we do expect the difference to be greater in diabetes.
The other interesting thing for me is the regulatory path that these two drugs are going to have to take are very different because the Regeneron product, which is used in combination with Eylea, has to show superiority in its Phase 3, if it gets there, whereas the Roche product being a biospecific molecule is actually a new drug. It’s not Lucentis-plus so its regulatory path is through a non-inferiority study, so that’ll definitely change the clinical trial design between the two drugs. It’ll be interesting.
Sam Slutsky:
Wow. Interesting. Thanks for that. Dr. Brown, you had touched on Ohr so we can discuss them right now. So, you’re both familiar with Ohr Pharmaceutical’s program of Squalamine, which his an antiangiogenic agent delivered as an eyedrop, inhibits a VEGF, PDGF and basic FGF through the inhibition of calmodulin, and its Phase 2 trial results from a prespecified analysis of patients within the (inaudible) CNB area of less than 10 millimeters squared, had particularly encouraging activity compared to Lucentis. The use of Squalamine led to a 5.3 letter improvement over Lucentis and mean change in visual acuity. The p value here is 0.03. Also that 40% of patients gained three or more lines of visual acuity versus around 25% for control, and based on the data and learnings of the drug’s mechanism of action or is enrolling the described patient population in its current large ongoing study.
So, Dr. Kaiser, can you discuss your impression on the company’s Phase 2 data and your thoughts on the rationale behind using the described enrollment criteria for the ongoing study?
Dr. Peter Kaiser:
Sure. I think one of the issues for Ohr was that many people, particularly people on Wall Street, bunched Ohr together with Fovista and other PDGF inhibitors because it does inhibit PDGF as one of its mechanisms of action, but what everybody—what all those people failed to realize is that as the molecule Squalamine doesn’t have any effect whatsoever on parasites. It’s effect is 100% on activated endothelial cells which is where the problem really lies, and so the Fovista drug and Regeneron’s PDGF inhibitor, both of which failed, were working an entirely different cell type, basically, than on parasites. That’s number one.
Number two, not only does it decrease these growth factors, it also specifically acts on these new endothelial cells. It changes the actin and filament within the cells which changes the structure of these new vessels, causing the vessels to block off, and that’s exactly what we want.
So, when you look at the Phase 2 data, unfortunately in the past everybody hoofed that horse, using Dave’s analogy, up to the buggy of all PDGF inhibitors and it was bunched together with them. Now, interestingly enough, the results of the study was actually very similar, however the similarity was not because it was working on PDGF; the similarity was that the combination of Squalamine as an eye drop together with Lucentis appeared to be working very well in Phase 2.
What I like about what Ohr did in Phase 3, unlike what Fovista did in its Phase 3 is that it basically Ohr took the patients who did well in Phase 2 and designed their Phase 3 clinical program on that, whereas Fovista and Ophthotech basically took their Phase 2 data where they did well and they changed it to include patients where their drug wouldn’t do well. So, one of the reasons why I think Fovista actually failed is they basically changed the study design between Phase 2 and Phase 3, which is a clinical trial no-no, and what Ohr did was the way that anybody who designs clinical trials would want to do which is take the learnings from Phase 2 and use that to design a rational Phase 3 that has an even higher chance of success than the Phase 2.
Sam Slutsky:
Got it. Thanks for that overview. Dr. Brown, wanted to get your view on the data and rationale for the patient enrollment in the current study.
Dr. David Brown:
First of all, on selecting patients that did better, I think it’s always good to enrich your effect. Certainly we do that in every clinical trial where we try to give a dose, you know, the month before the endpoint. It sounds like you wouldn’t want to restrict your label, but in today’s times where every optometrist has an OCT, most of the lesions we are catching are small lesions and most lesions are occult, and so this is the largest percentage of the lesions we get in the clinic these days.
I’m more excited about a continuous, ongoing anti-VEGF suppression. We basically give now pulsatile treatment where you give a big dose and most of the PK curves are linear, so when patients re-leak it’s typically when we think they get below a level of VEGF inhibition that would decrease leakage. If you could have ongoing VEGF suppression with something like an eyedrop, I think patients would love it. They’d definitely take their eyedrop and extend longer, and potentially get where they don’t have to have injections. I think that’s the most exciting part of this is a continuous anti-VEGF suppression along with some of the other cytokines that are blocked that we know from the Squalamine preclinical data.
Sam Slutsky:
Great. Thanks for that. Dr. Kaiser, in terms of the efficacy data for the control arm in Ohr’s study with Lucentis, do you think it was an accurate representation of what you would see in the real world?
Dr. Peter Kaiser:
Yes, it was. Obviously comparing across trials is an effort that you—fraught with error, however if you kind of look at the average of clinical studies where patients were enrolled all-comers, for instance the C.A.T. study or the IVAN study, the control group of Lucentis in the study performed almost identically to C.A.T., so it wasn’t that the control group was doing poorer and the combo group was doing normal. No, the monotherapy group was doing normal and the combo group was doing definitively better.
Sam Slutsky:
Okay, great. This question is for both doctors, but based on your extensive experience with clinical trials in the past and with Squalamine, what probability of success would you give this program in the current wet AMD trial? Dr. Brown, we can start with you.
Dr. David Brown:
I think that because of the continuous steady state suppression in multiple cytokines, I am on record as saying I thought the Fovista trial had a 10% chance of success and I think this one is much closer to 50/50.
It’s a well designed trial. They’ve got quite a bit of numbers. It seems like we’ve got quite a few patients in this trial and they’re not complaining that the eyedrop stings and it looks like their compliance is good. So, I’m optimistic that we got a horse race here. I hope we get visual acuity benefits. I think, to be honest, we may be close to the top of the curve, and so it may be that this is a drug that it does give you more duration or longer time between injections. We won’t see that in this first trial but hopefully there’s enough of a signal that they can go to a Phase 3. We’re in the second year. They’ve got where they stretch out the injections and you see duration. If we get visual acuity, that’s great, and I think that chance is about 50/50.
Sam Slutsky:
Great. Thanks for that. Dr. Kaiser, your thoughts?
Dr. Peter Kaiser:
Yes, I agree with Dave. I think when we look at some of the other combination studies, our probability of success that we were giving out was pretty low. Most companies will be pretty happy with 50/50; in fact, they would greenlight anything above probably about 30%.
I thinking maybe it’s a little higher. I’m going to go out on record and say 60% chance of success because I really think what the company has done in terms of honing in on the patients who did well in Phase 2 is going to bode well. They’ve eliminated the patients who may not do as well with the combination therapy from the enrollment, and to me this usually means that the success rate goes up from Phase 2.
So, you know, I’m pretty optimistic about this one. If it works, there’s a lot of other areas that an eyedrop can be used because remember now, the bar for a combo drop from a patient/physician standpoint—not from the FDA standpoint but from a patient/physician standpoint to add a drop is incredibly low versus another injection. The FDA, when you say combo to them, it doesn’t matter if it’s a drop or another injection, the bar is the same, but from a patient and a physician standpoint it’s a huge difference. An eyedrop, I don’t have to deliver it myself. I can write a prescription, the patient goes and gets it. The patient doesn’t mind taking an eyedrop, whereas if it’s another injection, here’s a whole nother worry about reimbursement, what’s going to happen with insurance companies’ coverage of that other injection. So, to me there’s a lot of reasons why I’m actually very bullish on this product and I’m optimistic to see the results in the future.
Dr. David Brown:
Yes, a lot of physicians that currently use Avastin, use Avastin because they’re worried about the financial implications, and what I mean by that is in a buy and bill scenario, when you give a $2,000 drug that you have to purchase from a drug distributor, you got to pay for that drug in 60 days. If your insurance company stiffs you once, and the margin’s 3%, 4% at the most, you got to do another 200 injections to make up for that one lost drug.
For this, physicians don’t have any financial risk by adding on the eyedrop with the prescription because it’s not a Part B drug.
Sam Slutsky:
Interesting. That’s going to be helpful for understanding the reimbursement landscape. Okay.
So, Dr. Brown, Dr. Kaiser had mentioned this briefly, but when thinking of some of the recent wet AMD failure’s such Ophthotech’s, Fovista, which had positive Phase 2 results, what do you think are the main contributors to the Phase 3 failing?
Dr. David Brown:
I think it’s the target. I mean, you had a very good study from Regeneron with potentially a better PDGF blocker that totally busted as well; the monotherapy did better than the combination therapy. If you look at Fovista’s Phase 2 data on lesion regression, which was the first thought, you strip the parasites, you get the anti-VEGF in there and it regresses more. If you go to the SEC (phon) filing, you see that monotherapy Lucentis caused more lesion regression than did combination therapy. So, if you’re premise is wrong, and I think it was tested well in both studies, both the Regeneron and the Fovista, and you put it up there and it loses, it loses.
Ang2 we hope has more of a potential of the combination, and again, anything that gives a steady state suppression like the sustained release device, like a gene therapy, if you can get enough product development, like an eyedrop from Ohr, I think that has the best chance of winning versus our paradigm of single injection high dose and then steady state linear decrease in PK.
Sam Slutsky:
Got it. Okay, thanks. Dr. Kaiser, in terms of combination approaches for wet AMD, do you think add-on therapies will be a one size fits all kind of like anti-VEGF, or do you think patient selection will be a key to truly recognizing the benefits of add-ons?
Dr. Peter Kaiser:
I think like everything, patient selection is going to be important. Certainly, for instance, with the Ohr product, very large occult lesions, probably not a good idea to be using the product unless we hear something differently. So yes, we are going to be using different add-ons for different reasons. The only other add-on that we probably will have is Ang2 in the near future—I should say anti-Ang2 in the form of Regeneron’s product which would be an add-on, but in that study we don’t know yet are there certain lesions that it works better on or is it a work on all comers? We don’t know yet.
Sam Slutsky:
Okay. In terms of the clinical pipeline, a bunch of companies are going after combination approaches on top of a VEGF inhibitor. So, Dr. Kaiser, in add-on works with one VEGF inhibitor in its study, do you think that can be extrapolated to use on top of the other anti-VEGF inhibitors as well?
Dr. Peter Kaiser:
As long as the mechanism of action is distinct, the answer should be yes. So, any add-on should work with any anti-VEGF agent, whether it be say a gene therapy anti-VEGF or a sustained release in the form of say an implant like the LADDER study from Genentech. It wouldn’t matter how the anti-VEGF is performed.
Now, if that add-on is another injection then the patient acceptance of it may be lower. If it’s an eyedrop like Squalamine, for instance, then that’s no big deal to add that on, and so it will be probably more likely for us to add on the ones that are easy to add on than the ones that are a little more difficult.
Dr. David Brown:
Yes, and that being said in an eyedrop, even if you have the world’s best injection—say RTH just kills it—there’s going to be very little uptake to that drug that’s a J code and that’s because of that buy and bill scenario I gave you. In other words, if I buy a $2,000, or a who knows, $3,000 RTH drug and there is no J code, you use an undefined code when you code it, which means that insurers always delay your payments. So that’s a six to eight-month delay typically after the drug comes out to get that J code.
With a prescription, I don’t care. I mean, it’s their problem if the patient’s insurance doesn’t cover it at the pharmacy. I think it’s much more likely to uptake an eyedrop quickly than it is another biologic injection.
Sam Slutsky:
Got it. Dr. Brown, can you discuss the potential challenges of combination therapy from a compliance and reimbursement standpoint when we have two products that are administered both as injection at different intervals?
Dr. David Brown:
Yes. So, even though the—Peter made a good point that the drugs are different, the Novartis and the Regeneron drug, but they’re still given as a single injection, so I think that’s okay. I think what would have been very challenging is something like Fovista where you had two injections, potentially the same day or close to each other. Currently we have both CMS Medicare and private insurers that do these overall big audits looking for an injection within 28 days of another, and that’s to say they don’t want me to give Avastin in between an Eylea injection. Anything within 28 days gets flagged. They typically deny the expensive drug; they’re not stupid. So, any time you have to give two injections that are expensive biologics within a similar time I think would be incredibly challenging unless you got the insurance companies to buy on that it was really that much better.
The two combinations, one, the BiFab from Novartis and the sort of like Tide where you’ve got the white little soaps and the blue little soaps together in the same injection, I don’t think is going to be as big of a deal for us because it’s just one injection code along with the price of the drug.
Sam Slutsky:
Interesting. Dr. Kaiser, you feel the same way about this or is there any differences from your practice?
Dr. Peter Kaiser:
I think David said it right, you know? What many on Wall Street don’t get is sort of the insurance aspects of what we do and how it guides so much of our practice of medicine, unfortunately, and the idea of having to do, like Fovista would have been, two injections, was really not going to be all that palatable to us with reimbursement. We’ll see what happens with the Ang2 inhibitors, where that plays out. It’s still an injection at the end of the day and when you have a new drug and a new injection, it’ll be a long uptake for us because of the worry about reimbursement.
Sam Slutsky:
(Inaudible). Got it. Thanks for that. I now wanted to turn to Regenxbio which is developing an AAV gene therapy technology that leads to the local production of an anti-VEGF antibody fragment. Dr. Kaiser, I wanted to get your view on the potential overall application of this technology and if it did work, how could it potentially interrupt the anti-VEGF market?
Dr. Peter Kaiser:
Well, let’s assume many things. One is that the vector that Regenxbio is using, so it’s its AAV vector, is correct to infect the cells we want and infect it in the retina. Let’s just assume that. Let’s also assume that the plasma they have packaged within the vector is correct also and will produce the anti-VEGF protein that will work. So, those are two big assumptions already. Then let’s assume that it actually transfects enough cells to produce enough protein for this to work in the eye.
Now, theoretically, it should, right? The Regenxbio IP is much stronger than say Avalanche’s old IP or some of the other gene therapy companies IP. It’s very strong and particular in the delivery of drug to the eye by an AAV vector. So, that part of the equation they’re at least as good as anybody else out there.
Let’s just assume that the drug completely works and produces long-term anti-VEGF protein within an eye. This is obviously an exciting thing, but it wouldn’t change any sort of the combo drugs that are individual. For instance, if Ohr worked, there’d be no reason to not combine that with a Regenxbio product because all you’re adding is an eyedrop. If there was another add-on that would require say an additional injection, then they’d be maybe a little less likely to be added on to a Regenxbio type situation.
So, I’m bullish on Regenxbio but it’s really early so there’s not too much to read into it because we have basically no data that really can guide us how that company is going to do just yet.
Sam Slutsky:
Okay. Great for that, thanks for that overview. Dr. Brown, just wanted to get your thoughts as well on the potential role of a gene therapy for wet AMD.
Dr. David Brown:
We’re excited about gene therapy. The difficulty is just as Peter alluded to, can you get enough product through your vector and your gene construct to actually give you a steady state drug? If you can, I think it would take over—it would be second line because you’d give injections for a while, and then people that knew they had to have injections more frequently than whatever it is, 8 weeks, 12 weeks, would say, “Hey, I’d love to have this operation.” There’s been two, I think, maybe three patients dosed in the U.S., so we’re going to have some data soon of whether it looks like this thing gives biologic activity. If it does, it will interrupt the landscape. Part of it’s going to be you’re going to have a surgery with a surgery center and a drug that’s probably got to be priced at 20 grand or more, so it’s going to take a while for insurance companies to swallow that, but I think it will be a major disruptor if, like Peter says, all the pieces fall into place and it really works.
Sam Slutsky:
Okay, thanks. Overall, Dr. Brown, from a prescribing standpoint, do you have any concerns with recommending gene therapy technologies for ophthalmology?
Dr. David Brown:
You know, we’re—AAV vector, the current vectors are not self-replicating. In other words, it’s not like something that can get in your system and go crazy and take over. That’s also a problem because those cells probably have less production of protein over time, which could limit potentially the use of this thing. Like it may not be a treatment that lasts 20 years, but we don’t know that. But, from a gene therapy perspective I think it’s a pretty safe bet with the current vectors.
Better vectors like the lentiviruses, the herpes, the AIDS viruses, etc., are much better at actually transfecting cells and turning your cells into doing what they want to do, but again, much scarier. A lentivirus is a much scarier virus that has much more potential for trouble, but yet it’s a better vector to actually do what you want to do. So, we hope that the AAV vectors work. If not, I think they’ll be pushing to stronger and potentially riskier vectors.
Sam Slutsky:
Oh, interesting. Thanks for that. Dr. Kaiser, do you have any additional potential concerns or thoughts on the overall application?
Dr. Peter Kaiser:
I don’t have a huge concern. One is more of a theoretical concern which is when we’re treating macular degeneration with anti-VEGF agents, there has been a suggestion that macular atrophy can occur. I’m on the camp that says I don’t really believe in it, but let’s just assume that there are some people who really believe in it and they’re right. In that situation, having chronic VEGF suppression for a disease like macular degeneration may not be a good idea.
Now, I say may not because all these things are theoretical and I’m still in the camp that says GA or macular atrophy is really not occurring in these patients; at least I haven’t seen it, so I think it’s more of a theoretical concern than a true concern at this point. Because once you turn on the gene production, you really can’t turn it off. Some of these gene therapy companies are saying you could turn it off by doing laser to the transfected cells. Well, that’s all said and good except you don’t know what the transfected cells are. So you can’t see it, so how are you supposed to laser it?
Sam Slutsky:
Got it. Got it, okay. Are there any other treatments in development that either of you are excited about for wet AMD that we haven’t discussed? Dr. Kaiser, we can start with you.
Dr. Peter Kaiser:
I think the other AMD product that has very strong data to date are the integrin inhibitors, in particular the one from Allegro Pharmaceuticals. That one has shown very good results in DME and some early results in AMD, and just by its mechanism of action would be distinct from anti-VEGF agents. What excites me is its possibility of it going—being used as monotherapy as well as combo therapy, but not having to do combo for the registration study, because I hate doing combo for registration if I can avoid it. It’s always easier to do monotherapy.
Sam Slutsky:
Got it. Do you think it’s magnitude of effect could go against VEGF?
Dr. Peter Kaiser:
It’s probably not going to be as strong as VEGF. It may last a little longer than anti-VEGFs, so that’s a plus, but because of its mechanism of action, it would be complementary to anti-VEGF. So, because of that, once we actually have it in market we would be able to use it in combo. Sort of like a lot of chemotherapy drugs are used now; they get approved mono but it turns out they work better together and they do that sort of post approval.
Sam Slutsky:
Okay, got it. Dr. Brown, are there any additional drugs in development that you want to discuss that we haven’t touched on?
Dr. David Brown:
It’s interesting. For years they kept looking for this magical factor, Factor X that became VEGF, and the VEGF blocker is amazing. We have equal scientific data on a bunch of other targets. CC3 chemokine receptors, tide agonists, Ang2 blockers, all of these things are a long ways away but potentially could be an additive agent or the magic bullet that really makes it where you turn off angiogenesis, neovascularization, and turn off the production of VEGF. Fortunately, there’s a lot of money in early drugs and so a lot of basic science been going on and preclinical data.
I don’t think we’ve found insulin. One of my partners keeps saying, “This is insulin, Dave. We’ll never have anything else. They’ve been using insulin since the ‘50s. They don’t have a second drug,” and they sort of do, but I’m hopeful that we will have something to decrease the treatment burden of the many, many, many patients I have that need injections every month to control their AMD, their DME or their RVO.
Sam Slutsky:
Okay.
Dr. Peter Kaiser:
I think the interesting thing about drug development in AMD is that many of the large pharma companies have offloaded the development onto the smaller companies. None of the large pharma companies—Regeneron excluded from that statement—really go out and develop in-house drugs and then take those drugs all the way throughout. They basically let somebody else do the development and then they buy them for large sums of money where it’s better to have a bird in hand than one in the bush, in other words. So, to me, companies like Allegro and like Ohr and some of these other smaller companies, once they show positive results in Phase 2, it’s very unlikely they’re going to stay alone at doing this. The pharma partner should be coming in very rapidly at that point.
I really wish also that these large pharma companies would spend some of that huge amounts of money they have on developing products because they have certainly much deeper pockets than the smaller companies.
Sam Slutsky:
Great. Yes, it seems like we’re seeing that approach throughout drug development overall in terms of partnerships and a lot of stuff being dumped onto the biotechs to do just because of the efficiency.
All right. I guess at this time, Operator, we’d like to open the line for questions. As a reminder, questions can also be submitted to questions@lifescicapital.com.
Operator:
Thank you. If you’d like to ask a question, please signal by pressing star, one on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, press star, one to ask a question. We’ll pause for just a moment to allow everyone an opportunity to signal for questions.
Sam Slutsky:
Great. While we wait for the queue to fill up, Dr. Brown, overall, could you provide us with a quick overview of the upcoming catalyst for wet AMD that you’re most excited about?
Dr. David Brown:
Like I said, end of the year we’re going to have our Ang2 combo results; we’re going to have some Ohr results here shortly thereafter. I think both are exciting.
Sam Slutsky:
Okay. Dr. Kaiser, any additional ones?
Dr. Peter Kaiser:
Those are the big ones. I think we’re all very excited about both these study results.
Dr. David Brown:
The RTH details obviously.
Dr. Peter Kaiser:
Yes, that’s for sure. We expect that probably like third quarter, around the AAO would be my guess. I’m actually surprised that you said that they’re not looking for approval for it until 2019. I would have thought they would be going earlier but you may be right.
Dr. David Brown:
Yes.
Operator:
Once again, if you’d like to ask a question, please press star, one.
Dr. David Brown:
Did they say why the delay? Is it production? That’s hard to believe. You would think that the second largest pharmaceutical company in the world could produce it.
Sam Slutsky:
Yes. I’m unclear (phon).
Dr. Peter Kaiser:
You would hope.
Sam Slutsky:
All right. At this time, it doesn’t seem like there are any questions in the queue, so wanted to thank both Dr. Kaiser and Dr. Brown for your time. Definitely a very insightful call, and thank you to everyone who tuned in.
Dr. Peter Kaiser:
Great.
Dr. David Brown:
Thanks, gentlemen.
Operator:
This conclude today’s call. Thank you for your participation. You may now disconnect.
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