The following interview was conducted with the management of Avalanche. As this took place over email, multiple participants responded to my questions. Management requested that I credit the responses to the entire team at Avalanche. Thus, it is reasonable to assume that such responses reflect the opinion of the Board of Directors - namely, Dr. Thomas Chalberg, Founder and CEO, and Dr. Mark Blumenkranz, Co-Founder and Chairman. The respective bios of these board members are located on Avalanche's website. Following are excerpts from the interview:
1. Could you please provide an overview of AAVL's pipeline and upcoming clinical milestones?
Our robust pipeline consists of several therapies which utilize our Ocular BioFactory platform for major and rare ophthalmologic diseases.
AVA-101: AVA-101 is being developed as a single sub-retinal gene therapy injection to provide a safe and effective treatment for wet age-related macular degeneration (wet AMD) that is durable and reduces the need for frequent anti-VEGF injections. We expect to announce 12-month topline data from the Phase 2a trial and 36-month follow-up data from the Phase 1 trial in June/July, and thereafter will initiate a Phase 2b trial.
AVA-201: AVA-201 is being developed for the prevention of wet AMD. AVA-201 delivers the same sFLT-1 expressing gene as AVA-101 but is administered by an intravitreal injection directly into the vitreous.
AVA-322/323: In collaboration with the University of Washington in Seattle, we are working to develop next-generation gene therapies for the treatment of color vision deficiency commonly known as red-green color blindness. Color blindness is one of the most common genetic diseases, affecting over 10 million people in the U.S. alone, for which there currently are no available treatment options. We are currently conducting IND-enabling studies, and our goal is to begin clinical trials by the end of 2016.
AVA-311: In collaboration with Regeneron, AVA-311 is being developed for the treatment of Juvenile X-linked Retinoschisis (XLRS), an inherited retinal disease. Pre-clinical studies are currently being conducted.
2. As reported, AAVL is expected to conduct a one-year follow-up analysis on the Phase 2a study in 2H 2015. What is AAVL expecting to achieve with this analysis?
This is a safety study, and the primary endpoint is to show that AVA-101 is well tolerated and safe. As secondary endpoints, to help guide our Phase 2b program, we also will be looking at durability and anatomic outcomes. We'd like to see that there are less frequent rescue injections of Lucentis required to maintain vision. We can't make specific predictions at this point, but we are optimistic that we'll see promising safety signals and potential positive secondary endpoints that will inform the Phase 2b study.
3. In an earlier clinical study, it was shown that treatment frequency was statistically reduced as compared to standard of care, but efficacy was not statistically improved. Could you elaborate on whether this is potentially attributable to an insufficient trial size and/or other important design components?
Our 12-month Phase 1 trial was not powered for statistically significant evaluation of efficacy, as it was a first-in-human study with a primary endpoint of safety. That said, data from the trial showed AVA-101 to be well tolerated, and the majority of subjects did not require re-treatment. While this study, conducted in eight patients, was not designed to evaluate potential improvement in efficacy, we did see comparable reduction in retinal thickness and a trend toward improved visual acuity.
4. What measures have been taken to increase the likelihood that statistically significant improvement in efficacy is achieved?
Our Phase 2a trial is a safety study, so our primary goal is to ensure that there are no major safety issues. This study is not powered for statistical significance of secondary endpoints. The results of the Phase 2a trial will inform the design of the Phase 2b trial, which will be conducted among a larger population of patients.
5. Do regulatory agencies (e.g., FDA) view treatment frequency as the primary factor in determining market approval, or is efficacy the primary consideration?
We cannot speculate on any future FDA decisions, but we believe reduction in treatment frequency would provide significant benefit to wet AMD patients.
6. If the product candidate has similar efficacy to standard care, but dramatically reduces treatment frequency, is it still marketable?
The primary endpoint of the Phase 2a study is safety. We cannot speculate on FDA approval at this point, but we know that the frequent anti-VEGF injections required by the current standard of care in wet AMD present a significant burden for patients and their caregivers, and can result in reduced patient compliance and under-treatment. We believe that a reduction in treatment frequency would benefit these patients.
7. What is the potential market opportunity for AVA-101 in reflection of current marketed products? How can you really judge what the opportunity is when there is no marketed gene therapy?
Each year, approximately 150,000 new patients are diagnosed with wet AMD. We believe that AVA-101 has the potential to substantially reduce the number of treatment injections for these patients. While there currently is no marketed gene therapy in the U.S., we have a deep understanding of the wet AMD market and what patients and ophthalmologists may be looking for in future treatments, and we believe AVA-101 could be an important addition to the arsenal of treatment options available in the future.
8. If AVA-101 is approved, how does AAVL anticipate bringing it to market, and how might other pipeline assets be impacted?
It's a little early in our development process to speculate on how we would bring AVA-101 to market. That said, there are about 1,200 retinal specialists in the U.S., and that is a very reasonable number of physicians to target on our own. We have several other assets in our pipeline that we're working diligently to advance as well, and we would expect to continue with those assets as AVA-101 moves forward.
9. Looking at Celladon (NASDAQ:CLDN), it was clear by the latest clinical data that its gene therapy MYDICAR failed to meet the target endpoints of the CUPID2 Trial. Gene therapy stocks tanked across the board. As Wall Street clearly - and perhaps mistakenly - places all gene therapy developers in the same basket as CLDN, is there any insight you can offer to potentially alleviate concerns that the AVA-101 trial might yield negative data?
While we can't make predictions about the Phase 2a data, our 12-month Phase 1 data showed AVA-101 to be well-tolerated with no significant drug-related safety concerns in eight subjects with wet AMD. There are significant differences in gene therapies depending on what disease is being treated and even how they are administered, and we believe the eye is an ideal environment for gene therapies.
10. What is your current position and cash burn? Do you see a need to return to the capital markets in the foreseeable future?
Cash, cash equivalents and marketable securities as of March 31, 2015 was $290.1 million. In January 2015, Avalanche raised net proceeds of approximately $130.6 million in a public offering of common stock. We believe our current cash position will see us at least through 2017.
11. In terms of corporate objectives, what is AAVL's view of being acquired? Is this something that management has broadly contemplated in reflection of the progress of AAVL's primary clinical program?
Our focus right now is on advancing our pipeline ourselves, and we are in a strong position to continue to do that.
12. It appears that AAVL insiders have been selling stock, which has started all sorts of rumors about the upcoming data readout. Is there any significance to these sales?
These are 105b-1 planned sales and are not associated with the upcoming data announcement in any way.
13. If AVA-101 yields positive findings in the Phase 2a study, how might this validate AAVL's pipeline?
The primary endpoint of the Phase 2a study is safety. We can't make specific predictions at this point, but we are optimistic that we'll see promising signals that will inform our Phase 2b study. Our pipeline of therapeutic candidates use different vectors and different routes of administration into the eye, so each is truly unique. Positive news would be good for gene therapy in general, and with one of the most exciting and innovative pipelines in ophthalmology, these findings could raise further visibility and interest.
14. In your opinion, why is AAVL a buy or sell? What makes either trades compelling?
We can't comment on potential individual investor decisions. We operate at the intersection of diseases of the eye and gene therapy, and that is where we believe the treatments that will be most beneficial to patients and physicians lie. We believe there is strong potential market opportunity for AVA-101 and our other pipeline candidates, and we look forward to continuing to advance our pipeline and develop therapies for patients with unmet medical need.
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