Earnings Call Transcript - EYPT Q4 2024

Operator, Operator

Good morning. My name is Michelle and I will be your conference operator today. At this time, I would like to welcome everyone to the EyePoint Fourth Quarter and Full Year 2024 Financial Results and Recent Corporate Developments Conference Call. There will be a question-and-answer session to follow the completion of the prepared remarks. Please be advised that this call is being recorded at the company's request. I would now like to turn the call over to George Elston, Executive Vice President and Chief Financial Officer of EyePoint. Please go ahead, sir.

George Elston, CFO

Thank you. And thank you all for joining us on today's conference call to discuss EyePoint's fourth quarter and full year 2024 financial results and recent corporate developments. With me today is Dr. Jay Duker, President and Chief Executive Officer. Jay will begin with a review of recent corporate updates and discuss the ongoing clinical trials for DURAVYU. I will close with commentary on the fourth quarter and full year 2024 financial results and we will then open the call for your questions. Earlier this morning we issued a press release detailing our financial results and recent corporate developments. A copy of the release can be found in the investor relations tab on the company website, www.eyepointpharma.com. Before we begin our formal comments, I'll remind you that various remarks we will make today constitute forward-looking statements for the purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. These include statements about our future expectations, clinical developments and regulatory matters and timelines, the potential success of our products and product candidates, financial projections and our plans and prospects. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors including those discussed in the risk factors section of our most recent annual report on Form 10-K, which is on file with the SEC and in other filings that we have made or may make with the SEC in the future. Any forward-looking statements represent our views as of today only. While we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so even if our views change. Therefore, you should not rely on these forward-looking statements as representing our views as of any date subsequent to today. I'll now turn the call over to Dr. Jay Duker, President and Chief Executive Officer of EyePoint.

Jay Duker, CEO

Thanks George. Good morning, everyone and thank you for joining us. 2024 was a year of continued execution and exceptional results for EyePoint on all fronts, bringing us closer to delivering on our goal of bringing life-changing treatments to patients with severe retinal diseases. On today's call we will review why we're the leader in ocular sustained drug delivery and how we are uniquely positioned to improve patients’ lives with strong data in two potential multi-billion-dollar blockbuster indications. We've advanced our best-in-class therapy DURAVYU into Phase 3 clinical trials in wet age-related macular degeneration or wet AMD. And we've reported positive 24-week Phase 2 results in Diabetic Macular Edema or DME supporting a second Phase 3 opportunity. DURAVYU is the only sustained delivery program with robust data for an investigational six-month therapy in both of these indications, highlighting how a differentiated TKI with a new mechanism of action may improve patient outcomes compared to the standard of care. I want to emphasize the safety of our Durasert technology beginning with the four products already approved by the FDA and continuing with the strong safety data from the four clinical trials of bioerodible Durasert E, consisting of over 190 patients treated with DURAVYU. This superb safety profile, coupled with the excellent efficacy data we saw in DAVIO 2, the largest intravitreal Phase 2 sustained delivery clinical trial in wet AMD to date, has driven significant patient and physician interest in our ongoing pivotal trials. With both of our Phase 3 wet AMD trials, LUGANO and Lucia surpassing enrollment expectations. I'm pleased to report that we are exceeding historical enrollment rates of comparable wet AMD trials by a substantial margin. The LUGANO trial is now well over 50% enrolled and the Lucia trial is tracking ahead of schedule as well. We continue to expect completion of enrollment in both trials in the second half of 2025 with top line data anticipated in 2026. The tried and true non-inferiority trial design of LUGANO and Lucia in wet AMD represents a clear pathway to regulatory approval should the results be positive. In the sustained release space, we anticipate being the first investigational six-month intravitreal wet AMD program to submit a new drug application or NDA allowing us to potentially reach patients first. Our patient-centric trial design should enable a broad product label with an optimal dosing interval, thereby providing physicians flexibility and allowing us to capture more of the market share. As part of our preparation for success, our commercial manufacturing facility in Northbridge, Massachusetts is now online with DURAVYU registration batch manufacturing underway to support an NDA filing. We recently reported positive efficacy, safety and subgroup data from our Phase 2 VERONA clinical trial for DURAVYU in DME. VERONA met primary and key secondary endpoints, firmly establishing DURAVYU as the only sustained release TKI program with an active DME program. DME is currently a large market but has a significant need for sustained delivery options. I will discuss the VERONA data in more detail later in this call, but based on the compelling Phase 2 data, we expect to hold an end of Phase 2 meeting with the FDA around pivotal trial design in the second quarter of this year. We remain in a solid financial position. We ended 2024 with a noteworthy balance sheet of $371 million in cash and investments and no debt. This was bolstered by a $161 million oversubscribed follow on equity offering in the fourth quarter. Turning to our science, DURAVYU consists of vorolanib, which is a patent protected best in class tyrosine kinase inhibitor, or TKI, formulated in proprietary bioerodible Durasert E. Durasert has been safely delivered to tens of thousands of eyes across four FDA approved products, meaning both patients and physicians are exceptionally comfortable with this delivery system and its established safety record. Durasert E uses a bioerodable matrix that allows for the sustained delivery of drugs via zero-order kinetic release for at least six months. Zero-order kinetics means that the drug is delivered at a steady rate so that small payloads can give an extended therapeutic effect with constant tissue exposure. In addition, Durasert E allows for immediate bioavailability and by design prevents uncontrolled release of free drug floating in the eye. Vorolanib is not another anti-VEGF and DURAVYU is not just another anti-VEGF program. Vorolanib is a potent and selective TKI that brings a new mechanistic approach to the treatment of VEGF mediated retinal diseases through intracellular blocking of all VEGF receptors. It therefore blocks all isoforms of VEGF, including VEGF C and D. Vorolanib has demonstrated neuroprotection in a validated retinal detachment animal model and may have an antifibrotic benefit as it blocks the PDGF receptor at tissue exposure achieved with DURAVYU; vorolanib does not block TIE2. Blockage of the TIE2 receptor is associated with retinal vascular instability. DURAVYU is packaged in a pre-filled sterile syringe injector. It is administered by a standard intravitreal injection in the physician's office, similar to the current standard of care anti-VEGF biologic treatments and consistent with current retinal practice dynamics. Unlike currently approved biologics and other sustained release programs in development, however, DURAVYU can be shipped and stored at ambient temperature. We have strong patent protection for DURAVYU in both the United States and outside of the U.S. This allows us to protect our innovation and provides us flexibility with our strategic partnerships. In summary, with an excellent safety profile, a distinct mechanism of action, zero-order kinetics that allows for sustained microdose delivery for at least six months, great patent protection and convenience for physicians, we believe DURAVYU is well positioned as an excellent treatment option for patients with VEGF mediated retinal diseases. Turning to the Phase 2 VERONA clinical trial in DME, we recently announced positive 24 week safety and efficacy data for DURAVYU with both DURAVYU arms meeting the primary endpoint of longer time to first supplement versus control. DURAVYU 2.7 milligram demonstrated an early, sustained and clinically meaningful improvement in best corrected visual acuity, or BCVA, with a gain of 7.1 letters compared to baseline and a central subfield thickness or CST improvement of 75.9 microns on OCT measurement. This represents 74% more drying effect versus the aflibercept control. Visual and anatomic gains were observed as early as week four and were much more robust than those achieved by the aflibercept control eyes, demonstrating the immediate bioavailability of DURAVYU and its differentiated profile as a sustained-release TKI. Both DURAVYU treatment arms showed a favorable safety and tolerability profile with no DURAVYU related ocular or systemic serious adverse events reported to date. Yesterday, we presented subgroup analyses from the Phase 2 VERONA clinical trial of the supplement-free patients through week 24. The data demonstrated that for those eyes that went 24 weeks with no supplementation, DURAVYU 2.7 milligrams had a significantly better improvement in BCVA and anatomic control compared to the aflibercept control group. BCVA improved 10.3 letters compared to baseline versus only three letters improvement for the aflibercept control group. DURAVYU 2.7 milligram also demonstrated concomitant structural improvement with CST improvement of 117 microns versus only 31 microns for the aflibercept control. This result confirms that the positive data from the Phase 2 VERONA trial were driven by DURAVYU as an active agent continuously released over six months and that the unsupplemented eyes had improved visual acuity of about two lines on the eye chart. The highly positive Phase 2 data supports our plans to engage in discussions with the U.S. and ex-U.S. regulatory agencies to solidify the plans around a pivotal program. As a company, we are highly focused on the successful completion of our Phase 3 wet AMD program for DURAVYU. In wet AMD, our goal is to provide a product that maintains stable vision at retinal anatomy for the majority of wet AMD patients within every six-month label. This could represent a significant improvement compared to the current anti-VEGF treatments that are typically dosed on average every two months in the United States. And it may allow patients and practitioners the flexibility to reduce the number of visits without sacrificing visual outcomes. As previously mentioned, enrollment is ongoing in both of our pivotal Phase 3 wet AMD trials, LUGANO and LUCIA, with rapid enrollment rates that are exceeding our expectations. Enrollment completion in both trials is expected in the second half of 2025. Both trials have received exceptional investigator and patient enthusiasm to date, driven by an established and familiar trial design. The two essentially identical non-inferiority trials with six-month redosing provide a clear and recognized pathway for global regulatory and commercial success, positioning to review to become a potential blockbuster franchise. To close, I'd like to thank the entire EyePoint team for an incredible year and a strong start to 2025. The dedication and execution capabilities demonstrated by our team to reach these milestones reflects the entire organization's commitment to improving patients' lives. On that note, I'd also like to thank the patients and the clinical investigators for their participation in our ongoing trials. Without you all, the progress we've made advancing DURAVYU would not be possible. With our compelling clinical pipeline representing multibillion dollar product opportunities, our best-in-class sustained ocular delivery Durasert E technology, along with a strong balance sheet, we have further established our role as the leader in sustained ocular drug delivery and are well on our way to bringing impactful therapies to patients suffering from serious retinal diseases. I will now turn the call over to George to review the financials.

George Elston, CFO

Thank you, Jay. As Jay noted, we ended 2024 with a very strong balance sheet, driven by continued stewardship of our cash and an oversubscribed $161 million follow-on financing in October, ending the year with $371 million in cash and investments. As the financial results for the three months and full year ended December 31, 2024, were included in the press release issued this morning, my comments today will be focused on a high-level review for the quarter. For the quarter ended December 31, 2024, total net revenue was $11.6 million compared to $14 million for the quarter ended December 31, 2023. The net product revenue for the quarter ended December 31, 2024, was $0.8 million compared to net product revenue for the quarter ended December 31, 2023, of $0.7 million. We expect net product revenue to continue at immaterial levels as we will no longer be supplying YUTIQ to ANI Pharmaceuticals, our U.S. partner as of May 31, 2025. This follows the nonrenewal of a supply agreement that accompanied the sale of YUTIQ commercialization rights to Alimera Sciences, now ANI in 2023. Consistent with our strategy, our forward manufacturing focus is on our DURAVYU program to support clinical trials and NDA filing and future commercial launch. Net revenue from royalties and collaborations for the fourth quarter ended December 31, 2024, totaled $10.8 million compared to $13.3 million in the corresponding period in 2023. The decrease was primarily driven by lower recognition of deferred revenue from the license of YUTIQ product rights. Operating expenses for the quarter ended December 31, 2024, totaled $56.8 million compared to $30.4 million in the prior year period. This increase was primarily driven by the two ongoing Phase 3 trials for DURAVYU. Net non-operating income totaled $3.9 million and net loss was $41.4 million or $0.64 per share, compared to a net loss of $14.1 million or $0.33 per share for the prior year period. Turning to the full year ended December 31, 2024, total net revenue was $43.3 million compared to $46 million for the year ended December 31, 2023. Net product revenue for the full year ended December 31, 2024, was $3.2 million compared to net product revenues for the full year ended December 31, 2023, of $14.2 million. This decrease was driven by the license of YUTIQ product rights sold in May 2023, completing EyePoint's exit from its commercial business. Net revenue from royalties and collaborations for the full year ended December 31, 2024, totaled $40.1 million compared to $31.8 million in the corresponding period in 2023. The increase was primarily driven by full year recognition of deferred revenue in 2024 from the license of YUTIQ product rights versus a partial year in 2023. Operating expenses for the full year ended December 31, 2024, totaled $189.1 million versus $121.1 million in the prior year period. This increase was attributed primarily to a $26.6 million increase in clinical trial costs related to the Phase 3 clinical trials of DURAVYU, $28 million of increased personnel costs across the organization, including $24.7 million increase in non-cash stock compensation, $16.7 million in DURAVYU nonclinical and license expense; these increases were offset by a $3.3 million decrease in other sales and marketing expenses due to discontinuation of YUTIQ commercialization in 2023. Net non-operating income totaled $15.1 million, and net loss was $130.9 million or $2.32 per share compared to a net loss of $70.8 million or $1.82 per share for the prior year period. Cash, cash equivalents and investments in marketable securities on December 31, 2024, totaled $371 million compared to $331 million as of December 31, 2023. We expect the cash and investments on December 31, 2024, will enable us to fund operations into 2027 and beyond top line Phase 3 data for DURAVYU and wet AMD expected in 2026. Accordingly, based on our solid cash position, we currently have no plans to access the equity capital markets this year. In conclusion, we are incredibly pleased with EyePoint's progress in 2024 and are well capitalized to advance our DURAVYU program through Phase 3 trials in wet AMD. I will now turn the call back over to Jay for closing remarks.

Jay Duker, CEO

Thank you, George. As we've discussed, EyePoint continues to be a story of a superior product, strong execution and focused leadership in the retinal disease space. We've accomplished our clinical milestones efficiently and aligned with our guidance, and we plan to continue this in 2025 and beyond. Key upcoming catalysts include enrollment completion in the Phase 3 LUGANO and LUCIA clinical trials of DURAVYU and wet AMD in the second half of 2025. Top line data for these Phase 3 trials in 2026 and an end of Phase 2 meeting with the U.S. FDA to discuss the first pivotal Phase 3 trial of DURAVYU in DME. This remains an incredibly exciting time for EyePoint as we are well positioned to execute on our upcoming milestones and continue to transform the treatment landscape with innovative long-term solutions to improve both the vision and the lives of patients with serious retinal diseases. Thank you all very much for listening this morning. I will now turn the call over to the operator for questions.

Operator, Operator

Thank you. Our first question is from Tessa Romero with JPMorgan. Your line is open. Please go ahead.

Tessa Romero, Analyst

Hi Jay and team. Thank you for taking our questions this morning. For your wet AMD pivotal program, how many clinical sites have been activated across the trials of your overall target so far? I think you were at over 100 sites activated across the trials, as of our conference in January. And for LUCIA, can you remind us how many U.S. sites do have open? Or are you aiming to open? Thanks so much.

Jay Duker, CEO

Good morning, Tess. Thanks for your questions. I'd like to introduce our Chief Medical Officer, Ramiro Ribeiro, who is also on the call. Dr. Ribeiro, do you want to answer those questions, first of all, about our wet AMD trials, the current sites open and Blue ex-U.S. sites planned?

Ramiro Ribeiro, Chief Medical Officer

Yes. Thanks, Jay and good morning, everybody. Thanks for the question, Tess. So, we have most of the sites already activated in the U.S. The ones that are not activated yet are usually the words that have more length process like academic centers that takes a little bit longer to be activated. But I think as we show with our enrollment numbers, we are very pleased with the progress of the studies, and we have most of the sites already activated, especially the strong ones. In terms of ex-U.S., we are planning to have between 60 and 80 sites per study, which should be coming later this year.

Tessa Romero, Analyst

Can you just clarify your numbers of active sites currently in each trial?

Ramiro Ribeiro, Chief Medical Officer

So, we have approximately active about 60 sites per study.

Tessa Romero, Analyst

Okay, thanks so much.

Operator, Operator

Thank you. And one moment as we move on to the next question. Our next question comes from the line of Yigal Nochomovitz with Citigroup. Your line is open. Please go ahead.

Yigal Nochomovitz, Analyst

Hi Jay and team. Thank you for taking the questions. I just had one on the analysis you presented yesterday in the supplement. It was interesting that you got a very, very strong separation with the 2.7 milligram versus aflibercept, though for the 1.3, it seems like it didn't separate as much as one may have expected. I was just curious if you could comment on the trend there. Relative to what was observed with the overall population of the 26 patients. Thanks.

Jay Duker, CEO

Thank you, Yigal. That's an excellent question. The evaluation of the subgroup analysis, especially among the non-supplemented patients, really highlights the effectiveness of DURAVYU in the DME population. These patients maintained their treatment for the full 24 weeks using only DURAVYU and showed improvements of over 10 letters and 117 microns less fluid, which is a significant advantage compared to the unsupplemented eyes in the control group. We are observing what appears to be a dose-response relationship between the 2.7 and 1.3 doses. The 2.7 dose is what we are using in our current pivotal trials and is our planned dosage for DME as we move to market. While there is some variability in individual responses, we believe this indicates a true dose response. What this indicates is that DURAVYU demonstrates considerable efficacy in this population when it is effective. The supplement-free rates achieved with the 2.7 milligram dose were not influenced by supplementary eyes that were gradually losing vision or gaining fluid but did not meet the criteria. In fact, the curves for those supplementary eyes indicate they were very well controlled. It’s worth noting that, aside from one exception, the supplements in the 2.7 group did not significantly impact vision or fluid levels, suggesting we may have reached a ceiling effect for most of these eyes. Therefore, this analysis is robust, and I believe the differences can be attributed to a dose response relationship between the two doses, with some individual variability.

Yigal Nochomovitz, Analyst

Okay. Thanks. And just one very quick one on the timing of the Phase 3. Will there come a point perhaps later this year where you'd be able to provide a little bit more granularity on sort of which half of 2026 we may expect the Phase 3 top line data.

Jay Duker, CEO

The Phase 3 top line data, sure. I think we will be able to give you more granularity certainly as we approach last patient in LUCIA. I think that will be obvious. So yes, we do expect some time, I expect early second half of the year to give you some more granularity around that.

Operator, Operator

Thank you. And one moment as we move on to the next question. Our next question comes from the line of Yatin Suneja with Guggenheim. Your line is open. Please go ahead.

Yatin Suneja, Analyst

Hey guys, thank you for taking my question. I mean now that the study is 50% enrolled, are you able to characterize the type of patients you are able to recruit right now, how they might be I know there are differences versus W2, but anything you can just comment on. So that's one. The second one is on the DME side. I mean now that you have a little bit more time to analyze the data. Could you maybe talk about the development plan, especially the Phase 3, how you are thinking about what sort of a load we should expect from standard of care. Yes, thank you.

Jay Duker, CEO

Thank you, Yatin. To address the first question regarding the patient population, we have capped the previously treated patients at about 25%, which we have already reached in LUGANO. Therefore, the majority of our enrolled patients, since we are over 50% enrolled, are treatment-naive patients. We do not anticipate enrolling any more previously treated patients in this trial. That's the broad understanding of our patient recruitment status. Beyond this, we haven't conducted any significant analysis yet and do not plan to analyze further details until the studies are completed. Regarding the Phase 3 DME trial, we have multiple options available. Ramiro is likely the best person to provide more specific insights. However, the truth is we do not yet know the exact direction we will take; we need to get critical questions answered by the agency. The key point is that the data is very strong, suggesting we have several pathways to approval. Ramiro, do you want to add any more details?

Ramiro Ribeiro, Chief Medical Officer

Yes. I think as you mentioned, Jay, the data from the Phase 2 study does show immediate benefit on the CVA on day one. So that type of results give us flexibility while we think about designing the Phase 3 studies for DME. The first option, of course, is always going to be something similar to what we're doing for wet AMD, right? We have the loading dose which for DME in this case, is five loading dose of aflibercept, and then we would give to review. But again, based on the results from the Phase 3 study, I think we might have an opportunity to design a study that is more efficient, meaning we would dose to review earlier, do a study that could be a little bit shorter and overall, have the results sooner.

Yatin Suneja, Analyst

That helpful. One more question. This one is for George. Could you maybe help us model the R&D expense going forward at least in 2025?

George Elston, CFO

Yes, sure, Yatin. So, remember, you did see that a fairly meaningful increase in Q4, and that was really related to the initiation of both the LUGANO and LUCIA trials in the fourth quarter. I think that's probably a good barometer of how you roll forward 2024. As we clarified yesterday and again today, we are laser-focused on execution of those trials, and that's going to be the focus for our burn on the R&D side in 2025.

Operator, Operator

Thank you. One moment as we move to the next question. Our next question comes from the line of Kambiz Yazdi with Jefferies. Your line is open. Please go ahead.

Kambiz Yazdi, Analyst

Morning, Jay and team. Congratulations on the enrollment progress. While LUCIA and LUGANO remain the laser-focused near term, I was wondering if you've considered any opportunities to conduct post-marketing studies for DURAVYU long term? If so, what information would be valuable to glean from such studies and help further differentiate DURAVYU and wet AMD marketplace? Thank you so much.

Jay Duker, CEO

Thanks, Kambiz for that question. And obviously, we've already started to think about what other studies might enhance the value of DURAVYU and wet AMD. And the one we've talked about, I think, for a while, that is most obvious would post approval to run the study in wet AMD of DURAVYU against whatever the current industry leader for Ligand blocker is at the point, whether it's high Decile-dose or VABYSMO. In the study, instead of the primary endpoint being change in visual acuity, the primary endpoint would be supplement free rate up to six months or percentage advised unsupplemented or time to first supplement that sort of thing. The obvious reason for doing that is we're going up against 2-milligram Eylea in the pivotal trials, which is a regulatory requirement. And while 2-milligram Eylea remains a very, very good treatment as a ligand blocker with terrific short-term efficacy. The market seems to be moving into VABYSMO and suspect high-dose Elyea eventually. So, it makes sense to prove our longevity against those two products. We think we would do very well against that and obviously then give us some more strength in the marketing argument. I can ask Ramiro, any other thoughts you might have on post-approval studies that would be interesting and helpful.

Ramiro Ribeiro, Chief Medical Officer

Yes. I think we are just learning about the effect of TKI in AMD. And of course, the Phase 3 studies are laser focused on gaining our regulatory approval. But as Jay mentioned, we're going to do studies compared to all the ligand blockers. But also exploring additional benefits that TK inhibitor could have such as prevention of atrophy in these type of wet AMD patients. So that's something that we're also going to be looking for as a post-market study.

Operator, Operator

Thank you. And one moment as we move on to the next question. Our next question comes from the line of Jennifer Kim with Cantor Fitzgerald. Your line is open. Please go ahead.

Jennifer Kim, Analyst

Hi. Thank you for taking my question, and congratulations on the strong execution. To start with DME, could you provide more details about your plans to meet with U.S. and international agencies next quarter? What are you hoping to achieve from these meetings? Should we expect an update by next quarter, or will it come shortly after? Additionally, when AMD becomes a focus, what would trigger a decision to advance the pivotal program? Is this dependent on the accelerated pathway that Ramiro mentioned?

Jay Duker, CEO

Thanks, Jennifer. Those are great questions as always. I’ll let Ramiro provide more details about the type of interaction we anticipate with the regulatory agencies. Typically, after we receive the written minutes, we will make a public announcement regarding our plans and how they align with the agencies' feedback. Regarding the acceleration of DME, we want to ensure that our focus on wet AMD remains secure and that we maintain the necessary resources, both in personnel and finances, to support a strong cash runway following the wet AMD data. Therefore, decisions about the structure and timing of DME after regulatory meetings will be secondary to our primary goal of ensuring the success of wet AMD. Now, I'll turn it back to Ramiro for any insights on what we hope to achieve in our second-quarter meeting with the agencies.

Ramiro Ribeiro, Chief Medical Officer

Yes. So, we are planning to have a meeting both with the FDA as well as with EMA to ensure we gather regulatory feedback globally. At the end of the day, the questions are going to be around the design of the study. So of course, I think we're going to propose something that, as I mentioned before, would make a study efficient. And then get feedback from the agencies if they agree with that approach.

Jennifer Kim, Analyst

Okay. I have a question about the wet AMD programs. Since you mentioned there are about 60 to 80 sites per study, should we consider LUCIA similarly to how we view LUGANO in terms of enrollment, or are there high enrollers participating in LUGANO before transitioning to LUCIA? I'm trying to understand the timing of these processes.

Jay Duker, CEO

The number of sites in LUGANO is currently slightly higher than in LUCIA. However, we anticipate that more LUCIA sites will be added over time. It's important to note that LUCIA began its first patient enrollment about six to seven weeks after LUGANO. This will naturally create a slight separation in recruitment timelines. Nevertheless, the recruitment trends we are observing in LUCIA resemble the initial patterns seen in the LUGANO trial. We are optimistic and confident that the enrollment pace in LUCIA will match that of LUGANO.

Operator, Operator

Thank you. One moment. As we move on to the next question. Our next question comes from the line of Graig Suvannavejh with Mizuho Securities. Your line is open. Please go ahead.

Graig Suvannavejh, Analyst

Good morning. Thanks for taking my question. Congrats on the progress in the year and the quarter. I just wanted to ask a question about your Northbridge manufacturing facility, manufacturing, obviously, is something that we on the cell I don't get a lot of visibility into, but maybe can you talk about how you are anticipating the manufacturing progress to continue? And maybe some color on, I guess, kind of the quality of the site that you've built out there and potentially anticipate any potential CMC issues, which, obviously, we always worry about because we can't get visibility to that. Thanks.

Jay Duker, CEO

Sure. Thanks, Graig. George, do you want to answer that question?

George Elston, CFO

Yes, Graig, that's a great question. We've been proactive on this front for several years. To remind everyone, we opened our Northbridge facility last fall, which is a state-of-the-art 41,000 square foot space. Our focus is not only on clinical execution but also on preparing for registration batches, pre-approval inspections, and eventual commercialization. The team has done an excellent job in getting that site operational. We have shifted all DURAVYU manufacturing to this facility, and the team has already begun activities to start registration batches this year to support an NDA filing. The site was constructed to our specifications by the landlord without requiring any cash investment, which has worked out really well for us. Moreover, we've involved the FDA early in the design and execution of the facility, and our quality team has been actively engaged throughout the process. We feel very positive and well-prepared as we move forward with the data we expect to have—not only for clinical use but also to support a successful commercial launch with favorable results.

Jay Duker, CEO

If I may tell a little anecdote about the site too, which I think reflects the team that we have and how focused we are. I've obviously been out there many times. And right before we were ready to have an official opening. I went out to inspect. And I walked around the site. It's in the middle of the woods, actually, it's a beautiful area. I walked around the site, and there's a sidewalk all the way around the building. I went to the head of the building, and I said, why did we put a sidewalk all the way around the building? And his response was, so when the FDA comes to inspect us, if it's a rainy day, they will have a sidewalk to walk on. That is the type of foresight that the team has putting it together to make sure that this site will be up and running on time into both FDA and EMA specifications. And we expect from a commercial perspective to be able to supply the entire global supply for DURAVYU from this site.

Operator, Operator

Thank you. One moment as we move on to the next question. Our next question comes from the line of Colleen Kusy with Baird. Your line is open. Please go ahead.

Colleen Kusy, Analyst

Great. Good morning. Thanks for taking our questions and congrats on all the progress. We've seen with other retina studies talking about GA studies, a difference in results ex-U.S. versus U.S. sites. Can you speak to whether you'd expect a meaningful difference in the type of patients you're enrolling in LUGANO and Lucia? Any differences in the standard deviation for patients and how that might impact the top line results.

Jay Duker, CEO

Great question, Colleen. And I have the best person next to me to answer that question, Dr. Ribeiro, who, of course, was quite involved in one of the international GA studies. So, Ribeiro, what do you think?

Ramiro Ribeiro, Chief Medical Officer

Yes. No, good question. And I think if we go back on the GA trial, I think there was something that could be one of the hypotheses, but I'm not sure if it was really confirmed that the geographical difference were one of the reasons for the difference in the results. Regardless, wet AMD studies are much more mature than GA trials across the globe, right? So clinical sites have been doing this working these studies for many, many years. I think we nailed down our inclusion exclusion parity to accommodate global study. So, I don't expect to see baseline characteristics being much different between the U.S. and ex-U.S. sites.

Colleen Kusy, Analyst

Great. That's helpful. And one quick one, if I can. On DME, does the FDA have the same noninferiority margin of minus 4.5 liters on the lower bound of the confidence interval as they do in wet AMD.

Jay Duker, CEO

Ribeiro, do you know historically how the monopolar has been calculated in DME?

Ramiro Ribeiro, Chief Medical Officer

Yes. So, for DME, of course, it's going to be part of our discussion with the FDA and EMA, but I think if you look back on some of the previous studies, they tend to use 4 letters instead of 4.5. But of course, it's going to be one of the questions we ask in our interactions.

Colleen Kusy, Analyst

Great. Thanks for taking our questions and congrats on the progress.

Operator, Operator

Thank you. One moment for our next question. Our next question comes from the line of Debanjana Chatterjee with Jones. Your line is open. Please go ahead.

Debanjana Chatterjee, Analyst

Hi, thanks for taking my question. So, in terms of future market positioning, how would DURAVYU's potential every six-month label compare to EXPAREL potentials every six months, every 12-month label that Ocular has guided to?

Jay Duker, CEO

Thanks for the question. I think an every six-month label is what the physicians I think prefer. I think that's been made clear not only by us but by quite a bit of market research. And of course, that's how we designed DURAVYU to consistently deliver therapeutic levels of vorolanib for six months in virtually everybody. So that we like our label. We like our study design, and we think the six-month label will deliver that flexibility to patients and physicians to help tailor their individual treatment to maximize the vision, maximize the drawing effect while minimizing the necessary visits and injections.

Debanjana Chatterjee, Analyst

Thank you. I have a quick follow-up. The way things are stacking up, DURAVYU could still be the first-to-market durable TKI. How would you use this lead time over XLY to capture the market?

Jay Duker, CEO

Well, that's a really interesting question because it's quite broad. And of course, first to market, there is an advantage, as I think you all know. And we strongly believe that we are still in a position to be first to market especially driven by this great enrollment that we've talked about today. In saying that, we've had an early program work done here for the past two years on exactly how we are going to position DURAVYU. And it is a shift in the market, a true six-month repeatable, safe, tolerable treatment for VEGF-mediated disease is you could argue with there really is nothing like that right now so that the idea of how to get physicians comfortable with it is the process that we are doing right now and it will certainly accelerate internally as we get closer and closer to data and closer to eventual launch. So, I think we could spend two hours on the details of what that might entail. But suffice it to say that just like we've been on the forefront of figuring out manufacture for commercial, we've been testing the market, interviewing KOLs talking to payers, and talking to the business people at the retina groups in order to best position ourselves.

Debanjana Chatterjee, Analyst

Thank you. Thanks for the insights.

Operator, Operator

Thank you. And one moment as we move to the next question. Our next question is going to come from the line of Greg Harrison with Scotiabank. Your line is open. Please go ahead.

Gregory Harrison, Analyst

Good morning. I appreciate the question. I'd like to know about your guidance on cash runway and what assumptions are included regarding work in DME and the earlier pipeline. Additionally, what is the current status of the razuprotafib program, and when can we expect to see more data on it?

Jay Duker, CEO

Thanks, Greg. I'm going to let George take both those questions.

George Elston, CFO

Sure. Our cash guidance extends through 2027. As Jay mentioned, we aim to have significant cash available following the Phase 3 data. Our guidance accounts for all activities related to DURAVYU and wet AMD, as well as our internal preparations for a future DME study, though not the study itself. With regard to razuprotafib, our preclinical work will continue, but it has taken a lower priority due to our emphasis on wet AMD. Nevertheless, we are progressing with some enabling studies to advance it toward an IND. For now, that program is in a holding pattern. The organization is heavily focused on executing our wet AMD plans this year while managing our cash conservatively.

Operator, Operator

Thank you. One moment as we move on to the next question. Our next question comes from the line of Yale Jen with Laidlaw and Co. Your line is open. Please go ahead.

Yale Jen, Analyst

Great. And thanks for taking the question and congrats on the progress. Just two from us. The first one is that you suggested you guys might be the first to market. And given the ocular sort of mentioned a few days ago, they may have the top line results in the first quarter of '26. Any read-through from these two statements? And then I have a follow-up question.

Jay Duker, CEO

Sure. First to market, of course, is going to be highly dependent on that last patient in the second trial. Whether the first trial, which was not run concurrently, reads out in the fourth quarter of this year, the first quarter of next year, doesn't affect the last patient in the second trial and for us, of course, last patient in for LUCIA. Once again, as we look at the rate that we're recruiting, we remain confident that LUCIA will recruit as rapidly as LUGANO is and therefore, we think that taken in total, we are confident we will be first to market.

Yale Jen, Analyst

Okay. Great. That's very helpful. And maybe one more follow-up here. which is that a few years ago, you reported the supplement free patients subgroup analysis. I know the numbers are small, but just curious, have you guys dissected the patient, which do not need supplement versus those needs? Any characteristic differences and be able to maybe apply to your current Phase 3 study?

Jay Duker, CEO

Yes. Great question. Yes. I'm going to let Ramiro answer that.

Ramiro Ribeiro, Chief Medical Officer

Yes. No, good question. And I think you already mentioned the limitation of the study being a small study. So, I think with this sample size, it's a little bit hard to predict which patients are going to be supplemental three. Of course, once we have a larger database with the Phase 3 program, then that's something that we might be able to look at.

Yale Jen, Analyst

Okay. Great. That's very helpful. Again, congrats on all the progress. Thank you.

Operator, Operator

Thank you. And one moment for our next question. Our next question comes from the line of Yi Chen with H.C. Wainwright. Your line is open. Please go ahead.

Yi Chen, Analyst

Thank you for taking my question. Could you talk about whether you currently have a plan to initiate a Phase 3 trial in DME at this point potentially late 2025 or 2026? If not, do you plan to find a partner potentially moving this indication forward? And what would be the target enrollment suggested by VERONA results in a potential Phase 3 concept? Thank you.

Jay Duker, CEO

All great questions, Yi. And I can say that we have currently no plans to initiate the pivotal trial in DME in 2025. We believe that it will be a 2026 event, at this point. And we would certainly welcome a potential partner, but we're not going to partner in indication individually. A partnership that might include clinical program development in DME would have to be a much larger partnership or we really wouldn't be interested in it. So that's something that I think we would consider at the right time. But as I said, it would have to be a much larger structured partnership than just DME. As for the target again, I think maybe Ramiro, you might be able to answer that better about how we would approach the targets.

Ramiro Ribeiro, Chief Medical Officer

Yes. And I think we have a great benefit of having the wet AMD study in a lot of the learnings as well as the relationship we are building with the sites now. So, we know that for DME clinical sites, they would be very likely the same one as we are using for wet AMD trial. So, I think in terms of enrollment rates, we would also be optimistic for a DME trial.

Operator, Operator

Thank you. I am showing no further questions in the queue at this time. Ladies and gentlemen, thank you for participating in today's conference. This does conclude your program, and you may now disconnect. Everyone, have a great day.