Conference Transcript - FDMT 2026-06-03

Pascal Khashid, Analyst — Jefferies

All right. Good afternoon, everyone. Thank you to those of you in the room and those dialed in on the webcast. My name is Pascal Khashid. I'm one of the senior biotech analysts here at Jefferies. Really pleased to have with us the management team of 4D Molecular Therapeutics. 4D is a super interesting company working on gene therapies for the masses with a lead program and approach in wet AMD. So we have with us today David Kern, CEO, Christiane Humer, CFO, and Chris Sims, Chief Commercial and Chief Business Officer. So with that, David, could I ask you to please start by introducing the company?

David Kirn, CEO

Yeah, thanks for having us. It's a pleasure to be here. I think we're going without slides today, Great. So we're a next-generation AV gene therapy company with a lead product, 4150, for wet AMD and diabetic eye disease. Our underlying technology is Directed Evolution, which is a Nobel Prize-winning technology that allows us to invent best-in-class vectors that have the features that we want for large market products like 4150. So it's been a powerful platform for us. It's allowed us to invent and develop 4150, which expresses the industry-leading anti-VEGF, Flibercep, but does it in a continuous fashion, 24 hours a day, seven days a week. It right in the back of the retina, right on site where it's needed. So we think this is fundamentally a backbone therapy for neovascular diseases of the retina which can continuously suppress the disease activity and lead to better patient quality of life, treatment burden reduction, and vision improvements over standard bolus therapies. We have two Phase 3s, Forefront 1, Forefront 2 in wet AMD, and Forefront 1 has completed enrollment at a very high rate, which is thrilling to see. It's been completed now in Q1, and we'll read out in the first half of next year. We think that that high enrollment rate was driven by the unmet need that patients have and by the physician's excitement about gene therapy and the results we're showing. We have a second product, second phase three, forefront one, which is a global study in that we expect to complete enrollment in the second half of this year with readout in the second half of next year. And we'll be starting a diabetic macular edema phase three in the second half of this

Pascal Khashid, Analyst — Jefferies

Got it. So maybe starting with that, you mentioned the unmet need and the rapidity of the enrollment that you saw in the pivotal studies. Can we start just high level conceptually? what is the point of 4D-150? Why do we need this when there are a few drugs that are approved for this disease?

David Kirn, CEO

Yeah, I'll kick it off and then turn it over to Chris, who's been in retina for nearly 14 years of commercializing products. So people think of, you know, wet AMD and DME as having effective therapies, and that is true. There are bolus anti-VEGF therapies that can transiently inhibit the VEGF signaling, which then calms down the blood vessels, reduces edema, and allows vision to improve. However, that's transient. And so what the result is, is most patients are going to need injections roughly every eight weeks. It could be anywhere from every four to every 12 weeks on average. But that's just, most patients can't sustain that. So what happens is they get undertreated, and they end up losing vision. and it's a huge impact on their quality of life having to go to the clinic and getting a needle in the eye which they absolutely hate you can imagine the needle in the eye um so there's a real unmet need for a product that can actually sustain the anti-veg effects consistently and constantly without going up and down up and down up and down and where patient compliance is not necessary for therapeutic benefit and therefore preserve vision. So that's why there's a huge element in need and we think that's why patients are flocking to it. And you know Chris has done a lot of thinking about this and analysis of various surveys on this that he can share with you to say that physicians believe the same thing.

Christopher Simms, Other

Yeah, I can add a little bit of color. Thanks, David. So, you know, as David mentioned, the current standard of care is bolus anti-VEGF treatment and that modality has existed for about 20 years now, actually. I think the initial anti-VEGF therapy was launched in 2006 and highly efficacious, you know, initially Lucentis and then follow-on medicines like ILEA and more recently Babismo and ILEA HD. What's important to recognize is that all the innovation that's come from follow-on more next-gen bolus therapies have largely extended the durability interval a little bit. So every new entrant has kind of stretched the durability literally by a week or two. And when you talk to physicians, that's super important for the obvious reasons that David just mentioned, right? Needles in the eye, the frequency of that is burdensome for the patient and for the But despite that incremental advancement and innovation, we've seen large commercial success. You've got a medicine like Babismo, I think, which, again, added an extra benefit of a couple weeks of durability, and I think it's on pace to be nearly a four to five billion in sales medicine for Roche Genentech. So we know that incremental advances in durability are highly important and they translate to commercial value. We've seen that historically. And our simple proposition is we're not trying to advance the incrementality by a week or two. We think we can make a paradigm shift in the incrementality measured in months, if not years, if not for the rest of the life for many patients. And that's a completely different treatment paradigm. and we think that commercial opportunities would be consistent with that shift in treatment paradigm as well.

Pascal Khashid, Analyst — Jefferies

And then from a clinical and commercial value proposition perspective, can you explain, like, your view on how, like, should investors think that this has to be curative to have a real value proposition, or what does kind of extending durability look like and what's kind of the benchmark that would really reframe expectations in the disease?

Christopher Simms, Other

yes it's a good question it comes up a lot especially when people hear gene therapy I think sometimes the natural reaction gene therapy must be one highly expensive and it must be curative and I think that's true for other gene therapy approaches it's not true for what we're doing so we're looking at a mass market approach we don't believe it needs to be cured if we think it is functionally curative for some patients and we've we think we've shown that in some of the data that we've generated thus far through our phase one two program but doctors will tell you it's like this if you reduce the treatment burden and even better if you do that while also giving patients the possibility of holding on to their vision gains which bolus therapies don't seem to be able to do then that's a an absolute game changer and of course for some patients if that means that 4150 is the last needle in the eye that they'll ever need and we think that will be true for some then that that's incredible but it doesn't have to be curative and the good news is that we work in a space where there's great bolus anti-vegf options available today there's more in development and for patients that need occasional supplementation with a 4150 backbone therapy in place physicians and patients have have and will have great options to

Pascal Khashid, Analyst — Jefferies

choose from got it so what proportion of patients still needing supplementation with ILEA or another injectable VEGF, like what proportion would be acceptable and in terms of like from the physician and patient perspective, what does that look like from a treatment burden perspective? Like do they mind that they would still have to go into the office at some frequency or is that part of normal standard of care anyways?

Christopher Simms, Other

Yeah, I think it's, I'll start with the end, I think it's part of normal standard of care and the frequency of visitation back to the office will depend upon how recently you were treated with 4D-150. So upon initiation, you're likely to have to come back a little bit more frequently to assess how you're doing, and assuming that you do well, that interval for revisiting would get extended out over time. And to your other question, I don't think there's a magical number that says if you're at this binary point, then physicians think you're successful or not. But what I will tell you is when we share the data that we generated from our Phase II PRISM study, which broadly showed like a 50% treatment free rate at 52 weeks and about an 80% to 90% treatment burden reduction across a broad range of different patient types, that profile from a physician's and a patient's standpoint was received very favorably. So we believe if we show something like that and maybe even better in Phase 3, then we have, I think, a massive opportunity on our hands.

Pascal Khashid, Analyst — Jefferies

Got it. And then let's talk more about PRISM because that's your Phase 2 study that kind of helped support going into Forefront 1 and 2. Can you remind us what have you seen so far in PRISM? And I believe you're going to give an update on the two-year data from that study coming up in a few months now. Can you help set expectations for what does good look like for that as well? Sure, so

David Kirn, CEO

prisms really a Several a couple of studies as a program a phase one two program And we as good drug developers studied a broad range of patients with the wet AMD It's quite a heterogeneous disease it waxes and wanes over time, so we felt that was important. And so first in human studies we we started in the most severe patient population. So these are patients who had 10 injections on average in the prior year, 10 needles in the eye, if you can believe that, and then still had very swollen, thickened retinas despite that. Many had had disease for anywhere from 4 to more than 10 years. So in that population, we still saw what we thought was very compelling efficacy and biological activity with treatment burden reductions on the order of 70 to 80 percent a significant proportion of patients either went to zero or only one injection a year that what was important about that was that that is likely where the product will first be used in the in the market and so showing that kind of efficacy where others have failed is really very very valuable safety was phenomenal there no significant adverse events at all, and I'll get to kind of a summary safety statement in a minute. We also look then at a broad population, a phase 2B population, where we took 30 patients who look more like a routine clinic, some severe, some less severe, and, you know, a broad range. There we saw, again, about an 80% treatment burden reduction, about 50% of patients injection free at a year, year and a half. follow-up and again there just like in the severe population we saw constant treatment burden reduction across each increment of time so there was no evidence that it was waning over time it was stable as expected with a gene therapy which we expect would be lifelong expression so you know that that's what we've shown there when we looked at the most recently diagnosed populations so patients we got to earlier when their retina was you know healthier there we saw a ninety percent treatment burden reduction and about nearly three-quarters of patients were injection free at the middle of the the second year at 18 months so very compelling efficacy far above a bar that would make this a highly successful product the injection is routine as as an outpatient simple intravitreal just like ILEA, so nothing there, and so the last box to check was safety, and that's critical with a market like this, and there, you know, what we've seen is a very good safety profile with no serious or significant clinical adverse events, and at the phase three dose with a phase three steroid regimen out of just over 70 patients that we've put into the public domain so far, we only had two who had very mild inflammatory cells detected at a single time point so not clinically significant so we're pretty thrilled with the safety profile in terms of what we expect at the two-year mark more of the same just boring is good for us you know continued safety continued treatment burden reduction are roughly the same level and that's fully what we expect to see got it and then based

Pascal Khashid, Analyst — Jefferies

Based on just what's known about the mechanism of expressing VEGF intraocularly, is there any risk known scientifically about late-onset inflammation? Yeah, let's start with that.

David Kirn, CEO

So the short answer is no. In terms of when we think about inflammation with a product like this, there's kind of the capsid itself, the delivery vehicle, that's only there for several weeks and then is gone, So you kind of cover with steroid eye drops while that's clearing. But then you think about what's the protein that I'm producing with my therapy. And in this case, it's a flibricep. Good news is we know a flibricep has been in over 60 million eyes safely. So it's very, very de-risked in terms of knowing it's non-inflammatory, knowing that it's well-tolerated and not immunogenic.

Pascal Khashid, Analyst — Jefferies

Got it. And based on what you know about the expression profile of your vector, what would you expect to see on duration of benefit? On the which? On duration, like durability of expression?

David Kirn, CEO

Well, we would expect, you know, based, so AAV, what happens is it goes to the nucleus of the cell, the target cell, and then the protein dissolves the carrier, and then you're just left with a circular piece of DNA, which is inert. So that should be there the rest of the patient's life. And unless the tissue is turning over, it should be lifelong expression. And, in fact, the retina does not turn over, and so it should be lifelong expression. There is data. The longest follow-up data with AAV in the retina is with Luxterna for LCA2, a rare disease, and that's shown really nice, stable efficacy out through 10-plus years. So we think it's going to be lifelong and should not wane, and I think patients are going to love that.

Pascal Khashid, Analyst — Jefferies

Yeah, I think this is an important point because I think for a lot of investors, at least like hemophilia and like liver vector gene therapy is i think the greatest kind of piece of like av gene therapy exposure for investors that's an interesting point well i think that's

David Kirn, CEO

a really that's an important point is you know people hear gene therapy many many think of very very high doses iv um they think of you know a million dollar to two million dollar price tag They think about the risk of serious IV toxicities. That's not the game we're playing. Our dose is one, I think, one one billionth of their dose probably. And it's just localized in the eyes. You're not getting that systemic exposure. Our cost of goods because of that is because of the low dose is less than $1,000. So it gives us big pricing flexibility.

Pascal Khashid, Analyst — Jefferies

Can we talk more about that? Like, how do you, because the thing is, like, in, like, retinotherapy, there's a, you know, a huge part of it is fitting in with the current practice dynamics in a buy-in bill setting and working with these practices and the financial aspect of the practices as well. How do you think about kind of fitting into that ecosystem with respect to the gene therapy and understanding that you have some nice COGS leverage here?

Christopher Simms, Other

Yeah, I can take that one. And so I think, first of all, we think we'd fit pretty seamlessly into the current logistics of a retina practice. I'll come to the reimbursement part of that in a second, but it's important to highlight that because we are an intravitreal delivery, we think the storage, the distribution channel, all of those things that a physician is really used to today would be the same as what they would experience if they're injecting bolus anti-Veg.

Pascal Khashid, Analyst — Jefferies

Is there anything different from like a handling perspective, like site certification or like Like a temperature fridge or anything like that?

Christopher Simms, Other

It's a good question because often that is the case for other gene therapies or unique modalities. For us, it's not. So again, pretty seamless logistics operations, pretty seamless integration into the operational flow of a retina clinic. The difference would be, as you alluded to, we do think it would be a buy and build product. So all of the things that come with buy and build that exist today, the opportunity to earn margin on these products and all of those things we think would be true for us as well and while it's way too early to speculate on what pricing would be certainly it would be higher than a single bolus injection of a branded anti-veg F and so when you think about practice economics practice economics are driven by first of all is the price of the medicine reimbursement is a is a function of that so we think the value of reimbursement on what is likely to be a higher price point in combination with the fact that you get that reimbursement up front. And then there's other follow-on implications for capturing patients that otherwise would have been lost to follow-up, and we think an implication for helping with practice capacity where you put all those things together. We actually think our practice economics proposition would be better than what they experience today with current bolus therapeutics. We just got to do some education as to what comprises that because the formula is a little different than what the current paradigm is. But I've had the opportunity to talk to many physicians about that concept and how it differs. They get it pretty quickly.

Pascal Khashid, Analyst — Jefferies

Understood. And then with respect to the competitive landscape, there's two other programs that are in phase three, gene therapy programs for what AMD. Can you talk about the differences between those programs and your approach? Sure, I can start and then Chris can

David Kirn, CEO

weigh in. So again, the issue with AAV is that the standard wild-type AAVs that other groups have used cannot be used intravitually to get to the retina. There are barriers. So we did directed evolution to get through those barriers and come out of the vector that could pass through and then transfuse the back of the eye very efficiently. There There are other, two other gene therapies we're aware of in phase three. One is overcoming the problem with the vector by doing a subretinal surgery. So implanting high pressure fluid containing their vector by detaching the retina surgically and infusing at high pressure that material into the retina with the hope that they can and sort of force the vector into cells and get enough expression to have efficacy. So that is Regenexx Bio partnered with AbbVie. That subretinal approach has been very, very slow to enroll, as you might imagine, because most patients don't like the idea of that surgery, and the physicians in a busy practice is just kind of a non-starter for many of them. So that is going to be reading out, I believe, the second half of this year. But, again, it's been very slow to progress, and we think commercially we'll have distinct advantages. But we would expect and hope that that would be effective, because it will be expressing continuous anti-VEGF, which should work. The other competitors at Virum, this is a group that has a vector that was evolved in mice for intravitreal. When it went into primates and humans, it's had issues with being inflammatory, which if you have severe long-standing inflammation it can last result in serious adverse events such as vision loss which they've seen in the diabetic population but they're still so they've shut down diabetic eye disease but they are still developing it in phase three for what AMD so we keep an eye on them but again we started about five years behind them and we've sprinted right past them because of our lack of safety issues so you think again we have a big

Pascal Khashid, Analyst — Jefferies

competitive advantage there got it and you believe that the safety issues seen with that program were more driven by vector or by dose or by capsid and how is your approach different on

David Kirn, CEO

those kind of major characteristics yeah so it's it's driven by the capsid and uh so the capsid dose the vector dose is critical uh they started with much higher doses than we needed um because again the vectors not apparently not as efficient that force because of the toxicity which is related to the total dose and we believe the immunogenicity of that vector they had to drop the dose which made a lot of sense and when they did that the tolerability was improved and then they spent a number of years trying to optimize the steroid regimens including oral steroid regimens and the like to try to combat the front of the eye information that they were seeing that they felt resulted in the severe toxicities in DME. So they're in phase three, and that should be effective. I think the big question there is just the safety and can that be maintained. Physicians really don't want to be managing complex steroid regimens and putting patients back on steroids after they go off, and that's something that their early programs were grappling with.

Pascal Khashid, Analyst — Jefferies

Makes sense. And clearly, you know, between these two programs, they're both partnered or sold to larger pharma companies. How are you thinking about the strategic landscape for gene therapy approaches in what AMD?

David Kirn, CEO

I'll kick it off and hand it over to Chris and Christian. You know, I think if you think broadly about treatment in neovascular disease of the retina, which is soon to be a $20 billion market that we'll be launching into. There's going to be a wide range of bolus anti-VEGF therapies with different mechanisms of action, different price points. You know, there will be TKIs. There's going to be Vibismo competing with TKIs. There's going to be, you know, some new combination mechanism products. There's going to be biosimilar. So it's going to be a complex space there. But if you think about the backbone therapy, which we believe is going to be the basal that everybody should get, and then they can rescue with these bolus therapies, there's only a few, and we believe we're clearly the market leader there at this point in time. And, again, we've got to finish our phase three and prove that that holds up. But to date, we have best-in-class data and best-in-class opportunities. So I would think that if you are interested in a $20 billion market and you think that these foundational backbone therapies are going to be a critical component of that and we have the best in that class, then there's going to be very significant interest. But we hired Chris because he has experience building U.S. sales forces and we think we can do it and really capitalize on a lot of value for our shareholders.

Christopher Simms, Other

Yeah, I think you kind of covered it. I don't think you can potentially have a very disruptive backbone therapy type of asset in a multi-billion dollar growing market without having significant strategic interest, probably stating the obvious. That said, to David's point, the beauty about Retina, both in the U.S. and ex-U.S. as well, is that you don't need a large pharma partner to commercialize. Like, I've done this two, three times in different settings and launched new medicines in retina in the U.S., and, you know, your total commercial footprint is probably less than 150 headcount, and there's not many multi-blockbuster therapeutic areas where that really is the commercial footprint that you need. So very scalable, even for a startup biotech like us. So we'll plan to do that, and certainly that's part of my responsibility, and, you know, Should there be strategic interest, we'll entertain those conversations when the time is right, but we also will prepare to go it alone, and we can do that.

Pascal Khashid, Analyst — Jefferies

And how do you think about that piece of when the time is right?

Christopher Simms, Other

You need phase three data in hand. So we're in execution mode. We've said publicly we're in the first half of next year. We'll have forefront one data, and shortly after that, we'll have forefront two. So that's the key time point for us. So we've got an exciting year ahead of us.

Pascal Khashid, Analyst — Jefferies

Yeah, totally. And then zooming in on Forefront 1, or both Forefront 1 and Forefront 2 a little bit, can you talk to us about the, on the Phase 3, there's two key differences on the patient population and the rescue criteria. Can you describe those changes that you made from the Phase 2 to Phase 3 and what impact that has on probability of success for the study?

David Kirn, CEO

Sure. So I think overall, the minor changes we made going from PRISM Phase 2b to Phase 3, we think overall will increase the likelihood of success, albeit we think it was already very high. We refined the patient population to exclude patients who did not have a robust response to a bolus of Flibercept, just to make sure we weed out those 10% or relatively resistant, which makes sense. And I think that's one minor addition we've made. And then we've also made sure that patients, the CST, the thickness of the retina is capped so that if they have anatomical abnormalities like so-called PEDs, they'll be weeded out. So those are just a couple of refinements that should, if anything, make things better. And then in terms of the supplemental injection criteria, we made some very small changes to make sure we did everything we could to protect the BCVA endpoint, which is, you know, phase three, you've got to hit your primary endpoint. The primary endpoint is BCVA non-inferiority. We don't think it will materially change the reduction in treatment burden. Again, all these are set by the best investigators in the field that we, you know, we're fortunate to work with as do other companies. So we think, if anything, this has increased the likelihood of success. I think in terms of what good looks like, I think just look at our Phase 2B data. You know, if we hit something close to 80 to 80-plus percent, that's a huge win. And the safety profile that we've shown, if that holds up, that's a huge win. and then there'll be a significant portion who are, you know, injection-free for a year or two years or more. And I think that'll be a big win because there's no other treatment class that can achieve that.

Pascal Khashid, Analyst — Jefferies

And then as you think about, you know, let's say we're having this conversation a year from now, you're preparing to be a commercial stage company. How are you equipped from a manufacturing and, you know, commercial, you know, I think Chris mentioned, you know, you just, you don't need hundreds of people. You need kind of more like dozens from like a sales perspective so can you talk to us about manufacturing and

David Kirn, CEO

commercial footprint sure so so complex biologics manufacturing is critical it's important to get it right early and not have significant changes as you develop the product if you can avoid it and we've got a phenomenal AV team they've made I think more different AV vectors by far than any other group in the in the world and they've been on it from day one with a really efficient manufacturing process and we made all our own material in-house up until phase three and then roughly half of the second trial will be material from a CDMO that we've already tech transferred to so this is a world-class AV experience CDMO so that material is going into phase three to make sure the bridging is done in phase three we'll do our qualification batches and then we'll be set for launch you You know, and as we said before, you know, the doses here are very, very small. So, you know, with one manufacturing run, you can make thousands and thousands of doses and stockpile those in advance of the launch.

Pascal Khashid, Analyst — Jefferies

Got it. And then I guess in our last minute here, what do you think investors misunderstand most about the company?

David Kirn, CEO

I'd say they, well, I'd say they don't appreciate the massive opportunity that we have with an AAV in a large market indication. I think they've been programmed to believe that AAV is for rare disease, got to charge a million bucks because you're only going to get to treat patients once and then the population's gone. We're flipping that on its head and say with innovation, you can actually access high incident rate, massive markets like a $20 billion retinal market with gene therapy. And we get why they don't get that yet, or not all of them get it, certainly some do, because it's never been done before. But when I think the penny drops, that they realize, oh, my God, the opportunity here to fully disrupt a massive market, it's a phenomenal business opportunity. So I think slowly but surely we're getting there.

Pascal Khashid, Analyst — Jefferies

Got it. All right, great. Well, on that note, thank you guys so much for joining. I really appreciate it.

David Kirn, CEO

All right. Thanks for having us.