EyePoint Pharmaceuticals, Inc. (EYPT) Q3 2026 Earnings Call Transcript

Operator: Good morning. My name is Didi, and I'll be your conference operator today. At this time, I would like to welcome everyone to the EyePoint Third Quarter 2026 Financial Results and Recent Corporate Developments Conference Call. [Operator Instructions] Please be advised 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. Sir, please go ahead.

George Elston: Thank you, and thank you all for joining us on today's conference call to discuss EyePoint's third quarter 2026 financial results and recent corporate developments. With me today is Dr. Jay Duker, President and Chief Executive Officer of EyePoint. Jay will begin with a review of recent corporate updates and discuss our clinical program for DURAVYU in DME and the results from the wet AMD program. I will close with commentary on the third quarter 2026 financial results. We will then open the call for your questions where we will be joined by Dr. Ramiro Ribeiro, our Chief Medical Officer; Mike Campbell, our Chief Commercial Officer; and Dr. Tarek Hassan, our Chief Strategic Science Officer. 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.eyepoint.bio. Before we begin our formal comments, I'll remind you that various remarks we 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 time lines, 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: Thank you, George. Good morning, everyone, and thank you for joining us. This has been an eventful quarter for EyePoint. And I want to begin with what is top of mind for all of us. This past August and October, we announced that our two Phase III wet AMD clinical trials did not meet the primary endpoint in the full analysis population. We are deeply disappointed with this result. At the same time, these two studies generated important clinical findings about DURAVYU. Across both trials, DURAVYU consistently demonstrated biological activity as well as vision improvement, superior reduction in treatment burden, anatomic control as measured by OCT and a favorable safety profile with repeat dosing. In the pooled analysis of both trials, the greater than 50% of DURAVYU-treated patients who went supplement free up to week 56 manifested nominal non-inferiority in mean change in BCVA versus on-label 2-milligram aflibercept control. These studies confirm that DURAVYU is active and could potentially play a role in exudative retinal disease. Following LUCIA, we acted quickly to align the organization around the program where we believe additional resources are justified by both the evidence and the potential for improving patient care. As previously mentioned, and to pursue our cash runway, we are discontinuing the wet AMD program, reducing our workforce by approximately 53% and significantly reducing our operating cost structure moving forward. Our main clinical priority now is diabetic macular edema or DME. There are several reasons to believe DURAVYU could perform differently in DME than it did in wet AMD. Our confidence in COMO and CAPRI rests on the following points: DME and wet AMD are biologically distinct diseases. Wet AMD is primarily caused by macular neovascularization or the growth of abnormal blood vessels from the choroid with VEGF playing the central role in driving angiogenesis and vascular leakage. DME in contrast develops from diabetes-related injury to the retinal microvasculature and breakdown of the blood retinal barrier due to inflammation, hyperglycemia and other factors that result in the leakage. Intraocular biomarker data reflects this difference. Unlike in wet AMD, patients with DME typically show elevated IL-6 levels. IL-6 signaling acts not only as a biomarker, but is linked to inflammation, retinal vascular dysfunction and the breakdown of the blood retinal barrier. Previously presented clinical data suggests that blocking both IL-6 and VEGF can potentially give better results than blocking VEGF alone in DME patients. This is directly relevant to DURAVYU because vorolanib inhibits all VEGF isoforms, the PDGF receptor and JAK1, a key mediator of IL-6 signaling. Our published preclinical work demonstrates a greater than 50% reduction in IL-6 activity through JAK1 inhibition. Thus, DURAVYUW has the potential to address both VEGF-driven vascular permeability and IL-6-driven inflammation with one therapy. Further evidence comes from the fact that intraocular corticosteroids effectively treat DME, but with minimal benefit in wet AMD. Studies in pseudophakic eyes demonstrate that corticosteroids exhibit similar activity to anti-VEGF biologics despite corticosteroids acting primarily through anti-inflammatory mechanisms. EyePoint's Phase II VERONA data showed equivalent vision improvement for DURAVYU and aflibercept, but DURAVYU eyes had superior reduction in CST as well as leakage as measured by fluorescein angiography. In VERONA, 73% of DURAVYU patients remain supplement-free of anti-VEGF injections through week 24 versus 50% of the aflibercept controls. DURAVYU also demonstrated rapid efficacy with four to five letters of vision improvement and approximately 50-micron improvement in CST compared to aflibercept at week four. We believe this early improvement for patients, if confirmed in the Phase III trials, will be important. We now have substantial clinical experience with DURAVYU in about 450 patients from the wet AMD Phase III trials demonstrating pharmacologic activity, durability and safety with repeat dosing. The extensive safety experience is an important component in our confidence in DURAVYU going forward. Sustained release may be particularly advantageous for DME as nearly 50% of patients discontinue treatment within six months. Patient age, comorbidities, treatment burden and delayed perceived benefit contribute to undertreatment in the real world. We believe DURAVYU's potential to deliver earlier improvement with fewer injections could offer a compelling treatment profile. Taken together, the rationale for DURAVYU and DME rests on these points, the distinct biology of DME, our compelling VERONA data and extensive DURAVYU's clinical experience showing fluid control and safety with repeat dosing. With a unique multi-mechanism of action, robust clinical data package, proven delivery technology, the ability to be shipped and stored at ambient temperatures and administration via a standard intravitreal injection, DURAVYU represents a compelling and innovative product profile that has the potential to meaningfully change the treatment paradigm in DME, a $5 billion global market that includes $3 billion in the United States. We expect to announce top line results from both COMO and CAPRI, which enrolled over 550 patients early in the fourth quarter of 2027. Our organization is focused on execution and delivering these results next year in order to maximize value for our shareholders and further our mission to improve the lives of patients with serious retinal diseases. Before passing it over to George to review our financials, I'd like to thank the entire EyePoint team for their commitment and perseverance to our mission. We are grateful to the study participants, study coordinators and clinical investigators who enable our research. I will now turn the call over to George.

George Elston: Thank you, Jay. As the financial results for the three months ended September 30, 2026, were included in the press release issued this morning, my comments today will address the actions we are taking to align our cost structure with our strategic priorities and preserve our financial flexibility. As previously announced, we ended September 30, 2026, with approximately $118 million in cash, cash equivalents and investments and marketable securities. We expect this runway to fund operations into late Q3 2027, excluding any potential cash flows from business development or financing activities that we may undertake or other operational savings and adjustments presently under active review. Capital discipline is now one of our highest priorities. Our objective is to preserve the resources required to obtain the pivotal DME data while delivering COMO and CAPRI to the utmost standard. We have multiple levers available to us to further extend our financial runway, and we are actively evaluating those opportunities to preserve strategic flexibility and maximize long-term shareholder value. Following the results of the LUCIA trial, we took decisive action to focus our financial and operational resources on the continued development of DURAVYU in DME. As part of this prioritization, we announced a workforce reduction of approximately 53%, generating $30 million in annualized savings once fully implemented and the discontinuation of the Phase III wet AMD program. These actions are intended to align our operating expenses with a more focused organization and development strategy. Our priorities are straightforward: execute COMO and CAPRI with the rigor required of pivotal clinical studies, carefully manage our financial resources and maintain flexibility as we approach the next major clinical milestone. I will now turn the call back over to Jay for closing remarks.

Jay Duker: Thank you, George. We believe DURAVYU represents a potentially meaningful and valuable opportunity in DME, supported by compelling clinical evidence and strong scientific rationale. With our strategic priorities clearly defined and our resources focused on DME, we are committed to advancing this important program by delivering on the next clinical milestone, maintaining financial discipline and creating long-term value for our shareholders. Thank you all for your attention this morning. I will now turn the call over to the operator for questions.

Operator: [Operator Instructions] And our first question comes from Ms. Samimy of Stifel Nicolaus.

Jack Padovano: This is Jack on for Annabel. Could you maybe speak to the variability that you expect from DME patients compared to those in wet AMD? And are you planning on making any changes? Or have you already made any changes to the COMO and CAPRI trials based on what you've learned in wet AMD that could potentially better protect noninferiority margins on the BCVA?

Jay Duker: Jack, thanks for your questions. I'm going to ask Dr. Ramiro, our Chief Medical Officer, to address both those, the variability in DME and any changes we may be making in the DME protocol.

Ramiro Ribeiro: Thanks, Jack. So first, addressing the first question about variability. We believe both COMO and CAPRI are sufficiently powered to account for any variability on the DME patient population. If you follow the recent Phase III studies in DME, what we are seeing over time over the past few years is that the variability on BCVA for the DME patients is decreasing. And it's an effect of early diagnose as well as more stable controlled disease. So again, I think we are adequately powered for variability in BCVA for the DME studies. The second question regarding changes in our study. So of course, we did a thorough review of the programs to ensure the success of the DME studies, and we did have an amendment to update the criteria for supplement injection. So before the threshold was a patient would receive a supplement injection if there was a decline of 10 letters associated with an increase in CST of 50 microns, and now with this amendment, patients are eligible for supplement injection if there is a decline of BCVA greater than five letters from [ VESTO ] study associated on the same visit, an increase in CST of 50 microns or more. We believe that those changes have the potential to preserve BCVA and help us, of course, with the primary endpoint.

Operator: Our next question comes from Mr. Khurshid of Jefferies.

Zeta Doufexi: This is Zeta on for Faisal. I had a question regarding the DME study. Is there any futility analysis planned for this one?

Jay Duker: Thank you for the question. And again, Ramiro, why don't you take that question, please?

Ramiro Ribeiro: Yes. Thanks for the question. So we are not planning for analysis for the DME studies. The primary endpoint is BCVA from baseline to week 52 to 56. And as we disclosed, we expect to have those Q4 of next year.

Operator: Our next question comes from Mr. Suneja of Guggenheim.

Devin Geiman: It's Devin in for Yatin. So one quick question on the DME. So DME patients are generally younger with less GA and fewer age-related issues. Do you think this enrollment like reduces the risk of these non-wet AMD vision loss that you guys saw in the donor?

Jay Duker: Yes. Thanks for the question. Tarek, why don't you take a tackle that one about the differences in age and comorbidities between wet AMD and DME.

Tarek Hassan: Sure. Thank you. An excellent question. And I think you are correct in your general premise. I think there's more homogeneity in regards to the underlying retinal status of the patients enrolled in the trial based on the inclusion criteria. There are so many variabilities seen with wet AMD patients, including the amount of fibrosis and geographic atrophy and hemorrhages and those things aren't necessarily expected in diabetic edema patients, certainly the ones enrolled in this trial. I think there are obviously some variabilities in the patients, whether it's glucose control or ischemia and some other things that are highly individualized, but over the larger populations, and as Ramiro had mentioned earlier, in today's population of diabetic patients, there are a lot less variable. So I think that we would expect that the data would more accurately or more specifically address the mechanism of action on DME specifically.

Operator: Our next question comes from Mr. Nochomovitz of Citigroup.

Yigal Nochomovitz: Just a few here. Just on the runway, it says that you have cash basically to the very end of 3Q and the readouts for DME or 4Q. So I just want to clarify if you will, in fact, need to secure additional capital to actually make it to get to COMO and CAPRI top line. That's the first question. And the second one is, despite the wet AMD result, I presume you will still be using the data for the safety database from those studies to support a hopeful DME filing. Is that correct?

Jay Duker: Thanks for the question, Yigal. So I'll take the second question first. And the answer is yes. We are going to be using the safety database from wet AMD to help inform the safety for DME. So we should have greater than 300 patients with two years of data at the end of the DME trial, should they be positive, which should we expect, if positive, give us a label for reinjection indefinitely. So as for the runway, George, why don't you tackle that one?

George Elston: Yes. Thanks, Yigal, and good question. I think as we said on the call, as part of the strategic adjustment of the organization, we have and continue to actively review forward obligations and for additional cost reductions and cash conservation as we focus on DME. And where we sit today, we just about get there, as we said on the call, there are multiple levers that we're evaluating, and we'll continue to update the Street on cash as we go into 2027. From a management perspective, our plan is to not run out of cash and to make sure that we get the organization and the company to and through DME data next year.

Operator: And our next question comes from Mr. Suvannavejh of Mizuho.

Graig Suvannavejh: Just was wondering in light of the Phase III data that you got in wet AMD, you've been at various conferences this summer and fall. Wondering what the feedback has been from the retinal specialist community. And maybe as a related question, you talked about the potential to address the cash runway with potential BD opportunities. And I'm wondering what those conversations, if you can provide color might be like and what kind of BD, I guess, deal would EyePoint be interested at this point?

Jay Duker: Yes, Greg, thanks for the questions. I think the first question, I think we can universally say that the retina community was really disappointed. We know that our patients could benefit from sustained release in diseases like wet AMD and DME. And there was a lot of hope and expectation that DURAVYU would be able to supply that durability with stable vision for wet AMD. The other thing that really strikes us when we talk to KOLs and frankly, retina specialists in general, is how well the drug performed with respect to the secondary endpoints. The primary endpoint, of course, is what gets us approval. The secondary endpoints is what would get us commercial success. The safety, the reduction in treatment burden, the excellent control of the fluid were all points that the retina community was really looking for. And many of the retina specialists told us in conversation that if this drug were approved with the profile they saw in LUGANO and LUCIA, they would use it. So I think the overriding feeling, frankly, across the board with everybody involved was really, really disappointment. Mike Campbell, perhaps you could expand a little bit on the commercial potential if we were able to get the drug approved in wet AMD based on the secondary endpoints?

Michael Campbell: Sure. Yes. As I said in the comments, there's about a $5 billion global opportunity with a little more than $3 billion in the U.S. And if you look at the patient population, it's about 50% of those DME patients are actually working age adults. So the treatment burden is actually exponentially higher in DME than it is in AMD. And these working adults taking off time from work and getting to appointments. And where it really shows up in the data is the discontinuation rate within DME patients. About 52% of these patients discontinue within one year of starting treatment. So there is a true burden a profile like DURAVYU, where our LUGANO and LUCIA data showed that we could reduce treatment burden and not only do it, but do it in a superior fashion compared to Eylea. I think if approved, this profile fits actually ideally within DME.

Jay Duker: Thanks, Mike. In the second question about business development. I'm going to say two things really at the highest level. The first is, we are going to proceed in a path that has the best opportunity to give our investors value. That's number one. Number two is, we're leaving no stone unturned here. Obviously, by our current market cap, the investment community is not really taking into account what we believe is a real opportunity in DME. And our conversations with others suggest that DME is a real possibility, along with potentially should we be able to identify a subgroup of patients or biomarker from the wet AMD data that might suggest the ability to have a successful trial, the possibility of trying to get approval in wet AMD again. So we are leaving no stone unturned here, Graig, and talking to any number of potential supporters.

Operator: And our next question comes from Mr. Jen of Laidlaw.

Yale Jen: We have two here. The first one is that in terms of the COMO and CAPRI, when you reported data in fourth quarter, would you report them at the same time or separately? Then I have a quick follow-up.

Jay Duker: Thanks for the question, Jen. Yes, our plan is to report them simultaneously. The studies both ended within days of each other. And therefore, the current plan would be to report them simultaneously. And that looks to be on track for early in the fourth quarter of 2027.

Yale Jen: Okay. And the other one is that you just mentioned in terms of the subgroup analysis of wet AMD study data. Any elaboration you can offer at this point?

Jay Duker: Yes. No elaboration at this point in the subgroup analysis. We want to, of course, be as sure as we can before we come out publicly with any findings as to specific biomarkers that would suggest success or failure with DURAVYU or other demographics or other pieces of data that we're looking at. We have quite a bit of data to go through. And again, I mentioned this with respect to going forward building value. We're leaving no stone unturned here. We believe that if approved, DURAVYU could help many patients with wet AMD. And so the question is, is there a pathway forward in wet AMD. At the same time, we remain quite confident in DME.

Operator: And our next question comes from Ms. Chatterjee of Jones.

Debanjana Chatterjee: So if you identify a subgroup of patients that are actually benefiting from DURAVYU more than the aflibercept arm, would you fall back on a similar trial design? Or if you think of a new trial in wet AMD, like would you consider a different design for that?

Jay Duker: So I think it's an excellent question. And we need to have the data first as to what might be new inclusion/exclusion criteria or a different design of a trial that may get us approval. So the first part of the answer is, find what I refer to as the smoking gun or smoking guns. Once we have that, if we can define it clearly, then I think the trial design follows. And obviously, we would want to run something that has a high probability of success. So we're, again, open to a variety of potential changes in the protocol, but not committing to anything right now until, in fact, we find enough scientific evidence that would make it a low-risk trial to run.

Debanjana Chatterjee: Makes sense. A quick follow-up on the design. How do you think it might influence the outcome if you measure the change from -- instead of measuring the change from baseline in BCVA like your baseline starts after the three loading doses versus before the three loading doses?

Jay Duker: Yes. So that's a good question, and that really gets back to the regulatory requirements for a wet AMD trial. First of all, the FDA is clear that they want to see randomization on day one. And while a run-in is possible, which might enrich the data base of the population, one also needs to be cognizant that if you select for a very small subgroup of patients after a run-in, the risk you take is that the control arm will not behave similarly to the control arms that gave us the non-inferiority margin. So this is a regulatory question. And while I wouldn't say that a run-in would be not in the cards, I think we would obviously discuss it quite extensively with the agency before we went forward with something like that.

Operator: And our next question comes from Ms. Walter of RBC.

Lisa Walter: Just wondering, can you walk us through what inspired you to change the DME rescue criteria? And was this in response to the LUGANO/ LUCIA studies? And as well, are you monitoring any blinded data in the COMO and CAPRI, for instance, safety or rate of rescue injections? Any color here would be helpful.

Jay Duker: Yes. Thanks, Lisa. So first of all, the decision we have, of course, with respect to rescue or supplemental injections has to do with the fact that we're supplementing with a different drug, not our drug. And therefore, it's quite clear that if in any trial, if the number of supplements is extensive, the statistical analysis may suggest that any good visual outcome would be attributed to the supplements as opposed to the study drug. On the other side, the fewer the supplements, the better the potential for commercial uptake. So it's a bit of threading a needle. And of course, when you think about only five letters of change, that's one line in an eye chart. That's not a lot of change and especially in a group of patients where their vision can be variable from one visit to the next. So that's a little bit of background about supplements. But the decision to make the change was to try to protect the non-inferiority margin.

Operator: And our next question comes from Mr. Seedhouse from Cantor.

Steven Seedhouse: I wanted to follow up on the DME trial protocol. So one of the features here, it looks like there's two additional Eylea loading doses in the control arm of the COMO and CAPRI studies that aren't in the DURAVYU arm. There's matching shams in the DURAVYU arm. And that's different from wet AMD, obviously, where the number of loading doses was equal. So do you think that makes meeting non-inferiority here sort of even more of an uphill battle in the DME trials? Or what would be your response, I guess, to that argument or concern?

Jay Duker: Yes. So Steve, that trial design came from two factors. The first factor is the FDA insists that if you're running a non-inferiority trial and you can only run it against the control group of 2-milligram Eylea or Lucentis and you have to run it on label. On-label 2-milligram Eylea for DME is five monthly injections and then every other month. So that trial design for the control arm comes directly from requirements of the FDA. With respect to Eylea in the study arm, remember, in VERONA, our Phase II trial, where we got excellent results as early as week four, we only gave those active diabetic patients a single injection of Eylea 30 minutes before they got the review. So we believe that two additional injections of EYLEA when you look at the visual acuity improvements and the OCT improvements curves in DME will be sufficient to give us non-inferiority as well as the important reduction in treatment burden, which we would expect to see and hope to see also.

Operator: Thank you. 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.