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Chairman and CEO
Aerie Pharmaceuticals, Inc.
Aerie Pharmaceuticals, Inc. didn’t quite enjoy the “roller coaster ride” that followed the disappointing results of Rocket 1, a trial testing Rhopressa, a potential treatment for glaucoma. But CEO Vince Anido explains how the company regained its momentum quickly and why 2016 promises to be a big year.
Vicente Anido, Jr., PhD has served CEO since July 2013. He is the former President and CEO of ISTA Pharmaceuticals, Inc., which was acquired by Bausch + Lomb, Inc. in 2012. From 1996 to 1999, Anido led CombiChem, Inc., a drug discovery company.
In this interview, Anido explains how Aerie has endured a wild ride. He also shares the companies expectations for 2016.
1:24 – How Aerie has faired after the Rocket 1 clinical trial `Roller Coaster Ride.’
2:00 – How did Rocket 1 impacted Rocket 2 trial.
2:55 – “The FDA was actually encouraging us to not give up on Rocket 1.”
3:30 – Aerie already had put $10 million toward Rocket 4.
4:36 – Welcome to the “kindler, gentler” FDA?
6:11 – Critical to get support of the “process side” of the FDA.
6:43 – “This is a big year for us.”
7:06 – Will unveil the 12-month safety data on the 100 patients
7:21 – Plans to launch second Roclatan study, Mercury 2, this quarter.
7:35 – Now have three big trials going on in glaucoma, each with 55-60 different sites.
8:32 – Planning to file NDA for Rhopressa in the third quarter.
8:52 – “There are a lot of folks out there who believe that if Rhopressa is going to be a big drug, Roclatan is going to be a monster drug.”
9:52 – “Our cash balance at the end of this year is no different than the cash balance at the end of last year.”
10:08 – How Aerie raised $50 million from public investors last year.
11:02 – What keeps Vince Anido up at night?
13:00 – Can Aerie fill any vacuum created by consolidation of Mega-mergers?
Tom Salemi: Hi, this is Tom Salemi from Healthegy TV. We ’re here at the JP Morgan conference, or at least a few blocks away, because JP Morgan is so much more than just what goes on at the Westin St. Francis. I’m here with Vince Anido from Aerie. Vince, thanks for joining us.
Vince Anido: Oh, it’s my pleasure. Thank you for having me.
TS: IT’s great to see you. We always see you at OIS and it’s been an interesting year for Aerie. Last year, and you alluded to this at OIS@AAO a few months ago, you had a bit of a roller coaster ride following the results of Rocket 1. And it’s the roller coaster certainly went down for a time, but it came back up. And you’ve actually – you’ve had some progress with Rocket 1. Could you bring us up to speed on sort of what your interactions following the release of those results have been with the FDA? And what impact has it had on Aerie? Because it seems like you’ve really weathered that storm pretty well.
VA: Well, as you can imagine, it was a pretty scary time for the company because here our primary drug failed in its first clinical trial. That was a real surprise.
VA: But we did hit the secondary endpoint. So we missed it below 27 millimeters of mercury, but we hit below 24 millimeters of mercury. And so the statisticians were pretty good about coming back and trying to explain to us sort of where the damage was done. And it was really only at the upper 1 millimeter. So for us, the primary job was to get back on track. We had a second trial that was already out in the marketplace, so was Rocket 2. And so we wanted to make sure that we didn’t experience the same thing, but it was almost an identical protocol. And so we went back to the FDA and said we wanted – because the trial was still enrolling, that we wanted to change, basically flip the primary endpoint and the secondary endpoint. So we went through about a 2-month process with them. My regulatory guys spent a lot of time on the phone with Wiley Chambers and his boss’ boss, Ed Cox. And what that allowed us to do was get a pretty good handle and feel for what the likelihood was that they were going to let us change the range for the primary endpoint on Rocket 2. So that was job one. As part of that process, and when we finally met with them to get the final agreement to change the range, we actually had a meeting with the FDA. And during that meeting, as they had been doing privately with my regulatory guy, [Mark Garrett?], who’s been in the industry for a long, long time, the FDA was actually encouraging us to not give up on Rocket 1 because except for that upper 1 millimeter slice, the data were solid. And so they said, “You know, don’t give up because you could actually use Rocket 1 as your supportive trial if Rocket 2 is successful.” And just to show you that we weren’t really expecting that kind of answer from the FDA, we had already started Rocket 4, which is about a $10 million investment on our part, because we were pretty well convinced that the failed trial was a failed trial, and we were going to need a third trial anyway. And so they were very supportive. And so as a result, when we saw the Rocket 2 data and it was positive, we had our pre-NDA meeting with the FDA where they again reaffirmed that using Rocket 2 and Rocket 1 as supportive were the right approach. And so it turns out we don’t need Rocket 4 for the NDA submission and the review. We’re using Rocket 4, mainly the safety side of Rocket 4 because we’re looking at patients out to 6 months. That’ll give us more than enough patients that we need for safety in Europe. Where in the US all you need is 100 patients on a drug for 12 months, Europe requires that plus 300 for 6 months.
VA: So Rocket 4 gives us that.
TS: That’s fantastic. So we hit upon the FDA a lot at OIS, and they’re a big presence, a big part of our program.
TS: Do you attribute that cooperative spirit to an overall change in the approach of the agency? Or is this do you think something Aerie-specific, that this was really something that the way you had compiled your data you were able to reuse Rocket 1? Is it a broader, more cooperative tone from the FDA, or was it specific to your company?
VA: My regulatory guy would die laughing if he ever heard me say the kinder and gentler FDA. Because a lot of us lived through the last decade or so of a lot of turmoil within the ophthalmology sector of the FDA. You know, they got moved an awful lot into different subgroups, right? So when we all started, they were part of dermatology. And then they went through and brought them together with anti-infectives. And then all of us were scratching our heads when they moved out of there to being part of the transplant group. And so I think what’s happened is all of that is behind them now. Right. So all of the processes and procedures and the changes that were occurring because of all that turmoil internally to them – nothing with us, it was to them – that’s done. So now they’re just operating. And so I think what all of us have determined is that Wiley is still a major player there from a pharmaceutical side. So that’s critical to get his support to what you want to do. But it’s also critical to make sure you understand the process side of the FDA. That’s not Wiley; that’s somebody like Ed Cox who’s more the, call it administrator. He’s a couple layers up. So he really makes sure that the review of our drugs in ophthalmology are consistent with the reviews in any other section. And so we now understand both sides of that, and we don’t have a meeting unless we get both of them in the room.
TS: That’s very smart. Can you give us a quick overview of where Aerie is with its progress in the pipeline?
VA: Sure. So this is a big year for us. I mean we thought last year was a roller coaster ride. Hopefully this year it won’t be a roller coaster ride; it’ll be a straight rocket ship.
TS: A tunnel of love.
VA: Yeah, something like that. And so what we have this year is, starting this quarter, we have 2 big events. Number one, we’ll unveil the 12-month safety data on the 100 patients. That was part of the commitment that we made – that was part of the requirement for the FDA to submit the NDA. But it’s also a commitment that we made to Wall Street, that we would share that data with them. So we’ll do that this quarter. We accelerated, thanks to the work of our clinical research team, the start of our second Roclatan study, Mercury 2, which was originally scheduled for the second quarter. Now it’s going to be done this quarter. And just to give you a perspective on this thing, we now have 3 big trials going on in glaucoma in the United States at the same time. Each one, 55 to 60 sites –
VA: – and they’re all different. They’re all different sites. And we don’t let them because they’re competing for patients and the Rocket 4 had a different IOP range than Mercury 1’s and 2’s. And so we don’t like them be in both in two trials at the same time. So we literally have tied up 160 sites or more.
TS: People must just live in planes going from –
VA: They do. We have an awful lot of CRAs and the like that are running around airplanes just keeping all this going. But we’ve hired an awful lot of people to help. And we have a great CRO that we use, and so that helps also tremendously. So this quarter, again, two safety – the safety information and the start of Mercury 2. We’re doing an awful lot of work in Q2 in order to make sure that we file the NDA for Rhopressa on time, and that’s a third quarter event. Also in the third quarter we will unveil the efficacy results, 90 day efficacy results of Mercury 1, which is the first of the Roclatan studies. Now there’s a lot of folks out there that believe that if Rhopressa is going to be a big drug, Roclatan is going to be a monster drug because if we can show in phase 3 what we showed in phase 2, which is roughly a 2 to 3 millimeter incremental difference in efficacy over latanoprost by itself, and half of the patients on Roclatan got to pressures starting at about 26, half of them got to pressure at 16 and below versus only about 20% of the latanoprost patients getting down that low. So we think that this could be a real monster drug. So obviously that’s going to be a big quarter for us with the unveiling of the Mercury 1 results.
TS: That’s fantastic. And you’re well capitalized. You’re in a position to fund all this. You raised –
VA: We’ve raised an awful lot of money since the IPO. What’s surprising an awful lot of folks is that our cash balance at the end of this year is frankly no different than our cash balance was at the end of last year. And we burnt 60. And so what we were able to do was take advantages of the market. And we had a shelf, what’s called the universal shelf, which is a financial vehicle that allows you to raise money under a number of different conditions, and ways of doing it. There’s a component of that called that the ATM, which is At The Market, which actually functions just like you going to the ATM and pulling money out. It allows the companies to, without telling anybody, to slowly take advantage of a lot of volume and a lot of upticks in the stock. And without telling anybody, you just float out some shares, maybe 100,000 today, 200,000 tomorrow, and those kinds of things. And so using that approach, we raised an incremental 50 million at an average price of $30 a share.
TS: That’s outstanding.
VA: Yeah. So it was really low cost of capital for us.
TS: What was your high at one point?
TS: 36. So you’re up there in the range.
TS: So looking forward, putting aside – assuming your clinical data goes great, what else out there is an obstacle for you? What could trip you up and what has you sort of thinking about things at night?
VA: Well, there’s very little that keeps me up awake at night because I think for us, things are going pretty well.
VA: So I think that the NDA process is always challenging, right, because we view it almost like a tennis match or a ping pong match, you know, where the FDA lobs questions over, and especially in today’s environment we’re all doing electronic filings. We get those questions here pretty quickly. Our job internally is to turn those questions around in 24 hours. And so it’s a constant battle. It’s just FDA lobs it, and then we have to return it almost immediately. And so that requires an awful lot of folks to spend an awful lot of hours making sure that we’re dealing with the FDA, answering their questions on a timely basis. And so it’s again for us more of an execution side. But having said that, the FDA could change its mind. We’ll have a new president by then.
TS: New FDA commissioner.
VA: And a new FDA commissioner, although the good news is remember our company was founded from what was in between the years of David Epstein and Duke, and this is a Duke guy. So hopefully that helps us a little bit.
TS: Of course it does.
VA: But it’s just going through the NDA process. There’s nothing really bad about it; it’s just a stressful time. Because you know that what you have in there, you have the confidence of what’s in there. All you’re trying to do is to make sure that no self inflicted wounds, that you respond as quickly as you can, accurately and that you’re doing the analysis, and that you’ve read the tea leaves correctly leading up to that point.
TS: Great. And final question: long term, we’re looking at obviously the end of last year we had the news with Allergan and Pfizer. Always raises the question when one big player is absorbed, will there be a vacuum that smaller players or mid-tier players can move into to become, maybe not the next Allergan, but a leader in ophthalmology. Is Aerie that kind of company? I mean you’ve got products for glaucoma, you’ve got some back of the eye products going on. You’re really going to be a full-fledged ophthalmology pharmaceutical company. What could Aerie become? Could it become one of those companies that really grows into a vacuum created by these mega-mergers?
VA: I love it when those guys get into that kind of turmoil, because it does create the vacuum.
VA: And certainly in the past we’ve been able to take advantage of that. What’s really interesting this time for us is that if you take a look historically at the Allergans and Alcons of the world – this is long before the back of the eye stuff with Regeneron and Lucentis and stuff like that – but if you look historically, whoever won glaucoma became the number one ophthalmic pharmaceutical company.
VA: Because it was the biggest market.
VA: Right? And so we think that the fact that we have Rhopressa and Roclatan, and if we commercialize those, and if they’re as big as we think they’re going to be, then we have a really, really good shot at being one of the major players.
TS: Well, let’s hope so. Thank you for taking some time today.
VA: Thank you. Great.