InSite Vision Overview

InSite Vision DOUBle

Phase 3 Clinical Program

InSite VisionInSite Vision DOUBleDOUBle

Phase 3 Clinical Program Phase 3 Clinical Program

AzaSite PlusAzaSite Plus™™

(ISV(ISV‐‐502) & 502) & DexaSiteDexaSite™™

(ISV(ISV‐‐305)305)For the Treatment of For the Treatment of BlepharitisBlepharitis

May 2011

2

Today’s DiscussionTodayToday’’s Discussions Discussion

Overview & Opportunity

Phase 3 Trial Design/SPA Agreement• Primary Endpoints

• Pre‐treatment Period & Patient Eligibility

• Investigator Scoring Instrument (BleSSSED)

• Patient Quality of Life Instrument (BleQOLITY)

• Treatment Period

• Clinical Evaluations• Follow‐up Period• Design & Statistical Analysis Plan

Why We Think We Can Win

Summary & Next Steps

3

Blepharitis: Acute and/or Chronic Inflammation of the Eyelids

BlepharitisBlepharitis: Acute and/or Chronic : Acute and/or Chronic Inflammation of the EyelidsInflammation of the Eyelids

Blepharitis(also known as Lid Margin Disease)

Image Source: WebMD.com

Signs & Symptoms

• Redness• Flaking

skin• Crusting• Cysts• Irritation

• Gritty sensation

• Itching• Vision

impairment• Discomfort

Possible Causes

• Bacteria• Viruses• Allergy• Environmental conditions• Systemic disease

Prevalence

• Estimated 34 million people in the U.S. alone

• Widely considered both under- diagnosed and misdiagnosed

4

AzaSite Plus™

(ISV‐502) for BlepharitisAzaSite PlusAzaSite Plus™™

(ISV(ISV‐‐502) for 502) for BlepharitisBlepharitis

Combines low doses of azithromycin and dexamethasonewith DuraSite® to address both infection and inflammation

Intended to rapidly reduce signs and symptoms of acute and chronic blepharitis• Dexamethasone

= potent short‐term anti‐inflammatory effect• Azithromycin

= potent antibiotic; proven long‐term anti‐

inflammatory effect

Administered twice‐daily for 14 days

Safety and efficacy established in prior clinical studies • Evaluated in 174 patients

Phase 3: blepharoconjunctivitis; n= 140Phase 2: blepharoconjunctivitis; n= 11Phase 1: healthy volunteers; n= 23

5

DexaSite™

(ISV‐305) for BlepharitisDexaSiteDexaSite™™

(ISV(ISV‐‐305) for 305) for BlepharitisBlepharitis

Low‐dose dexamethasone in DuraSite

Intended to rapidly reduce acute inflammation in non‐bacterial blepharitis• Dexamethasone

= potent short‐term anti‐inflammatory effect

Administered twice‐daily for 14 days

Safety and efficacy established in prior clinical trials versus AzaSite Plus in blepharoconjunctivitis• Evaluated in 146 patients

Phase 3: blepharoconjunctivitis; n= 136

Phase 2: blepharoconjunctivitis; n= 10

6

Blepharitis: Global Landscape OverviewBlepharitisBlepharitis: Global Landscape Overview: Global Landscape Overview

No approved agents

Clear market need• Ophthalmologists see worst patients; many “silent sufferers”

Off‐label prescribing by ophthalmologists• Scant reimbursement; patients pay out‐of‐pocket

High FDA hurdle: traditional endpoint• Complete (100%) resolution of all clinical signs & symptoms

• Appropriate in acute infection settings (pink eye)• Onerous in chronic settings of inflammation/infection (blepharitis)

Industry “Holy Grail”: front‐of‐eye focus

7

Classic First‐to‐Market Winners/ExamplesClassic FirstClassic First‐‐toto‐‐Market Winners/ExamplesMarket Winners/Examples

Diseases where waves of “silent sufferers”emerge post‐approval of an effective first‐to‐market pharmaceutical therapy:• Overactive Bladder

Ditropan XL/Detrol LA

• Restless Leg SyndromeHorizant

• Dry Eye DiseaseRestasis

8

The InSite Vision OpportunityThe InSite Vision OpportunityThe InSite Vision Opportunity

Classic first‐to‐market advantage

Approval = broad reimbursement = promotion = use

FDA wants a drug approved for blepharitis• Well aware of acute vs. chronic disease endpoint issue

• Clearly understand reality of ophthalmology clinical practice

AzaSite Plus clearly superior to AzaSite®• Efficacy results (InSite’s

work):2007 blepharoconjunctivitis Phase 2 pilot

2008 blepharoconjunctivitis Phase 3

• Convenience (Inspire’s

work):Prior 14 & 28 Day regimens: no difference vs. DuraSite (vehicle)

Current Phase 2: BID x 14, then QD x 14 (28 Day regimen)

9

Special Protocol Assessment (SPA): DOUBle

Phase 3 for AzaSite Plus & DexaSite

Special Protocol Assessment (SPA): Special Protocol Assessment (SPA): DOUBleDOUBle

Phase 3 for AzaSite Plus & Phase 3 for AzaSite Plus & DexaSiteDexaSite

DOUBle

(Dual Ophthalmic agents Used in Blepharitis)

Simultaneous evaluations of AzaSite Plus, AzaSite, DexaSite and DuraSite (vehicle)• Valuable data on our two agents ‐

and AzaSite

‐

in one Phase 3 study

Four‐arm Study

N= 900

AzaSite Plus (ISV-502)N= 300


AzaSite (Marketed)N= 150


DexaSite (ISV-305)N= 300


DuraSite (Vehicle)N= 150


10





SPA Primary Endpoint ‐

Traditional

Complete (100%) resolution of all clinical signs &

symptoms (cure)

DOUBle



and AzaSite

‐


AzaSite Plus (ISV-502)AzaSite Plus (ISV-502)

AzaSite (Marketed)AzaSite (Marketed)

DuraSite (Vehicle)DuraSite (Vehicle)

vs.

DexaSite (ISV-305)DexaSite (ISV-305)

DuraSite (Vehicle)DuraSite (Vehicle)vs.



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SPA Primary Endpoint ‐‐

New

Time to recurrence: Patients with complete (100%) resolution of clinical signs & symptoms (cure)





DOUBle


Simultaneous evaluations of AzaSite Plus, AzaSite, DexaSite and DuraSite (vehicle)


AzaSite Plus (ISV-502)AzaSite Plus (ISV-502)vs.

12





DOUBle



and AzaSite

‐


SPA Primary Endpoint ‐‐

Novel

Improvement in clinical signs & symptomsExacerbation of clinical signs & symptoms

AzaSite Plus (ISV-502)AzaSite Plus (ISV-502)



vs.





13

DOUBle

Phase 3 Trial: Pre‐Trial & EligibilityDOUBleDOUBle

Phase 3 Trial: PrePhase 3 Trial: Pre‐‐Trial & EligibilityTrial & Eligibility

Day ‐7‐0: The Pre‐trial Phase (Pre‐eligibility)

Patients instructed to perform lid scrubs twice‐daily for one week (current standard of care)

-7Day

BID Lid Scrubs

0

14

DOUBle

Phase 3 Trial: Eligibility & BaselineDOUBleDOUBle

Phase 3 Trial: Eligibility & BaselinePhase 3 Trial: Eligibility & Baseline

Day 0: Investigator's Patient Eligibility EvaluationQuantitative BleSSSED assessment

-7Day

BID Lid Scrubs

0

> Total Score & Minimum Sign/Symptom Parameters =

Moderate-to-severe Blepharitis

> Total Score & Minimum Sign/Symptom Parameters =

Moderate-to-severe Blepharitis

Eligibility/Baseline

< Total Score = Mild Blepharitis < Total Score = Mild Blepharitis

Severe Dry Eye Dx: Schirmer’s Test

Severe Dry Eye Dx: Schirmer’s Test

> Score, but without Minimum Sign/Symptom

Parameters = Mild Blepharitis

> Score, but without Minimum Sign/Symptom

Parameters = Mild Blepharitis

Eligible for StudyIneligible for Study

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InSite’s

BleSSSED

Investigator Instrument: Setting a new Standard for Blepharitis

Diagnosis

InSiteInSite’’ss

BleSSSEDBleSSSED

Investigator Instrument: Investigator Instrument: Setting a new Standard for Setting a new Standard for BlepharitisBlepharitis

DiagnosisDiagnosis

Study Population Sought: Moderate‐to‐severe blepharitis• Eligible: >

Minimum total score, AND minimum individual scores on

specific signs/symptoms of disease

• Ineligible: ≤

Minimum total score, OR >

minimum total score but

without minimum individual score on specific signs/symptoms of

disease, OR severe dry eye diagnosis (Schirmer’s

test)

Investigators use laminated “cheat sheet” with photographic examples in support of scoring each category and its severity

Proprietary and quantitative blepharitis scoring system developed & owned by InSite Vision

Blepharitis Signs & Symptoms Scoring for Evaluating Disease

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Day 0: Patient Population is now Quantified for RandomizationModerate‐to‐severe blepharitis diagnosis quantified via:• Investigator BleSSSED

scoring• Standardized digital photography

Cameras, lighting, photo distance

Patients least likely to benefit from pharmaceutical therapy are screened out; will not confound study results

-7Day

BID Lid Scrubs

0

Moderate-to- severe

Blepharitis

Moderate-to- severe

Blepharitis

Randomized into 1 of 4

study arms

Randomized into 1 of 4

study arms


Digital photo

Digital photo

Eligible for Study

DOUBle



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Day 0: Patient BleQOLITY

Assessment

At randomization, baseline Quality of Life is quantified via proprietary scoring system developed & owned by InSite Vision

-7Day

BID Lid Scrubs

0

Moderate to Severe

Blepharitis

Moderate to Severe

Blepharitis

RandomizationRandomization


Digital photo

Digital photo

Eligible for Study AzaSite Plus (ISV-502)AzaSite Plus (ISV-502)




Patient’s BleQOLITY Evaluation

Patient’s BleQOLITY Evaluation

DOUBle



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Sample Questions (2 of 19)Please circle the number that best describes your symptoms today…

BleQOLITY

Patient Questionnaire: Quantifying the Patient’s Blepharitis

Experience

BleQOLITYBleQOLITY

Patient Questionnaire: Patient Questionnaire: Quantifying the PatientQuantifying the Patient’’s s BlepharitisBlepharitis

ExperienceExperience

Blepharitis Quality Of Life In TherapY

How important is each of these in addressing your eye problems?

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DOUBle

Phase 3 Trial: Treatment PhaseDOUBleDOUBle

Phase 3 Trial: Treatment PhasePhase 3 Trial: Treatment Phase

Days 0‐14: Treatment Period

Following randomization, patient administers blinded agent twice‐daily (BID) for 14 days

Patients continue daily BID lid scrubs

After washing/cleaning hands, each agent is applied topically to lids, via a clean finger, and then rubbed/massaged onto lids

Novel topical clinical approach & application for blepharitis, a disease of the lid margins, and not the conjunctiva/eye

Day 0 14

Treatment PeriodEligibility/Baseline

-7

20

DOUBle

Phase 3 Trial: 1st Clinical EvaluationDOUBleDOUBle

Phase 3 Trial: 1st Clinical EvaluationPhase 3 Trial: 1st Clinical Evaluation

Day 15: 1st Evaluation: Traditional EndpointDetermine patients with complete (100%) resolution of all clinical signs and symptoms (cure)Investigator Assessment• BleSSSED

scoring: zero• Standardized digital photographyPatient Assessment• BleQOLITY

scoring• Quantifies patient experience through 14‐day therapy

Day 0 14


-7 15

1st Evaluation

21

DOUBle

Phase 3 Trial: 1st Clinical EvaluationDOUBleDOUBle

Phase 3 Trial: 1st Clinical EvaluationPhase 3 Trial: 1st Clinical Evaluation

Day 15: 1st Evaluation: Novel EndpointsBleSSSED score/digital photograph also quantifies patients who indeed clinically improved, but did not score complete resolution of all (100%) clinical signs & symptoms (cure) via the traditional endpoint Same is true for patients whose disease exacerbated (worsened) during the 14‐day treatment periodBleQOLITY scoring also quantifies patient’s experience as they improved or exacerbated during the 14‐day therapy

Day 0 14


-7 15

1st Evaluation

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-7Day 0 15

6-Month Follow-up Period

45 75 105 135 195165

1st Follow-upEvaluation

Day 45: Starts 1st

Evaluation: New Recurrence EndpointBleSSSED score/digital photograph quantifies recurrence of disease in those patients who had complete (100%) resolution of all clinical signs and symptoms at Day 15BleQOLITY scoring also quantifies patient’s experience as their disease recurred, following complete (100%) resolution of their disease on Day 15

DOUBle

Phase 3 Trial: Follow‐up EvaluationsDOUBleDOUBle

Phase 3 Trial: FollowPhase 3 Trial: Follow‐‐up Evaluationsup Evaluations

23

-7Day 0 15

6-Month Follow-up Period

45 75 105 135 195165

1st Follow-upEvaluation

Day 45: Continued Evaluations: Novel EndpointsBleSSSED score/digital photograph continues to quantify on‐study patients over time for • Improvements in clinical signs & symptoms• Exacerbation of clinical signs & symptoms

BleQOLITY scoring also continues to quantify on‐study patient’s experience as their disease status improves or exacerbates

DOUBle



24

-7Day 0

DOUBle



Scheduled follow‐up evaluations every 30 days (up to 6 months)Investigator Assessment• BleSSSED

Score• Standardized digital photographyPatient Assessment• BleQOLITY

scoring

Patients go off‐study via pre‐determined “Clinical Events”• Disease recurrence: Patients with complete resolution of all clinical

signs/symptoms at Day 15

• Exacerbation of disease: all other patients• Patient may schedule MD visit prior to 30‐day periods if they believe

recurrence and/or exacerbation occurred; if MD confirms, off study

15

Follow-up Period

45 75 105 135 195165

25





DOUBle

(Dual Ophthalmic agents Used in Blepharitis)Simultaneous evaluations of AzaSite Plus, AzaSite, DexaSiteand DuraSite (vehicle)• Valuable data on our two agents ‐

and AzaSite

‐


Four‐arm Study of 900 Patients Design and Statistical Analysis Plan

N= 900

Randomized

Quadruple‐blinded

Powered at 80%

2‐sided Fisher’s Exact Test









26

Why We Believe We Can WinWhy We Believe We Can WinWhy We Believe We Can Win

Patient eligibility criteria• Only enroll patients with moderate‐to‐severe blepharitis

Mild cases that could confound diagnosis and/or results do not qualify

• Eliminate patients with severe dry eye diseaseFrequently misdiagnosed as blepharitis

• Classic “targeted therapy”

clinical trial strategy

Novel Dosing & Administration• Rubbed/massaged onto the lids (lid margin disease) vs. into eyes

Well‐defined & SPA agreed clinical endpoints• Traditional: Resolution of all (100%) clinical signs & symptoms

• New: Time to recurrence, following traditional endpoint

• Novel: Improvement and/or exacerbation of signs & symptomsCovers majority of patients who traditionally would not be followed

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Why We Believe We Can Win (continued)Why We Believe We Can Win (continued)Why We Believe We Can Win (continued)

Quantitative & proprietary investigator assessment tools• BLeSSSED: quantify eligibility and longitudinal clinical status• Standardized digital photography

Quantitative & proprietary patient assessment tools• BleQOLITY: quantify patient’s longitudinal clinical experience• Clinically meaningful measurements of how patients suffering

from blepharitis

feel (better or worse) during and following

therapy, as their disease improves or exacerbates, and whether or

not they experience complete (100%) resolution of disease (cure)

AzaSite Plus has consistently outperformed AzaSite in clinical settings, including head‐to‐head studies

28

AzaSite Plus Consistently better than AzaSite:

Phase

2/3 Results in Blepharitis

& Blepharoconjunctivitis

AzaSite Plus Consistently better than AzaSite: AzaSite Plus Consistently better than AzaSite:

PhasePhase

2/3 Results in 2/3 Results in BlepharitisBlepharitis

& & BlepharoconjunctivitisBlepharoconjunctivitis

Study Design Treatment Period Primary Endpoint Results

InSite’s Phase 3 AzaSite Plus for

Blepharoconjunctivitis(2008)

AzaSite Plus vs. AzaSite

vs. DexaSite vs. Vehicle

14-day Rx

BIDx14 2-week follow-up

Resolution of all clinical signs &

symptoms

AzaSite Plus 27.1%

vs. AzaSite 15.6%P=0.0284

Inspire’s Phase 2 (044- 101)

AzaSite for Blepharitis(2009-2010)

AzaSite vs. Vehicle

14-day Rx

BIDx2; QDx12 2-week follow-up

Clearing of lid debris

No difference over vehicle


AzaSite for Blepharitis(2009-2010)

AzaSite vs. Vehicle

28-day Rx


Mean lid margin hyperemia

No difference over vehicle


AzaSite for Blepharitis(Initiated late 2010)

AzaSite vs. Vehicle

28-day Rx


UnknownTBD;

Mid-year 2011 results expected

29

Why We Believe We Can Win (continued)Why We Believe We Can Win (continued)Why We Believe We Can Win (continued)

Our open and collaborative FDA relationship• AzaSite/conjunctivitis interactions through approval• AzaSite Plus/DexaSite

blepharoconjunctivitis

interactions,

especially post‐2008 Phase 3 study results AzaSite Plus 27.1% vs. AzaSite 15.6%, p=0.0284

Evidence that other patients got better, but couldn’t be counted

• Traditional, new and novel endpoint discussions

Our clinical trial approach, being the first to:• Quantify and evaluate blepharitis

as a chronic disease over time

(versus an acute disease @ Day 15; the traditional approach)

Blepharitis is a chronic disease characterized by inflammation• Tissue “depot effect”

of azithromycin

in DuraSite

30

Anti‐inflammatory & Tissue‐Penetrating Properties of

Azithromycin

are Well Established in Peer‐reviewed Literature

AntiAnti‐‐inflammatory & Tissueinflammatory & Tissue‐‐Penetrating Properties of Penetrating Properties of

AzithromycinAzithromycin

are Well Established in Peerare Well Established in Peer‐‐reviewed Literaturereviewed Literature

31

Azithromycin

Concentration in Tissue is Dose and Duration Dependent

AzithromycinAzithromycin

Concentration in Tissue is Dose Concentration in Tissue is Dose and Duration Dependent and Duration Dependent

Azithromycin penetrates and concentrates in eye tissues in a dose & duration dependent manner

“high levels of azithromycin, which can be achieved in ocular surface tissues, particularly eyelids, …. and the degree to which these levels persist after discontinuing the drug, distinguish azithromycin….” (AzaSite labeled use: BID x 2, QD x 7)

Following BID x 14 day dosing onto the lids, we believe azithromycinlevels should be detectable in eyelid tissue for ~90 days (“depot effect”)

32

Why We Believe We Can Win ‐

SummaryWhy We Believe We Can Win Why We Believe We Can Win ‐‐

SummarySummary

We believe DOUBle is the most comprehensive and well‐thought out blepharitis clinical study ever designed

We believe DOUBle is the most quantitative blepharitis clinical study design ever designed

We are proud to have designed this protocol in collaboration with the FDA, and finalized via this SPA agreement

33

What Does This Mean in Simple Terms?What Does This Mean in Simple Terms?What Does This Mean in Simple Terms?

Historically, only patients who were “cured” (complete resolution) of all clinical signs & symptoms counted in the primary endpoint• 2008 Study: AzaSite Plus 27.1% vs. AzaSite 15.6%, p=0.0284

For the first time, patients who did indeed achievecomplete (100%) resolution of all clinical signs & symptoms (cure) will continue to be quantitatively evaluated over time for disease recurrence

For the first time, patients who did not achieve complete (100%) resolution of all clinical signs & symptoms will continue to be quantitatively evaluated over time for improvement in and/or exacerbation of disease

34


BleSSSED, in combination with standardized digital photography, quantifies each patient’s clinical improvements, recurrence and/or exacerbation over time

BleQOLITY, in combination with BleSSSED and standardized digital photography, quantifies each patient’s clinical experience during improvements, recurrence and/or exacerbation over time

This gives us, in collaboration with the FDA, the first opportunity to quantitatively examine data on all patients with moderate‐to‐severe blepharitis, and determine “just how better is better” in the clinical setting, and thus put more patients into primary endpoints analyses

35


The DOUBLe Phase 3 study strives to improve the way blepharitis is both diagnosed and treated, and also reviewed (and hopefully approved), with the quantitative BleSSSED and BleQOLITY tools leading the way

We would gladly pursue BleSSSED and BleQOLITY data and claims into labeling, and in commercialization efforts

36

Endpoint Risk: AzaSite Plus vs. AzaSite Endpoint Risk: AzaSite Plus vs. AzaSite Endpoint Risk: AzaSite Plus vs. AzaSite

AzaSite Plus vs. AzaSite• AzaSite Plus already beat AzaSite in 14‐day BID regimen

AzaSite Plus vs. DexaSite• Good scientific rationale, following traditional endpoint:

Anti‐inflammatory effect of azithromycin

Eyelid tissue “depot effect” of azithromycin

AzaSite vs. DuraSite (Vehicle)• 1st 14‐day BID evaluation: Phase 3• 1st approach using topical/finger application

DexaSite vs. DuraSite (Vehicle)• Good scientific rationale following 2008 Phase 3 efficacy/safety

AzaSite Plus vs. DuraSite (Vehicle)

37

AzaSite Plus and DexaSite

Market Opportunities

AzaSite Plus and AzaSite Plus and DexaSiteDexaSite

Market Market OpportunitiesOpportunities

Blepharitis estimated to effect up to 34 million adults in U.S. • Widely considered under‐diagnosed and misdiagnosed

• Moderate‐to‐severe disease: clear need for a proven therapeutic

No FDA approved drugs• Numerous attempts & failures

Assuming moderate market penetration and current pricing of drugs prescribed for blepharitis, possible sales ranges are:• AzaSite Plus

$500M to $1B

[Based on 10% at $120/prescription]

• DexaSite

$200M to $400M

[Based on 5% at $90/prescription]

• AzaSite

We haven’t examined possible $ effects of a

positive outcome for AzaSite via this study

AzaSite Plus pricing potential could be doubled by the pursuit of an AzaSite indication in blepharitis on 28‐day regimen

38

Next StepsNext StepsNext Steps

Validate BleQOLITY assessment• Collaboration with UCLA/blepharitis

experts

Formally re‐initiate partnering discussions• Focus on AzaSite Plus; maintain DexaSite

rights

• SPA validates clinical & regulatory strategy

Explore novel financing• Maintain options to conduct Phase 3 independently while

examining partnership economics

Finalize CRO & Phase 3 trial costs• Nearly complete

Phase 3 supplies available: July• Manufactured in May

39

Summary: Why We Believe We Can WinSummary: Why We Believe We Can WinSummary: Why We Believe We Can Win

Patient eligibility criteria

Well‐defined Phase 3 with SPA agreed clinical endpoints• History of AzaSite Plus beating AzaSite: Traditional endpoint• Scientific rationale for AzaSite Plus over DexaSite: New endpoint• Potential to change the regulatory landscape: Novel endpoints

Quantifiable/proprietary investigator measurement tools• Digital photography• BleSSSED

Quantifiable/proprietary patient measurement tools• BleQOLITY

Open and collaborative FDA relationship

Two (three?) potential positive product outcomes

Classic first‐mover advantage

Thank youThank youThank you

www.insitevision.com

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