Aerie Pharmaceuticals CEO discusses what's new in the pipeline

Video transcript

Note: This transcript has been lightly edited for clarity.

David Hutton:

I'm David Hutton of Ophthalmology Times.^® And joining me today is Raj Kannan, the new CEO of Aerie pharmaceuticals. Thank you for joining us today.

Raj Kannan:

Thank you, David, thank you for having me here.

David Hutton:

We're coming off the heels of AGS in Nashville, and the return to live meetings is in full swing. How have things been going for Aerie at the meetings.

Raj Kannan:

It's been wonderful. To see people in person, especially after a long hiatus that we've had, where we only saw people virtually. So just to meet people in-person, and to also get introduced to the world class clinicians and thought leaders for me, especially as a new CEO to Aerie was quite exhilarating, to say the least.

David Hutton:

Can you update us on the latest developments in the Aerie pipeline?

Raj Kannan:

Absolutely. Here's a company that I think is quite unique in the ophthalmic space; it has a commercial franchise [with] approved products with a novel MOA, that physicians are quite excited about. But more importantly, we have two Phase 3-ready assets, which is atypical for a small biotech company, our size — and I'll talk to you more about even our research program, our early-stage programs, we have a robust foundation in place to continue filling the pipeline with novel products. So, I'm excited about the pipeline, it becomes a question of capital, how much bandwidth you have in terms of funding all of these, how much risk appetite you have in terms of betting on these assets? Because not everything is going to get to market. And so how do you smartly think about partnering? How do you think about where do you want to focus? [These} are all the questions that we're currently focused on.

David Hutton:

And what are some of the products that you kind of alluded to?

Raj Kannan:

So obviously glaucoma, we've got a very good footprint right with two novel MOAs. And that's been about 20 years — the space has not seen any innovation in this particular space, and our products do something that no other product can do. So that by itself is quite a good place to be in glaucoma. We're equally excited about the two Phase 3-ready programs. And I'll talk to you about the two which [are] late stage. And that's more relevant for people than something that is still in early stage. So, we've got an asset that we term internally called AR-15512, which is a TRPM8 Agonist, which acts by stimulating the cold thermal receptors in your eye, and for producing tears in dry eye.

And so, what we see with this product in particular that we're excited about is the rapid onset of efficacy, which we don't see in the products that are currently in the market today. We saw almost a consistent pattern in how it reduced the symptoms that patients with dry eye suffer in our Phase 2b that we were quite excited about. And they were all trending in the same direction statistically significant, and in particular, on quality-of-life metrics.

So not only are we able to produce a robust amount of tear production in dry eye, but more importantly, we answer that question, “Well is how does the patient feel?” And we could say the patient feels better, right. And that's what we're aiming for in terms of a product profile. If we hit that product profile, we believe, David, that this could be a very compelling and differentiated product for patients that suffer with dry eye.

The other product, [about which] we're equally excited, which is we call AR-1105. And this has two things that I believe it validates. One is it validates our print technology platform, which is an extended dosing delivery mechanism that we have. So, the current standard of care in steroid in the space that we're competing in, is a product that is used once every two months. We've been able to take that, reduce the steroid dose by half, and extend the dosing delivery for once every six months. So, we think that is a meaningful differentiation for physicians and patients, especially in a condition like diabetic macular edema (DME) or retinal vein occlusion, and that is an asset that we are equally excited about.

And then what we did was we said internally, we could fund one of them; we can’t fund both. So, we are looking for partners to take that asset forward and bring it to market themselves.

David Hutton:

And how's the glaucoma franchise performing for Aerie?

Raj Kannan:

I would say the glaucoma franchise has done well. Certainly not done well versus external expectations, and that's the thing that I've always got to set. If you've got very high expectations, no matter what you do, or how well you do, you will always be sort of relatively contrasted with what you said.

I think when you look at a highly genericized marketplace, and look at the branded products, I think we have done reasonably well, given COVID-19, given the genericization in this particular marketplace, and given the payer pushback.

And I think what I'm more excited about is that we have a refreshed story of how to position the products really well for patients today than we had in the past. And the positive feedback that physicians are starting to get from their patients — and how well this product does — starts playing out over a period of time in terms of reinforcing that they should be prescribing this product for more of their patients. So, we continue to be optimistic and confident about the future of our glaucoma franchise, as well.

David Hutton:

You kind of alluded to the pandemic, how much of an impact did it have on Aerie? And do you believe you're at the pre-pandemic levels regarding R&D and other operations?

Raj Kannan:

So, I think Aerie was not unique in the sense of how we got affected. We certainly had products that were going through what I would call a “launch phase” during a pandemic. And no matter how much launch experience a pharmaceutical person has, I don't think any one of us had a playbook in how to go to market during a pandemic. So, this was something of a learning experience for all of us in terms of how to manage the customer engagement at a time when you couldn't see them in-person.

I think the other part that was important is even patients did not have access to the physician's office. So, one of the studies in 2020 that came out in ophthalmology said that 600,000 patient visits were missed compared to the previous year. Patients were not even going into the offices for their own care, because COVID-19 became sort of the priority of care.

Not just in ophthalmology, you could go across the board: diabetes, cancer, immunologic conditions, etc. patients who are struggling to get the kind of access and care during the pandemic. That is one piece that I feel is returning back to normal, in which patients are now increasingly getting back into the office, and we're seeing — rather than a flat market — the market growth for prescriptions is starting to inch back to the pre-COVID normal.

Two, I think in terms of access itself, we're starting to see an improvement in in-person meetings. And David, I was in a sales meeting, we had our entire sales force in-person that I never thought would be possible anymore. You know, it was great to have that. So that's getting back to normal, and the access to our sales force, our field force is starting to get back into 90% or more of these meetings in-person, which is very different than what we had in COVID.

The last piece is even in clinical trials, we become very savvy about making sure that if something like this happens in the midst of a clinical trial, that our statistical analysis plan — our missed data points —are all accounted for in the statistical analysis itself. So, there's a lot more focus on decentralizing clinical trials, there's a lot more focus on making sure if patients [can't] get to the site, how do you manage that? There’s been a lot of learnings and we've incorporated that as we think about clinical trials in the future.

The last piece is supply chain. Aerie’s very unique in that sense, that for a small biotech company, we established our own manufacturing plant. So really getting that supply chain in-house and mitigating the risks to the extent we can, is an important piece that we as an industry learned during COVID-19, as well.

David Hutton:

What is one thing that you would like ophthalmologists to know about the work going on at Aerie?

Raj Kannan:

If there's one thing I would like them to know it's that we're a small company; we're not a big behemoth, and we're quite innovative. And usually, the conventional wisdom will tell you that smaller companies tend to be more agile, nimble and innovative than large behemoths. And it was very heartwarming for me to hear that from the thought leaders and clinicians at AGS, because they were saying they were rooting for our success, because we were one of those small companies that they did not want us to lose as a piece of a massive behemoth, where innovation starts struggling. And it is true, 70 to 75% of all innovations today in pharmaceuticals comes from small biotech companies and physicians and prescribers and thought leaders do recognize that.

David Hutton

What is your outlook for the rest of 2022, and maybe into 2023?

Raj Kannan:

I would say this is Aerie version 2.0, as we dub internally; always trying to get to be a better version of yourself and the company and in Aerie version 2.0 we're going to be a lot more focused in knowing what we're great at doing. And then partnering and giving to somebody else who's better at it than trying to do it all by ourselves.

So, you'll see Aerie version 2.0 becoming very focused in what we want to do and where we want to play and how do we want to leverage our strengths.

David Hutton:

Excellent. Thank you so much for your time today; we really appreciate it. And as we get back to live meetings here, I'll make sure to keep my eyes out and hopefully we'll cross paths and I get to say hello in-person.

Raj Kannan:

Thank you, David. I look forward to meeting in-person, as well. And thank you for having me; I really appreciate it.