Executive Summary / Key Takeaways

• Clearside Biomedical is pioneering targeted drug delivery to the back of the eye via the suprachoroidal space (SCS) using its proprietary SCS Microinjector, a platform validated by an FDA-approved product (XIPERE) and multiple high-profile partnerships.
• The company's lead internal candidate, CLS-AX for wet AMD, demonstrated positive Phase 2b results, showing promising durability and a favorable safety profile, leading to FDA alignment on a pivotal Phase 3 program designed for flexible, long-acting maintenance treatment.
• Strategic collaborations with partners like REGENXBIO (RGNX)/AbbVie (ABBV), Aura Biosciences (AURA), and BioCryst Pharmaceuticals (BCRX) are expanding the application of the SCS platform across various retinal diseases and therapeutic modalities, providing external validation and potential future revenue streams.
• Despite recent financing activities and revenue from partnerships, Clearside faces a critical funding gap; current cash is expected to fund operations only into Q4 2025, necessitating significant additional capital to initiate and complete the planned CLS-AX Phase 3 trials.
• The investment thesis centers on the potential of the SCS platform and CLS-AX to capture a meaningful share of the multi-billion dollar retinal disease markets, contingent upon successful clinical development, regulatory approval, and securing the necessary financing to advance its pipeline.

The Promise of Precision: Targeting the Back of the Eye

Clearside Biomedical, Inc. is carving out a unique position in the competitive landscape of ophthalmic pharmaceuticals by revolutionizing how therapies reach the critical structures at the back of the eye. The company's core innovation lies in its proprietary suprachoroidal space (SCS) injection platform, centered around the SCS Microinjector. This technology enables physicians to deliver drugs directly into the SCS, a vascular layer between the choroid and the sclera, offering a targeted and compartmentalized approach to treating diseases affecting the macula, retina, and choroid.

This differentiated delivery method stands apart from the standard intravitreal injections used for many approved therapies, including market leaders like Regeneron's (REGN) Eylea and Roche's (RHHBY) Lucentis. While intravitreal injections deliver drugs into the vitreous humor, potentially exposing non-diseased anterior structures to medication and sometimes leading to side effects like vitreous floaters or inflammation, SCS delivery aims to bypass the vitreous. By directing the therapy behind the retina, Clearside's approach seeks to maximize drug concentration at the site of disease while minimizing exposure to the front of the eye, potentially enhancing efficacy and improving the safety profile. The SCS Microinjector itself is a key technological component, designed for an in-office, repeatable, non-surgical procedure, featuring a syringe with a custom hub and two approximately one-millimeter microneedles to optimize SCS administration.

The company's strategic approach leverages this foundational technology through two main avenues: advancing its own internal pipeline of drug candidates and establishing collaborations with other biopharmaceutical companies. This dual strategy aims to maximize the reach and application of the SCS platform across a broad spectrum of retinal diseases and therapeutic modalities, from small molecules to gene therapies. The wet AMD market alone represents over $12 billion in annual sales, while geographic atrophy (GA) is valued at over $20 billion, highlighting the significant commercial opportunities Clearside is addressing.

Validating the Platform: From XIPERE Approval to Partner Momentum

Clearside's journey began with research and development efforts focused on the SCS delivery concept. A pivotal moment arrived with the FDA approval of XIPERE (triamcinolone acetonide injectable suspension) in October 2021. This marked the first-ever FDA-approved therapeutic delivered into the SCS and Clearside's first commercial product, indicated for macular edema associated with uveitis. The approval served as crucial validation for the SCS platform and the SCS Microinjector, demonstrating the feasibility and regulatory acceptance of this novel delivery route.

Commercialization of XIPERE is handled through partners, including Bausch + Lomb (BLCO) in the U.S. and Canada, and Arctic Vision in the Asia Pacific region. Recent real-world data analysis of XIPERE usage, evaluating nearly 800 eyes, showed compelling durability, with over 75% of eyes not requiring retreatment for six months after a single dose. This real-world evidence supports the potential for extended drug release and reduced treatment burden offered by SCS delivery of small molecules. Further validation comes from the establishment of a permanent Category 1 CPT code for suprachoroidal injections, facilitating broader access and adoption.

Beyond XIPERE, Clearside's collaboration strategy is gaining significant momentum, providing external validation and expanding the platform's reach. Partnerships with companies like REGENXBIO (with AbbVie), Aura Biosciences, and BioCryst Pharmaceuticals demonstrate increasing industry interest in utilizing the SCS Microinjector for various indications and therapeutic classes. REGENXBIO is advancing a global Phase 3 program for their gene therapy candidate (RGX-314) in diabetic retinopathy using the SCS Microinjector, with plans to start later in 2025. Aura Biosciences is enrolling a global Phase 3 trial for Bel-sar in choroidal melanoma, exclusively using SCS delivery. BioCryst Pharmaceuticals recently licensed the SCS Microinjector for the delivery of their plasma kallikrein inhibitor, avoralstat, for diabetic macular edema, a deal that included a $5 million upfront payment and potential future milestones and royalties. These collaborations not only provide potential future revenue streams but also underscore the perceived advantages and versatility of the SCS platform for delivering diverse therapeutic agents.

CLS-AX: The Lead Candidate's Potential and Path Forward

The cornerstone of Clearside's internal pipeline is CLS-AX (axitinib injectable suspension), a proprietary formulation of the tyrosine kinase inhibitor (TKI) axitinib for suprachoroidal injection, aimed at treating wet AMD. Axitinib is a potent pan-VEGF receptor inhibitor, offering a mechanism of action that complements existing anti-VEGF therapies by blocking receptors rather than just circulating VEGF. Clearside believes this broad blockade could provide advantages, particularly for patients who respond sub-optimally to current treatments.

The CLS-AX program recently achieved a critical milestone with positive topline results from the Phase 2b ODYSSEY trial in wet AMD patients. The trial met its primary and secondary objectives, demonstrating stable visual acuity and retinal anatomy, reduced treatment burden, and a positive safety profile. Notably, the trial showed promising durability, with 100% of CLS-AX participants going 3 months, 90% going 4 months, 81% going 5 months, and 67% going 6 months without needing additional treatment before mandatory re-dosing at week 24. Overall injection frequency was reduced by 84% compared to the period prior to screening. CLS-AX was well-tolerated, with no ocular serious adverse events or treatment/injection procedure-related SAEs reported.

Building on these results, Clearside held a successful End-of-Phase 2 meeting with the FDA in Q1 2025, achieving alignment on the essential components of the planned Phase 3 program. The plan involves two pivotal, non-inferiority trials comparing CLS-AX to aflibercept 2mg, likely enrolling treatment-naïve patients. The design incorporates specific screening criteria (BCVA between 20/80-20/32, CST <500 microns) and a personalized treatment interval (PTI) approach using OCT biomarkers to assign patients to flexible dosing regimens (every 12, 16, 20, or 24 weeks). This flexible dosing, coupled with the ability to re-dose with CLS-AX rather than requiring anti-VEGF rescue, is highlighted by management as a key differentiator compared to other TKI programs in development, aligning with real-world clinical practice and potentially reducing regulatory risk. Clearside is preparing to initiate these Phase 3 trials in the second half of 2025.

Financial Realities and the Funding Imperative

Despite the clinical and strategic progress, Clearside's financial position reflects its stage of development as a clinical-stage biopharmaceutical company. The company has consistently incurred net losses and negative cash flows from operations since its inception. For the three months ended March 31, 2025, Clearside reported a net loss of $8.2 million, compared to $11.8 million for the same period in 2024. Revenue saw a significant increase to $2.3 million in Q1 2025, primarily driven by a $1.5 million milestone payment from Arctic Vision, compared to $0.2 million in Q1 2024. Research and development expenses decreased to $4.5 million in Q1 2025 from $5.6 million in Q1 2024, mainly due to the completion of the ODYSSEY trial, while general and administrative expenses remained stable at $2.8 million.

As of March 31, 2025, Clearside held $13.6 million in cash and cash equivalents. The company has historically funded operations through equity offerings, warrants, debt, and license agreements. Recent financing activities include a registered direct offering in February 2024 that generated $13.9 million in net proceeds and ongoing sales through an at-the-market (ATM) facility, which raised $0.4 million in Q1 2025 and an additional $0.4 million subsequent to the quarter end.

Based on current plans and forecasted expenses, Clearside expects its cash resources to fund planned operating expenses and capital expenditure requirements into the fourth quarter of 2025. However, this estimate is based on assumptions that could prove incorrect, potentially leading to an earlier depletion of capital. Crucially, the company explicitly states that additional capital is required to complete the clinical development of CLS-AX, particularly the planned Phase 3 program. These factors raise substantial doubt about the company's ability to continue as a going concern within one year of the May 15, 2025 filing date. Clearside is actively pursuing options to fund the Phase 3 program, including potential partnerships.

Risks and the Path Ahead

The investment in Clearside Biomedical is subject to significant risks inherent in the biotechnology sector, particularly for a company at its stage of development. The most immediate and pressing risk is the need for substantial additional financing to fund the planned CLS-AX Phase 3 program and ongoing operations beyond Q4 2025. Failure to secure this funding on favorable terms, or at all, could force the company to delay, limit, reduce, or terminate its development efforts or enter into unfavorable collaboration agreements.

Clinical trial risk remains paramount. While ODYSSEY results were positive and FDA alignment for Phase 3 has been achieved, there is no guarantee that the pivotal trials will demonstrate the necessary efficacy and safety profile for regulatory approval. The success of partner programs also impacts potential future revenue streams from milestones and royalties, introducing reliance on third-party execution. Competition in the wet AMD and broader retinal disease markets is intense, with established players and other companies developing novel therapies and delivery methods. Clearside's ability to differentiate CLS-AX and the SCS platform will be critical. Macroeconomic conditions could also adversely affect the company's ability to raise capital and the commercial potential of approved products.

Despite these challenges, the core investment thesis rests on the potential of the SCS delivery platform to offer a differentiated and valuable treatment approach for multiple sight-threatening diseases. The validation provided by XIPERE's approval, the growing number of high-profile partnerships utilizing the SCS Microinjector, and the promising ODYSSEY data for CLS-AX underscore this potential. The planned CLS-AX Phase 3 program, designed with flexible dosing to align with clinical practice, represents a significant opportunity in the large wet AMD market. However, the successful execution of this strategy is directly contingent on the company's ability to secure the necessary funding in the near term.

Conclusion

Clearside Biomedical stands at a critical juncture, having successfully validated its innovative suprachoroidal delivery platform and advanced its lead candidate, CLS-AX, to the cusp of pivotal Phase 3 development. The SCS Microinjector offers a compelling, targeted approach with potential advantages over traditional intravitreal injections, a value proposition increasingly recognized through strategic partnerships across diverse therapeutic areas and indications. The positive ODYSSEY results and subsequent FDA alignment provide a clear path forward for CLS-AX in the multi-billion dollar wet AMD market, positioning it as a potentially differentiated long-acting maintenance therapy with flexible dosing.

However, the company's financial runway is limited, extending only into the fourth quarter of 2025, highlighting the urgent need for significant additional capital to fund the ambitious Phase 3 program. Securing this financing is the immediate and most critical factor determining Clearside's ability to realize the full potential of its SCS platform and pipeline. For investors, the story of Clearside is one of technological innovation and clinical promise confronting the inherent capital demands of drug development. The outcome hinges on the company's success in navigating the financing landscape and executing its pivotal clinical trials, which, if successful, could unlock substantial value by bringing novel, precisely delivered therapies to patients with serious retinal diseases.