Take a deep dive into the first treatment for macular telangiectasia type 2: an allogeneic encapsulated cell therapy

In a new episode of The Ophthalmic Project, Mark Dlugoss speaks with Rich Small, CEO of Neurotech, to discuss their newly FDA-approved treatment for macular telangiectasia (MacTel).

Mark Dlugoss:

In March, the FDA approved Encelto, the first and only approved treatment for macular telangiectasia, commonly known as MacTel. The company that developed this treatment, Neurotech, is soon to launch the treatment with its first patient implantation.

Hello, this is Mark Dlugoss, Senior Contributing Editor for Ophthalmology 360, and welcome to The Ophthalmic Project powered by Ophthalmology 360. In today’s edition of The Ophthalmic Project, we will learn more about Encelto, the role that cell therapy plays in this treatment protocol, and Neurotech’s plans as it begins treating MacTel patients.

Joining The Ophthalmic Project to discuss Encelto and everything related to its cell-based platform is Richard Small, CEO of Neurotech.

Rich, welcome to The Ophthalmic Project.

Rich Small:

Thanks, Mark. Thanks for having me join you.

Mark Dlugoss:

We have some questions, obviously, and I think we’re going to start. Before we get into details with the drug, let’s begin with our discussion with the overall view of Neurotech Pharmaceuticals. Neurotech, we know, is a private biotech company focusing on the transformative therapies for chronic eye diseases. Can you give us a view as a little bit of information or background about Neurotech?

Rich Small:

Sure. One of, that we feel, obviously, I’m a little biased, one of the more remarkable aspects of the company is that how long we’ve actually been developing our encapsulated therapy.

Actually, the company was formed actually in the early 2000s, and so we’ve been working at our encapsulated cell therapy program for now over 20 years. As you know, Mark, to have a startup working with technology for such a long period of time, it’s really remarkable. Not many companies can persevere through that.

Something that’s part of our history and something we’re really proud about, because obviously we faced a lot of challenges during those times, and we got to, as you said, FDA approval of our first ECT platform product.

Mark Dlugoss:

What’s the company’s plans as an ophthalmic company moving forward?

Rich Small:

Sure. Obviously, we’re focused in the ophthalmic space, specifically in the back of the eye, the retina, to treat retinal diseases.

Actually it’s a multipronged approach we’re taking out. Obviously, with this being our first product, we’re extremely focused on a successful launch of the product. It is a first-of-its-kind platform. We just need to make sure that we introduce it into the community properly, that it’s well-accepted, and that it creates then a foundation for further type of applications of our technology.

Our technology is extremely flexible as far as potentially treating other diseases. Obviously, MacTel is an orphan disease that has no treatment, so very excited about, we’re introducing a product and treatment for that disease, but we potentially could expand our platform to treat other diseases, like glaucoma or macular degeneration.

Basically, anything that potentially impacts retinal diseases, we potentially have an application for. We just need to make sure that the launch of our first product is done properly and is successful.

Mark Dlugoss:

I noticed that Neurotech has built a pretty strong management team and you’re supported by a board of directors with well-established names in ophthalmology, and also your scientific medical advisory board, a lot of renowned and high-profile retina specialists. Can you highlight the experience of the Neurotech leadership teams and what their background means to Neurotech’s efforts in developing therapies for eye diseases?

Rich Small:

Sure. Let me just, even going back to the origins of what I was speaking to, the other thing very extremely proud of is that we still have a team that was actually involved for 20-plus years. The core of the team was involved with developing the technology as well as manufacturing a product.

We do manufacture our own product, and those folks are really the backbone of the company. Folks like Konrad Kauper and Crystal Cortellessa have been around for 15 to 20 years, and really a very important aspect of our success is actually having those people who actually have that long knowledge and understanding of this very unique technology. I cannot stress more the importance of having those foundational people within the company.

To that further, we’ve actually have created, over the last 2-plus years, what we think is a world-class commercial group. We have built the team up, and we have a very experienced team now on the ground and helping us to commercialize.

Actually, it’s almost like 2 different companies we’ve created over the years.

Mark Dlugoss:

Now, Encelto is an intravitreal implant, and it’s basically cell-based gene therapy. Now, gene-based therapy basically, to my knowledge, is, I’m going to give you a 30,000-foot observation, pretty much involves extracting patient’s cells, modifying them in a lab, and then re-infusing them back into the patient to treat diseases.

Now, I know this is a little bit more involved than what I just gave you. Can you outline for viewers a more detailed look at cell-based gene therapy and how it works?

Rich Small:

Sure, sure. We’re actually a little different. We actually have a cell line, so we’re allogeneic approach.

We have a cell line that we can genetically modify to release whatever the protein or growth factor of interest that we think could be applicable to help treat a disease. For example, Encelto is genetically modified to release the neurotrophic factor CNTF, which has been shown to protect the health of photoreceptors.

It’s a little different than maybe folks think about a cell-based therapy. We’re not re-injecting cells into the human body. We’re actually have a cell line that we actually modify to release whatever the therapeutic of interest to help treat a disease.

That’s actually a really unique part in what makes us a little different than other type of cell and gene therapy companies.

Mark Dlugoss:

What’s the potential long-term effects?

Rich Small:

I can tell you from a clinical aspect, in our studies and what we have seen even long-term, we’ve had a very favorable safety profile.

We’ve actually have had our treatment… Because we’ve had other programs that preceded MacTel, and we actually still have some of our treatments in people’s eyes for now over 15 years, and seem to tolerate it fine.

It is meant to potentially just be a 1-time treatment. Once again, the durability aspect of our platform is also very key, but very exciting part of our treatment, and actually, out into in the retina world, something that the retina physicians really take a great interest in.

Because you can imagine, instead of having to come back and retreat, it is a surgical procedure, but if it potentially is a one-and-done treatment, just think about the huge advantages around compliance.

The patient doesn’t have to keep on coming in for further treatments. There’s a host of advantages that ECT potentially has out into the community.

Mark Dlugoss:

Are there any challenges with cell therapy?

Rich Small:

From a cell therapy standpoint, an advantage we have over, let’s say, typical gene therapy, it’s reversible. You can actually explant the treatment if needed.

But it’s more around what we really are making sure that we do properly. It is a surgical procedure, it’s a straightforward surgical procedure, but it is a surgical procedure, so we just need to make sure that the retinal doctors are sufficiently trained.

It is something that they’re very comfortable with. They are trained surgeons to begin with, but we just need to make sure that the surgical aspects are done as flawlessly as possible.

That’s the biggest thing from just a treatment standpoint that we’re really paying a lot of attention to.

Mark Dlugoss:

You mentioned earlier that you do all the manufacturing yourself. How is that in terms, is it more complex? Easier for the company? How would you address that?

Rich Small:

I’m not sure it’s easier, but it is something, if I had to think about a core strength of ours, we can manufacture Encelto. We’ve been manufacturing, once again, for 20-odd years.

It is very unique manufacturing process, but it’s not something that unusual. The process itself is not overly complicated, but obviously, we’ve been able to perfect it in our hands over the years.

But we feel that it is something we can control. Anytime you can control your manufacturing process, the better off you are.

But it does create, obviously, additional challenges and steps because you obviously need to make sure not only it’s manufactured, but that all the quality aspects are intact and meeting all the standards.

That’s really where more of the challenges are in the manufacturing process.

Mark Dlugoss:

I was doing some research on global cell therapy market, and I found that the market is almost at… Well, it was at $6 million in 2024 and it’s projected to reach $7 million in this year, in 2025, and the growth potential to $34 million by 2033.

During that whole timeframe, expected to grow over 22%. What’s Neurotech’s perspective of the cell therapy market?

Rich Small:

Yeah, I mean, once again, we’re more focused on, we think we have a unique approach that’s just not another intravitreal injection. We come at it, the market, from that perspective.

We know there’s a great unmet need and demand for better and improved treatment for retina diseases. Right now, you go to these conferences and what are folks working on? They’re working on a longer-duration intravitreal injection type of system.

A lot of companies are doing that, but to deliver therapeutics into the back of the eye over an extended period of time, many, many advantages to it, and we think through ECT, that’s really long-term what we want to do.

We look at it more from, our segment is more retina diseases rather than particularly cell therapy because we think we can replace or modify other type of treatments and just do it in a better way.

Mark Dlugoss:

Before we get into more details of Encelto, let’s talk a little bit about MacTel. I mean, most of our viewers should know the basis of it, but there are people sometimes that may or may not know the details. We know it’s a neurodegenerative disease affecting the retina, but can you give a little bit of an intricate disease of MacTel for our viewers?

Rich Small:

Sure, sure. I mean, it is from every of our understanding and the research we’ve done and talking out in the community, it does appear to be an under-diagnosed disease, and there’s probably many reasons for that.

Before I explain the disease, part of our education is to educate the ophthalmic community just to how to identify the disease itself.

But it is a disease that believe to be the Müller cells. What the Müller cells are, they actually protect the health, simply to think about the health of the photoreceptors in the retina.

As Müller cells are being impacted by the disease, their ability to protect the photoreceptors in the retina diminish over time, and then that leads to the progression of the disease.

From a real-world aspect, it impacts the patient’s ability to read, to drive, to see in the light. They have blurred vision.

It basically is more, think about, it’s more impacting a person’s quality of their vision rather than their visual acuity because, it’s interesting, visual acuity is fairly good for a long period of the disease itself, but the quality of their vision is severely impacted.

Mark Dlugoss:

How much different is MacTel from, say, GA or AMD?

Rich Small:

There’s similarities from a standpoint of it’s an area of a lesion that actually expands over time as the photoreceptors die, and that’s what impacts your vision.

It’s a break in what they call the ellipsoids of the macular.

There is some similarities with the dry version of macular degeneration. The wet version is totally different than this disease.

But where our treatment comes into play is we’re slowing down the loss of photoreceptors to slow down the progression of that disease.

Mark Dlugoss:

Basically, since its comparisons are rather close to AMD and GA, is it often misdiagnosed?

Rich Small:

It is often misdiagnosed. I mean, the other thing that’s interesting about the disease is in the more advanced stages, you actually will get some fluid buildup. Sometimes it will be diagnosed as wet AMD, and actually some of those patients actually will get injections.

Now, the injections will dry up the fluid, but it has no impact on the disease itself.

It is misdiagnosed as well as because there is no treatment, a lot of times the patient will come in, from what we understand, they’ll complain that there’s a problem with your vision. The doctor, they look at their visual acuity and they said, “Your visual acuity still is relatively fine.” 20/30, 20/40.

But the patient keeps on coming in. They might get a new pair of glasses, so they might get some other type of care. The doctor will come in and say, “Just come back and let me take a look at you.”

Also, because once it’s diagnosed as macular telangiectasia and the doctor says, “Well, there’s no cure for it.” They just watch their patients.

Also, if you think about that from a patient perspective, there’s a great amount of frustration with this type of disease because a lot of times it’s not being diagnosed properly. Then, when it is diagnosed, the doctor has no optionality as far as a treatment to help these patients.

Mark Dlugoss:

How many people are actually affected by MacTel?

Rich Small:

What we believe is, I mean, there’s no database, but there is some prevalence information that we can go on. The prevalence data tells us it’s roughly about 0.1% of people 43 and over, which rough out to about 160,000 people in the US.

Mark Dlugoss:

Wow.

Rich Small:

We probably think the core at least who have been diagnosed are probably somewhere in the 20,000 to 30,000 range. But a part of our initiatives also is as we educate the retina docs and the ophthalmologists to identify the disease that will expand over time, but that’s our rough forecast and estimates right now.

Mark Dlugoss:

Yes, and you expect that number to increase in the future. Do you have any potential idea of what the number of people that’ll be affected in the future?

Rich Small:

Well, I think the other key is because it is a slow-progressing disease. But if you can simply think about it, it’s early, mid, and more advanced stages.

Probably the advanced stage, which might, I don’t know, probably 15%, our numbers tell you it’s probably about 15% to 18% of the population, those patients or those patients’ eyes will not always be the best candidates. Because if you’re too far progressed, the photoreceptors are already dead, and our treatment’s not going to revive that.

The more mid-stage is probably about 50% to 60%. A lot of that is our sweet spot. But really what we’re trying to do is, so you have 20-odd percent that’s earlier, really, the power of our technology is the earlier you can treat, because then you can save the photoreceptors from ever dying. That’s really the power.

What our objective is, is to start with the mid-range disease, where the patients are really anxious to get treatment, but through education and through showing that our treatment works, is to continuously move to the milder of the disease area.

Just the last thing, just so I don’t forget, it is a bilateral disease. It’s not always totally symmetrical, so meaning 1 eye can advance at a little different rate of the other. Even one eye can be severe and the other eye could be mild to moderate, which would be a candidate for our treatment.

It is something that we just want to make sure to understand; it is a bilateral disease, so potentially our treatment could be used for both eyes.

Mark Dlugoss:

Let’s move on to Encelto. It was approved in early March and is based on your Neurotech’s encapsulated cell therapy or ECT platform. Obviously, it’s a cell-based gene therapy delivery system. Let’s talk about what is the concept behind ECT, the versatility of the platform, things like that?

Rich Small:

ECT is a capsule that’s sutured into the sclera. It’s roughly about the size of a grain of rice, it’s 6.5 mm long, 1 mm wide, so fairly small.

The whole aspect, it does have a membrane actually is incorporated into the capsule. What the membrane does is, obviously, cells are encapsulated into the capsule, and then the membrane allows these cells to diffuse into the back of the eye, as well as allowing the nutrients of the eye to enter into the capsule to continuously produce these cells.

As well as the pore size of the membrane does not allow any sort of immune host response from occurring. That was a whole original idea, to have this perfect type of system that could deliver, and then could also always continuously be manufacturing these cells, while not allowing any sort of immune rejection.

That was the whole design about it. It’s been described as a “biofactory in your eye” is how it’s been described because of the continuous production of the cells, and that’s what really gives its longevity and durability.

Mark Dlugoss:

How is it surgically implanted? Is it just a basic… I guess provide the details.

Rich Small:

Yeah, yeah. It is a…

Mark Dlugoss:

Continue to let you talk about it than me trying to guess it.

Rich Small:

… It is roughly about a little over 3-mm incision. It’s about 95% depth and it’s a 3-suture procedure that happens. As I said, it’s fairly straightforward. It’s roughly, say, a 30-minute type of procedure as our retinal doctors will tell us, but there’s some suture techniques that are very important to the procedure.

Mark Dlugoss:

Basically, then it’s a pretty simple procedure, 30 minutes from a retina’s perspective is pretty good. How long does the implant last? Has it got a timeframe in which it disintegrates or does it stay in the retina for as long as the patient needs?

Rich Small:

Yeah, so no, it’s not designed to dissolve. As I said before, we have actually had other programs, clinical programs, that actually date back to the mid 2000s, like 2006. We had a couple of clinical programs and our capsule was actually used and some of those patients still have our treatment in their eyes. The longest dated capsule that we have removed was 14.5 years.

Mark Dlugoss:

Wow.

Rich Small:

Remarkably, it does not look that much different than a new capsule upon the implantation.

As well as that, when we cut open the capsule and took a look at the cells, the morphology of the cells was great. It was still producing cells at the therapeutic level, and upon introduction of the capsule.

Something that we just found very remarkable.

We obviously believe that this is a very long-term and durable procedure. Even though our clinical study for 2 years, it’s hard to run a 20-year clinical study. But as I said, our durability data is looking very positive.

Mark Dlugoss:

Now, the FDA’s approval on Encelto was based on results from two phase 3 clinical trials, which demonstrated that Encelto significantly slowed the loss of macular photoreceptors in MacTel patients over 24 months. Can you provide the details about the results of those 2 trials? What stood out to both you and Neurotech and the FDA about Encelto’s efficacy?

Rich Small:

First off, it’s really important to understand, our primary endpoint was to show slowing down loss of photoreceptors, something that the FDA has approved as a primary endpoint.

Our studies were, as you said, we ran 2 parallel studies. We ran them, it was multi-national, it was in the US, UK, France, Germany, Australia.

We ran it at about 40, I think 43, clinical sites. It was 1:1 randomization, 115 in one study, 113 in the second study.

The first study actually showed slowing down progression of loss of photoreceptors by almost 55%. The second study showed slowing down progression of photoreceptors by over 30%, both very highly statistical.

From an efficacy standpoint, it’s strong and actually very much demonstrates our treatment effect in this disease.

Mark Dlugoss:

Now with the FDA approval here, what are Neurotech’s next steps? I know that the first patient is to be implanted with Encelto this week or in the coming weeks. Can you elaborate more on that?

Rich Small:

Sure. We did announce our intention to do our first surgeries in this month, in June. We’re gearing up to do that.

Once again, and I’ve said it a couple of times, but we want to do our launch in a very well, I’ll say, controlled way. Meaning, initially, we’re focused on the sites and the retina doctors that have familiarity with us, i.e., the ones that participate in the clinical studies.

There are some other sites that we’re also reaching out to and just to make sure… but we’re not going out in a mass type of introduction of our treatment.

Over time, obviously, we will expand that in the coming months and years. Eventually, we will have it available throughout the retina community, but our original launch is, we want to just make it control, just to make sure we do it right.

That’s our plans for at least throughout 2025. Then once we set that base, then our design is to expand it into other practices and then, at the same time in parallel, to go out and educate the ophthalmologists as well as the optometrists.

Because at the end of the day, if you think about it, a lot of these folks, they’re first coming in through their optometrists. We want to make sure the optometrists also are educated and understand the disease and if they see it, to know to refer it up to the retinal doctors.

Mark Dlugoss:

Yeah, you got a lot of potential with optometrists. They’re very good at diagnosing and sometimes better than the ophthalmologists. It’s amazing how they’re really good at diagnosing eye diseases. It should be very promising going down the line.

Rich Small:

Yeah, yeah. No, we’re really excited about expanding it over time.

Mark Dlugoss:

Okay, with the potential of cell-based gene therapy, we touched based on this a little bit earlier, what are the future opportunities for Neurotech beyond MacTel? You mentioned glaucoma and probably so many other retina diseases.

Rich Small:

Right.

Mark Dlugoss:

Can you elaborate on that or is that something we can…

Rich Small:

Yeah. First off, just so the flexibility of our cell line, it does have the ability to produce proteins, growth factors, antibodies.

Some of the diseases, it’s more, can we deliver enough of these proteins or growth practice from a treatment effect? If people approach us, or even internally, the first question we have, can we deliver enough through this capsule to actually have, obviously, a treatment effect?

But there is a wide variety of molecules that we can actually deliver through it. As I said, there might be some retina diseases that we’d have a difficult time doing, but that would be more of a product, there are therapeutics that actually could treat the disease.

But if there’s what we would think is a therapeutic that could treat retina diseases, we could probably take a look at it.

It’s fairly… Well, our issue is more to be focused on a couple of them. We can’t do them all. I think right now we have more ideas than we have ability to develop programs on.

Once again, like we did with MacTel, we always have been a very focused and driven company, and that’s the approach we just take. We’ll do that with any future diseases too that we look to engage.

Mark Dlugoss:

I know you mentioned strictly ophthalmic eye diseases, but any of those ideas considering outside of ophthalmology into other areas of medicine?

Rich Small:

Yeah, I mean, the technology itself, because the technology actually was designed for systemic and CNS-type diseases, but the challenge for us would be, the capsule we have is perfect for the eye.

If we did it within the body, first off, we probably would have to redesign the capsule itself. Two, you do need to… immune rejection becomes another issue.

The eye is actually a perfect place for us, for our technology to demonstrate. But there could be applications, we have so many opportunities within the eye, to develop something outside of the environment of the eye is a longer-term project.

Not to say it couldn’t happen, but it would take us several years to do that.

Mark Dlugoss:

Now, if viewers are interested in learning more about Encelto and cell-based gene therapy in general, how do they go about reaching or contacting you and Neurotech?

Rich Small:

Sure, so a couple. We actually have an Encelto website, and it’s encelto.com. That would have all of the prescribing information, patient information, so forth and so on.

We also have our own corporate website, neurotechpharmaceuticals.com. You can go there, and that will actually direct you to our Encelto website too.

There are a couple of different ways for folks to do their research and to read up about us.

Mark Dlugoss:

Now, our discussion has provided a lot of information about Encelto and cell-based gene therapy. Are there any other points you would like to add regarding Encelto, Neurotech, or some of its programs before we close?

Rich Small:

I mean, just in general, obviously, as a company, we’re obviously very excited and proud to have gotten this technology through, and it took us, as I said before, a lot of years to do it.

To have something that we can actually have a treatment to give patients that had no treatment is an incredibly inspiring and satisfying achievement for myself, for Laurie, for the whole company, and something we’re very proud of.

It really is the backbone of the company.

But besides that, Mark, you asked great questions and did a really great job of hopefully giving people who are going to listen a good understanding of what we’re doing.

Mark Dlugoss:

Well, that includes today’s Ophthalmic Project podcast. I want to thank Rich Small for discussing Encelto, the cell therapy, and Neurotech’s plans as it brings its treatment to market.

We at Ophthalmology 360 wish Neurotech all the success in the world as it begins treating MacTel patients.

I also want to thank you, the viewers, for watching, and I hope you’ll join us for the next edition of The Ophthalmic Project, powered by Ophthalmology 360.

Until next time, have a great day.