Eyenovia Inc (EYEN) 2018 Q1 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Eyenovia, Inc.

First Quarter 2018 Earnings Conference Call.

(Operator Instructions) As a reminder this conference call is being recorded.

I would now like to turn the conference to Tram Bui from The Ruth Group.

You may begin.

Good morning and welcome to Eyenovia's first quarter 2018 earnings conference call and audio webcast.

With me today are Dr. Sean Ianchulev, Eyenovia's Chief Executive Officer and Chief Medical Officer; and John Gandolfo, Eyenovia's Chief Financial Officer.

Earlier this morning, Eyenovia issued a press release announcing financial results for the three months ended, March 31, 2018.

We encourage everyone to read today's press release as well as Eyenovia's quarterly report on Form 10-Q, which will be filed with the SEC later today.

The company's quarterly report and press release will also be available on Eyenovia's website at www.eyenoviabio.com.

In addition, this conference call is being webcast through the company's website and will be archived there for future reference.

Please note that certain information discussed on the call today is covered under the safe harbor provisions of the Private Securities Litigation Reform Act.

We caution listeners that during this call, Eyenovia's management will be making forward-looking statements.

Actual results could differ materially from those stated or implied by these forward-looking statements due to risk and uncertainties associated with the company's business.

These forward-looking statements are subject to a number of risks, including risks related to fluctuations in our financial results; risks of our clinical trials, including but not limited to, the initiation, timing, progress, and the results of such trials; the timing and our ability to submit applications for and obtain regulatory approvals for our product candidates; our estimates regarding the potential market opportunity for our product candidates; our ability to attract and retain key personnel and others detailed in and qualified by the cautionary statements contained in Eyenovia's press releases and SEC filings, including its most recent annual report on Form 10-K and subsequent filings.

This conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, May 9, 2018.

Eyenovia takes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call except as may be required by applicable securities laws.

With that, I'd like to turn the call over to Dr. Sean Ianchulev.

Thank you, Tram, and welcome everyone to Eyenovia's first quarter 2018 earnings conference call.

We started 2018 with the completion of our initial public offering, in which we successfully raised $24.5 million in net proceeds that will help support our clinical initiatives based on our proprietary piezo-print technology platform.

With this newly infused capital, we believe we're well positioned to advance multiple product candidates in our late-stage clinical pipeline into Phase 3 development over approximately the next 12 months, and that includes MicroProst for chronic angle-closure glaucoma, MicroStat for mydriasis, and MicroPine for pediatric myopia.

We also recently completed an additional clinical trial, the Eyenovia PG21, which demonstrated the robust IOP, intraocular pressure lowering effect of our high-precision piezo-print micro-dosing platform in 30 subjects and 60 eyes, and builds upon previously reported clinical data from our Phase 2 studies in mydriasis.

Furthermore, we have assembled an experienced team, reinforced by the addition of John Gandolfo, our Chief Financial Officer, and expansions to our scientific advisory board and board of directors.

With our novel, smart, high precision, piezo-print micro-dosing technology and experienced team, we believe Eyenovia is poised to transform the treatment of front-of-the-eye conditions as we continue to develop all four of our clinical programs.

I will now highlight the progress we have made in this regard so far in 2018.

Our first program, MicroProst, which is our proprietary latanoprost prostaglandin micro formulation being developed for the treatment of chronic angle-closure glaucoma, aims to be the first FDA-approved treatment specifically for this indication.

We estimate that in the U.S. alone, there are more than 600,000 patients with chronic angle-closure glaucoma.

That's almost as many as those with wet macular degeneration for which there is an FDA-approved therapy.

During the first quarter of 2018, we received positive feedback from the FDA in a pre-Phase 3 meeting to advance the program for chronic angle-closure glaucoma.

We plan to submit our IND for MicroProst in the second half of 2018, the approval of which will allow us to initiate the Phase 3 trial in the first half of 2019.

As we prepare to submit our IND for MicroProst, we recently completed an ancillary study, PG21 Eyenovia, which evaluated micro-dose topical delivery of micro-therapeutic latanoprost to examine patient interface in the clinical application of micro-dosing for intraocular pressure lowering.

As you recall, an increase in intraocular pressure is one of the main characteristics of chronic angle-closure glaucoma, and intraocular pressure lowering will be the primary endpoint in our Phase 3 trial.

In this clinic-based study, we treated 60 eyes of 30 healthy volunteers, who each received a once daily micro-dose treatment with subsequent diurnal IOP, intraocular pressure, assessments three times a day.

Preliminary top line results from the study indicated that our piezo-print micro-therapeutic latanoprost demonstrated a strong IOP-lowering effect, consistent with the reduction in intraocular pressure seen with standard eye drops.

In addition, our micro-therapeutic approach achieved a significantly lower level of exposure to drug and preservatives.

This clinical trial builds upon previously reported clinical data from our Phase 2 studies in mydriasis, and we intend to submit the data from the EYN PG21 study for potential presentation at a major upcoming medical conference as well as for peer review publication.

Simultaneously, we're working to submit our IND for our second Phase 3 ready program, MicroStat for mydriasis or pupil dilation.

MicroStat is a first in class fixed combination, phenylephrine-tropicamide formulation, that requires only a single mydriatic microdose application.

This differs from traditional dilation exams, which use two separate agents, tropicamide and phenylephrine, which are combined upon administration, and as a result often lead to overdosing-related side effects.

Based on our strong Phase 2 data, which demonstrated comparable clinical efficacy using micro-dosing compared to traditional drops, we believe that our fixed-dose micro therapy will simplify and streamline the dilation process while also eliminating overdose-related side effects.

We remain on track to submit our IND application as well as initiate our Phase 3 trial for MicroStat in the second half of 2018.

Finally, we've made good progress on our third Phase 3 program, MicroPine, for the treatment of progressive pediatric myopia, which to our knowledge has no approved therapy to treat its progression.

We believe that there is a significant market opportunity for a first in class therapeutic for progressive myopia, which affects more than 5 million young adults and children in the U.S. alone, and up to 80% to 90% of all adolescents in many East Asian communities.

This currently untreated population is larger than the total addressable population for open-angle glaucoma and wet macular degeneration combined.

Just this month, a review in the journal of the American Academy of Ophthalmology indicated the growing health impact and high disease burden of myopia, noting the dire need for an approved therapeutic to slow its progression.

In particular, for those who continue to progress to advanced myopia, 39% experience uncorrectable visual impairment by the age of 75.

And without an approved therapy to slow progression, we will continue to see an increase in the rates of visual impairment by seven- to 13-fold over the next few decades.

Additionally, secondary conditions and diseases that arise from myopia, such as myopic macular degeneration which affects approximately 10 million people globally, are projected to increase in frequency over the next several decades.

With that said, we believe that our micro-therapeutic formulation of atropine has the potential to be a significant breakthrough in ophthalmology as the only stable sufficiently low-dose formulation that meets the FDA's registration requirements.

Following discussions with the FDA, we have received positive feedback on our pivotal trial protocol design and confirmation to advance the MicroPine program into Phase 3 development.

In addition, the FDA has indicated that potentially only one Phase 3 pivotal study will be required for registration rather than the two studies generally required, which could improve our timeline while reducing the costs for the clinical study.

For our robust clinical pipeline, we have brought together an exceptional team at Eyenovia.

During the first quarter, we announced the addition of Kenneth Lee, Jr., General Partner at Hatteras Venture Partners; Charles Mather, Co-Head of Equity Capital Markets at BTIG; and Dr. Anthony Sun, formerly a Partner at Aisling Capital as independent members of the Board of Directors.

With respect to our Scientific Advisory Board, we appointed Dr. Douglas Frederick, an accomplished pediatric ophthalmologist and clinical professor of ophthalmology and pediatrics at Lucile Packard Children's Hospital at Stanford University.

And finally on the management team, we appointed John Gandolfo as our Chief Financial Officer.

Together, this reinforced team of ophthalmology and financial veterans brings an immense amount of experience to Eyenovia, and we look forward to their guidance as we aim to enter Phase 3 development in multiple programs and indications over the coming year.

And now, I would like to turn the call over to John to discuss our financial results.

Thank you, Sean.

Once again, thank you all for joining us this morning, and let me start by saying that the company made a significant step forward by completing its initial public offering of 2.73 million shares at $10 per share in January of this year, which raised $24.5 million in net proceeds after underwriting discounts, commissions, as well as other estimated offering expenses.

These proceeds give us the capital required to move ahead with our planned IND submissions for MicroProst and MicroStat in the second half of the year, followed by the initiation of Phase 3 studies in each.

For the first quarter of 2018, we reported a net loss of approximately $3.4 million or $0.45 per share compared to a net loss of approximately $1.1 million or $0.49 per share for the first quarter of 2017.

Research and development expenses totaled approximately $2.1 million for the first quarter of 2018 compared to approximately $900,000 for the same period in 2017, an increase of 130%.

The increased R&D expenses reflect increased personnel, contract services, facilities, and other related expenses for the development of the company's product candidates.

For the first quarter of 2018, G&A expenses were approximately $1.3 million compared to approximately $200,000 for the first quarter of 2017, an increase of 583%.

This increase was primarily attributable to an increase in professional fees associated with being a public company, noncash stock-based compensation cost, and expenses related to payroll and benefits as compared to 2017.

The increase in G&A expenses was also due to increased headcount associated with the continuing growth of our business.

Total operating expenses for the first quarter of 2018 were approximately $3.4 million compared to total operating expenses of approximately $1.1 million for the same period in 2017, an increase of 210%.

The 2018 first quarter figure includes approximately $660,000 in noncash stock compensation expense, which has no impact on the company's cash [balance].

As of March 31, 2018, the company's cash balance was approximately $27.6 million, and we expect our current cash on hand to be sufficient to meet our operating and capital requirement for at least the next 12 months.

That concludes the remarks on our financial statements.

I'd like to hand the call back over to Sean for closing remarks.

Thank you, John.

In closing, Eyenovia had a strong start for 2018 and is well positioned to meet the anticipated key milestones ahead of us.

In particular, we are on track to make IND submissions for both MicroProst and MicroStat followed by a Phase 3 trial initiation in MicroStat by the end of the year.

Additionally, we remain on track for the first half of 2019 to initiate our Phase 3 trial in MicroProst and MicroPine as well as over-the-counter registration for our MicroTears program for dry eye.

We believe that we have the potential to transform the field of ophthalmology and the way in which we treat front-of-the-eye conditions using our highly differentiated smart technology platform, and we look forward to updating you on our progress in the future.

That concludes our prepared remarks.

We'd now like to open the call for questions.

Operator?

(Operator Instructions) And our first question comes from the line of Scott Henry from ROTH Capital.

Just a couple questions and I apologize if I missed this.

But I believe on MicroPine, you stated you would start the trial in the first half of 2019.

When do you expect to file the IND for that product?

Yes, hi, Scott.

We expect to file the IND for that trial, for that product, in the first half of 2019 as well and later in the same half of the year to initiate the Phase 3 trial.

And then on PG21, I guess, we'll get full presentation at an upcoming medical conference.

Were there any surprises in that, particularly with regards to the dosing?

Or did everything, for the most part, confirm your prior hypothesis?

It's the latter, Scott, I think.

We did that study very much to confirm our expectations based on our two prior Phase 2 trials that we've done in another front-of-the-eye indication, the pupil dilation.

And as we mentioned, we've confirmed a very strong robust effect for IOP lowering with micro-dosing in quite a few eyes, actually, 60 eyes of 30 patients, and there were no surprises to the team.

The technology performed as anticipated.

And the final question, just on spending.

Should we expect that to sequentially uptick through the year; not of a significant magnitude but just trying to get an idea of how we should think of operating expenses in the model?

I think that for G&A expenses, I think that you'll have a slight increase as we go out through the year.

We do have a couple of new hires that we plan on making.

But with respect to R&D expenses, we do expect as we get to the second, third, and fourth quarter that we will see increases as the studies begin to take hold.

So, I would say if you're asking me a preliminary estimate, it's probably upwards of maybe $1 million per quarter from first quarter 2018 levels.

Okay, great.

With respect to spending, one more comment, Scott.

The spending for the first quarter actually came in right where we thought it would be.

The thing I want to highlight is that the expenses include about $660,000 of noncash stock compensation expense.

So, obviously, that doesn't impact the company's cash resources, but it shows up on the P&L.

(Operators Instructions) Our next question comes from the line of Matt Kaplan from Ladenburg.

This is Maria for Matt.

So, for MicroProst, what are the steps that you need to complete before being able to initiate the MicroProst Phase 3 study?

So, for MicroProst, as we've mentioned, we're going to submit the IND later this year, and that is simply sequential to completing the formulation stability and preparation activities.

And we expect to initiate the trial shortly after the IND, which will fall in the first half of next year.

So, currently, in addition to preparing the IND submission on the regulatory front, there is also formulation activities on stability and so forth, which are pacing items for that program.

And in addition to that, we are also undergoing a lot of planning and activities on MicroStat, which is the one we're going to initiate further.

Those are also falling in the same time period for both the IND submission and we also plan to initiate the study for MicroStat this year.

So, a lot of activities moving in parallel by the team, and many of them are an interplay of both regulatory and -- as well as formulation activities.

Then for the PG21 study, you said that you will present the results.

Can you give us any more specifics in terms of when do you know?

And then regarding the study, was that study required to file the IND?

Yes, good questions.

On your first question about when we're going to submit it, we're going to submit to one of the upcoming ophthalmology conferences.

And those do have a lead time because the abstracts will take several months to review and be accepted.

So, we're going to target one of the follow-on conferences plus we'll target also preparing the data for publication and just following the standard process of peer review.

On the PG21, no, this trial is not required.

We have direct to Phase 3 confirmation with the FDA without that study.

This was an ancillary study coming out of the IPO.

We got feedback by the investors, too, that we did have two Phase 2 trials that demonstrated very convincingly that microtherapeutic dosing can really match the efficacy of eye drops, which are overdosing at 300% and over, while dramatically reducing the exposure to preservative and API.

But the feedback was also that people wanted to see some data in other indications even though this is a class categorical effect for front-of-the-eye when you compare the micro-dosing approach to eye dropper approach.

So, that was an additional study that we did and we folded into our clinical development time lines, which we could do pretty efficiently, and it's not required in any way to initiate the Phase 3 program.

Okay, so then for the MicroStat, you said H2 2018 to initiate and H1 2019 for trial results.

So when is the timeline for approval?

Yes, so looking out in the next 12 months, you have those timelines right; spot-on.

We're going to -- this is a pretty fast-paced program because the pupil dilation, the mydriasis is, the outcome is same day.

So we think that we will probably have the results and that will be done by the first quarter of 2019.

So subsequent to that, we have to confirm all the results and prepare the clinical study report, and prepare all the -- from manufacturing and readiness, get everything synced up for the submission of the NDA, which will be later in the year.

Again, we will inform you guys on more particular and more specific timing of that.

But I think that it will really follow in good faith after the availability of the results.

And then my last question is you mentioned that for MicroPine, two Phase 3 studies are required but you will only need to do one.

So what is the rationale for that?

That's a very good question, and thank you for asking that because initially we -- it's a really important thing for the program, I mean, going from two major studies that were all going to be in the 400-plus patients, and those are relatively long trials.

Those are not like the MicroStat same-day outcomes.

We're looking at several years of a primary endpoint, but it's a very dramatically bigger opportunity, which we mentioned earlier.

So the reason that we are probably able from regulatory perspective to go with the single study is because there is a lot of data that's currently available from multiple Phase 3 studies that were done by collaborative and academic groups.

Those were actually published and more recently backed by a meta-analysis in the technology review by the American Academy of Ophthalmology that came out last year.

And all those studies had looked at compounded atropine, the same therapeutic agent of being low-dosed through lower concentrations, and have shown dramatic and very consistent effects in slowing down the progression of myopia by 60% to 70%; so [directly cut] multiple Phase 3 collaborative studies that show us that.

And they basically highlight that we now have a therapeutic approach to slow down one of the biggest problems in the field of ophthalmology.

I mean this is bigger than the population of chronic angle-closure, open-angle, and wet macular degeneration combined.

So I think that that was convincing.

That has been convincing to us.

That has been convincing to our advisory board and clinicians that now there is ample evidence that low-dose atropine will have the proper risk benefit profile.

And I think it is something that has convinced also the FDA that under the least burdensome approach I think they understand that there is need on the market and with patients to have a solution of an FDA-approved agent for that.

So I think it's explainable by just the availability of a lot of clinical data and evidence for this therapeutic approach.

And, of course, what Eyenovia contributes to that equation, which is different and will be evaluated specifically in our study is that now we can achieve the low-dose atropine, which is otherwise toxic with a lot of problems and side effects and cannot be used in the standard 1% concentration.

We can achieve the low dosing not by diluting the agent and reducing its concentration where it becomes unstable, but in fact we can achieve the low-dosing through micro-dosing and high-precision piezo-print micro-dosing, which, again, our technology is perfectly suited for that.

And we're also very excited that, with that, we're moving our smart functions along because for that population of young adults, of course, nobody likes to take drugs and medications; the least of whom are kids and the young adults.

So I think the smart monitoring and compliance monitoring of our technology and enhancement of compliance will be critical because obviously this will be a therapeutic which works really well to slow down this significant disease only if you are consistent and compliant over not days and months but over years.

And so, our compliance technology will be further important for marrying that with a therapeutic approach.

So I hope that explained that in a little bit of a long-winded way, but it's the first time actually we've explained that out because it's an important part of that program.

And I currently see no further questions.

I would now like to turn the call back to Sean Ianchulev, CEO, for any further remarks.

All right.

Well, with that, if there are no further questions, thank you very much.

We hope this was informative for everybody, and we look forward to continuing the dialogue at our next earnings call next quarter.

Thank you.

Ladies and gentlemen, thank you for your participation in today's conference call.

This concludes today's program and you may all disconnect.

Everyone, have a great day.