Eyenovia Inc (EYEN) 2019 Q2 法說會逐字稿

Good day, ladies and gentlemen.

Thank you for standing by, and welcome to Eyenovia, Inc.

Second Quarter 2019 Earnings Conference Call.

(Operator Instructions)

As a reminder, this conference may be recorded.

At this time, I would like to turn the conference call over to Tram Bui from The Ruth Group.

You may begin.

Good afternoon, and welcome to Eyenovia's Second Quarter 2019 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 afternoon, Eyenovia issued a press release announcing financial results for the 3 months ended June 30, 2019.

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 on August 14.

The company's quarterly report and press release will also be available on Eyenovia's website at eyenovia.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 risks 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; risk of our clinical trials, including, but not limited to, the design, initiation, timing, progress and results of such trials; the timing and our ability to submit applications for and obtain and maintain regulatory approvals for our product candidates; our estimates regarding the potential market opportunity for our product candidates; our ability to timely develop and implement manufacturing, commercialization and marketing capabilities and strategies for existing product candidates; our ability to identify new 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, August 12, 2019.

Eyenovia undertakes 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 law.

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

Thank you, Tram, and welcome, everyone, to Eyenovia's Second Quarter 2019 Earnings Call.

We're very pleased by the progress we've made last quarter, as we continue to steadily advance our late-stage clinical pipeline and seek to change the treatment paradigm of front and back-of-the-eye diseases.

Just recently, we initiated our MicroPine Phase III CHAPERONE study for progressive myopia in children, which represents an estimated $5 billion U.S. market opportunity and has the potential to be the first topical therapeutic to treat myopic progression.

In addition, we are working to initiate the MILAGRO trial for MicroProst for the lowering of intraocular pressure in an expanded glaucoma population by the end of this year.

Before I highlight our plans for the rest of the year, let me first discuss our CHAPERONE study, which is now well underway.

The MicroPine program is our second product candidate to enter Phase III and is our first-in-class topical treatment to potentially slow the progression of myopia in children.

As you may remember, there are currently no FDA-approved therapies to treat myopic progression, which can lead to serious -- to a series of vision-threatening back-of-the-eye diseases including glaucoma, retinal detachment and retinal atrophy.

Our CHAPERONE study, which is a registration Phase III study, aims to change all that.

The study is based on the growing body of scientific literature, which has been generated from the ATOM1, ATOM2 and LAMP studies, demonstrating the ability to slow myopic progression by up to 60% to 70% using low-dose atropine.

The CHAPERONE study, which we launched in June, is a U.S.-based multi-center randomized double-masked controlled trial, which plans to enroll more than 400 children between 3 to 12 years of age.

The study will investigate the safety and efficacy of MicroPine for the reduction of progressive myopia, using Eyenovia's proprietary atropine topical micro-formulation.

Subjects will be randomized to receive treatment with either of 2 MicroPine concentrations or placebos.

Our primary endpoint of the study is the change in refractive error from baseline through 36 months.

In addition to the initiation of our Phase III CHAPERONE study for MicroPine, we are preparing the IND application of our MicroProst program for the lowering of intraocular pressure in patients with ocular hypertension, open-angle glaucoma or chronic angle-closure glaucoma.

The trial will be a single multi-center double-masked registration study, which plans to enroll approximately 250 patients who have elevated IOP and no contraindications for PGA or beta blocker therapies.

We're very excited about this trial, which we expect to begin by the end of this year, as it will give us the potential to treat a very broad population of approximately 4 million patients in the U.S., while also bringing our novel microdosing technology to glaucoma patients who oftentimes have trouble administering traditional eyedrops.

With respect to MicroStat, we remain focused on preparing the registration and stability lots and expect to file a complete new drug application with the FDA in 2020.

As a reminder, MicroStat is our novel microdose co-formulation of phenylephrine and tropicamide for pharmacologic mydriasis, which we believe represents a significant improvement in the efficacy, tolerability and speed in which pupil dilation is performed in the estimated 80 million office-based comprehensive and diabetic eye exams and 4 million ophthalmic surgical dilations annually in the U.S.

With that, I would like to turn the call over to John to discuss our financial results.

Thank you, Sean, and once again, thank you all for joining us this afternoon.

Before I review our financial results for the second quarter of 2019, I would like to note our improved financial position, having successfully completed our underwritten public offering this July, in which we raised approximately $14 million in aggregate gross proceeds and $13 million in aggregate net proceeds for the company.

The underwriters fully executed their overallotment option, and we raised the maximum amount possible at the time under the SEC's baby shelf rules for an offering of this type.

We believe we have the necessary working capital to continue advancing our current CHAPERONE study for MicroPine, moving our MILAGRO study for MicroProst into Phase III by the end of this year and continue developing the NDA for our MicroStat program.

With that said, I will now highlight our financial results for the 3 months ended June 30, 2019.

For the second quarter of 2019, we reported a net loss of approximately $5.3 million or $0.44 per share, and this compares to a net loss of approximately $3.3 million or $0.33 per share for the second quarter of 2018.

Research and development expenses totaled approximately $3.6 million for the second quarter of 2019, and this compares to approximately $2.4 million for the same period of 2018, an increase of 48%.

The increase was primarily due to the continued advancements of the company's clinical drug pipeline.

For the second quarter of 2019, general and administrative expenses were approximately $1.8 million compared with approximately $900,000 for the second quarter of 2018, an increase of 99%.

This increase was largely the result of increased personnel costs, professional fees and rent expense between periods.

Total operating expenses for the second quarter of 2019 were approximately $5.4 million and this compares to total operating expenses of approximately $3.3 million for the same period in 2018, an increase of 62%.

As of June 30, 2019, the company's cash and cash equivalents balance was approximately $9.2 million.

This amount does not include the approximately $13 million in aggregate net proceeds from Eyenovia's underwritten public offering, which closed in July 2019.

We expect that our current cash on hand and the net proceeds from our recent offering to be sufficient to meet our operating capital requirement into the fourth quarter of 2020.

That concludes our financial statement remarks.

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

Yes.

Thank you, John.

Before we open the call to questions, I'd like to reiterate that we remain committed to developing our first-in-class therapeutics in order to tackle the serious unmet medical needs in ophthalmology.

In the second half of the year, we look forward to continuing to execute on our clinical milestones as we work to advance MicroPine and MicroProst as well as complete the necessary registration and stability manufacturing materials for the submission of our NDA for MicroStat in 2020.

With the latest infusion of capital from our recent underwritten public offering, we believe that we have sufficient capital to achieve all of these goals, and we would like to thank our new and existing shareholders for their continued support.

That concludes our prepared remarks, and I would now like to open the call to any questions.

Operator?

(Operator Instructions) And our first question is coming from the line of Matt Kaplan with Ladenburg Thalmann.

Just wanted to dig into a few of your programs here.

I guess with the initiation of the MicroPine Phase III CHAPERONE study, how -- it's early stages, but how is enrollment going so far in the study?

Matt, this is Sean here.

Yes, enrollment is really proceeding as we forecasted.

The trial is -- has been initiated, and I think we'll probably need another few months to kind of have more sites come on board as planned.

But at this point, everything is proceeded as planned, and our original forecast was to enroll the study within 12 months or so of launch.

So no changes to that forecast.

And in that line, how many sites do you have up and running so far?

Well, I don't know the exact number as of now.

We are starting in a slow activation of sites, but we are planning to get close to 20-plus sites by the Q1 of next year.

I think the total number of sites is around 20 for the whole study.

That's helpful.

And then with respect to MicroStat and the NDA submission, where are you in terms of executing on the CMC package, specifically, I guess, preparing the stability and manufacturing lots that you need to have done to be able to submit the NDA?

Yes.

So -- I mean, maybe I can answer that.

We are pretty much at the same place as the last quarterly update.

Nothing has changed.

We're in a waiting mode to complete the stability and submit the NDA in 2020, and all of that is proceeding according to the time lines we've had all along from the last quarter.

Okay.

That's helpful.

And then with respect to MicroProst, you're, I guess, on track to start the study by the end of the year.

What do you think of in terms of the potential time lines for that study?

Is that something that could proceed faster than the CHAPERONE study?

I think it will be faster, although don't forget, it's a study that we're starting later, so 6 to 9 months -- I mean, 6 months later than the CHAPERONE, but it's going to move relatively fast because, as you remember, we are doing a single study, not 2. So that was a major improvement to the burden of the program.

And at the same time, it's a larger population.

So this is a trial that we expanded to include not only the chronic angle closure, but it includes now the ocular hypertension and the open angle, and that's a very well-characterized population, and we expect this trial to enroll relatively fast and also the endpoint of that study is 3 months.

So once the patients are fully enrolled, we will be able to have data relatively fast.

So yes, we're looking to see results from that study in 2020.

Yes, mid-2020 or in the third quarter.

Okay.

Great.

And then couple more questions in terms of just thinking about MicroStat and since you're getting relatively closer to preparing -- having that approved, can you talk about 2 things: Number one, the commercial opportunity for MicroStat; and then number two, where you are in your commercial preparation for -- to be able to launch that product?

Yes.

So the commercial opportunity is something that we updated on recently.

It's a twofold opportunity.

One of that, the major addressable market is the clinic-based market where you have the 80 million dilations that happen every year for comprehensive eye exams, for diabetic retinopathy screening and that's the clinic-based market.

There is also another market, which is the surgical market.

So 4 million cataract surgeries per year, which require mydriasis, and that's a separate segment but again very palpable too because unlike in the market for office-based dilation where most of this mydriatic agents are used on multiple patients and in the case of the current paradigm, probably anywhere between 30 to 40 patients with one set of drops, in the surgical market, that doesn't happen.

It's usually a single set of drops per patient because it's not indicated to reuse that in the surgical setting.

So we're very excited about both opportunities.

Obviously, these are big numbers in terms of the addressable market, and we think that the product that we have, with its horizontal delivery mechanism, with the microdosing, the less exposure to preservative and to -- eyedrops can be really differentiated compared to the legacy eyedropper technology that hasn't changed over the past 50 to 100 years.

And at the same time, it's a co-formulation.

So it requires single administration even at the microdose versus 2 separate eyedrops that are commonly used.

So we are really zeroing in on the commercial preparation here for the commercial launch.

And as you know, we hired Michael Rowe, who is our Vice President of Marketing, and a lot of preparation is happening alongside the formulation and the stability studies, which give us a little bit more runway to prepare.

And we are also looking at opportunities that are partnership opportunities with strategic partners, who have feet on the ground and a framework already established that may actually facilitate that.

So a lot of work happening there, and probably in the coming quarters, we can start getting more granular as to the commercial plan.

Very good.

And then last question, maybe one for John.

I guess following the offering, number of shares outstanding that you have?

We have 17.1 million outstanding at this point in time.

Our next question coming from the line of Yi Chen with H.C. Wainwright.

First question is, could you comment on the MicroTears OTC registration?

Is it still on track to occur in 2019 and the launch, is it still on track to be launched with MicroStat next year?

Yes.

So as you know, we've mentioned before, the OTC is a companion program to the MicroStat.

It doesn't really make sense to launch it as a stand-alone.

It's something that we want to maximize the ROI on any sales force and sales effort.

So we are synchronizing, and again, it's a purely -- that doesn't require any clinical studies as you know.

So it's really tracking alongside the MicroStat program, which, as you know, the updated time line is in 2020 for the NDA.

So we are not planning anything imminent for MicroTears and ahead of the MicroStat launch.

Both of them are, more or less, joined at the hip.

To say in other ways, we do plan on launching at the same time as MicroStat in 2021.

There's no sense of urgency right now to get it registered in 2019.

We could do that 2020 and still launch in 2021.

So it's the -- it's no longer a high priority to get registered in 2019.

Got it.

Second question is, the operating expenses in second quarter appeared to be lower than the first quarter, but as you continue the enrollment for the CHAPERONE study and start the MILAGRO study during the remaining of 2019, should we expect the operating expenses to go higher?

And how much higher do you think is appropriate?

So I think when we look at the cash burn, say, through the end of the third quarter of 2020, we are looking at an average of about $4.5 million per quarter.

Now that being said, it's not a linear type of burn, one quarter -- and it depends upon how much clinical cost, how much registration batches are being manufactured for drug formulation during a given quarter.

But the average will be about $4.5 million, but there may be a quarter that's $5 million and then maybe a quarter that's $4 million.

So I think if I was modeling, I would model it probably linear at about $4.5 million, but recognize that it could go a little up and down.

(Operator Instructions)

And our next question coming from the line of Esther Rajavelu from Oppenheimer.

It's Benjamin Fages on for Esther.

I have a question regarding CHAPERONE.

When might we receive the first interim safety update?

And then a second question, have there been any developments in potential partnerships around presbyopia?

And what are you looking for in a potential partner?

And what might be the time line here?

Thank you, Benjamin.

No, there are no planned interims.

The study is -- has 36-month endpoint as we've discussed and that's prespecified with the FDA.

We will update periodically on enrollments, but there is no planned interim that is bookmarked in the time lines.

We want to maintain that trial.

It's very important.

We want to maintain full integrity of the endpoint, and we will follow through those patients through the final endpoint.

Of course, in terms of safety and also efficacy, I think people can look into the results of the ATOM1, ATOM2 and LAMP studies, which are, in fact, on macrodose for topical therapy with eyedroppers and those are very informative, all the way to some of them with 5-year data.

The second question was...

Partnering of presbyopia...

Yes.

So we have our -- our hands are full right now.

It's a small team, and we are very prioritized on the current programs.

So we think that presbyopia is a great opportunity.

It came out of our R&D pipeline development efforts, and it's something that we have now defined the clinical development path around that.

It's ready to be launched into a Phase III presbyopia program.

Presbyopia is a huge market opportunity, pretty much everybody over 40, and you can imagine, especially in today's day and age when people are looking for independence and lifestyle is very important, reading glasses is not the best solution, and a therapeutic like that can be really game changing and first-in-class.

So we are very seriously pursuing discussions, and we think this would be a great program to partner with the right partner, and we hope that this will be something we can execute over the next 6 to 12 months.

Thank you.

And I'm showing no further questions at this time.

Ladies and gentlemen, thank you for participating in today's conference.

This concludes today's program.

You may all disconnect.

Everyone, have a great day.

Thank you.