Eyenovia Inc (EYEN) 2019 Q3 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to the Eyenovia, Inc.

Third Quarter 2019 Earnings Conference Call.

(Operator Instructions) Please be advised that today's conference is being recorded.

(Operator Instructions)

I would now like to hand the conference over to your speaker today, Tram Bui from The Ruth Group.

Please go ahead.

Good afternoon, and welcome to Eyenovia's Third Quarter 2019 Earnings Conference Call and Audio Webcast.

With me today are Dr. Sean Ianchulev, Eyenovia's Chief Executive Officer and Chief Medical Officer; John Gandolfo, Eyenovia's Chief Financial Officer; and Michael Rowe, Eyenovia's Vice President of Commercial.

Earlier this afternoon, Eyenovia issued a press release announcing the financial results for the 3 months ended September 30, 2019, and we encourage everyone to read today's press release as well as Eyenovia's quarterly report on Form 10-Q, which has been filed with the SEC.

The company's press release and quarterly report will also be available on Eyenovia's website at eyenovia.com (sic) [eyenoviabio.com].

In addition, this conference call is being webcast on 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 statements 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; the potential success of our reprioritized pipeline and cost savings related to our reprioritized pipeline; our ability to identify new products, the rate and degree of market acceptance and clinical utility of our products; our estimates regarding the potential market opportunity for our product candidates; the potential advantages of our product candidates; risk of our clinical trials including, but not limited to, the design, initiation, timing, progress and result of such trials; the timing and our ability to submit applications for, obtain and maintain regulatory approvals for our product candidates; our ability to timely develop and implement anticipated manufacturing, commercialization and marketing capabilities and strategies for existing product candidates; our ability to raise money; 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, November 13, 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 now like to turn the call over to Dr. Sean Ianchulev.

Thank you, Tram, and welcome, everyone, to Eyenovia's Third Quarter 2019 Earnings Conference.

We're very pleased with our clinical progress this year as we continue to build a robust, late-stage pipeline in ophthalmology using our next-generation, intelligent microdosing platform.

The completion of our MicroStat Phase III studies for pharmacologic mydriasis, as well as the initiation of our Phase III study for our MicroPine program for the treatment of progressive myopia earlier this year, have helped to demonstrate the significant potential of our novel therapies.

As we look ahead and work to maximize the value of our internal portfolio, we recently announced that our Board and senior management team conducted a comprehensive strategic review of all of our programs.

As a result, we have reprioritized our efforts to focus on MicroPine, MicroStat and our newest program, MicroLine, for the improvement in near vision in patients with presbyopia.

These 3 programs, in our view, represent areas where there are currently no known drugs approved or where we believe we can greatly improve upon the patient experience, bringing our novel technology into the hands of optometrists, ophthalmologists and patients.

To build on this, the World Health Organization recently published a report entitled the World Report on Vision.

The report examined some of the most pressing, vision-related issues facing the global population today.

The myopia epidemic, which starts with our children, was highlighted not only because of its considerable growth but also because there are currently no known FDA-approved pharmacologic treatment options to address the disease process.

According to the report, myopia currently affects nearly 2.6 billion people worldwide, with this number expected to grow to nearly 3.8 billion people by 2030 if nothing is done.

To put that into perspective, according to the statistics published in the report by 2030, nearly half of the world's population is expected to be myopic.

It is into this world that we're working towards bringing MicroPine to market as what we believe will be one of the best options for treating myopia from where it starts in children.

The report also reviewed presbyopia.

According to the report that nearly 1.8 billion people worldwide who are presbyopic.

In the United States, many of these people are our friends, neighbors and colleagues, who are now relegated to wearing reading glasses when they might prefer to have another option.

Our MicroLine program is designed to offer presbyopics that option.

And our entire late-stage portfolio is intended to help address growing vision-related issues.

And now let me turn to our programs and highlight the progress we've been making.

First, our latest addition to the pipeline, MicroLine, which has been garnering significant interest as it potentially could be one of the first pharmacologic therapies in a space that is dominated primarily by devices such as reading glasses and contacts.

As many of you know, presbyopia is the nonpreventable, age-related hardening of the lens, which causes gradual loss of the eye's ability to focus on near objects commonly known as farsightedness.

The symptoms of presbyopia include blurred vision, difficulty reading materials at close range, eye strain and headaches.

And there are currently no known FDA-approved drugs in this indication.

Presbyopia is diagnosed through a basic eye exam, though for many who have had normal vision for most of their lives, it can cause a significant shift in lifestyle.

In the United States, presbyopia affects an estimated 113 million people.

Of that population, an estimated 43 million people between the ages of 40 and 65, who have otherwise normal vision and available disposable income, could benefit from a pharmacologic treatment option like MicroLine.

The MicroLine program is based on our proprietary microdose formulation of pilocarpine, which causes constriction of the pupil, producing a pinhole effect and temporarily correcting vision.

MicroLine is designed to replace reading glasses on demand, while our delivery system is designed to enhance tolerability and make instillation easier and neater versus traditional eye drops.

We believe that we could enhance the lifestyle of millions of people with a cash pay prescription drug for the improvement in near vision in those with presbyopia in the model of other aesthetic-focused products.

As we look ahead, we're currently preparing to initiate the 2 Phase III vision studies in 2020.

We expect both studies to be double mass, placebo-controlled, crossover superiority trials, which will enroll approximately 120 patients between the ages of 40 and 60 with presbyopia.

Subjects will be randomized to receive treatment with either of 2 MicroLine concentrations or placebo.

Our primary endpoint of the studies will be buying off to a distance-corrected visual and near visual acuity, and we expect to complete both trials in 2020 as well.

Moving now to MicroPine, our program to address myopia in children and where we believe there are no FDA-approved therapies currently available.

We initiated a CHAPERONE study in June, which is a U.S.-based multi-center, randomized, double mask trial that will enroll more than 400 children between 3 and 12 years of age.

The study is investigating the safety and efficacy of MicroPine for the reduction of progressive myopia using Eyenovia's proprietary atropine topical micro formulation.

Subjects are being randomized to receive treatment with either of 2 MicroPine concentrations or a placebo.

And our primary endpoint is the change in refractive error from baseline to 36 months.

With the study now underway, we're very excited to share some preliminary usability data regarding our Optejet dispenser.

After enrolling in the study, children and their parents participate in a training session on how to use the Optejet.

After being trained, we found that in all cases, either the parent or child was able to successfully use the dispenser at home to deliver a micro dose to the eye.

In fact, in the vast majority of cases, the child, some as young as 5 years of age, was able to use the dispenser by him or herself, further supporting the ease of use of the Optejet.

This early look into our CHAPERONE study is very encouraging and helps to further support our platform technologies' potential to transform the way we deliver therapeutics to the eye.

In addition to the preliminary usability data from our CHAPERONE study, one of our primary investigators recently presented a poster at the American Academy of Optometry's 3rd World Congress of Optometry, highlighting the very positive MicroStat Phase III MIST-1 and MIST-2 study results.

MicroStat is our novel microdose pain-free coformulation of phenylephrine and tropicamide of pharmacologic mydriasis and could potentially be our first product on the market.

This coformulation significantly reduces the amount of drug delivered to the eye and potentially eliminates the need for an anesthetic commonly used to reduce the discomfort often associated with traditional eye drop delivery of these drugs.

To briefly recap the results, MicroStat was shown to be safe and effective for pharmacologic mydriasis, achieving clinically and statistically superior mean pupil dilation.

Both studies achieved their primary endpoint, demonstrating that approximately 93% of treated eyes achieved pupil dilation of at least 6-millimeter at 35 minutes post-installation.

Approximately 2/3 of patients reached the same endpoint in 20 minutes or less.

We're now focused on completing the registration and stability manufacturing lots and expect to file our new drug application with the U.S. FDA in 2020.

We believe that MicroLine, MicroPine and MicroStat represent the highest value opportunities for Eyenovia and our shareholders at this time.

In addition, as we announced last month, with the reprioritization of our pipeline.

We also decided to defer the development activities for our MicroProst program for the treatment of glaucoma and ocular hypertension as well as MicroTears, our over-the-counter program for red eye and itch relief.

We believe that we could restart both of these programs with minimal delay, if we so decide, as we filed an IND for MicroProst with the FDA, and MicroTears only requires OTC registration as opposed to Phase III clinical studies.

I would now like to turn the call over to our VP of Commercial Operations, Michael Rowe, to discuss further the reprioritization of our pipeline as well as its anticipated commercial opportunities.

Michael?

Thank you, Sean.

We are very excited about our streamlined pipeline, including MicroLine, MicroPine and MicroStat, representing what we believe to be some of the highest value opportunities in eye care.

For those who are unable to join our previous conference call that went into depth about this reprioritization, we encourage you to listen to the audio replay and view the presentation on our website, eyenovia.com.

Over the coming year, we believe that we will have a number of significant milestones, including the initiation and completion of our Phase III studies for MicroLine, the completion of patient enrollment for MicroPine and our NDA filing for MicroStat.

Before I address our commercialization strategy for MicroStat, let me first highlight the anticipated opportunity and business advantages for the MicroLine program as compared to MicroProst glaucoma.

As Sean just mentioned, presbyopia represents a large market opportunity in a space that currently has no known approved pharmaceutical therapies with a potential to benefit up to an estimated 43 million people in the United States.

MicroProst, on the other hand, would likely be one of dozens of IOP-lowering therapies of already existing glaucoma, making for a very crowded playing field.

Compared with traditional eye drops, MicroLine may represent a more patient-friendly treatment due to our proprietary piezo-print technology platform and Optejet dispenser designed to provide a more comfortable, easier and neater application than traditional eye drops.

And the biggest advantage of MicroLine that we see is that it would be a cash pay prescription drug, avoiding the reimbursement hurdles, rebates and co-pays that would come along with the glaucoma therapy such as MicroProst.

We believe that this provides us with a potentially straightforward commercialization strategy with a very attractive product candidate.

Let's now look at our MicroStat program, which is fast approaching an NDA submission in 2020.

We believe that we can successfully commercialize MicroStat with a relatively small sales force, utilizing a specialty pharmacy and real-time direct distribution.

We currently plan to use one specialty pharmacy to manage and distribute to high-volume optometric and ophthalmic offices around the country.

This method could potentially simplify the traditional distribution network and eliminate payments to distributors, rebates and, most importantly, the need for a large staff at Eyenovia to manage the process.

Using one specialty pharmacy also would allow us to have centralized access to critical data, such as who's ordering and when and allow us to link this information directly into our sales force to help create a highly efficient system.

Finally, looking at our MicroPine program for progressive myopia, we believe that this is a considerable untapped market opportunity with an increasing amount of attention from major players in the industry.

We believe that our technology and proprietary formulation of atropine, we could potentially have one of the best products on the market.

And while our CHAPERONE study is ongoing, we are looking to develop our commercial strategy for this indication that is currently a white space with no known FDA-approved therapy on the market.

As we approach commercialization, we look forward to providing additional detail and color on our strategy as it develops.

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

Thank you, Michael.

And once again, thank you all for joining us this afternoon.

First, I would like to reiterate our improved financial position from our underwritten public offering this July in which we raised approximately $14 million and $13 million in aggregate gross and net proceeds, respectively.

As of September 30, 2019, the company's cash and cash equivalents balance was approximately $18.3 million, which keeps us well positioned to fund our programs as we go forward.

For the third quarter of 2019, we reported a net loss of approximately $4.6 million or $0.29 per share, and this compared to a net loss of approximately $4.3 million or $0.43 per share for the third quarter of 2018.

Research and development expenses totaled approximately $3.2 million for the third quarter of 2019 compared to approximately $2.5 million for the same period in 2018, an increase of approximately 29%.

The increase was primarily attributable to an increase in contracted services, expanded R&D activities and an increase in facilities and other expenses related to supplies and materials.

For the third quarter of 2019, G&A expenses were approximately $1.5 million compared with approximately $1.8 million for the third quarter of 2018, a decrease of approximately 19%.

The decrease was primarily attributable to a decrease in legal and professional fees of approximately $400,000 due to higher expenses incurred in the third quarter of 2018.

Total operating expenses for the third quarter of 2019 were approximately $4.7 million compared to total operating expenses of approximately $4.3 million for the same period in 2018, an increase of 9%.

Third quarter 2019 operating expenses include approximately $500,000 of noncash stock compensation expense.

That concludes our financial statement remarks.

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

Thank you, John.

We had a great number of successes this year as we work to transform the way we treat front and back of the eye diseases.

We aim to continue this trend in 2020 as we plan to initiate our third Phase III program, MicroLine, next year; continue to enroll patients in our Phase III CHAPERONE program for progressive myopia; and submit our new drug application for MicroStat.

We appreciate the continued support of our shareholders and look forward to providing additional updates on our clinical progress.

That concludes our prepared remarks.

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

Operator?

(Operator Instructions) Our first question comes from Matt Kaplan with Ladenburg Thalmann.

Congratulations on the progress during the quarter.

Just wanted to dig in a little bit to the MicroPine program and where that is.

You noted that you expect to complete enrollment in the CHAPERONE studies next year.

Can you give us a sense in terms of where those studies are and how the -- how those studies are progressing right now?

Yes, Matt, that is the program that's currently enrolling.

We initiated it in June, and the enrollment is proceeding.

We're continuing to onboard sites.

In fact, it's one of the -- probably, from my perspective, having done a number of those through the years, it's probably one of the easier programs in terms of motivation of investigators and the interest that we're finding in investigators in sites.

So no shortage of that.

We're seeing tremendous enthusiasm all across -- from both optometrists and ophthalmologists.

Ginger Clasby, our VP of Clinical Operations, is leading that, and we are tracking with our plans to complete the enrollment in 2020 as scheduled.

So we're very happy with the way the program is enrolling, and we're finding that everybody out there definitely is interested in a better treatment, and people are appreciating the urgency for the need of a better treatment there.

And in terms of the number of sites that you ultimately will strive to have in the...

I think the total number of sites for the program and -- is about 20 -- about 12 to 15 sites or so, the -- probably 15 more, towards the 15 because -- yes, within those, when you look at the enrollment that they would all have to enroll a good number of patients, about 30 patients each.

So we're tracking with them, and we hope to have the trial wrapped up in 2020.

And then it's going to be the follow-up for 36 months.

Sure.

Sure.

And then the new program that you emphasized recently in terms of the refocusing on the MicroLine, you expect to start those studies and complete them, I guess, both in 2020.

Can you give us a sense in terms of when in 2020 you could have a readout of top line results?

Is it really kind of late next year?

Or is this something that is much faster because it's just -- it's easier to do?

Matt, I like to speak in hemis -- in half years versus quarters.

So I think we're planning to initiate in the first half of the year, and you'll have results by the second half -- in the second half of the year, probably towards the end of the second half.

Okay.

And then just with -- for Michael, in terms of -- help us understand the -- for MicroLine, the -- kind of that current competitive landscape there and then in terms of competitive programs in development right now.

Right.

Well, the current competitive landscape is -- device is basically reading glasses.

And that's the current option.

What we do know is that there's about 4 companies who are working on presbyopia drops of some kind.

Most of them are related to pilocarpine or are a -- or they are pilocarpine.

Probably the one that's furthest ahead might be Allergan.

The rest of them are in Phase II, basically.

So the landscape looks like we'll be out there probably before many of them, among the first.

And in the end, you're talking about a population of 43 million people.

There's plenty of opportunity for everybody, but we believe that our solution will match the needs of this market better because of the way that the product is delivered, how the product works and also, it fits well with the optometric model in that the dispenser is something that optometrists like to use, like to provide, like to talk to patients about rather than just simply writing an Rx.

Okay.

Very good.

And just last question in terms of MicroLine, how do you envision patients using it?

I guess, in other words, perhaps some patients will be frequent users and others less so.

And help us -- can you help us understand what you've done there?

Sure, Matt.

Yes.

So Matt, it's a companion product to eyeglasses.

It's not meant to replace your eye glasses.

It's meant to be used on demand.

So it's more an episodic type of thing that you would use when you don't want to wear your glasses.

You're going to dinner, you're going to a game, you're doing something where glasses just would not be your first option, and this will give you significant functional vision for a period of time.

So we are envisioning that you would use them on demand.

And the way we do our forecast, for example, is we assume that there's a proportion of the population that will use this kind of therapy.

And of that population, there's a subpopulation that would use it maybe daily.

There's a bigger population that would use it perhaps twice or 3 times a week.

And there's a population that would use it on an episodic basis.

In terms of the duration of use that we're targeting, we're looking for something that will work about 3.5, 4 hours in duration.

So again, that would fit very nicely with -- you could easily plan to use it for some kind of events, some kind of thing that you're doing, and then it doesn't work anymore.

You could take it, again, I suppose, but that would be the end of that episode.

And Matt, I think that I have a lot of patients too who hit the age of 40, 45, and for them, it's also not only near vision, but it's also intermediate vision at a computer.

And it's all going to be good for that.

Basically, Michael here doesn't have to read.

He can just use the MicroLine.

It's just very -- Matt, I wish you could see what was going on here because I was taking my glasses on and off during this whole thing.

And I was saying, "I wish I had the (expletive) thing now."

Our next question comes from Esther Rajavelu with Oppenheimer.

I just had a couple of quick ones.

First, on the MicroLine product, with 4 other competitors potentially starting Phase III trials at the same time or give or take 1 quarter or 2, and you seem to have a fairly aggressive recruiting time line there, how do you think that kind of plays into patient recruitment?

Yes.

I think that, Esther, we've looked at that.

And in fact, we already have the sites identified, and we've done a lot of work.

As you know, Ginger and her team, they initiated and completed the MicroStat studies in a blink.

And I think that we feel this kind of program has the same acute nature of enrollment and delivery of results.

So also, the patient population is not something that you really have to go looking for.

And frankly, the third part is when people look at our delivery system, and this would be the only one that we know of that's out there in any stage of relevance that will not be on an eye dropper, it will be on a horizontal delivery microdosing with electronic delivery.

So dramatically different.

So I think we feel that this is going to be absolutely no issue in terms of identifying patients and enrolling the studies.

Got you.

And in terms of MicroStat, what kind of a -- can you set our expectations on sort of how that product is going to trend from a launch standpoint and adoption standpoint?

Yes.

So the nice thing about this because it's not a typical prescription drug that's more like a diagnostic supply is once you get it into a large practice, it takes over for that large practice.

It replaces what they're currently using for pupil dilation.

So our goal is to go into those very, very big practices first and help them with the switchover, so that we can expect a relatively fast uptake initially.

It's not going to be the kind of thing with traditional pharmaceuticals.

You have to wait for a patient to show up, and then you have to do a sample, and then you have to switch and you have other people counter-detailing you.

It's not like that at all.

In this case, you're going in.

You have to show the doctor the value of the technology, which from our meetings and advisory boards, they all buy into, and then once they do, you set up the technician and the office staff to make the order, and they make the transition, and then that's it.

There's no reimbursement.

There's no insurance company.

So we look at the uptake.

It's not one of these where it will be 5 to 7 years, it will be much faster than that.

Our next question comes from Yi Chen with H.C. Wainwright.

This is (inaudible) dialing in for Yi Chen.

Question, I actually got a couple of them about MicroLine.

The first one, what are your thoughts on the pricing of MicroLine for presbyopia, given that the glasses are available as cheap and they're effective?

In our model, we are -- we're pricing this and again, because this is episodic, it doesn't go on a month basis.

The way we're looking at it is what would we price it on a cartridge basis.

Our cartridge would hold sufficient medication for 75 binocular applications, so 75 episodes of use.

And our model has a price of $85 for that.

So if you assume somebody uses this maybe 4 or 5 times a week, that would last about 9 months -- I'm sorry, 3 months.

And that would cost them roughly $25, $30 a month.

The other thing to also consider is that many people have a flexible spending account or health care spending account.

This is still a prescription medication, so even though it's cash-paying not covered by insurance, they can still get reimbursed for it.

All right.

Great.

So the next one, while MicroLine improves near-distance vision, could it possibly interfere with the long-distance vision?

Yes.

So MicroLine, again, the major impact and the major mechanism actually through which MicroLine acts is through a pinhole pupil, not as much through accommodation.

And of course, we will have to ultimately answer your question through our Phase III clinical program when we have the results.

So I would defer full comment on that until we have our Phase III trials.

But to, a little bit, highlight the mechanism that we think is at play with MicroLine or pilocarpine is mainly through pinhole effect or small aperture effect, which creates an extended depth of focus.

And the extended depth of focus effect is something that doesn't interfere with your distance vision.

The only time it would is if it's really -- acts through some sort of an accommodative effect, which could potentially have some involvement here, but we believe the major effect is the extended depth of focus through the pinhole, and that should give people the enjoyment of both distance, intermediate and near-visual acuity, which is not the case with reading glasses because the moment you put reading glasses, you've now shifted your vision to near and not distance.

Our next question comes from Scott Henry with Roth Capital.

Just a couple of follow-ups on MicroLine or pilocarpine.

I guess, first, qualitatively, could you speak a little bit about the magnitude of effect this drug typically has?

I mean is it very similar to eyeglasses?

Just trying to get qualitatively an idea of that impact.

Yes.

And again, Scott, this is something that is supported by a lot of literature.

In fact, extended depth of focus through pinhole has been something that has been also product developments and technologies in the intraocular lenses, where they've done a pinhole effect as well as even in some other procedures.

So pinhole effect is really beneficial, and it's able to create about 1.5 diopter to 2-diopter near point.

And it's really -- from that perspective, it's really great because it also leaves you the benefit of intermediate and also distance vision.

So yes, it's something that there's plenty of data.

It's something that one can even look at surrogates through the intraocular lenses, where extended depth of focus was done as well as even corneal inlays have also investigated a pinhole effect for presbyopia.

So those data and those studies indicate about the 1.5 diopter to 2. And I think that covers most patients from where they are today in terms of their intermediate and near-vision needs.

Okay.

Great.

Final question, when it comes to MicroLine as a cash pay, large market product, how would you expect to market that product?

I mean it seems kind of like an awareness campaign, a DTC campaign would all lend well into that, but those can be somewhat cost prohibitive.

So is this something you would do yourself?

Or would you bring in a partner?

It just seems like it would appeal to a mass audience.

Sure, Scott.

I mean, certainly, if there were partners interested, we're not -- we're going to talk with whoever that might be.

But regardless of that, this is the kind of product that we would see being offered to patients while they're getting their eyes exam.

So they go to their optometrists.

They're getting their annual eye examination.

They're getting the new reading glasses.

And the optometrist will offer this to them as a companion product.

And the reason that he or she might do that over something else is because the Optejet dispenser lends itself to some extra things that an optometrist can monetize when he writes a prescription for this.

For example, he or she can sell a travel kit or he and she can sell customizations to the dispenser.

It fits within their economic model.

So we see them going to this very, very quickly and making this part of their practice.

And also, I think, given that we have got how many companies we mentioned that are going into that space, I think that we're going to see some sort of pharmacologic treatment out there with all of that.

And I think Allergan is the one leading, as Michael mentioned, with the Phase III.

They are very experienced in developing the aesthetic market very well.

And I think that there will be some pharmacologic treatment because we now realize that our patients today are very different than patients 20, 30 years ago in terms of their lifestyle and independence.

So we think that fits very well with the retail model in ophthalmology and optometry and also with the lifestyle needs and what will be ultimately developed by many companies in the space.

Our next question comes from Maria Barbera with National Securities.

My first question is for John.

It seems that R&D and SG&A has been going down each quarter since first quarter '18.

So I was wondering if that's something that we should expect also for third quarter '19.

Yes.

So because a lot of our expenses -- specifically, our R&D expenses are project related, they are going to go up and down, and they will not be linear.

But I would say, overall, I wouldn't expect that trend to continue because as we ramp up the MicroLine Phase III study and continue with the increased enrollment of MicroPine as well as the MicroStat NDA filing, I do anticipate the R&D expenses to go back up, probably at the levels that they were at, maybe first quarter of this year.

G&A, it's slightly up and down.

I don't think we'll see large increases in G&A by any stretch of the imagination, but more cost of living type adjustments that you will see with your G&A expenses.

Okay.

Great.

And then I have a couple of questions about MicroPine.

The first one is the primary endpoint is at 36 months.

And I was wondering what is the rationale for then re-randomizing the children for -- again and then following up them for 12 months.

Yes.

So it's -- the primary endpoint, as you said, is at 36 months, and that really defines the risk benefits for the study and that's where we're going to be filing.

The extended follow-up is partially because, I think, the FDA would like to see what happens when patients stop taking the drug.

As we know, for example, in glaucoma, when you take an IOP-lowering drug, your IOP goes down.

If you stop taking it, your IOP goes back up and glaucoma progresses.

We have seen that from some of the collaborative study groups that when the drug is discontinued, atropine, you can have a regression effect of myopia.

If you discontinued before the age of 18 to 21, your development stops.

So I think that the last year, this additional year is to better characterize what happens and to see whether it really is in line with what we have from the collaborative study groups, which really reinforces the fact of compliance and reinforces the fact of how important is to take that drug until young kids come out of the development stages of the eye, which happens about 18 to 20 years of age and also reinforces the importance of our compliance monitoring system.

Why is it so important to have an electronic delivery and compliance monitoring?

Because you want to have compliance, and you want to have consistent dosing through the teenage, post-teenage years, after which, really, the myopia doesn't seem to progress even if you stop the treatment.

So they need those 12-month for that data to file the NDA?

We will be filing the NDA with the 36-month data and the primary endpoint with, certainly, during the review cycle, as we have the data come through, we can roll that in from the 48 months.

But the filing will be with the primary endpoint of risk benefit at 36 months.

Okay.

Great.

And then I have a question about the run-in period at the beginning of the study.

So how long is that period?

And is the idea to make sure that the children or parents know how to use the device before they start the trial?

The period is only 2 weeks.

2 weeks?

Yes.

And I'm not showing any further questions at this time.

Ladies and gentlemen, this concludes today's conference call.

Thank you for participating.

You may now disconnect.