Eyenovia Inc (EYEN) 2021 Q1 法說會逐字稿

Greetings. Welcome to the Eyenovia First Quarter 2021 Earnings Call. (Operator Instructions). Please note, this call is being recorded.

I will now turn the conference over to your host, Eric Ribner. Please go ahead.

Good afternoon, everyone, and welcome to Eyenovia's First Quarter 2021 Earnings Conference Call and Audio Webcast. With me today are Eyenovia's Chief Executive Officer and Chief Medical Officer, Dr. Sean Ianchulev; Eyenovia's Chief Financial Officer, John Gandolfo; and Eyenovia's Chief Operating Officer, Michael Rowe.

Earlier this afternoon, Eyenovia issued a press release announcing financial results for the 3 months ended March 31, 2021. We encourage everyone to read today's press release as well as Eyenovia's quarterly report and on Form 10-Q for the quarter ended March 31, 2021, which will be filed with the SEC. The company's press release and quarterly report 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 for future reference.

Please note that on today's call, we will be discussing investigational products, which have yet to receive FDA approval. Please also 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 those -- by these forward-looking statements due to the 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, volatility, and uncertainty in the global economy and financial markets in light of the evolving COVID-19 pandemic, our ability to raise additional money to fund our operations for at least the next 12 months as a going concern.

Our estimates regarding the potential market opportunity for our product candidates and potential revenue from licensing transactions, reliance on third parties, the ability of us and our partners to timely develop, implement, and maintain manufacturing, commercialization and marketing capabilities and strategies for our product candidates, risks of our licensee clinical trial, our licenses, clinical trials, including but not limiting to, the cost, design, initiation, and enrollment, which could be adversely impacted by COVID-19 and resulting social distancing, timing, progress, and results of such trials, the potential impact of COVID-19 on our supply chain, the timing and our licensees ability to submit applications for, obtain, and maintain regulatory approvals for our product candidates, changes in legal, regulatory, and legislative environments in the markets in which we operate, and the impact of these changes on our ability to obtain regulatory approval for our products, the potential advantages of our product candidates, the rate and degree of market acceptance and clinical utility of our product candidates, our ability to attract and retain key personnel, intellectual property risks, and others detailed in and qualified by the cautionary statements contained in Eyenovia's press release 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 12, 2021. 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 all of that said, I'd like to turn the call over to Dr. Sean Ianchulev. Dr. Ianchulev?

Thank you, Eric, and welcome, everyone, to our first quarter 2021 earnings conference call. A key highlight since our last quarterly update is that the FDA has confirmed October 28 as the PDUFA date to review our MydCombi NDA. Recall that MydCombi is our unique fixed combination of 2 leading mydriatic medications for pupil dilation. If approved, this would be the first microdosed ocular therapeutic applied with a high-precision smart delivery system, the Optejet. It would also transition us to a commercial-stage company. So we are rapidly approaching a very significant milestone for our company. If approved, we would anticipate launching MydCombi commercially soon after the FDA approval.

In anticipation of potential approval later this year, in March, we announced an exclusive agreement with EVERSANA, a leading commercial service provider to the life sciences industry to manage the physical distribution of MydCombi and to oversee the order fulfillment process. Michael will elaborate on this shortly.

Also, during the first quarter, we completed enrollment in our VISION-1 study of MicroLine, our proprietary pilocarpine formulation for the improvement in near vision in patients with presbyopia. Presbyopia is the age-related hardening of the lens of the eye, causing blurred near vision that affects approximately 113 million people in the U.S. alone. The most common remedy is glasses or readers, consequences of surgery. MicroLine is intended to be a companion product to glasses to be used situationally on demand and not necessarily as a full replacement of glasses altogether. We're expecting to see VISION-top top-line results shortly, pending data export and analysis by our data management partners. We anticipate sharing the results in the coming weeks.

Those results will help inform how VISION-2 will be conducted, helping us to quickly and efficiently complete this program and if approved, unlock a market opportunity that we estimate at nearly $8 billion in the U.S. alone.

Before turning the call to Michael, I want to comment on the significant addition that we've made to our Board of Directors last month. We announced that renowned ophthalmologist and scientific leader, Dr. Julia Haller, has joined our Board. Dr. Haller is one of the world's leading retinal surgeons and physician educators. She currently serves as an Ophthalmologist-in-Chief at Wills Eye Hospital in Philadelphia, where she holds the William Tasman Endowed Chair. She is also Professor and Chair of the Department of Ophthalmology at Sidney Kimmel Medical College at Thomas Jefferson University and Hospitals. Needless to say, we're very pleased that Dr. Haller has decided to join us, and we believe her insights and guidance will be invaluable as we advance our current programs, while in parallel working on our pipeline.

At this point, I'll turn the call over to our Chief Operating Officer, Michael Rowe, for a more detailed update on our clinical programs. Michael?

Thank you, Sean. Let's lead off today with an update on MydCombi, our unique fixed combination of 2 leading mydriatic medications or pupil dilation agents. As we announced a few weeks ago, the U.S. Food and Drug Administration accepted our new drug application and has now informed or confirmed the PDUFA date of October 28, 2021. The NDA was supported by 2 Phase III studies, MIST-1 and MIST-2, which demonstrated that MydCombi provides quick, effective, and reliable pupil dilation, with fewer than 1% of subjects reporting blurred vision, reduced visual acuity, photophobia, or instillation site pain.

MydCombi is a diagnostic agent with meaningful potential benefits to both the practitioner and the patient. For the practitioner, there is the potential to increase patient throughput without increasing costs. With MydCombi, doctors and staff can spend less time putting different eye drops into patients, including those have helped minimize the sting of the current formulations. On a daily basis, we believe that over an hour of exam room time can be reclaimed, just by switching to this faster, more comfortable option. And for patients, since there are no protruding parts with the Optejet and the recess nozzle, MydCombi is far less likely to touch the surface of the eye as compared to a conventional eyedropper. This results in a potential decrease in cross-contamination and improve patient safety, something that resonates loudly in the COVID-19 era.

Also as mentioned, the product was reported to be very comfortable in use in our clinical studies. All of these benefits, we hope, will translate to more people being willing to undergo a comprehensive eye exam. Market research suggests that millions of people fail to get a comprehensive eye exam every year due to the discomfort and other side effects of traditional mydriatic drops. MydCombi may be able to address these issues and doctors may be able to further encourage people to take better care of themselves by having a comprehensive exam.

The market opportunity for MydCombi is substantial. There are an estimated 80 million office-based comprehensive and diabetic eye exams and 4 million ophthalmic surgical dilations performed annually in the U.S. alone. We estimate this market to be approximately $250 million annually in value. Last quarter, we went into some detail on our commercialization plan for MydCombi. Just recapping the key points, upon FDA approval, our planned approach will not resemble a traditional drug launch with the related expenses around the large sales force and corporate infrastructure. Instead, we plan to target high-volume practices in the 10 largest metropolitan areas with just 11 sales professionals. To help maximize this efficiency and create quick payback, our sales force will initially address the top 20% of eye care practices in terms of total patient volume and expand from there.

Another key differentiator is that MydCombi as a diagnostic pharmaceutical agent is something purchased directly by the doctor's practice. This means no managed care contracting, no waiting for formulary replacement, no need to purchase prescription drug data to track sales and so on. The savings in infrastructure, direct cost, and time is substantial. And along with our distribution agreement with EVERSANA means that we do not have to ramp up other areas of the company for launch. If MydCombi is ultimately approved, we are currently aiming to launch within about 6 weeks of approval.

Turning now to our MicroLine program for presbyopia, which is the non-preventable age-related hardening of the eyes lens. Presbyopia causes blurred vision at normal reading distances and can lead to eyestrain and headaches. We recently announced that we have completed enrollment on our placebo-controlled VISION-1 study, which is assessing our proprietary pilocarpine solution for the treatment of blurred near vision in patients with presbyopia. Pilocarpine is a compound whose efficacy in improving near vision has been well validated, and the administration via the Optejet is one of the factors that sets us apart from future competition. With the Optejet, the eye is not overdosed with drug as often happens with conventional droppers, a centrally old technology that can lead to unwanted side effects.

The primary endpoint in our study is the binocular distance corrected near visual acuity. VISION-1 has been a relatively quick study, and we anticipate reporting top line data in a few weeks. And as Sean mentioned, the results of VISION-1 will help inform how we conduct VISION-2 as part of our overall plan to develop MicroLine quickly and efficiently.

I'd like to take a minute to address the potential market opportunity for MicroLine. Nearly 1/3 of the U.S. population or 113 million people suffer from presbyopia, and the most common remedy is reading glasses. Within these 113 million people or about 18 million younger people for whom having to rely on reading glasses has a significant impact on their quality of life. We believe there would be a significant uptick for an on-demand option that can temporarily replace glasses in this population. A presbyopia market research report from December 2020 estimated the market potential to be nearly $8 billion in the U.S. alone. We are very pleased with how these 2 programs are progressing.

And now I'd like to turn the call back to Sean. Thank you.

Thank you, Michael. For those of you who have been following Eyenovia, you know that we out-licensed our third program, MicroPine for the treatment of progressive myopia to Bausch Health in the U.S. and Canada and Arctic Vision in Greater China and South Korea. MicroPine is a proprietary atropine formulation that has been shown in clinical studies to slow myopia progression by 60% or more. There are currently no FDA-approved therapies and if left untreated, this can result in retinal detachment, myopic retinopathy, and vision loss.

These partnerships are having the intended benefit of extending our commercial reach, while at the same time, providing non-dilutive capital. To date, we have received $16 million in upfront and milestone payments, with the potential for significantly more when milestone-based payments reimbursed development costs and potential sales royalties are factored in. We expect partnerships such as this will continue to be an important part of our long-term growth strategy. And to that end, we continue to evaluate additional out-licensing opportunities in other parts of the world.

We are also assessing pipeline expansion opportunities as we believe we can leverage the Optejet technology to address unmet needs in additional large ophthalmic indications. Some examples include anti-infectives, anti-inflammatories, dry eye, glaucoma, each with significant market opportunities. We have nothing definitive to share today. We do look forward to keeping you apprised of our progress in that front. Of course, the beauty here is that these development activities would be at least partly funded by outsourcing opportunities such as those just described.

I'd now like to turn the call over to John to review the financials. John?

Thank you, Sean. Now I would like to review the financial results for the 3 months ended March 31, 2021. For the first quarter of 2021, we reported a net loss of approximately $5.4 million or $0.21 per share, and this compares to a net loss of approximately $5.5 million or $0.31 per share for the first quarter of 2020. For the first quarter of 2021, the company reported license fee revenue from our Arctic Vision license agreement of $2 million and a corresponding cost of revenue representing payments to Senju of $800,000.

Research and development expenses totaled approximately $4.2 million for the first quarter of 2021, and this compares to approximately $3.6 million for the same period in 2020, an increase of approximately 16.9%. For the first quarter of 2021, G&A expenses were approximately $2.3 million compared with approximately $1.8 million for the first quarter of 2020, an increase of approximately 25.2%.

Total operating expenses for the first quarter of 2021 were approximately $6.5 million compared to total operating expenses of $5.5 million for the same period in 2020. This represents an increase of 19.7%. Operating expenses in the first quarter of 2021 included approximately $657,000 of noncash stock compensation expense. As of March 31, 2021, the company's cash balance was approximately $24.9 million, and this figure excludes approximately $7.5 million, and initial net proceeds from the recently announced $25 million credit facility with Silicon Valley Bank. We believe our current cash resources and the initial SVB loan proceeds provide the company with sufficient cash into the third quarter of 2022.

Our current cash resources, inclusive of the SVB proceeds was sufficient to bring our MydCombi mydriasis product through the NDA process and commercial launch, complete our presbyopia clinical programs for MicroLine and prepare our pilot manufacturing capabilities of our advanced dispenser technology.

This concludes our prepared financial statements, and I'll now turn it over to Sean.

Thank you, John. In closing, we're very pleased with our performance during the first quarter and subsequent periods. To summarize our key highlights today, we look forward to an October 28 PDUFA date pertaining to our MydCombi NDA. We are rapidly advancing our Phase III presbyopia program in an estimated multibillion-dollar indication and anticipate data from VISION-1 in the very near term. And our licensing agreement with Arctic Vision and Bausch Health are progressing well and continue to offer the potential for meaningful development and regulatory milestones, non-dilutive funding, if realized, we can use to expand and advance our pipeline. We believe we are well positioned to achieve multiple commercial, regulatory, and development catalysts this year for the benefit of patients and shareholders.

That concludes our prepared remarks. We would now like to open the call to questions. Operator?

(Operator Instructions). Our first question comes from Len Yaffe with Stoc*Doc Partners.

I was wondering if you could comment on the Allergan Phase III study that's been completed and submitted to the FDA for approval. I'm pretty sure they looked at a patient cohort in age 45. And in your VISION-1, you were looking at age 40 to 60. And given that presbyopia tends to decline quite significantly, I think, between ages 55 and 60 and then it stabilizes. Does Allergan not focusing on that age group potentially confer an advantage to you? Or does it make it more difficult if you included patients 55 to 60 in your cohort for you to show benefit in that group? And can you tell us in the VISION-1 study, roughly what the breakdown was by 5-year increments in the Phase III clinical study?

Well, Len, thank you. That's -- I think I'll be better able to answer in more detail on this question once we have the data, which will be shortly, and we look forward to analyzing it. First, I want to step back and just mention that we have not, in our field, seen too many well conducted registration level studies in presbyopia. It's a fairly new field. And even though we are approaching it and all of us and many other companies who are going into that field with established agents such as pilocarpine, which seem to be very active.

Again, we're yet to see high-quality, well, rigorously conducted data in the field. You mentioned correctly that Allergan is one of the first ones, and they have conducted Phase III studies and completed, and I believe, announced that pilocarpine in their formulation in an eyedropper form is -- has met the primary endpoint of their studies. That being said, we really haven't seen, to date, at least I haven't seen the actual data presented so that I can really answer your question in a more informed way. We haven't seen even the point estimates or the exact results nor have we seen subgroup analogies. We and other companies, too, are approaching presbyopia in a slightly bigger range of population with another 5-year population between 55 and 60. That wasn't included in Allergan study.

Again, this is another population that is presbyopic, and one can argue that that population is more presbyopic because, obviously, between 50 and above 50, the population is more severely affected, and they lose their accommodative potential almost completely. We are hoping to see a balanced population in our study, probably biased or maybe more on the earlier side, given that those are the patients, the 40 to 50 that are not quite settled into eyeglasses, and they are the ones that experience presbyopia firsthand and for the first time and are looking for solutions.

That being said, we are yet to see the exact breakdown. There is also a little bit of a factor of how COVID really impacted the enrollment, whether it was -- it led to more preferential enrollment with established older patients or younger. So in order to answer your question, I think we'll give us a few more weeks once we come out with the data, we'll be able to talk a little bit more about that. But we really haven't seen too many results from other companies, neither Allergan nor others that will give us that. And hopefully we'll see all of that and be able to do comparative analysis.

Michael, do you want to comment anything more?

No. I think you handled that quite well. Thank you.

Our next question comes from Tim Chiang with Northland.

Sean, I know you haven't seen the results from VISION-1. I noticed that in the press release, you guys talked a little bit about planning for the second Phase III study, the VISION-2 study. Have you guys already thought about how that study is going to be designed? I thought the study was going to be very similar to VISION-1, but I'm sort of wondering if there's going to be any slight tweaks to the second pivotal study.

Yes. Well, it's a good question. First, maybe I would also ask another question, why did we not do them all at the same time? Why not just run them in parallel, both of them? And I think we thought about that. Given the dearth of data and real rigorous clinical results all around, a lot of it is anecdotal or Phase II. We definitely wanted to see results from one trial before we plunge with the second one, just to be prudent and do very more conservative development. Also, we found that if we look at the data from VISION-1, we may be able to inform VISION-2 in a way that will make it more efficient.

Maybe we modify the population a little or maybe we eliminate one of the doses because if you look at the design of VISION-1, it actually -- it's a bit of a dose-ranging study. I would call it almost a Phase II/III because it's definitely one that can be qualified for registration, if positive, but it really doesn't have a full dose selection, and we may be able to find a dose that we like and for VISION-2, we could keep a very similar design, but go with one dose and make it more efficient and faster. So I tend to -- in clinical development, you never know. It's always good to look at empiric data. So I tend to obtain exactly how we're going to modify it, but I can tell you, my team and our advisers will be able to get through the data quickly and we'll be able to find the best path forward with VISION-2.

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

I just wanted to follow-up a little bit on Len's question in terms of VISION-1. What should we be looking for in terms of the primary endpoint of top line results that should be exciting in terms of reaching and achieving that endpoint?

Yes. It's a good question, Matt. And I think that I would look not only at the primary endpoint. I would also look at some of the secondary end points, too. The primary endpoint is 3 line vision gain at near. And it's a very standard point that we use in ophthalmology across multiple indications, such as macular degeneration, DME, it's a bit of a nonspecific, and I don't think it's necessarily the most realistic for actually what matters to patients. I think patients want to be able to see their smartphone, their tablet, their computer. They don't necessarily have to gain 3 lines at 40 centimeters.

But that is what is required for registration. And it's actually a pretty standardized way for ophthalmology. So the other parts that are also important is that we have -- we'll be looking at 2 line gainers. We'll be looking at also intermediate vision. And again, these are things that really will inform the overall therapeutic benefit for patients. Now Michael has done a lot, and I'll let him answer more specifically because we've done a ton of market research of what matters to patients.

But since this will be an on-demand as needed therapy, obviously, you would want to see a fairly quick action. The effect comes in quickly. And our endpoint is 2 hours, which is great. We expect maybe it will go even to 3 or 4. But again, this will be on-demand episodic treatment, and we wanted to be as close to on and off type of treatment as possible.

So Michael, do you want to comment anything more to that?

Yes, Sean, thank you. And hello Matt. I think the other thing I would pay attention to is the side effect profile. One of the major theses behind microdosing is that you can get efficacy and minimize some of the side effects. And we know that pilocarpine and probably all myotics have an issue with brow ache from the local circulation that comes out of the eye and gets into the brow and contracts the muscle. We know from market research that if we're seeing or if anybody has seen a brow ache of 20%, that could really put a damper on acceptance of this product. So I would be looking for a side effect profile with a very low level of brow ache, which would then differentiate us from the eye drops as well.

I would now like to turn the floor over to Sean for closing remarks.

Well, thank you all. I think we look forward to communicating with you on our upcoming milestones. And with that, I want to thank you again for joining us, and I hope everybody has a good afternoon.

This concludes today's teleconference. You may disconnect your lines at this time, and thank you for your participation.