Eyenovia Inc (EYEN) 2020 Q1 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to the Eyenovia First Quarter 2020 Earnings Conference call with your host, Tram Bui.

Good afternoon, and welcome to Eyenovia's First Quarter 2020 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 financial results for the 3 months ended March 31, 2020. We encourage everyone to read today's press release as well as Eyenovia's quarterly report on Form 10-Q for the first quarter of 2020, 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 there for future reference. Please note that on today's call, we will be describing 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 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 impacts of an uncertainty related to COVID-19, fluctuations in our financial results, and stock price, particularly given market conditions and the potential economic impact of COVID-19; our need to raise additional money to fund our operations for at least the next 12 months as a going concern; potential impacts of COVID-19 on our supply chain; risk of our clinical trials, including, but not limited to the costs, design, initiation and enrollment, which could continue to be adversely impacted by COVID-19 and resulting social distancing, timing, progress and results of such trials; the timing and our ability to submit applications for, obtain and maintain regulatory approval for our product candidates; the potential success of our reprioritized pipeline; any protected cost savings related to our reprioritized pipeline; our estimates regarding the potential market opportunity for our product candidates; the potential advantages of our product candidates; the rate and degree of market acceptance and clinical utility of 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 identify new products; our ability to attract and retain key personnel, intellectual property risk and others detailed 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 13, 2020. 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, everybody to Eyenovia's First Quarter 2020 Earnings conference call. We hope that everyone is staying safe and healthy during this time, and we appreciate your continued interest in Eyenovia.

As we started the New Year, we were able to successfully strengthen our balance sheet to help fund our operations into 2021 as we continued to monitor and assess the potential impact of the COVID-19 pandemic.

The challenges stemming from this pandemic have accelerated. Since our last call, into short span of a few weeks, COVID-19 has ensnared the global economic landscape as the country slowly and cautiously tries to return to a new normal. On the last call, I mentioned that we were closely monitoring the situation and continually assessing the potential impact of COVID-19 on our business.

Well, today, we do know that the pandemic's effect is going to be with us for some time. And we do know that recent events will be more than a footnote in the annual report of Corporate America. As a physician and public health professional, I also know that our patients, hospitals and clinics will have to cope with the aftermath of COVID-19 for some time before they resume a pre-pandemic level of operation and reengage on non-COVID related clinical trials and investigations.

Notwithstanding this terminologies of COVID-19, in 2020, we continue to make progress towards multiple catalysts in our best-in-class late-stage therapeutic pipeline. We continue to advance some of our programs and are working diligently to ensure we can resume all planned clinical activities when possible. This year, we still anticipate submitting our new drug application for MicroStat to the FDA. And when the environment becomes safe to do so, initiating an expeditious Phase III trial for MicroLine. We also look forward to reinitiating enrollment of our MicroPine Phase III study when possible, and in the meantime, are pleased to continue to work virtually with the subjects who are already enrolled in our CHAPERONE study.

Let me first start with our most advanced program, MicroStat for pharmacologic mydriasis, which is our first pipeline program to complete Phase III studies last year. As you remember, MicroStat is our novel combination formulation of phenylephrine and tropicamide for pharmacologic mydriasis, 2 products that are often used together during the approximately 80 million diagnostic eye exams and 4 million cataract surgeries performed each year in the United States.

With our 2 positive Phase III trials in hand as well as the 12-month stability testing of registration work in progress, we are working diligently to prepare the necessary components of our new drug application. If approved, this will be our first commercial product that would allow us to start introducing our Optejet dispenser to patients and physicians.

As we move ahead, we remain on track to file our planned NDA with the U.S. FDA by the end of 2020, and we do not currently see an indication that the COVID-19 pandemic will impact this time line, although that could change.

We also remain excited about our Phase III MicroLine program for presbyopia, which we plan to initiate once conditions improve and clinical trial sites began to come back online. Presbyopia is the nonpreventable age-related hardening of the ocular lens, which causes the gradual loss of the eye's ability to focus on nearby objects.

Currently, presbyopia affects an estimated 113 million people with a treatment paradigm dominated, primarily by devices such as reading glasses and non-pharmacologic drugs FDA approved for the indication. We anticipate initiating an expeditious Phase III program for MicroLine when it becomes safe to do so. The reasons we expect the Phase III to be fairly quick is that similar to our MicroStat MIST-1 and MIST-2 trials, our VISION 1 and VISION 2 studies represent a fairly rapid program, both in terms of the size and availability of the patient population and the short study duration.

In the face of COVID-19, we see even more meaning to our fight against the global epidemic. The serious growth of progressive myopia, which threatens the vision of not only the elderly, but our children and adolescence. Rates of progressive myopia have doubled in the last couple of decades, with more than 9% of children in the U.S. and more than 80% of kids in Asia suffering from this disease. If unchecked, it is estimated that myopia will affect nearly half of the world's population by 2050.

Today, with stay-at-home orders and remote learning programs in place around the country, time spent outside of people's homes has decreased by about 20% compared to January 2020. In addition, as children adjust to remote learning, they are using their electronic devices more than ever with fewer chances to go outside. There is a well-established link between the lack of outdoor activities and an increase of risk of myopia in a meta-analysis published in the peer-reviewed journal, Acta Ophthalmologica. Researchers found that even a single hour a day spent outdoors resulted in a 45% reduction in incidence of myopia compared to control group.

In another recent study published in Acta Ophthalmologica, children who use their electronic devices more than 6 hours in a day have -- or have less than 3 hours of outdoor activity a week, roughly double their risk of having myopia. With this information, we believe that in the post-COVID world, progressive myopia could accelerate and have a profound impact on the vision of our children. We are pleased to have robust Level 1 evidence of therapeutic approach with topical atropine from large randomized collaborative studies, such as the ATOM1, ATOM2 and LAMP studies, which provide significant momentum behind our CHAPERONE Phase III program of microarray print atropine.

Last year, we initiated our Phase III CHAPERONE study, which is a randomized, double-masked trial, set to enroll more than 400 children between 3 and 12 years of age. The study examines the safety and efficacy of our proprietary atropine topical micro-formulation delivered in the Optejet dispenser for the reduction of progressive myopia. Subjects are being randomized to receive treatment with either of 2 MicroPine concentrations or a placebo, and the primary efficacy endpoint is the change in refractive error from baseline through 36 months.

At this time, due to the COVID pandemic, our CHAPERONE study has been delayed. Even though we had to pause enrollment in new subjects, we have continued to supply cartridges of MicroPine for the Optejet by mail and to work with our clinical partners to follow-up virtually all previously enrolled patients and study participants to help ensure that the trial continues to progress.

I would now like to turn the call to our VP of Commercial, Michael Rowe, to discuss commercialization activities.

Thank you, Sean. As Sean mentioned earlier, we are getting ready to reignite our clinical programs for both MicroPine and MicroLine, when it is safe to do so. In support of those efforts, we have updated our understanding of how parents of myopic children view our CHAPERONE Study through quantitative research. The results of this research will help our study sites fine-tune how they communicate with parents as well as help us with the eventual commercialization of the product.

Last week, we completed a national survey of parents with myopic children who are currently being treated only with eyeglasses or contact lenses. In the survey, we presented these parents with information about CHAPERONE Study and asked them to assign a score from 0 to 100, with 0 being very poor to 100 being very good, indicating their reactions of the study description. We found that 85% of parents had a positive reaction to the study. And on average, these parents rate CHAPERONE Study at 83%, well into the good to very good range.

Additional analysis are underway to look at what specifically drives this response and how we might address anything that takes away from it. We believe that actions such as this survey as well as other partnerships we continue to build within the community of childhood myopia treating doctors will help us make up for the time lost due to the COVID crisis.

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

Thank you, Michael. And once again, thank you all for joining us this afternoon. I would like to review our financial results for the 3 months ended March 31, 2020.

For the first quarter of 2020, we reported a net loss of approximately $5.5 million with $0.31 per share, and this compares to a net loss of approximately $5.9 million or $0.50 per share for the first quarter of 2018.

Research and development expenses totaled approximately $3.6 million for the first quarter of 2020 compared to approximately $4 million for the same period in 2019, a decrease of 9.3%. For the first quarter of 2020, general and administrative expenses were approximately $1.8 million compared with approximately $1.9 million for the first quarter of 2019, a decrease of 5.5%.

Total operating expenses for the first quarter of 2020 were approximately $5.5 million compared to total operating expenses of approximately $6 million for the same period in 2019, a decrease of 8.1%. As of March 31, 2020, the company's cash balance was approximately $13.7 million, and this includes approximately $5.4 million of net proceeds from our private placement, which closed in March 2020.

So that concludes our prepared financial remarks. I would now like to hand the call back over to Sean for closing remarks.

Thank you, John. Before we open the call to questions, I would like to reiterate that our primary priority remains the health and safety of our employees, patients and partners as well as the communities they serve.

With our recent private placement that raised approximately $5.4 million in net proceeds, we should remain funded into 2021. We look forward to submitting the MicroStat NDA this year. And assume, it is safe to do so, initiating our Phase III MicroLine studies for presbyopia as well as reinitiating enrollment of our Phase III CHAPERONE Study for progressive myopia.

We believe that our fearless Eyenovia spirit of ingenuity and resilience will ensure that we persevere through this period of uncertainty, and we look forward to providing additional updates over the coming months.

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

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

Wanted to dig into the MicroLine Phase III program for presbyopia a little bit. Once you're able to initiate that study, when conditions are safe to do so, what's the potential time line for that study or for completion and readout of data?

Yes, that's a good question, Matt. And if you remember the MIST-1 and MIST-2 studies for mydriasis, those studies are similar to MicroLine in the way that we measure the primary outcome, which is a same-day primary outcome and basically shows the pre and post refractive response. So again, those are studies that, as I mentioned, there is no shortage of population to tap. These are pretty much 130 million people in the U.S. It's a huge population. There is tremendous interest in our program, even from the investigators themselves who some of them are presbyopic. So we are confident.

I think the biggest factor to consider is when our designs are going to be ready to begin investigative work. And once that happens, my team and Ginger Clasby, who leads our operations and has tremendous experience in the space, I'm assured that this will be fairly expeditious program. And we're talking about a very low-risk intervention. This is not a surgery. This is a topical, well-known established compound. And so we're very hopeful that we'll be able to enroll these 100 patients for study and very soon thereafter, and it could be as soon as 3 and maybe 6 months, be able to produce results. Of course, we are very impatient and very eager to get into the clinic because this pandemic literally undercuts our efforts to start those programs imminently.

Okay. Thanks for the comparison to the MIST-1 and MIST-2 studies put that in context. And then just turning to the MicroStat NDA, you mentioned that right now, you're not seeing any impact on the time line. What's currently the rate-limiting step for the NDA filing for MicroStat?

So today as pretty much is the case and has been the case for the past 6 to 9 months, the rate-limiting step is the fact that we are waiting for the stability studies. I think now we're much closer than we were 6 to 9 months ago. And so we are on track from everything that we understand to complete the stability and then the entire package for the NDA submission, my team has been working to prepare all the other sections and to be ready so that we can plug the stability data and then submit that. And we think we're very confident that we have very strong clinical data from our studies, as you recall, we reported the results.

So I think that we are holding our breath because, again, a lot of those stability studies and all the information is coming through our vendors. And so far, they haven't given us any indication that there is any disruption. And as of today, I think we're tracking -- this is probably where we feel the most confident that the time lines are not as much impacted by COVID as some other programs where we need patients in the clinic and physical contact with the patients and all of that seems to be not only impacted, but also the return of activities is so differential between different states, different sites. So we're -- the team is working really hard. This is hard to predict how it's going to play out for each site, but we, at least, don't have to do the patient interaction. And we have our Phase III data complete and wrapped up and being written up to be collated with the stability studies and registration lots studies that are coming. And so we hope that this would be forthcoming this year.

Okay. Great. And then just with MicroPine, the phase III study, can you give us a sense in terms of how far into that study in terms of enrollment? And then question is, how you're managing those patients that are currently enrolled to making sure that you maintain the integrity of the study for the patients already enrolled?

Yes. Matt, these are very good questions and things that are really in front of my team all the time. So we -- as you remember, we said, we're not going to be reporting every time we enroll 5 or 10 patients or 50 patients and do status updates. We were on track to enroll and our original plan was to enroll the study completely by the end of this year. Now -- and that was going to come close towards the middle of December. Now everything is being linearly pushed. And in fact, it may be not so linear because as you know, some of those studies go through a ramp and a hockey stick inflection in enrollment as you bring more sites and the sites get more comfortable. And right now, we really don't know how the sites will come back to light and how they're going to do their enrollment. Some of them or most of them, we hope will come back fast, and they're very excited about the program. We don't lack enthusiasm by the investigators and the patients, which I think is the fundamental thing. There's just so much need out there. And as we -- you and I know, people compound and they look -- they take product that's not FDA-approved to compound it. So we have a tremendous medical need for this, especially now as MicroPine and as the progressive myopia epidemic will get exacerbated from COVID.

To your other question, when -- Eyenovia was one of the first country -- first companies that factored in COVID, and partially because we're based in New York City, in New York. And we early on realized what was happening. So we really ensured we had adequate reserve of clinical product, and we prepared for virtual visits. And one of the good, I think, probably it's a double-edged sword, in a way, we do have longer time lines for the primary endpoint, which is a 36 months, but also that plays to our advantage because we don't have any patients coming up anytime soon for a primary outcome measurement. So that's a good thing for the enrolled patients. And then we're able to have plenty of cartridges and MicroPine supply for them and maintain the currently enrolled patients because we don't want to lose anybody. And so far, we've been doing great.

And from a clinical operations standpoint, we're focusing on 2 things: one, maintaining everybody and not losing anybody; and two, being ready to hop back into the saddle and support the side and facilitate their onboarding, so to speak, back to enrollment as they reenter. So I think we're doing a great job on that. And I'm lucky that we don't have to deal with issues of clinical product supply interruptions, of supply to patients. We have virtual monitoring, and we've implemented a lot of things that we can do virtually for those patients. And the advantage of the primary endpoint being way out with visits being about 6 months in between provides us, I think, some breathing room in that situation.

(Operator Instructions) Our next question is from Yi Chen with H.C. Wainwright.

Could you remind us how many clinical sites of the CHAPERONE Study or the proposed VISION study are located in the heavily affected areas, such as New York state or California state? And how many sites are located in less affected areas in which those state governments may consider or have already started for gradual recovery?

Sean, do you want me to take that?

Yes, Michael, please do. I think this is probably a highly specific question that I wish we had, Ginger, but Michael, if you want to tackle that, that's fine.

Right. My pleasure. So about 6 of our sites are located either in California or in New York, and those are definitely the ones that are probably the furthest from opening up. The rest of our sites, however, are in the mix of states where some are opening up as early as next week. So we're going to start seeing patients come online very soon from places where they are having the offices open. And the investigators are really chomping at the bit to get back to work. They've taken some very concrete steps to address safety in their offices because that's the great limiting step is they want to make sure that the patients are safe. They've been removing, for example, chairs from the waiting room to socially distance people. They're making everyone wear masks. The people in the office are in masks and gowns and gloves when appropriate. So they're working all of this out, and I would expect that we will start to see some of our sites up as early as next week.

Got it. So if, let's say, most of the sites return to normal activities in the third quarter then we are only expecting a delay of roughly a quarter for all the clinical trials, right?

Well, I can let Sean answer that. It's Just hope. Yes.

Yes. I think that's where we are today. We expect that. And that includes a dose of optimism that the return to normal is fairly prompt. And I can tell you, as a physician, and somebody who is also public health expert, this is a situation that is very difficult to predict and also it is not uniform. There is no homogeneous situation here where the entire country is the same. And we're seeing different clinics adopt slightly different pathways in terms of their return to "normal." So I think that we're hoping that we will be exactly -- and from our standpoint, our team is ready to get back in the saddle.

We have product. We have the sites. We have enthusiastic signs, and everybody is ready to get going, but we'll see. So I think next time, when we have the call, we're going to have a lot more visibility as we will as a country altogether. I don't think that this is just isolated to ophthalmology and ophthalmology investigation sites. We will know a lot more, and I tend not to speculate until we see where we stand. But my team is ready and really looking forward to getting back because we have the whole momentum going. We know what we're doing. We have a great protocol. We have great science. We have very, very interested patients. And we really feel bad that we cannot execute with respect to how we are ready and how well-designed that program is.

Got it. On the operations side, do you expect the total operating expenses to be at a much lower level before the resumption of enrollment for the CHAPERONE Study and the initiation of the VISION study?

Yes. So as we look out through the balance of 2020 into 2021, we expect the cash burn to be reduced probably somewhere in the $3.5 million to $4 million per quarter area. Because of the reasons, as we mentioned, associated with COVID-19. And then they'll ramp back up to pretty much what this quarter's level was once we get back into full-scale operation.

Yes. Definitely, one of the silver linings here is that John's purse is a little bigger.

(Operator Instructions) Our next question is from Jonathan Aschoff with Roth Capital Partners.

I was wondering, can you tell us what the Novartis Phase II trial which is when I look forward. It’s delayed? And I guess, do you believe, second question, just the non-life-threatening nature of the conditions you're pursuing, make you guys particularly vulnerable to COVID-19 delays?

Okay. Jonathan, I missed the very first part of your question about the Novartis trial. Can you repeat that?

If that is also similarly delayed, I mean yours can't start, but I was curious if you know the extent to which that has delays?

Yes. I mean, I don't know more than you do about the Novartis trial. Obviously, it's a different trial design, and it includes a new molecular entity. And this is the Phase II study versus our Phase III. I can definitely appreciate the fact that, we were not caught in the middle of our Phase III, when we had to decelerate or disrupt some of the activities because this is a very fast-paced study that we're planning to execute on. So I would rather take this situation that we have that we're a little delayed in terms of starting. But when we start, we can initiate the proper steps and finish the trial and wrap it up quickly. And this is probably related to the fact that we have the type of trial design that we anticipate will go fairly rapidly. And so it's good to delay that and then execute quickly versus to get going and then you have to interrupt, and then you have to redo everything, particularly for a trial, which unlike CHAPERONE, where we're talking 3 years from now, and you don't have to worry about a specific primary endpoint for some time. Here, you have your primary endpoint right on the heels of your enrollment. So I think that really is potentially a good news for us when it comes to that program in terms of execution.

Okay. And when you were talking earlier before about extra time outdoors, what was that percent decrease in myopia that was associated with? How many hours or hour outside per day?

I'm glad that you guys are paying attention because these are really interesting studies. And in fact, these are studies that have been done for quite some time from independent groups. And the data is really growing. And there is a preponderance of data to the point that, as you recall, the American Academy of Ophthalmology did a meta-analysis for atropine drops and basically said there was Level 1 evidence from the collaborative study groups that atropine works.

Now there was a study of meta-analysis published in the peer reviewed journal of Acta Ophthalmologica, where researchers found that even a single hour a day spent outdoors resulted additional hour a day. So 7 hours a week additional, resulted in 45% reduction in incidence of myopia compared to control groups. Now that is a 1 hour more. Now we really don't have the flip side of that coin, 1 hour reduction of time spent. And that will be interesting to know, but I think it's going to be somewhere in the same ballpark because that's an incremental hour. And we're seeing now incremental or decremental hours lost from outdoor activities in our children every day. So this is not a trivial 4.5%. We're talking 45% in those studies.

And on top of that, you have children who use their electronic devices more than 6 hours in a day or have less than 3 hours of the outdoor activity a week, roughly double their risk of having myopia. So those 2 factors one of the biggest risk factors for progressive myopia are time outdoors or lack thereof or spending time at near devices, looking at a computer screen, looking at iPads and tablets. And guess what, both of these things are exasperated from COVID-19. And I know it because I have 2 teenage boys, age of 10 and 14, and they're spending their whole time for school work is in front of the computer. So I see it first-hand at home. I'm competing for bandwidth with my kids when we do the Zoom calls. And so I really don't like it that they spend home all the time. And that -- for them, it's even more than an hour that way. So the data are very strong, very compelling. And if we don't break that or if that becomes the new normal, I think that would be very, very impactful in terms of what's happening to the prevalence and incidence of progressive myopia, which, in some countries, is and in some academic journals is declared as an epidemic proportion.

I would just like to request, could you please send you a link to those primary sources after the call?

Absolutely.

And with that, ladies and gentlemen, we end our Q&A and program for today. Thank you for participating, and you may now disconnect.