Eyenovia Inc (EYEN) 2022 Q1 法說會逐字稿

Thank you for standing by, and welcome to the Eyenovia First Quarter 202 Earnings Call. During the presentation, all participants will be in a listen only mode. Afterwards, we will conduct a question-and-answer session. (Operator Instructions.] As a reminder, this conference is being recorded, Thursday, May 12, 2022. I would now like to turn the conference over to Eric Ribner with LifeSci Advisors. Please go ahead.

Good afternoon, and welcome to Eyenovia's First Quarter 2022 Earnings Conference Call and Audio Webcast. With me today are Eyenovia?s Chairman, Chief Executive and Chief Medical Officer, Dr. Sean Ianchulev, Chief Operating Officer, Michael Rowe, and Chief Financial Officer, John Gandolfo.

This afternoon, Eyenovia issued a press release announcing financial results for three months ended March 31, 2022. We encourage everyone to read today's release as well as Eyenovia's annual report on Form 10-K for the year ended December 31, 2021, which was filed with the SEC on March 30, 2022. The company's press release and annual report are also 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, on today's call, we will be discussing investigational product candidates, which have yet to receive FDA approval. Please also note that certain information discussed on the call today is covered under the safe harbor provision 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. This forward-looking statement -- these forward-looking statements are subject to a number of risks, which are described in more detail in our annual report on Form 10-K and most recent refiled 10-Q.

This conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, May 12, 2022. 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 laws. With that said, I'd like to turn the call over to Dr. Sean Ianchulev.

Thank you, Eric, and welcome, everyone, to our first quarter 2022 financial results conference call. We're excited to report on a quarter during which we continue to make notable progress with our presbyopia clinical program as well as the preparation for the refiling of our mydriasis drug, the MydCombi with the FDA. We continue to track towards the third quarter resubmission of the MydCombi NDA. MydCombi?s our investigational program for pharmacologic mydriasis. We have now successfully completed three of the four device validation tests of the Optejet device that had been requested by the FDA following our reclassification as a drug device combination product. The last test should be completed by late summer. None of these evaluations involve clinical work, so we remain on track to resubmit our MydCombi NDA in the third quarter of this year, consistent with our prior guidance.

We are assuming a six-month review period and are making plans for a targeted commercial launch, if approved, for the first half of next year. As we have stated previously, much of the device validation work just described for MydCombi may be referenced in regulatory filings for our other programs that are also -- that also use the Optejet device, including MicroLine and MicroPine potentially streamlining the FDA review process for those product candidates after other data requirements are also fulfilled.

In parallel, we continue to enroll patients in our VISION-2 Phase III study for our MicroLine presbyopia program and anticipate top line data in the middle of this year. If positive, we plan to begin manufacturing our registration [lots] to support stability and commercial expiration dating as a requirement for the NDA for MicroLine. Many of you have likely seen the advertisement for Allergan's VUITY, a pilocarpine-based presbyopia eye drop that was approved by the FDA in October of last year for the temporary improvement of near and intermediate vision. We believe that VUITY?s helping to create this new multibillion dollar market for pharmacologic presbyopia treatment, where one did not previously exist.

We believe our MicroLine product, if and when approved, will be poised to capture significant share of this market due to the many unique benefits of the Optejet dispenser. Not the least of which is its superior tolerability profiles that we demonstrated in VISION-1, and we are looking to replicate also in VISION-2. Michael will expand on that and the other benefits shortly. These are exciting times for Eyenovia as we believe we have a clear line of sight to two commercially approved products, both leveraging our proprietary Optejet dispensing technology.

At this point, I'll turn the call over to Michael for an update on our operations. Michael?

Thank you, Sean. I would like to begin where Sean left off with a more detailed update on our investigational mydriasis candidate, MydCombi. As Sean indicated, we have now completed all but one of the device validation tests that were required by the FDA subsequent to our original NDA submission when MydCombi was reclassified to a drug device combination. These specific tests, all of which were completed successfully include a microbial challenge study, a human factor study assessing the ability of users to follow cleaning instructions for the device and an electronic safety study. The fourth test, drug stability is ongoing. We expect results in late summer, shortly after which we intend to resubmit the MydCombi NDA. We are assuming a six-month review period and are making plans for a targeted commercial launch, if approved, for the first half of next year.

We are pleased to have completed this extra device validation work on the Optejet now as we expect to reference it in future regulatory filings, potentially streamlining FDA review of future programs, most notably MicroLine, which I will now discuss. MicroLine now our proprietary microdose array print pilocarpine therapy for the temporary improvement in near vision associated with presbyopia represents a market of over 18 million people in the United States between the ages of 40 and 55 who otherwise never wore glasses. In the VISION-1 trial, we demonstrated positive efficacy with a very low rate of headache, which is a common side effect as compared to pilocarpine eyedrop formulations. We hope to replicate these same positive results in VISION-2, which is ongoing.

VISION-2 is a Phase III registrational double-masked, placebo-controlled superiority trial, evaluating 2% multi-array print pilocarpine versus placebo. We aim to enroll about 140 subjects into the study and anticipate top-line data around midyear this year. Just a moment ago, Sean mentioned Allergan's pilocarpine-based presbyopia treatment VUITY, the first eye drop approved by the FDA to treat presbyopia, and they are supporting this with a very robust and broad-based direct-to-consumer advertising campaign. This is a brand new market that we estimate to be worth multiple billions of dollars annually in the U.S. alone. So, while we are eager to successfully complete VISION-2 and submit an NDA for MicroLine, we remain nonetheless confident that we will be able to capture a significant share of the market irrespective of the number of therapeutic options that may ultimately exist due to the many unique advantages conferred to the user by the Optejet dispenser. In the end, there may be multiple eyedrop options, but there will only be one Optejet product.

One of those potential advantages is tolerability, and with pilocarpine specifically, reduced incidents of headache. Conventional pilocarpine drops can cause headache in about 15% of patients. For the Optejet, we saw this rate reduced to less than 3% in our VISION-1 trial, and we hope to replicate this very favorable result in VISION-2.

In addition, MicroLine, delivered through the Optejet dispenser, is easier and neater to administer and it is designed to use on demand. Also, the microdose ray print technology embedded in our proprietary Optejet dispenser has been found to deliver far less preservatives than traditional eyedrops. As you may know, the vast majority of topical ophthalmic medications contain preservatives to help ensure the sterility of the product and to increase its shelf life. Over time, this can lead to adverse events and ocular stress due to the toxicity from overexposure to these preservatives. Our recent work with Tufts demonstrated that preserved drugs delivered with the Optejet act more like unpreserved drugs, reducing ocular stress and potentially avoiding these long-term adverse events.

In the past year, we have compiled a significant body of market research indicating strong consumer and prescriber preference for the Optejet smart delivery system over traditional eye droppers. The ease of use and precision dosing of the Optejet, along with the potential for fewer side effects, were some of the main reasons for this preference. Plus, there is also the cool factor. People just like the form factor of the device. So, while we are pleased that Allergan is creating a market for a pilocarpine-based presbyopia treatment, we ultimately believe that MicroLine, if approved, will better address what patients and prescribers actually want and a product for this indication.

Last quarter, we recapped the study that we recently completed in collaboration with the Dr. Pedram Hamrah, Interim Chairman of Ophthalmology at Tufts Medical Center. The purpose of the study was to compare the impact on conjunctival cells of the most commonly prescribed reserved glaucoma medication delivered by the Optejet versus the same medication delivered in the traditional eyedrop. We also prepared Optejet to non-reserved medication delivered by eyedrop. I'm not going to go through the full results again here, but overall, the study demonstrated that human conjunctival epithelial cells, tolerated preserved drug treatment administered with the Optejet spray significantly better than the same drug administered by eyedrops and similar to non-reserved drugs treated cells and control with respect to cell viability, cytotoxicity, apoptosis and metabolic activity. This is important because a preserved medication delivered by the Optejet appears to provide the same benefit as non-preserved eyedrops, but in a dispenser that makes administration of the drug easier and more comfortable.

Bringing this back to the emerging presbyopia market, we are relatively unconcerned with a number of competitors that may one day exist to differentiate themselves on being preserved or non-preserved or by being dosed once or twice a day because Eyenovia will be the only one with the Optejet dispenser. It's the Optejet that we believe will provide a significant differentiator and competitive advantage for us no matter how crowded the market may be.

It is also worth mentioning that the findings from the study can potentially have significant positive implications for our company as we look to expand our development pipeline into indications such as glaucoma and dry eye where exposure to preservatives from chronic use is a very serious consideration. A major benefit of our technology that we have previously discussed is the potential of the Optejet to enable providers to follow patient compliance through remote therapeutic monitoring. We recently surveyed 100 glaucoma treating ophthalmologists and optometrists to measure their interest in remote therapeutic monitoring. Of the providers surveyed 98% said that understanding compliance and adherence behavior with the glaucoma medications was important and 93% said it was very important.

Notably, all the providers thought that the availability of the new CPT code for remote therapeutic monitoring would lead to better patient outcomes. When presented with the Optejet smart therapeutic monitoring concept, 98% of those surveyed were interested with 81% being moderately or very much interested, and providers felt that a smart platform with monitoring capabilities would improve the care patients received. Further, 80% of providers surveyed said that they would change their treatment regimen to one that used Optejet if that change would cost their patients $20 a month or less out of pocket. That's $20 additional or less out of the pocket with the remaining 20% believing the patient would not move off of the least expensive option. The results from this survey validate the wide-ranging benefits of our Optejet platform that doctors can already envision applying in their practices, especially related to smart technology that will improve patient compliance and outcomes.

I would now like to turn the call over to our Chief Financial Officer, John Gandolfo, to provide a financial update. John?

Thank you, Michael. For the first quarter of 2022, we reported a net loss of approximately $7.3 million or $0.24 per share on approximately 30 million weighted average shares outstanding, and this compares to a net loss of approximately $5.4 million or $0.21 per share for the first quarter of 2021 on approximately 25.3 million weighted average shares outstanding. Research and development expenses totaled approximately $3.7 million for the first quarter of 2022. This compares to approximately $4.3 million for the same period in 2021, a decrease of approximately 14.1%.

For the first quarter of 2022, G&A expenses were approximately $3.5 million compared with approximately $2.2 million for the first quarter of 2021, an increase of approximately 54.9%. Total operating expenses for the first quarter of 2022 were approximately $7.2 million compared to total operating expenses of $6.6 million for the same period in 2021. This represents an increase of approximately 9.5%. As of March 31, 2022, the company's unrestricted and restricted cash balance of approximately $34.6 million, which includes the recent $15 million offering through Amicus Capital, which was completed in March.

Before we open the call to questions, I will conclude with a brief update on our licensing programs with Bausch Health from MicroPine in the U.S. and Canada and Arctic Vision for all three of our drugs in China and South Korea. MicroPine, as you may recall, is the proprietary atropine formulation for the reduction of pediatric myopia progression. It has been shown in clinical studies to slow myopia progression by 60% or more, and there are currently no FDA-approved drug therapies for this indication. And if left untreated, this can result in retinal detachment, myopic retinopathy and vision loss. Bifocal, multifocal glasses or contact lenses are typically prescribed to myopic children.

Recall that as part of the agreement with Bausch, Bausch agreed to assume oversight in costs related to the ongoing Phase III CHAPERONE clinical trial. This is a 48-month U.S.-based multicenter randomized double-mask trial that is enrolling more than 400 children between 3 and 12 years of age. The trial is comparing microdosed atropine 0.01% versus placebo ophthalmic solution. Enrollment is progressing as planned.

Our agreement with Arctic Vision covers Greater China and South Korea. And while the original agreement was for MicroPine and MicroLine, they also recently added MydCombi as well. So Arctic Vision now licenses all three of our current programs, and we are pleased to announce that Arctic Vision recently enrolled the first patient in this presbyopia study. So that program is also progressing nicely. To-date, our license agreements have generated approximately $16 million in license fees, and we have the potential to earn an additional $60 million in net license and development milestones and reimbursable expenses over the next four years.

In addition, with the transfer of the CHAPERONE clinical study and related [calls] to Bausch, our clinical trial expenses will be reduced by $3 million to $4 million per year from originally anticipated levels since we are no longer responsible for those expenses. Upon commercialization, if approved, Eyenovia can earn significant sales royalties as well. We are also continuing to assess potential 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 and glaucoma, each with significant market opportunities.

In conclusion, we continue to be pleased with our performance to date. And to summarize our key highlights today, we are continuing to rapidly advance our Phase III MicroLine presbyopia program, and we are enrolling patients in our Phase III trial VISION-2 and expect top-line data in mid-2022. We're also actively preparing for the resubmission of our MydCombi NDA in the third quarter of this year, which, if approved, would give us our first commercial product and validates our Optejet dispensing technology.

In parallel, we are continuing to expand the body of research on Optejet, as shown by the remarkable findings in our collaboration study with Tufts that highlighted the significant potential of the Optejet to bypass common adverse effects associated with chronic ophthalmic therapy use. And our licensing agreements with Arctic Vision and Bausch Health are progressing well and continue to offer the opportunity for meaningful development and regulatory milestones as well as line of sight to potential sales royalties possibly within the next two years.

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

[Operator Instructions.] One moment for the first question. Our first question comes from the line of Tim Chiang with Northland Capital.

Sean and Michael, could you just talk a little bit about just some of the details on the VISION-2 study, how many patients who enrolled, what the primary and secondary endpoints are again?

Go ahead, Michael. Yes, Michael, you want to go first?

No, no, Sean. Do you want to -- I can give the update on the enrollment is that we are looking forward to have a last patient last visit in about the next -- it's probably in the next month and a half. And then shortly after that, to have some top-line data. If you want to talk about the specific endpoints that are very similar to VISION- 1, Sean, would you like to talk about that?

Yes. I mean, they're very much the same. As you recall, VISON -1, we used two doses, and we did a crossover design. At that time, we were using pilocarpine, 1%, pilocarpine 2% and then placebo crossover. The design of VISION-2 is pretty much spot on the same. We have the 140 patients. It really looks at the same endpoint, which is the three-line gain in distance-corrected near visual acuity. And again, we have very much the same crossover design, which is very efficient. And it really is in line with our overall plan for the program, which is really for the temporary on-demand improvement of near visual acuity, which Michael has been talking about in terms of how these products will be used.

We hope to have those results pretty imminently over the next couple of months. And we -- with that, we'll combine them with the VISION-1 data package and share that with you. But it's really a confirmation -- a confirmatory trial by design of the VISION-1 study.

Okay. Good. And I just had one follow-up to that. Because I guess the age difference in the patients who enrolled in VISION-2 is slightly different than in VISION-1. Could you just talk a little bit about why you did that?

Yes. So, I think we learn in general from our clinical experience. As you know, VISION-1 was our first trial that we did. In fact, it was -- we didn't -- we didn't have a benefit of a Phase I or Phase II. So, when you do that, you?re able to really look at the spectrum of response. We had a very unselect population in VISION-1. And we learned that most of the -- really the target population for that product and as well as the sweet spot of response is the younger [presbyops], which is kind of where everybody else is as well, mostly with the patients below 55 years of age. Most of the presbyopia hits around 40, late 40s. And this is where you capture most of the people who start to experience those problems.

If you talk to the market research that we've done, the users are not the people who have been wearing glasses for 20 years. It's really the new presbyops. And so, we refocused our study really towards the beachfront of where the target population is, the best therapeutic response and effect is and really the entire overall program.

Michael, if you want to add some additional insights here, feel free.

No. I think, Tim, what Sean said is exactly right. And in fact, it also matches what most other people are doing and matches what Allergan did in their studies.

[Operator Instructions.] Our next question is from the line of Matt Kaplan with Ladenburg Thalmann.

This is Raymond in for Matt. Thanks for taking our questions and for all the updates. Just a few on our end. Just following up on the VISION question. I was wondering, did you have any updated plans to perhaps submit data from the VISION trial in totality in the medical conference or publication?

Yes. So, the way we proceed with this is we think the most important activity right now is to integrate and get all of the data and prepare that for the FDA review and submission. And once we have that, of course, we'll synchronize our publication and presentation plans. So probably once we have the totality of the data, the full analysis and probably within a few months of submitting that to the FDA, we then will turn our attention to presenting it. And for us, it's most important to make sure that we do all the necessary work for the FDA registration of the product.

Okay. That's helpful. Okay. And I guess for the MicroLine program, I was wondering if you had any direct learnings or surprises from the beauty launch that you think might be instructive for the MicroLine program?

Well, that's a good question. I think personally, again, it's hard to know because we don't have that many data points from the VUITY launch, meaning that we at least don't have numbers to see how the launch is really proceeding. Being a clinician and knowing the patient interest in this, I think it's really the right time for a launch. And there is a lot of demand that my colleagues and I see in the clinics. The advertising and the consumer outreach has been quite good and has resonated with patients. And ultimately, we hope by the end of the year, we'll be able to get some hard metrics around that, like any new market and having been of the new market of anti-VEGF from the time of my experience with Lucentis at Genentech, it's really hard to know how this would go and what the acceleration will be. So, the next 12 months will probably give us a lot of information that we currently don't have.

But for sure, what is very evident is that patients now are starting to hear about options. And they're coming to the clinic, they're asking for that. They think it's exciting. It's a new paradigm. They want to get out of glasses. It's really things that we never paid attention to before and now are coming to the forefront among the physicians and also the patients. So, I hope that translates in good numbers for the launch. And I hope this also translates in a prime market for a best-in-class product as is the MicroLine Optejet.

Also, I would add to that, that one of the actually benefits of what's happening with VUITY is it's encouraging a lot of people who have not gone to see a doctor before into the office to get a real eye exam. Many of these people would have just gone to the drugstore and purchased a pair of readers. But now because they're interested in finding a different way to treat the presbyopia they're going in and, for many of them, they're getting their first eye exam ever. So, it's actually doing a good service for a lot of these people.

I have seen those ads. Just last question, just a clarification. I was wondering, is there a milestone payment associated with the completion of enrollment for the CHAPERONE trial?

No. The milestones are associated with the FDA approval and the commercialization in the Bausch agreement.

And our next question is from private investor, Len Yaffe.

I had a couple of questions for you. I'm thinking that given the consumer advertising that AbbVie, Allergan are doing for VUITY, that that will drive, as you say, the patients to the doc. And unlike other more therapeutic pharmacological agents where this one is more of a pseudocosmetic, that would be sufficient to get the interest and the doc would be able to tell the patient about Optejet or if the doc thinks that that's a better alternative and the patient won't offer much resistance unlike when you get in other drug categories, a lot of advertising and the patient is set on the ad and one specific drug. So, I was wondering if you think that, that's the case or if you think you'll have to do what's likely to be expensive consumer advertising, TV advertising. And if you do in order to save money, we use Michael as the model on the TV spot.

I wish but I aged out of the product. But Len, you bring an interesting question, then let me bring this back to MydCombi because remember, MydCombi, hopefully, will be on the market for a bit of time before MicroLine, we're looking hopefully to an approval early next year. And if that's the case, you can imagine that somebody would go into the office, have their standard eye exam and have their eyes dilated with MydCombi and then the conversation comes to, would you like to have MicroLine? By the way, it's in the same device that I use to dilate your eyes. This very futuristic and comfortable and easy-to-use thing that my technician came in here and took all of 10 seconds to use on you.

So MydCombi serves that strategic purpose for us to get it into the doctor's offices into their hands. So, the patient will actually see very much what MicroLine is all about.

And then I think as another sound but the way I think about it is when you validate something and you drive patients there, it's kind of you've sold them on the more or less on the flip phone. And at that time, we come out with the better, more elegant and differentiated technology, smartphone, so to speak, with better profile. I think in ophthalmology, particularly optometry and ophthalmology, we are very biased towards the best technology because we know patients like the best when it comes to their eyesight and the most precise and the most elegant and the most -- the safest type of approach. So, I think this probably will play. And the more patients driven to the offices and the more patients are already alerted to this technology, the market is primed for many products and hopefully for the best-in-class.

And then the second question is MicroPine, which we haven't discussed, which it?s further out obviously, but I think it's potentially the largest market of the three that you're addressing. Any updates on that in terms of the time of clinical trials when we might get some data because the potential there seems to be incredibly significant.

Yes. Well, I think, Len, that's true. My two cents, and Michael can give more details, but you're right. If MicroPine was gene therapy or a back-of-the-eye product with the same economics. Eyenovia probably will be a multibillion-dollar company. So, it's true. It's a huge opportunity that somehow -- because maybe of the timelines and the longer horizon is currently ignored from a valuation perspective. But again, I think that we are excited. Bausch is really committed to this in a major way. They're executing well. We've transferred now the program to them. So, they own the program. And I think the communication so far is that we're looking at complete enrollment by the end of this year. Of course, the details and the more granular details would come from them.

And then we know we have a three-year endpoint and an additional fourth year, which is not part of the primary, but it's a follow-up. So really, the pacing timeline is the three-year end point. And again, this will be a 2025 horizon program, but of enormous impact and huge unmet need that is really in the core of preserving site for our children and our next generation. So, Michael, maybe you can add a few additional comments here.

I would add, Sean, that we shouldn't also discount Arctic Vision, they will be starting their version of the CHAPERONE study this year. I believe their study does not have to be as long as the U.S. one. And the market opportunity in China, even when you adjust for prices and things like that because there are so many more children at risk for progressive myopia there is about the same size as the U.S. opportunity. So, we are very much looking forward to our partner there starting their trial later in this year.

There are no further questions registered at this time. Sean, I will now turn the call back to you.

Yes. Thank you. I thought -- again, thank you for everybody for joining us today and learning about our programs and updates. As you can see the next 12 months, we have a lot of inflecting milestones, and the team is completely committed. We're a small company with a small team that's doing a lot of heavy lifting on three programs with major indications, and we look forward to sharing additional details over the coming months. And again, thank you all for joining today.

Thank you.

That does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your line.