EyePoint Pharmaceuticals Inc (EYPT) 2011 Q1 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the first quarter 2010 pSivida Corporation earnings conference call.

My name is Noelia and I'll be your coordinator for today.

At this time, all participants are in a listen-only mode.

We will be facilitating a question-and-answer session towards the end of this conference.

(Operator Instructions).

I would now like to turn the presentation over to your host for today's call, Ms.

Lori Freedman, Vice President Corporate Affairs, General Counsel and Corporate Secretary.

Please proceed.

Thank you, Noelia.

Good morning, everyone, and thank you for joining us.

Before the market opened today, we released our fiscal 2011 first-quarter results.

A copy of the release is available in the investor section of our website at www.psivida.com.

On the call with me today is Dr.

Paul Ashton, President and Chief Executive Officer; and Mr.

Len Ross, Vice President of Finance.

Before I hand the call over to Paul, I need to remind everyone that some of our prepared remarks as well as answers to your questions will be forward-looking in nature.

These forward-looking statements are inherently subject to risks and uncertainties.

All statements other than statements of historical fact are forward-looking statements and we cannot guarantee that the results and other expectations expressed, anticipated or implied will be realized.

Actual results could differ materially from those anticipated, estimated or projected in the forward-looking statements.

For a more detailed discussion of the risk factors that could materially affect our future results and financial condition, and other items expressed or implied in our forward-looking statements, I refer you to our filings with the SEC, including our fiscal 2010 annual report on Form 10-K, which was filed on September 27, 2010.

The Company undertakes no obligation to update any forward-looking statement in order to reflect events or circumstances that may arise after this conference call.

With that, I'd like to turn the call over to Paul.

All right.

Thank you, Lori, and welcome everyone as we discuss the results of our fiscal 2011 first quarter.

On the financial side, as you know, we are not at the moment an earnings revenue driven company.

So I think there are two important items to note on our financial statement.

First, our cash position remains solid.

We ended the quarter with $15.3 million in cash, which we are comfortable should take us into calendar 2012.

Second, our cash burn also remained constant.

Sorry, consistent.

Although this year's first quarter was a bit higher than recent quarters, the increase was primarily due to the delayed receipts of one payment that fell outside the quarter.

Len will take us through the detailed breakdown of the quarterly numbers shortly.

Looking at our business on our future prospects, we expect this quarter will be a very significant one for our Company.

A decision from the FDA on the new drug application or NDA on Iluvien for diabetic macular edema is expected by year end.

As you know, this NDA received a priority review from the agency in August, and we have a PDUFA date of December 30, 2010.

So in fact, we should have FDA action on Iluvien before the end of the year.

FDA approval of Iluvien would be significant for us from a financial point of view.

We will be entitled to a $25 million milestone payment from our licensee for Iluvien, Alimera Sciences, as a result of that approval.

We'll also be entitled to 20% of net profits from sales of Iluvien by Alimera, which was reported that, with an approval in December, first commercial sales could begin as early as Q1 2011.

Alimera seems to be well positioned to begin rolling out the sales of Iluvien on FDA approval.

They recently reported securing a $32.5 million credit facility to help finance its working capital requirements and entered into an agreement with a contract sales organization to recruit (inaudible) sales force to sell Iluvien.

We remain very optimistic about the opportunity presented by Iluvien for DME.

The market is very large.

In terms of people, the disease affects approximately 1 million people in the US alone.

And in terms of dollars, the US DME market alone has been estimated to be between $1.5 billion and $4 billion annually.

In addition to DME, Iluvien is in Phase II trials for wet AMD, dry AMD, and retinal vein occlusion.

Beyond Iluvien, our collaboration with Pfizer continues to go very well.

As you know, we cannot comment further on the work we're doing with Pfizer.

All I can say we're very pleased with our collaboration under that agreement.

We're also continuing to work on our next generation systems which are designed to be fully bio-erodible, injectable, and can potentially deliver small molecules, peptides, proteins, and antibodies.

We are completing some of these studies and we continue to be optimistic about these new products and the market potential in ophthalmology.

DME is a big indication affecting approximately a million people in the US.

Both glaucoma and AMD, dry AMD are much larger.

Each of these diseases affects approximately 2 million people in the US.

So with that thought, I'm going to hand you over to Len.

Len?

Thank you, Paul, and good morning, everyone.

I'd like to review with you the results for the first quarter of fiscal 2011 that we reported earlier today.

In my comments, I would like to focus you on two fundamental points about our revenues and our cash burn.

First, turning to revenues for the quarter ended September 30, 2010, we reported revenues of $476,000 as compared to $3.4 million reported in the first quarter of last year.

This decline does not reflect any fundamental change in our business.

As you will recall, the period of amortization of deferred revenues, which resulted from a consideration we received under our collaboration agreement with Alimera, ended in December 2009 which marked the completion date of our performance obligations.

As a result, last year's first-quarter revenue of $3.4 million included revenue of approximately $3.2 million related to Alimera, while we had almost no revenue from Alimera in this year's first quarter.

Revenues for the fiscal 2011 first quarter included $373,000 of royalties earned on sales of the registered product by Bausch & Lomb as compared to none last year.

Retisert royalty income resumed in the quarter ended June of 2010 following completion of a 2005 agreement, under which we received $3 million in consideration of $6.25 million of future Retisert royalties that otherwise would have been payable to us.

We expect our total quarterly revenues to continue at around this level in the immediate future until receipt of the $25 million milestone and subsequent profit-sharing from Alimera if Iluvien is approved and successfully marketed.

First quarter research and development expense remained essentially flat to the prior year period.

General and administrative expense totaled approximately $2.2 million in the first quarter this year, compared to approximately $1.7 million last year, and primarily reflected higher levels of professional fees and stock-based compensation.

Net loss for the first quarter was $3.1 million or $0.17 per common share, compared to a net loss of $1.6 million or $0.09 per common share for the prior year quarter.

This reflects the decrease in revenues that I just discussed, offset in part by a swing to non-operating income of $336,000 this year from non-operating expense of $1.5 million for the first quarter of the prior year, predominantly due to the change in the evaluation of our outstanding investor warrants that have exercised prices denominated in Australian dollars.

The derivative liabilities balance of $972,000 at September 30, 2010 will continue to be subject to quarterly reevaluation through the expiration dates of the underlying warrants, which have a weighted average remaining life of 5.5 months.

Almost 95% of these Australian dollar warrants are due to expire within the next six months.

Moving onto our cash resources.

The point I'd like to make here is that with careful management of resources and the reasonably consistent quarterly cash burn from operations, we continue to be comfortable with our financial position.

At September 30, 2010, we reported cash, cash equivalents and marketable securities of approximately $15.3 million, a net decrease of $2.3 million compared to $17.6 million at June 30, 2010.

Of this decrease, $500,000 represented the delayed receipt of our quarterly research funding payment until after the balance sheet date.

We do not expect future delays.

This delay gave the appearance of an increase in our operating cash burn, which after taking this payment into account remains substantially consistent with prior periods.

As Paul mentioned earlier, we will continue to closely manage our cash resources.

Excluding the $25 million milestone payment that would be due from Alimera upon FDA approval of Iluvien, we believe we can maintain our current and planned operations into at least calendar year 2012 with our current sources of cash and expected revenues.

With that, I will now turn the call back over to Paul.

Great.

Thanks, Len.

The most exciting event for our Company right now is the upcoming FDA action on Iluvien.

We expect to hear from the FDA on Iluvien's NDA by the end of the year and hope to see first sales early next year.

Beyond Iluvien, we're looking forward to being able to report future developments with respect to our ongoing development programs.

So we're very well positioned for a very exciting time ahead.

I look forward to speaking to you again the next quarter.

At this point, we'd be happy to take your questions.

Operator, would you please initiate the Q&A portion of the call?

Thank you.

(Operator Instructions).

Please stand by for your first question.

Suraj Kalia, Rodman & Renshaw.

Hi, good morning, guys.

Hi,Suraj.

How's it going?

Hey.

Paul, on the Alimera call also yesterday, they mentioned the same thing but I was hoping that I could get a little more specifics which is Q1 -- assuming Iluvien gets approval, let's say end of the year, early Q1, how do you -- and even if you have the centers lined up where you say these are our initial target centers, great.

Given the reimbursement gap and I'm kind of trying to understand how do you get the initial penetration given the reimbursement delay on the device side.

It usually takes six months, I would say.

I'm just trying to understand the game plan here because obviously you have done the math.

To the extent that you can share, how do you see Alimera convincing position.

Hey, even though reimbursement is not there you can try it out.

With regard to the specifics on that I would have to defer to Alimera.

I would say that if we look at the -- say the Vitrasert device for CMV retinitis, this is an area that is 15 years old.

That was being used fairly actively -- very, very rapidly indeed.

That product, if you may recall, was designed to treat CMV retinitis which was a particularly unpleasant viral infection that hit AIDS patients.

A very large unmet medical need, kind of a critical issue for these people.

Physicians seem to be very happy to put that device in as soon as it was approved.

And there was a lot of traction as well from the AIDS community that at that time to ensure that that device was available to people.

So it certainly can be done very quickly.

But for details I would have to defer to Alimera.

Okay.

I had to try.

And I'm assuming Lori is not around, so anyway.

Paul, in terms of new agreements in oncology and/or ophthalmology, any color you can shed on that?

No, unfortunately, not.

As I've said many times, there is no such thing as a late-stage negotiation in any of this work.

You have a deal when you have it.

Okay.

And we're in discussions with lots of people, but until you have a signed deal, you are not pregnant.

Sure, sure.

And in terms of Pfizer, finally, Paul, when does the next should I say milestone or a point where we would get some more tangible information and say, okay, this is what these guys are working on, this is -- maybe, let's extrapolate on the probability of success and market opportunity.

When can we get some additional color?

Is it still many quarters out?

Is it relatively in the near future?

I wouldn't want to discuss when it might be, but a likely event would be initiation of the clinical trial.

Well, okay.

And do you think it would be something that is the possibility in calendar '11?

I wouldn't want to comment on that at this point.

Okay.

I had to still try.

Okay, thanks, guys.

I appreciate it.

Thanks, Suraj.

(Operator Instructions).

Juan Sanchez, Ladenburg.

Good morning, guys.

Good morning.

The first question is at the pacethings are going on in Europe, when do you guys expect a potential decision in Europe?

The second question is whether or not there are any plans to do some small trials in uveitis?

Again, with respect to Europe, I would have to defer to any guidance that's being provided by Alimera Sciences as they are actually running the programs there.

There are yet no plans to conduct small trials in uveitis.

Thank you.

And at this moment there are no questions.

I'd like to turn the call back over to Dr.

Ashton for closing remarks.

Great, thank you.

So I would like to thank you all for joining us today, and I look forward to speaking with you again next quarter.

Thank you.

Thank you for your participation in today's conference.

This concludes your presentation.

You may now disconnect.

Have a good day.