Ocular Therapeutix Inc (OCUL) 2019 Q4 法說會逐字稿

Good afternoon, ladies and gentlemen. Thank you for standing by, and welcome to the Ocular Therapeutix Fourth Quarter and Year-End 2019 Earnings Conference Call. (Operator Instructions) It is now my pleasure to turn the call over to Donald Notman, Chief Financial Officer of Ocular Therapeutix. Please go ahead, sir.

Thank you, Latif. Good afternoon, everyone, and thank you for joining us on our fourth quarter and year-end 2019 financial results and business update conference call.

This afternoon, after the close, we issued a press release providing an update on the company's product development programs and details of the company's financial results for the quarter and year ended December 31, 2019. The press release can be accessed on the investors portion of our website at investors.ocutx.com.

Leading the call today will be Antony Mattessich, our President and Chief Executive Officer, who will provide a summary of our corporate developments and an update on the DEXTENZA commercial launch. Also speaking on the call today will be Dr. Michael Goldstein, our Chief Medical Officer, who will give an update on our clinical developments and pipeline. Following Michael's remarks, I will provide an overview of the financial highlights for the fourth quarter and year ended 2019 before turning the call back to Antony for a summary and questions. For Q&A, we will also be joined by Scott Corning, our Senior Vice President, Commercial.

As a reminder, during today's call, we will be making certain forward-looking statements. Various remarks that we make during this call about the company's future expectations, plans and prospects constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the Risk Factors section of our most recent annual report on Form 10-K, which was filed with the SEC this afternoon, March 12, 2020.

In addition, any forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. While we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, except as we are required to do so by law, even if our views change.

I will now turn the call over to Antony.

Thanks, Donald. And thank you, everyone, for joining the call today for an update on the events of the quarter, including an update on the company, the commercial launch of DEXTENZA and on the recent advances in our pipeline.

The launch of DEXTENZA remains a key focus, and we are encouraged with our progress. Importantly, the DEXTENZA is performing well in patients, is well liked by surgeons and is getting very good feedback from the market. And all of the key launch metrics signal growing momentum.

For those who may be new to Ocular story, DEXTENZA is a bioresorbable intracanalicular insert that delivers a 0.4 milligram tapering dose of preservative-free dexamethasone for up to 30 days. DEXTENZA is approved for the treatment of ocular inflammation of pain following ophthalmic surgery. The product is the first of a novel dosage form and route of administration that has the potential to become a transformative product for both patients and physicians. For patients, DEXTENZA offers the convenience of a full course of steroid treatment in a single preservative-free insert. For surgeons, it puts control of the postsurgical steroid regimen back in their hands by mitigating the risk of patient noncompliance.

We started the commercial phase of our DEXTENZA launch in July 2019 with a temporary C code and pass-through payment status, which assured reimbursement for Medicare Part B patients treated in ambulatory surgery centers or ASCs and hospitals. In October, we received a major boost when our permanent J code became effective. Not only did the J code enhance our ability to sell in ASCs and hospitals, it also allowed for permanent product coding in the office setting. Today, we're in the market with 28 key account managers, or KAMs, focused on selling DEXTENZA to high-volume ASCs and hospitals.

Complementing the work of our KAMs and the critical element to gaining penetration within the ASCs and hospitals is the team of 10 field reimbursement managers and our external reimbursement hub. The goal of our reimbursement specialists and external hub is to help customers put protocols in place to ensure that all purchased product is reimbursed in a timely and predictable manner. We believe that nearly all the necessary elements are in place to support the success of our commercial launch in the institutional setting.

Among the key metrics signaling strong momentum is the rapid addition of new accounts. More importantly, the potential volume in those accounts added in the most recent quarter is generally greater than in the early launch quarters. For example, 4 large university systems and significant new ASCs have been added within the last quarter. Also, reordering trends from existing accounts remained high as the number of samples have steadily declined.

By far the most important and indicative metric of performance is the sales of billable inserts from the specialty distributors into the ASCs and hospitals. This is the true end market demand for the product without the distortion of distributor inventory. Over the last 3 months, we have seen month-over-month growth in billable units of 9%, 6% and 34% for the most recent full month of February. Billable units to the ASCs and hospitals in March have started even stronger than expected, leaving us confident as we approach the end of the first quarter and the remainder of the year.

Moving to our pipeline, we continue to make tremendous progress, both extending the potential of DEXTENZA as well as our other differentiated ophthalmics programs.

First, on the life cycle management for DEXTENZA. While we believe DEXTENZA with its current indication for the treatment of inflammation and pain following ophthalmic surgery remains a large opportunity on its own, the potential for DEXTENZA in ocular surface diseases could far exceed its potential as a post-surgical drug. Allergic conjunctivitis or AC is the first extension of DEXTENZA into ocular surface disease. We are pleased we have completed enrollment and are on track to announce in the second quarter Phase III data on a trial that, if successful, could lead to a potential sNDA application for an indication in this area.

Beyond DEXTENZA, we recently provided interim updates on 2 of our key development programs: OTX-TIC, a long-acting travoprost containing intracameral implant for the treatment of patients with primary open-angle glaucoma and ocular hypertension; and OTX-TKI, a long-acting tyrosine kinase inhibitor intravitreal implant being evaluated for the treatment of wet age-related macro degeneration and other retinal diseases.

Although the Phase I clinical trial is not empowered to measure efficacy with statistical significance, we believe the interim results from the first 2 cohorts of OTX-TIC show the possibility for a duration and magnitude of effect that if demonstrated in latest clinical trials could result in a product that becomes the standard of care in the treatment of primary open angle glaucoma, a large market where lack of compliance is perhaps the greatest area of unmet need.

As if the increasing momentum of DEXTENZA launch, the pending readout of the Phase III trial that could lead to an sNDA application in AC and the Phase I readout for OTX-TIC were not enough, we believe the most exciting recent development for ocular therapeutics is the potential emergence of an efficacy signal in our OTX-TKI program.

The quest for next-generation treatments for wet AMD has been frustrating and elusive for the industry as a whole, but the potential in this space remains enormous for our product candidate with greater durability than existing VEGF therapy. While it is still very early days for OTX-TKI, the interim results we have seen to date in our second Phase I cohort are encouraging for a product candidate that could represent a transformational opportunity for ocular therapeutics.

To go over those results as well as selected developments across the pipeline, I will hand over the call to Dr. Michael Goldstein, our Chief Medical Officer.

Thanks, Antony.

DEXTENZA represents a franchise opportunity for ocular and for the potential treatment of a number of ocular surface diseases. As Antony mentioned, we have just completed dosing patients in a Phase III clinical trial of DEXTENZA in the treatment of ocular itching associated with allergic conjunctivitis. The current study is a multi-center, one-to-one randomized, double-masked, placebo-controlled Phase III clinical trial that enrolled 96 subjects. The study's primary objective is to evaluate the safety and efficacy of DEXTENZA versus a placebo vehicle insert using the modified Conjunctival Allergen Challenge model for the treatment of ocular itching associated with allergic conjunctivitis. The trial is designed to assess the effect of DEXTENZA compared with the placebo on allergic responses using a series of successive allergen challenges over a 30-day period. The primary efficacy end point being evaluated in the study is ocular itching 1 week following insertion of DEXTENZA. We anticipate data from this trial in the second quarter of this year. If successful, this trial will be part of a supplemental NDA submission to the FDA to expand the potential indication of DEXTENZA for the treatment of ocular itching associated with allergic conjunctivitis in the outpatient setting. As important as the indication would be to extend the growth of the DEXTENZA franchise, the potential approval would be the first indication not directly associated with surgery and enable us to use DEXTENZA more widely within the physician office.

Beyond allergic conjunctivitis, we remain pleased with the interest from the ophthalmic and optometric communities, the interest points to the versatility of the products and the opportunity to potentially study DEXTENZA in multiple other areas that treat ocular surface diseases beyond post-cataract inflammation and pain. One metric of this strong indication is the number of requests for investigator-initiated trials or IITs that we have received. We now have almost 70 IITs submitted covering areas ranging from use of DEXTENZA in cataract surgery, placed in different settings of care and different timing of placement, use of DEXTENZA in other surgical areas, such as glaucoma surgery, refractive surgery, retinal surgery, corneal surgery, oculoplastic surgery and pediatric surgery, and use of DEXTENZA for ocular surface diseases, such as dry eye disease and blepharitis. We currently have 10 different IIT studies that are either actively enrolling or screening patients.

Moving to the pipeline.

We are especially excited about OTX-TIC, our Phase I clinical program for the treatment of patients with primary open-angle glaucoma or ocular hypertension. The product candidate is a bioresorbable travoprost containing hydrogel implant delivered via an intracameral injection designed to deliver a high level of IOP reduction. We continue to enroll patients in a Phase I prospective multicenter open-label dose escalation clinical trial to evaluate the efficacy, safety, durability and tolerability of OTX-TIC. As this is an open-label trial, we were able to assess early biological activity and safety. And just a few weeks ago, we presented encouraging interim data at the Glaucoma 360 conference that took place in February in San Francisco. Data from the first 2 fully enrolled cohorts, 5 subjects in cohort 1 and 4 subjects in cohort 2, showed decreased IOP in patients receiving OTX-TIC that was comparable to current standard of care, topical travoprost placed in the nonstudy eye. The data also showed that the IOP remained decreased at the ADM time point from the baseline values throughout the 6-month study period in 1 patient for over 18 months at the time of assessment. The hydrogel has consistently biodegraded in 5 to 7 months and there have been no significant changes in corneal endothelial health as measured by slit lamp examination, tachymetry and endothelial cell counts.

Interest in long-acting drug delivery for glaucoma is high due to significant compliance challenges with daily drop therapy in this population. We believe that we can be a fast follower with the possibility for a superior product profile to Allergan's recently FDA-approved bimatoprost SR implant. With a targeted product profile of 6 to 9 months of IOP lowering with a single insert and current data showing efficacy signal beyond that in some subjects, all with a favorable safety profile, we are very excited about what we have seen with the early results from this trial and look forward to continuing enrollment in 2 additional cohorts and further evaluation of these patients over time.

Moving to the back of the eye. We continue to dose subjects in a multicenter, open-label Phase I clinical trial for OTX-TKI in Australia. OTX-TKI is a bioresorbable hydrogel implant containing axitinib, which has anti-angiogenic properties and is delivered by intravitreal injection. It is being developed to treat patients with wet age-related macro degeneration and other retinal diseases. This, like OTX-TIC, is a novel approach to address a very large commercial market opportunity and is a program we're very excited about. We believe OTX-TKI carries the potential of being a next-generation treatment for wet age-related macro degeneration given its ability to act upstream of VEGF and therefore may have broader antiangiogenic properties.

Last week, we announced encouraging interim results from the ongoing Phase I trial evaluating the safety, durability and tolerability of OTX-TKI. Interim data recorded on the first 2 fully enrolled cohorts demonstrated OTX-TKI was generally observed to be well tolerated and have a favorable safety profile to date with no ocular serious adverse events. Regarding biological activity in the higher dose cohort 2, OTX-TKI treated subjects showed a decrease in retinal fluid as mentioned -- as measured by decreases in intraretinal and/or subretinal fluid in some subjects with wet age-related macro degeneration at 2 and 3 months. Additionally, some subjects in cohort 1 who required frequent anti-VEGF dosing prior to enrollment in the study were shown to not need rescue therapies for as long as 10 months after being treated with OTX-TKI. While the drug's product profile is still emerging, we are pleased with the interim data that shows intravitreal injection of a TKI can reduce intraretinal and/or subretinal fluid.

Finally, amongst our early stage programs, I want to note that we filed an IND for OTX-CSI in the fourth quarter of 2019 and plan to start dosing patients in a Phase I trial in the second quarter of this year.

OTX-CSI is an intracanalicular insert which releases cyclosporine for approximately 3 months for patients with dry eye disease. We are excited about this product that could deliver a convenient potentially dropless and effective solution for these dry eye patients.

I would now like to turn the call back over to Donald who will review our fourth quarter and year-end financial results.

Thanks, Michael.

Gross product revenue net of discounts, rebates and returns, which the company refers to as total net product revenue, was $2.3 million for the 3 months ended December 31, 2019, reflecting a 172% sequential increase over the third quarter. Net product revenue of DEXTENZA in the first quarter of 2019 -- in the fourth quarter of 2019 was $1.6 million versus $0.3 million in the third quarter and reflects a 433% sequential increase. Total net product revenue for the fourth quarter of 2019 also includes net product revenue of $0.7 million from ReSure Sealant. Overall, net product revenue for the year ended December 31, 2019, was $4.2 million versus $2.0 million for 2018 and primarily reflects the addition of DEXTENZA sales beginning in the second quarter of 2019.

Research and development expenses for the fourth quarter were $10.1 million versus $10.3 million for the comparable period in 2018 and primarily reflect an increase in unallocated costs and clinical trial costs associated with the Phase III DEXTENZA allergic conjunctivitis trial and the Phase I trials for OTX-TIC and OTX-TKI, offset by a significant reduction of the Phase III clinical trial costs associated with OTX-TP. Overall, R&D expenses for the full year increased $4.2 million to $41.1 million from $36.9 million in 2018, reflecting increased unallocated costs and the trend in clinical trial expenses mentioned above.

Selling and marketing expenses for the fourth quarter were $7.1 million as compared to $2.3 million for the same quarter in 2018. This increase relates almost entirely to support of the commercial launch of DEXTENZA, driven primarily by the full impact of the hiring of new members of the commercial team, including key account managers, field reimbursement managers and medical sales liaisons, beginning in the second quarter of 2019. Overall, selling and marketing expenses for the full year increased $19.6 million to $24.5 million from $4.9 million in 2018, driven primarily by the hiring of new members of the commercial team, as highlighted above, as well as increased spending on consulting, conferences and related costs.

Finally, general and administrative expenses were $5.6 million for the fourth quarter of 2019 versus $5.1 million in the comparable quarter of 2018. The increase in expenses for the fourth quarter stemmed primarily from the increased personnel costs. Overall, G&A expenses for the full year increased $3.3 million to $22.1 million from $18.8 million in 2018, again, reflecting primarily increased personnel costs.

With respect to the financial results for the fourth quarter, the company reported a net loss of $26 million or a loss of $0.53 per share on a basic and diluted basis. This compares to a net loss of $17.4 million or a loss of $0.42 per share on a basic and diluted basis for the same period in 2018. The net loss for the fourth quarter included $2.6 million in noncash charges for stock-based compensation and depreciation compared to $2.5 million for the same quarter in 2018. In addition, the net loss for the quarter includes a noncash charge of $3 million related to the change in the fair value of the derivative liability associated with the company's convertible notes.

Overall, the company reported a net loss of $86.4 million or a loss of $1.91 per share on a basic and diluted basis for the full year ended December 31, 2019, versus a net loss of $60 million or a loss of $1.57 per share on a basic and diluted basis in 2018.

As of March 2, 2020, the company had 52.6 million shares outstanding.

As of the full year ended December 31, 2019, we had $54.4 million in cash and cash equivalents versus $54.1 million at year-end 2018. These cash amounts exclude restricted cash of $1.8 million and $6.6 million, respectively. Restricted cash was reduced by $5 million in the third quarter of 2019 as a result of an amendment with the lenders of our $25 million term loan facility to eliminate the $5 million liquidity covenant. The cash balance benefited during the fourth quarter from $8.9 million in net proceeds generated from the sale of common stock under the company's 2019 Sales Agreement, under which the company may offer and sell its common stock, having aggregate proceeds of up to $50 million from time to time. For the full year ended December 31, 2019, cash balances benefited from total net proceeds from financing activities of $75.3 million, primarily consisting of net proceeds from the 2026 Convertible Notes of $37.3 million, common stock sales under the 2016 Sales Agreement of $4.9 million and common stock sales under the 2019 Sales Agreement of $32.7 million. For the current calendar year through March 10, 2020, the company has sold additional common stock under the 2019 Sales Agreement, generating net proceeds of $10.7 million. Approximately $5.2 million of common stock remains available to be sold under the agreement.

Based on our current plans and related estimates of anticipated cash inflows from the DEXTENZA and ReSure product sales and cash outflows from operating expenses, we believe that existing cash and cash equivalents as of December 31, 2019, together with the first quarter 2020 net proceeds through March 10 from the sales of common stock pursuant to our 2019 Sales Agreement highlighted previously, will enable the company to fund planned operating expenses, debt service obligations and capital expenditure requirements into the first quarter of 2021. This cash guidance is, of course, subject to a number of assumptions related to the revenues and expenses associated with the commercialization of DEXTENZA as well as the pace of research and clinical development programs and other aspects of our business.

This concludes my comments on the fourth quarter and year-end financial results. And I would now like to turn the call back to Antony for some summary thoughts.

Thanks, Donald.

So before opening the call to questions, let me do a quick summary.

We are pleased with the building momentum of the DEXTENZA launch. And my helpful CFO has told me that I misspoke earlier about the only important metric in the launch of DEXTENZA, which is the sales of billable units from the specialty distributor into the ASCs and hospitals. To repeat what, I guess, I should have said at the time was the growth -- month-over-month growth in December was 9% over previous month. In January of this year, it was 26% over previous month. And then in February, it was 34% over the month before that. We have started off in March with a very strong growth rate, and we expect to be able to reach near 2,000 billable inserts into the ASCs and hospitals for the month of March. So the momentum is increasing, and we're very excited about how that is working out in the marketplace.

We are also anticipating a Phase III readout for DEXTENZA in allergic conjunctivitis in the second quarter that could potentially extend the DEXTENZA franchise into ocular surface disease. In our Phase I glaucoma program with intracameral OTX-TIC, we are seeing both the magnitude and durability of effect that support a product that could become standard of care in the treatment of elevated intraocular pressure. Finally, and most importantly, we have seen the evidence of biologic activity in our OTX-TKI program, keeping alive our dream of developing a true next-generation treatment for wet AMD.

With that, I will turn the call over for questions.

(Operator Instructions) Our first question comes from the line of Joe Catanzaro of Piper Sandler.

Congrats on the progress. I guess, first, just a couple on DEXTENZA and the first one there. And maybe it's too early to say, but are you seeing or hearing patients deferring their cataract procedures because of the coronavirus situation?

To date, we haven't heard anything. What we are hearing, starting to hear now is that hospitals are starting to not have elective surgeries or to delay elective surgeries. So we haven't seen anything yet so far in terms of what the number of procedures that are being done, but we will monitor it very, very closely, and clearly, as it become a very important driver for our business in the future.

Okay. Great. And another one, quick one on DEXTENZA. I guess maybe can you give a little bit of a sense of how ordering patterns have changed over time for those ASCs that have been ordering accounts for 6-plus months, both in terms of maybe size of orders, timing of orders?

Yes. This is Scott Corning. I'll take that. I mean over time what we've seen, Joe, is more accounts ordering. And those orders, after gaining reimbursement confidence, especially starting in the fourth quarter with the J code coming on board, really put the trust in reimbursement. And so order sizes got larger and we've maintained a nice high reorder rate through this period. So as more accounts have come on board, we expect reorders from those accounts because, as we've said all along, the product is so well received that people are having quite a positive experience with it.

Okay. Great. And then maybe one quick one on the OTX-TKI. So the press release notes that you guys are going to look at 1 more additional dose. Just wondering if you could say what dose that would be and whether there are any formulation changes that would need to happen beyond just putting more drug in the insert. And then maybe a bit longer term, once you had established the recommended dose, what do you envision as the next steps for this program?

Joe, it's Mike. Thanks for the question. So the next -- we have a protocol amendment that we're working on to go to the next higher dose, which would be 600 micrograms. So to do that, we would actually not need another -- we would not need a formulation change. We could do that with the current formulation we have. And so once we have the data from the full trial and have been able to assess activity, both as monotherapy and in combination in some way with anti-VEGF drugs and understand durability, we'll then develop a Phase II program based on that information.

Our next question comes from Dane Leone of Raymond James.

It sounds like you might have been hanging out with the Biogen crew too much. I just wanted to ask on allergic conjunctivitis, you have -- what -- can you just remind us of the regulatory pathway for this one? So you'll have the readout of now a second Phase III in the second quarter, correct? I'm just trying to remember what you guys think the pathway is for ocular itching.

Yes, Dane. So just like with any indication, you need 2 adequate and well-controlled trials. The -- so in the -- with the indication in allergic conjunctivitis, you can get an indication for ocular itching or conjunctival redness. So we're looking for an indication for ocular itching. And there are basically 2 pathways you can use. One is to use the Conjunctival Allergen Challenge model where allergen is placed directly on to the eye, and the other is to do a true environmental study. Of all the drugs that are approved in the U.S., almost all of them have been approved using the Conjunctival Allergen Challenge model, and that's the model we're using. So in that model, you put the allergen on the eye and you then assess itching symptoms at various time points after the allergen goes on the eye. And you need to show statistically significant improvement compared to the placebo and the difference needs to be clinically meaningful. And the FDA defines clinically meaningful as a half unit at all time points measured and a unit difference at a majority of time points.

Okay. And so you'd -- based on the results that you'll have in -- because the other Phase III study, correct me if I'm wrong, was clear the statistical end point on itching, but not conjunctival redness. So this one -- if this one hits on ocular itching, then that will complete the package?

That's correct.

Okay. Great. So basically, after you get the data, you could get the package together and then submit the supplementary NDA for us?

Yes. That's correct.

So the question is, how do you go to market in the context of DEXTENZA currently? I mean what are the new touch points that your team has to work on? Can you price it the same? Is there -- how is the reimbursement coding going to work? Anything you guys can highlight from that, I think, would kind of help our models.

Sure. I mean the basic touch points that we were focusing on at launch really was around the anterior segment surgeon and getting them to understand the benefit of this product in the patients. We did work with ASCs in terms of getting them to understand the proper reimbursement pathways and being able to select out patients for whom they could get reliable and timely reimbursement. What -- the area that we're focusing on more going forward -- we continue to focus on the anterior segment surgeon, but what we can do is we can do a lot more for the ASCs themselves, and particularly for the consolidators of the ASCs. And that's an area where we think we can really leverage our business going forward now that we've built up demand with the anterior segment surgeons. So what you don't want to do is you don't want to open that door with the ASC and get them excited about using it and then have no demand within that ASC. We have a lot of pent-up demand and physicians who would like to use it. Being able to open that door with the ASCs is going to be a major opportunity for us moving forward.

How would someone get referred to DEXTENZA in this indication? Would it be the PCP or?

It's generally the choice of the anterior segment surgeon to use the product or not to use the product. But maybe, Mike, do you want to say anything?

Yes. I mean -- so it's a good, great question, Dane. So we typically do use steroids in cases of allergic conjunctivitis that have failed antihistamine mast cell stabilizers, which are sort of standard of care. And as you are probably aware, the largest antihistamine mast cell stabilizer, olopatadine, just went over the counter, I believe, this month. So people come into our offices, my office, they could walk in, they could try antihistamine mast cell stabilizer on their own. They could come through their PCP. They could come through optometrists. They could come through general ophthalmologists. Or a big source, that they come through allergists. So a lot of different ways. But they end up in the -- generally, the office of an anterior segment surgeon or a cornea specialist, which is, by the way, the exact same population that we're calling on for DEXTENZA in the surgical field. So there's a high, high overlap in these groups of people -- groups of physicians.

I think one of the important things to understand about the AC indication is that it is our entrée into the ocular surface disease in the ophthalmologist office, which is a much larger opportunity over a longer period of time than the surgical product alone would be. So as we look at where we would move this product over time, allergic conjunctivitis is a great initial indication. We're very excited by the results of the STRIDE program for Kala. If that would lead to an approval for Kala's product in dry eye, having a steroid approved in dry eye therapy would be very exciting for, I think, the marketplace, but also open up a potential pathway for us to be able to move into an area where DEXTENZA would be ideally suited, because there are no preservatives in DEXTENZA. There's punctal occlusion, which is already a very common treatment for dry eye disease. There's nonpulsatile dosing, so you have consistent dose of DEXTENZA, of dexamethasone. It's also non-abusable, which is a huge factor in the favor of a product like DEXTENZA. So AC is part of the stepping-stone. In and of itself, it's a valuable indication. But the larger area of ocular surface disease, particularly dry eye disease, is something where we see real value in the product.

(Operator Instructions) Our next question comes from the line of Yi Chen of H.C. Wainwright.

Would you be able to provide us with the number of inserts used by ASCs since launch?

We certainly could do that being the present -- the current presentation that we showed actually shows the billable units by month. So the numbers were there. So you could add those up and you would then have the number of -- I don't remember whether it included all the months that we've been on the market, but those are definitely the lion's share of the billable units that have been sold into the ASCs and hospitals.

But right now, we're in billable units over 6,000, and in samples, we're almost at 10,000. But it is important to note that we were sampling almost exclusively at the beginning. And over time, the number of samples used has dropped precipitously as sales have increased. So in the -- by the fourth quarter, and especially in this quarter, sales by far outstripped samples. And samples are used simply as a training element at the very beginning of the customer uptaking the product.

Second question. Could you remind us the gross price of DEXTENZA currently? And how much rebate or discount you've been giving to either end user or distributors?

We haven't been using rebating as a driver for the business to date. The WAC price is $538 per insert. We've had some issues with the timing of our average selling price. We've made ASCs whole on what that is, but it has not been a driver of our business in any way, shape or form up until now.

Final question. For commercialization for the -- of DEXTENZA for the allergic conjunctivitis indication, would you need a different sales team? Or do you plan to start with the existing team?

We would start with the existing team. As Mike mentioned, the people who are treating in the office in a sort of refractory setting for allergic conjunctivitis with something like DEXTENZA would be the same patient with the same physician population that we're currently seeing for the surgical product. Clearly, over time, as we move into ocular surface disease and more deeply into the offices of not only the ophthalmologists, but the optometrists, that would require a larger field structure.

As I show no further questions in queue, this does conclude today's conference call. Thank you for participating. You may now disconnect.