Eyenovia, Inc. (NASDAQ:EYEN) Q3 2022 Earnings Conference Call November 10, 2022 4:30 PM ET
Company Participants
Eric Ribner – Investor Relations
Michael Rowe – Chief Executive Officer
John Gandolfo – Chief Financial Officer
Conference Call Participants
Leonard Yaffe – Stoc Doc Partners
Operator
Good day and welcome to the Eyenovia’s Third Quarter 2022 Earnings Call. Today’s conference is being recorded.
At this time I would like to turn the conference over to Eric Ribner, LifeSci Advisors. Please go ahead.
Eric Ribner
Thanks everyone and good afternoon and welcome to Eyenovia third quarter 2022 earnings conference call and audio webcast. With me today are Eyenovia’s Chief Executive Officer, Michael Rowe; and Chief Financial Officer, John Gandolfo.
This afternoon, Eyenovia issued a press release announcing financial results for the 3 months ended September 30, 2022. We encourage everyone to read today’s press 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 March 30, 2022 and our most recently filed 10-Q. The company’s press release and annual report are also available on Eyenovia’s website at www.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, on today’s call, we will be discussing investigational products 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 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 which are described in more detail in our annual report on Form 10-K and our most recently filed 10-Q. This conference call contains time-sensitive information accurate only as of the date of this live broadcast, November 10, 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 law.
With that said, I’d like to turn the call over to Michael Rowe, Eyenovia’s Chief Executive Officer. Michael?
Michael Rowe
Thank you, Eric and welcome, everyone, to our third quarter 2022 financial results conference call. It’s been about 100 days since I’ve taken over the CEO role from Dr. Ianchulev and we have been laser focused on increasing our company’s value by advancing our key programs. I will provide an operational update and then turn the call over to John Gandolfo, our CFO for a review of the financials.
I would like to begin with MydCombi which is our proprietary combination microdose formulation of tropicamide and phenylephrine for in office pupil dilation. In October of last year, we received the complete response letter or CRL from the FDA indicating that MydCombi had been reclassified as a drug device combination product, which ultimately necessitated additional testing of the Optejet dispensing device. The additional tests included a microbial challenge study that demonstrated the ability of the Optejet to keep microbes from entering the device. A human factor study assessing the ability of users to follow cleaning instructions for the device and electronic safety study and a study on age devices to ensure their long term reliability.
All of these tests have now been successfully completed. It is important to note here that these additional tests were non clinical in nature, no additional clinical data was requested. The original NDA was supported by two successful phase three clinical trials MIST1 and MIST2. With the additional device testing complete, we recently resubmitted our NDA and MydCombi NDA. For normal procedures the FDA has 30 days from that submission to review our NDA for completeness and to notify us of its acceptance. Once our NDA is accepted we would anticipate a six month review process from the date of the resubmission which could result in approval around midyear 2023. A fall goes as anticipated.
If approved, MydCombi would represent an important validation of the Optejet technology, which has been shown in previous studies to deliver a therapeutic dose of medication with significantly less drug and preservative exposure as compared to standard eyedrops. This validation is important not only for our other proprietary programs, and our existing partnerships with Bausch and Lomb and the Arctic vision, but also for future potential partnerships, where the benefits of the Optejet may be leveraged and other high value ophthalmic indications.
It is also worth it noting that the additional device validation testing that we conducted for the MydCombi NDA may be referenceable in filings for our presbyopia, and progressive myopia programs, potentially streamlining those regulatory review processes in the future. MydCombi potentially represents our first commercial product and so we regard the successful resubmission of our NDA as a significant achievement for our company.
Let’s move on to MicroLine which was which is our proprietary topical on demand pilocarpine based therapeutic candidate that we are developing for the temporary improvement near vision associated with presbyopia. Presbyopia is the age related hardening of the eyes lens causing blurred near vision. This is an addressable market representing over 18 million people in the United States alone between the ages of 40 and 55, who otherwise never wore glasses and have the resources for a cash paid product. In terms of dollars, our proprietary market research suggests that this could be a multibillion dollar annual market in the U.S. alone.
Just a few weeks ago, we announced positive results from VISION-2 which is our second phase three study of MicroLine and a modified per protocol analysis of the valuable patients excluding a non study related adverse events impacting pupil size or reactivity, otherwise known as new onset anisocoria. VISION-2 met its primary endpoint with a statistically significant proportion of subjects treated with MicroLine showing a 15 letter or more improvement in distance corrected near visual acuity with less than a five letter loss in distance acuity versus placebo, in low light conditions at two hours post treatment. The study also achieved all secondary endpoints with statistical significance.
A particular note is the compelling safety and tolerability profile of the product. Consistent with prior studies, MicroLine was found to be very well tolerated, but fewer than 3% of MicroLine treated subjects reporting adverse events, all of which were considered mild and transient. This compares very favorably to other [pilo] based presbyopia treatments, where about 15% of study subjects reported some form of headache or brow ache.
VISION-2 follows the successful outcome of the VISION-1 study that we announced in May of last year. The VISION-1 study evaluated the safety and efficacy of our 1% and 2% pilocarpine microarray print formulations versus placebo, all administered by the Optejet. With VISION 1 and 2 we now have completed four studies demonstrating utility of Optejet’s microdose array print technology, and improving the therapeutic index of topical ophthalmic drugs.
In terms of next steps, we plan to request a meeting with the FDA to hopefully be held in early 2023 to review the totality of data compiled on MicroLine to-date, and to gain alignment on remaining regulatory steps. Following that meeting, we plan to initiate the manufacture of registration batches at our new state of the art facility in Redwood City, California. We believe there’s a significant market opportunity for our spray presbyopia treatments. An alternative to reading glasses when wearing glasses is undesirable. And we believe the Optejet will allow us to capture a significant share of this market irrespective of the number of eyedrop products that may be on the market when we hopefully launch.
Now for the benefit of those of you who may be new to our story, Optejet is our proprietary dispensing device which we incorporate across all of our development programs. It offers significant advantages as compared to standard eyedrops which are difficult to use. I can overdose the eye by as much as 300%. This overdosing has been shown to cause potentially dangerous ocular and systemic side effects over time. And speaking of ocular side effects recent studies have a human conjunctiva cell line conducted with Tufts University demonstrated that the Optejet can minimize the impact of reserved medications on the ocular surface.
In fact, reserved medication delivered to the Optejet acted very similar to non reserved eyedrops with respect to cell viability, cytotoxicity, apoptosis and metabolic activity in the study. The Optejet is also significantly easier to use than conventional drops since it delivers medication horizontally. There is no need to tilt one’s head back and there is no drug overflow. This helps increase compliance especially among children and there is the form factor it is simply a sophisticated looking device.
Finally, the Optejet is equipped with smart technology that can be paired with devices for the purpose of remote therapeutic monitoring. Earlier this year, we served a 100 Glaucoma treating ophthalmologists and optometrists to gauge their interest to remote therapeutic monitoring of patients of a type that Optejet technology can provide. The provider survey 98% said that the understanding of compliance and adherence behavior with glaucoma medications was important but 93% saying that was very important. Notably, almost all providers thought that the availability of the new CPT code for remote therapeutic monitoring or RMT, would lead to better patient outcomes.
Delivering the right dose make the administration easier, minimizing side effects and improving communication between doctor and patient are just some of the reasons that we feel the Optejet is a paradigm shift, and topical ophthalmic medication delivery. We look forward to bringing this technology to not just our own development programs, but through partnering to bring these benefits into the program of others.
Before turning the call over to John to review the financials, I want to acknowledge the recent retirement that Ken Lee from our board of directors. Ken has been a valued member of both our board of directors and the Eyenovia family since 2018. And has made many key contributions to our strategy over the years, particularly as it pertains to the resubmission of our MydCombi NDA. We wish him well in his retirement and we are encouraged that he has agreed to remain available to us for advice and consultation in the future.
I would now like to turn the call over to our Chief Financial Officer John Gandolfo to provide a financial update. John?
John Gandolfo
Thank you, Michael. For the third quarter of 2022 we reported a net loss of approximately $7.3 million at $0.21 per share on approximately 34.6 million weighted average shares outstanding. And this compares to a net loss of approximately $5.6 million at $0.21 per share for the third quarter of 2021 on approximately 26 million weighted average shares outstanding. Research and development expenses totaled approximately $3.9 million for the third quarter of 2022. This compares to approximately $3.6 million for the same period in 2021, an increase of 9.1%.
For the third quarter of 2022, General and Administrative expenses were approximately $3.4 million compared with approximately $2.4 million for the third quarter of 2021, an increase of approximately 41.3%. Total operating expenses for the third quarter of 2022 were approximately $7.2 million, compared to total operating expenses of $5.9 million for the same period in 2021. This represents an increase of approximately 22%. As of September 30, 2022, the company’s unrestricted and restricted cash balance was approximately $25.3 million, including $7.9 million of restricted cash.
In early November, we paid off our outstanding Silicon Valley Bank loan with our restricted cash funds, which was collateralizing the loan. Over the near term we are focusing our efforts on raising capital through a non-diluted financing transaction as well as closing on additional technology licensing transactions.
Before we open the call to question, I will conclude with a brief update on our licensing programs with Bausch & Lomb from MicroPine in the U.S. and Canada and Arctic Vision for all three of our products in China and South Korea. MicroPine is a 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. 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 & Lomb oversight and costs related to the ongoing phase three CHAPERONE MicroPine clinical trial were transferred to our partner. CHAPERONE is a 48 month U.S. based multicenter, randomized double mass trial that is enrolling more than 400 children between three and 12 years of age. The trial is comparing microdose MicroPine 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 that we announced in August 2020 was for MicroPine and MicroLine Arctic Vision also subsequently added MydCombi as well. So Arctic Vision is now licensing all three of our current programs. MicroPine for pediatric myopia in particular represents a significant opportunity in China. The Ministry of Education estimates that nearly 53% of all Chinese children suffered from myopia in 2020 and 13 million children are estimated to be at the highest risk. Our agreement with Arctic Vision provide for sales royalties, in addition to development milestones. So if and when approved, MicroPine could be a significant source of non diluted fund for our company over the long term.
And finally, we recently announced that Arctic Vision has now enrolled the first patient in its presbyopia study. This marks the first time that a clinical trial has been approved in China to evaluate a pharmacologic treatment for presbyopia. So that program is progressing very nicely. To-date our license agreement 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, as well as reimbursable expenses over the next four years. As noted upon commercialization, if approved, Eyenovia can earn significant sales royalties from his products 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 and additional large ophthalmic indications. Some examples include anti- infective, anti-inflammatories, dry eye and glaucoma, each with significant market opportunities. Pipeline expansion was significant consideration as we were building out our new Redwood City facility.
And in conclusion we continue to be pleased with that performance to-date. To summarize our key highlights, we achieved two key milestones to resubmission of our NDA for MydCombi and the positive completion of our VISION-2 presbyopia study for MicroLine.
We executed on the plan CEO transition and add significant expertise to our board of directors. Our new state of the art manufacturing facility in Redwood City, California, is now operational and provides significant additional capacity to complement our existing contract, manufacturing relationships.
And our license agreements with Arctic Vision and Bausch & Lomb are progressing well and continue to offer the opportunity for meaning development and regulatory milestones as well as line of sight to potential sales royalties, possibly within next two years.
That concludes our prepared remarks. We would now like to open the call for questions.
Operator?
Question-and-Answer Session
Operator
Of course. Thank you. [Operator Instructions] And we’ll take our first question from Len Yaffe with Stoc Doc Partners. Please go ahead.
Len Yaffe
Hi, thanks so very much. I had a couple of questions for and I apologize, I was late to the call. So if you went over this, please feel free to pass. But I was at the optometry meeting down in San Diego a couple of weeks ago. And one of the things I noticed as I spoke to a lot of the optometrists down there is that there seems to be a lot of interest in the device for its application for making their life easier, either with fussy patients or younger patients. And I’m talking about MydCombi. And I was just wondering if you could shed any light on that.
And then the second thing is VUITY is not off to a really good start. And some of that might be the way they thought the market would develop with chronic use rather than PRN use. But could you discuss your data in terms of the improvement you’re getting in visual acuity near vision versus what other companies have had and then on the other side, as it relates to brow ache or headache, your data versus others? Thanks so very much.
Michael Rowe
Thank you, Len, and thanks for the questions and calling in. In response to your first one with the optometrists and the use of the Optejet device. Yes, we have seen that there’s a lot of interest especially among doctors who treat younger patients and kids that they’re telling us to put dilation drops or basically any eyedrops into children is an ordeal. And when they see the Optejet, and we have it down there the demo for them, they immediately saw. So they had great interest in using that specifically for those patients right off the bat, which was interesting because it wasn’t exactly something that we had paid a lot of attention to before. But now because we’re seeing that kind of interest in acceptance, we’re adding that to our targets, when we do eventually commercialize MydCombi hopefully the middle of next year.
So that was a learning on, all of that very pleasant learning for all of us. For your second question on the efficacy, our efficacy related to VUITY launch, I’m not going to go into how the VUITY launch was done and how Allergan now is coming back and basically doing a relaunch the way probably it should have been done. But what I will say is that they are pilocarpine, we are pilocarpine. The actual efficacy in approving patients getting 15 letters is very, very similar between the two drugs.
If you compare, at the same time point in the study, at the same days in the study, they’re very similar. What’s not similar is the side effect profile where our product has fewer than 3% of patients have any kind of adverse events and the adverse events are mild and transient. And of that even less than that is brow ache or headache. And we know from our own market research that once you get over 5%, brow ache or headache, it really really dampers people’s interest in using the product. So that’s a key part of what we offer.
So I think where we benefit is that people really liked the Optejet device. They like not having to put in eyedrops they liked the spray a lot more. The efficacy will be very similar, but the side effect profile will be better. And our value proposition is to provide patients with functional vision so that they’re able to do things like see their telephone. So they’re able to read a menu, they can fill in the scorecard, playing golf, that’s what this is really intended for, and not really have to worry that they’re going to get some kind of adverse event that’s going to give them a headache. So thanks for the question.
Len Yaffe
Thank you.
Operator
[Operator Instructions] And it appears we have no further questions.
Michael Rowe
All right, so that makes it easy. And that concludes today’s call. We hope we were successful in conveying the significant progress that we continue to make with the Optejet technology and across our key clinical programs. We have one NDA now pending with the FDA and the second late stage program that we will be discussing with the FDA early next year. But simply we believe we have potential line of sight to two commercial products.
There are also a number of emerging opportunities to license out Optejet technology for additional high value ophthalmic indications. We believe we have reached an inflection point and I know this evolution and look forward to positive and potentially value creating developments in the next year. And again, thank you all for joining us and have a good evening.
Operator
And with that, that does conclude today’s call. Thank you for your participation. You may now disconnect.
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