Alimera Sciences, Inc.
Q2 2019 Earnings Call Transcript

Published: 30 Jul 2019

[Operator:]

Ladies and gentlemen, thank you for standing by. Good morning and welcome to the Alimera Sciences Second Quarter 2019 Financial Results and Corporate Update Conference Call. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions.Participants of this call are advised that the audio of this conference is being broadcast live over the Internet and is also being recorded for playback purposes. A webcast replay of the call will be available approximately one hour after the end of the call through September 13, 2019.I would now like to turn the call over to Scott Gordon, President of Core IR, the Company's Investor Relations firm. Please go ahead, sir.

[Scott Gordon:]

Thank you, Nancy. Good morning and thank you for participating in today's conference call.Joining me Alimera's leadership team are Rick Eiswirth, President and Chief Executive Officer and Phil Jones, Chief Financial Officer. During this call management, we'll be making forward looking statements, including statements that address Alimera's expectations for future performance or operational results. Forward-looking statements involve risks and other factors that may cause actual results to differ materially from those statements. For more information about these risks, please refer to the risk factors described in Alimera's most recently filed periodic reports on Form-10-K and 10-Q, a Form 8-K filed with the SEC today, and Alimera's press release that accompanies this call, particularly the cautionary statements in it.Today's conference call, includes adjusted EBITDA, a non-GAAP financial measure Alimera believes can be useful in evaluating its performance. You should not consider this additional information in isolation or as a substitute for results prepared in accordance with GAAP. For a reconciliation of this non-GAAP financial measure to net loss, its most directly comparable GAAP financial measure, please see the reconciliation table located in Alimera's earnings release. The content of this call contains time-sensitive information that is accurate only as of today, July 30, 2019. Except as required by law, Alimera disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call.It is now my pleasure to turn the call over to Rick Eiswirth. Rick?

[Rick Eiswirth:]

Thank you, Scott, and good morning, everyone. Welcome to the call.During the second quarter, we continued to advance our business strategy in many areas, including, obtaining a positive outcome from NICE for non-infectious posterior uveitis and launching our pilot direct-to-patient or DTP campaign.We were disappointed however in the consolidated net revenues this quarter, but pleased with our international segment growth year-over-year. As we noted in the first quarter call, we had many U.S. sales representatives to partly join other companies that we're launching ophthalmic products. This turnover definitely adversely affected our U.S. sales.We aggressively addressed this issue during the second quarter and we were fully staffed by early July. Although there is a learning curve to get each new representative up to speed in his or her territory, we are already seeing some of the recently staffed territories respond quickly to visit by our new reps in physician offices.I am pleased to announce that during the second quarter we brought in Andy Young as our new Vice President of Sales to lead the ILUVIEN sales effort in the U.S. Andy has over 25 years of experience as a senior sales leader in companies such as Teva Pharmaceutical and CooperSurgical. At Cooper, he led the sales team and growing demand for a long-term buy and build products with great success. And we believe this experience will be beneficial to our business.Despite the challenges resulting from the U.S. turnover of our U.S. sales team, our consolidated net revenue for the first six months of 2019 is at 17% versus the prior year. Now with all U.S. territories filled and with the progress that we're making outside the U.S., including the launch in Europe of ILUVIEN's new indication for non-infectious posterior uveitis, we believe that we're positioned to deliver strong overall growth in the second half of this year.As mentioned, we are pleased with our progress in our international segment. We delivered 21% sales growth for the second quarter of the year compared with the same period last year. As we had previously noted, international geographic expansion remains a strategic growth initiative and we are beginning to see strong uptake in recently launched countries like Spain and France.Where interact with steroid use has a greater share than most other markets. Already in the second quarter, France and Spain ranked first and third in European end user demand for ILUVIEN. As a result of this early success, we're already receiving orders for those distributors for additional deliveries in the second half of this year.Taking note of the international performance in DME, and with the recent launch of the new posterior uveitis indication in the U.K. and soon in Germany, we believe that our sales growth trends in international markets have potential acceleration in the back half of the year.Our intention is to continue commercial expansion in new territories and execute follow-on launches for the posterior uveitis indication should also fuel growth in the future. From a cash flow standpoint, as many of you know, we delivered positive adjusted EBITDA and positive cash flow in the fourth quarter of last year, as well as the first quarter of this year.This quarter we get back in negative territory. So, I want to take the opportunity to emphasize that we intend to get back to positive adjusted EBITDA operations over the next two quarters. We will invest in the growth of our business while continuing to keep our operating expense budget well contained relative to the growth potential for ILUVIEN.I'd now like to highlight some of our key accomplishments in the second quarter of 2019. In early April, we announced the appointment of Dr. Samer Kaba as our Chief Medical Officer. Dr. Kaba's expertise in neuro-ophthalmology is helping us further develop the value proposition for ILUVIEN to accelerate the paradigm change for treating retinal disease.For example, Dr. Kaba is focusing on the potential for ILUVIEN to slow down neurodegeneration in the retina induced by DME in diabetic retinopathy. In a retrospective study that was published earlier this year in the Journal of Investigative Ophthalmology and Visual Science, patients treated with ILUVIEN had a statistically significant reduction in the rate of thinning in the [indiscernible] in the retina, suggesting a slowing of retinal neurodegeneration.Just last week, we attended the Ophthalmology and Innovation Summit in Chicago at the American Society of Retina Specialist Annual Meeting. There several companies addressed the importance of reducing inflammation and providing neuroprotection in retinal disease in the innovation showcase section of the meeting.We believe this underscores the importance of our approach with ILUVIEN already demonstrating the ability to affect inflammation consistently and continuously every day. Proving that ILUVIEN can preserve neuronal health in the retina could be game changing and we believe this could further increase market share as ILUVIEN helps patients see better longer.There continues to be more discussion of the unique benefits of ILUVIEN, among physicians at major medical conferences. In April, we sponsored 15 posters in a podium presentation of the Association for Research in Vision and Ophthalmology or ARVO, medical conference in Vancouver. The posters and presentation highlighted data that continued to affirm ILUVIEN's ability to consistently reduce and control retinal fitness and preserve or improve vision in patients with DME and non-infectious posterior uveitis with fewer injections.We continue to develop the data that we have for both indications and expect to present additional papers and posters at future medical conferences. In fact, today four clinical papers featuring ILUVIEN are being highlighted at the 2019 American Society of Retina Specialists or ASRS Annual Meeting in Chicago.In late May, we launched the pilot direct-to-patient or DTP campaign, in select territories, to increase patient awareness of ILUVIEN's benefits. Based on our patient research, the two most important features of the DME treatment connect well with ILUVIEN's benefits. Seeing better longer with fewer injections.We are running digital, radio and in-office marketing campaigns in four cities. And while the campaign is in its initial launch phase, we're seeing significant impressions being generated as well as strong social media engagement, indicating that our content appears relevant and engaging to our target audience.We announced the three year clinical trial results for ILUVIEN in the treatment of non-infectious posterior uveitis during the quarter. Specifically, the results that support our approvals and recent launches for the new indication in Europe.In this 129 patient trial, the number of occurrences of uveitis was significantly lower in the ILUVIEN arm. The ILUVIEN arm had 1.7 recurrences over 36 months versus the control arm, which had 5.3 recurrences representing a 68% reduction in the average occurrence of the disease in these patients.Additionally, the median time to first recurrence of symptoms was 71 days in the control arm compared to 657 days with ILUVIEN. Our occurrence period more than 9x greater than the control. Both measurements were highly statistically significant with each having a P-value of .001.In addition, ILUVIEN offered improvements in visual acuity from baseline versus the control arm. Non-infectious posterior uveitis can be a devastating condition that affects a younger patient population, with frequent and severe relapses leading to blindness. Additional treatments such as oral steroids and immuno suppressant agents can have significant side effects and often cannot be used on a long-term basis.We believe that ILUVIEN's entry into this market is a significant opportunity and our clinical data is gaining attention in Europe. We also believe that this type of data further reinforces the true benefits of ILUVIEN and how different ILUVIEN is from the acute therapies used to treat both uveitis and DME.We announced in early June that the U.K.'s National Institute for Health and Care Excellence, also known as NICE, issued a positive opinion for reimbursement of ILUVIEN for this indication. To emphasize the importance of ILUVIEN's potential in the posterior uveitis indication, the announcement from NICE included this quote

[Phil Jones:]

Thanks, Rick, and hello, everyone.During the second quarter of 2019,our consolidated net revenue was up 2% to $10.9 million compared to $10.7 million in the second quarter of 2018. U.S. net revenue was approximately $7.3 million for the second quarter of 2019, down approximately 6% from $7.8 million for the same period in 2018.U.S. and end-user demand, which represents units purchased by physicians and pharmacies from our distributors is down 4% in the second quarter of 2019, decreasing to 917 units compared to 955 units from the second quarter of 2018. The decline was primarily attributable to decrease in end-user demand, which represents units purchased by physicians and pharmacies from our distributors.As we have previously shared, our GAAP revenues in the U.S. do not always perfectly correlate with end-user demand due to the timing of purchases by our specialty distributors. The discrepancy between GAAP revenue and end-user demand was negligible in 2019 second quarter.Net revenue from Alimera's international segment increased 21% to approximately $3.5 million for the second quarter of 2019 compared to approximately $2.9 million for the same period last year. Revenue in the international segment will fluctuate from quarter-to-quarter, depending primarily on the timing and size of our international distributor ordering patterns. For example, our Q1 2019 revenues were significantly higher due to orders related to our expansion into Spain and France, as those distributors stop inventory.Now turning to operating expenses, research, development medical affairs expenses were $2.8 million during the second quarters of both 2019 and 2018.General and administrative expenses for 2019 second quarter were approximately $3.7 million compared to approximately $3.2 million for the same period last year. The increase was primarily attributable to professional fees and logistics costs, some of which are attributable to our Brexit preparation.Sales and marketing expenses during the second quarter of 2019 were approximately $6.1 million, up 3% to $5.9 million for the second quarter of 2018.The increase was primarily attributable to increases in marketing costs associated with the launch of our Direct-to-Patient advertising program and market access costs.Total operating expenses increased by $700,000 or 6% to $13.3 million for the three months ended June 30, 2019 from $12.6 million for the three months ended June 30, 2018.During the second quarter of 2019, we reported an adjusted EBITDA loss of $2.1 million compared to an adjusted EBITDA loss of $980,000 during the second quarter of 2018.As Rick mentioned previously, our objective is to return to generating positive adjusted EBITDA result in the back half of the year with a long-term goal of remaining sustainably positive on an annual basis.Net loss for the three months ended June 30, 2019 was approximately $5 million, an increase in comparison to the net loss of approximately $4 million for the three months ended June 30, 2018.Our GAAP basic and diluted net loss per share for the three months ended June 30, 2019 was $0.07 on approximately 71 million weighted average shares outstanding.This compares to basic and diluted net loss per share of $0.06 or approximately 70 million weighted average shares outstanding for the three months ended June 30, 2018. On June 30, 2019 we had cash and cash equivalents of approximately $12.2 million, a decrease from the $13 million in cash and cash equivalents that we reported on December 31, 2018.With that, I'll now turn the call back over to Rick to wrap up our prepared remarks. Rick.

[Rick Eiswirth:]

Thank you, Phil.As I mentioned before, we addressed return of in our U.S. sales force earlier this year and are now fully staffed and focused on returning to greet domestically. We recognized ILUVIEN to be promotionally sensitive and believe that the employee, staff and back and front physicians and all sales territories will bring back to our growth potential.We continue to deliver positive results in Europe, with the recent approval of the ILUVIEN for non-infectious posterior uveitis in our European markets as well as the launch of ILUVEIN in France, we look forward increasing share in all markets in the second half of this year.We also intend to continue to pursue our strategy to leverage our global sales infrastructure and build a leading company focused on the treatment of retinal diseases. ILUVIENs continuous micro dosing technology is design to offer two things as the only non-acute therapy to treat DME and posterior uveitis.One has to consistently treat the condition, continuously delivering drug to minimize the DME and information of the retina. The other is to significantly reduce the number of injections the patient must endure.Both the clinical trials and real work data support these two benefits and these two benefits enable physicians to buy patients what they want for the disease management, longer-lasting vision with fewer injections.We remain steadfast on driving this message into our target physician and patient audiences to continue to grow ILUVIENs use. We believe that Alim has well-positioned for the next phase of growth and the increase shareholder value as the benefits of ILUVIEN continue to gain appreciation by the ophthalmology and retinal specialist communities.And with that, we’re ready to take questions. Operator?

[Operator:]

[Operator Instructions] And our first question comes from Alex Nowak from Craig Hallum Capital Group. Please go ahead.

[Alex Nowak:]

Rick, you have now cited higher sales first turnover here twice as reasons for the depressed U.S. growth, can you give us some more color on why the sales team is leaving you know, how much of your sales force is new within the last six months and how do you plan to remedy the churn going forward and just maybe any initial changes made Andy has begun to implement here and what is his plan to ultimately fix the US sales problem?

[Rick Eiswirth:]

Sure. So I think now the turnovers started occurring in January and continued throughout the first quarter and some early end of the second quarter. I think there are couple of things driving and I think there's frustration concerning the sales force that we are a one trick earlier have one product like ILUVIEN and frankly the stock prices lag where it is despite what we thought was pretty good performance in 2018.And I think what happened was there were four, five products that were being launched in the ophthalmology space. In the first quarter and those people were right for departure. We ended up turning over about half of the sales force. I think on average we had between eight and nine territories you open over the course of the second quarter, so its definitely big hit.I’ll tell you that I'm extremely proud of the team that stayed and the team is onboard now. Frankly with about a third of your sales force being out of place in the U.S. and a product like ILUVIEN that is somewhat device like and requires us to be in front of the physician on a regular basis, a4% decline in sales, I am going to remain proud of what the teams accomplished there because I think they’ve done a great job and I’ve got good people out there working hard.Andy, coming on board, he’s a 25, 30 year veteran of sales in the ophthalmology space. He sold sort of paradigm shifting products in the women's health space that are [indiscernible] products. He is coming and looking at our compensation structure and help us and address our culture, improving my communication his communication with the team in the field and we hope retaining them.And I think my stated goal of trying to find ways to leverage our commercial infrastructures something we’re continuing to look to do to broaden the portfolio here at Alimera, so that our sales team has more than one product itself.

[Alex Nowak:]

Okay. Understood. And then on the Q1 call you mentioned that $6 million might be -- per quarter might be the new norm here for international sales. Obviously Q2 had some nice growth but it did fall short of that $6 million numbers. So what is the new norm here for international sales?

[Rick Eiswirth:]

I think that was misunderstood and we try to correct the localized state the norm is about $3.1 million from run rate and we’re obviously up from that this quarter.Revenue over the course of this year Alex we’ll continue to be choppy from the distributors because the distributors take load in and big blocks from us to build their inventory and then they sell off to the end-users. I will tell you that the second quarter this year we did extremely well in end user demand from a global perspective between the U.S. and Europe we sold 1,700 units to end-users global either us or our distributors.So the demand is definitely increasing from a global perspective but until those distributors get on a more consistent basis you are going to see some choppiness there which is what you saw in the first quarter. I noted in my comments earlier that we already have some order for additional stocking to come in the second half of the year. So you’ll see some reordering in the second half of the year from those distributors because the launches have gone well.

[Alex Nowak:]

And then what are you seeing with retreatment on the U.S. side. We've done some checks out there looks like the retreatment have just started, but it's still early so I am just curious what you're hearing from the clinics?

[Rick Eiswirth:]

Yes, I would love to give you a great answer to that to be candid it's hard to access the impact because of the compounding effect of the turnover in the sales force and draw hauls we’ve seen in some territories there. We do know for our benefit investigation system that their benefit investigations coming back in for patients that had received or move in or at least had been investigated for insurance coverage two and three years ago.And we have anecdotal evidence from doctors that those retreatments are occurring, but to quantify that’s a little bit challenging at this point in time. We’re getting the same anecdotal evidence you would be in your channel checks still.

[Alex Nowak:]

And just last question from me and I'll jump back in the queue. You have a number of real-world studies ongoing right now and that includes the user in the PALADIN study. Which study in your opinion could have the biggest influence here going forward to help get the doctor trust ILUVIEN. And then when is the expected readout for those?

[Rick Eiswirth:]

Well I mean the user study readouts done and gone the PALADIN study we will be presenting over the course of the remainder of this year. The two year data or 24-month data on that and we expect that to be consistent will resolve in user. I guess I would probably say that in the end the PALADIN study probably will be more impactful because that was a retrospective study versus the user study was. Excuse me the PALADIN study was a prospective study versus the user study was a retrospective analysis. So you'll see more data coming out from the PALADIN study over the course of the year.

[Operator:]

Our next question comes from Andrew D'Silva from B. Riley, FBR. Please go ahead.

[Andrew D'Silva:]

A few for you built,, a couple quick bookkeeping ones Phil if you could please just let me know what cash flow from operations and CapEx were for the quarter. And then while you're pulling that Rick could you just let me know how much the sales turnover impacted results during the quarter or what could sales have looked like in a normalized sales force setting during Q2?

[Rick Eiswirth:]

I mean that’s obviously hard to say because that’s a big hypothetical. We over the course of 2018 when our sales force was fairly stable we grew end user demand between 16% and 17%. And so I would like to think that continues to be a good target. We've often said expect growth in the mid to high teens and we would hope to over perform that and my expectation that we can get our U.S. sales team back to that.

[Andrew D'Silva:]

And was there actually like normal double-digit growth in the - from a consolidated standpoint in the regions that didn't have sales force turnover or were those regions also impacted in some way. Basically I'm just trying to get a sense if there is some systemic issue or not and if areas that were not impacted by lost reps were performing as expected and growing close to that 20% rate that you previously mentioned?

[Rick Eiswirth:]

Yes Andy it’s a - we’re not going to talk about individual territories I think that’s a little bit granular but I will tell you it depends. We don’t believe this is a systemic issue at all. As I mentioned we had an average of between eight and nine vacancies over the course of the second quarter which means by almost a third of our sales territories were opened and those doctors were not being visited. And with a product like ILUVIEN that is very device like having the rep in the office on a regular basis does matter and we have found that.I think overall the trends in the industry are good, the preferences and trends 2019 survey was presented at ASRS over this weekend. One of the questions was about how doctors were changing their use of ILUVIEN. And in the U.S. 17% physicians said they were increasing their use of ILUVIEN 11% said they were decreasing, 20% were about the same.And importantly 50% of the physicians have said they still are trying to haven’t use ILUVIEN right. So we think there is huge opportunity to grow the physicians that are using ILUVIEN are increasing their usage and they’re still huge untapped market out there for us to get to the physicians that aren’t using it yet.

[Andrew D'Silva:]

Okay fair enough. And then go ahead Phil

[Phil Jones:]

Yes I was say on the operating cash flow we had a cash burn of about $676,000 in Q2 and CapEx of approximately $39,000.

[Andrew D'Silva:]

And last two questions from me, first if you could just give a little bit of color on what Q3 is looking - like at right now has it rebounded and benefiting from the sales force essentially being replenished and as well is benefiting from the uveitis launch in the U.K. And then second question do you still believe that for 2019 you can grow in the high teens close to 20% rate or is that to high of a bar right now considering the Q2 slip?

[Rick Eiswirth:]

Yes so Andy – July is looking pretty good. I would say it’s not where we want to be relative to 2018 yet, but we’re seeing sort of a bend in the curve from what we saw in the second quarter as these territories have been filled. So I feel like we are getting some improvement from pharma territories again the train and Andy is having a positive impact. But as we’ve discussed in the past, it takes four to six months to get it wrap up to speed and trained in some of the territory.So we’re expecting to bend the curve in the third quarter we’ll see how it turns out as the quarter plays out. The uveitis indication is getting some early response in the UK, but the reality is the CCG’s over there have 90 days to implement the guidance. So it won’t be formally adopted into the guidance in all of the various hospital until sometime in September I believe or early September, but we know that the doctors are using it in some patients already.Overall with respective to the year I’ll reiterate what I said in my comments we’re up 17% the first six months of 2019 over 2018. I still think that mid to high teens is achievable with these distributors coming on board. We certainly need to continue to bend the curve in the U.S. as we get the sales force retrained.And we got a find a way in the fourth quarter overcome that OZURDEX impact, but I feel good we’ve been growing sales. The global adoption of this product is continuing to grow. As I said to Alex a few minutes ago there were over 1,700 units used from an end user demand perspective in the second quarter across the globe which is much higher than we’ve ever done in any quarter before. So there is certainly some balance in some of these other territories to offset this little set back in the U.S.

[Operator:]

Our next question comes from François Brisebois from Laidlaw. Please go ahead sir.

[François Brisebois:]

Just couple here I think a lot of people are trying to wrap their head around the sales force turnover, but can you just help us understand when you mentioned device like why it is so important for reps to be in the office often and seeing the docs and the impact that - basically why you think that is?

[Rick Eiswirth:]

Yes, I mean I think it’s a big part of this is because ILUVIEN it’s a one-time using codes. I mean if you use once every three years - sort of like a device is used in surgery. You don't get recurring prescriptions so that patient is not coming back in once a month, once every two months getting reinject with ILUVIEN. And the doctors forget about it to some extent. The drawback we have out there in making sure we’re in front of the physicians all the time.Is unlike the [indiscernible] that approved for wet AMD or DME or Vin inclusion and even OZURDEX its approved for uveitis and DME and the Vin inclusion were approved for one indication. And so we just have to be back in there reminding and frequently and staying in front of their face. There are great example we’ve done good job of changing the paradigm and getting the doctors to think about living in a different way.There's a retro to practice in Atlanta, Georgia that’s one of our larger users that despite having a vacancy here has continued to use the product and continue to levels that they did before we had vacancy but there are other territories where the usage is dropped off because that frequency isn’t there. So it’s a little bit of a mix tag but that’s when I say device like that’s what I am referring to.

[François Brisebois:]

Understood. And a lot of the sales force, you talk about launches of other product, is it mostly to the front-of-the-eye that they went and how easy this is for salesforce to go from back-of-the-eye specialists to front-of-the-eye, are you guys still oppose to M&A towards front-of-the-eye. Are you trying to restrict yourself to be back of the eye specifically?

[Rick Eiswirth:]

Yes, I think certainly from our perspective, the best way for us is something has retina experienced because they know the retina doctors but I think there’s flexibility in the ophthalmology. We are departures for three or four front-of-the-eye products that were launched in the first half of this year for us and then we lost a couple of reps to eye point that went over to be part of UT launch for Uveitis.

[François Brisebois:]

And then just on the sources I thought that as of May 1, with those first quarter call basically you had lost 30% to 35% I thought a lot of it had been kind of filled back, reps kind of leave again in the second quarter this surprise you and you mentioned half -- half of territories is still about a third of the reps. So can you just -- can be very clear on the granularity there with those reps leaving.

[Rick Eiswirth:]

So the average number territories that were vacant over the course of the quarter was between 89.We had an average of like 20 point full time equivalent hedge in the sales force over the course of the quarter and we got 29 territories.

[François Brisebois:]

And then I’ve got a bunch of questions here but any thoughts on the anti-VEGF kind of coming out patent soon and does that help you guys kind of transition treatment paradigm to try to get a ILUVIEN first one ahead of the anti-VEGF?

[Rick Eiswirth:]

I think there’s an opportunity there for us related to the economics potentially right. As you see more competition of the anti-VEGF space. I mean its logical to conclude that the pricing will come down probably not as much as you in the generic space because typically biosimilars don't result in quite as much pricing pressures as the traditional generic does.But as that occurs, the doctors make money in the space because it’s a buy and build space as a percentage of each one of those drugs and so as pricing comes down, the monetary incentive for doctors to continue to do anti-VEGF injection properly decreases and we want to be positioned to take advantage of that. So I think there is an opportunity over the next two years as that occurs.

[François Brisebois:]

And then on the adjusted EBITDA you guys have talked about been positive there for a while. Would this slight pullback on the top line should we expect any adjustments on the OpEx side to remain on the positive adjusted EBITDA. So just to be more driven by the top line picking up here?

[Rick Eiswirth:]

It’s going to be driven by the top line. We feel pretty good about our expense space where it is. The shortfall this quarter was all top line related.

[Operator:]

Our next question comes from Jim Molloy with Alliance Global Partners. Please go ahead.

[Jim Molloy:]

I had a question the any guidance on the timing of potential acquisitions bringing additional products, I know this is a long then -- you’ve given the queue they were for long time obviously of the one product, one salesforce is a challenge sooner that played out with the turnover. Is there anywhere to put a timeframe on what you are looking at and when something might come into sort of beef that up?

[Rick Eiswirth:]

Nothing I could talk about in this call, Jim. I’ve said since I took over CEO in January 1, and have been looking at trying to change that that vision look the things. But my goal is to try to find something over the first six to 18 months. So we are inside that time. I can assure you that the team is certainly aggressively looking for things to broaden our portfolio.

[Jim Molloy:]

And as the Allergan buyout for you up reps through guys, are you able to pick up any of their top performers there?

[Rick Eiswirth:]

Not, yet. Not yet, but I certainly think that’s the possibility. As you know change impact sales seems quite a bit, and I think they got to have to sort out what their situation is with that be once their transaction closes but I think that could present some opportunity for us as well yes.

[Jim Molloy:]

And then the last question sort of broader picture. Have you ever or have you considered given the chance of a single product sales force just selling [indiscernible] two or third come, to have the Allergan perhaps or something like that where they can fold your product and are those discussions that even occur?

[Rick Eiswirth:]

Jim, those conversations are occurring, you know I couldn't comment them on this call. But I think the way I approach my job is I need to build this Company as if we're going to run it forever. And we got to create value for the shareholders as it is. I'm not sitting around trying to figure out a way that this Company can be bought. I don't think that's productive.I think if we do the right things to build this Company and grow it, make it a more diversified Company that's focused on retina, we can create a lot of value that one of those people may recognize one day. But that's certainly not anything we think about every night here.

[Operator:]

Our next question comes from Yi Chen from H.C. Wainwright. Please go ahead.

[Yi Chen:]

My first question is with the new sales force turnover, how should we look at the SG&A expenses for the second half 2019?

[Phil Jones:]

Yi, the SG&A expenses in the second half of 2019 will be similar to what we had in the first-half of 2019. We don't plan for dramatic increase over the course of the remainder of the year, therefore you should see no real significant change in the pattern.

[Yi Chen:]

Second question is, how effective is the direct-to-patient marketing campaign for DME so far?

[Rick Eiswirth:]

I am sorry, can you say that one more time.

[Yi Chen:]

How effective is the direct-to-patient marketing campaign for DME?

[Rick Eiswirth:]

So the campaign has been out there for about two months. It's a little bit early to track patient impact there. Obviously, our numbers are down. We do know that from metrics, looking at our activity on social media, click through rates on search engines, things like that that the number of impressions is significantly up on ILUVIEN, and significantly up in those four markets.So we know that the message that we're putting out there is being well received or is garnering interest. But it's a little bit early to see that trickle through to the doctor's office.

[Yi Chen:]

Last question is, do you know how much revenue is - has been generated for the posterior uveitis indication in Europe?

[Rick Eiswirth:]

I don't, I don't. I mean, I can say it's got to be approximately nothing, because the reality is we launched for uveitis in the U.K. in the last week in June. And as I mentioned in my earlier comments, the guidance for NICE reimbursement isn't official - for the trust that disburses payments for 90 days. So that occurs around September. We expect the German launch to occur sometime in the third quarter. So it'll be the second half of the year when you start to see the impact in uveitis.

[Operator:]

Our next question comes from François Brisebois from Laidlaw. Please go ahead.

[François Brisebois:]

Just a follow-up on here, I was just wondering with ASRS in Chicago and OIS at conferences, is this something you mentioned the doctor's incentive [indiscernible] coming off patent? Is this something that - is there any buzz around reimbursement going more to a value based process? Is this just something that you guys are hearing at ASRS or is that still something that is kind of far down the line not really a priority at the time being?

[Rick Eiswirth:]

No, it's something that is always been discussed and comes up. I can't say that it's been an elevated topic in the industry meetings. I think that the retina specialist, because there's a fairly small contained group and there's only about 2,000 retina specialists in the country. They've really been able to push back against any significant changes in the retina space and the way the drugs are reimbursed or the way they get reimbursed today.

[François Brisebois:]

And you're not getting from this direct-to-patient campaign that you guys are doing, you're not getting any push back from that study?

[Rick Eiswirth:]

No, we have not.

[Operator:]

Ladies and gentlemen, this concludes our question-and-answer session. I would now like to turn the conference back over to Mr. Rick Eiswirth, for any closing remarks. Please go ahead, sir.

[Rick Eiswirth:]

Thank you all for participating on today's call, and for your interest in Alimera Sciences. We do look forward to sharing our progress on our next quarterly conference call and hopefully better results when we report our third quarter. Thank you and have a good day.

[Operator:]

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect and enjoy the rest of your day.