Alimera Sciences, Inc.
Q1 2018 Earnings Call Transcript

Published: 6 May 2018

[Operator:]

Greetings, and welcome to the Alimera Sciences' First Quarter 2018 Results Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Jacob Goldberger, CG Capital.

[Jacob Goldberger:]

Thank you all for joining us today for the Alimera Sciences' first quarter 2018 financial results conference call. With me on the call today are Dan Myers, Chief Executive Officer; and Rick Eiswirth, President and Chief Financial Officer. Yesterday, the company issued a press release announcing first quarter 2018 results. Today's call is being webcast and a recording will be posted to the company's website. Following remarks by management, we will open the call up to your questions. During this call, management may make certain forward-looking statements regarding future events and the company's future expected performance. These forward-looking statements reflect Alimera's current perspective on existing trends and information and can be identified by such words as expect, plan, will, may, anticipate, believe, should, intend, and other words of similar meaning. Any such forward-looking statements are not guarantees of future performance and involve certain risk and uncertainties. These risks are described in the risk factors and the management's discussion and analysis sections of Alimera's annual report on Form 10-K for the fiscal year ended December 31, 2017, which is on file with the Securities and Exchange Commission and available on the SEC's website. Additional factors may also be set forth in those sections of Alimera's quarterly report on Form 10-Q for the quarter ended March 31, 2018, to be filed with the SEC soon. Alimera's press release includes certain non-GAAP financial measures. Alimera does so because it uses those non-GAAP financial measures to measure performance and beliefs that such non-GAAP financial information can enhance the overall understanding of the company's financial performance when considered together with GAAP figures. Adjusted EBITDA and adjusted operating expenses exclude certain noncash items. These non-GAAP metrics, however, are not measures of financial performance under GAAP and should not be considered a substitute for GAAP net loss and operating expenses and may not be comparable to similarly titled measures reported by other companies. Non-GAAP financial measures should be read in conjunction only with financial information reported under GAAP when understanding Alimera's operating performance. For reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures, see the table located in Alimera's earnings release from yesterday. In addition, any unaudited or pro forma financial information is preliminary and does not report to project financial positions or operating results of the company. Actual results may differ materially. All numbers discussed on this call and on the slides accompanying this presentation are approximate unless otherwise indicated. For the benefit of those of you who may be listening to the replay of this call, this call was held and recorded on Thursday, May 3rd at approximately 9 A.M. Eastern Time. Since then, Alimera may have made additional announcements related to the topics discussed and filed its quarterly report on Form 10-Q for the quarter ended March 31, 2018. Please reference Alimera's most recent press releases and filings with the SEC. The forward-looking statements contained in this presentation are expressly qualified by the cautionary statement contained or referred to in this presentation. Alimera's cautions investors not to rely too heavily on the forward-looking statements it makes or that are made on its behalf. These forward-looking statements speak only as of the date of this presentation. The company undertakes no obligation and specifically declines any obligation to publicly update or revise any such forward-looking statements or because of new information, future events or otherwise except as required by applicable law. Now, I'd like to turn the call over to Dan Myers, CEO of Alimera.

[Dan Myers:]

Thank you, Jacob, and thank you, all, for joining us today. I will begin by examining the overall progress we have made with ILUVIEN. During the first quarter of 2018, our consolidated global revenue grew 48% to $9.8 million compared to $6.6 million in the first quarter of 2017. In the U.S., net revenue increased to $7 million from $4.4 million, an increase of $2.6 million or 59%. This increase was driven by end user demand growth of approximately 21% and more normalized ordering patterns from our distributors compared to the prior year. Rick will discuss this in greater detail in a few minutes. The end user demand growth in the U.S. increased at a higher rate in the first quarter than what we saw in the second half of 2017. We believe this increase is a result of our strategy to reinvest in our salesforce and to focus on generating persuasive datasets and data presentations. As we've shared before, we operated with a reduced sales presence in the U.S. in 2017. Throughout last year, we averaged 23 full-time sales equivalents in the field and we begin refilling some of those territories late last year and operated with 27 full-time equivalents in the first quarter of 2018. And we believe this had a direct positive impact on our sales in the quarter. Our U.S. salesforce is focused on what we believe are the top 30% of physician targets. Our goal is to increase awareness and to deliver new data as it becomes available on a timely basis. We intend to increase the comfort of our target physician with ILUVIEN and to emphasize to them that the need for ILUVIEN is significant within the DME market. Our salesforce has clearly played a key role in our U.S. growth this quarter and we are excited to see what they can deliver with continued training experience and data under their belt. We have also made similar investments in Europe slightly expanding our salesforces in Germany and the U.K. and working with our international distribution partners to increase the availability of ILUVIEN. As a result, our revenues in our international segment increased 27% to $2.8 million in the first quarter of 2018 from $2.2 million in the first quarter of 2017. As I mentioned, the second part of our strategy is to continue data generation. We believe replicated real world patient outcomes across our markets will drive revenue growth as physicians see beneficial outcomes in similar cases from their peers. As we said before, the release profile of ILUVIEN provides for unique therapy unlike any other ophthalmic pharmaceutical. It is the only single injection therapy that releases a drug consistently and continuously every day for up to 36 months. We are confident that real life datasets will be consistent with our clinical trials and from data set-to-data set. We see this each time we gather new data. However, for most other ophthalmic products real world outcomes do not match clinical trial results and therefore, result in suboptimal treatment because clinical treatment regimens cannot be replicated in the real world. Patients and physicians could not adhere to the strict protocols and required injection frequency. Everyday life simply gets in the way. With ILUVIEN consistently and continuously delivering drug every day for three years, the patient's ability to receive ongoing treatment is not dictated by whether the patient can get to the doctor's office or whether the practice can provide service to the patient when required. Compliance is already built into our drug. At this year's annual meeting of the Association for Research in Vision and Ophthalmology or ARVO, which has taking place this week in Hawaii, there were 19 presentations on ILUVIEN; 18 in the treatment of DME and one in uveitis. ARVO is a pivotal event for data presentation and a springboard to other meetings. The real world presentations on ILUVIEN include experience from eight practices in the U.S. and 10 from the EU and Middle East. Much of the data coming from Europe reviewed outcome from patients with 36 months of treatment where doctors found sustained improvements in both reduction of edema and gain in vision. From the U.S., more user study data as well as our preview of our PALADIN study highlighted the reduced treatment burden for patients in addition to the efficacy and safety status. Other data sets show that predictability of any IOP response when treating with ILUVIEN under the U.S. label. We consistently discuss new data and support not to underestimate the impact that increased clinical confirmation can have for a product like ours. Remember, ILUVIEN represents a paradigm shift in ophthalmological treatments. We are changing habits and physicians need to feel confident in ILUVIEN's ability to treat effectively and safely. In addition to the currently available data, we anticipate continuing to release new analysis in the future. During the third quarter, we announced that we had successfully secured the rights to pursue posterior uveitis as a secondary indication for ILUVIEN in the European Union, the Middle East and Africa. Uveitis is a chronic noninfectious inflammatory disease affecting the posterior segment of the eye. Today, corticosteroids are the standard-of-care in uveitis, and we expect ILUVIEN's continuous microdosing delivery will be highly attractive to physicians and patients. We received acceptance of our filing with the Medicines and Healthcare products Regulatory Agency or MHRA in the United Kingdom late in the fourth quarter of 2017. Though we initially expect to receive approval as early as the fourth quarter of 2018, we have received a request from the EU regulatory authorities for longer follow-up data in uveitis. Our partner, EyePoint, will have 36-month data from one of its clinical trials in the fall of this year and we anticipate providing that data in our response to the authorities before the end of the year. As a result, we now expect that we will receive approval in the first half of 2019. Rick is going to take you through more detail operational metrics and our financials. But before I transition the call, I want to provide you some perspective on the growth of ILUVIEN and our increasing penetration of the patient population. It's important to remember that ILUVIEN delivers drug for up to 36 months. So, those patients are not available for a refill or retreatment as they might be with the more traditional pharmaceutical therapy. Beyond the potential for treating the patient's other eye, that patient is no longer a near-term revenue generating patient or an opportunity for us. In fact that patient is now out of the market for us for up to three years. In a sense, ILUVIEN is more like a medical device than it is a pharmaceutical as there is no recurring refill business each month or year-to-year. I'm going to turn the call over to Rick to provide more details on this. Rick?

[Rick Eiswirth:]

Thank you, Dan and good morning everyone. Unlike a more traditional pharmaceutical that may grow at 30% over the previous year by adding 30% to 40% more script volume, our sales team are starting over each year working with physicians to identify all new patients each January to rebuild our business until there's previously treated patients are available for retreatment or an additional implant. For example, in the U.S. end-user demand amounted to 3,288 units in 2017, an increase of 13% over 2016. However, looking at another way, as of December 31st, 2016, ILUVIEN was installed in approximately 4,600 U.S. patient eyes. And as of December 31st, 2017, ILUVIEN was in approximately 7,900 patient eyes. That translates into more than 70% increase in the number of eyes being treated with ILUVIEN in the U.S. in 2017. We think our trajectory is stronger than has been appreciated and then on as us, we are not explaining as well we should have. ILUVIEN has now been used to treat over 15,000 eyes globally since launch with a strong trajectory of growth, but the opportunity is still significant with over 1 million patients suffering from DME in the markets in which ILUVIEN is now available. Each patient who receives an ILUVIEN has the opportunity to maintain or improve the vision with a reduced treatment burden. These are patients who can spend less time getting treated and more time treating their families. We are proud to have helped so many patients and their families. Before I turn to the financials, I want to give you greater insight and an understanding of the metrics we use to monitor our business. For those of you who have been following our story, you have often heard us discus disconnect between reported GAAP revenues in the U.S. and the downstream sales to physicians and pharmacies where the product is ultimately used. The reported GAAP revenues represent sales to our distributors that stock ILUVIEN. We refer to the units sold by those distributors to physicians and pharmacies as end user demand. This demand is the number that we focus on as a management team because it represents actual usage of ILUVIEN by physicians and sales driven our sales team. Prospectively, we intend to disclose both units sold to our U.S. distributors and the end user demand to provide more insight into our progress. It is important to recognize that these two numbers have not and will not always correlate due to the timing of the orders and their ordering patterns of these distributors. Although the correlation was nearly perfect in the first quarter of this year, you can see in the slide, that the correlation has been very inconsistent since launch. As a result, our reporting in the U.S. has been choppy quarter-to-quarter and not always reflective of our increased penetration and end user demand. Turning to historical and user demand, you can see that the trends are more consistent, including the seasonality we've talked about in the past. For all quarter-to-quarter comparisons end user demand has increased since the launch of ILUVIEN in 2015. Obviously, 2016 represented our highest growth with a receipt of our JCAHPO providing broader reimbursement for ILUVIEN. I will note that in 2017 our growth slowed over the latter part of the year, but we believe this was predicated upon our decision in late 2016 to reduce our cost structure and focus on decreasing our cash burden. As Dan referenced, under this strategy, we combined or eliminated some then underperforming sales territories. Combined with other organic turnover, we had significantly fewer full time equivalent sales reps in the field in the middle of 2017 which slowed our growth. We ended the year with end user demand of only 12% as we have previously shared. As Dan also mentioned, because our cost structure changes were successful, we began reinvesting in the salesforce late last year, targeting a salesforce of 28 reps in the U.S. In the first quarter, we operated with the equivalent of 27 reps, which we believe contributed to the higher growth rates you see in this quarter. We expect maintaining a stronger sales presence over the course of 2018 will result in better growth rates than we saw in 2017. I will now discuss our first quarter 2018 financial results. We are reporting $9.8 million in global net revenue in the first quarter of 2018, which represents growth of 48% over the $6.6 million reported in the prior year. Our U.S. net revenue increased by $2.6 million or 59% to $7 million for the quarter ended March 31st, 2018, compared to U.S. net revenue of $4.4 million for the quarter ended March 31st, 2017 with our end user demand increasing at a rate of 21% over the same comparable period. As I previously stated our revenues can be adversely affected by the timing of orders from our two largest U.S. distributors. However, in the first quarter of 2018, there was no material difference between the amounts purchased by distributors and the amounts sold to end users. In our international segment, net revenue increased by $600,000 or 27% to $2.8 million for the first quarter ended March 31st, 2018 compared to $2.2 million for the first quarter ended March 31st, 2017. This was driven by an increase in our direct markets of 9% and sales of approximately $400,000 to our international distributors. Revenues from our international distributors included both stocking of inventory and our revenue share of distributors' end users sales. Our global operating expenses were approximately $13.3 million for the first quarter -- March 31st, 2018 compared to $11.5 million for the first quarter ended March 31st, 2017, an increase of 16%. Our adjusted operating expenses, which exclude noncash expenses, depreciation, amortization, stock-based compensation expenses, increased by $1.7 million or 18% from $9.7 million for the first quarter ended March 31st, 2017, to $11.4 million for the first quarter ended March 31st, 2018. The increase in our expenses mainly represent the cost associated with the expanded sales coverage we discussed along with increases in research, development and medical fairs expenses, attributable to the receipt of a refund from the FDA that offset the expenses incurred in the first quarter 2017 that was not repeated in the first quarter of 2018 and cost associated with the filing for approval of uveitis in Europe. Our GAAP net loss was $7.7 million for the first quarter ended March 31st, 2018 compared to a net loss of $6.7 million for the first quarter ended March 31st, 2017. GAAP basic and diluted net loss per share for the first quarter ended March 31st, 2018, was $0.11 per share on $69.9 million weighted average shares outstanding compared with GAAP basic and diluted net loss per share of $0.10 per share on $64.9 million weighted average shares outstanding during the first quarter ended March 31st, 2017. The increase in our net loss was attributable to a charge of $1.8 million for a loss on the extinguishment of our prior loan facility when we obtained our new facility with Solar in January. We report our financial results in alliance [ph] of GAAP, but we believe that the non-GAAP measures of adjusted EBITDA provides a more useful measure of our operating performance. Adjusted EBITDA is earnings before interest, taxes, depreciation, amortization, stock-based compensation, net unrealized gains and losses from foreign currency exchange transactions, gains and losses from the change in the fair value of a derivative warrant liability, and losses on extinguishment of a debt. Our adjusted EBITDA loss for the first quarter decreased by $800,000 or 22% from $3.7 million for the first quarter ended March 31st, 2017 to $2.9 million for the first quarter ended March 31st, 2018, a substantial improvement associated with our improvement in sales and spending in line with our budget. Turning now to our balance sheet. As of March 31st, 2018, we had cash and cash equivalents of $20.3 million. As everyone may recall from our March 2018 call, we completed a refinancing with Solar Capital in January 2018 replacing our then existing term loan. As a result, we've gained additional capital and removed stringent liquidity requirements that we had in our previous loan facility. We've been able to make additional investments in the first quarter of 2018 to increase our engagement with physicians, reestablish our field presence both in the U.S. and in Europe, and update our marketing plans. We are proud of the growth of our business in the first quarter and believe that our strategy of consistent field engagement has been critical to our success in changing the way physicians treat DME. We continue 2018 committed to maintaining our physician engagement through our expanded worldwide salesforce and are also committed in our efforts to supporting the medical community with additional medical science liaisons. We believe we are seeing the rewards from our efforts to leverage the user study, other impactful role or evidence, and a stronger more consistent salesforce. In both U.S. and in Europe, we want to congratulate our sales teams on record end user unit sales compared to any of our prior first quarters. Their efforts will continue to support our expectations for overall growth in 2018. With that, I'd like to turn the call back over to the operator for any questions.

[Operator:]

[Operator Instructions] Our first question today is from Andrew D'Silva of B. Riley and Company. Please go ahead.

[Andrew D'Silva:]

Hey good morning. Thank you very much for taking my question. Just a few quick ones here. I know you kind of give an overview of this on your prepared remarks. But can you give me a little bit of a sense of what seasonality is really like for you guys? Should we continue to anticipate the first quarter now being at least somewhat slower period than other quarters as it was in 2016 and 2017 in the first quarter? Was that more of a coincidence or timing issue than anything else? And then as you see the year evolving and could you reflect back on the first quarter and see if any second time users of ILUVIEN have actually come on in the first quarter and if that's a goal or an expectation we should model for the back half of the year or last three quarters?

[Dan Myers:]

Yes, sure Andrew. Thanks for joining us today. So, with respect to the seasonality, we continue to believe that the first quarter and the third quarter will provide some seasonality in business. In the first quarter, it primarily relates to everybody being on new insurance plans at the beginning of the year, having to reevaluate their deductables and their coverage, and it creates a backlog in the system in the U.S. with respect to benefit investigations for the high priced drugs. It also does have an impact in some of the countries in Europe where the hospitals sort of reevaluate their budgets and reestablish drugs on the formulary in the first quarter of the year. So, for example, it does impact us in Portugal as well. We do think that the seasonality was possibly a little bit less in the first quarter of this year because we did put some procedures in place late in the end of 2017 to try to get ahead on this benefit investigations to work with doctors that had some maybe benefit investigations that were expiring from the prior year get them back in the system so they would be treated earlier and we did add some staffing in January. So, we hope that we softened the blow of some of that seasonality with some improvements in the process, but we do think it has an impact still as it would with other high priced drugs. And the seasonality in the third quarter is really related to summer vacations both in the Europe and the U.S because of our drug is not a repeat prescription and it is used with the procedure that the doctor has to do themselves. If that doctor is not in the office because of holidays it, obviously, impacts us as it has for the past couple of years. So, we would expect that to continue. With respect to retreatments, it's a great point that we would expect the patients from 2015 to begin coming back into the system. Because of the HIPAA rules and everything, we don't have greater transparency where those patients are and when they would be coming back into the system. And we know from experience in Germany, specifically, not all the patients are retreated at 36 months. So, we expect it to come, but to say that will happen late this year, it's a little bit unclear yet. We've got to gain a little bit more experience in seeing those patients come back to the system before we can give you any predictability.

[Andrew D'Silva:]

Okay. Has there been any initial data from the patients that, I guess, installed in 2013 or 2014 in Europe? Have those -- have any physicians come back to you and said that patients have started to come back in or it is just too early at this point to tell as many patients are waiting for flare-up to take place before they actually come back in to get their second treatment?

[Dan Myers:]

It's much more anecdotal than it is. We'll get data to look at. We know that some patients are being reinjected. In fact we have a new sales aid that's going to our sales team in the U.S. in the next week or so that includes a case study from Germany where patient was rejected after about 37 or 38 months. But we also have many examples in Europe as well where patients are being evaluated at 36-month mark and not necessarily needing a reinjection yet. So, it's really too early to give you any good data or any guidance on that at this point. We do expect it would be coming because we obviously believe we have got quite a few satisfied patients and physicians out there.

[Andrew D'Silva:]

Got it, perfect. And then, as far as utilizing a shorter-duration ILUVIEN for uveitis or potentially for DME as well, is that something that's you're looking into. I know that your partner EyePoint is looking to issue or released a shorter-duration version of their Durasert insert for uveitis kind of shortly after they released their three-year. Is that something that you're looking into as well or do you see a necessity for that?

[Dan Myers:]

No, not at this time. And we think there is a quite few other short-term options out there for steroid treatments in DME at this point in time. So, it's nothing that we would pursue at this point.

[Andrew D'Silva:]

Okay, got it. And then just last question R&D dipped a little bit this quarter relatively to the last two quarters in 2017? Any programs finishing that we should be thinking about or anything in the pipeline that's worth considering as we start modeling out yours?

[Dan Myers:]

Not at this point in time. That spending you see in the third and fourth quarter is really tied to some of the big industry meetings and events. You have your Retina late in the third quarter and you have VAO and there is a lot of spending around these meetings from a medical affairs or medical messaging standpoint, which is what drives this cost in those quarters.

[Andrew D'Silva:]

Okay, perfect. Thank you very much and congratulations on the progress in the first quarter and good luck going through 2018.

[Dan Myers:]

Great. Thanks Andrew.

[Operator:]

The next question is from Yi Chen of HC Wainwright. Please go ahead.

[Unidentified Analyst:]

Hi. Thank you for taking the question. This is Kartik on for Yi. In regards to demand growth in Q1, are you satisfied with it? And are you employing any new marketing strategies other than improvement in sales to drive that particular revenue growth?

[Rick Eiswirth:]

So, the end user demand growth of 21%, I mean, we are pleased with it, but we are constantly striving to push that even higher and do more. I do want to point out; again, that 21% end user demand growth though is already about 120% because all those patients are new patients coming to the system. So, we're very proud of what the teams accomplished. In addition to additional feet on the street, we are, as Dan alluded to continue to put more data out there. We've got new sales aids coming out in the next couple of weeks for a renewed campaign. And we are doing a little bit work on social media through Facebook and Twitter to try to spread the awareness I believe around through that venue you as well, probably little bit early to tell you what the impact of that would be, but certainly another venue that we are trying to use to promote ILUVIEN.

[Unidentified Analyst:]

Perfect. Thank you so much.

[Operator:]

Our next question is from François Brisebois of Laidlaw. Please go ahead.

[François Brisebois:]

Hey guys thanks for taking the questions. Can you just remind us how many docs you're targeting and how many are using? And is the thought you said your 30% best prescribers or it is just more regions or just more targeted to the docs that are prescribing, what the strategy there?

[Dan Myers:]

So, Frank, there is about 2,000 retina specialists in the U.S. We really focus our focus right now on keying in on the top 600 of those doctors. We certainly will continue to get sales outside of those targets and everything and I think our split was probably about 70/30 inside of those targets and outside of those targets in the first quarter. That's really what the attack plan is right now.

[François Brisebois:]

Okay. And do you where you are at in terms of numbers right now that out of that 600?

[Dan Myers:]

Not -- we don't have specific data on individual doctors' usage. We do track the number of accounts that are actually ordering the product from quarter-to-quarter. And I can tell you that we reached a new high in the first quarter of 2018 with about 270 accounts ordering products.

[François Brisebois:]

Okay, great. And Dan you mentioned ARVO is going on right now in Hawaii. There is a pretty good presence for you guys there. Can you compare this year ARVO for you guys versus last year and the user post-marketing data in the hands of the [Indiscernible] longer time and I guess the buzz around ARVO?

[Dan Myers:]

Yes. Although, I attended personally although last year, I chose not to go there this year. So, I'm not specifically able to comment on, but from a sheer number standpoint, this was a significant increase the number of posters and papers that we were able to have in Hawaii versus in Baltimore last year. And I think as I said earlier in fact we've got more and more doctors beginning to produce for us real-world data which is I know, we keep in banging the drum on this, but we're really excited about what see in the real world data versus this clinical outcomes. And so to that degree, this user study, which, of course, is compilation of 160 eyes in four centers with 20 different retinal specialists in the real world in the U.S., has really been impact we think in the hands of our salesforce. So, they have been very excited about the training they had in the fourth quarter. And I think we're starting to see advance of that. Just to reiterate for those who don't recall, when launched in 2015, our Phase 3 trial of same data was about five years old. And so we had quite a gap between the time we finished our trial and able to launch. So, it's been very important to start generate over the last 18 to 24 months real-world data, which really mimics more what the doctor sees everyday versus clinical trial patients. And so I would just to sum that up, I just think ARVO this year represents a lot more reality for doctors in treating patients for long-term therapy versus what we have seen in the past. And clearly the PALADIN data that we hope to put in sales reps hands the next few months would just reinforce the user data.

[François Brisebois:]

Okay. And great and then just lastly last in terms of financing for the debt facility, now that's a little less stringent liquidity and little more flexible structure. Are there still thoughts of expanding the pipeline? Are you guys just going to try to keep growing sales and grow the salesforce for ILUVIEN for DME right now?

[Dan Myers:]

I think from the standpoint of the market in expanding the salesforce. There is perhaps few more territories that we could either add or to buy if you've got the kind of volume that you think you can split territories. There could be a little bit growth in the number of sales reps as we think that makes the impact, but that would be marginal. There is always been the question about looking at the value of social media and we just started that in first quarter and it could be a precursor to looking at some version of DTC marketing where the patient or the caregiver is the focus of your effort in trying to sort of push the patient to the office versus the pull-through strategies that you typically see with sales representatives. We're not ready to comment how much we would invest in that and what kind of programs, but we're beginning to do some things that give us some insights because, obviously, the messaging to the patient and the caregiver would be key here because that's clearly where the benefit lies. So, we'll look at that more during the course of the back half of this year. As far as the pipeline, I think what you'll see earlier on as I mentioned years ago, our meetings with the FDA have been encouraging around other indications such as ARVO and non-proliferative diabetic retinopathy. We have had good discussions on what would be required there and we think one trial would be requirement. So, of course, cost and time would be much faster and less expensive than the original DME trial. We've committed to look at that in the back half of the year as we get closer to profitability and try to fund those trials more on a profit as opposed to some capital raise that we invested in the commercial side. So, it would be something to watch in the second half. I think right now our pipeline is better served expanding the indications for ILUVIEN than acquiring new chemical entity that some are few and far between out there.

[François Brisebois:]

Got you. Thank you very much. That's it for me.

[Operator:]

[Operator Instructions] There appears to be no further questions at this time. I would like to turn the call back to Dan Myers for closing remarks.

[Dan Myers:]

Thank you. Thanks for your time today and your attention in the questions. We all appreciate the opportunity to share the first quarter. Obviously, we are extremely proud of the accomplishment in the first quarter, excited about going in the second quarter and look to come back to you with further updates in the subsequent quarters. Thank you for your time.

[Operator:]

This concludes today's conference. You may now disconnect your lines. Thank you for your participation.