Alimera Sciences, Inc.
Q3 2017 Earnings Call Transcript

Published: 4 Nov 2017

[Operator:]

Greetings and welcome to the Alimera Sciences' Third Quarter 2017 Earnings Conference 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 turn the conference over to Mr. Jacob Goldberger of CG Capital. Thank you, Mr. Goldberger. You may now begin.

[Jacob Goldberger:]

Great. Thank you, operator, and thank you all for joining us today for the Alimera Sciences' third quarter 2017 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 third quarter 2017 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 the course of 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 risks 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, 2016, and quarterly report on Form 10-Q for the quarter ended June 30, 2017, which are 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 September 30, 2017, to be filed with the SEC in the fourth quarter of 2017. You will see in Alimera's press release that the company is offering non-GAAP financial measures. Alimera does so because it believes that such non-GAAP financial information can enhance an overall understanding of the company's financial performance when considered together with GAAP figures and is used both by management and by Alimera's lender to measure performance. Adjusted EBITDA and adjusted operating expenses exclude certain non-cash 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 only be read in conjunction with financial information reported under GAAP when understanding Alimera's operating performance. For a reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measure, 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. 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, November 2nd, 2017, at approximately 9 A.M. Eastern Time. Since then, Alimera may have made additional announcements related to the topics discussed herein. Please reference Alimera's most recent press releases and current filings with the SEC. The forward-looking statements contained in the accompanying presentation are expressly qualified by the cautionary statement contained or referred to in the accompanying presentation. Alimera 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 the accompanying presentation. The company undertakes no obligation and specifically declines any obligation to publicly update or revise any such forward-looking statements, whether 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, everyone, for joining our call. I'd like to begin with some highlights of our recently completed third quarter of 2017. We posted a revenue gain of 18% versus third quarter a year ago. We continue to develop and grow end-user demand with doctors utilizing more ILUVIEN. We announced a partnership with Horus, our distributor in France. And we sold our first units in Italy. We signed an agreement with the largest private insurer in Europe -- in Ireland to make ILUVIEN available to Irish patients. We announced that we secured the rights to pursue posterior uveitis, a secondary indication for ILUVIEN in the EU, the Middle East, and Africa. We have made significant progress toward following the label variation for posterior uveitis in Europe. Earlier this year, we told you we plan on delivering positive cash flow from operations in the near future. We expected to do so by growing revenues through increasing end-user demand, while working to contain our operating expenses at an appropriate level. As I noted earlier, revenues grew by 18% in the third quarter of 2017 as compared to the same period in 2016. Global end-user demand increased approximately 9% compared to the third quarter of 2016. This increase in end-user demand was driven by an increase in the U.S. of 6% and an increase in the European country, where we sold direct, of 15% in the third quarter of 2017 as compared to the third quarter of 2016. International demand was driven primarily by the increasing demand in Germany, which continues to recover from the second quarter stock ads that we just discussed in last quarter's conference call. Additionally, demand in U.K. returned to growth, posting a significant increase in end-user demand compared to the third quarter of 2016. As we have discussed in the past, the variances between end-user demand and revenue growth is due to timing and purchases by our two large distributors. It's important to note that these differences balance out over an extended period of time. For example, during the nine months ended September 30th, 2017, global GAAP revenue growth is 13% and end-user demand growth is 14% compared to the same period in 2016. We believe the growth in end-user demand indicates that physicians are using ILUVIEN more frequently as part of their treatment strategy. Physicians have begun to realize, through our efforts, to change the paradigm that ILUVIEN is the only drug with continuous micro dosing that enables them to treat DME consistently on a daily basis. As anticipated, during the third quarter, our revenue was subject to seasonality during July and August in the U.S. and Europe since physicians are typically out of the office vacationing during the summer months. Expenses are also higher during this period because many of the major ophthalmology conferences in the world take place in the second half of the year, where the bulk of this cost incurred during the third quarter. During the third quarter of 2017, we reduced our operating expenses by 17% from the third quarter of 2016, an approximate $2.5 million decrease. And for the year, our operating expenses are running $9.6 million less than our operating expenses for the comparable period in the prior year. Rick will go into more detail about the numbers, but we believe that our growth and revenue of approximately 13% globally for the nine months ended September 30th, 2017, from the comparable period in 2016 and are decreased in operating expenses by approximately 21% during the same period from the comparable period in 2016, demonstrates that we have remained on a path delivering positive income from operations consistently in the near-term. As I said previously, we are pleased with our topline growth at 13% in consideration of our cost control measures in 2017, which included reducing our salesforce and marketing spend. Prospectively, we anticipate reinvesting revenue growth in our salesforce and our marketing efforts, which we believe will drive our revenue further in the future. I remain confident that ILUVIEN's acceptance will continue to grow based upon the feedback we get from our customers in the U.S. and in Europe regarding the real-world data. We have something unique in ophthalmology, real-world efficacy, reflecting our pivotal trials and reduced treatment frequency for patients, with the only drug that enables physicians to treat the disease consistently every day. Our competitors cannot offer this as they provide only acute therapy for a chronic disease and unlike ILUVIEN, real-world research do not mirror their studies. I'd like to provide you with more insight into why I believe we are just scratching the surface with ILUVIEN. I discussed this in our last call that we had U.S. data on the usage of ILUVIEN comparable to our European data. But at the time, it had all been presented in a small meeting. In this past quarter, this data was presented in two major meetings; the American Society of Retina Specialists and the Retina Society Meeting. And our salesforce is now fully final presenting this data. The sales team along with our medical team have a very compelling story to tell and I'd like to share some of it with you now. As a reminder, the user study representing over 20 physicians encompasses 130 patients and 160 eyes at four practices using ILUVIEN today. The patients in the user study were treated with alternatives prior to introducing ILUVIEN. This chart illustrates the effectiveness of ILUVIEN to treat DME as well as its ability to reduce the number of injection treatments that patients receive for their DME. These lines represent four patient groups with their vision before getting the ILUVIEN injection. For brevity sake, I want to focus on two of the lines, the top and the bottom. The topline or green line shows patients -- shows data for patients whose vision was good at 20/40 prior to the injection of ILUVIEN. They can legally drive. Arguably, they were being treated effectively with anti-VEGF and other two therapy. The bottom-line shows data for patients with visions worse than 20/200 prior to the injection of ILUVIEN. Arguably, these patients are those that were truly unresponsive to anti-VEGF and other therapy. Looking at the left side of the chart marked before ILUVIEN, you can see that patients were treated, on average, every three months for their DME and their vision was even stable or decline. But look at the right side of the chart after the ILUVIEN injection. For those patients on the topline with good vision, they maintained their good vision, but went from an average treatment once every three months to once every 22 months. ILUVIEN gave these patients the independence from treatment. For those on the bottom group, ILUVIEN improved their vision by an average of 20 letters or four lines, while having the treatment burden. These patients gained an improved vision and they experienced a reduction in treatment. Importantly, 63% of the patients in the study eyes required no additional DME treatment throughout the study and finding it consistent with the European data. This data highlights the efficacy of ILUVIEN for all types of patients and it supports the reduction in treatment frequency that ILUVIEN provides the patients. The fewer number of treatments is evidence of ILUVIEN's ability to reduce the recurrence of edema. We believe this demonstrates the value of continuous daily micro dosing and illustrates the expanded opportunity to treat all patients with DME. This is why our medical and sales team are excited to share this data broadly. Users also addressed as one of the greatest challenges in selling ILUVIEN. From clinical trials, it's well known that ILUVIEN and other intraocular [ph] steroids increase the risk of intraocular pressure, or IOP rise, in roughly 40% of patients. While this is easily managed in the majority of patients with IOP-lowering drops, it is nevertheless a concern to retinal physicians and can be raised as an objection to using steroids in the treatment of DME. The user study was conducted to illustrate the performance of ILUVIEN in the clinic rather than in a clinical trial setting. This is important because all patients were treated within the U.S. label which requires a prior course of corticosteroids, a key difference to clinical trial protocols. The user study provides us with a couple of key insights to the IOP side effect profile of ILUVIEN. As you can see in this chart, there was no significant increase in mean IOP after ILUVIEN administration. This second table demonstrates the predictability of patient's IOP responses following with treatment with ILUVIEN based upon prior corticosteroid treatment. You can see that there was no statistically significant difference with respect to IOP before and after ILUVIEN. Importantly, physicians in this study did not use the prior corticosteroid to solely screen out all patients with any IOP response. This is evidenced by 61 of the 160 eyes in the user study having experienced an IOP rise on the prior corticosteroid above 21 millimeters of mercury. Rather, physicians appear to have utilized the results of the prior corticosteroid test in accordance with the label and as a guide to manage IOP following the injection of ILUVIEN. The user study validates the value of our label in helping mitigate IOP and provides doctors with greater confidence now in managing IOP. This is consistent with the data that has emerged from Europe over the past year, as well. In the third quarter, our European team had a large symposium at the EURETINA conference in Barcelona, where over 300 attendees were shown real-world data from a variety of sources. Confirming the performance of ILUVIEN, the clinic [Indiscernible] to the same trials. Further, within the scientific program, new data was presented, including patients with three-year follow-up from Germany. In Europe, we have been using this data over the past year, which we believe is driving increasing end-user demand. Recall, we expanded our license with pSivida, announced early this quarter to potentially provide ILUVIEN to patients with posterior uveitis, a non-infection inflammatory disease affecting the posterior segment of the eye. Since that announcement, we have been progressing well with preparing for the extension of our label for ILUVIEN in Europe. We have compiled the data, which we believe justifies the anticipated approval on this indication. I'd like to share with you a couple of key data points coming from the planned MHRA submission. The study, NIU-PS, which stands for non-infectious uveitis affecting the posterior segment, is comprised of two parallel multicenter Phase III studies, 001 and 005, with a six-month primary read-out and a 36-month data collection. 282 patients were enrolled in the trials. The primary endpoint is a reduction in the recurrence of uveitis. As you can see on this chart, with fluocinolone acetonide injected, uveitis recurred in 73.4% of the patients treated with the Sham Injection, while only in 26.6% of patients treated with fluocinolone acetonide. This difference of approximately 47% was highly statistically significant. Looking at ocular safety, the data encompasses 12 months' data from study 001 and six months of data from study 005. And as you are likely aware, for a corticosteroid injection, potential intraocular pressure rises and cataract development are the two main side effects. We're looking at different parameters that rates for ILUVIEN are typically higher than the sham, but in line with expectations. From our discussions with physicians in Europe specialized in the treatment of this disease, the clinical need is all too clear. Uveitis patients are often at working age and live with the thread of blindness. While the problems is lower than DME, the motivation to treat is very high. Steroids, both systemic and intravitreal, are the standard-of-care in posterior non-infection uveitis, so physicians are already accustomed to managing side effects associated with these patients. We believe that continuous unique micro dosing of an alternative low-dose steroid will provide a logical progressive step in the treatment of this disease. We have a meeting with MHRA in the fourth quarter to discuss the submission. Our plan is to file a variation to our product label by the first quarter of 2018 for the 17 countries in Europe in which we are proved to treat DME. If successful, we would expect approval in 2018 and then commence for the marketing of ILUVIEN for posterior uveitis in 2019. We look forward to keeping you apprised of our progress regarding our filing to posterior uveitis. With that, I would like to hand it off to Rick to go in more detail on our financials. Rick?

[Rick Eiswirth:]

Thank you, Dan. On a GAAP basis, we recognized approximately $9.8 million in revenue in the third quarter of 2017 compared to approximately $8.3 million in the third quarter of 2016. This represents an 18% increase in revenue, which as Dan said, we are very pleased with considering our cost containment measures this year. In the United States, we recognized revenue of approximately $7.1 million in the third quarter of 2017, which represented an increase of 15% over approximately $6.2 million in the third quarter of 2016, while end-user demand grew 9%. As Dan mentioned, there can be a difference in end-user demand growth and revenue growth quarter to quarter due to the purchasing patterns of our two major distributors in the U.S. This balances out over an extended period of time. For the nine months ended September 30th, 2017, U.S. revenue is up 12% and end-user demand is up 14%. In our International segment, we recognized a record revenue of approximately $2.6 million in the third quarter of 2017, which represented an increase of 24% of approximately $2.1 million in the third quarter of 2016. End-user demand in Germany, U.K., and Portugal was up 14% and we made initial shipments to our distributor in Italy. Gross margin was 89% in the third quarter of 2017 compared to 94% in the third quarter of 2016. Gross margin was primarily impacted by royalty expense payable to pSivida in the third quarter of 2017 due to the recent conversion of our profit sharing arrangement to our royalty. We are pleased with the management of our operating expenses. Our operating expenses for the third quarter of 2017, including depreciation and amortization expense, totaled $12.6 million compared to approximately $15.1 million in the third quarter of 2016, representing a decrease of $2.5 million or 17%. For the year-to-date, we have significantly reduced our operating expenses from $44.7 million for the nine months ending September 30th, 2016 to $35.1 million for the current nine-month period. That's a reduction of 21%. Our GAAP operating net loss for the third quarter of 2017 improved to approximately $3.8 million compared to approximately $7.2 million for the third quarter of 2016, a decrease of $3.4 million. That's a decrease of 47%. For the nine-month period, our GAAP operating loss decreased more than 50% from $22.5 million in 2016 to $10.7 million in 2017. As Dan said, in July, we acquired the license reg to uveitis from pSivida for Europe, the Middle East, and Africa and restructured our collaboration agreement. The restructuring included a conversion of our obligation to share profits from the commercialization of ILUVIEN to a royalty on that revenue. Just to clarify, we have moved from a 20% profit share to a 2% royalty. The royalty will increase to 6% of the first $75 million on sales on an annual basis and 8% thereafter around the beginning of 2019. As consideration for the uveitis rights and the profit share conversion, we agreed to reduce our right to utilize pSivida share previous losses associated with the commercialization of ILUVIEN, which would have been used to partially offset future profit sharing payments under the agreement. This right of offset was not previously reflected on our balance sheet due to the uncertainty of future realizability. We have valued the transaction utilizing a present value analysis at $2.9 million. Because there is no pre-indication for ILUVIEN for uveitis at this time, we expensed a $2.9 million non-cash charge as in-process research and development expense in the third quarter of 2017. We also recognized a recovery of prior collaboration losses of $2.9 million for the value of the right of the offset as reduction of operating expenses. As a result, there was no impact on our operating loss or net loss for the three and nine months ended September 30th, 2017. On our last call, we discussed that we are focused on Alimera achieving financial independence this year, which requires revenue and gross margin exceeding our operating expenses, excluding any non-cash items. Therefore, we believe that the non-GAAP measures of adjusted EBITDA and adjusted operating expenses are relevant measures of our operating performance. We believe the achievement of positive adjusted EBITDA is the precursor of future positive cash flow due to the lag time in collecting our receivables. As Dan mentioned, adjusted EBITDA for the nine months ended September 30th, 2017, improved to a loss of $1.8 million compared to a loss of approximately $5.4 million for the same period last year. This represents a decrease of 67%. For the full nine months, we decreased our adjusted EBITDA loss by 74% from $19.2 million to $14.2 million. These improvements were due to an increase in global revenue and lower operating expenses, as previously discussed. Our adjusted operating expenses, which are basically our cash expenses, have decreased significantly. For the three-month period, our adjusted operating expenses were $10.6 million compared to $13.2 million in prior years' period, a decrease of 14%. For the nine-month period, adjusted operating expenses decreased from $38.9 million to $29.4 million or a decrease of 24%. Please see yesterday's press release for a reconciliation of these items. We ended the third quarter of 2017 with $25.6 million in cash and cash equivalents. As you may have seen, we filed an S3 registration statement or self-registration for up to $100 million of debt or equity securities earlier this month. This registration also included an at-the-market, or ATM component for up to $25 million of common stock. I want to clarify that this filing was only done for good housekeeping purposes to replace our S3 that expired in August, should a future need arise. As Dan and I have shared throughout this call, we have made significant improvements to our cost structure, which, we believe, have strengthened the company and placed us on a path to delivering positive income from operations consistently in the near term and providing stronger revenue growth in the future. The filing of the S3 registration statement is not any indication of plans to raise equity and we do not have any such plans at this time. I will now turn the call back over to the operator for questions.

[Operator:]

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Our first question is from François Brisebois of Laidlaw. Please go ahead.

[François Brisebois:]

Hey guys. Thanks for taking the question. I just wanted to double check on -- so the user study is, obviously, I think very interesting, but when are the sales reps are going to be able to have this in their bag when they see docs? Is that happening? Or when should we expect that?

[Dan Myers:]

Yes. So, the sales reps were trained on that very clearly in mid-September. The training was completed with the last region in early October, so they are on the ground running with that right now. And there's a lot of enthusiasm out there amongst the team to have that information. As you know, that's the first real new information we've had to sell off of in the U.S. since the launch.

[François Brisebois:]

Okay, great. And then at -- when you've been to a couple of conferences now, OIS, I think, the one in New Orleans, is coming up next week. The medical community, when they see this -- the user study, is there any kind of pushback? Or is it very excited? Or any anecdotal stories on that?

[Dan Myers:]

Frank, I can only speak to the interaction I had at OIS -- or the ASRS meeting back in August. I will be presenting this at the OIS next week, as you mentioned, at the AAO in New Orleans. I think two kind of -- maybe just anecdotal comments I get is the surprise at how well the patients on that topline who were actually doing quite well on anti-VEGF, but when they were switched to ILUVIEN because of the dosing, the treatment reduction, how well they continue to do. Those are patients, as you can imagine, in absence of data, we're not typically getting. If you go back to that chart, most of the patients that are driving our revenue line now are those bottom two lines, where patients haven't done that well on anti-VEGF and then ILUVIEN becomes an alternative. So, I think that was the first sort of aha moment that patients who just simply don't like to come in every three months might do well on ILUVIEN alone. I think, probably, more exciting was the actual IOP data. I got a strong response from that because I think there's been a little bit of a myth, if you will, that if you give a patient corticosteroid, they are all going to get glaucoma and we know the data doesn't suggest that. But in the absence of real-world data, which was being used on label when these patients getting a prior course of corticosteroid, we just didn't have any data. So, I think, maybe, as much as the efficacy is the fact that doctors can now get data to show. If I put a patient on ILUVIEN, on label, the management of IOP is going to be there for them and the likelihood of a spike in pressure or certainly, an IOP surgery is going to be minimal, if any. So, I think those are the two biggest anecdotal comments I got from doctors in presenting this data.

[François Brisebois:]

Okay, great. Now, that's very helpful. And then just lastly on the uveitis with the agreement with pSivida there. So, you guys are expecting probably launch in 2019. Can you just tell us a little bit more? I guess in terms of the market, the market size -- it's obviously a smaller market than DME, but at the same time, they could become -- it's -- it would be first-line treatment versus anti-VEGFs or DME. So, just wondering how you guys see the market and how your interactions with the docs over there because you've spoken to them so much already on DME, how that could be an advantage to kick-off uveitis?

[Dan Myers:]

Yes. So, Frank, I think the uveitis market is probably somewhere in the 15% to maybe 20% range of the DME market for us. But as you said, because physicians are already treating with corticosteroids, both systemically and localized delivery as the standard of care, we think there's a very logical transition to a lower dose and extended delivery that we provide with ILUVIEN. There are KOLs in Europe. They're already engaged and in discussions with us. They were both part of the pSivida trials or have used ILUVIEN on an off-label basis. And I would say that there's a lot of enthusiasm and excitement to see us add that to the label. I do think that you would see more rapid uptick there in uveitis market because of that engagement. We know physicians, as I said, are using it on an off-label basis and they've been very successful with that treatment. It's been presented at several of the ophthalmology meetings in Europe, both in the form of posters and on the podium. And there's no anti-VEGF available to treat uveitis.

[François Brisebois:]

All right. Okay, great. Thank you. That's it for me.

[Operator:]

Thank you. [Operator Instructions] Our next question is from Yi Chen of HC Wainwright. Please go ahead.

[Yi Chen:]

Thank you for taking my questions. Just to confirm. You just mentioned that currently, doctors and physicians in the -- in Europe are actually using ILUVIEN off-label to treat uveitis.

[Dan Myers:]

Yes, that is correct. We know they are. We don't promote for uveitis anywhere, but we know that doctors have gotten special permission on a patient-by-patient basis to utilize ILUVIEN because some of them who put together some posters for some of the industry meetings.

[Yi Chen:]

Okay. Do you know roughly how many units -- how many numbers -- or how many doctors or how many units of ILUVIENs are actually being used currently off-label to generate those sales?

[Dan Myers:]

No, I really don't have any -- we really don't have any way of knowing that since it's being used on an off-label basis, but it's a small amount.

[Yi Chen:]

Okay. Thank you. And regarding the operating expenses going forward, do we -- shall we expect more cost savings implemented? Or should we expect the expenses to remain relatively stable?

[Dan Myers:]

We would expect our expenses in 2018 to remain fairly stable with where they have been throughout 2017. You still are going to see some seasonality in the expenses because of things like the big ophthalmology meetings in the third quarter.

[Yi Chen:]

Thanks. And finally, regarding seasonality, do you see that it is less so in Europe than in the U.S.?

[Dan Myers:]

It's interesting. We see -- seem to see more of a prolonged period with less volatility in the U.S. over the summer months. Because of the shifts in holidays in the U.S., you see it spread out over July and August, where as in Europe, it seems to be more concentrated on August because a lot of the vacations are concentrated in that month.

[Yi Chen:]

Okay. Thank you.

[Operator:]

Thank you. Our next question is from Alan [Indiscernible] of Wells Fargo. Please go ahead.

[Unidentified Analyst:]

Thank you. How are you doing fellows?

[Dan Myers:]

Good. Thanks Alan.

[Unidentified Analyst:]

Good. You had kicked the whole month off in Europe, obviously. Could you just give us a little more color on the royalty stream increase in what 2% to 8% or 2% to 6%? Can you kind of get a little bit into that? It seems like a significant amount. So, could you elaborate a little bit more?

[Rick Eiswirth:]

Yes. So, the royalty for basically the rest of this year in 2018 is 2% gross sales -- or excuse, of net sales. And approximately January 1, 2019 and some of that depends upon the timing of the filing for uveitis and the ultimate approval for the uveitis, it's just to a 6% royalty on the first $75 million in annual sales and 8% on anything annually above $75 million. So, we believe as we've stated on our prior calls that that's actually an accretive change to us for the next 18 months and that as long as we can get the company stabilized above $60 million to $65 million in revenue, it's accretive after it switches to 6% to 8% as well.

[Unidentified Analyst:]

What kind of time frame could that potentially happen, 2% to 6%?

[Rick Eiswirth:]

Our goal -- our target -- to the 2% to 6%, that shift will happen right around January 1st, 2019.

[Unidentified Analyst:]

No, I'm just saying when can that number be reached to $75 million per annum?

[Rick Eiswirth:]

Sometime between 2019 and 2020, I would guess right now.

[Unidentified Analyst:]

That was nice. Okay. And also the $100 million S3 filing, I mean, it came out of the time where it seems a little confusing. And you -- I don't know if you had stated that it was replacing the old agreement. But perhaps that should be elaborated a little bit more. I don't know if that was done at the time. It seems like there was a new -- kind of a new statement that you were making. What -- I didn't say anything about replacing the one from last year, although I remember you had -- did have that last year, but is it the same exact thing?

[Rick Eiswirth:]

It's the same exact thing. Actually, the ATM component is a little bit smarter. The S3 expired. I don't have an exact date, but I'm going to say around August 15th or so. And then we did the late work and everything. Get it all, put back together and filed earlier this month as you know. But it's simply replacement to the prior facility that was in place [Indiscernible] biotech companies of our size.

[Unidentified Analyst:]

Right. So, at the same time you don't need any -- your cash burn is pretty low, it looks like, at this point in time.

[Rick Eiswirth:]

Right. I mean we ended the quarter as you know with over $25 million cash. And our cash burn is continuing to come down. It's come down substantially this year. And we think we are getting very close to, obviously, that breakeven point and getting to positive cash flow in a not too distant future.

[Unidentified Analyst:]

Great. Thank you. Appreciate it. Have a good day and good luck to you guys.

[Rick Eiswirth:]

Thanks Alan.

[Dan Myers:]

Thank you.

[Operator:]

Thank you. [Operator Instructions] Okay. At this time, I would like to turn the conference back over to Mr. Myers for closing comment.

[Dan Myers:]

Thanks. Thank you all for joining us today. And moving forward, our focus will be on profitable revenue growth and maintaining the financial stability of the company. We have significant expectations for the use of the user study data in the marketplace and its impact on our revenue growth. We look forward to seeing the impact of our expanding geographical footprint on Europe and the Middle East on our revenues from these regions. And we're excited about the opportunity to expand the potential for ILUVIEN in 2018 with the approval of the treatment of posterior uveitis. Thanks for your time and hope you have a nice day. Thank you.