Alimera Sciences, Inc.
Q2 2016 Earnings Call Transcript

Published: 7 Aug 2016

[Operator:]

Greetings, and welcome to the Alimera Sciences Second Quarter 2016 Results Conference Call. At this time, all participants are in a listen-only mode. An interactive question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I'd now like to turn the conference over to your host, [indiscernible]. Thank you. You may begin.

[Unidentified Company Representative:]

Thank you all for joining us today for the Alimera Sciences second quarter 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 second quarter 2016 financial 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 in the Management Discussion and Analysis section of Alimera's annual report on Form 10-K for the fiscal year ended December 31, 2015, and quarterly report on Form 10-Q for the quarter ended March 31, 2016, which is on file with the Securities and Exchange Commission and available on the SEC's website. Any additional factors may also be set forth in those sections of Alimera's quarterly report on Form 10-Q for the period ended June 30, 2016 to be filed with the SEC in the third quarter of 2016. Alimera believes the metrics non-GAAP adjusted net loss attributable to common stockholders and non-GAAP adjusted basic and diluted loss per share are useful financial measures for Investors in evaluating Alimera's performance for the periods presented. Non-GAAP adjusted net loss attributable to common stockholders and non-GAAP adjusted net loss per share 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 net loss attributable to common stockholders or net loss per share in accordance with GAAP 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 the 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 purport 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, August 4 at approximately 10 AM 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. These forward-looking statements contained in this presentation are expressly qualified by the cautionary statements contained or referred to in this 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 this presentation. The Company undertakes no obligation and specifically declines any obligation to publicly update or revise any such forward-looking statements whether as a result of new information, future events or otherwise. Alimera declines any obligation to update these forward-looking statements except as required by applicable law. Now, I would like to turn the call over to Dan Myers, CEO of Alimera. Go ahead, Dan.

[Dan Myers:]

Thank you, Jacob, and thank you all for joining us today. I am pleased to report that we had positive activity in the second quarter of 2016. We had record revenues; we released real world data in Europe and we also had successful meetings with the FDA this quarter regarding potential label extensions for ILUVIEN. We recorded total revenues of $9.6 million, a 66% increase over the $5.8 million we achieved during the first quarter of 2016. The revenue increase was primarily driven by the sales of ILUVIEN in the U.S. which grew 76% to approximately $7.2 million in the second quarter of 2016 compared to $4.1 million in the first quarter of 2016. Our growth in the U.S. is due to the increasing acceptance of corticosteroid use in treating DME and in ILUVIEN's unique ability to deliver a continuous micro-dose of fluocinolone acetonide on a daily basis. This was evidenced by an increase in new customer accounts as well as increased penetration of existing ILUVIEN accounts. Despite a slow first quarter that we believe was partially due to reluctance on the part of physicians to venture forward during the conversion to the permanent J-code, we believe we're now seeing sales escalate as practices are being reimbursed on a more regular and timely basis. Last quarter, we made adjustments to our U.S. sales efforts to build a more robust field sales team. We transitioned out some underperformers and brought in new hires with stronger ability to drive change. We continue to integrate our key account managers and engage senior management with our personnel and their customers in the field. We've added an increased emphasis on additional training and resources for our sales staff, and just this week, promoted one of our key employees to Vice President of Sales, bringing a singular focus on the field teams and our customers moving forward. The results of these efforts are evident in the U.S. marketplace where we finished the period with over 400 accounts having used ILUVIEN to date, including 50 new accounts in the second quarter. We move into the third quarter with increased confidence that our efforts to change physician behavior in addressing diabetic macular edema are taking hold and will continue to impact decision being made when treating DME. I'd like to thank our management team and sales force for their hard work during the second quarter. Their persistence in the marketplace is a strong testament to our ability to educate physicians and increase adoption of ILUVIEN. In our international segment, we sold approximately $2.3 million in the second quarter of 2016, representing sequential growth of 35% over approximately $1.7 million in the first quarter of the year. Our return to growth in Europe is primarily driven by our successful recovery in Germany, which has now delivered its fifth consecutive quarter of unit volume growth, recording a new high in terms of ILUVIEN implants sold. Our Portuguese business continues to grow, delivering unit and revenue volume over the first half of 2016 in excess of what was generated in the entire full year of 2015. In the United Kingdom our business remains down in comparison to the levels of 2015 as physicians continue to assess the replacement, of Eylea and Ozurdex in their treatment paradigms, following the reimbursement guidance issued by NICE for these products in the summer of 2015. However, we are extremely pleased with return to growth in the UK with unit sales in the second quarter up 26% over the first quarter of 2016. To date, we have sold over 6,000 units of ILUVIEN across the markets and I believe this represents a small portion of what we believe for ILUVIEN's global sales potential. Over 3,000 of these patients have been treated in Europe. We have said before that one of the unique elements of ILUVIEN is that the clinical trial experience will likely mimic real world experience unlike many other drugs. For example, in anti-VEGF trials as many as 36 injections over a three-year period were given to patients. Yet in the clinic, data has shown far fewer injections were actually given to patients due to the physicians' and the patients' inability to keep up with that regimen. ILUVIEN however, is one injection. We're very pleased to have released this real world data from our experience in Europe over the last three years on 550 of these patients treated with ILUVIEN in a clinical setting. Unlike our pivotal Phase 3 FAME study, the majority of these patients were refractory to anti-VEGF therapy. Despite these patients being arguably more severe and having not responded to the current standard of care, the efficacy and safety data mirrored the results from the earlier FAME study. We believe this data is having a profound effect on the marketplace, driving growth across our European markets in the second quarter. We have also believed that ILUVIEN presents opportunities to treat other diseases of the eye and benefit patients. We engaged in discussions with the FDA regarding potential future indications. Based on these calls, we believe that we should be able to establish adequate evidence of safety and efficacy for the approval of ILUVIEN for an additional indication to treat either retinal vein occlusion or non-proliferative diabetic retinopathy with one additional trial. We are evaluating how to best move forward with potential options to expand ILUVIEN applications and we should expect to make an announcement about one of these opportunities in early 2017. We are continuing to work to expand our international footprint, extend the reach of ILUVIEN to new patients and leverage our cost structure. We are scheduled to meet with pricing authorities in France during the third quarter and hope to have agreed on a reimbursement price by the end of the year. Our distribution partner SIFI is pursuing the same in the Italian market and we're working with a potential partner in Spain to secure pricing in those markets, that market as well. All of these markets represent sizable opportunities for ILUVIEN in Europe. Outside of Europe, we have been working to train the team at MEAgate International, our Middle East partner headquartered in the UAE, for engaging with healthcare professionals. As we have previously discussed, the diabetic population in the Middle East is large and growing, presenting a significant addressable market for ILUVIEN. We expect to see revenue contribution from these four markets in 2017. I would now like to turn the call over to our President and CFO, Rick Eiswirth.

[Rick Eiswirth:]

Thank you, Dan. Consolidated net revenues increased by $3.8 million or 66% to $9.6 million for the three months ended June 30, 2016, compared to net revenues of $5.8 million for the three months ended June 30, 2015. The increase was primarily driven by an increase in sales volume as ILUVIEN gained market acceptance in the U.S. U.S. net revenue was up 89% to $7.2 million during the second quarter of 2016 compared to $3.8 million reported during the same period last year. International net revenue increased by approximately $300,000 or 15% to $2.3 million for the three months ended June 30, 2016, compared to $2 million for the three months ended June 30, 2015. Consolidated gross profit increased by $3.6 million or 67% to $9 million for the second quarter of 2016 period compared to $5.4 million during the same year -- period last year. Gross margin for the second quarter of 2016 expanded to 94.2% compared to 93.5% in the second quarter of 2015. Consolidated research, development and medical affairs expenses for the second quarter of 2016 decreased to $3.2 million compared to $3.8 million during the same period last year. Consolidated general and administrative expenses for the second quarter of 2016 were $4 million compared to $3.8 million for the second quarter of 2015. Consolidated sales and marketing expenses increased during the three months ended June 30, 2016 to $7.5 million compared to $6.9 million in the three months ended June 30, 2015. Alimera's GAAP net loss applicable to common stockholders for the second quarter of 2016 were $6.9 million compared to $8.6 million for the same period last year. GAAP basic and diluted net loss per share for the second quarter of 2016 was $0.15 on approximately 45.1 million weighted average shares outstanding compared with GAAP basic and diluted net loss per share of $0.19 on approximately 44.4 million weighted average shares outstanding during the second quarter of 2015. The GAAP net loss attributable to common stockholders and the GAAP basic and diluted net loss per share were affected by certain non-cash items, including a loss on the early extinguishment of debt, unrealized foreign currency gains and losses, changes in the fair value of derivative warrant liability and the reserves for potential inventory expiration. Non-GAAP adjusted net loss attributable to common stockholders for the three months ended June 30, 2016 was $7.7 million compared to an $11 million loss in the same period last year. Non-GAAP adjusted basic and diluted loss per share for the three months ended June 30, 2016 and June 30, 2015 were $0.17 and $0.25 respectively. Non-GAAP adjusted net loss attributable to common stockholders per share were based on 45.1 million weighted average shares outstanding for the three months ended June 30, 2016 and approximately 44.4 million weighted average shares outstanding for the three months ended June 30, 2015. Turning now to our balance sheet, as of June 30, 2016, Alimera had cash and cash equivalents of $16.6 million. As stated in our second quarter pre-announcement on July 26, we have modified the financial covenants under our existing loan agreement with Hercules Capital. As a result of the modification, there was a reduction of our liquidity threshold and our trailing three-month revenue requirement has reduced to the period ending August 31, 2016. We're in continued dialogue with Hercules regarding a longer-term financial solution, which we anticipate having in place prior to the end of the third quarter. Additionally, we are transitioning existing and new accounts from 120-day terms to 90-day terms in order to benefit our cash position. We previously offered 120-day payment terms in 2015 during the initial rollout of ILUVIEN in the U.S. market as practices were uncomfortable to reimbursement process and we are still navigating through the J-code process. We continued this practice through the first half of 2016 as the J-code was adopted. Now that we are confident accounts receiving payment on a timely basis, we are moving back to the industry standard of 90 days, and we expect this to have a positive impact on our cash position by the end of the year. With that, I would like to turn the call back over to Dan for closing comments.

[Dan Myers:]

Thanks, Rick. ILUVIEN is a change in a way doctors treat DME. ILUVIEN represents unique treatment option for patients with diabetic macular edema that has never been available to the ophthalmologists. Consider for a moment how their colleagues in another discipline treat disease, would a cardiologist ever treat a hypertension patient with 400 milligrams of losartan on the first day of every month and then wait 30 days to retreat them? Or would they dose them with 200 milligrams per day for two weeks and take two weeks off? They wouldn't because they have the option of providing their patients with consistent daily low dose to control the disease. Closer to our disease state, one of the most significant advancements in the treatment of diabetes is the insulin pump to provide consistent control over the patient's glucose levels. We see ILUVIEN as the insulin pump for the eye, providing continuous daily micro dosing of fluocinolone acetonide to the retina to consistently treat diabetic macular edema. This option is not available to the retina specialists in any other approved therapy. The alternative options only allow for bolus dosing and inconsistent levels of therapy from day to day as the bolus dissipates. With ILUVIEN as a new tool, we have slowly changed the way physicians are treating DME. In closing, I'm pleased we are seeing a steady rise in the level of interest from physicians and the emergence of practices that are incorporating routine use of ILUVIEN into their treatment regimen. We have been encouraged by the anecdotal feedback and data that we're hearing from our current markets, and I'm excited about what the future holds for Alimera. I will now turn the call over to the moderator to begin our Q&A session.

[Operator:]

Thank you. At this time, we'll be conducting a question-and-answer session. [Operator Instructions] Our first question comes from Laura Engel from Stonegate Capital Partners. Please go ahead.

[Laura Engel:]

Good morning, and thanks for the information and the great results. Wondered if you could just comment on, looking at your current cash levels and what's changed over the past six months, you mentioned the change in the payment terms and a few other factors, but what is your thought longer term now that you've kind of renegotiated the Hercules terms and just to fund operations looking at the remainder of the year?

[Rick Eiswirth:]

Well, as I said, we are in the process of trying to negotiate a longer-term situation with Hercules that we expect to have done by the end of the third quarter. We are still striving to get to breakeven from an operational perspective by the end of this year or early 2017 and obviously positive cash that would follow shortly after that. So that's still our plan from an operational perspective.

[Laura Engel:]

Okay, great. And that was actually one of my questions as well. Okay, so related to the breakeven, the current level of your sales and marketing at 7.5 million, and given you're still ramping and adding to support those growing numbers, can you give us a little bit of feel looking forward on that kind of cost line item? And then also the gross margin, is that something that the mid-90s we're looking at as sustainable going forward or is there even more room for improvement on that line item?

[Rick Eiswirth:]

Yes, I think what you're seeing at the gross margin level is generally where we would expect it to stay. With respect to the sales and marketing costs, we are very comfortable with the size of the field team we have in place. It is appropriate for the effort in the US as well as the existing three markets that we're in, in Europe. So I don't anticipate any significant changes there. You may see some seasonality in marketing spend in the third quarter because there are three or four very large ophthalmology and retina meetings globally that we participate in in the third quarter this year. And you will also see some of the commission rates increase. Obviously, as we increase sales, the commissions that we pay those reps go up, but from a structure standpoint, we're sort of good where we are.

[Laura Engel:]

Okay. And then last question, talking about the label extensions, the conversations with the FDA and the timing on that, what would be the earliest possible time frame you'd see that you might get approval for additional indication?

[Dan Myers:]

Laura, I'll take that. It's a little difficult at this time. The fact that we came away from the meetings, feeling like only one additional trial would be needed, of course, greatly shortens the timeline, but I think until we meet with doctors over the next three to six months, determine what protocols would look like and the number of patients that would be statistically needed, it's kind of tough to make the call, but I think the real positive right now is that we only have to look at a timeline as we see it now of one additional trial.

[Operator:]

Our next question comes from Boris Peaker from Cowen. Please go ahead.

[Boris Peaker:]

Good morning and congratulations on a fantastic result. Just wondering if you could comment on what's kind of driving ILUVIEN adoption. Anything specific and is there any kind of a doctor subgroup? Is there any kind of a data that occurred in the marketplace? What's kind of driving this inflection?

[Rick Eiswirth:]

Well, I think, Boris, what you're saying is, doctors -- I mean, the one reason people would not want to use ILUVIEN is concerned about side effect profile and the more and more trial we get in the space, the more doctors get comfortable with steroid usage and the fact that ILUVIEN is so unique that the side effect profile associated with us as a steroid is vastly different from what they've experienced in the past. So I think it's more, more comfort from that perspective. It's also managing their expectations of what the drug can do. This is a very low dose drug and understanding how it fits in their current treatment paradigm, as it builds up in the eye over a couple of months, it's critical to them. And lastly, I would say the real world data, the real world data from Europe being out there in the domain and obviously providing further evidence that ILUVIEN works in the eye, consistently what we saw in the same study, and in fact, consistently despite the fact that these patients are probably more softer we're getting right now than they were in the same study, because they're all refractory to the anti-VEGF is very critical to us.

[Boris Peaker:]

Got you. In terms my next question is in terms of operating expenses in Europe, what fraction of your current operating expenses are Europe-related? And an extension of that is, when do you anticipate to be cash flow breakeven in Europe and is there an opportunity to really optimize European operations to just really focus on the higher selling countries?

[Rick Eiswirth:]

Yes. So right now, I would say about 35% to 40% of our expenses are being incurred in Europe, although we do benefit from some of those expenses back every year because there are some global positions that are managed out of Europe. I think critical for us is trying to drive toward getting that price in France and Spain and Italy. So we can start generating some revenue out of those markets to sort of cover the overhead costs that we have in Europe as well as generating some of that revenue in the Middle East, and we do have expectations that we can generate revenue in those four markets in 2017. I will tell you that the team in Europe is extremely committed to managing their expenses and trying to get to breakeven from an operational standpoint by the end of the year as well. Obviously some of that is dependent on continued growth in Germany, Portugal and a return to growth in the UK as we said.

[Boris Peaker:]

Got you. And then my last question is going from 120 to 90 day payment terms, what do you anticipate the cash benefit to be by year end?

[Rick Eiswirth:]

Yes. It should happen in December as when we should see that inflection point.

[Boris Peaker:]

Okay. So you won't actually get to see any kind of net cash in this year from that?

[Rick Eiswirth:]

No, we should pick up one month of cash effectively in December is when that would happen.

[Boris Peaker:]

And how much is that?

[Rick Eiswirth:]

We're doing roughly 2.5 million in sales a month in the U.S. right now. So that would be about a positive impact.

[Boris Peaker:]

Got you. All right, great. Thank you very much for taking my questions.

[Operator:]

Our next question comes from Jim Molloy of Laidlaw. Please go ahead.

[Jim Molloy:]

Hey, guys. Thanks for taking my questions. Congrats on the good sales. Can you talk a little bit about how much of that was volume versus price in the quarter? Was there any sort of one-time big order or channel stuff that came through in the quarter, or is it straight volume driven?

[Dan Myers:]

It was pretty much volume driven. One of the aspects of the buy and bill model is we're shipping product to doctors usually within a few days of the patients' injection date. So you don't really see a lot of inventory flow through a pipeline. And so, with the exception of maybe on a cusp of a quarter where our whole set of buys one purchase on the 31 rather than 2nd, which would just be coincidental, there is no real inventory build or any pre-sale in. So this is pretty much straight-line demand just picking up on a daily basis.

[Jim Molloy:]

Was there any price increase in the quarter?

[Dan Myers:]

No.

[Jim Molloy:]

Okay, excellent. And then it's fantastic jump, 75% quarter-to-quarter. Do you think you can do it again in third quarter or should we sort of expect a more moderated growth?

[Rick Eiswirth:]

Jim, I would expect a little more moderated growth going forward. I mean, obviously we feel like we're starting to hit inflection points. The reality is, as Dan said, we're in about 400 accounts, which is as not nearly the majority of the market and we are continuing to rely on a small group of doctors that are sort of getting in their daily routine. We have a lot of trial usage out there. So until we get a broad base of doctors that are using it on a regular basis and sort of on the menu every day, we're going to see fluctuations in revenue while we build that base.

[Jim Molloy:]

I recall last call you guys talked about people starting Ozurdex and moving to ILUVIEN when they see the IOPs being steady. Is that something you're still seeing out there? Or are you guys having more success with the Ozurdex counter detail?

[Rick Eiswirth:]

I mean, I think the numbers somewhat honestly speak to themselves when it comes to that. I mean, certainly we are having more success in the marketplace getting them to shift from these higher dose steroids to ILUVIEN and that consistent low dose. It's a combination of switching those and it's also getting physicians that are still using a lot of anti-VEGF, to make the switch from anti-VEGF to any steroid.

[Dan Myers:]

Jim, keep in mind Jim, let me add to that though, Jim. Keep in mind that our label requires a higher course of corticosteroid. So having a Ozurdex injection or an IVTA injection is not necessarily a negative for future use of ILUVIEN because many doctors are using that as sort of a diagnostic, if you will, for ILUVIEN. So I don't really necessarily see an Ozurdex implant as a necessarily competitive threat to ILUVIEN, if in fact the doctors just wanting to make sure this patient is not going to see any IOP spike and are ready to ILUVIEN. So clearly, we want to see ILUVIEN used as early as possible in the treatment paradigm, but I wouldn't expect to see doctors just routinely skip going from anti-VEGF straight to ILUVIEN without having some sort of steroid test, if you will.

[Jim Molloy:]

Thanks. That makes sense. The last couple of questions I had would be on the RVO trial or the diabetic retinopathy potential trial, can you talk a little bit about cost? Do you have cash on hand to run those trials? Would you need additional funding for that? And then, would you guys be in position to give any sales or OpEx guidance for either 16 or 17?

[Rick Eiswirth:]

So Jim, on the trials, I mean, those trials are probably somewhere in the 15 million, $15 million to $20 million range to run those trials, but those trials would be, that money would be incurred over a three to four-year period of time because we obviously have three years to follow up for ILUVIEN because of the duration of the drug. I mean, the expectations, as Dan said, would be they would start sometime in 2017. So the hope would be that we would be able to ultimately fund those trials out of cash flow from operations at that time.

[Jim Molloy:]

Got it.

[Rick Eiswirth:]

And then regarding guidance, we're not in a position right now to give further guidance on revenue levels at this point.

[Jim Molloy:]

Any thoughts on operating expenses?

[Rick Eiswirth:]

I mean, we are really comfortable with the operating expenses (inaudible) are. I think as I said to Laura earlier, I think you will see increases in the sales and marketing side of the business as we ramp sales because commissions to the sale team will go up, and you may see some seasonality in the third quarter in the sales and marketing expenditures because there is a heavy volume of industry meetings in the third quarter.

[Operator:]

Our next question comes from [Sam Jay] from KV Capital. Please go ahead.

[Unidentified Analyst:]

Hi, congratulations on a great quarter. My question would be related to any benefits investigation information that you could share in the current month of July if you've seen and if at all there is any interest from any partnerships or anything of that nature? Thank you.

[Dan Myers:]

Thanks for the question. I'll speak to the benefit investigation and let Rick take the other. We did not put in benefit investigations up for this particular quarter because we're finding them to be less and less of a leading indicator for the following reason as doctors have become more comfortable filing benefit investigations with a certain carrier. For example, if you're in a particular city and you file with UnitedHealthcare for four or five consecutive patients and you've gotten paid on a routine basis, the need to go through the bureaucracy of filing that benefit investigations is less necessary because your payment history is available [ph] with that particular carrier. So we're starting to see a larger percent of accounts who are comfortable and don't put in a benefit investigation. So I think from a global perspective, that's going to be less and less indicative of future sales. Now to answer your question, I will tell you that quarter-over-quarter benefit investigations were higher in second quarter than they were in the first quarter. So as a trend line, clearly benefit investigations continue to grow. Where I think we're going to see benefit investigations continuing to be very important is more at the sales rep or regional manager level where you have a new account open up, and you want to start tracking the early adoption. So I think benefit investigations remain important as more of a, on a granular basis, at a territory level or at a new account level to monitor uptake in activity, but we're relying less and less on it for a global basis because many accounts are no longer doing those. Your second question was on partnerships?

[Rick Eiswirth:]

Yes. On the partnerships, Sam, right now we're not really aggressively pursuing any further distribution partnerships other than the Spanish opportunity that I mentioned or that Dan mentioned in his comments. We believe that right now we've got big opportunity in Italy and in the Middle East, and what we have in Canada and we're sort of focused our efforts on those with the limited bandwidth that we have.

[Operator:]

Our next question comes from Ernest Caponegro from National Securities. Please go ahead.

[Ernest Caponegro:]

Good morning, gentlemen. Congratulation on a nice quarter. Maybe you can address the stock a little bit more presently. It's been looking like it's been moved up and down like a yo-yo the last couple of months. And it doesn't seem like you're getting any respect from the market. Considering the fact that you are a small micro-cap, growing in excess of 30% to 40%, what is it about the Street that they don't like you? And what can you do to alleviate this and change it? Certainly this kind of growth and opportunity in front of you, you should be more deserving about better market cap. And the way the stock moves, even today, $0.50 move, that's a 25% up and down yo-yo today. It's a little bit ridiculous and frustrating for individual shareholders. Appreciate your comments.

[Rick Eiswirth:]

Ernest, it's very difficult obviously for us to comment on movement in the stock market from a day-to-day basis, right, and understand what all the dynamics are that go into that. We believe that our responsibility is to keep operating the Company and drive that revenue topline as much as we can and eventually we'll get noticed. And I think obviously you saw that in the last 10 days or so, since we put out our pre-announcement on what the revenue is. We intend to keep doing that over the course of the remainder of the year. We hope that the results of the hard work we're doing here actually will obviously improve that stock price.

[Ernest Caponegro:]

I understand that, but is there anything that you can do to get your story out there, better explain, because again there are people on the Street who don't really view this as a long-term growth potential? Perhaps it's a question of explaining the opportunity a little more directly and potential new opportunities you find in other markets.

[Rick Eiswirth:]

It's a fair comment. I mean, Dan and I are very active on the road, trying to visit with people and tell the story. Candidly, I think the results of the second quarter will obviously generate some more interest and we will have even more receptive audiences than we had in the past.

[Ernest Caponegro:]

Thank you.

[Operator:]

Our next question comes from Mitch Drucker from National Securities. Please go ahead.

[Mitch Drucker:]

Hi, good morning. Congratulations, Dan. Congratulations to Rick with that tremendous revenue spike. The Street or the analysts that have been following your stock were expecting $7.2 million to $7.5 million in revenues, and of course you came in above the high end of your projection of 9.2 to 9.5 to at 9.6. Can one perceive that with that increase of 35% or thereabouts, be like a person who gets compounding interest on the 100,000, he gets a 7% interest rate on 100,000. So next year, when he gets to 7% interest, it's on 107,000. Can't we perceive that with this increase in revenue that -- and since Dan did express that it's not a one-time phenomenon, that it's been steady growth that we'll call it doctors, for lack of a phrase, that has been initiating the purchase of ILUVIEN that all of a sudden, 35% more in revenues means that more procedures are being done? And then this number for the third quarter or fourth quarter is going to be -- is going to expand way above the channels that were thought about?

[Rick Eiswirth:]

Mitch, we're obviously in the business of trying to grow revenue and grow the presence of ILUVIEN out there in the marketplace and we're very pleased with the metrics and everything we've seen over the course of the second quarter and expect and -- hope that that continues throughout the rest of the year, but as I said before, we're not in a position to give revenue guidance for the third or fourth quarter at this point in time. And we won't be comfortable doing so until we continue to broaden the base of consistent users, which is what the effort is focused on right now.

[Mitch Drucker:]

Okay. And in addition to what my colleague from National Securities just asked, regarding -- this is not the right word, transparency, but regarding you being a little bit more in touch with the Street, when Dan was accepted to give a presentation a month ago on Fox Business News, the stock got attention, got a lot of volume, got a lot of people watching it. It seems, I'm not stating that your job is exclusively to this, but it seems that we need more of that, we need some more of interviews being done with Forbes Magazine and we need some more explanation on the CNBC and the Fox TV Networks to explain just how great it is that a patient goes every three years for an injection versus every 30 days, which is almost -- it is almost talking like it's in the 1950s.

[Dan Myers:]

Yes, Mitch, I appreciate the comment and certainly trying to get more quote airtime or voice in the market is always something we work towards and a challenge for me. And I will say that that was a result of us changing IR firms. We have a new group that's working on Investor Relations, and that was one of the first kind of cues they had. I was very pleased with that. And they are working diligently, and I think we'll see more opportunities like that with that change we've made. We are looking to get out there more and I think they're doing a good job of getting us set up for that, but I take your comment and we're working hard at that.

[Operator:]

[Operator Instructions] And our next question is from [Indiscernible], who is a Private Investor. Please go ahead.

[Unidentified Analyst:]

We have time for -- this will be the last question. We're going to close out after this. Yes, Dan. Does your licensing agreement with pSivida, is that limited for just DME or is it, does it pertain to broader indications, broader, for example, the retinal vein occlusion? Would you need their permission to embark on clinical trials for that disease?

[Dan Myers:]

No, we have the ability to pursue retinal vein occlusion and non-proliferative diabetic retinopathy under that license agreement.

[Operator:]

Thank you. I'd now like to turn the floor back over to management for any closing comments.

[Dan Myers:]

We thank you for your time today and the excellent questions. Obviously, we were pleased with the second quarter results. We look forward to updating you on our third quarter call in the future. Thanks for your time.

[Operator:]

This concludes today's teleconference. Thank you for your participation. You may disconnect your lines at this time.