Alimera Sciences, Inc.
Q2 2015 Earnings Call Transcript

Published: 11 Aug 2015

[Operator:]

Good day, ladies and gentlemen, and welcome to the Alimera Sciences Second Quarter 2015 Earnings Conference Call. [Operator Instructions] As a reminder, this call is being recorded. I would now like to turn the conference to Rick Eiswirth, Chief Operating Office and Chief Financial Officer.

[Rick Eiswirth:]

Thank you. Good afternoon, everyone, and welcome to the Alimera Sciences conference call to update you on our progress with ILUVIEN, our sustained-release intravitreal implant for diabetic macular edema or DME, and to review our second quarter 2015 financial results. A press release regarding these results was issued this afternoon and is available on our website. On the call with me today is Dan Myers, our President and Chief Executive Officer. Before we begin our prepared remarks, I would like to remind you that various statements we make during this call about the company’s future results of operations and financial position, business strategy, and plans and objectives for Alimera’s future operations are considered forward-looking statements within the meaning of the federal securities laws. Our forward-looking statements are based upon current expectations that involve risks, changes in circumstances, assumptions and uncertainties. These risks are described in the Risk Factors and Management’s Discussion and Analysis of Financial Conditions and Results of Operations sections of Alimera’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014, Our Form 10-Q for the quarter ended March 31, 2015 which is on file with the SEC and available on the SEC’s and Alimera’s websites and the Form 10-Q for the quarter ended June 30, 2015 which we expect to file today. We encourage all investors to read these reports and our other SEC filings. All of the information we provide on this conference call is provided only as of today, and we undertake no obligation to update any forward-looking statements we may make on this call on account of new information, future events, or otherwise. Please be advised that today’s call is being recorded and webcast. Additionally, adjusted net loss and adjusted net loss per share will be discussed on this conference call. A reconciliation to these measures to GAAP can be found in our press release, which is available on the SEC’s and Alimera’s websites. Now, I would like to turn the call over to Dan Myers.

[Dan Myers:]

Thanks, Rick. And thanks everyone for joining our second quarter 2015 conference call. We are pleased to provide you with an update now that we have full quarter of sales of ILUVIEN in the U.S. market as well as another quarter in Europe. After my comments I will pass the call back over to Rick who will discuss in more detail our financial and operational results. We’ll then open up the call for questions. Overall we reached second quarter total sales of $5.8 million an increase of 164% compared to the same period a year ago. A majority of this increase came from the U.S. where we have begun to see market penetration following our recent commercial launch. The U.S. market accounted for $3.8 million which is an increase of 58% over the first quarter results of $2.4 million. Outside the U.S. we saw strength as well with the sales of $2.0 million, an increase of 33% over quarter one of this year. I will start with the recently launched U.S. we are excited with the traction that we’ve gained so far and while still early we have seen clinical interest in ILUVIEN continue to expand with a number of ILUVIEN sales downstream from our distributors to physicians and pharmacies growing 180% in the second quarter versus the first quarter. The total number of retina practices purchasing product tripled in the second quarter and we now have over 161 accounts ordering ILUVIEN. In regard to reorders we have 14% of our accounts reordering ILUVIEN at the end of first quarter and through the end of June 38% of those accounts have placed more than one order. We had anticipated a relatively low percentage of reorders as it was believed it is typical in a buy and bill launch for physician practices to use a limited number of units initially and wait and see if they reimburse. We believe the rising number of reorders is an early indicator that claims are now beginning to be paid in fact we have now confirmed fully paid claim for all the Medicare carriers throughout the country as well as numerous commercial plans. This is the type of activity that will help U.S. stay confidence in those accounts which are still hesitated to expand the usage because of payer concerns we are really excited to see that payments are beginning to come in and expect to see this have a positive impact on orders going forward. As you may recall submission of the benefit investigation is a step to determining insurance coverage and is a sign of underlying demand. As of June 30th we had 390 physicians that had submitted a total of 766 benefit investigations for patients with 99% of those benefit investigations considered covered. Another sign of demand is acceptance into formularies at major institutions. This quarter we have successfully been added many important formularies including the John’s Hopkin’s Eye Institute, the Massachusetts Eye and Ear Infirmary and the New England Eye Center. I’d now like turn our attention to the European business and share some key highlights. We’re pleased to report sales growth in Germany of more than 80% versus the first quarter of 2015. You may remember that we ended the first quarter with a decision to embark on a relaunch of ILUVIEN in Germany in 2015 our strategy to bring ILUVIEN back to growth as quickly as possible included focus on three key areas. Number one, gaining inclusion of ILUVIEN into reimbursement contracts. Number two, broadening the base of experience through a short term period of sampling and number three, addressing the commercial attractiveness of ILUVIEN versus other intravitreal products in the hospital setting. Our German team has done a great job executing in all three areas which has resulted in significant progress. ILUVIEN is now included in multiple reimbursement contracts covering more than half the population of Germany. The short term period of sampling has given valuable experience to new adopters of ILUVIEN during the time when they cannot otherwise gain access for patients now a new source of orders. And contract with the hospitals has resulted ILUVIEN being in my front of mine, when the patient needs it and available in the pharmacy. In Portugal we more than doubled our sales in the second quarter versus the first quarter. You may remember we previously reported on hospital contracting as a gating factor. This has proven to continue to be the case during the second quarter. However clinical efficacy for ILUVIEN is strong in Portugal and consequently in a significant number of hospitals ophthalmologists are now waiting to treat their patients. After this summer break we anticipate clinical support will become an important factor when they pursue the contracting to free up access to ILUVIEN. This in turn is expected to lead to continue growth in our business in Portugal. In the United Kingdom we have continued to see significant growth in our injection rate which has nearly doubled in the first half of 2015 versus the same period in 2014. In addition second quarter sales were our strongest since we launched in the UK. As a result we have taken a decision to expand our salesforce from five clinical account specialist to eight. I’ve also described before how our UK team works educates centers on ILUVIEN’s role in the treatment paradigm by directing and building centers specific treatment pathways with the clinical teams. The first centers who adopted ILUVIEN their pathways are now reporting results from their cohorts and we are encouraged by the strong efficacy results and also the manageable safety profile. Doctors are seeing efficacy in clinical practice that is actually better than what we saw in our clinical trials. Further instead of IOP requiring treatment has been much lower than we saw in the same study and more importantly the vast majority of patients requiring treatment have been managed with topical drops. We need to bring this information to the U.S. to demonstrate the benefits of ILUVIEN to physician and their patients. Our experience in Europe have been now treated over 2000 eyes in the clinical setting is a great asset that we can leverage with our customers here in the U.S., because we believe that this efficacy and safety profile will be - in U.S. In the second quarter we initiated the Paladin study to accumulate data in a real world setting. The Paladin study will focus on patients treated in accordance with U.S. label we believe that Paladin study will demonstrate a possible IOP side effects, especially IOP related surgery associated with ILUVIEN will be less frequent that what we’re seeing in the population in the FAME study. As a reminder in our FAME Phase 3 population the subset of patients who had a prior ocular steroid injection did not experienced any IOP lowering surgery. All of the IOP lowering surgeries for ILUVIEN patients occurred in those patients who had no periocular or ocular steroid injection. Our goal is to enroll 300 patients and up to 50 clinical sites and follow these patients for three years because this study is not massed we expect to make interim assessment to the safety and efficacy of ILUVIEN as this emphasis grows. This will generate additional data for physicians A, in their assessment of ILUVIEN. We are pleased to recently announce distribution agreement with Knight Therapeutics Incorporated a Canadian specialty pharmaceutical company to handle all regulatory commercial activities for ILUVIEN in Canada. This is another market that offers a great opportunity for long term growth and we’re excited to be working with Knight’s prudent management team. Outside of our existing European and U.S. markets we now have distribution agreements for ILUVIEN in Canada, Israel and Australia where we anticipate generating incremental revenue as early as 2017. We are continuing to evaluate other opportunities for the geographical expansion of the availability of ILUVIEN by actively looking for distribution arrangements in the Asian and Middle Eastern markets. With that I’ll now turn the call back over to Rick.

[Rick Eiswirth:]

Thank you, Dan. Turning to our financial results, year-over-year revenue growth for the second quarter was 164% from $2.2 million to $5.8 million. This represented sequential growth of 49% from $3.9 million in the first quarter of 2015. This was primarily due to an increase in U.S. sales following the launch of ILUVIEN in February of this year from $2.4 million in the first quarter to $3.8 million in the current quarter. It is important to note that a significant portion of our sales in the first quarter of this year represented an initial stocking sales to our special distributors in the U.S. and that downstream sales from those distributors to end-customers which we believe represents true market demand increased to 180% from quarter-over-quarter. Now that our specialty distributors are stock-to-sales we expect our sales to approximate end user demand going forward. Our international sales drive from United Kingdom, Germany and Portugal increased 33% from $1.5 million in the first quarter to $2 million in the second quarter. The cost-of-good remained flat at approximate $380,000 in comparison with the second quarter of 2014 despite the higher sales volume primarily due to an inventory reserve of $210,000 a quarter in 2014 for German Inventory. Gross margin in the second quarter is approximately 90%. For the second quarter of 2015, research and development and medical affairs expenses increased by approximately 10% to $3.8 million from $1.9 million in the prior year period. This increase was primarily as a result of increased spending on clinical trials, medical science and scientific communications to further the understanding of ILUVIEN in the medical community. General and administrative expenses in the first quarter of 2015 increased approximately 36% to $3.8 million compared to $2.8 million in the prior year period. This increase was primarily attributable to increased employee cost associated with our growth to support launch ILUVIEN in the United States and our international growth. For the second quarter of 2015, sales and marketing expenses increased approximately 130% to $6.9 million compared to $3 million in the prior year. This increase was primarily attributable to increased personnel and travel cost associated with the hiring of the U.S. field force as well as increase promotional and marketing cost associated with the launch in commercialization of ILUVIEN in the United States. GAAP net loss for the second quarter of 2015 was $8.6 million compared to a GAAP net income attributable to common stockholders of $1.1 million for the second quarter of 2014. GAAP net loss for the quarters ended June 30, 2015 and 2014 was affected by certain non-cash items including changes in the fair value a derivative warrant liability, unrealized foreign currency gains and losses and reserves for potential inventory exploration. GAAP basic and diluted net loss per share for the second quarter of 2015 was $0.19 based on $44.4 million weighted average shares outstanding compared with GAAP basic earnings per share and diluted loss per share for the three months ended June 30, 2014, income of $0.03 and a loss of $0.16 respectively based on $40.3 million and $42.5 million weighted average shares outstanding respectively. Non-GAAP adjusted net loss for the second quarter of 2015 was $10.9 million compared to non-GAAP adjusted net loss for the second quarter of 2014 of $6.1 million. non-GAAP adjusted basic loss per share for the three months ended June 30, 2015 and 2014 were $0.25 per share and $0.15 per share respectively, non-GAAP adjusted diluted loss per share is not presented as all outstanding common stock equivalence are anti-dilutive. Net loss per basic weighted shares outstanding attributable to common stockholders per share and non-GAAP adjusted net loss attributable to common stockholders per share was based on $44.8 million weighted average shares outstanding for the second quarter of 2015 and $40.3 million weighted average shares outstanding for the second quarter of 2014. As of June 30, 2015, we had cash and cash equivalents of approximately $48.1 million compared to compare to approximately $61.3 million as of March 31, 2015. Our cash burn of approximately $13.2 million for the quarter was impacted by a significant increase in accounts receivable in the U.S. due to the extended terms provided to our distributors and further downstream to the end customers. With that I will turn the call back to Dan for closing comments.

[Dan Myers:]

Operator at this time, we'll take we'll open the call to questions.

[Operator:]

Thank you. [Operator Instructions]. The first question is from Caroline Corner of Cantor Fitzgerald. Your line is open.

[Caroline Corner:]

Hi guys, congratulations on all progress. Couple of questions from me. First of all just real quick on your gross margin. Looks like you reported around 93% again, given the blend of direct and distributor models that you have decent at 93% is sustainable going forward and a good number to use.

[Rick Eiswirth:]

Yes, we do. That will change when get to cash profitability and we start to having make some proprietor payment. But as far from an operational stand point 93% is where it should be yes.

[Caroline Corner:]

Okay, great. Thank you. And then your sales force you mentioned that you are adding 3 sales people in UK, is that going to be a 2015 event? Can you just remind U.S. the size of your different sales forces globally in broad terms?

[Rick Eiswirth:]

Yes, previously we had five sales representative in the UK and we just decided to expand that because we felt like more feet on the street, more face time with the physicians and time in the hospital is more important. So we sort of redeployed some dollars and we have three additions that could be coming on team in September. In Germany we have five reps, in Portugal we have two and we have M&S in Portugal as well and M&S medical people in Germany and then in the U.S. I believe we got 32 reps in the field.

[Caroline Corner:]

Okay, great. That's helpful. And then sounds like you are making great progress with claims being paid and we sets our conversation and you've spoken in the past to this first year post launch before your J code in price, revenues potentially being kind of lumpy as physicians try out the product and then help to get that claim state. In previous conversation you mentioned that some physicians might be trying the products three or four times, they like it but they are potentially waiting until our J code is in place before they use it on a more regular basis. Given in the progress that you've had lately with claims being paid you said all Medicare providers are paid and most of the privates as well. Are you seeing less of that now or people or doctors feeling more comfortable try to go ahead and using a little of the end with the insurance that they are going to paid in relatively short order?

[Dan Myers:]

Caroline, I understand. I think we are seeing from the difference of the 14% reorders into that first-quarter to 39% obviously that's a good trend. I think it is quite frankly a little more sluggish than we had originally anticipated and one of the phenomenon’s that it's hard to specifically quantify. But when you look at some of the numbers, there is approximately 2000 retina specialists depending on which data source you use. But that's a pretty good number. We've had a 1000 doctor sign up for access plus which of course is the program that could get U.S. assistance in these benefit investigation et cetera. So I mean that's a pretty good hit 50% and the 2000 number I gave you is not necessarily doctors treating DME, that's just the number of retina specialist's some may or may not treating EMEA. So we were pretty happy with the 1000 doctors who have signed up for this benefit. When you look at how many doctors have actually submitted benefit investigations a quarter earlier number that gives you about roughly 25%-30% of those doctors who signed with access plus - you think you might want to see that number higher the stage. But we also have heard from our clinical account specialist's and field personnel is that some of these access plus doctors in the other words the 1000 signed up maybe at a multi-specialty practice. So for example there might be three people signed up for those 1000 in the same account and in some cases we find that one doctor may go ahead and do two or three patients and the other two doctors in practice just wait and see what his or her experience has been from the clinical outcome as well as from the reimbursement. So it's a little hard to quantify because obviously if you see the glass is half full as soon as that one doctor in the group sees the positive experience we not only get reorder from him or her but now they associate still comfortable saying alright we are seeing data. I mean the - test here and it's a little difficult for U.S. to have transparency here in what this week or the third quarter or so to have a real good feel for what's that ramp look like in September-October and that's where I'm most keen on seeing in the third quarter is what will be the step up from the successful reimbursement. Whether it will continue to be a little bit of what we see kind of an incremental step because some of these doctors have been waiting see how their associates have done.

[Caroline Corner:]

Okay, that's helpful. Thanks. And then my last question, the J code I think we're expecting to hear news on that in November for to be effective in January, can you just talk a little bit about I mean I think feed certainly build out into their numbers and adoption after January but can you just talk a little bit about what are the chances as you like it is like code actually been in place January 1st or are there any risk that we need to be aware of that not happening. And if so, then you just continue to selling into the following January 1st.

[Rick Eiswirth:]

Yeah we're not Caroline we're not aware with any risk I mean we've been notify that it will be coming and it will be in place and effective on January 1 and the incremental practice perspective it will take the course of first quarter were to be really implemented throughout the system. So that all the offsets use it effectively and that ensures actually use it effectively as well. We of course will have our team of reimbursement account specialist in the field like we have now that will help to make sure that that gets used in a more efficiently, but I think it will take the course of the first quarter to be implemented.

[Caroline Corner:]

Thanks guys. Congrats on the quarter.

[Dan Myers:]

Thanks.

[Operator:]

Thank you. The next question is from Jim Malloy of Laylow [ph]. Your line is open. Hi Jim please check your line is on mute.

[Unidentified Analyst:]

Hi thanks again. Thanks for taking the question guys. I was wondering if you could talk a little bit about some of the differences that you're seen into the UK markets versus a Germany, France and French will wait not the price initiative. For the success you're having on the UK versus Germany. And then in the U.S. some of the nice move up in the quarter. Did you say 14% reorder rate and 38% of those have greater than 1RX was it 38% this quarter to - my apologies.

[Dan Myers:]

Hey Jim this is Dan I'll take the last part and then I'll let Rick on the update on to your question around the UK and German and French market. Yeah to be clear that 14% of the 161 accounts reordered at by the end of the first quarter. And now 38% of the 161 accounts have now reordered. So you haven't a delta between 14% and 3% of the 161 accounts base. As far as the other.

[Rick Eiswirth:]

Yeah so Jim I think the primary difference we see between what happens in the UK versus Germany. In the UK, almost 100% of the sales within the National Health Systems. And so the doctors are not compensated to do injection so we're on part of right at the gate with we sent to sending out there is not a difference economic incentive for doctor who wanted to attribute to injection that maybe more frequently versus another one. I think also they have specific treatment paradigms in place in each one of the hospitals that take the doctors through what they should be using. And then third, because of the way nice guidance works, ILUVIEN is available in certain situations where - is not. So - is only available for patients that have - of greater than 400 microns. So that leaves a bucket of patients that might be less than 400 microns where ILUVIEN will be available. So there is several differences there. I think in Germany the challenge we've had before now is we want to fit into some of the reimbursement contracts and the injection fee arrangements including the doctors. So we have a little bit of disadvantage in the way the doctors are getting paid. However Dan alluded to in his comments, a lot of that is being has been rewritten over the first half of the year or is still being rewritten and we seem to be getting into a better position in some of those reimbursement contracts in Germany. So hopefully we'll be catching up over the rest of the year there.

[Unidentified Analyst:]

Great, thanks. And maybe on the first quarter call you have talking about a little bit about pushback on ILUVIEN three year implant and sort of that IOP and hopefully over that time we go buy you're thinking will be that that will be sort to mitigate. How was another quarter under your belt you had success and getting the cross that counter detail that you do what IOP is sort of sale it because what are the - to give these patients if you take them off. How the - in the field then on the counter detail through the three year plan.

[Rick Eiswirth:]

I think in the U.S. it's still kind of a day-to-day grand I don't think we buy means one that sort of battled mind if you will but I think what has really been sort of breakthrough for U.S. since the ARBO meeting in Denver which is a large R&D ophthalmic driven meeting where we presented this cohort of UK patients that I had mentioned in my comments earlier. And what we saw there was efficacy numbers that are far better than the same trial numbers and IOP treatment of pretty much only top at the drop. So I mean just the quick numbers by the way. We now done 2000 patients in the EU and reported filtration surgery is two. Now, some could argue that's not as rigorous reporting as it is in a FDA mandated trial and I certainly take that point. But still filtration surgeries are taking very seriously and you would think that being recorded and so I'm not suggesting that I would take that - that's the percentage we'll see going forward. But I do know that of our early two years or so in the EU. We've seen two filtration of 2000 eyes injected and we're seeing better efficacy in these cohorts where doctors know better where to use ILUVIEN than they did in a trial done back in 2005 when there was no anti-VEGF. So my point is I think our job is now to leverage that experience in the EU where it does become a comment where you'll hear retinal specialist's saying a much more comfortable now moving from VEGF job after 2 or 3 or 4 injections because I'm more confident in the efficacy than I saw in the same trial and I just simply haven't seen the side effect profile that I was concerned about on the in the same data and I guess you said has been used in counter detail. What we really need to do and working diligently on that is get that data published and get it to the place where we can use that to our advantage in the U.S. because as you know it becomes just basically medical marketing. When company says one thing and the other says the other, I mean the best data, the best answer is real time data in the clinical commercial setting and I'm really happy to see that. I think that information is to our advantage and is to our favor. We've got to get that into our medical science liaisons hands in the U.S. and get doctors educated that in the real world setting we think they are going to see better efficacy and better cyclical obviously on the same day. But as you know it's once in the launch. I think we are making progress but clearly we can always do better to that.

[Unidentified Analyst:]

Great, thank you. Last question, any thoughts on DTC campaign and what would be thinking of initializing between direct and at the specialist and what type of pricing party you think you see in the U.S. at what point do you start to thinking as a typical form of 5% to 6% price increases?

[Rick Eiswirth:]

Well, that's a tough question. It's a good question. One we struggle with that because clearly we've seen right away what we anticipated that the benefit of an injection once every 3 years is clearly something that not only the patient but the care giver is holding in high regard. I think the retinal specialist probably will come to grow to appreciate that more as patients begin to talk more about it. Some of the retinal specialist I think probably underestimate that value as much as the patients and it's good a question Jim because we are pretty profited and the program like that will be highly successful than marketing to the care giver or to the patients. It comes down to little bit of economics. But it also comes down to our good timing. I'm comfortable telling you that there will be a period of time in the next few quarters we'll move to some form of DTC and I was jokingly say there is capital DTC and there is lower phase DTC and Dave Hall, our head of sales and marketing has done both of these of his career at Novartis and here at Alimera and so we're going to start looking at that I think we move too quickly on that is probably not doing justice to the ophthalmologists and the retinal specialist. I think we need to kind of make sure we get our message so they'll understand the features and benefits of ILUVIEN before we start moving beyond them to the caregiver and patient. But I think your point is well taken. It will certainly be wise for us to start thinking about that and then looking at the economic because as you know that's sometimes very costly and so the quicker we can move to profitability and see our cash flow position improved the quicker I'll be willing to move in that area. As far as the price increase part of it that's a little more difficult and buying bill than you see in a typical Big Pharma distribution where your moving product through the wholesales and the retail chains. I don't anticipate in the near future taken of price increase on ---.

[Unidentified Analyst:]

Thanks for taking my questions.

[Operator:]

Thank you. [Operator Instructions] Next question is from Boris Beaker [ph] of Cowen. Your line is open.

[Unidentified Analyst:]

Hi, congrats on the quarter. This is George calling it from Boris. I was just wondering if you can provide some granularity on what happen sequentially to sales in Germany and whether or not these new IVON [ph] contracts are using the same pricing that we saw before.

[Rick Eiswirth:]

Well, sequentially sales in Germany were up a little bit over 80%....

[Unidentified Analyst:]

You mean that they were up over 80%?

[Rick Eiswirth:]

They are above over 80%, it's for quarter-over-quarter. That's correct. As we got into some of these hospital contracts and got products on the shelves in the pharmacy to drive their presence as Dan said. With respect to the IVON contracts, I don't our pricing is not different our list price still remains EUR7959 in Germany. I don't I cannot comment on what is what pricing is inside there on IVON contract so the reimbursement to the doctors right now.

[Unidentified Analyst:]

Okay, great. That's fair. And then also can you talk about what the gross net adjustment for U.S. sales.

[Rick Eiswirth:]

Sure that's typically going be on the Medicaid rebates, VA rebates as well as some more patient assistance programs that subsidize basically.

[Unidentified Analyst:]

Sure I mean too quantitatively what is the gross net adjustment on the list price.

[Rick Eiswirth:]

About 5%.

[Unidentified Analyst:]

Okay. Got it. Great, thanks for taking my questions.

[Operator:]

Thank you. The next question is from Guy Detrick of Detrick Capital [ph]. Your line is open.

[Unidentified Analyst:]

Hi you've referenced payments to say if you guy like - might they've been today.

[Rick Eiswirth:]

They've been immaterial today to mean diminished amounts just based on cash with times. We've been operating in a cash loss in all of our countries today. And we expect that to start to turn maybe in some geographies toward the end of the year.

[Unidentified Analyst:]

Okay. And then Dan you've referenced a 300 patient study and I was wondered if you just elaborate on that to a little bit and what the cost to that would be.

[Dan Myers:]

To take the last part first we anticipate the cost to be roughly $2.5 million over the course of the study. It's really designed to give doctors an opportunity to enroll patients in a trail that will be able to look at the IOP overtime as well as efficacy and of course getting back to what I said to Jim's question it's a whole pole that we can escalate what we've seen in Europe in real-time here in the U.S. It's nice to have EU data with their peers across the ocean that shows what we think is very compelling data. But as you know I mean doctors would love to have U.S. data as well. So it's a parallel program that was these 300 we were had a previous course of - or now being looped on to ILUVIEN pretty much watching them on label and been able to take time point checks and give again an inside into what is the experience in today's world but what we now know about DME and how we treat DME versus the same trail that was done back in 2005.

[Unidentified Analyst:]

Okay just a follow up final question on your burn rate. What sort of number volume of procedures do you need to see your cash flow breakeven that right now looks like you're going to be pretty stretched for cash four or five quarters out.

[Rick Eiswirth:]

Well our burn rate is continue to come down. Yeah we burn $13.2 million this quarter than little over $3.5 million of that or approximately - that believes to the increase in receivables because we're not collecting anything in the U.S. yet. So we believe that we've got enough to fund ourselves to positive cash flow. As far as what we need we need to be in a better annual run-rate of about $70 million to be positive cash flow. The number of units depends on the mix obviously in which countries that's coming from but so that's $70 million run-rate we need to get to.

[Unidentified Analyst:]

Okay. Thank you.

[Operator:]

Thank you. There are no further questions in queue at this time. I'll turn the call back over for closing remarks.

[Dan Myers:]

As you can see, we're pleased with our progress year-to-date and we're now at a point where the first UK centers to have adopted ILUVIEN and their pathways are now reporting results from their cohorts. And we're encouraged by the strong safety results and also the management safety profile. Efficacy has surpassed even the same studies I said earlier and the IOP requiring treatment significantly lower than we saw in the study. Most importantly those patients requiring treatments have been managed through standard of practice. And stated like this we think will be usable in the U.S. and I'm very excited about those carrying forward and we'll be looking forward to reporting you on our next quarter earnings call. Thank you.

[Operator:]

Thank you. Ladies and gentlemen, this concludes today's conference. You may now disconnect. Good day.