EyePoint Pharmaceuticals, Inc.
Q4 2014 Earnings Call Transcript

Published:

  • Operator:
    Good day ladies and gentlemen. And welcome to the Fourth Quarter 2014 pSivida Corporation Earnings Conference Call. At this time all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. (Operator Instructions). As a reminder, today's conference is being recorded. I would now like to turn the call over to Lori Freedman.
  • Lori Freedman:
    Thank you Jaime. Good afternoon everyone and thank you for joining us. After the market closed today, we released our fourth quarter financial results for fiscal 2014. A copy of the release is available in the Investor section of our website at www.psivida.com. On the call with me today is Dr. Paul Ashton, President and Chief Executive Officer and Len Ross, Vice President, Finance. Before I hand the call over to Paul, I need to remind everyone that some of our prepared remarks are and answers to your questions may be forward-looking in nature. Forward-looking statements are inherently subject to risks and uncertainties. All statements other than statements of historical facts are forward-looking statements and we cannot guarantee that the results and other expectations expressed, anticipated, or implied will be realized. Actual results could differ materially from those anticipated, estimated or projected in the forward-looking statements. For a more detailed discussion of risk factors that could affect our future results and financial conditions, I refer you to our filings with the SEC including our Annual Report on Form 10-K for the fiscal year ended June 30, 2013. We undertake no obligation to update any forward-looking statements in order to reflect events or circumstances that may arise after this conference call. With that, I’d like to turn the call over to Paul.
  • Dr. Paul Ashton:
    Great. Thank you, Lori. And welcome everyone as we discuss the results of fiscal 2014 and the fiscal (inaudible) . This was a very good quarter for us as we continue our transition to a product based specialty pharma company, all day along still capitalizing on collaborations and licenses by appropriate. Here is some of the highlights. One, our pivotal Phase III for our lead development product, Medidur for posterior uveitis is progressing well and we anticipate enrollment will be completed in calendar Q1 next year. Two, we're very optimistic for our lead on the product ILUVIEN for Diabetic Macular Edema. The new drug application was refiled with the FDA earlier this year and licensee Alimera factors and the delivering discussions with the FDA. And the FDA review is expected to be completed by September 26, just a few weeks away. Three, in Europe ILUVIEN continues to expand its approval footprint. It has now been approved in 10 EU countries for patients with chronic available therapies and approval is pending in seven more EU countries. Our partner, Alimera is selling ILUVIEN in the UK and Germany and expected to launch in France and Portugal in late 2014. Number four, we're continuing to make progress with our delivery systems for peptide and proteins and anticipate selecting a product candidate and being in clinical trials within a year. Five
  • Len Ross:
    Thank you Paul and good afternoon everyone. I will briefly review our fourth quarter and fiscal year 2014 results reported earlier today, starting with our financial position. As Paul noted at June 30, 2014 we had cash, cash equivalents and marketable securities of $18.3 million, an increase of $8 million compared to $10.3 million at June 30, 2013. The most immediate variable in our liquidity picture is the potential $25 million milestone from Alimera. Without this payment or any net profit payments from Alimera, we anticipate that our existing capital resources and expected cash in flows under existing collaboration agreements will enable us to fund our current and planned operations through the third quarter of calendar year 2015. This estimate includes our expected cost of clinical development of Medidur. If we receive the $25 million Alimera milestone payment, we believe it will extend our capital resources into calendar 2017. Alimera has not yet reported quarterly net profits as defined from its sales of ILUVIEN in either the UK or Germany that would result in payments to us. And we do not yet know when or if we will receive any such net profit payments. Turning now to our full year fiscal 2014 results. Revenues increased by $1.3 million to $3.5 million for the year ended June 30, 2014 compared to approximately $2.1 million for the same period last year. This increase primarily reflected $1.5 million of consideration that was recognized in our fiscal third quarter upon resolution of a contingency associated with completion of a feasibility study agreement. Research and development totaled $9.6 million for fiscal 2014, an increase of $2.6 million or 37% compared to $7 million in the prior fiscal year. This change was primarily attributable to a $3.3 million increase in contract research organization or CRO costs for our Medidur Phase III clinical trial, partially offset by $665,000 decrease in personnel costs including stock based compensation. General and administrative expense increased by $300,000 or 4% to $7.5 million for fiscal 2014 from $7.2 million in the prior year, primarily due to increased stock-based compensation and professional fees. Net loss for the year ended June 2014 was $13.4 million or $0.49 per share compared to a net loss of $11.9 million or $0.52 per share for the year ended June 2013. Turning to our fourth quarter results. We reported revenues of $292,000 compared to $492,000 for the same period last year. The decrease predominantly related to collaborative research and development revenue largely resulted from lower amortization of deferred revenue balances. Research and development totaled $2.3 million in each of fiscal 2014 and 2013 for the quarters. Increased CRO cost related to the Medidur trial in the fiscal 2014 fourth quarter were substantially offset by lower levels of personnel costs and professional fees. General and administrative expense decreased by $153,000 to $2 million for the three months ended June 2014 from approximately $2.2 million in the prior year quarter, primarily attributable to lower professional fees partially offset by increased stock-based compensation. Net loss for the fourth quarter of fiscal 2014 was $4 million or $0.14 per share compared to a net loss of $3.9 million or $0.17 per share for the prior year period. I will now turn the call back over to Paul.
  • Dr. Paul Ashton:
    Great. Thank you Len. So to sum up, it’s been an excellent year and quarter for us. Key points are one, the continuing enrollment of our Phase III trial of Medidur for the treatment of posterior uveitis which we plan to complete in Q1 calendar 2015; two, our revised regulatory plan for Medidur for posterior uveitis seek FDA approval based on the single Phase III trial with additional data on the new inserter; three, ILUVIEN now approved in 10 EU countries and marketed in two; four, the FDA’s PDUFA date for ILUVIEN in the U.S. is just two weeks away; and five, continued optimism for Tethadur based on our own pre-clinical research and our work with the global biopharmaceutical company. At this point, we will be happy to take your questions. Operator, will you please initiate the Q&A portion of the call?
  • Operator:
    (Operator Instructions). Our first question comes from Matt Kaplan from Ladenburg Thalmann.
  • Matt Kaplan:
    Hey guys, can you hear me?
  • Dr. Paul Ashton:
    Yes Matt, how it’s going?
  • Matt Kaplan:
    Going well; thanks Paul. Just question, trying to get a little bit more detail on the Medidur program. And I guess congrats on your new strategy there. In terms of the timing of your planned meeting with the FDA to confirm your revised regulatory strategy for one study and then could you give a sense of that when we would have that kind of locked in?
  • Dr. Paul Ashton:
    Yes, we will have that, we’ll request a meeting with them after the PDUFA date or it will be in MD&A.
  • Matt Kaplan:
    Okay, very good. And then in terms of the redesigned applicator, what type of study or what type of data would you need for the applicator, is it just user usability type of study or what would you name?
  • Dr. Paul Ashton:
    Usability.
  • Matt Kaplan:
    Usability?
  • Dr. Paul Ashton:
    Yes.
  • Matt Kaplan:
    So that’s something that you could do rather quickly and trade for?
  • Dr. Paul Ashton:
    Exactly.
  • Matt Kaplan:
    Good. And then in terms of just going back to ILUVIEN, in your prepared remarks, you mentioned Alimera has started on some discussions, labeling with the FDA. At this point, have they gotten a draft label from the FDA, can you comment on that?
  • Dr. Paul Ashton:
    I cannot comment on that.
  • Matt Kaplan:
    Okay, fair enough. And then in terms of Tethadur, what are you thinking right now in terms of some of the leading potential product candidates that you will bring into the clinic in the next year?
  • Dr. Paul Ashton:
    Well, the two separate applications there I think. One is an intraocular application where we will be looking to deliver an antibody or antibody type molecule, so we can guess this one we might be thinking of.
  • Matt Kaplan:
    Sure.
  • Dr. Paul Ashton:
    Try to get and extend it to this [note]. And the other is a subcutaneous administration. If something can release the drug into the back-of-the-eye, it’s then the same technology should be useful for the subcutaneous administration. And if you’re looking at a drug or a compound that’s typically injected once a day; moving it to once a week that would be a big event. So, we're looking at a couple of different possibilities.
  • Matt Kaplan:
    And are you thinking about injection and directly into joint perhaps or something like that as well or?
  • Dr. Paul Ashton:
    Injection of possibility Tethadur into joints is intrinsically tricky.
  • Matt Kaplan:
    Okay.
  • Dr. Paul Ashton:
    Because joints tend to react very unfavorably; it's really easy to trigger and inflammatory reaction if you got full into joint. This is even reports the possibilities (inaudible), which is a steroid, this powerful dose can actually trigger and inflammatory response. So, influent joint is a big trickier.
  • Matt Kaplan:
    Okay, alright, good. Well, again thanks for taking my question and congrats on the [promise you made].
  • Dr. Paul Ashton:
    Thank you.
  • Operator:
    The next question comes from Suraj Kalia from Northland Securities.
  • Suraj Kalia:
    Hi, Paul.
  • Dr. Paul Ashton:
    Hi, Suraj.
  • Suraj Kalia:
    Can you hear me alright?
  • Dr. Paul Ashton:
    Yes.
  • Suraj Kalia:
    My apologies if there is some background noise. So Paul, I want to go back to Medidur. Now, the new strategy is predicated only on a single Phase III study, maybe I didn’t follow it Paul. Is this something that was decided on after some preliminary discussions with the FDA? And I am curious about the inserter, what all transpired that made your belief we can go down a single Phase III patch now?
  • Dr. Paul Ashton:
    Without getting to too many specifics, we can get out a test with a single Phase III. The best example of this, I can point to is, (inaudible) was initially approved for vein occlusion based on two Phase III clinical trials in vein occlusion and a total of approximately 1,000 patients in each trial. And again subsequently was able to reference that data file sNDA (inaudible) on the basis of single Phase III trial of 370 patients. So, in our case we have the ILUVIEN device [Technical Difficulty] Phase III clinical trials in 1,000 patients. Referencing that data and using that to support a single Phase III trial, using that sort of in conjunction with a single Phase III trial in uveitis (inaudible).
  • Suraj Kalia:
    Okay. And Paul obviously in your prepared remarks you have mentioned about Alimera getting into labeling discussions. And I know this might be a slightly unfair question, but I'll still ask, if or how would you qualitatively and possibly qualitatively characterize the market for ILUVIEN, is it insufficient to responsive is included the label? And also if it is excluded from the labels how do you see that at least in your own internal strategic analysis, how do you see inclusion and exclusion of these two words in the label?
  • Dr. Paul Ashton:
    Well, obviously you want to spend the label, but being more conservative, I think it's difficult and frankly I'd be much happy if I have some of the session access September 25. One way or the other.
  • Suraj Kalia:
    Fair enough. Paul those are all the questions I have for now. Thank you.
  • Dr. Paul Ashton:
    Thank you.
  • Operator:
    (Operator Instructions). The next question comes from Orlando from MLV & Co.
  • Unidentified Analyst:
    Hi guys, thanks for taking the question.
  • Dr. Paul Ashton:
    Hi Linda.
  • Unidentified Analyst:
    Hi, how are you?
  • Dr. Paul Ashton:
    Good. Thank you.
  • Unidentified Analyst:
    Thank you. Can you help us understand maybe some of the US versus new markets for uveitis in particular you I think it's unfair that you guys might be able to use only one Phase III trial is that true in Europe as well?
  • Dr. Paul Ashton:
    It's not, we won't be able to think the Phase II trial in addition to the U.S. we haven’t had that conversation yet with the European regulates.
  • Unidentified Analyst:
    So, I think which -- I guess do you plan to and if so, what is the timing basically about that?
  • Dr. Paul Ashton:
    And we have plans to have inspections following the PDUFA here in the U.S.
  • Unidentified Analyst:
    And then on the EMEA markets in both the U.S. and Europe, can you maybe help us understand some of the discussions that you’ve been having I know you don’t you can’t say that much but if there is something that you can help with from…
  • Dr. Paul Ashton:
    I am sorry, I cannot hear you.
  • Unidentified Analyst:
    Sorry. Is this better?
  • Dr. Paul Ashton:
    Yes, it is thank you.
  • Unidentified Analyst:
    Okay. So, on the U.S. and European DME market I know you can’t talk about discussion specifically but maybe can you help us understand what some other differences might or similarities might be between Europe and U.S.?
  • Dr. Paul Ashton:
    I can’t comment I'm afraid, I do apologize.
  • Unidentified Analyst:
    It’s all right. I will ask you offline.
  • Dr. Paul Ashton:
    I still won’t be able to comment.
  • Unidentified Analyst:
    Okay. Thank you.
  • Operator:
    And I am showing no further questions. I would now like to turn the call back over to Paul for closing remarks.
  • Dr. Paul Ashton:
    Okay. Well thanks you all very much for joining us today. I look forward to speaking to you again in the next quarter. In the meantime if you have any additional questions please feel free to contact us. Thank you.
  • Operator:
    Ladies and gentlemen, that does conclude the conference for today. Again, thank you for your participation. You may all disconnect. Have a good day.

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