Q4 2019 Earnings Call

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Operator: Good morning, and welcome to the Alimera Sciences fourth quarter and full year 2019 financial results and corporate update conference call. Our participants will be in a listen-only mode. Should you need assistance, please signal the conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press the star key then one on your touchtone phone.

Jules Abraham: To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Jules Abraham, CORE-IR. Please go ahead.

Jules Abraham: Good morning, and thank you for participating in today's conference. Joining me today from Alimera's leadership team are Rick Eiswirth, President and Chief Executive Officer, and Phil Jones, Chief Financial Officer. During this call, management will be making forward-looking statements, including statements that address Alimera's expectations for future performance or operational results, while looking at statements involving risks and other factors that may cause actual results to differ materially from those stated. For more information about these risks, please refer to the risk factors described in Alimera's most recently filed periodic reports on Form 10-K and Form 10-Q, the Form 8-K filed with the SEC today, and Alimera's press release that accompanies this call, particularly the cautionary statement tonight. Today's conference call includes Adjusted EBITDA, a non-GAAP financial measure that Alimera believes can be useful in evaluating its performance.

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Jules Abraham: You should not consider this additional information in isolation or as a substitute for results prepared in accordance with GAAP for reconciliation of this non-GAAP financial measure to net loss, its most directly comparable GAAP financial measure. Please see the reconciliation table located in Alimera's earnings process. The content of this call contains time-sensitive information that is accurate only as of today, February 27, 2020. Except as required by law, Alimera disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call. It's now my pleasure to turn the call over to Rick Eiswirth.

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Richard S. Eiswirth: Thank you, Jules, and good morning to everyone on the call. I'm really pleased to share that we reported strong results to finish out the 2019 calendar year, with sales in the fourth quarter of $17.3 million, our best quarter ever for revenue generation. Revenue growth for the full year of 2019 was approximately 16%, as we delivered nearly $54 million in total revenue for the year. We closed out 2019 with strong growth in the fourth quarter of 2018, which was also a strong quarter for us. You may recall that our results in the fourth quarter of 2018 were positively impacted in Europe by a shortage of Azidex, providing an estimated incremental $2.4 million in one-time revenue. I'm particularly pleased that the fourth quarter of 2019 surpassed last year's fourth quarter and grew 15% year-over-year despite the loss of that one-time revenue.

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Richard S. Eiswirth: We are also pleased that our fourth quarter demonstrated the strength of our business in both the U.S. and our international segments. We indicated on our third quarter call that our objective was to return the U.S. segment to growth as our field force continued to gain experience. I'm very happy to report that we met this objective, realizing a record quarterly end user demand for Elluvian, a 14% increase in end user demand units over the fourth quarter of 2018, and a 9% sequential increase over the third quarter of 2019. Our strengthened U.S. sales team is performing solidly behind the Alluvion brand promise as this is resonating with our physician customers. That message is strong and clear, that Alluvion is the only therapy that controls the recurrence of the disease so patients can see better, longer, with fewer injections. Because of the uptick in U.S. sales in Q4 and a manufacturing issue over the holidays, we did have to manage an out-of-stock situation for four weeks in the current first quarter. However, we were able to closely work with many of our physician offices to reschedule patients or utilize consignment units on hand in the doctor's offices to minimize any disruption.

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Oh, sorry. It's my ringtone. Good morning and welcome to the elementary sciences fourth-quarter and full-year 2019 Financial results in corporate update conference call. All participants will be off only mode should you need assistance, please signal conference specialist by pressing the star key followed by zero after today's presentation. There will be opportunity to ask questions to ask a question. You may press * then 1 on your touchtone phone to withdraw your question, please press * then two, please note this event is being recorded. I would now like to turn the conference over to jewels Abraham, please go ahead good morning. And thank you for participating in today's conference call joining me today from American leadership team are Ricky's worth president and chief executive officer until Jones Chief Financial Officer during this call management. We will be making forward-looking statements including statements that address expectations for future performance or operational results.

forward-looking statements involve risks

And other factors that may cause actual results to differ materially from those statements for more information about these risks. Please refer to the risk factors described in a linear has most recently filed periodic reports on form 10-K and form 10-q the form 8-k filed with the SEC today and press release that accompanies this call particularly the cautionary statements in it today conference call includes adjusted ebitda and non-gaap financial measure that Elementary believes can be useful in evaluating its performance. You should not consider this additional information in isolation or is the substitute for results prepared in accordance with gaap reconciliation of this non-gaap financial measure can that lost its most directly comparable gaap Financial measure, please see the reconciliation table located in Alamo Springs, press release the content of this call contains time sensitive information that is accurate only as of today, February 27th, 2020 except this month.

Richard S. Eiswirth: Additionally, our distributors continue to take orders for a living and maintain a backlog. We were able to ship product to our distributors at the end of last week, and our distributors have already shipped over 300 units through Wednesday of this week. As a result, although it is early, we do not expect the outage to have a material impact on the first quarter.

Richard S. Eiswirth: As we turn our focus to our international segment, I'd like to remind everyone that Alimera is as unique as a small ophthalmology company having both a U.S. and international presence. We are greatly encouraged that our international segment continues to contribute materially to our revenue and cash flow. In the fourth quarter of 2019, we grew our international business by 26% compared to the fourth quarter of last year. And for the year, our international revenues were $21.7 million, up 49% compared to 2018, and another record for our international business. Three factors drove our international growth in 2019.

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Any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call? It's now my pleasure to turn the call over to Rick Heisler. Thank God. Thank you Jules and good morning to everyone on the call. I'm really pleased to share that we reported strong results to finish out the 2019 calendar year with sales in the fourth quarter of 17.3 million months our best quarter ever for Revenue generation Revenue growth for the full year of 2019 was approximately 16% as we deliver nearly $54 million dollars in total revenue for the year, We closed out 2019 with strong growth over the fourth quarter of 2018, which was also a strong quarter for us.

Richard S. Eiswirth: Continued growth of our DME business and our direct market. Continued expansion in our distributor markets, specifically rapid adoption in France following the launch of Elluvian in the first half of the year, and the launch of the indication for non-infectious uveitis affecting the posterior segment of the eye in the UK and Germany in the fourth quarter. Both geographic expansion and the launch of a lubricant for patients suffering from uveitis in European markets remain key components of our growth strategy going forward. You may recall that the results of the Phase III trial demonstrated a median disease-free recurrence period more than nine times greater than the control arm, and that the average patient had a 68% reduction in the number of recurrences of uveitis over three years.

You may recall that a results in the fourth quarter of 2018 were positively impacted in Europe by a shortage of objects providing an estimated incremental 2.4 million dollars in one-time Revenue. I'm particularly pleased that the fourth quarter of 2019 surpassed last year's fourth-quarter and grew 15% year-over-year despite the loss of that one-time Revenue. We're also pleased that our fourth-quarter demonstrates the strength of our business in both the us and our International segments. We indicated on our third quarter call that our objective was to return the segment to growth as our Field Force continue to gain experience. I'm very happy to report that we met this objective realizing a record quarterly end-user demand for alluvium a 14% increase in end-user demand units over the fourth quarter of 2018 and not a 9% sequential increase over the third quarter of 2019. Our strength of the sales team is performing solidly behind the alluvian brand promise as this is resonating with our position customers wage.

Richard S. Eiswirth: We believe that these data, the strong, real-world results we are seeing for the DMA indication, and the response from patients all demonstrate the unique value that alluvium delivers in treating retinal disease by reducing the recurrence of inflammation. These factors underscore our message to physicians that alluvium provides longer-term and more consistent disease control. The true value of Illuvian is its continuous microdosing technology, which is designed to offer two distinguishing benefits as the only non-acute therapy to treat DME globally and uveitis in Europe. The first benefit is to consistently treat the condition, continuously delivering a microdose of the drug to minimize the edema and inflammation of the retina. The other benefit is to significantly reduce the recurrence of the disease and, therefore, the number of injections a patient must endure. These benefits enable physicians to provide what their patients want, longer-lasting vision with fewer injections.

That message is strong and clear.

That are leaving is the only therapy that controls the recurrence of the disease. So patients can see better longer with fewer injections because of the uptick in sales in Q4 and a manufacturing issue holidays. We did have to manage an out-of-stock situation for four weeks in the current first quarter. However, we were able to closely work with many of our Physician Offices to reschedule patients or utilize Consignment units on Hancock doctor's office has to minimize any disruption additionally have Distributors continue to take orders for a living and maintain a backlog. We are rather ship products are Distributors at the end of last week and our Distributors of or shipped over 300 units through Wednesday of this week as a result. Although it is early. We do not expect the outage to have a material impact on the first quarter as we turn our Focus to our International segment off. I'd like to remind everyone that Al Ameri is a unique is unique as a small opthamology company having both of us and international presence. We are greatly encouraged that our International segment continues to contribute ma'am.

Richard S. Eiswirth: In addition to the strong revenue performance across our business segments, we were able to achieve a significant milestone. Completing 2019 with slightly positive adjusted EBITDA for the full year, we believe this further demonstrates the uniqueness of Alimera in the landscape of small, independent ophthalmology companies.

Richard S. Eiswirth: I would like to congratulate and thank all the employees at Alimera, each of whom contributed greatly to this significant milestone. During our third-quarter call, we expressed our expectation of positive cash flow in the fourth quarter, and we were able to do that, generating approximately $500,000 in cash from operations during the quarter. I want to reiterate our goal of generating positive adjusted EBITDA in 2020 and maintaining cash neutrality after covering our interest payments on our debt facility. We enhanced our ability to meet this goal by refinancing our debt with solar capital on December 31, 2019. In that refinancing, we extended our interest-only period through December 2022.

Really to our revenue and cash-flow in the fourth quarter of 2019. We grew International Business by 26% compared to the fourth quarter of last year. And for the year International revenues were Twenty One thirty seven million dollars up 49% compared to 2.

Richard S. Eiswirth: I am pleased to announce that we also triggered a significant milestone in the solar agreement upon the completion of the fourth quarter. Under our agreement with SunPower, we were eligible to receive an additional $2.5 million advance upon achieving at least $30 million in revenue for any trailing six-month period on or before November 30, 2020. We achieved that as of December 31st, 2019, with $30.2 million in revenue over the final six months of the year. As a result, we believe that our cash position is sufficient to fund our operations for the foreseeable future, and we do not have plans for any additional financing at this time. As we look forward, we believe 2020 will be a major year for executing and growing Lubyans sales and market share.

718 and another record for the international business three factors drove our International growth in 2018 continued growth of our business and our direct markets continued expansion in our distributor markets specifically the rapid adoption in France following the launch of a looming in the first half of the year and the launch of the indication for non-infectious uveitis affecting the posterior segment of the I am in the UK and Germany in the fourth quarter both Geographic expansion and the launch of a Libyan for patients suffering from the itis in European markets, remain key components of our growth strategy going forward you may recall that the results of the phase 3 trial demonstrated a medium disease-free recurrence. More than nine times greater than the control arm and that the average patient had a 68% reduction a number of occurrences of uveitis over three years. We believe that these data the strong real world results. We are seeing for the demon vacation and the response from patients all demonstrate the unique value that are living wage.

Richard S. Eiswirth: Our corporate priorities include the following: continue to grow unit demand for alluvium in both the U.S. and our international markets where we have direct sales; continue to expand the uptake of alluvium into more hospitals in the UK and Germany as a treatment for uveitis, as well as obtain reimbursement in Portugal, which is necessary to launch this indication there; continue to assist our distributors in delivering strong growth of olivine for DME and I'll now turn the call over to Phil, who will review our financial results for the third quarter.

Rivers in treating retinal Disease by reducing the recurrence of inflammation these factors underscore our message to Physicians that are leaving provides longer-term and more consistent Disease Control. The true value is it's continuous microdosing technology that is designed to offer to distinguishing benefits as the only non-acute therapy to treat DME globally and uveitis in Europe. June 1st benefit is to continue consistently treat the condition continuously delivering a micro dose of the drug to minimize the edema and inflammation the retina the other benefit is to significantly reduce the recurring lung disease and therefore the number of injections of patient must endure these benefits enable Physicians to provide what their patients want longer-lasting Vision the fewer injections in addition to the strong performance across our business segments. We're we were able to achieve a significant Milestone completing 2019 with slightly positive adjusted ebitda for the full year. We believe this further demonstrates the Dead

Phil Jones: Thanks, Rick, and hello everyone. During the fourth quarter of 2019, our consolidated net revenue grew approximately 15% to $17.3 million, compared to $15.1 million in the fourth quarter of 2018. US net revenue was approximately $9.5 million for the fourth quarter of 2019, up approximately 7% from $8.9 million for the same period of 2018. US end user demand, which represents units purchased by physicians and pharmacies from our distributors, was up 14% in the fourth quarter of 2019, increasing to 1,164 units compared to 1,019 units for the fourth quarter of 2018. As we have previously shared, our gap revenues in the U.S. do not always correlate with end-user demand due to the timing of purchases by our specialty distributors. Net revenue from the international segment increased 26% to approximately $7.8 million for the fourth quarter of 2019, compared to approximately $6.2 million for the same period last year. This was driven by growth in our European DMA business, as well as the launches of Alluvion's UV-I disindication in Germany and the UK.

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Independent Ophthalmology companies. I would like to congratulate and thank all the employees at Al Ameri each of whom contributed greatly to this significant Milestone during our third quarter call Press * expectation of positive casual in the fourth quarter, and we were able to do that generating approximately $500,000 in cash from operations during the course. I want to reiterate our goal of generating positive adjusted ebitda in twenty-twenty and maintaining cash neutrality after covering our interest payments on our debt facility. We enhanced our ability to meet this goal by refinancing our debt with Solar Capital on December 31st, 2019 in that refinancing. We extended our interest only. Through December 20-22. I am pleased to announce that we also triggered a significant milestone in the Solar agreement upon completion of the fourth quarter under our agreement with solar we were eligible to receive an additional two and half million dollar Advanced upon achieving at least Thirty million in revenue for any trailing six month period on birth

Phil Jones: Research, development, and medical affairs expenses decreased by approximately 7 percent to $2.7 million in the fourth quarter of 2019 compared to $2.9 million in the fourth quarter of 2018. General and administrative expenses decreased by approximately 5% to $3.8 million in the fourth quarter of 2019 compared to approximately $4 million in the fourth quarter of 2018. Sales and marketing expenses during the fourth quarter of 2019 were approximately $6.5 million, up 7% to $6.1 million for the fourth quarter of 2018. The increase was primarily attributable to increases in marketing costs associated with the launch of our direct-to-patient advertising program.

or before November 30th 2020

Richie that as of December 31st 2019 with 30.2 million in Revenue over the final six months of the year as a result. We believe that our cash position is sufficient to fund our operations for the foreseeable future and we do not have plans for any additional financing at this time as we look forward. We believe 2020 will be a major year for executing and growing leaving and sales and market-share our corporate priorities include the following continue to grow unit demand for a living in both the us and our International markets where we have direct sales continue to expand the update of believing in New Jersey hospitals in the UK and Germany as a treatment for uveitis as well as obtaining reimbursement in Portugal which is necessary to launch this indication there continue to assist our distributors in delivering strong growth Thursday evening for DME and support their anticipated launches behind the uveitis indication in the second half of the year. Now turn the call over to Phil who review our financial results for the third quarter Bill dead.

Phil Jones: Total operating expenses were possibly $30.6 million for the fourth quarter of 2019, compared to $13.7 million for the three months ended December 31, 2018. In the fourth quarter of 2019, we reported an adjusted EBITDA of $2.6 million, compared to $2.4 million in the fourth quarter of 2018. The growth in both our U.S. and international segments, along with our cost containment expenses, primarily drove the increase in our adjusted EBITDA.

Thanks, Rick and hello, everyone.

During the fourth quarter of 2019 are Consolidated net revenue approximately 15% to Seventeen point three million dollars compared to Fifteen Point 1 million dollars in the fourth quarter 2018 u.s. 9th Avenue was approximately 9.5 million dollars for the fourth quarter of two thousand miles on up approximately 7% from 8.9 million dollars for the same period of 2009 to 2018 Us in user demands represents units purchased by positions and pharmacies on our Distributors was up 14% in the fourth quarter of 2019 increasing to $1,164 units compared to 1019 units for the fourth quarter of 2018 as we have previously shared our Gap revenues in the u.s. Do not always correlate with a newsroom and due to the timing of purchases by our specialty of computers net revenue from International segment increased 26% to possibly seven point eight million dollars for the fourth quarter of 2019 compared to approximately 6.2 million dollars for the same period last year off.

Phil Jones: For the fourth quarter of 2019, we generated a net income of approximately $500,000 compared to a net loss of approximately $1.2 million for the fourth quarter of 2018. Before getting into any EPS discussions, it should be noted that all EPS calculations reflect our 1 for 15 reverse stock splits. Basic and diluted net income per share for the 4th quarter of 2019 was $0.08 per share on approximately 6.2 million weighted average shares outstanding. This compares to basic and diluted net loss per share for the 4th quarter of 2018 of $0.27 per share on approximately 4.8 million weighted average shares outstanding. Turning to our results for the full year, revenues for 2019 were $53.9 million, up 16%, and compared to approximately $46.6 million for 2018. Research, development, and medical affairs expenses decreased by approximately $300,000 or 3% to $11 million compared to $11.3 million in 2018. The decrease was primarily attributable to decreases in clinical study and scientific communication.

This was driven by growth in our European.

Business as well as the launches of Illusions uveitis indication in Germany and the UK research development and medical Affairs expenses decreased by approximately 7% to two point seven million dollars in the fourth quarter of 2019 compared to 2.9 Million Dollars in the fourth quarter of 2018 General and administrative expenses decreased by approximately 5% to 3.8 million dollars for the fourth quarter of 2019 compared to approximately four million dollars in the fourth quarter of 2018 sales and marketing expenses during the fourth quarter of 2019 were approximately 6.5 million dollars up 6% to 6.1 million dollars for the fourth quarter of 2018. The increase was primarily primarily attributable to increases in marketing costs associated with the launch of our direct patient advertising program.

Total operating expenses were possibly $16 for the fourth quarter of 2019 compared to thirteen point seven million dollars for the 3 months ended December 31st, 2018.

Phil Jones: General administrative expenses decreased by approximately $500,000, or 3%, to $14 million compared to $14.5 million for 2018. The decrease was primarily attributable to a one-time severance expense incurred in 2018. Sales and marketing expenses increased by approximately $1.5 million, or 6%, to $25 million compared to $23.5 million in 2018. The increases were mainly attributable to the launch of our direct-to-patient advertising pilot program in the United States and market access costs associated with uveitis in the European area.

In the fourth quarter of 2019. We reported adjusted ebitda of two point six million dollars compared to 2.4 million dollars in the fourth quarter of 2018 the growth in both our us International segment along with our containing expenses primarily drove increase in our adjusted ebitda for the fourth quarter of 2019. We generated net income of approximately $500,000 compared to net loss is across one point two million dollars for the fourth quarter of 2018 before getting into any EPS discussions. It should be noted that all EPS calculations reflect our one for 15 reverse stock split.

Phil Jones: Total expenses in 2019 were $52.6 million compared to $52 million in 2018. The net loss for the full year of 2019 was $10.4 million compared to a net loss of approximately $16.4 million for the full year of 2018. Our earnings per share calculation in 2018 was impacted by our preferred stock exchange, which resulted in a $38.3 million gain attributable to our common shareholders. Therefore, net income available to shareholders in 2018 was approximately $21.9 million. Basic and diluted net loss per share for 2019 was $2.19 per share on approximately 4.9 million weighted average shares outstanding. This compares with basic net income per share of $3.74 on approximately 5.9 million weighted average shares outstanding and diluted net income per share of $3.71 per share on approximately 5.9 million weighted average shares outstanding for 2018.

basic and diluted

The net income per share for the fourth quarter of 2019 was eight cents per share on approximately 6.2 million weighted average shares outstanding this compares to basic and diluted net loss per share for the 4th 2018 of $0.27 per share on approximately 4.8 million weighted average shares outstanding turning to our results for the full year revenues, 50019 or fifty three point nine thousand dollars up 16% compared to approximately 46.6 million dollars for a 2018.

Research development and medical Affairs expenses decreased by approximately $300,000 or 3% to $11 compared to eleven point three million dollars in 2018. The decrease was proud to be able to decreases in clinical studies scientific Communications General administrative expenses decreased by approximately $500,000 or 3% to $14 compared to fourteen point five million dollars for a 2018. The decrease was primarily attributable to a one-time Severance expense incurred in 2018 sales and marketing expenses increased by approximately 1.5 million dollars or 6% to twenty five million dollars compared to twenty three point five million dollars in 2018.

Phil Jones: On December 31st, 2019, we had cash and cash equivalents of approximately $9.4 million. As Rick mentioned, on December 31st of last year, we refinanced our debt with Solar Capital, extending our interest-only period through December 2022. We announced this past Monday that we achieved a revenue milestone stipulated in our new agreement with Solar, which enabled us to draw down an additional $2.5 million to strengthen our balance sheet. As a result, we believe that we are in a good financial position to fund the growth of our business going forward without further dilution to our shareholders and have no plans to issue equity at this time. In addition to the out-of-stock situation Rick described earlier and the recent uncertainties associated with the coronavirus that we are monitoring, I want to remind everyone of the seasonality of our business.

The increases were mainly true.

Attributable to the launch of our direct patient advertising pilot program in the United States in Market access costs associated with uveitis in the European area told expect in 2019. We're fifty two point six million dollars compared to fifty two million dollars in 2018 net loss for the full year of 2019 was ten point four million dollars compared to a net loss of a process sixteen point four million dollars for the full year of 2018. Our earnings-per-share calculation in 2018 was impacted by a preferred stock exchange which resulted in a 38.3 million dollar gained attributable to our common shareholders. Therefore net income available to shareholders in 2018 was approximately 21.9 million dollars basic and diluted net loss per share for 2018 was $2.19 per share on approximately 4.9 million weighted average shares outstanding this compares to basic net income per share of $3.74 off.

Phil Jones: The first quarter tends to be considerably lighter than other quarters due to the change in the calendar year and the impact of patient insurance approvals and deductibles. In the U.S., physician practices will re-verify patient insurance plans in the first quarter, which typically slows down the time for lubion injections. In Europe, many hospitals restart their annual budgets, leading to a delay in patient acceptance of lubion injections. And with that, I'll now turn the call back over to Rick to wrap up our prepared remarks.

on approximately 5.9 million

Weighted average shares outstanding and diluted they offer share of 3.71 cents per share are possibly 5.9 million weighted average shares outstanding for two people on December 31st, 2019. We had cash and cash equivalents of approximately 9.4 million dollars as as Rick mentioned on December 31st of last year. We refinanced off debt with Solar Capital extending our interest only. Through December 2022. We announced this past Monday that we achieved a revenue Milestone stipulated in our new agreement with Soulja which enabled us to draw down additional two point five million dollars to strengthen our balance sheet average result. We believe that we are in good financial position to fund the car business going for out further dilution Dark Horse and have no plans to issue Equity at this time.

Richard S. Eiswirth: Thank you, Phil. As I said earlier, we are very pleased with our fourth quarter and full year results. Looking back on my first year as CEO, I believe we have accomplished much of what we set out to do at the beginning of the year. We continue to grow alluvium organically, increasing the usage of alluvium for DME in our existing market. We expanded geographically, launching Alluvion in France with our distributor Horace Pharmaceuticals. We obtained approval for Alluvium for a new indication for uveitis patients in Europe. And we were able to commercialize alluvium for uveitis patients before the end of the year. As a result, approximately 7,900 eyes were treated with Illuvian globally in 2019, compared to approximately 6,000 units in 2018.

In addition to the out-of-stock situation described earlier and the recent uncertainties associated with the coronavirus that we are monitoring. I want to remind everyone of the seasonality of our business. The first quarterback has to be considerably lighter than other quarters do to change in the calendar year and the impact of patient Insurance approvals and deductibles in the US decision practices will roverify patient in home plans in the first quarter, which typically close down the time for Olivia injections in Europe many hospitals restart the annual budget leading to a delay in patient acceptance for losing injections off and with that. I'll turn the call back over to Rick trap officer remarks Rick. Thank you Phil. As I said earlier. We are very pleased with our fourth-quarter and full-year results came back on my first year of CEO. I believe we have accomplished much of what we set out to do at the beginning of the year. We continue to grow lupient organically increasing the usage of alleviate 4D me in our existing markets wage.

Richard S. Eiswirth: That's growth in global demand of 32%, which enabled us to report record revenues for the year and, more importantly, achieve financial independence. As Phil indicated, we believe our cash on hand is sufficient to fund the continued growth of Elluvian without the infusion of additional capital. We have accomplished a lot at Alimera this past year, but, as I always tell our team, we are just getting started.

Geographically launching a living in France with our distributor horse Pharmaceuticals. We obtained approval for alluvian for new indication for uveitis patients in Europe and we are

Operator: We continue to believe that we have a better mousetrap, a better way to treat DME and uveitis because of Aleveum's unique continuous microdisc, making it the only drug that can help patients see better for longer with fewer injections. The opportunity for additional utilization is significant. In 2020, we intend to continue to grow alluvium organically in our existing markets, make alluvium available for UVI's patients in more markets, and continue to expand geographically. And with that overview, we are now ready to take questions, Operator.

Able to commercialize lubing for uveitis patients before the end of the year as a result approximately seventy nine hundred eyes were treated with the with the leading Global in 2019 compared to approximately six thousand years 2018 that's growth in global demand of 32% which enabled us to report record revenues for the year and more importantly Achieve Financial Independence. It's still indicated We Believe are cash and insufficient fund the continued growth of a living without the infusion of additional Capital. We have accomplished allotted al-amir this past year. But as I always tell our team we are just getting started I and I continue to believe that we have a better mousetrap a better way to treat d me and uveitis because of aliens unique continuous microdosing making it the only drug that can help patients see better longer. If you were injections, the opportunity for additional utilization is significant in twenty-twenty. We intend to continue to grow a living organically in our existing markets make Aloo being available for you guys patience and more FAQ.

Andrew J. DaSilva: We will now begin the question and answer session. To ask a question, you may press star then 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then 2. At this time, we'll pause momentarily to assemble the roster. The first question comes from Andrew J. DaSilva of B. Riley FBR. Please go ahead.

Richard S. Eiswirth: Yes, good morning, congratulations on the very strong close to 2019. I just have a few quick questions. Could you please just discuss the current status of Salesforce, maybe a little bit of context, where they were when you maybe started the fourth quarter and where they are today. That'll give us a little bit of a reference point.

And continue to expand geographically and with that overview. We are now ready to take questions operator.

We will now begin the question-and-answer session to ask a question. You may press * then 1 on your touchtone phone. If you are using a speaker phone, please pick up your handset before pressing the keys to withdraw your question, please press * then two at this time. We'll pause momentarily to assemble our roster. The first question comes from Andrew of beer, please go ahead. Yes, good morning congrats on the very strong close to 2019. I just have a few quick questions. Could you could you please just discuss the the status of the sales force, maybe a little bit of context where they were when you maybe started the fourth quarter and where they are today, they'll give us a little bit of a reference point. Yeah sure. And I mean, I think the sales team continues to strengthen, you know, we have Thirty sales territories right now. I believe we have we have one opening in a new territory that we

Richard S. Eiswirth: Yeah, sure, Andy. I mean, I think the sales team continues to strengthen. You know, we have 30 sales territories right now. I believe we have one opening in a new territory that we – sorry, not a new territory. We do have one opening in the New York City market right now.

Richard S. Eiswirth: The staff was full at the beginning of the quarter, although we did have some turnover in December. We turned over, I believe, three or four reps, but honestly, they were underperforming territories, and I expect that to be sort of the normal going forward. So there's nothing out of the ordinary there. We just had our national sales meeting in the U.S., and we had a similar one in Europe, and I will tell you that the enthusiasm of the sales team, both in the U.S. and in Europe, is at an all-time high. So I feel really good about where they are, and I think we can continue to get better. But to give you some perspective, we ended 2019 in the U.S. with our largest end-user month ever in December.

Richard S. Eiswirth: Okay, okay, that's good context, thank you. And then as far as the fourth quarter goes, internationally, do you have insight on stocking orders, either new regions or the VV-itis becoming relevant in the UK and Germany? Just curious if there was a bolus of Alluvian sales that seemed maybe unusual to you, and maybe you could be likely attributed to the label expansion?

When the sorry not a new territory we do have.

One opening in the New York City Market right now, the the staff was full at the beginning of the quarter. We did have some turnover in December. We turned over I believe three or four years, but honestly, they were the underperforming territories and I expect that to be sort of the normal going forward. So nothing out of the normal course, they're just had our national sales meeting the and we had a similar in Europe and I will tell you that the enthusiasm, you know with the sales team both in the USA and Europe is is at an all-time high. So I feel real good about where they are, you know, and I think we can continue to get better but to give you some perspective, you know, we ended 2019. I mean the us with our our largest end-user DeMont ever in December.

Richard S. Eiswirth: Yeah, so it's a great question, and I think the growth in the fourth quarter comes from a couple of places. One, if you recall during the third quarter call, I talked about the outstanding presence that we had at the Uretina conference in Europe, right, and we had symposiums for both uveitis and DME, and frankly, Professor Bandella from Italy, you know, stood on the podium and talked about alluvium being, you know, the best way to treat DME as a disease. So I think there was some carryover of that in Europe. We also launched the uveitis indication in Germany and the UK at the end of September, and we know that we've gotten some very quick and rapid uptake in a few hospitals.

Okay. Okay. That's a good contact. Thank you. And then as far as the fourth quarter goes internationally. Do you have Insight on Stocking orders either, you know new regions or Thursday itis becoming relevant in in the UK and Germany just curious if there was a bolus of alluvian sales that seemed maybe unusual you and maybe you could be likely attribute it to the label expansion. Yeah. So any it's it's a great question and I think the growth in the fourth quarter comes from a couple of places one. If you recall. Third-quarter call, I talked about an outstanding presence that we had at the Met in the conference in Europe. Right? And we had symposiums for both uveitis, India me and frankly Professor bandello from Italy, you know stood on the podium and talked about it being, you know the best way to treat a disease. So I think there was some carry forward of that in Europe. We also did launch the uveitis indication in Germany and the UK at the end of September and yep.

Richard S. Eiswirth: I do have a little bit of, I don't want to say concern, but you know we want to continue to monitor the situation. We don't know how much of the uveitis that we're seeing in the fourth quarter and even right now is, you know, a bolus of patients and what the steady run rate will be, but at the same time, I don't think it's been broadly accepted across a large number of hospitals yet in either Germany or the UK. So I think we've got the ability to, you know, continue to expand into more hospitals with that uveitis indication even if we've absorbed a bolus in some of the early early adopters.

Know that we've gotten some very quick.

And wrap it up take in a few hospitals. I do have a little bit of I don't want to say concern but you know, we want to continue to monitor the situation. We don't know how much of the uveitis that we're seeing in the fourth quarter. And even right now as you know, a Bolsa patience and what the steady run rate will be but at the same time, I don't think it's been broadly accepted across a large number of hospitals yet in either Germany the UK. So I think we've got the ability to you know, continue to bring in a more hospitals with uveitis indication, even if we've absorbed a bolus in in some of the early Hospital early adopters, excluding just the stocking not to stocking but the out-of-stock that took place in the first quarter or are you leasing a trend adjusting for seasonality carry over in Europe as it remains maybe hospitals that weren't using um alluvian prior to the uveitis launch still using it in ordering or yep.

Richard S. Eiswirth: Excluding just the stocking, not just the stocking, but the out of stock that took place in the first quarter, are you at least seeing a trend adjusting for seasonality carryover in Europe as it relates to maybe hospitals that weren't using Alluvion prior to the uveitis launch still using it and ordering or trying to order now that we're into the first quarter?

Richard S. Eiswirth: With two separate issues there, so the short period of stock out was in the US only, so I'll come back to that in just a moment. With respect to uveitis, we are seeing that usage continue in the quarter. I'll give you one example, though.

Richard S. Eiswirth: Moorfields Hospital in London is a hospital that's used very limited amounts for the DME indication over time, but I believe in the first two or three months, it treated about 70 patients with uveitis. So, big uptake in a couple of limited hospitals. We've seen the same thing at the University Hospital in Munich, Germany.

Richard S. Eiswirth: So it's being received well, and I will tell you one of the great things, and I've always said that we thought there could be some overhang longer term, is that you see a lot of uveitis physicians and KOLs talking to their peers saying, "This is so obvious because it reduces the recurrence of the disease in uveitis, you guys need to smarten up and use it more often in D So we think that there will continue to be an overhang as more uveitis physicians use the drug as well. The stock out was isolated to the US, and as I said, we had product last week, the end of last week, that was shipped out to the distributors. We've shipped out more than 300 units; those distributors, I'm sorry, have shipped out more than 300 units to end users in the US, which, candidly, 300 units was more than we did in a month at times last year. So we feel really good about the rebound from that, and at the rate the reps were selling in November and December, we don't anticipate there being any material impact, but obviously, we're three days back in stock right now, so we'll have to see, but we feel pretty good about it.

Order now that now that we're into the first quarter.

Was in the only so I'll come back to then just a moment with respect to uveitis. We are seeing you know, that usage continued in the quarter. I'll give you one example, though more Fields hospital and lunch is a hospital that's used very limited amounts for the communication of a time. But you know, I believe in the first two or three months treated about seventy patients with uveitis. So big uptake in a couple of limited Hospital seen the same thing at the University of Hospital in Munich Germany. So it's it's being it's being received well and I will tell you one of the great things and you know, I've always said that we thought there could be some overhanging longer-term is you see a lot of uveitis Physicians and kol was talking their peers saying this is so obvious is it reduces the recurrence of the disease and uveitis. You guys need to smarten up and use it more often India me. So, you know, we think that you know, there will continue to be overhang is more the uveitis, you know, Physicians use the drug as well. The the stock out was isolated to the US and as I said, you know we had product dead.

Richard S. Eiswirth: Okay, and I'll lump my last two questions together. Any insight into how the DC programs are going as far as outreach to consumers and patients? And then any update on Canada? I know that it's not going to be a large market for you, but you obviously have substantial contribution margins, so just interested to see if there's been any updates on the reimbursement side there.

You know last week and the last week it was shipped out to Distributors. We've shipped out more than those Distributors. I'm sorry have shipped out more than 300 units to the end users in the US which candidly you know, three hundred units was more than we did at a month at times last year. So we feel real good about the rebound from that, you know, and at the rate the

With two separate issues there. So so the the the the short period of stock at

Richard S. Eiswirth: Yeah, sure. So, with respect to the Directed Consumer Programs, we just got, you know, some early data in the past couple of weeks on that because the program ran through the end of the year. It was very, very promising. I will tell you that, you know, the program was very well received.

The Reps were selling in November and December. We don't anticipate there being any material impact, but obviously we're three days, you know back in in in in stock right now. So, you know, we'll have to see but we feel pretty good about okay and I'll let my last two questions together just any any insight into how the programs are going as far as Outreach to Consumers and patients and then off any any update on Canada. I know that it's not going to be a large market for you, but you obviously have substantial contribution margin. So just interested to see if if there's been any updates on the left hand side there. Yeah sure. So with respect to the direct-to-consumer programs, we just got you know some some early data in in the past couple of weeks on that cuz the program ran through the end of the year, but it was very very promising. I will tell you that, you know, the the program was very well received the message seemed to resonate with the patience and we certainly saw an uptick in usage in the bath.

Richard S. Eiswirth: The message seemed to resonate with patients, and we certainly saw an uptick in usage in the markets and in the benefit investigations that are being submitted in those markets. Right now, we're trying to sort through that data and try to figure out which pieces of the program were the most effective, you know, whether it was social media or Pandora or some of the printed materials and things like that. So, you know, over the next couple of months, we will be sitting down with the doctors and trying to evaluate what had an impact and, you know, if they were indeed responding to the patients, and, you know, look at how we might, you know, broaden that later.

Richard S. Eiswirth: But right now, you know, we've got the program sort of on hold while we evaluate all that data. It was really good data, and we felt like we got a great response out of it. With respect to Canada, unfortunately, our partner in Canada is struggling a little bit with pricing and reimbursement, and I think they're having to resubmit right now, so we don't really have, you know, great insight into when that might be resolved at this point in time. But again, as I've said, although Canada is certainly a nice add-on for us as we continue to expand geographically, we did not ever expect it to be a huge material part of what we're doing.

Hips and in the benefit and investigations are being submitted in those markets right now. We're trying to sort of work through that data and try to figure out which pieces of the program where the most effective, you know, whether it was social media or Pandora or something printed materials and things like that. So, you know over the next couple of months, we will be sitting down with the doctors and trying to evaluate, you know, what had an impact and you know, if they if they indeed were responding to the patience and you know, look at that we might you know broaden that later, but right now, you know, we've got program sort of on hold while we evaluate all that data. It was really good data and we felt like we got a great response from it with respect to Canada, you know, unfortunately in Canada our partner there is struggling a little bit with the you know, pricing and reimbursement and I think they're having to resubmit right now, so we don't really have, you know, great insight into win that might be resolved at this point in time. But again as I've said, although Canada is a is certainly a nice add-on for us as we continue to expand geographically it we didn't ever we did not ever expect it to be a huge material part of what we're doing wrong.

Richard S. Eiswirth: Okay, great, great, congratulations on the progress and continued momentum in 2020.

Richard S. Eiswirth: Thanks Andy; we appreciate your support.

Alexander David Nowak: The next question comes from Alex Nowak of Craig Hallam Capital Group. Please go ahead.

Richard S. Eiswirth: Great. Good morning, everyone, and congrats on a solid finish to the year here.

Richard S. Eiswirth: Just wanted to follow up on Annie's question around the stock out. Could you explain more exactly what happened with that stock out? Was this an issue with your CMO just unable to make a leap, or was this just an experience the higher self went through at the end of Q4 and just ran out of stock?

Okay, great great congrats on the progress and continue the momentum and twenty20. Thanks Annie. We appreciate your support.

Capital group, please. Go ahead. Good morning, everyone and congrats on a solid finish of the Year here. Just wanted to follow up on an easy question around the stock out. Just can you explain more exactly? What happened with that stock? Was this an issue with your CMO? Just unable to make a luvian or is this just an experience the higher self through at the end of Q4 in just ran out of stock? Yeah. I think we you know, we were selling a lot more in the fourth quarter of expect it and you know candidly right around the Christmas holidays. They had a one piece of equipment broke down that had to be repaired and just because of the Christmas holidays. It took a little bit longer than we than than we expected it to you or would the normal course of business. So just let us down but I will tell you Alex our team and frankly the doctors responded phenomenally to this, you know, we we prepared the market for it. We talked to doctors our team talked to the doctors about, you know, rescheduling patience and holding them out and you know, we've seen the rebound in the in the sales and and the deliveries this week and candidly, you know, my my sales reps. Yep.

Richard S. Eiswirth: Yeah, I think we were selling a lot more in the fourth quarter than we expected. Candidly, right around the Christmas holidays, they had one piece of equipment broke down that had to be repaired.

Richard S. Eiswirth: And just because of the Christmas holidays, it took a little bit longer than we expected it to or would have in the normal course of business. Just to let us down, but I will tell you, Alex, our team and, frankly, the doctors responded phenomenally to this. We prepared the market for it. We talked to doctors. Our team talked to the doctors about rescheduling patients and holding them out, and we've seen a rebound in sales and deliveries this week. And, candidly, my sales reps, my MSLs, my reimbursement team, everybody in the field, and even the doctors, said from the very beginning, hey, this is manageable. We've dealt with much longer stockouts in the past. As long as we know we're getting product back, we'll be able to handle it. And that was echoed by the physicians. I think we're fine and we're out of the woods with it. It was unfortunate, but it was a combination, like I said, of volume and then that one issue with manufacturing happening during the Christmas holidays.

My cells my reimbursement team everybody in the field and including the doctors, you know said from the very beginning. Hey, this is manageable. We dealt with much longer stock outs in the past as long as we know we're getting product.

Back, you know, we'll be able to handle it and that was echoed by The Physician. So I think we're fine. And we're we're out of the woods with it. It was unfortunate but it was a combination. Like I said of, you know volume and then you know that that one issue with the manufacturing jobs, you know during the Christmas holidays. Okay understood and then I mean it was a little bit buried in 2019 just because you have the sales force transition and you know, as we reached through Q4 wage growth has slowly incrementally gotten better and better. So as you're going here into twenty-twenty, do you think you know high single-digit or more like teens growth is achievable here? What what's the right number? We should be think about? Yeah, we're still we're still targeting, you know, mid-to-high teens growth, you know, that's where we believe we can we can end up, you know, we got back to you know, what fourteen percent in the fourth quarter and we still think I'm in a room for the team to improve, you know, if you go back to two thousand, you know, eighteen we grew about 17% end-user demand, you know, when we had consistency in the field, so, you know, we're hoping we can get back to my dog.

Richard S. Eiswirth: Okay, understood.

Richard S. Eiswirth: For U.S. growth, I mean, it was a little bit varied in 2019 just because you have the salesforce transition and, you know, as we reached through Q4, the growth has slowly, incrementally gotten better and better. So, as you're going here into 2020, do you think, you know, high single-digit or more like teens growth is achievable here? What's the right number we should be thinking about?

Richard S. Eiswirth: Yeah, we're still we're still targeting, you know, mid to high teens growth, you know That's where we believe we can we can end up, you know, we got back to you know What 14% in the fourth quarter and we still think there's no room for the team to improve, you know If you go back to 2000, you know 18 we grew about 17% end-user demand, you know when we had Consistency in the field so, you know, we're hoping we can get back to mid to high teens

the next question comes from Alex Nowak craig-hallum

19th, okay, excellent. And then just going over to International debt ended at about seven million in the quarter. You mentioned seasonality elements. So hear that loud and clear but what is the right way to kind of build off in 20 20 cuz if we look into a 19 the normalized Run rate per quarter has been about 3 million. I think you're going to be well above that number starting in 2020. So just how may help us out there so we can while this appropriately yeah. I mean, I think I think the seven you know is a is is a little bit High, you know, but at the same time, you know, we ended the year off closer to a what a 24 million dollar run rate there and I think that's a good place to to start off with in Europe.

Richard S. Eiswirth: Okay, excellent. And then just going over to international, that ended at about 7 million in the quarter. You mentioned the seasonality element, so I hear that loud and clear, but what is the right number to kind of build off in 2020? Because if we look at 2019, the normalized run rate per quarter has been about 3 million. I think you're going to be well above that number starting in 2020, so just maybe help us out there so we can model this appropriately.

Got it. Okay. That sounds good.

And then just last question for me just your current thoughts and m&a. You know last quarter. There was a a thought that would be potentially some m&a in the future. I think your commentary has changed since last quarter back and said you're just kind of rallying around a live in which thinks makes sense. But just your your current thoughts there. Yeah. So I mean look Alex, we we think we've got a pretty valuable platform here, you know wage is a small company especially value where we are. We're pretty unique and then we've got a retina presence, you know both in the US and Europe and there's and and making money or excuse me, you know generating a little bit off and hope a little bit more cash next year. We have a platform that could be leveraged cuz the moment we drop something else in the bag, you know, it should you know for the most part goes straight to the bottom line that said, you know, we think we're in a pretty nice place is a small company too and that we are going to be generating cash next year and we don't have to do anything to change our story right we can focus on a Lube in continue to grow and be opportunistic. So we're going to continue age.

Richard S. Eiswirth: Yeah, I mean, I think the 7 is a little bit high, but at the same time, we ended the year closer to... What, a $24 million run rate there? And I think that's a good place to start off within Europe.

Richard S. Eiswirth: Got it. Okay, that sounds good. And then just last question for me, just your current thoughts on M&A. Last quarter, there was a thought that there'd be potentially some M&A in the future. I think your commentary has changed since last quarter and said you're just kind of rallying around Alluvium, which I think makes sense, but just your current thoughts there.

Richard S. Eiswirth: Yeah, so, I mean, look, Alex, we think we've got a pretty valuable platform here. You know, we think as a small company, especially valued where we are, we're pretty unique, and that we've got a retina presence, you know, both in the U.S. and in Europe, and making money, or, excuse me, generating a little bit of EBITDA and hopefully, a little bit more cash next year. We have a platform that could be leveraged, because the moment we drop something else in the bag That said, you know, we think we're in a pretty enviable place as a small company, too, in that we are going to be generating cash next year, and we don't have to do anything to change our story, right?

Look, but the reality is, you know, if we just continue to execute the story the way it is, we should increase shareholder value and we'll look for the right thing at the right time, you know for us, so we're going to be looking but we're not near us to do anything. We don't want to do the wrong trance.

Action if there's something out there no, it's a great day here. Appreciate it. Thank you. The next question comes from James Molloy of Alliance Global Partners, please go ahead.

Hey guys. Thanks for taking my question and looks pretty good quarter in the fourth quarter. I know you mentioned the first quarter typically is weaker. I think the fourth quarters that should typically be stronger going phone number here is that I wish to shape the the quarters going forward. We expect the fourth. Yeah. The fourth quarter is typically a stronger quarter force. And the reason for that is, you know, even though there's a lot of subsidization of co-pays and things like that a lot of people seem to try to you know, push these these higher-priced products into the fourth quarter, right? And we always seem to see an uptake in the US specifically of usage in the fourth quarter as people are trying to get these procedures done before the insurance your insurance year Runs Out

Richard S. Eiswirth: We can focus on alluvium, continue to grow, and be opportunistic. So, we're going to continue to look, but the reality is, you know, if we just continue to execute the story the way it is, we should increase shareholder value, and we'll look for the right thing at the right time, you know, for us. So, we're going to be looking, but we're not in any rush to do anything. We don't want to make the wrong transaction if there's something out there.

Richard S. Eiswirth: No, that's great to hear. I appreciate it. Thank you. Mm-hmm.

James Francis Molloy: The next question comes from James Molloy of Alliance Global Partners. Please go ahead. Hey guys, thanks for taking my question.

Got it. Thank you. And I know one of the questions was always been the retreatment, you know, three years going up and every every I'm sort of call to see like we asked about it. Is there have you seen it as our way to pass say how many maybe treatments coming through or is there an impact that could be happening here? Yeah. So GM I there definitely is an impact of it. Right and it's a positive impact wage. It's a very hard one to triangulate because of the just because of the HIPAA rules and things like that, but we can we can tell is that about 10% of the patients that were treated back in June 2016 came through for repeat benefit investigations. So where we help provide, you know looking at the insurance understand what the co-pays are for the doctor making sure a pre-authorization is not required all those types of things off about 10% of those patients from 2019 came back through now that's not always an accurate measurement because you know, sometimes the patient is moved to a different office comes through with a different number or something like that or off.

Richard S. Eiswirth: And it looks like a pretty good quarter in the fourth quarter. I know you mentioned the first quarter typically is weaker. Looking at the fourth quarter, does that typically be stronger going forward every year? Is that how we should shape the quarters going forward?

Richard S. Eiswirth: Yeah, the fourth quarter is typically a stronger quarter for us, and the reason for that is, even though there's a lot of subsidization of co-pays and things like that, a lot of people seem to try to push these higher-priced products into the fourth quarter, and we always seem to see an uptake in the U.S. specifically of usage in the fourth quarter as people are trying to get these procedures done before the insurance year runs

Richard S. Eiswirth: Got it, thank you. And one of the questions has always been the re-treatment, you know, three years going up, and every, every, almost every call we see, look at, we ask about it. Is there, have you seen it? Is there a way to, to, to... Say how many maybe retreatments are coming through, or is there an impact that could be happening here?

Richard S. Eiswirth: Yeah, so Jim, there definitely is an impact from it, right? And it's a positive impact.

Physicians offices stop using that system but we

The other coming back through and Physicians are looking at those and I know that you know our new VP of sales and the young that joined us, um, you know in the middle of this year is really really focused with the team in the US specifically at looking at the data off on where the business came from three years ago and where the business came from, you know in the first half of the year to make sure we're getting you know better repeat business, you know, any doctor that's already made the decision you use live in Palm best one to get the continued use it so we're really focused on that. I know it's coming through but it's very hard to quantify.

Richard S. Eiswirth: It's a very hard one to triangulate because of the HIPAA rules and things like that. But what we can tell is that about 10% of the patients that were treated back in 2016 came through for repeat benefit investigations. So where we help provide, you know, looking at the insurance, understanding what the co-pays are for the doctor, making sure pre-authorization's not required, all those types of things. About 10% of those patients from 2019 came back through. Now that's not always an accurate measurement because, you know, sometimes the patient has moved to a different office, comes through with a different number or something like that, or a physician's office has stopped using that system.

I understood know. It's always been a challenge to figure that those numbers out. Have you guys seen any ability to take pricing and and I was been unit growth has been any pricing group to anticipate there will be any pricing for that. Anyway, you know now there's there's there's not we have not taken any price increases and at this point, we really don't perceive there being any opportunity increase price if you look across and you know, the opthamologist and specifically retina drugs, we're not aware of any retina drugs that have been able to take a price increase and it's a lot of it has to do with the fact that most of these drugs are reimbursed through by and Bill and so the doctors are getting reimbursed based on sort of an average sales price of looking back, you know over six months of store fully. So if you raise price, they arguably be under reimbursed for a few months at a time and and you'd have a negative impact on usage. Just typically don't see it in this space.

Richard S. Eiswirth: But we know they're coming back, and physicians are looking at them. And I know that, you know, our new VP of sales, Andy Young, who joined us in the middle of this year, is really, really focused with the team in the US specifically on looking at the data on where the business came from three years ago and where the business came from in the first half of the year to make sure we're getting, you know, better repeat business. You know, any doctor that's already made the decision to use Alluvion is the best one to continue to use it. So we're really focused on that. I know it's coming through, but it's very hard to quantify.

Richard S. Eiswirth: Understandable. I know it's always been a challenge to try to figure those numbers out. Have you guys seen any ability to take pricing? I know there's been unit growth. Has there been any pricing growth? Do you anticipate there will be any pricing growth at any point?

The last couple questions in and thank you for taking the interior uveitis indication in you is that how much would you tribute to the strong growth in the fourth quarter of the stronger through the throughout the year?

Richard S. Eiswirth: No, no. We have not taken any price increases. And at this point, we really don't perceive there being any opportunity to increase prices. If you look across the ophthalmology space and specifically retina drugs, we're not aware of any retina drugs that have been able to take a price increase. And a lot of it has to do with the fact that most of these drugs are reimbursed through buy and bill. And so the doctors are getting reimbursed based on sort of an average sales price looking back over six months. So if you raise the price, they arguably would be under-reimbursed for a few months at a time, and you'd have a negative impact on usage. So you just typically don't see it in this space.

To that indication and then the final question. I guess you touched on it briefly. Another coronavirus is all over the news. Italy getting locked down and China would have you any thoughts on how long it may have sure sure so, you know with respect to uveitis again, you know, because because it's alluvian goes out in a in a box, you know based on the order page regardless of what the indication is, you know, we don't have specific, you know, script data in Germany and the UK to tell us you know, how much is uveitis. And how much is DME? I know there's some DME growth as I said coming off of, you know continued improvement in our messaging more line with our medical team what we saw your retina from from from an advocacy standpoint, but also the launch of choice to send some of these hospitals, so I think it's a combination of both and I think you know the growth in usage and uveitis is going to have a positive impact on me as well with respect to the coronavirus. You know, we're Contender to moderate wage.

Richard S. Eiswirth: The last couple of questions then, and thank you for taking them. The Ontario uveitis indication in the EU, how much would you attribute to the strong growth in the fourth quarter, or the strong growth really throughout the year, to that indication? And then the final question, I guess you touched on it briefly, I know the coronavirus is all over the news, Italy getting locked down, and China, what have you. Any thoughts on the potential impact that may have?

Richard S. Eiswirth: Sure, sure. With respect to uveitis, again, you know, because it's... Alluvian goes out in a box, you know, based on the order, regardless of what the indication is. You know, we don't have specific script data in Germany and the U.K. to tell us how much is uveitis and how much is DME. I know there's some DME growth, as I said, coming off of continued improvement in our messaging, more alignment with our medical team, what we saw at Uretna from an advocacy standpoint, but also the launch of uveitis in some of these hospitals. So I think it's a combination of both, and I think, you know, the growth and usage of uveitis is going to have a positive impact on DME as well.

Situation, you know, we we either operate directly or through Partners. We operate in the US Europe including Italy in the Middle East none. None of the alluvian parts or the drug.

So for made in China, you know, it's all done and either Mexico or final assembly in the US. So we do think you know, we have limited our exposure with respect to China. I do know that in Italy page with some of the announcements in Italy. They recently restricted access to some of the hospitals to Personnel from pharmaceutical companies. So if that continues and that spreads throughout Europe and we're to make its way in the US Bank, you know, that obviously will impact the ability for us to have a presence in front of the doctors, you know, but at the same time, you know, these patients still need to be treated, right and a lot of them need to be treated, you know, we often because they're on these acute therapies. So, you know, we we're going to continue to monitor the situation. We don't know anything right now. I mean, obviously there's some risk out there for us. Like there is any other country one of the things we're coming down one things we're looking at is doing some detailing as well and trying to accelerate that we are trying to set that up for some remote territories and try to accelerate the development of that right now and be in case they just becomes more of an issue.

Richard S. Eiswirth: With respect to the coronavirus, you know, we're continuing to moderate the situation. We operate either directly or through partners. We operate in the U.S., Europe, including Italy, and the Middle East. None of the Alluvian parts or the drug itself are made in China.

Richard S. Eiswirth: You know, it's all done in either Mexico or final assembly in the U.S. So we do think, you know, we have limited our exposure with respect to China. I do know that in Italy, with some of the announcements in Italy, they recently restricted access to some of the hospitals to personnel from pharmaceutical companies. So if that continues and that spreads throughout Europe and were to make its way into the U.S., you know, that obviously will impact the ability for us to have a presence in front of the doctors. You know, but at the same time, these patients still need to be treated, right? So, you know, we're going to continue to monitor the situation. We don't know anything right now. I mean, obviously, there's some risk out there for us like there is for any other country. One of the things we're looking at is doing some e-detailing as well and trying to accelerate that. We're trying to set that up for some remote territories and trying to accelerate the development of that right now in case this becomes more of an issue.

Great. Thank you for the questions. Sure. The next question comes from HC Wainwright, please. Go ahead.

Thank you for taking my question. First question is do you expect overall?

Princess to remain relatively at the same level in 2020. So I think ye we we do expect to increase the operating expenses in line with Revenue growth right down to the extent we can generate cash to pay the interest cost on the debt, you know, as we've always said, you know, we want to continue to grow looping we want to get to the point where we may not relying on raising additional Capital but you know from that point forward to the expectation is to be sort of cash neutral and so the goal is as we generate more margin, you know above our operating costs and above paying off the debt that we will take that cash and reinvest in the business to try to continue to grow the top-line second question. Could you tell us the how many stock how many common stock is currently outstanding and whether the 1.3 million participating shears will be uh added each quarter for calculating EPS going forward.

Richard S. Eiswirth: Great. Thank you for taking the questions. Sure. The next question comes from Yi Chen of HC Wainwright. Please go ahead. My first question is, do you expect overall operating expenses to remain relatively at the same level in 2020?

Yi Chen: So I think we do expect to increase operating expenses in line with revenue growth, right? To the extent that we can generate cash to pay the interest cost on the debt. You know, as we've always said, we want to continue to grow Lubin. We want to get to the point where we are not reliant on raising additional capital. But, you know, from that point forward, the expectation is to be sort of cash neutral. And so the goal is, as we generate more margin, you know, above our operating costs and above paying off the debt, we will take that cash and reinvest it in the business to try to continue to grow the top line.

I'm going to I'm going to fill the answer that yeah currently outstanding. We have 4965949 shares of common stock outstanding.

And in calculating the fourth quarter EPS, there is 1.3 million participating shares added. Is that the way it going to be for each quarter going forward?

Yes, that should be there actually know changed that moving forward. Okay, and when do you expect to file the Tanki?

Phil Jones: Got it. Second question... Could you tell us how many common shares are currently outstanding and whether the 1.3 million participating shares will be added each quarter for calculating EPS going forward?

We're tentatively planning to file the 10K either this Friday or or Monday.

Got it. Thank you.

Yi Chen: I'm going to ask Phil to answer that question.

Our next question comes from ranches a private investor, please. Go ahead. Good morning calling Ron do you have what is your expectation about retaining customers retaining patients that were treated three years ago as you go forward do you expect to read feet 100% of them 50% what what your goal and expectation?

Phil Jones: Yeah, currently outstanding, we have 4,965,949 shares of common stock outstanding.

Yi Chen: And in calculating the false quarterly EPS, there are 1.3 million participating shares added. Is that the way it's going to be for each quarter going forward?

Phil Jones: Yes, there should absolutely be no change to that moving forward.

Yi Chen: Okay, and when do you expect to file the 10-K?

yeah, so

But as I address earlier, we we think we're seeing about, you know, ten percent of the patients right now coming through for you know, benefit investigations in so the doctors, you know, evaluating their insurance coverage for that off second living injection, you know candidly the way losing works. It works as you know, monotherapy and fifty to sixty percent of the patients is what we're seeing so it works very well by itself. I think conservatively Thursday, we would probably model out ourselves that you know, somewhere in that, you know Thirty to 35% repeat range, you know until we have a little bit more experience and and one of the reasons we discount that down is it is working longer in some circumstances then we expect and these DME patients have a lot of other comorbidities so we know from some of our estimate out in the field and talking to doctors about retreatants that we're losing some of these patients to mortality. So, you know, I conservatives say, you know, our goal is to get the 30% you know, hopefully can be higher as we learn more but you know where we are right now, I think 30% is what I would think about.

Phil Jones: We're tentatively planning to file the 10-K either this Friday or Monday.

Ron Kez: Got it. Thank you. Our next question comes from Ron Kez, a private investor. Please go ahead. Good morning. Good morning, Ron.

Richard S. Eiswirth: Do you have, what is your expectation? about retaining customers, retaining patients that were treated three years ago as you go forward? Do you expect to lose 100% of them, 50%? What's your goal and expectation?

Richard S. Eiswirth: Yeah, so Ron, as I addressed earlier, we think we're seeing about, you know, 10% of the patients right now coming through for, you know, benefit investigations. So the doctors are, you know, evaluating their insurance coverage for that second alluvian injection. You know, candidly, the way Alluvian works, it works as monotherapy in 50 to 60% of the patients we're seeing, so it works very well by itself. I think, conservatively, we would probably model ourselves at somewhere in that 30 to 35% repeat range until we have a little bit more experience. And one of the reasons we discount that down is that it works longer in some circumstances than we expect, and these DME patients have a lot of other comorbidities.

Are you working?

Harder now to get good data in that area. We we are we are and I think as I said Andy young our new VP of sales is is really focused on utilizing, you know, frankly more efficiently than I think we've done in the past the dad on where the business is come from where the opportunities for those treatments are is where you know targeting the Reps out there in the field.

You have a goal for new doctors or how many doctors do you have now? And how many would you expect to add this year as new-age Doctor of customers? So so Ron we don't have great transparency into the exact number of doctors. We know it based on accounts and off, you know, we we typically ship to you know, between four and five hundred accounts on an annual basis and there's probably nine hundred to a thousand retina practices out there. We estimate inside of them accounts that are using the product. There's somewhere between six hundred and eight hundred doctors that are using the products on a regular basis. There is some data out there in the marketplace. It's a limited sample, but at the asrs meeting last year a survey among the doctor said about you know, fifty percent of the doctors had not used alluvium yet. So when I say, I think there's significant opportunity out there, you know, it's getting to those doctors and getting greater usage there.

Richard S. Eiswirth: So we know from some of our reps being out in the field and talking to doctors about retreatments that we're losing some of these patients to mortality. So, you know, I'd conservatively say our goal is to get to 30%. It hopefully can be higher as we learn more, but, you know, where we are right now, I think 30% is what I would think about.

Richard S. Eiswirth: Are you working harder now to get good data?

Richard S. Eiswirth: We are; we are!

Richard S. Eiswirth: I think, as I said, Andy Young, our new VP of sales, is really focused on utilizing, you know, frankly, more efficiently than I think we've done in the past, the data on where the businesses come from, where the opportunities for those retreatments are as we're, you know, targeting the reps out there in the field.

Richard S. Eiswirth: Do you have a goal for new doctors, or how many doctors do you have now and how many would you expect to add this year as new doctors? [inaudible]

I believe and I say this repeatedly to the team, I mean, I really do believe we've got a better mousetrap and I'm going to continue to be bullish.

Richard S. Eiswirth: So Ron, we don't have great transparency into the exact number of doctors. We know it based on accounts. And we typically ship to between 400 and 500 accounts on an annual basis, and there are probably 900 to 1,000 retina practices out there. We estimate that inside of those accounts that are using the product, there are somewhere between 600 and 800 doctors that are using the product on a regular basis. There is some data out there in the marketplace. It's a limited sample.

About that. It's a better way to treat the disease the patients deserve the opportunity to to reduce the recurrence and stop that disease coming back so that they can see more consistently over time. And I think our message is getting better and we are going to get two new doctors, you know on a regular basis so that when I talk about the big opportunity in front of us it's to get two more of those doctors and get them using a losing earlier in the treatment. I'm you have good Data Tracking that now well, we have what I'm sharing that we don't have script dad. And the reason we don't have script dad is because these patients, excuse me these Physicians use the bind Bill model. So it's bought at the practice level and you don't have data at the doctor love but I'm talking about Good data with respect to number of offices then as opposed. Yeah. Absolutely. Absolutely. We we see that we've got great transparency on the offices and where the products going on a daily basis, you know with our Distributors your goal for this year in terms of adding doctors, you know, I'd like to suck.

Richard S. Eiswirth: But at the ASRS meeting last year, a survey amongst the doctors said about 50% of the doctors had not used Elluvian yet. So when I say there's a significant opportunity out there, it's getting to those doctors and getting greater usage there. I believe, and I say this repeatedly to the team, I mean, I really do believe we've got a better mousetrap. And I'm going to continue to be bullish about that. It's a better way to treat the disease. Patients deserve the opportunity to reduce the recurrence and stop that disease coming back so that they can see more consistently over time. And I think our message is getting better, and we are continuing to get to new doctors on a regular basis. So when I talk about the big opportunity in front of us, it's to get to more of those doctors and get them using Elluvian earlier in the treatment paradigm.

Like to get a hundred new practices using the product as I could.

And you talked about taking it slow with regard to looking for Acquisitions bolt on or whatever which makes sense to me given the circumstances are people approaching on the other end of this are people approaching you to acquire your company, you know, I think you know, we could always we always hear people interested in what we're doing here at Al Ameri I think because you know, if you look at the opthamology space we are pretty unique and that we've gotten to the point where you know fifty four million in Revenue this year and off obviously expect to be quite a bit higher next year where other companies in the space, you know are are struggling with launches and you know and and seem to be quite a bit of ways from you know, profitability wage. But at this time, you know, there's no transaction that we're pursuing anything like that. You know, I believe you have to build companies as if you're going to run them forever. And if you do that, you know, they become attractive to other parties and

Richard S. Eiswirth: Do you have good data tracking that now?

Richard S. Eiswirth: Well, we have what I'm sharing with you. We don't have script data, and the reason we don't have script data is because these physicians use the buy and bill model, so it's bought at the practice level, and you don't have data at the doctor level.

Richard S. Eiswirth: But I'm talking about good data with respect to the number of offices, then, as opposed to... Oh, yes.

Richard S. Eiswirth: Absolutely, absolutely. We see that. We've got great transparency in the offices and where the product is going on a daily basis with our distributors.

Richard S. Eiswirth: What is your goal for this year in terms of adding doctors...

Richard S. Eiswirth: You know, I'd like to get a hundred new practices using this product if I could.

Richard S. Eiswirth: And you talked about taking it slow with regard to looking for acquisitions, bolt-ons, or whatever, which makes sense to me given the circumstances. But are people approaching, on the other end of this, are people approaching you to acquire your company?

You know, so our goal is to continue to grow.

2 p.m. Leverage the platform we have and if that happens that happens, but it's certainly something that we don't sit around waiting to happen. I agree with your commentary completely. But but how long have you had people extended interest to you on occasion in the last year, you know, you know and even if they could I couldn't comment on that. I'm sort of restricted under Reagan to comment on things like that. Even if even if it had happened so I'm I'm going to have to say no comment on that and one last question and that is the stock price is off on unpleasant for everyone any specific plans to talk to retail Brokers or others who may have an interest in the stock.

Richard S. Eiswirth: You know, I think we always hear people interested in what we're doing here at Alimera. I think because, you know, if you look at the ophthalmology space, we are pretty unique in that we've gotten to the point where we're, you know, 54 million in revenue this year and, you know, we obviously expect to be quite a bit higher next year, while other companies in the space are struggling with launches and, you know, and seem to be quite a bit away from, you know, profitability. You know, but at this time, there's no transaction that we're pursuing or anything like that.

Richard S. Eiswirth: You know, I believe you have to build companies as if you're going to run them forever. And if you do that, you know, they become attractive to other parties. And, you know, so our goal is to continue to grow Alluvion, leverage the platform we have. And if that happens, that happens. But it's certainly something that we don't sit around waiting for to happen.

Yeah, you know Ron we're out on the road quite often. We're planning some, you know, non-deal roadshows to get out there and talk to investors both retail and institutional and the coming months. We're presenting at the Oppenheimer conference in March and at the Wainwright conference in in London in April as well at this point in time. So, you know, we were on the road pretty aggressively in the fall, you know, and I'm trying to get out there pretty aggressively and you know, March April and may as well, we're very bullish on the story. We think we made great progress and you know, we want to try to you know, get get more people in front of us to hear our story off last question Are the officers continuing with this stock purchase plan.

Ron Kez: I agree with your commentary completely, but have people extended their interest to you on occasion in the last year?

Richard S. Eiswirth: You know, Ron, even if they could, I couldn't comment on that. I'm sort of restricted under Reg FD from commenting on things like that, even if it had happened. So I'm going to have to say no comment on that.

Ron Kez: And one last question, and that is the stock price is unpleasant for everyone. Any specific plans to talk to retail brokers or others who may have an interest in the stock?

Stock purchase plan, you know that we all had in place was terminated as of December 31st, and we've been in a Blackout Window since then but we all participate in a in a ESPN a stock purchase plan through the company as well on a regular basis to so are you going to have the same kind of plan going forward as you did last year? I'm not I'm not sure at this point in time. I'm Ron. I can't I can't comment for you know, the the whole executive team and you know, I I haven't made a decision myself on what I'm going to do, but I am participating in the plan right now.

Richard S. Eiswirth: Yeah, you know, Ron, we're out on the road quite often. We're planning some non-deal roadshows to get out there and talk to investors, both retail and institutional, in the coming months. We're presenting at the Oppenheimer Conference in March and at the Wainwright Conference in London in April as well at this point in time. So, you know, we were on the road pretty aggressively in the fall, and our plan is to get out there pretty aggressively in March, April, and May as well. We're very bullish on the story. We think we have made great progress, and, you know, we want to try to get more people in front of us to hear our story.

Okay. All right.

Thanks, Ron.

This concludes the question-and-answer session. I would like to turn the conference back over to Rick for closing remarks. I want to thank all of you for participating on today's call and for your interest in Alameda Sciences. I said, I think we had a great year and we appreciate your support and interest in our story. We look forward to sharing our progress on our next quarterly conference call when we report our first quarter results. Thank you and have a great day.

Ron Kez: Last question: are the officers continuing with this stock purchase plan?

Richard S. Eiswirth: Well, the stock purchase plan, you know, that we all had in place was terminated as of December 31st, and we've been in a blackout window since then, but we all participate in an ESP employee stock purchase plan through the company on a regular basis, too.

The conference is concluded. Thank you.

For attending today's presentation you may now disconnect.

Ron Kez: Are you going to have the same kind of plan going forward as you did last year?

Richard S. Eiswirth: I'm not sure at this point in time, Ron; I can't comment for the whole executive team. I haven't made a decision myself on what I'm going to do, but I am participating in the ESPP plan right now.

Ron Kez: Okay.

Richard S. Eiswirth: Alright? Thanks, Ron.

Richard S. Eiswirth: This concludes the question and answer session. I would like to turn the conference back over to Rick Eiswirth for closing remarks.

Unnamed: I want to thank all of you for participating in today's call and for your interest in Alimera Sciences. As I said, I think we had a great year and we appreciate your support and interest in our story. We look forward to sharing our progress on our next quarterly conference call when we report our first quarter results. Thank you, and have a great day.

Unnamed: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.