Q2 2020 Oyster Point Pharma Inc Earnings Call

Good morning, welcome to the Web 2.4, My second quarter 2020, <unk> earnings Conference call. My name is poly and I will be your operator today.

The company's formal remarks, there will be a question and answer session. At this time I would like to turn the call over to Mr., Daniel Lochner Oyster point, former Chief Financial Officer.

Sir Please go ahead.

Good morning, everyone and welcome to Oyster point foremost second quarter earnings conference call three months ending June Thirtyth 2020.

This morning, we issued a press release containing our second quarter financial results and recent business highlights that's true press releases and our form 10-Q that was filed yes. You see this morning are available on our website R&D Investor and news section at Www Dot Oyster point Rx dotcom.

Joining us on the call today are Dr., Jeffrey now President and Chief Executive Officer, or what's your point pharma and Johnson has a winco chief commercial officer.

Following dr. now in my prepared remarks, well open up the line for questions.

This conference call contains forward looking statements regarding future events in the future performance in western once more.

Forward looking statements include statements regarding whats your points possible are seeing future results of operations expenses in financial position business strategies, and plans research development and commercial plans or expectations trends market sizing competitive position, our belief regarding our clinical trial outcomes, including secondary endpoint and.

Al says prediction regarding product approvals or the FDA or efforts to mange the impact of called in 19 and industry environment and potential growth opportunities. Among other things. In addition, this conference call discussions products that are under clinical investigation, which have not yet been approved for marketing by the U.S. food and drug in that.

Straight.

There are currently limited by Federal law, It's you investigational use and no representation is need as to their safety or effectiveness for purposes for which there being investigated.

These statements are based upon information available to the company today and we support assumes no obligation to update you statements as circumstances change.

Future events and actual results could differ materially from those projected in the company's forward looking statements additional information concerning factors that could cause results to differ materially from are forward. Looking statements are described in greater detail under the caption risk factors in the Companys filings of as you see including our quarterly report on form 10-K.

For the quarter ended June Thirtyth 2025, with yes, you see on August 20 Twond.

I will now turn the call over to Dr., Jeffrey now President and Chief Executive Officer avoid trick wind farm.

Thank you Dan for the introduction good morning, everyone and thank you for joining us and our call. Today. This is right to discuss our second quarter 2020 financial results and recent business highlights.

First I would like to acknowledge the ongoing Sars koby to virus pandemic.

What's your point pharma continues to monitor the impact to the Sars could be two virus pandemic and it's taken proactive steps to ensure the safety of its employees maintain business opportunity if its operations and to advance our R&D pipeline today Waster point pharma has continued to maintain a remote working environment for its employ.

In addition, the company remains in close contact with its R&D contractors and to date the company's contractors have not reported significant disruption to their operation as a result of the source koby to fires pandemic.

We are happy to see that after a brief adjustment period to establish new operating procedures I care clinics is continue to operate and engage in clinical trials subject recruitment enrollment with the implementation of additional patient and staff protective measures.

Despite the ongoing pandemic, we're proud to have completed in the first half of 2020 in a strong position.

Positive results from the Mr. Phase two trial announced in January Todd results from our pivotal onset two phase three trial announced in May and the completion of our first equity follow on offering also in May which netted the company 112.6 million in proceeds.

For the remainder of 2020 Oyster point pharma plans to submit an end da for OTI on one nasal spray for the treatment of signs and symptoms of dry eye disease to the FDA in the fourth quarter of 2020.

Mr Point is currently formalizing, our rest of world clinical and regulatory strategy, specifically in the you as well as within the Asia Pacific region.

We intend that beginning clinical development in the second indication for last year when nasal spray in the second half 2020 in the United States.

In addition, the company will continue to execute on our launch readiness plan for OCIO, one in dry eye disease and advance our R&D pipeline as we look forward to 2021, if approved by the FDA. The company plans, a U.S. launch Oh steel one in the fourth quarter of 2021.

In May Oyster point announced topline results from on the onset to clinical trial, which met its primary endpoint with both the 0.6 milligram per mill and 1.2 milligram per melt doses of most year, one achieving a statistically significant improvement in schirmer score as compared to placebo at week four.

These results also translated into a statistically significant improvement in the secondary endpoint of mean change from baseline in Schirmer square at week four in both doses as compared to placebo consistent with our data from the onset one phase Twob trial.

Benefits were also seen on a number of secondary endpoints in the 1.2 milligram per mill dose group, including the mean change from baseline an eye dryness score in the clinic environment that we for and as early as we too.

We believe that the results from onset warning onset to or the first studies show signing symptom improvement in patients presenting the baseline symptoms mild to severe characteristic that we expect to translate from our development program into similar clinical outcomes something we believe that is an unmet need.

In the dry eye marketplace.

The common adverse event seem with those tier one in the onset to trial were sneezing and cost.

Neither one throat irritation reported in less than 15% of subjects in each dose group. This is consistent with the data from the onset one trial and no new safety signals.

There were no reports of serious adverse events related to nasal administration. We believed at the onset to phase three trial data supported by trial data from the onset one fees to be trial, well supported indication for the treatment of the signs and symptoms of dry eye disease and serve as clinically meaningful data that will produce.

Prove useful to the patient in the eye care practitioner.

Currently there is no substitute for the Bodys own natural tear film natural to your phone consists of a mixture of thousands of compounds that beneficial components, including growth factors anti inflammatory compounds lubricating hydrating components and is inherently anti microbial in nature.

Your one provides therapy to the ocular surface that we believe will provide an early and sustain symptomatic relief Walt treating the underlying disruption of pure film homeostasis.

Let's see on one nasal spray has a unique and well differentiated mechanism of action designed to reestablish tearful homeostasis homeostasis via stimulation of the Paris sympathetic nervous system using a nasal spray.

Yeah, one nasal spray as demand has been developed as a preservative free nasal spray to avoid the potential toxicity associated with preservatives to affiliated cells within the Nizam COSA.

The therapeutic benefit to the akio surface from Oh steel one is from the patient's own natural tear film. The product is also designed to avoid the delivery of preservatives to the ocular surface, which is an unmet need for patients seeking treatment for the signs and symptoms of dry eye disease.

We look forward to the plan filing of our first anyway in the fourth quarter of 2020.

We expect physician engagement from both ophthalmology and optometry communities will be a focus than 2020, as we build and refine our commercialization and pipeline development strategies.

In summary, we remain committed to bring innovative and transformative ocular surface treatments to patients and building oyster point into a best in class Ophthalmology Company I will now turn the call back over to Dan Lochner Oyster plates, Chief Financial Officer.

Thank you Joe I will now provide a brief overview of always Sharepoint Pharmas second quarter financial results additional E detailed bought our second quarter financial results can be found in our form 10-Q that was filed with the FTC. This morning.

The second quarter 2.1, Oyster point pharma reported a net loss at 15.5 million or 66 cents per share compared to a net loss of 10.7 million or $7.60 per share for the same period and 29 team.

As of June Thirtyth, 2020, cash and cash equivalents were 226.7 million compared to 128.6 million as of March 30, Onest 2020.

This increase in cash balance reflects 112.6 million in net proceeds from our equity follow on offering completed in may of this year, partially offset by cash used in operations driven primarily by the continued development of the company's product candidates total research and development expenses for the second quarter 2020 were 8.6 million.

Compared to 8.1 million for the same period in 2019, the increase in research and development expenses were primarily due to an increase in expense related to see our roads and you know mode in connection with the advancement of LTL one.

As well as higher employee employee headcount, which resulted in increase in payroll and personal related expenses, including salaries bonuses benefits and stock based compensation.

Total general administrative expenses for the second quarter 2020 were 6.9 million compared to 3.19 for the same period in 2019.

The increase was due do a head count and reflects an increase in payroll and personal related expenses, including salaries bonuses benefits and stock based compensation of 1.89.

Additionally, there was an increase in other general and administrative expenses of 1.6 million due to the expansion of the company's organization and operating as a publicly traded company.

The company also incurred higher commercial planning expenses, a point 4 million in anticipation of a plan you a launch both seal one if approved in the fourth quarter 2021.

With that brief overview of our financials I'll now turn the call over to the operator to open up the line for question.

Thank you.

To ask a question you need to press star one on your telephone to address your question press the pound key police entirely compiled the community roster.

My first question, we're comfortable I know Georgie your didn't know from Cowen.

They begin.

During your line maybe on me.

Our next question comes on line of Terra Bancroft from Piper Sandler.

And is open.

Thanks, Hi, there and now congrats again on the the great data the progress so far but I'm now that you're close to your NDA submission in Q4 could we talk about your launch preparations over the next year in terms of.

So far as marketing and commercial supply ramp up.

Yes, Hi, this is johnson's or income the chief commercial officer.

We're starting to lunch, perhaps this year, we plan to do a lot of the commercial hiring.

Early to mid next year.

We've stated publicly already we're looking to feel the sales force of between 150 at 200 reps, which will call on about 80% of the prescriber base of.

Prescription therapeutics and the dry eye space.

We're also doing a lot of prep in regards to assembling be dossier for payers, both commercial and eventually Medicare, Oxford that were well prep by the time, where commercializing Q4 up 21.

That there would be a very good access for it.

Patient base.

Great. Thanks, so much.

Thank you and our next question will come from Ryan.

Pound Ramos from JP Morgan you may begin.

Okay. Thanks, so much for taking my question just a quick one for me what are the final gating factors here to completing the indeed filing for OTO, one and when you're thinking about the filing and the totality of data that we saw from opposite to announce that one is their plans on filing for having multiple doses in.

The label or just maybe a single dose like how should we be thinking about that thanks. So much.

Yes, great question. Thanks, a lot so I think.

To answer your first question with regards to the end Diego gating items.

The development program for only a one that's moved quite quickly if you remember back we filed the R&D for this product in 2018 go that clinical team.

And so fishing that we've actually got ourselves a little bit ahead of CMC, which often doesn't happen, but in this case.

We've moved the clinical trials quite efficiently and so the good gating item at the moment is just having that stability data to support the shelf life for the drug and so we're on track one of the nice thing.

If there's any positive about this pandemic is we've had our team home.

Working remotely heads down we've really got a great jump on the end D.A., so little bit fortuitous, there in being able to get the filing completed from a clinical data in sort of package perspective, we're just waiting for those lastly, the samples to age and test them from a stability perspective.

And then that'll allow us to file the NDA.

And as we think about regulatory strategy.

We feel we feel very strongly that both doses are approvable, what I would say is as we see the data today, we see both doses approval for.

Tear film production, although we see to 1.2 million per mill dose.

As a signs and symptoms and much stronger on the sent them sites. So we will likely go into the filing with both doses from an approvable standpoint, but we would only commercialize one dose.

Got it thanks, so much for taking my question.

And our next question will come for line Patrick the leap.

From life's like capital you may begin.

Hi, Thanks for taking the questions on congrats on the progress just curious if you guys have begun any conversations with payers at this point.

You could provide any emerging thoughts on pricing and then I've a follow up as well.

Sure. Thanks for your question in regards to pricing, we want to make sure. We're gonna be very competitive with the branded products that are approved at the kind of our commercialization. So that's that's the strategy.

In regards to the payer homework that we're doing right now we've had many had boards.

To talk with existing commercial payers medical directors.

To see what it is from data perspective from a from a package perspective that they want to see in order to lift.

Eventually list feel one in a competitive position on the commercial claims.

As we stated earlier Medicare it's all based on the timing of the submission to Medicare for reimbursement and.

Kind of commercialization in Q4 up 21, we do not expect to have Medicare till probably 2023.

So we haven't had direct conversations with Payors.

Just yet until we.

See the regulatory package and provide the school dossier, we've had preliminary discussions on what it takes to include only a one in the reimbursed class of dry eye disease.

Great. Thanks, and I guess, one on the competitive landscape.

Dri is having kind of a shift others therapies.

I'll bet on the pipeline.

One of which is.

That's helpful steroids, what's dry eye on label, which which may be approved this fall could you just catch up differentiation of this year one versus this class.

Right and they thoughts on weather, having a tough bolstered on label has potential to meaningfully shifts the treatment paradigm.

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Yes so.

Great question, you know the way we look at the OTO one.

Molecule is that.

It's it's very well differentiated amongst all of the dry eye care piece that are out there. So it has a very unique mechanism of action.

Novel Route of administration, you know T. only product out there that is specifically designed to stimulate natural tear film production. So we see this is very unique within the armamentarium, all just the clinician and how they may use the product.

When we look at the landscape today.

We do you see some.

Physicians utilizing topical steroids in their treatment paradigm today.

Although we think that because the the tier one nasal spray product is so unique that it will fit in basically with any of the other.

Products that are in the dry eye market, regardless of whether they're a pharmaceutical approach or a medical device approach. We think that reestablishing. This tier from homeostasis is critical and certainly something that we'll be able to provide patients with early symptomatic relief, but also a chronic benefit overtime.

So.

We don't see anything that's in the pipeline at the moment or on the horizon that will meaningfully shift how physicians will use our product once it's approved.

Great. Thank you.

Thank you.

Our next question on social line Georgie go to know from Cowen.

You may begin.

Hey, guys can you hear me.

We can't thanks Gerry.

Thanks, So much for taking my question. So I guess, what we were wondering is how are you thinking about the ex us opportunity for US you know on.

Would you need to run a separate clinical programs for example in Europe and you have any guidance in terms of timing on that and would you consider partnering before running any additional studies or would that be something that.

I would happen after after you actually going to additional studies and then I have a cool.

Sure. That's a great question. So as we look to formalize our plans to move into both the Europe in the Asia Pacific Region, I think the way that we would characterize it is we want to continue to maintain.

Optionality, what we were hoping to see with the.

Submission of Zohydro with that that you would accept three month data package it looks like.

There are still holding steady on six months needed for approval.

As we were developing the product we've been very clear that we we realized we would do additional clinical development and European theater to support the approval and I don't think that down we have changed our.

Switching it all with regards to the our plans to do you know some additional clinical development work in the European Theater to support approval. We're currently working.

Working on.

Arranging those discussions with the he may and and formalizing that studies designed by I think now that we've seen that.

The regulators want those six months endpoints, we have pretty clear picture of what our study designs would look like in the Asia Pacific region.

As you know which is common.

The Chinese as well the Japanese regions, both want pharmacokinetic work done in their specific populations with natural born citizens. So we're working on those studies as we speak.

I have really a lot of fees in our clinical development team. So my team.

Has run multi center global clinical trials in the past that we have no problems certainly tackling these phase one studies as well as beginning the phase three studies in Europe and.

From a partnering standpoint, obviously, we will be looking for a partner to support commercialization.

Unlikely that we would want to build out that commercial infrastructure ourselves in those regions.

But for the time being we will remain.

Keeping that optionality and being able to do that development ourselves and.

Obviously, if there is an opportunity to partner on the development side. We're we're open to those discussions but for the time being we're pretty confident in our own team being able to do the clinical development in those regions.

That's great and just just one more question can you remind is of the IP around those here one.

And those with the agreement that you have Pfizer for granted clean what are the biggest upcoming milestone payments that you had previously disclosed.

Yeah. So on the IP front, what I would say, it's we have.

Filed our IP globally.

In all the major countries throughout Europe, as well as in the Asia Pacific region, we have exclusivity.

Based on their own patent filings out 2035, and almost every one of those regions.

And we have opportunity.

Two.

Move forward with some additional filings.

With regards to methods and other areas of the world.

With regards to the Pfizer agreement I think as we've stated before we paid.

An upfront payment.

On that agreement. This agreement is specifically for the U.S.

So it does not cover X U.S. regions although.

The.

Composition of matter intellectual property will not be enforced in many of these read regions by the time that we would seek approval. So we would be protecting the asset with our own method in formulations as well as you know our unique delivery system on the nasal spray side.

That is very helpful. Thank you so much.

Thank you and as a reminder to ask a question of a star one.

Yeah.

Next question.

Sorry, then next question will be fun line of Terra Bancroft from Piper Sandler you may begin.

Yeah. Thanks, just one more question. So can you give us anymore color on which the follow on indication do you think you're pursuing do you still expect to enter the clinic and narrow trophic care tightest, it's too.

Yes. So great question. So we are still currently on track to.

Look at that indication, which as we've stated in the past we have looked that we are interested in other indications as well. So we think that the unique mechanism of action this product in providing.

Stimulation of tear film also would play into indications of contact lens intolerance also you know pre and post.

Prepped therapy for cataract and refractive surgery is there are other indications such as.

Some different ocular surface disorders that fall into similar categories as neurotrophic care titles, such as corneal neuropathic pain, where there's a very unmet medical need there with patients. So we are looking really to be the first therapy in the dry ice space with more than one indication on the legal.

And that's our plan.

From a clinical development perspective, we think that that would you know pope pose a very unique situation for oyster point in that none of the other products are indicated for more than one condition and we want to continue to build that label build the body of evidence to really support physician community as well as.

Provide.

Support for reimbursement across your various different indications.

Great. Thanks.

Thank you.

And I'm not showing any further questions at this time I like to turn the call back over to Jeff now for any closing remarks.

Thank you operator.

So in closing, we believe that Oh seal, one and some of the strongest clinical trial to data yet in the dry ice space and we will represent a transformative treatment to address the large unmet medical need that currently exist with dry eye disease patient.

Yeah, our hypothesis of restoring tear film homeostasis natural to your production.

We produce positive efficacy efficacy results on multiple endpoint the signs and symptoms in several randomized placebo controlled clinical trials, we purposely designed our trials to address a real world dry eye patient population, which we believe will allow eye care practitioners to translate the clinical trial results from our clinical trials.

Into practice and strategize, how best to use the product within their treatment armamentarium. We feel that this is one of the underlying reasons that patients do not persist with current dry eye therapies as the benefits seen in the clinical trials did not translate to the broader dry eye population.

I'd like to thank everyone for joining us today, and I hope that you and your family stay safe and healthy.

Thank you.

Okay.

Ladies and gentlemen, this concludes todays conference call. Thank you for participating you may now disconnect.

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