Q4 2020 Oyster Point Pharma Inc Earnings Call
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Ladies and gentlemen, please stand by your Oyster point pharma fourth quarter 2020 earnings conference call will begin momentarily. Thank you for your patience and please sandbox.
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Good evening and welcome to Oyster point Pharma fourth quarter 2020 earnings Conference call. My name is Josh and I'll be your operator today. After the company's formal remarks there'll be a question and answer session. At this time I would like to turn the call.
Over to you Mr. Daniel Lochner Oyster point pharma as Chief Financial Officer, Sir. Please go ahead.
Good evening, everyone and welcome to the Oyster point pharma fourth quarter earnings conference call and a three months ending December 31 and 2020.
This evening and issued a press release containing our fourth quarter financial results and recent business highlights. In addition, our earnings press release, and our form 10-K that and filed with the SEC. This evening are available on our website under the Investor and news section.
Ww Oyster point Rx dotcom.
Joining us on our call today are Dr. Jeffrey now President and Chief Executive Officer of Oyster point pharma and Johnson as a wrinkled chief commercial officer falling Doctor now John and my prepared remarks, and the old pump the line for questions.
This conference call contains forward looking statements regarding future events and the future performance and Oyster point pharma forward looking statements, including statements regarding oyster point's possible or assumed future results of operations expenses and financial position.
And strategies and plans and research development and commercial plans or expectations.
And then market size and competitive position our belief regarding our clinical trial outcomes, including secondary end point analysis predictions regarding product approvals or the <unk> Yang R.
Our efforts to manage the impact of COVID-19, and the industry environment and growth opportunities. Among other things. In addition, this conference call discusses products that are under clinical investigation, which has not yet and it.
Our marketing by the food and drug administration.
And are currently limited by federal law, and investigational use and no representation is made as to their safety or effectiveness for the purposes for which there are investigating.
These statements are based upon information available to the company today and Oyster point assumes no obligation to update these statements as circumstances change.
Sure events and actual results could differ materially from those projected and the company's forward looking statements additional information concerning risk factors that could cause results to differ materially from our forward. Looking statements are described in greater detail on and the caption risk factors and the company's filings with the SEC, including our annual report on form 10-K for debt.
Year ended December 31, 2020 filed with the SEC on February 18, two.
2021.
I will now turn the call over to Dr. Congesting, now President and Chief Executive Officer of Oyster point pharma.
Thank you Dan Good evening, everyone and thank you for joining us on our call today to discuss our fourth quarter 'twenty and 'twenty financial results and recent business highlights as you know on December 17th Twenty-twenty, We submitted our NDA for Oc <unk> nasal spray with an indication for the treatment of the signs and symptoms of dry eye disease.
And the coming days, we expect to hear back from the FDA regarding the acceptance of our NDA for review and the Paducah date if accepted.
Once we are and receipt of the correspondence from FDA, we will issue a press release announcing the NDA acceptance.
In addition to our OCR <unk> nasal spray for dry eye disease, we filed and the IMD and November to evaluate the potential of OCR <unk> for the treatment of stage, one and stage two neurotrophic keratopathy.
We believe that OCR <unk> unique mechanism of action and stimulating natural tear film by the trigeminal parasympathetic pathway and <unk>.
And in preclinical and clinical studies may be beneficial for patients with corneal epithelium hyperplasia and door punctate keratopathy as well as those with persistent epithelium defects. We plan to begin enrollment of the phase two Olympia clinical trial and the first half of 2021.
As we are preparing for a potential launch there are a number of major ophthalmology meetings that we plan to attend either virtually or live in 'twenty and 'twenty one dependent on the fluent environment in light of the current pandemic.
The 'twenty 'twenty, One association for research and vision and Ophthalmology meeting will be held virtually may 1st through the seven oyster point phase III and cut two data will be presented at this meeting with the time and date details to be announced the.
And the 'twenty 'twenty, one Royal Hawaiian eye meeting at present will be held live for may 8th through the 14th and Maui.
The American Society of cataract and refractive surgery is scheduled for July 2003rd through the 27th and Las Vegas, and the American Academy of Ophthalmology annual meeting will be held in New Orleans from November 12 through the 15th we were looking forward to a year, where we were able to showcase the various ophthalmic meetings the data from our clinical development.
And highlight what we believe is the strongest dataset and the treatment of a real world population and the dry eye space, We expect 2021 to be an incredible year for the company as we transition from a clinical development company to a commercial organization that remains committed to the research and development of therapies to treat diseases of the.
<unk> surface, we plan on bringing innovative and transformative ocular surface disease treatments to patients and building oyster point pharma into a best in class Ophthalmology company.
Now I'd like to turn the call over to Johnson and its rinko Oyster Point's Chief commercial officer to discuss our ongoing preparations for the potential commercial launch of Oc <unk> nasal spray and dry eye disease, and Q4, 'twenty and 'twenty one.
Thank you, Jeff the dry eye disease segment is a large market with over 16 million people diagnosed in the United States alone.
Only a small proportion of these patients approximately $2 million are currently being treated with a branded therapeutic and over 7 million people diagnosed with dry eye disease have tried and abandoned the currently available options.
We believe that OCR, one nasal spray has a compelling therapeutic profile that if approved may address the unmet needs of a broad audience, which includes those patients with mild moderate and severe dry eye disease, and the eye care practitioners, who provide care for these patients.
This product has been developed with patient safety and comfort and mind as a preservative free nasal formulation that naturally spares the ocular surface from harmful preservatives and common ocular side effects associated with topical eye drops.
From a commercial perspective, we are planning three phases of launch preparedness, including a disease state awareness campaign, which is kicking off this quarter.
And we intend to reframe the narrative around dry eye disease to educate on the importance of tear film homeostasis and house here, some instability impacts dry eye disease.
Historically education has been primarily focused on later stage disease and inflammatory component of the disease, which in our opinion is a long terms to qualify of a disruption and tear film homeostasis.
The second phase will consist of starting dialogue with payers about OCR once therapeutic profile and value proposition, which will also occur in early 'twenty and 'twenty one week.
We've done quite a bit of research with payors, including a number of advisory boards and we remain extremely focused on obtaining the best possible positioning I both C O one post approval.
The third stage is continuing to build out our sales team throughout the upcoming year.
We plan on hiring between 150 to 200, Representatives, which would target approximately 90% of the current prescriber base, a therapeutic dry eye products.
At lunch post FDA approval, our focus will be on broad eye care practitioner and patient education, and marketing whats focused direct to consumer campaigns, leveraging the novel MLA and the nasal spray route of administration.
As a first in class nasal spray to treat the signs and symptoms of dry eye disease, we feel that the target product profile of OCR, one will be compelling to both prescribers as well as patients.
I will now turn the call back over to Dan Lochner, Oyster Point's, Chief financial officer to discuss our fourth quarter financial results.
Thank you John I will now provide a brief overview of oyster point pharma fourth quarter financial results.
Additional detail about our fourth quarter as well as our annual financial results can be found in our form 10-K that was filed with U S and feed the season.
For the fourth quarter 2020, Oyster point pharma reported a net loss of $22 2 million or <unk> 86 per share compared to a net loss of $19.7 million or $1 41 per share for the same period and 2019 and.
As of December 31, and 2020, and cash and cash equivalents were 190 to $2 6 million compared to 139.1 million as of December 31, 2019.
Total research and development expenses for the fourth quarter of 2020 were $11 7 million compared to $15 million per the same period and 2019, the company's expenditures for preclinical and clinical programs were $4 6 million lower during the fourth quarter of 2020, primarily due to the completion of the onset two phase III clinical trial and May 2020.
The company incurred higher CMC extensive $2 9 million, primarily due to the continued advancement of <unk> one.
Kris and other research and development expenses cost was primarily a result of the NDA submission to the FDA and the amount of $2 9 million made in December 2020, as compared to the 5 million non exclusive license agreement to Pfizer and October 2019.
This increase was partially offset by higher costs and the knowledge point $5 million related to data management and regulatory costs and connection with the advancement of those tier one NDA submission.
Total selling general and administrative expenses for the fourth quarter of 2020 was $10 5 million compared to $5 1 million for the same period between 19 and the increase was due to higher employee head count and reflects an increase in payroll related expense, including stock based compensation of $3 million.
The company incurred higher commercialization plan expenses of $1.5 million in anticipation of and expected U S launch of <unk> in the fourth quarter of 2021 and if approved.
Additionally, there was an increase and other general and administrative expenses of <unk> 9 million due to the expansion of the Companys organization and operating as a publicly traded company.
With that overview of our financial results I will now turn the call over to the operator to open up the line for questions.
Thank you as a reminder to ask a question you will need to press star woman and telephone to withdraw your question press the pound key please stand by with a molecule day roster.
Our first question comes from a mono Palm Rama with Jpmorgan you May proceed with your question.
Hi, guys. Thanks, so much for taking the question.
Just two quick ones for me.
It's still 60 days right from the December 17th filing for when you would hear but do for it right and so we're sitting here on February 18th.
Is there something like Covid related or.
Anything in terms of timelines, we should be thinking about here for the quarter the paducah.
And then second question is you mentioned the medical meeting.
And for Oc <unk> one.
The recent data will be highlighted any new additional analyses, we should be looking at.
At these conferences thanks, so much.
Thanks, and upon for the question I'll take the first question first so just to remind everyone and timelines for.
Review from the FDA. So as this is a 505 btu product we have a standard 10 month review cycle and the FDA has required to provide feedback to us and writing by day 74. So just as a reminder, we filed our NDA back in December 17th of 'twenty and 'twenty.
And so we're still within that day 74.
Window, and we've had good conversations with the FDA.
And as we stated in our prepared remarks.
Once we do receive that letter we will issue a press release for.
The second question.
We do have a number of acceptances already this year with data.
It will be probably a combination of top line data as well as.
Additional analyses, we have a great medical affairs team that we've brought on who's now started to go through some of the additional analyses that are and are fairly robust dataset and so we would expect to be on the podium virtually at the ARVO annual meeting and recently.
We're accepted at the <unk> annual meeting and so we'll be looking to present data at both of those meetings and then as we get into the March timeframe, we will get into the window to submit for the American Academy of Ophthalmology, where we intend to have presentations there as well.
Thanks, so much for taking our questions.
Thank you. Our next question comes from Tara Bancroft with Piper Sandler You May proceed with your question.
Hi, guys. Thanks for taking the question.
I guess yeah.
Using the the true tier experience as the lenses of sorts and do you anticipate any read through from that from payers on our Internet intranasal delivery of your product and.
And that and the same vein have you had more detailed discussions on covered yet and the positioning and the treatment paradigm and if you can't provide details of that what is the general sentiment youre hearing, especially for coverage and first line setting or and do you think of scepter will be required.
Yeah. Thanks, guys. Thank you Eric.
Oh, sorry, Jeff go ahead John.
Yeah, Thanks, Tara and I will address the question around the payers from a two tiered perspective true chair with a medical device that was not reimbursed from a traditional payer perspective.
This is a pharmacologic Asian, and we do expect.
The standard commercial insurance as well as Medicare down the line two to list some formulary.
<unk>.
What we've had to date, we've done quite a bit of extensive research and we've had some headboards with payers and so.
So we have a good idea of what youre looking for namely differentiation of the product as well as competitive contract and get it going to be key to get competitive listing on the commercial plans and then we have to wait for the cycle of contracting per Medicare that we expect.
For the 2023 year.
We are building a compelling dossier to be used as monotherapy first line for dry eye disease for the signs and symptoms and.
And we're going in with that position with very competitive contracting strategy.
Great. Thank you.
Thank you. Our next question comes from Ken Cacciatore with Cowen and co you may have.
Preceded and your question.
Hey, Jeff Dan and John Thanks for the call. Appreciate it I was wondering maybe John you could talk a little bit about some of the lessons learned from the <unk> launch I know you have some end of it.
Understanding of what went right what went wrong and and a little bit and maybe a background around the pricing issues that zydeco and restasis had it seemed to kind of get locked into a little bit of book.
Pricing battle, So I'm wondering where that is shook and out if you feel that the marketplaces.
Condition now for you wall and and more stable around that and also was real interested you mentioned DTC and kind of fascinated by that obviously shire went out.
Pretty hot on DTC, and just how that really plays into the game plan here.
Here and then lastly.
And just how is the market played the ball thing now we have novartis, a little bit more aggressively back and the market with I draw and and advertising. So just kind of the underlying trends that youre seeing that you can share with us obviously, it's an interesting time with COVID-19, but any thoughts there so kind of a lot of just general market commentary. Thank you.
Yes, Ken I'll address these questions, let's start with kind of the marketplace in general.
One of the things that we did learn from these either launch what's got the market is very promotional and sensitive both from a field force perspective, as well as an investment and direct to consumer we've seen the market growth as high as double digits, 30% win when good effort is put behind educating the consumer.
And dry eye disease, and getting your eyes checked and getting getting treatment.
So that's a very positive lesson that we've taken away.
We're going to be much more precise with our DTC efforts initially as were getting payer coverage.
We're going to be really targeting a lot more digitally and not casting the net is wide.
But as we do get more favorable coverage and then eventually Medicare we plan on having quite an extensive direct to consumer campaign as we've seen this market reacts quite well to it, especially with our therapeutic product profile.
Only nasal spray on the market for dry eye disease.
Something that the patients could easily identify and ask for when they are coming into the eye care provider.
You mentioned also pricing I think all the branded products and there are four of them approved on the market. They all range between 500 and $600 whack.
Wholesale acquisition cost on a monthly basis and.
I think that pricing has kind of settled the branded products are are at that price I think.
It's going to be important.
And how we approach the payers from a contracting strategy, but I think overall that market has stabilized and and that pricing is it's kind of been that for quite a few years now.
And last on the question around the market evolving.
Restasis has been around 15 plus years as either now for.
There are some new competitors that have come on the market.
We feel that this market still has a lot of headroom in regards to market potential.
A lot of these products do focus and I'm kind of later stage disease. The inflammatory component, we feel that our products such as I see a one is that is acting more upstream on restoring natural tear film and tear film homeostasis.
And is conducive for the market to be used more upstream such as mild and moderate disease. In addition to moderate to severe disease. So we're quite excited that we'll be able to grow the segment the prescription and therapeutic segments.
And a lot of our commercialization efforts are going to be around that education as well as expansion of that market.
Great. Thanks, so much.
Okay.
Thank you and as a reminder to ask a question you will need to press star one on your telephone. Our next question comes from Patrick Zone with lifestyle capital. You May proceed with your question.
Hi, Thanks for taking my questions.
And so a few for me and perhaps you could help us think about the unmet need and merit.
And there are terrific keratopathy and the rationale for OCR, one and this indication and then more specifically on the Olympiad study just curious about any takeaways from the broader OCR, one experience and dry eye that might speak to the ability of those tier one and to improve corneal staining and then maybe and a more general sense just.
You guys could contextualize, how you're thinking about pursuing additional label expansion and whether there was anything else.
It might be expected and the relative near term.
Yeah, great. Thanks, Patrick those are those are great questions. So as we think about neurotrophic keratitis C. One of the things that I think is important is to understand.
The disease state.
When we think about patients with this disease think about it almost as a.
Patients, whose diabetic that has peripheral neuropathy only it's in their cornea, so that underlying nerve plexus and the cornea is not providing feedback back to the brain to stay blink or tier and so we get a breakdown not only from the lack of blinking and tiered production, but also because.
Those underlying nurse keep that corneal epithelium healthy the way in which Oc <unk> nasal spray works is by completely bypassing the ocular surface and therefore.
And we think this is actually a really important product for these patients because we can stimulate natural tear film production, we can do it many times a day.
We're contemplating actually treating more than twice a day that we did and the dry eye program in the NK program and we think that these patients will benefit because we don't rely on debt underlying nerve plexus and as we have stated previously the lacrimal gland produces a whole myriad of growth.
Factors, including.
Including nerve growth factor epidermal growth factor and we think that those are going to be important for healing that corneal surface. When we look at the different stages of.
Neurotrophic Keratopathy, we're really focused with OCR, one as a standalone agent right now for stage, one and stage, two and K and our clinical trials as we develop the pipeline.
And internally there may be other things that we look at for those stage three patients, but we think that actually all three patients all three stages of patients could benefit from a treatment such as OCR, one because regardless of whether you're have corneal hyperplasia.
Or you have a corneal ulcer that stimulation of the natural tear film could be beneficial to those patients and as we know today.
One of the only therapies and that's out there for those stage three patients taking.
Taking quite a long time for that therapy to get to the patient and work its way through the payer system and so we think that this could potentially be a product that we may ultimately look at just sort of bridge those patients during that time, so more to come but right now we're really focused on stage, one and stage two patients and.
And we think that this this product just has a very unique mechanism of action.
To be able to improve the health of the corneal surface. When we look at the corneal staining data that we did see and the onset one and onset two studies a.
A couple of different 0.1 is.
We're really encouraged by the data as you saw and the onset one study we had statistically significant improvement in multiple areas of the cornea and again, we're one of the few companies that have shown our data across all areas of the nei scale not just one specific area and then in the <unk> or sorry, the answer to.
<unk> program again, we saw a directional benefit and all of the areas of the cornea with regard sustaining.
And we will be presenting some additional data as we go forward on certain subsets of that patient population, but two things to keep in mind on the dry eye side. One is we only treated for 28 day. So sometimes staining resolution takes some period of time and second because we were focused on.
Looking at the patient Schirmer scores, we had to give topical prepare akane pretty often over the course of the study, which we know can also exacerbate screening so.
When we look at neurotrophic keratitis, we obviously won't have as much prepare akane on the ocular surface will be treating over a 56 day period. So a much longer period of time, and we're really excited to see the data and that patient population.
Great that was super helpful. Thanks, so much.
Thank you I will now turn the call back over to Dr. Now for any closing comments.
Thank you operator I'm.
And I'm extremely proud of the progress with the Oyster point team has made and developing <unk> nasal spray specifically through the efficient development program that began in may of 2018, when we filed the initial IND application for this product and look forward to the team's continued execution through developing and advance.
And the additional pipeline assets in line with our goal to expand the pipeline to other ophthalmic indications initially focused on transformative therapies for diseases of the ocular surface and.
In addition, we have continued to bolster our R&D and clinical development capabilities as well as strength in our manufacturing team. In 2021, we will also continue to enhance our commercial capabilities, including a planned competitively sized ophthalmic sales force to launch <unk> nasal spray and the fourth quarter of 2021.
Approved.
We are driven to build oyster point into a world class Ophthalmology company and closing I'd like to thank everyone for joining us today and I hope that your families stay safe and healthy.
Thank you ladies and gentlemen. This concludes today's conference call. Thank you for participating you may now disconnect.
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