Q4 2020 Alimera Sciences Inc Earnings Call
They'd conference call.
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Operator: Participants of this call are advised that the audio of this conference call is being broadcast live over the internet and is also being recorded for playback purposes. A webcast replay of the call will be available approximately one hour after the end of the call through May 25, 2021. I would like to turn the call over to Scott Gordon of CoreIre, the company's investor relations firm. Please go ahead. Thank you, Francesco.
Yeah, let's go for the replay of decor, we'd be available on approximately one hour. After the end of the day cool through May the 20th like fifth 2021.
I would like to turn to call over to Scott Gordon <unk> the companies Investor Relations. Sir. Please go ahead.
Thank you Francesca good morning, and thank you all for participating in today's conference call for.
Scott Gordon: Good morning, and thank you all for participating in today's conference call. Joining me 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. 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 Alimera's most recently filed periodic reports on Form 10-K and Form 10-Q and Form 8-K filed with the SEC today and Alimera's press release last evening, particularly the cautionary statements in it.
Joining me from Alan Mirrors leadership team Ah, Rick is worth President and Chief Executive Officer.
Phil Jones, Chief Financial Officer.
During this call management will be making forward looking statements, including statements that address element or his expectations for.
Future performance for 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 <unk>. Most recently filed periodic reports on for them 10-K and for them turned to and for 8-K files a V. I P. For you today <unk> press release last evening, particularly the cautionary statements in it.
Today's conference call includes adjusted EBITDA, a non-GAAP financial measure that Alan Mirror believes can be useful in evaluating his performance.
Scott Gordon: Today's conference call includes Adjusted EBITDA, a non-GAAP financial measure that Alimera believes can be useful in evaluating its performance. However, you should not consider this additional information in isolation or as a substitute for results prepared in accordance with GAAP. For a 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 press The content of this call contains time-sensitive information that is accurate only as of today, February 25th, 2021. 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 is now my pleasure to turn the call over to Rick Eiswirth. Rick, please go ahead.
You should not consider this additional information in isolation or as a substitute for results prepared in accordance with gap for reconciliation of this non-GAAP financial measure to net loss. It's most directly comparable GAAP financial measure. Please see the reconciliation table located in Eleanor's earnings press release.
The content on this call contains time sensitive information that is accurate only as of today February 25th 2021, except as required by law Alamito disclaims any obligation to publicly update for advice any information to reflect events or circumstances that occur. After this call is now on my pleasure to turn the.
Call over to <unk> <unk>. Please go ahead.
Thank you Scott and good morning to everyone on the call. It goes without saying that 2020 was extremely challenging do the COVID-19, and give them a tough environment. We were really pleased with the way with the company managed throughout the year, we delivered annual revenue of over $50 million and 2020 down just 6% compared to 2019, despite shelter and for.
Place mandate and health care provider Lockdowns multiple times across several regions of the U S and on international territories.
During the pandemic, we decided to retain our entire work force, while significantly reducing on travel and expense, then and delaying or moving projects that would not be as effective while our access to physicians with limited.
Richard S. Eiswirth: Thank you, Scott, and good morning to everyone on the call. It goes without saying that 2020 was extremely challenging due to COVID-19, and given the tough environment, we are really pleased with the way that the company performed throughout the year. We delivered annual revenue of over $50 million in 2020, down just 6% compared to 2019, despite shelter-in-place mandates and healthcare provider lockdowns multiple times across several regions of the U.S. and our international territory.
This discipline enabled us to not only keep our work force in place, but we actually improved our cash position over the year and achieved positive adjusted EBITDA of three and a half million dollars in 2020 does.
Despite reducing our expenses to achieve this goal we continue to execute on key components of our strategy. We took steps to expand the availability of alluvium for D me and the poster uveitis indication an additional international markets. We also initiated the landmark New day study, which if successful could help change the current paired on and significant.
Increase your slow moving as baseline therapy for patients suffering from Jamie.
Ah retaining on workforce and advancing these initiatives throughout last year. We believe that we are on a strong position to return to significant growth is COVID-19 becomes better managed.
Turn it on the fourth quarter U S reported net revenue was $7.4 million a decline of 22% vs. The fourth quarter of 2019 and U S. N user demand also declined approx from the same compared to last year due to lower patient volumes in physician offices caused by COVID-19. However is important to note that these quarterly year over year.
Harrisons reference outperformance during the latest surge of COVID-19, compared to pre pandemic conditions and the for quarter of 2019, when our business was experiencing strong growth, we hope to get back to the level soon once depend on it begins to resolve if.
Richard S. Eiswirth: During the pandemic, we decided to retain our entire workforce while significantly reducing our travel and expense spend and delaying or removing projects that would not be as effective while our access to physicians was limited. This discipline enabled us to not only keep our workforce in place, but we actually improved our cash position over the year and achieved positive adjusted EBITDA of $3.5 million in 2020. Despite reducing our expenses to achieve this goal, we continue to execute on key components of our strategy.
If we look sequentially at R. U S segment, we see that the fourth quarter end user demand was up 19% vs. The third quarter of 2020, while generating 867 units are international segment also has impacted by renewed Lockdowns lately. This year with revenue is now 18% on the fourth quarter of 2020 vs. The year ago again.
These figures should be taken in context, given a comparison between pre pandemic performance and the ongoing impact of the pandemic.
Notably our international segment performance on October and November was in line with our expectations, but tight lockdowns throughout Europe in December significantly affected the overall quarterly performance.
Spike the challenges of COVID-19, the fourth quarter represented to the third highest quarterly end user demand and our international segment in the history of the company we.
We expect our international segment to get back to delivering material growth as COVID-19, vexation vaccination rates rise and patients return to clinics and hospitals.
However, we do anticipate distributor ordering patterns and our international segment to be disrupted during the first quarter do the inventory build up in 2020, there was not offset by end user demand during the pandemic on.
On the positive side the message that ILUVIEN differs disease recurrence and enables patients to see better longer was significantly fewer injections continues to resonate with physicians, particularly his patients appear to be missing appointments for reasons associate with COVID-19.
We believe this message is supported by two recently published papers. The first is from the Cleveland clinic entitled the effect of delay and care among patients required which original injections.
Richard S. Eiswirth: We took steps to expand the availability of alluvium for DME and the posterior uveitis indication in additional international markets. We also initiated the Landmark New Day Study, which, if successful, could help change the current paradigm and significantly increase the use of diluvian as baseline therapy for patients suffering from DME. By retaining our workforce and advancing these initiatives throughout last year, we believe that we are in a strong position to return to significant growth as COVID-19 becomes better managed. Turning to the fourth quarter, U.S. reported net revenue was $7.4 million, a decline of 22% versus the fourth quarter of 2019.
This 1041 patient retrospective analysis was done to examine the effect of a delay and care on the visual acuity of patients requirements for original injections.
The authors looked at patients with retinal disease, or we received an interim vitriol injection and the 12 week period, leading up to March 14th 2020, arguably the start of the lockout pay.
Patients in this study were stratified into three groups those the completed their scheduled visit during the time period for March 14th to May 4th 2020, those that cancelled their scheduled visit during this period and those that were no shows during the spirit.
Upon their return to the office. After these seven weeks patients who either cancelled or no shows experienced statistically significant vision loss compared to the patients who completed their scheduled visit during the study period.
The study authors concluded that patients with demi <unk> proliferative diabetic retinopathy, and <unk>, where the most vulnerable to vision loss with even short lapses in care.
A second study of 183 eyes has recently been published by Dr. <unk> Ashkenazi and other from Bascom Palmer I Institute to determine secondary effects of the mandated COVID-19 pandemic closure period on injection based retina care and outcomes.
In this cross sectional retrospective analysis of a single provider outpatient clinic across multiple satellites consecutive patients returning.
For each original injections of anti vascular NFA low growth factor or corticosteroids were identified as delayed or underlaid. During a six week study intervals during the COVID-19 pandemic.
The consequence of delayed care were reduced vision and significantly worse retinol anatomy.
In this study investigators concluded that Undertenant unintended consequence of delayed care of patients on established care regimens should be anticipated and mitigation strategies considered if similar restrictions are mandated in the future.
At Almere, we have a proven mitigation strategy to address this problem. We believe these studies further reinforce the importance of long term continuous microdose on with Alluvion, which reduces the recurrences disease.
As I mentioned in 2020, we made great strides and setting the stage for future growth by executing on several key corporate initiatives major accomplishments in 2020 included the following we achieved on important milestone with the initiation of our landmark study the New day study the first and only head to head comparative study of an approved corticosteroid therapy.
Richard S. Eiswirth: And U.S. end-user demand also declined approximately the same compared to last year due to lower patient volumes in physician offices caused by COVID-19. However, it is important to note that these quarterly year-over-year comparisons reference our performance during the latest surge of COVID-19 compared to pre-pandemic conditions in the fourth quarter of 2019, when our business was experiencing strong growth. We hope to get back to these levels soon once the pandemic begins to resolve itself.
Against the current anti VEGF standard of care for the treatment of diabetic macular Nemo.
Recall that new day as a randomized controlled multicenter study decided to demonstrate reduced disease recurrence a reduction of treatment frequency better disease control and reduced retinal damage compared to current standard of care therapy in the treatment of naive and new naive patients.
Just as reduced patient flow and offices and hospitals as negatively impact on our commercial revenues reduce patient flow has impacted the speed of enrollment on the setup. We currently have 19 patients enrolled however.
However, while enrollment has been suppressed we focused on getting investigative sites up and running and as of today. We have 40 sites under contract with 35 of those sites activated and looking for patients and evaluating the potential outcomes of the new day study and it's very important to remember that we've created over 37000 eyes globally and have significant real world.
Clinical experience.
We have data from both prospective in retrospective datasets.
Although both are too large post marketing datasets palatin from the U S and Iris from Europe were designed to confirm our understanding moving safety. They also provide a significant evidence space for alluvium consistent control of disease and reduced recurrence of disease and need for frequent re treatment.
Richard S. Eiswirth: If we look sequentially at our U.S. segment, we see that the fourth quarter end-user demand was up 19% versus the third quarter of 2020 while generating 867 units. Our international segment also was impacted by renewed lockdowns late last year, with revenues down 18% in the fourth quarter of 2020 versus the year ago. Again, these figures should be taken in context given the comparison between pre-pandemic performance and the ongoing impact of the pandemic. Notably, our international segment performance in October and November was in line with our expectations, but tight lockdowns throughout Europe in December significantly affected the overall quarterly performance.
We also have several retrospective datasets that we have accumulated since launch to support. This conclusion. These and other datasets continue to support and solidify our confidence in a potential success for outcome for new day.
While access to patients has remained off we have two sub studies as part of a new day.
We're excited about these studies because they have the potential to answer some important questions relating to the broader impact of consistent and continuous control of information and the retina offered by leaving for patients for the early do you mean.
Historically diabetic retinopathy and <unk> have been considered ocular microvascular complications of diabetes caused by increased levels of fed Jeff hence the use of anti VEGF to address TMA emerg.
Emerging evidenced now suggests the diabetes induced hyperglycemia leads to low grade inflammation of the retina, which would precede the vascular changes the anti VEGF specifically address.
Thus the chronic inflammation May act as a central in early process and the pathophysiology of DMA, resulting in damage to photo receptors and outcome known as nerds generation as well as vascular changes and Demma the.
The first of these subsidies as an interior chamber cytokine announced level analysis to assess the effective alluvion Anna flip intercept on intra ocular cytokine levels and patients with a really Dear me. This will provide clinical data supporting other bins anti inflammatory capabilities as corticosteroid to suppress the levels of interactively inflammation cytokines in patient.
We believe this study will support elevens ability to suppress chronic inflammation by regulating interactor cytokine levels, which will address many of the aspects of the pathophysiology of deeming in addition to control of edema.
The second study is the electro retinol graffiti or <unk> study.
Preliminary data from a sub analysis of the user study with investigators from the University of Iowa suggested that ILUVIEN slows the rate of defending other retinal nerve fiber later and this spinning is considered a marker of retinal degeneration.
Therefore results of the <unk> sub study will provide an assessment of retinal function change over time and help us to understand the potential neuroprotective value of Eluvium overtime in early deeming patient population comparison to a flivver steps.
Richard S. Eiswirth: Despite the challenges of COVID-19, the fourth quarter represented the third highest quarterly end-user demand for our international segment in the history of the company. We expect our international segment to get back to delivering material growth as COVID-19 vaccination rates rise and patients return to clinics and hospitals. However, we do anticipate distributor ordering patterns in our international segment to be disrupted during the first quarter due to inventory buildup in 2020 that was not offset by end user demand during the pandemic.
We believe that positive results were positioned leaving is a formidable competitor to the seven $5 billion standard of care and provide a significantly greater opportunity for Eleanor.
Another key area of accomplishment is our continued global expansion on believing in deeming and non infectious post your you got us in August we saw on the distribution agreement with our Nordic distributor Nordic crime as our dedicated wholesaler in the region. This agreement covers the commercialization of Alluvion in Sweden, Denmark, Finland, and Norway, all countries, where I'm moving is approved.
We expect to begin commercializing are leaving in these countries. During 2021 and has announced this month have already done so in Finland.
In September of last year, we announced the attainment of reimbursement in Scotland for non infectious poster uveitis supporting a sales in that region also on September we entered into an agreement with a new distributor partner medicine medical to market a living in Austria, and the Czech Republic Medicine commenced sales of Alluvion in Austria on October and preparations are underway for.
For submission for reimbursement in the Czech Republic.
In December we announced the launch of a living in the Netherlands for both indications with our distributor partner horse farm on and we are now working with for us to launch, leaving in Belgium, and Luxembourg in 2021 and.
And with that on now turn on the call over to fill who review our financial results for the fourth quarter.
Richard S. Eiswirth: On the positive side, the message that alluvium defers disease recurrence and enables patients to see better, longer, with significantly fewer injections continues to resonate with physicians, particularly as patients appear to be missing appointments for reasons associated with COVID-19. We believe this message is supported by two recently published papers.
Thanks for it can help <unk> Hello, everyone. During the fourth quarter of 2020, a consolidated net revenue was down approximately 20% to $13.8 million compared to $17.3 million on the fourth quarter of 2019 at Rick explained earlier. This comparison reflects pre pandemic performance in 2019 verse.
The current COVID-19 environment, and making the comparison, even tougher Ah business was in full stride in the fourth quarter of 2019.
Sequentially or compared to the third quarter of 2020 are consolidated net revenue was up 10% on higher sales in both R U S and international business segments.
Richard S. Eiswirth: The first is from the Cleveland Clinic entitled The Effect of Delay in Care Among Patients Requiring Intravitreal Injections. This 1041 patient retrospective analysis was done to examine the effect of a delay in care on the visual acuity of patients requiring a traditional injection. The authors looked at patients with retina disease who had received an intravitreal injection in the 12-week period leading up to March 14, 2020, arguably the start of the lockdown.
U S. Net revenue was approximately $7 for a million dollars for the fourth quarter of 2020, a decline of approximately 22% from the $9.5 million reported in the fourth quarter of 2019, However sequentially use net revenue was up 6% compared to the third quarter of 2020.
U S in user demand, which represents units purchased by a physician to pharmacies from our distributors was down 26% in the fourth quarter of 2020 to 867 units compared to 1164 units in the fourth quarter of 2019, but again on a sequential basis and user demand grew 19% vs. The third.
Third quarter of 2020, an indication of recovery and U S treatment.
Richard S. Eiswirth: Patients in this study were stratified into three groups: those that completed their scheduled visit during the time period from March 14th to May 4th, 2020; those that canceled their scheduled visit during this period; and those that were no-shows during this period.
As we have previously shared our GAAP revenues in the U S do not always correlate with end user demand due to the timing of purchases by our specialty distributors in the fourth quarter of 2020, alamito use distributors purchase or possibly 6% more units than were sold to end users.
Net revenue from our international segment decrease approximately 18% to six $4 million for the fourth quarter of 2020. This compares to seven $8 million reported for the same period last year. The decrease was due to the impact of COVID-19 Lockdowns.
Richard S. Eiswirth: Upon their return to the office after these seven weeks, patients who either cancelled or were no-shows experienced statistically significant vision loss compared to the patients who completed their scheduled visit during the study period. The study authors concluded that patients with DME and or proliferative diabetic retinopathy and retinal vein occlusion were the most vulnerable to vision loss with even short lapses in care. A second study of 183 eyes has recently been published by Dr. Ashkenazi and others from Baskin-Palmer Eye Institute to determine the secondary effects of the mandated COVID-19 pandemic closure period on injection-based retina care and outcomes.
Total operating expenses were possibly 11 $6 million in the fourth quarter of 2020, a reduction of 15% compared to $13 6 million reported on the fourth quarter of 2019.
We reported adjusted EBITDA of $1.1 million from the fourth quarter of 2020 compared to $2.6 million on that in queue for 2019 importantly, we achieved a quarterly goal that generate sufficient adjusted EBITDA to cover a quarterly interest payments. Despite the ongoing challenges of the pandemic for the.
Three months ended December 31, 2020, we reported a net loss of approximately $1 million compared to net income approximately $500000 for the three months ended December 31 2019.
Basic and diluted net loss per share for for three months ended December 31, 2020 was 18 cents on approximately five 4 million weighted average shares outstanding. This compares to basic and diluted net income per share for the fourth quarter of 2019 at eight cents on approximately 6.2 million total weighted average shares outstanding.
Richard S. Eiswirth: In this cross-sectional retrospective analysis of a single provider outpatient clinic across multiple satellites, consecutive patients returning for individual injections of antivascular endothelial growth factor or corticosteroids were identified as delayed or undelayed during a six-week study interval during the COVID-19 pandemic. The consequence of delayed care was reduced vision and significantly worsened retinal anatomy. In this study, investigators concluded that the unintended consequence of delayed care of patients on established care regimens should be anticipated and mitigation strategies considered if similar restrictions are mandated in the future.
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Total weighted average shares in 2019 includes participating shares associated with our outstanding preferred stock.
Turning to our results for the full year revenues for 2020 were $58 million down approximately 6% from the $53.9 million that we reported in 2019.
Operating expenses in 2020 or $44.4 million, a reduction of 16% compared to $52.6 million that we reported in 2019.
Year over year declines in total operating expenses for both the fourth quarter and full year 2020, where do did cost reduction measures, we implemented to offset the effect of COVID-19, including reduce travel expenses medical Congresses marketing costs and other non essential spending.
For the full year 2020, we reported adjusted EBITDA of $3.5 million compared to $21000 in 2019.
We are proud of this achievement and while the pandemic constrained certain aspects of our business. We continued to manage our business to performance that exceeded the result of the prior year and gave Almere is best annual adjusted EBITDA and bottom line performance in the company's history.
Richard S. Eiswirth: At Alimera, we have a proven mitigation strategy to address this problem. We believe these studies further reinforce the importance of long-term, continuous microdosing with alubion, which reduces the recurrence of disease. As I mentioned, in 2020, we made great strides in setting the stage for future growth by executing on several key corporate initiatives. Major accomplishments in 2020 included the following.
For the year ended December 31, 2020, we reported a net loss of five $3 million compared to <unk> net loss of $10 for a million dollars for the year ended December 31, 2019, representing a 49% improvement.
Basic and diluted net loss per share for $2021 for sets on approximately 5.1 million weighted average shares outstanding.
This compares to basic and diluted net loss for sure for 2019 of $2.19 on approximately for 8 million weighted average shares outstanding.
The increase in shares outstanding as a result of the conversion in retirement of our series see convertible preferred stock in the second half of 2020.
We believe the conversion simplifies a cap structure and eliminates a $10.2 million preference that was perceived as debt by some.
Richard S. Eiswirth: We achieved an important milestone with the initiation of our landmark study, the New Day Study, the first and only head-to-head comparative study of an approved corticosteroid therapy against the current anti-VEGF standard of care for the treatment of diabetic macular edema. Recall that New Day is a randomized, controlled, multi-center study designed to demonstrate reduced disease recurrence, a reduction in treatment frequency, better disease control, and reduced retinal damage compared to current standards of care therapy in the treatment of naive and near-naive patients.
On December 31, 2020, we had cash and cash equivalents of approximately $11.2 million compared to $9.4 million in cash and cash equivalents that we reported in December 31 2019.
I would like to take this opportunity to remind everyone on of the seasonality of our business. What we typically see a sequential decrease in revenue from queue for Q1 and.
In the U S physician practices will reverified patient insurance plans and patients will have a larger burden with co pay deductibles from the first quarter, which typically slows down U S end user demand in Europe, many hospitals restart their annual budgets, leading to a delay and patient approval for Alluvion administration and of course are busy.
This is still affected by the continuing COVID-19, pandemic and with that I'll turn on the call back over to Rick to wrap up our prepared remarks rip.
Thank you Phil.
2020 was fraught with significant challenges, we were able to weather the COVID-19 storm and demonstrate the resilience of the company and the ILUVIEN franchise.
Richard S. Eiswirth: Just as reduced patient flow in offices and hospitals has negatively impacted our commercial revenues, reduced patient flow has impacted the speed of enrollment in the study. We currently have 19 patients enrolled. However, while enrollment has been suppressed, we've focused on getting investigative sites up and running, and as of today, we have 40 sites under contract, with 35 of those sites activated and looking for patients.
As the pandemic becomes better control, we remain ready to put the business back on track for strong growth is physician offices increased capacity and patient flows return.
Our cash position remains strong at $11.3 million compared to $9 for a million dollars at the end of 2019.
And we did this without having to raise additional equity financing during the year and faced incremental shareholder dilution that so many other companies have had to encourages environment.
For 2021, we're back to focusing on our for core goals, which are.
One continue to grow Luwian sales and our international markets and restoring year over year growth and R. U S business.
Absolutely COVID-19 challenges, we remain confident we can grow our business organically, increasing both the number of physicians using ILUVIEN and the frequency of use and all of our markets.
To executing on our strategy to expand the number of international territories, and which Alluvion is approved.
Richard S. Eiswirth: In evaluating the potential outcomes of the New Day study, it is very important to remember that we've treated over 37,000 eyes globally and have significant real-world clinical experience. We have data from both prospective and retrospective data sets. Although both are large post-marketing data sets, Paladin from the U.S. and Iris from Europe, were designed to confirm our understanding of alluvium safety, they also provide a significant evidence base for alluvium's consistent control of disease and reduced recurrence of disease in need for frequent retreatment. We also have several retrospective data sets that we have accumulated since launch to support this conclusion. These and other data sets continue to support and solidify our confidence in a potential successful outcome for New Day.
Reimbursed and launched with our direct sales organization and through a distributor partners, which includes both Amy and the approval uptake of balloons, non infectious you guys indication and new and existing territories.
Three advancing the new day study on completing the recruitment of sites for plans study centers and driving patient enrollment recall that we plan on roll around 300 patients and approximately 40 to 45 centers and this landmark head to head clinical trial.
And for remaining focused on the management of our resources on our financial performance, while the pandemic continues as.
As most of you know our success with this is unique among standalone small cap ophthalmology companies.
And with that you already know where you are now ready to day questions operator.
And that is in judgment, if you wish to have a question on today's call you would need to press con and and number one on your kind of from if your question has been on and you wish to list for your question you May do so my question Scott and then in on that to you for using <unk>. Please pick up your handset to me for and to me.
Request and speaking of Nicole.
The first question is from on it and not working from Craig Hallum. Cathy accounts. Please go ahead.
Great. Good ash on good morning, everyone, Rick I want to pick up right, where you left off on the 2021 piece I know, you're not giving guidance, but obviously easier comps now with the pandemic behind us in 2020 or yeah. The the impact at least but obviously Q1 still.
Richard S. Eiswirth: While access to patients has remained limited, we have two sub-studies as part of New Day. We're excited about these studies because they have the potential to answer some important questions relating to the broader impact of consistent and continuous control of inflammation in the retina offered by lubing for patients with early DME. Historically, diabetic retinopathy and DME have been considered ocular microvascular complications of diabetes caused by increased levels of VEGF, hence the use of anti-VEGFs to address DME.
For as a pet that makes bill goes on but how are you thinking about growth here in 2021.
Given all the facts as you mentioned.
Yeah. So I mean, I think I think we're still being impacted by Covid as we speak right now.
I would say patient volumes are down and it's an interesting reason why we're seeing them down right now Alex.
What we're hearing is that patients are canceling your postponing visit because of where they sit in the queue for their vaccinations right. They don't want to take a chance of.
Coming down with Covid before they get vaccinated or in the middle of their two injections two treatments. So they somehow missed the vaccination. So we've we've heard a little bit about it delays like that and we're experiencing the typical seasonality.
If you look at the first quarter, we are usually down in the high teens to 20% from queue for I think that's probably a good.
Richard S. Eiswirth: Emerging evidence now suggests that diabetes-induced hyperglycemia leads to low-grade inflammation of the retina, which would precede the vascular changes the anti-VEGF specifically addresses. Thus, chronic inflammation may act as a central and early process in the pathophysiology of DME, resulting in damage to photoreceptors, an outcome known as neurodegeneration, as well as vascular changes and edema.
Good estimate for Q1 could be slightly higher could be slightly lower depending on how patients Nino returned from the the vaccine situation over the next few weeks.
And I do believe that once we can get through this get through most of people in phase one a which are most of our patients vaccinated that hopefully we can return to grow throughout the rest of the year.
That's all for added October November look like in 2020 is that gonna be a useful proxy for you to think about how the beginning of the recovery books.
Yes, as I said I mean in the U S. We did I think it was about 867 units. So that's obviously not where we want to be we were doing much closer to.
Richard S. Eiswirth: The first of these sub-studies is an interior chamber cytokine level analysis to assess the effect of alluvium and aflipricept on intraocular cytokine levels in patients with early DME. This will provide clinical data supporting Illumina's anti-inflammatory capabilities as a corticosteroid to suppress the levels of interocular inflammation and cytokines in patients. We believe this study will support a living being's ability to suppress chronic inflammation by regulating interocular cytokine levels, which will address many of the aspects of the pathophysiology of DME in addition to control of edema.
I think we did between 1100 1200 so.
Not where we want to be but at the same time. It was really good growth coming out of the queue to wear with salting suppressed. So I certainly feel like we can get back to the volumes.
On that we were doing in fourth quarter of 2019 is things start to normalize.
Honestly, though I'm not sure if that is that's in April may or June when we start to get back there. It depends on how quickly we can get the rest of these patients vaccinated and take the pressure off of people skipping visits.
Okay got it you you didn't make some changes to shoot medical offices or just maybe some uhm can you walk us through the the details there.
Yeah sure obviously people leave people joined companies and people leave companies I can't get into the details of Uhm our decision on part ways with Dr kind of Ah, but I can tell you that we are very very confident in our medical messaging and positioning now we think the changes that we've made over the past couple of years focusing on the need to treat.
Broader information.
Looking at the potential of the disease and that underlying information, creating damage on the neural fiber layers is pretty good pretty critical to differentiate the value of alluvion. The.
The great thing is the entire company is sort of unified around that story and that strategy and so we will continue on pushing that and we will certainly search for a replacement for doctor cover.
Richard S. Eiswirth: The second study is the electro-retinography, or ERG, study. Preliminary data from a sub-analysis of the user study with investigators from the University of Iowa suggested that alluvium slows the rate of the thinning of the retinal nerve fiber layer, and this thinning is considered a marker of retinal degeneration. Therefore, results of the ERG sub-study will provide an assessment of retinal function change over time and help us to understand the potential neuroprotective value of eluvium over time in early DME patient population comparison to a FLIR receptor.
That that's helpful and then on the set that day.
U S. Obviously, you can't Germany, or the or the major points right now and then you're launching and the other geography. So you mentioned their apparent remarks, but I just want to make sure.
We're we're all on the same page for 2021, what are the new geography that you expect to launch it and have reimbursement beyond the ceremony. So the most critical ones you're going to be the three bigger countries in southern Europe obviously.
Spain, France and Italy.
R. R. Three partners in those countries are all working through reimbursement right now and the discussions are active but they've been delayed because of COVID-19. So it's hard for me to put a specific date on on when we expect them to get reimbursement right now because things are not as open as we would like them to be in those three countries as well, but we do think that that will happen in 2021 on one.
Would be able to launch on those free markets.
Good chance will add countries like Portugal potentially.
And our new launch in the Netherlands, where we recently sold some product is the pricing and reimbursement there is actually for both uveitis and DMA. So we're.
Phil Jones: We believe that positive results would position Alluvion as a formidable competitor to the $7.5 billion standard of care and provide a significantly greater opportunity for Alimera. Another key area of accomplishment is our continued global expansion of the alluvian endemy and non-infectious posterior uveitis. In August, we signed a distribution agreement with our Nordic distributor, Nordic Prime, as our dedicated wholesaler in the region. This agreement covers the commercialization of alluvion in Sweden, Denmark, Finland, and Norway, all countries where alluvion is approved.
We're slowly rolling that out, but the key markets would be those three southern southern European countries.
Okay. That's great and then the latest new day time line is given where enrollments tracking on right now with your original plan. When would you expect to finish enrollment and then also I read out that study.
Yeah. So.
Certainly we're gonna try to ramp up everything we possibly can to try to drive enrollment as things continue to open up but where our goal was originally to get everybody enrolled in 2021, I would say, it's probably likely that it slips into the first quarter of 2022 before he can complete that which would push the reader first read out of the study on to.
Late 2023.
Okay helpful. Thank you I appreciate it absolutely Alex Thanks for your support.
The next question you send me to channel with H C. Wainwright. Please go ahead.
Oh. Thank you for taking my question first question is could you. Please comment on the patient flows independence two months in the U S vs Europe.
Phil Jones: We expect to begin commercializing alluvium in these countries during 2021 and, as announced this month, have already done so in Finland. In September of last year, we announced the attainment of reimbursement in Scotland for non-infectious posterior uveitis, supporting sales in that region. Also in September, we entered into an agreement with a new distributor partner, MEDIS Medical, to market alluvium in Austria and the Czech Republic. MEDIS Medical began sales of alluvium in Austria in October, and preparations are underway for submission for reimbursement in the Czech Republic.
Well, we are continuing to see patient flow is a little bit suppressed for these diabetic patients E. As I mentioned and what we are hearing anecdotally from the doctors as we have patients that are canceling and postponing visits.
Because of where they potentially are in the in the vaccinations for scheduling process I guess, where they are pending the first vaccination and they just don't want to risk getting COVID-19 and then somehow be taken out of that Q or same thing where they may be scheduled for their second vaccination, and obviously don't want to miss that as well. So we know that that is suppressing it.
How much of how much of the suppression, we're seeing in January and February is is that phenomenon vs. The typical seasonality.
It's hard to quantify that.
In Europe, we've see it saw more aggressive lockdowns in Germany, specifically.
In December and January than we'd ever seen before because of some spikes. So that certainly has limited patient flow in Germany.
We've had complete lockdowns in Portugal, right because of the.
And the UK because some of the hospitals were just flooded with patients that seems to be leading up right now as we speak. So we hope that that continues to improve over over March and obviously April.
Got it can you put them on on the.
Phil Jones: In December, we announced the launch of Illuvion in the Netherlands for both indications with our distributor partner, Horace Pharma. And we are now working with Horace to launch Illuvion in Belgium and Luxembourg in 2021. And with that, I'll now turn the call over to Phil, who will review our financial results for the fourth quarter.
Whether it be level operating expenses seem to force quarter could be to serve as a reference level for 2021, particularly be G&A expenses.
Uhm.
I think the G&A expenses are probably a fairly good marker overall.
We actually feel like the appropriate level of spending is where we were in queue for a 2019 right that that's where we want to be to continue to invest in trying to drive the top line.
Obviously, we've made the decision to control some of those and there's some self controlling aspect just because we haven't been able to travel and have reps out on the road and do some of the trade shows and things like that so we slowly as things open up will probably work our way back up the expense low but the plan is to continue to manage that expense flow I guess in peril.
Well with improvements in revenue so that we continue to generate positive EBITDA, we'd like to be in a position going forward that we're always generating positive EBITDA.
Phil Jones: Thanks Rick and hello everyone. During the fourth quarter of 2020, our consolidated net revenue was down approximately 20% to $13.8 million compared to $17.3 million in the fourth quarter of 2019. As Rick explained earlier, this comparison reflects pre-pandemic performance in 2019 versus the current COVID-19 environment, and to make the comparison even tougher, our business was in full stride in the fourth quarter of 2019. Additionally, sequentially, or compared to the third quarter of 2020, our consolidated net revenue was up 10% on higher sales in both our U.S. and international business segments.
Sufficient to cover our quarterly interest expense Mister at all.
Got it at last question it could the company consider any new pipeline candidates during 2021.
Absolutely we're always on the look out for those we'd like to find something that would be a novel mechanism action and certainly be something that could be a quality of life type improvement for the patients just like we believe ILUVIEN is in the unique weighted treats for the disease. So we're out there looking for stuff and.
We hope to be able to find something out of the pipeline, but certainly we think we've got a pretty strong and stable business here and so it needs to be the right right product at the right time, rather than a rush to maybe make an acquisition or something that.
Could impair with what we've built here.
Got it thank you.
Absolutely thanks for Ya.
The next question is from James from the line with the line. So the partner. Please go ahead.
Good morning, Thank you for taking my questions that congrats on on a pretty good year in a very tough circumstances, you guys really hold the line as you're coming out of I know the prior questions. You were asking about sort of the COVID-19 impacts is there and it you've been very clear about some of the delays due to people being concerned about missing the vaccines, but.
Looking past at any anecdotal stories from field on what thanks for thinking of a doctor might be thinking of from the sales force perspective on with a few things will start to what started getting more normalized in 21 if at all.
Phil Jones: U.S. net revenue was approximately $7.4 million for the fourth quarter of 2020, a decline of approximately 22% from the $9.5 million reported in the fourth quarter of 2019. However, sequentially, US net revenue was up 6% compared to the third quarter of 2020. U.S. end-user demand, which represents units purchased by physicians and pharmacies from our distributors, was down 26 percent in the fourth quarter of 2020 to 867 units, compared to 1,164 units in the fourth quarter of 2019.
Yeah, I think I think it really ties to the vaccination curve right Jim.
Thanks for your question, it's really how how quickly I guess, what we're referring to sort of one day slash one be the patients that would be high risk like diabetic patients how.
How quickly they get vaccinated and then our comfortable returned in the office is the one thing we have heard is that the majority of the the doctors and the majority of the personnel in the clinics have been vaccinated right because they are on the front line and had a high priority and so the doctor's offices are open up a little bit more for us to get access.
Yes.
It's patient flow at the moment, so we hope patient flow returns and we can get there.
I would say just anecdotally we continue to hear you.
Good stories about Doctor seeing the value of Alluvion in this environment right. The fact that I mentioned, a couple of those papers, where patients that didn't miss visits or had their visits deferred or delayed we're coming back with worst vision, the net ever had before or worse anatomy and so they see the value of keeping that long term consistent therapy on line.
And we've actually been able to continue to add some new doctors and some new accounts. During this period of time so.
We think that by maintaining all our personnel keeping the relationships in place we can really come out of this pretty strong.
We're sort of just waiting to get out of the starters gate so to speak.
Thank you and I know that sales very much at <unk> face to face sport and obviously the curtailed the ability to do that with the a P. I N demick any changes that you found that you know you don't really need some expense was going back I mean.
Phil Jones: But again, on a sequential basis, end-user demand grew 19 percent versus the third quarter of 2020, an indication of recovery in U.S. treatment. However, 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.
Pretty good job I mean honestly on on keeping the sales where they are.
In the middle of the pandemic are the things that you need to look back and say well, maybe we don't need to send an X y Z. We can really hold sales without some of these things.
Jim <unk> question, but I think I think the reality is Alan Mirror and you for this story for quite some time I would argue that from a commercial standpoint.
The launch of the product was somewhat underfunded overtime right and we've always tried to get through by by minimizing the budget. So certainly as we as we.
Make more money and generate more margin I do want to reinvest it back in the business that said I will say that we are learning things that we continue to learning that learn things about maybe how we want to spend the money in this market to get the better Cher voice, we've been spending more time with them. Some of the trying to work on our advocacy and I think we may continue to to.
Phil Jones: In the fourth quarter of 2020, Alimera U.S. distributors purchased approximately 6 percent more units than were sold to end-users. Net revenue from our international segment decreased approximately 18% to $6.4 million for the fourth quarter of 2020. This compares to $7.8 million reported for the same period last year. The decrease was due to the impact of COVID-19 lockdown.
I drive a drive advocacy and engaged with the doctors in different formats, and things like that but engaging with those doctors getting the face to face time, whether it's from a sales rep or an MSL or tll roll or even the executive team is going to be critical to continuing to drive those sales in the future. So I don't see is continuing to can't contain the spending where it is.
Phil Jones: Total operating expenses were approximately $11.6 million in the fourth quarter of 2020, a reduction of 15% compared to $13.6 million reported in the fourth quarter of 2019. We reported adjusted EBITDA of $1.1 million in the fourth quarter of 2020 compared to $2.6 million in Q4 2019. Importantly, we achieved our quarterly goal of generating sufficient adjusted EBITDA to cover our quarterly interest payments despite the ongoing challenges of the pandemic.
Once the environment opens up.
I think the last question I guess on the Salesforce Uhm cute.
Kudos of keeping the sales works together during this can you talk about any changes on the sales originally had some changes last year.
Anything along those lines happen this year or.
Any plans to grow the sales force going for it.
So nothing I would say no unusual turn it over on the Salesforce I mean, we've had the typical tournament you have whether it's.
Typically on underperforming territory, and we've had some turnover related to some things like that but.
No mass exodus or anything of that nature like we experienced in 2019.
Which I believe you're referring to so we feel pretty good about it obviously, we our team on our employees are very important to us and we tried to do everything you can to keep them happy and keep them excited about being here in almere.
Haven't seen anything unusual to date and I think the way we've taken care of our team hopefully has created a lot of loyalty and excitement for the future album here as we move forward.
Okay, great. Thank you for taking the questions.
Absolutely Jim Thank you.
Sure, it's kind of a question and on <unk> I.
I would like to turn the conference on my caller to management and currency and can I get your remarks.
Well, thank you and I want to thank all of you for participating on today's call and for your interest in Almere, We do look forward to sharing our progress on our next quarterly conference call wanted to report our first quarter results in late April early may Thank you and have a great day.
Phil Jones: For the three months ending December 31st, 2020, we reported a net loss of approximately $1,000,000 compared to net income of approximately $500,000 for the three months ending December 31st, 2019. Basic and diluted net loss per share for the three months ended December 31, 2020 was $0.18 on approximately 5.4 million weighted average shares outstanding. This compares the basic and diluted net income per share for the fourth quarter of 2019 of $0.08 on approximately 6.2 million total weighted average shares outstanding. Total weighted average shares in 2019 include participating shares associated with our outstanding preferred stock.
And conference call has now concluded. Thank you for attending today's presentation you may now disconnect.
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Phil Jones: Turning to our results for the full year, revenues for 2020 were $50.8 million, down approximately 6% from the $53.9 million that we reported in 2019. Total operating expenses in 2020 were $44.4 million, a reduction of 16 percent compared to the $52.6 million that we reported in 2019. Year-over-year declines in total operating expenses for both the fourth quarter and full year 2020 were due to cost reduction measures we implemented to offset the effect of COVID-19, including reduced travel expenses, medical congresses, marketing costs, and other non-essential spending.
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Phil Jones: For the full year 2020, we reported adjusted EBITDA of $3.5 million compared to $21,000 in 2019. We are proud of this achievement, and while the pandemic constrained certain aspects of our business, we continued to manage our business to a performance that exceeded the result of the prior year and gave Alimera its best annual adjusted EBITDA and bottom-line performance in the company's history. For the year ended December 31, 2020, we reported a net loss of $5.3 million compared to a net loss of $10.4 million for the year ended December 31, 2019, representing a 49% improvement.
Uh-huh.
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Phil Jones: Basic and diluted net loss per share for 2020 was $1.04 on approximately 5.1 million weighted average shares outstanding. This compares to a basic and diluted net loss per share for 2019 of $2.19 on approximately 4.8 million weighted average shares outstanding. The increase in shares outstanding is a result of the conversion and retirement of our Series C convertible preferred stock in the second half of 2020. We believe the conversion simplifies our cap structure and eliminates a $10.2 million preference that was perceived as debt by some. On December 31st, 2020, we had cash and cash equivalents of approximately $11.2 million compared to $9.4 million in cash and cash equivalents that we reported on December 31st, 2019.
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Phil Jones: I would like to take this opportunity to remind everyone of the seasonality of our business, where we typically see a sequential decrease in revenue from Q4 to Q1. In the U.S., physician practices will re-verify patient insurance plans, and patients will have a larger burden with copay deductibles in the first quarter, which typically slows down U.S. end-user demand. In Europe, many hospitals restart their annual budgets, leading to a delay in patient approval for Lubyan administration. And, of course, our business is still affected by the continuing COVID-19 pandemic. And with that, I'll turn the call back over to Rick to wrap up our prepared remarks. Rick?
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Richard S. Eiswirth: Thank you, Phil. While 2020 was fraught with significant challenges, we were able to weather the COVID-19 storm and demonstrate the resilience of the company and the Alluvian franchise. As the pandemic becomes better controlled, we remain ready to put the business back on track for strong growth as physician offices increase capacity, and patient flows return. Our cash position remains strong at $11.3 million compared to $9.4 million at the end of 2019. And we did this without having to raise additional equity financing during the year or face the incremental shareholder dilution that so many other companies have had to incur in this environment.
Operator: For 2021, we are back to focusing on our four core goals, which are: 1. Continue to grow alluvium sales in our international markets and restore year-over-year growth in our U.S. business. Absent the COVID-19 challenges, we remain confident we can grow our business organically, increasing both the number of physicians using Alluvion and the frequency of use in all of our markets. Executing on our strategy to expand the number of international territories in which Alluvion is approved, reimbursed, and launched with our direct sales organization and through our distributor partners, which includes both DME and the approval and uptake of Bolivia's non-infectious eugaitis indication in new and existing territories.
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Operator: 3. Advancing the New Jay Study by completing the recruitment of sites for planned study centers and driving patient enrollment. Recall that we plan to enroll around 300 DME patients in approximately 40 to 45 centers in this landmark head-to-head clinical trial. Remaining focused on the management of our resources and our financial performance while the pandemic continues. As most of you know, our success with this is unique among stand-alone, small-cap ophthalmology companies. And with that, we are now ready to take questions. Operator?
Mhm.
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Operator: Ladies and gentlemen, if you wish to ask a question on today's call, you will need to press star then the number 1 on your telephone. If your question has been answered and you wish to withdraw your question, you may do so by pressing star then the number 2. If you are using a speakerphone, please pick up your handset before entering your request and speaking on the call.
Okay.
Alexander David Nowak: The first question is from Alec Nowak from Craig Harlem Capital. Please go ahead. Good morning, everyone.
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Richard S. Eiswirth: Rick, I want to pick up right where you left off on 2021. I know you're not giving guidance, but obviously easier times now with the pandemic behind us in 2020, or at least the impact, at least, but obviously Q1 is still, you know, as the pandemic still goes on, but how are you thinking about growth here in 2021 given all the facts that you mentioned?
On.
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Richard S. Eiswirth: Yeah, so, I think, I think, you know, we're still being impacted by COVID as we speak right now. I would say patient volumes are down, and it's an interesting reason why we're seeing them down right now, Alex. What we're hearing is that patients are canceling or postponing visits because of where they sit in the queue for their vaccinations, right? They don't want to take a chance of coming down with COVID before they get vaccinated or in the middle of their two injections, two treatments, so they somehow missed the vaccination.
Okay.
Okay.
Richard S. Eiswirth: So, we've heard a little bit about delays like that, and we're experiencing typical seasonality. You know, if you look at the first quarter, we are usually down in the high teens to 20%, you know, from Q4. I think that's probably a good estimate for Q1. It could be slightly higher or slightly lower depending on how patients return from the vaccine situation over the next few weeks.
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Richard S. Eiswirth: You know, and I do believe that, once we can get through this, get through most of the people in Phase 1A, which are most of our patients, vaccinated, that hopefully we can return to growth throughout the rest of the year.
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Richard S. Eiswirth: It's helpful. And how will October and November look in 2020? Is that going to be a useful proxy for you to think about how the beginning of the recovery looks?
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Richard S. Eiswirth: Yeah, you know, as I said, in the U.S., we did, I think it was about 867 units, you know, so that's obviously not where we want to be. We were doing, you know, much closer to, I think we did between 1,100 and 1,200. So it's not where we want to be, but at the same time, it was really good growth coming out of, you know, Q2 where we saw things suppressed.
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Richard S. Eiswirth: So I certainly feel like we can get back to the volumes that we were doing in the fourth quarter of 2019 as things start to normalize. Honestly, though, I'm not sure if that is a, you know, that's in April, May, or June when we start to get back there. It depends on how quickly we can get the rest of these patients vaccinated and take the pressure off of people skipping visits.
So.
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Richard S. Eiswirth: Okay, I got it. You did make some changes to your chief medical officer, just maybe some. Can you walk us through the details there?
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Richard S. Eiswirth: Yeah, sure. Obviously, people join companies, and people leave companies. I can't get into the details of our decision to part ways with Dr. Kaba, but I can tell you that we are very, very confident in our medical messaging and positioning now. We think the changes that we've made over the past couple of years, focusing on the need to treat that broader inflammation, looking at the potential of the disease and that underlying inflammation creating damage in the neurofiber layers are pretty critical to differentiating the value of alluv
Richard S. Eiswirth: The great thing is that the entire company is sort of unified around that story and that strategy. And so, you know, we will continue to push that, and we will certainly, you know, search for a replacement for Dr. Kaba.
Mhm.
Okay.
Richard S. Eiswirth: That's helpful. And then on the U.S., obviously the U.K. and Germany are the major points right now, and then you're launching into other geographies. So you mentioned there a couple of remarks, but I just want to make sure we're all on the same page. For 2021, what are the new geographies that you expect to launch in and have reimbursement beyond the UK and Germany?
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Richard S. Eiswirth: So the most critical ones are going to be the three bigger countries in Southern Europe, you know, obviously, Spain, France, and Italy. Our three partners in those countries are all working through reimbursement right now, and the discussions are active, but they've been delayed because of COVID.
Richard S. Eiswirth: So it's hard for me to put a specific date on when we expect them to get reimbursement right now, because things are not as open as we would like them to be in those three countries as well. But we do think that that will happen in 2021, and we'll be able to launch in those three markets. There is a good chance we'll add countries like Portugal, potentially. And, you know, our new launch in the Netherlands, where we recently sold some product, is, you know, the pricing and reimbursement there is actually for both uveitis and DME. So we're slowly rolling that out, but the key markets will be those three southern European countries.
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Richard S. Eiswirth: Okay, that's great. And then the latest New Day timeline, just given where enrollment is tracking right now with the original plan, when would you expect to finish enrollment and then ultimately read out that study?
Richard S. Eiswirth: Yeah, so, certainly we are going to try to ramp up everything we possibly can to try to drive enrollment, you know, as things continue to open up. But, you know, where our goal was originally to get everybody enrolled in 2021, I would say it's probably likely that it slips into the first quarter of 2022 before we can complete that, which would push the readout, first readout of the study into late 2023.
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Richard S. Eiswirth: Okay. Helpful. Thank you. Appreciate it. Absolutely, Alex. Thanks for your support. The next question...
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Yi Chen: The next question is from Mr. Chen with HC Wainwright. Please go ahead. Thank you for taking my question. My first question is, could you please comment on the patient flows in the past two months in the U.S. versus Europe?
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Richard S. Eiswirth: Well, we are continuing to see patient flows a little bit suppressed for these diabetic patients, Yi, as I mentioned. And what we are hearing anecdotally from the doctors is we have patients that are canceling and postponing visits because of where they potentially are in the vaccination sort of scheduling process, I guess, you know, where they're pending their first vaccination and they just don't want to risk getting COVID and then, you know, somehow be taken out of that queue or same thing where they may be scheduled for their second vaccination and obviously don't want to miss that as well.
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Richard S. Eiswirth: So, we know that that is suppressing it. But how much of the suppression we are seeing in January and February is that phenomenon versus the typical seasonality? You know, it's hard to quantify that.
Richard S. Eiswirth: In Europe, you know, we saw more aggressive lockdowns in Germany specifically in December and January than we'd ever seen before because of some spikes. So, that certainly limited patient flow in Germany. You know, we've had complete lockdowns in Portugal, right, and the UK because some of the hospitals were just flooded with patients, but that seems to be letting up right now as we speak. So, we hope that that continues to improve in March and, obviously, April.
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Richard S. Eiswirth: Can you comment on whether the level of operating expenses in the fourth quarter could serve as a reference level for 2021, particularly G&A expenses?
Richard S. Eiswirth: I think the G&A expenses are probably a fairly good marker. Overall, we actually feel like the appropriate level of spending is where we were in Q4 of 2019, right? That that's where we want to be to continue to invest in trying to drive the top line. Obviously, we've made the decision to control some of those, and there's some self-controlling aspect just because we haven't been able to travel and have reps out on the road and do some of the trade shows and things like that.
Mhm.
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Richard S. Eiswirth: So, we'll slowly, as things open up, we'll probably work our way back up to that expense level. But the plan is to continue to manage that expense flow, I guess, in parallel with improvements in revenue so that we continue to generate positive EBITDA. We'd like to be in a position going forward where we're always generating positive EBITDA sufficient to cover our quarterly interest expense. That's the goal.
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Richard S. Eiswirth: Last question: could the company consider any new pipeline candidates during 2021?
Richard S. Eiswirth: Absolutely. We're always on the lookout for those. We'd like to find something that would be a novel mechanism of action and certainly be something that could be a quality-of-life type improvement for the patients, just like we believe alluvium is in the unique way that it treats the disease. So we're out there looking for stuff. We hope to be able to find something out of the pipeline, but certainly, we think we've got a pretty strong and stable business here, and so it needs to be the right product at the right time rather than a rush to maybe make an acquisition or something that could impair what we've built here. Thank you.
Richard S. Eiswirth: Absolutely. Thanks, Yi.
James Francis Molloy: The next question is from James Molloy with Alliance Global Partners. Please go ahead. Good morning. Thank you for taking my questions and congrats on a pretty good year and very tough circumstances. You guys really held the line. As you're coming out of it, I know the prior questions were asking about sort of COVID impacts. Is there any, and I know you're very clear about some of the delays due to people being concerned about missing their vaccines, but looking past that, any anecdotal stories in the field on what folks are thinking of or doctors might be thinking of from the Salesforce perspective on where they think things will start to get more normalized in 21, if at all?
Richard S. Eiswirth: Yeah, I mean, I think it's, I think it really ties to the vaccination curve, right, Jim? Thanks for your question.
Richard S. Eiswirth: It's, you know, really how quickly, I guess, what we're referring to is sort of 1A slash 1B, the patients that are, you know, high risk, like diabetic patients, how quickly they get vaccinated and then are comfortable returning to their offices. The one thing we have heard is that the majority of the doctors and the majority of the personnel in the clinics have been vaccinated, right because they're on the front line and have a high priority.
Okay.
Okay.
Richard S. Eiswirth: And so the doctors' offices are opening up a little bit more, you know, for us to get access. It's patient flow at the moment. So we hope patient flow returns, and we can get there. You know, I would say just anecdotally that we continue to hear good stories about, you know, doctors seeing the value of alluvium in this environment, right? The fact that I mentioned a couple of those papers where patients that had missed visits or had their visits deferred or delayed were coming back with worse vision than they ever had before or worse anatomy.
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Richard S. Eiswirth: And so they see the value of keeping that, you know, long-term consistent therapy online. And we've actually been able to continue to add some new doctors and some new accounts during this period of time. So, you know, we think that by maintaining all our personnel, keeping the relationships in place, we can really come out of this pretty strong. You know, we're sort of just, you know, waiting to get out of the starter's gate, so to speak.
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Richard S. Eiswirth: Thank you. I know that sales is very much a face-to-face sport, and obviously, it pertains to the ability to do that with the pandemic. Any changes that you've found that, you know, you don't really need some expenses going back? Pretty good job. I mean, honestly, keeping the sales where they are in the middle of the pandemic are the things that, you know, you look back and say, well, maybe we don't need to be spending on X, Y, Z. We can really hold sales without some of these things.
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Richard S. Eiswirth: You know, Jim, that's an interesting question, and I think the reality is Alimera, and you've followed this story for quite some time. I would argue that, from a commercial standpoint, the launch of the product was somewhat underfunded over time, right? And we've always tried to get through by minimizing the budget, so certainly, as we make more money and generate more margin, I do want to reinvest it back in the business. That said, I will say that we are learning things, and we continue to learn things about maybe how we want to spend the money in this market to get a better share of voice.
Okay.
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Richard S. Eiswirth: We've been spending more time with some of them, trying to work on our advocacy, and I think we may continue to try to drive advocacy and engage with the doctors in different formats and things like that, but engaging with those doctors, getting the face-to-face time, whether it's from a sales rep or an MSL or a TLL role or even the executive team is going to be critical to continue to drive those sales in the future. So I don't see us continuing to contain the spending where it is once the environment opens up.
Richard S. Eiswirth: Last question, I guess on the sales force. Kudos on keeping the sales force together during this. Can you talk about any changes in the sales force? I know you had some changes last year. Anything along those lines happen this year, or any plans to grow the sales force going forward?
Mhm.
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Richard S. Eiswirth: So, nothing, I would say no unusual turnover in the sales force. I mean, we've had, you know, the typical turnover you have, you know, whether it's a, you know, you know, typically an underperforming territory, and we've had some turnover related to some things like that, but, you know, no mass exodus or anything of that nature like we experienced in 2019, which I believe you're referring to.
Okay.
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Uh-huh.
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Okay.
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Richard S. Eiswirth: So, we feel pretty good about it, you know. Obviously, our team and our employees are very important to us, and we try to do everything we can to keep them happy and keep them excited about being here at Alimera. Haven't seen anything, you know, unusual to date, and, you know, I think the way we've taken care of our team, hopefully, will create a lot of loyalty and excitement for the future of Alimera as we move forward.
Okay.
Okay.
Richard S. Eiswirth: All right, great. Thank you for taking the question. Absolutely.
[music].
Richard S. Eiswirth: Absolutely, Jim. Thank you.
Richard S. Eiswirth: This concludes our question and answer session. I would like to turn the conference back over to management for any closing remarks.
Operator: Well, thank you, and I want to thank all of you for participating in today's call and for your interest in Alimera. We do look forward to sharing our progress on our next quarterly conference call when we report our first quarter results in late April or early May. Thank you, and have a great day. The conference call has now concluded. Thank you for attending.
Operator: The conference call has now concluded. Thank you for attending today's presentation. You may now disconnect.
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Operator: The Bulletproof Executive, 2013
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