Q4 2020 EyePoint Pharmaceuticals Inc Earnings Call
Yeah.
Good morning, My name is Katherine and I'll be your conference operator today at this time I'd like to welcome everyone to the other point pharmaceuticals fourth quarter and year end of 'twenty 'twenty financial results and recent corporate developments conference call.
There'll be a question and answer session to follow with the completion of the prepared remarks. Please be advised this call is being recorded at the company's request I would now like to turn the call over to George Ellison, Chief Financial Officer of Oxalate Pharmaceuticals.
Thank you and thank you all for joining us on today's conference call to discuss I point Pharmaceuticals fourth quarter and year end 2020 financial results and recent corporate developments.
With me today is Nancy Lurker, President and Chief Executive Officer, Dr. Jay Duker, Chief Strategic Scientific Officer, and Scott Jones, Chief Commercial officer.
We will begin with the review of recent corporate updates Dr. <unk> will then discuss pipeline developments for E Y P 19 of one and Scott will comment on recent progress made on our commercial activities I will close with commentary on the fourth quarter and full year 2020 financial results. We will then open the call for your questions.
Earlier. This morning, we issued a press release detailing our financial results as well as commercial and operational developments a copy of the release can be found in the Investor Relations tab on the corporate website Www Dot <unk> pharma dot com.
Before we begin our formal comments I'll remind you that various remarks, we will make today constitute forward looking statements for the purposes of the Safe Harbor provisions under the private Securities Litigation Reform Act of 1995.
These include statements about our future expectations clinical developments and regulatory matters and timelines the potential success of our products.
And the product candidates financial projections, and our plans and prospects actual results may differ materially from those indicated by these forward looking statements as a result of various important factors, including those discussed in the risk factors section of our most recent annual report on form 10-K, which is filed.
With the SEC.
And in other filings that we may make with the SEC in the future.
Any forward looking statements represent our views as of today only while we may elect to update these forward looking statements at some point in the future. We specifically disclaim any obligation to do so even if our views change. Therefore, you should not rely on these forward looking statements as representing our views as of any date subsequent to today I'll now turn the call over to Nancy Lurker.
President and Chief Executive officer of by point of Pharmaceuticals.
George Good morning, everyone and thank you for joining US let me start by emphasizing the highly positive momentum that began in the fourth quarter of 2020 and has continued into 2021.
These past several months have been remarkable and transformative for <unk> Pharmaceuticals, we are extremely pleased with the significant progress across our business illustrated by three noteworthy events we.
We advanced our exciting and potential blockbuster wet AMD drug candidate E Y P 19 O one into the clinic, we substantially strengthened our balance sheet and we grew demand for our commercial products. Despite the pandemic negatively affecting patient visits to physicians.
As Youll hear from Jay shortly we successfully progressed our lead pipeline assets E Y P 19 O. One for the treatment of wet age related macular degeneration into the clinic as a refresher the wet AMD market for drugs in the U S is approximately 8 billion and growing at a compound annual growth rate of 8%.
This is being driven by the aging baby Boomer population as the disease, primarily affects people over the age of 65.
While there are safe and effective medications available today, such as Eylea and Lucentis. There continues to be of significant need for extended delivery drugs that can avoid the monthly or bimonthly eye injections.
We are targeting E. White P 19 of one as a potential twice yearly treatment for a majority of patients and we are eager to progress you might be 19 of one through the clinic.
We dosed the first patient in our Derby on Phase one study, marking a major milestone towards advancing our clinical pipeline.
Very excited about the progress we've made in delivering on our quick initiation of the phase one trial, thus far and look forward to providing further updates with expected preliminary data in the second half of 2021.
As you will hear more about from George later on we also made tremendous advancement in strengthening our balance sheet.
We significantly increased our cash position marked by the successful completion of a $115 million follow on offering in February that followed of $15 7 million equity investment by out of Asia partner occupation of Therapeutics in December.
We also completed of royalty monetization of agreement in December with S. WK holdings, allowing us to pay down a portion of our debt obligation to C or G holdings.
We are now very well financed the execute on a critically important E Y P 19 of one wet AMD trial.
And potentially you take five of them are twice yearly UBI. This drug candidate as well as other clinical and commercial milestones.
Despite the challenges of the COVID-19 pandemic. We're pleased to report an encouraging sequential increase in customer demand as Scott will discuss in more detail later on.
In the past quarter, we saw customer demand increases of 30% and 10% for Dec. The Q and you take respectively over Q3 2020.
Although 2020 was a challenging year I point ended the year on a very strong note and we are focused on carrying our positive momentum through 2021 and beyond.
As we look to complete enrollment of our E. P 19 O. One phase one trial, we remain equally determined to continue driving revenue for our commercial products to execute and Utica, maintaining a strong balance sheet and bolstering our clinical pipeline.
Before I turn the call over to my colleagues I'd like to take a moment to thank the entire team of I point Pharmaceuticals, Our board of directors and the many physicians and their staff who use our products.
2020 was a very tough year and I'm grateful for the tireless efforts of eye points employees and customers on behalf of patients. Despite the impact of COVID-19.
Our ongoing commitment to ourselves into the communities. We serve is safety and we're proud to say we've come together as a company to overcome obstacles and achieved several vital goals. During this time of utmost of uncertainty and we're looking forward to what we see as bright light at the end of the tunnel I'll now turn the call over to Dr. Jay Duker, our chief strategic Science.
Typical officer to provide an update on our lead program E Y P 19 on one as well as other pipeline initiatives Jay.
Thank you Nancy and good morning.
As you know we are extraordinarily pleased with the progress so far on our E. P 19 of one program for the potential treatment of patients with wet AMD we.
We were able to complete our I N D submission and begin enrollment of our phase one clinical study the <unk> trial. Despite the challenges of the COVID-19 pandemic.
This took a tremendous amount of effort by our team and our external partners.
Wet AMD is of progressive chronic debilitating eye disorder that causes blurred vision and can culminate in a permanent central blind spot.
The hallmark of wet AMD as the formation of abnormal blood vessels that leak fluid in blood into the macular area of the retina.
It's the leading cause of vision loss from people over 65 years of age in the United States and other developed countries. Despite several safe and effective FDA approved medications there is significant need for longer lasting therapies to replace the relatively short duration of action of the current medications on the market.
As a reminder, you white P 19 of one is of bio erodible formulation of our <unk> technology combined with barone on it the active drug a small molecule <unk> tyrosine kinase inhibitor.
The research is the sustained release delivery system per for FDA approved products. After a single intravenous true injection. It can provide continuous staple of lease of medication to the back of the eye. We believe that introvert trio <unk> 19 of one has the potential to safely treat chronic visual loss in patients with wet AMD.
Hey.
As Nancy mentioned in December 2020, we filed an IND application with the FDA to initiate a phase one clinical trial in wet AMD patients the.
Indy was based on preclinical studies of <unk> 19 of one administered into the eye that showed promising anti VEGF activity with no serious safety concerns observed.
In January 2021 of the IND was cleared by the FDA and we initiated a phase one trial with the first patients successfully dose later that month.
The phase one trial is an open label dose escalation study of three ascending doses with a total of 13 patients to be enrolled.
We firmly believe the wipes 19 of one has the potential to be a transformative and incredibly beneficial option for patients and physicians for the long term treatment of wet AMD and we're excited that the trial is actively enrolling.
We have yet to see any negative impact on patient enrollment from COVID-19 in our phase one trial, thus far and assuming this remains the case, we anticipate preliminary data from the trial in the second half of 2021.
Additionally, we continue to be excited by the potential of the E. White P 19 of one's application to other severe eye disorders, including diabetic retinopathy and retinal vein occlusion and we intend to explore these indications in the future.
In November 2020, we also reported positive data for Utica Index CQ4 presentations at the American Academy of Ophthalmology 2020 virtual annual meeting.
These presentations included statistically significant efficacy results from the second phase III trial of boutique and post cataract surgery inflammatory reduction data from our multicenter retrospective study of real world usage of deck CQ.
Two separate investigator initiated studies for <unk> were also presented the demonstrated the benefits of debt CQ versus postoperative eye drop treatments.
Turning to our pipeline of initiatives, we are actively exploring new applications for <unk> technology, along with potential product and technology and licensing.
This includes <unk> 50 up potential twice yearly sustained delivery treatment for chronic non infectious uveitis affecting the post your segment of the eye using the same non erodible <unk> formulation and corticosteroids.
In Utica.
Cheeks fifties design offers and introduce the true insert with of shorter duration of action that provides physicians with the flexibility to dose over shorter intervals compared to the three year intervals that U T. Currently provides.
We have identified the potential clinical pathway with the FDA for an S. NDA filing and we're currently evaluating the timeline of investment requirements for trial completion.
We look forward to providing an update on the <unk> 19 of one as well as our other pipeline initiatives over the upcoming quarters.
I'll now turn the call over to Scott Jones, Chief Commercial officer for the commercial update Scott.
Thank you Jay before I begin as you all know I points revenues were negatively affected throughout the COVID-19 pandemic and like many other companies 2020 was the challenging year for us so I'd like to thank the team for the resilience and commitment to our success.
For the fourth quarter of 2020, we're pleased to reported increase in customer demand for Utica and execute we're encouraged by this growth with by this growth. Despite the continuing effects of the pandemic on customer demand due to decreased office visits and elective surgeries.
And despite the first quarter being weaker historically, we have been pleased with the continued demand of both products in Q1 2021 of them.
I'll now review of our commercial performance in more detail net.
Net product revenue for the fourth quarter was $4 million and $2 7 million for you to execute respectively.
During this time, we saw customer demand of approximately 6200 units for the execute and approximately 500 units for Utica, representing increases of 30% and 10% respectively over Q3 2020 customer demand.
Increased demand for the execution in Q4 2020 continues to reflect the upward trajectory of elective surgeries towards pre COVID-19 levels. The expansion of the available market based on the contracting strategy and a growing positive impact from our commercial alliance partner Imprimis Rx it from.
<unk> brings an experienced cataract surgery field force and we are beginning to see positive momentum from their efforts and we expect to see additional opportunities developed in 2021 based on their broad network in the cataract market.
Turning to U T. The increase in demand was driven largely by two factors increased patient access to care of especially in the large hospital environment and the expansion of our sales and marketing efforts into the retro market.
Please note that you did not experience the dramatic reduction in demand that we experienced with the execute due to the due to the COVID-19 pandemic and we're pleased to see the strong Q4 demand growth.
Looking ahead for both products, we expect growth in demand, we will continue to be contingent upon the rollout of the vaccines and the easing of restrictions on the office visits and elective surgeries, while it is difficult to project customer demand. In 2021, we are optimistic that we will continue to see increased growth of sales and marketing efforts are you taking to execute increase.
<unk> continues to gain experience with the execute and we roll out the new Siliconized needle for Youtube.
The execute on Youtube continue to provide a unique value proposition of sustained delivery and fewer doctor visits which remains attractive to doctors and patients both during the pandemic and beyond again I would like to thank each and every team member in our many physicians for their continued support throughout 2020, and we're looking forward to 2021.
I would now like to turn the call over to George to review the financials George.
Thank you Scott as the financial results for the three months and full year ended December 31, 2020 were included in the press release issued this morning. My comments today will be focused on a high level review for the quarter.
As Nancy mentioned in December Archie mentioned Therapeutics of China based ophthalmic pharmaceutical company and our Asia partner made a $15 $7 million equity investment of nine point purchasing approximately 3 million shares of I'd point of common stock.
In addition, we announced the royalty monetization agreement with SW K Holdings Corporation for royalties payable to <unk> under our license agreement with Alan Mayor of Sciences for ILUVIEN.
Under the agreement we received of one time $16 $5 million payment from S. WK and exchange for rights to future royalties from the Ala Murra of agreement.
$15 million of the net proceeds from this transaction were applied towards debt obligations with CRM services and the remaining one of $5 million will be used to advance our product pipeline programs.
Now I will turn to a summary of our fourth quarter financial results for the three months ended December 31, 2020 total net revenue was $7 1 million compared to $8 6 million for the three months ended December 31 2019.
This includes the net product revenue for the three months ended December 31 2020.
$6 7 million compared to net product revenue for the three months ended December 31, 2019 of seven 9 million net.
Net revenue from licenses royalties and collaborations for the three months ended December 31 2020 totaled.
<unk> 5 million compared to <unk> 8 million for the corresponding quarter in 2019.
Operating expenses for the three months ended December 31, 2020 totaled $19 9 million compared to $17 6 million in the prior year period. This increase was driven by G&A expenses increase in cost of sales and R&D expense.
Being partially offset by a reduction in sales and marketing expenses.
Non operating expense net totaled $2 7 million of net interest expense net loss for the period was $15 5 million or $1 seven per share compared to net loss of $10 4 million or <unk> 98 per share for the prior year quarter.
Turning to the full year ended December 31, 2020, total net revenue was $34 4 million compared to $24 million in the prior year.
This includes net product revenue for the full year ended December 31, 2020 of $20 8 million compared to $16 $8 million on the previous year.
Net revenue from royalties and collaborations for the full year was $13 6 million compared to $3 $5 million in the corresponding period of 2019.
Operating expenses for the full year ended December 31, 2020 totaled $71 7 million versus $68 2 million in the prior year period. This increase was primarily due to the increase in cost of sales G&A expense and increase in R&D expenses, partially offset by decrease in sales and marketing.
Expense.
Non operating expense net totaled $8 1 million and net loss was $45 4 million or $3 54 per share compared to a net loss of $56 8 million or $5 44 per share for the prior year period.
Cash and cash equivalents at December 31, 2020 totaled $44 9 million compared to $22 2 million at December 31, 2019.
We expect the cash on hand at December 31, 2020, together with the approximate $108 million of net proceeds from the February of 2021 public offering and.
An expected net cash inflows from our product sales will enable us to fund our current and planned operations through the second quarter of 2022.
In conclusion, we are extremely proud of the work I'd point has done in the fourth quarter of 2020 and into 2021 to strengthen our balance sheet and pivot to becoming a part of product pipeline focused company.
You all very much for listening this morning, I'll now turn the call over to the operator for questions.
Ladies and gentlemen, if you of a question or a comment at this time. Please press Star then the one key on your Touchtone telephone. If your question has been answered or you wish to move yourself from the queue. Please press the pound key.
First question comes from Jennifer <unk> with Cantor Fitzgerald.
Hi, Thanks, so much for taking my question Congrats guys.
Really impressive progress over the quarter.
I haven't seen a full of question yes.
My first question is for <unk>.
Scott I know you said you still expect continued growth for the commercial business.
I'm wondering so consensus estimates currently have I think incorporated sales around the $45 million range. I'm. Just wondering is that a number that you're comfortable with currently or what's your general thinking about where consensus is that.
My second question somewhat related is where the where the gross margins in the fourth quarter was that impacted mainly from the commercial lines of our and execute and then.
How should we think about gross margins going forward.
And then my last few questions of for Jay for the one 901 product.
I'm just wondering can you remind us what we should expect to see in the preliminary data and what you would consider a homerun in terms of that early data and then also is there a bar in that first set of data that is the reach that bar it could expedite expansion into new indications like the or an RV or RVO.
Or will there.
Are the more mature data be needed for you to pull that trigger.
Jennifer lots of questions.
Questions.
Let me, let me I'll tackle the first one on the consensus on revenues.
Excuse me at the $45 million. So right now as we look into first quarter first quarter actually going quite well and so we're comfortable with that number.
The pending any additional changes in trajectory due to the pandemic, but right now it does look like the countries. The opening up we're seeing very nice momentum in first quarter.
So we're comfortable with where we are George I'll, let you handle the gross margin questions.
Yes.
In Q4, and it will be covered in our 10-K, but we had a one time.
Inventory adjustment that we wrote off on the fourth quarter then.
Affected margins.
On which we don't expect to continue and so it would be.
The <unk> relationship Jennifer that debt expense than what we pay them as the commission that actually shows up in SG&A as SG&A expense.
So the.
Any activities of their don't affect the margin.
So.
We had a one time.
Events that affected Q4 was that as discussed in our K and that'll be filed I believe next week.
The margins, we expect to continue to wait as Youtube becomes a heavier weighting in that mix.
We expect margins to do very well over time.
Yeah. Let me also just add a comment or our co promotion with Imprimis Rx is now really starting to ramp up nicely. So we're quite pleased with how that alliance is going.
Okay, Great and then on the E Y P. 190 line what are you expecting in the preliminary data what would you consider a homerun and could we see expansion into additional indications from the first early dataset are more mature data would be needed.
Okay Jay.
Nancy I think you have to take them on I think Jay got delayed this morning.
Okay, Alright, so let me answer it this way debt we right now are on track with our clinical trial enrollment.
On.
Continuing to state, we expect to see results in the back half of this year.
We are looking at potentially going into additional indications.
And very early.
<unk> one studies potentially this year, that's under active evaluation right now and what we would see is a is a minimum threshold that we would hope to achieve would be 50% rescue at four months. If you look at what some of the competitive products are at right now in the pipeline.
To get at 50% or above the four months would be still a very good result, we of course are aiming for better than that.
Our goal is to get the six months with at least 50% and potentially even higher but you have a viable product, it's 50% rescue at four months.
Let me Jennifer did I answer all your questions because you had quite a few wrapped in there.
No that was perfect. Thanks, so much guys now congrats to Gary good alright.
Our next question comes from Dana Flanders with Guggenheim.
Great. Thank you very much for further questions.
Just a quick commercial one from me wondering.
I'm wondering if you could put any quantitative metrics around.
Kind of where you are in terms of patient and sales force access.
The docs at this point is it is it gets I mean, it sounds like it's getting better.
But just wondering kind of how close.
Normal you are and then kind of a second question there George I know you've made a lot of tough decisions on cost.
Last year with the growth Youre expecting from the commercial portfolio.
Close do you think the commercial business could get to breakeven.
This year.
Scott why don't you answer the access question.
Absolutely.
So on the <unk> side, the cataract surgery market is a little uneven in many areas. It's back to a 100% you still have certain states, where axis and on the elective surgeries is continues to be limited.
But we are certainly.
Much closer to getting back to normal then we were at any point during the.
During 2020.
On the Utica side.
The access.
Our access into the physician office is still limited, but patient access has improved dramatically I think on the retinal physician.
They are back to near 100% outside of the teaching hospital environment. Some of the teaching hospitals are still limiting.
Some of the <unk>.
Some of the patient access.
But it's certainly in most states is on both products is marching toward on.
A more normal trajectory than we've seen in many many months.
George I'm going to pick up the question on <unk>.
Expensive on cost and breakeven.
Yeah, So Jamie that's a good question and when we raised money.
Last month we.
We did make some tough decisions I think importantly.
The commercial business is now positioned.
The in 2021, assuming the Covid does not come back in force.
And that the reopening of continue we've positioned the current commercial business each of the franchises, we expect them to become profitable as a standalone franchise. This year of Utica will happen a little sooner than the execute.
But that's how we have strategically positioned.
On those franchises because it's important that any new equity is really on the pipeline and then the commercial the band.
The other piece, which I want to tie into this as well because we were expecting the question.
Our cash projection assumes some some very conservative assumptions on the commercial business as well and so while we said we have cash.
Included in our press release this morning that we have cash.
Through Q2 of 'twenty, two that's our conservative estimate because of Covid remains an overhang.
Obviously, we raised the significant amount of money that can get us.
Quite a ways and we have no plans on raising cash.
On the near term certainly not this year.
So I just wanted to tie that in as well.
Okay, Great no.
That's helpful and also just maybe looking to.
Kind of clarify some of the comments on Youtube 50.
Wanted to make sure I just understood that is that of program that you were going to be moving forward in development or should I take the comments you made that youre looking to.
Part of that.
Yeah, Dana right now.
<unk> net we're going to move forward with that potentially start that study. This year, we held off a bit just because we are managing cash flow tightly last year.
But now we feel that we can certainly get that started this year as you may recall and let me just repeat for everyone.
Fake that that is going to be a very small study we've had conversations with the FDA around that.
Somewhere between probably 45 patients in total.
And then we just file it and it's a.
Six month review clock. So we could get that filed early next year and then have it on the market as soon as late next year. So our plan right now is to potentially get that started this year.
Okay, Great and maybe just my quick last one on <unk> 19 of one can you just remind us.
The trigger factor on extending that study for the additional 12 patients.
What doses those patients would be getting and then how that would potentially impact kind of the start time for your next phase of development. Thank you.
Yeah, I'll take that question.
Right now, where we are not anticipating we'll do that extended arm debt.
Partly because the it's important that we get into a controlled clinical study.
All of the thinking right now is we'll finish up phase one if the data of good will go right into either of two way and potentially depending on what the data readout is a pivotal study as well and then you had one of the question tied in with that what was that.
Oh. It was it was just if you extended the additional 12 patients would that impact.
The next study, but it sounds like the kind of answered it.
Yeah, and let me just say the our goal with <unk> 19 of one is fast to market with the major caveat of safety first for patients and ensuring that we've got the right the <unk>.
Right dose identified that's the purpose of the phase one study obviously, we're going to have to wait to see how the phase one data rolls out so we can't make any predictions on that.
But our goal is to get those data look good we would anticipate to start to move as quickly as we can into either a phase iia or pivotal trial.
Okay. Thank you that's it from me congrats on all of the progress.
Thank you.
Our next question comes from Yale Jen with Laidlaw <unk> company.
Good morning, and also congrats on the development.
The first question probably of the housekeeping probably flow judge what's.
The cash income.
Hence would you guys considering retiring of the.
The debt or you want to keep some of those on your balance sheets.
Yes the.
Cash we raised Yale is really for development and again going back to the the notion of.
You use it using this to advance the 19 on one and other pipeline programs forward. It wasn't on our use of proceeds that said we are looking at alternatives because of our balance sheet is now stronger on the commercial business is returning.
We do have.
Alternatives potentially for our existing debt.
But as we noted in the release and the <unk>.
Prior press releases, we were able to pay some of that down in December.
And make that a much more manageable number and we continue to have a good relationship with our debt provider.
Okay, Great. That's very helpful and maybe two quick ones. The first one is what that's of queued.
In terms of the pass through reimbursement status with the CMS.
Any update on debt.
Yeah, Scott why don't you take that.
Thanks for the question.
We are still actively engaging both legislative and a regulatory strategy.
On the pass through both.
Both projects.
And both projects, meaning we have one project relating to the public health emergency and the an extension of pass through based on that and the second project based on more of the long term payment.
Payment per pass through products in the ASC setting.
<unk> of those are still proceeding.
We are certainly actively working with CMS as well on some other projects that we hope to have more information about as the the physician rules on ASC Hospital outpatient rules are written midyear this year.
Okay, maybe the last question here is about the 19th.
The 19 O one the.
First is that the would you guys reported.
The completion of the patient enrollment when that's done and the followed by debt is debt you'll have three doses.
Well most likely the 2000 of 3000, Michael Graham.
Those will be in the <unk>.
<unk>.
The therapeutic range okay. Thanks.
Okay. So I'll take the first one I'll have Dr. Dario <unk>, our chief Medical officer to take the second one.
So, yes, we will announce when.
Full enrollment of hits.
And the Oreo why don't you take the questions about therapeutic dose for the three dose range.
Sure. Thank you Nancy I Hope you can hear me well so yes the the.
Two of those as the median high dose the two referred to are being tested in the phase one of our safety and of course of the.
You know those those who'd been selected also on the basis that we think of.
Based on the animal studies and the PK.
The studies we've conducted the.
Our actually doses that would allow us to deliver.
Drug concentration sufficient to absorb the clinical effect. So I think youre correct. Those are probably the two of those are more likely to.
To move forward in the next study of course.
Granted that we.
The proved the safety of the product, which we're very confident on.
Okay, great, Thanks, and again congrats.
Thanks Yale.
Our next question comes from Andrew the silver with B Riley.
Hey, good morning, Thanks for taking my questions.
Just a few quick ones.
As it relates to accounting for.
For the S K W royalty rates.
How should we think about that from a P. P.
Now of recognition standpoint, just cadence.
As it would be.
To the top line would be useful there.
And then just a little bit more clarification on pass through I think previously it was thought that the extension could be in the Corona virus stimulus package that is working its way through Congress.
I believe there has been additional color on that more recently is that included in what's recently been approved in the house.
So let me answer the last question first and then George will take the the first one.
So we can't comment on that right now this is like.
As you guys all know its like making sausage day, you never quite sure of what's going to set out at the end.
We're obviously actively engaged in a number of different areas of Scott said to try to get this extended.
Im fairly confident we can build the theres no prediction because we are pursuing both pass legislatively and we do have support I will say, we do have support.
The inventory of level.
And the house level.
We're getting extensions to this and I will.
Fair for me to say the G E O just issued a report as well that talked about without.
Extension and once the drug is going to pass through the.
You dropped dramatically and that impacts patient can't remember that's what this is all about.
Because the Ta report issued we also believe that gives us further support for why the drug which are highly useful should not on.
The put through a pass through.
The period, where they lose their pass through and as Scott said. The second area is we continue to work with CMS on non alternative pathway as well.
George go ahead.
Yes, Thanks Vivien.
Although we did receive $16 $5 million on the fourth quarter for the Allan Merrill of royalty, we actually didnt recognize any of that revenue because of the kind of accounting rules, which is a little frustrating, but it's.
And I know it.
Of some models out there in the.
The the short answer is that's going to be amortized over a number of years from an accounting perspective, it's the likely going to be lower than what we have.
<unk> in the past and the strictly accounting rules, it's noncash.
I don't have a strict number but I would I would estimate.
Something lower than what we saw quarterly on a historical basis.
And.
It's a little unusual but it's.
I'm not of technical expert, but that's that's where we sit today.
No no that's the $99000 of royalty income I'm, assuming that was just related to S kw and not actually tied to the percentage of sales you get from Almere related to ILUVIEN correct.
Yes.
No no royalty income in Q4 that recognize revenue was related to an R&D collaboration.
So it was fairly small number.
Okay. Okay, and then just more on the regulatory side of things.
Physician monetization with debt execute where are you.
Related to initiatives to actually get the product specific injection reimbursement code established.
And then with Utica.
I don't know if you mentioned this but the stocking nearing customer demand again at this point and if you could give any other color on your cheek around where you're seeing inventory levels.
How the east kind of think of the inventory demand dynamic playing out as the year progresses.
Yeah sure.
Scott why don't you answer the <unk>.
Injection code the question.
Sure.
We have actually filed now for a new CPT code for that post of your chamber injection. It will be discussed at the May two.
2021 meeting so we'll have more information at that time.
Sure.
And then as far as your teeth and inventory levels. Let me just say this that.
We did we are on the process right now of launching a new silicon is needles and because of that.
Inventories were drawn down a bit in <unk> and so we're seeing inventory levels in first quarter come back down more to normal.
No we do not see inventories right now by any means.
Over what is typically seen so the with the specialty distributors have now gotten in sync I mean, we're two years into launch even with the pandemic, but with the pandemic coming back.
They wanted to make sure as well that they've done a very good job of managing.
What to project. So we don't see significant swings up and down the only thing just to be aware of is there was draw down in <unk> as the silicon needle with preparing to get rolled out we obviously informed them of that.
And so now theyre, starting to stock up with that new needle.
Okay, so of that should be factored.
Actually if you can get for you the first quarter I had mentioned so that good color. There. Thank you very much and I'll just lump my last two questions together.
Should we expect information is just percent of total of execute sales.
The two increase on a percentage basis relative to what we saw on the fourth quarter. I mean is that a fair assumption of at least.
And you did note that it was material Okay and then how many patients just in the Davita trial of enrolled thus far and that's it for me. Thank you very much and the best of luck.
Good questions, Andy we're not giving color around how many patients.
Have enrolled other than to say the are on track and we're pleased with where we are on.
So just to remind everyone at the 13 patient trial, obviously, it's not a lot, but nevertheless, we are fairly strict entry criteria. So you have to be careful the ticket the right patients.
Our police as well the thing we have enough a fair number of sites that we've opened up sell of it based on that and the fact of the pandemic as is.
<unk>.
We're pleased with where we are on enrollment and as I said, we'll issue a press release, when we get the full enrollment.
Okay, great. Thank you very much best of luck.
Thank you.
Our next question is the follow up question from Yale Jen with Laidlaw and company.
Thanks for taking the follow up question just a follow on the last question their debt in terms of the amortization for the 16 point, but.
But the revenue hull.
How long the how should we think about the duration of the amortization so it'll help us in the modeling.
Yes.
Yes.
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It's probably.
The.
It's tough to give guidance on that but it's roughly a five eight year timelines of pending of five to 10, depending on structure.
If you use 10 as a conservative number and again, it's just accounting driven and it's a noncash event.
But we're still working the nuances of accounting will come on.
Unfold over time as the actual results start rolling through but I think from just from a modeling perspective, if you use 10 years that'll get you close.
Okay appreciate it.
That's very helpful. Thanks.
And I'm not showing any further questions at this time, ladies and gentlemen, thank you for participating in today's conference. This does conclude your program and you may now disconnect everyone have a great day.