Q1 2021 Alimera Sciences Inc Earnings Call

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Ladies and gentlemen, thank you for standing by good morning, and welcome to L. A marriage Sciences first quarter fiscal year 2021 financial results and corporate update conference call. At this time all participants are in listen only mode should you need assistance. Please signal a conference specialist by pressing the star key followed by <unk>.

Operator: Ladies and gentlemen, thank you for standing by. Good morning, and welcome to Alimera Sciences' first quarter fiscal year 2021 financial results and corporate update conference call. At this time, all participants are in listen-only mode.

Zero after today's presentation, there will be an opportunity to ask questions.

Operator: Should you need assistance, please signal a conference of specialists by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press the star key, then one on your telephone keypad.

Ask a question you May press Star then one on your telephone keypad to withdraw your question. Please press Star then two 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 by a playback purpose.

Operator: To withdraw your question, please press star, then two. 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 13, 2021. I would now like to turn the call over to Mr. Scott Gordon of CoreIR, the company's investor relations firm.

A webcast replay of the call will be available approximately one hour. After the end of the call through May 13th 2021, I would now like to turn the call over to Mr. Scott Gordon of core IR, the company's Investor Relations firm. Please go ahead Sir.

Good morning.

And thank you for your participating in todays conference call.

Operator: Please go ahead, sir, and thank you 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 Commercial Officer. During this call, management will be making forward-looking statements, including statements that address Alimera's expectations for future performance or operational results. Such forward-looking statements involve risks and other factors that may cause actual results to differ materially from those stated.

Turning me from Allamerican leadership team are Rick is worth President and Chief Executive Officer.

And Phil Jones, Chief Financial Officer.

During this call management will be making forward looking statements, including statements other dress <unk> 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 <unk>. Most recently filed periodic reports.

Operator: For more information about these risks, please refer to the risk factors described in Alimera's most recently filed periodic reports on Form 10-K and Form 10-Q, the Form 8-K filed with the FCC today and Alimera's press release last evening, particularly the cautionary statements in it. Today's conference call includes Adjusted EBITDA, a non-GAAP financial measure that Alimera believes can be useful in evaluating its performance. For a reconciliation of this non-GAAP financial measure to net loss, please see the reconciliation table located in Alimera's earnings press release.

<unk> form 10-K, and form 10-Q or form 8-K filed with the SEC today and Alan Maris Press release last evening, particularly our cautionary statements in it.

Today's conference call includes adjusted EBITDA, a non-GAAP financial measure that Allomap believes can be useful in evaluating its performance for a reconciliation of GAAP non-GAAP financial metrics from net loss. Please see the reconciliation table located in Ala Maris earnings press release, the content of this call contains time.

Information that is accurate only as of today April 29 2021.

Operator: The content of this call contains time-sensitive information that is accurate only as of today, April 29, 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 event. It is now my pleasure to turn the call over to Rick Eiswirth. Rick, please.

Except as required by law Alomar 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 book guys. Rick. Please go ahead.

Thank you Scott and good morning to everyone on the call with the dual headwinds of both the typical seasonality in our business in the early part of the year and the continued presence of COVID-19, the first quarter was challenging as we indicated it would be on our fourth quarter conference call in early February <unk>.

Richard S. Eiswirth: Thank you, Scott, and good morning to everyone on the call. With the dual headwinds of both the typical seasonality in our business in the early part of the year and the continued presence of COVID-19, the first quarter was challenging, as we indicated it would be on our fourth quarter conference call in early February. First quarter demand for alluvium, as a higher priced product, is generally lower than fourth quarter due to seasonality, as insurance plans and deductibles reset in the U.S., and hospital budgets are re-established in our European market. That was the case again this year.

First quarter demand for ILUVIEN is a higher price product is generally lower than fourth quarter due to seasonality as insurance plans and deductibles reset in the U S and hospital budgets are reestablished in our European markets that.

That was the case again this year. However, we are also seeing the typical seasonal rebound in end user demand picked up over the course of the quarter and returned to Q4 levels by the end of March across most of our markets.

Richard S. Eiswirth: However, we've also seen the typical seasonal rebound as end-user demand picked up over the course of the quarter and returned to Q4 levels by the end of March across most of our market. In particular, our U.S. demand showed growth month over month during the first quarter. Our business is still impacted by the pandemic as patients are skipping and postponing visits, and certain parts of Europe remain in lockdown condition. As a result, we don't expect a full global recovery to occur in our business until the second half of this year, but based upon the overall trends we've seen recently, we believe that we will return to growth in the current quarter.

In particular, our U S demand showed growth month over month during the first quarter.

Our business is still impacted by the pandemic as patients are skipping and postponing visits and certain parts of Europe remain in lockdown conditions.

As a result, we don't expect a full global recovery to occur in our business until the second half of this year, but based upon the overall trends. We've seen recently, we believe that we will return to growth in the current quarter.

Importantly, while we navigated through the COVID-19, and continue to manage the residual challenges of the pandemic. We are executing on our key longer term growth initiatives, including launches of ILUVIEN to new markets and adding additional license or distribution agreements.

Richard S. Eiswirth: Importantly, while we navigated through COVID-19 and continue to manage the residual challenges of the pandemic, we are executing on our key longer-term growth initiatives, including launches of Alluvium in new markets and adding additional licenses or distribution. Our international segment is profitable and leverageable, and our expansion strategy to gain market share outside the U.S. remains a key priority. As most of you know, earlier this month, we entered into an agreement to license exclusive rights to develop and commercialize our Alluvian intravitral implant for diabetic macular edema and other retina diseases to OccuMention Therapeutics, a Chinese-based ophthalmology company, in China and Western Pacific countries under its own separate branded label.

Our international segment is profitable and Leverages all in our expansion strategy to gain market share outside the U S remains a key priority.

As most of you know earlier this month, we entered into an agreement to license exclusive rights to develop and commercialize our ILUVIEN interdigital implant for diabetic macular edema, and other retinal diseases to occupancy therapeutics.

Ana based ophthalmology company in China, and Western Pacific countries under its own separate branded label.

In exchange, we received a $10 million upfront license payment.

And potentially we can receive up to $89 million and sales based milestone payments.

Richard S. Eiswirth: In exchange, we received a $10 million upfront license payment, and potentially, we can receive up to $89 million in sales-based milestone payments. Additionally, we will be the exclusive manufacturer for OccuMention and will supply commercial goods to OccuMention at an agreed-upon transfer price once the product is approved and launched in the licensed territory.

Additionally, we will be the exclusive manufacturer for Oscar mentioned and will supply commercial goods talk you mentioned and an agreed upon transfer price once the product is approved and launched in licensed territories.

Simultaneous to the licensing transaction Archie mentioned also made a $10 million equity investment in our common stock and we received a four year warrant, giving us the right to purchase up to 1 million shares Inaki mentioned.

Richard S. Eiswirth: Simultaneously to the licensing transaction, OccuMention also made a $10 million equity investment in our common stock, and we received a four-year warrant giving us the right to purchase up to one million shares in OccuMention. The aggregate $20 million cash infusion from the OccuMention transaction significantly strengthens our balance sheet and provides us additional funding to pursue our strategy to create a unique global company focused solely on Anticipated future milestone payments and commercial product supply under the Aki mentioned agreement offer potential for additional revenue streams, and the warrant we received from OccuMention provides another opportunity for us to capture future value and non-diluted financing from this transaction.

The aggregate $20 million cash infusion from the Ark, you mentioned transaction significantly strengthens our balance sheet and provides us additional funding to pursue our strategy to create a unique global company focused totally on their treatment of retinal diseases.

Anticipated future milestone payments and commercial product supply under the Ark, you mentioned agreement offer potential for additional revenue streams and the warrant we received from Ark. You mentioned provides another opportunity for us to capture future value and non dilutive financing from this transaction.

We are very pleased to have I can mention is our partner in China, and other Asian markets, where diabetes is a major issue and the ILUVIEN technology can make a real difference to patients diagnosed with <unk> in that region.

Richard S. Eiswirth: We are very pleased to have OccuMention as our partner in China and other Asian markets where diabetes is a major issue, and the Alluvium technology can make a real difference to patients diagnosed with the immune system in that region. Although the OccuMention relationship may not provide additional revenues for three to four years while they pursue approval in the region, we have continued to execute on expansion strategies that can drive revenue in the near term during the pandemic. In the second half of 2020, we signed a distribution agreement with Nordic Prime as our distribution partner in the Nordic region.

Although the Ark you mentioned relationship May not provide additional revenues for three years to four years, while they pursue approval in the region. We have continued to execute on expansion strategies that can drive revenue in the near term during the pandemic.

In the second half of 2020.

We signed a distribution agreement with Nordic crime as our distribution partner in the Nordic region.

This agreement covers the distribution of ILUVIEN in Sweden, Denmark, Finland and Norway.

All countries, where ILUVIEN has marketing approval for both <unk> and post year easy ice.

Richard S. Eiswirth: This agreement covers the distribution of alluvion in Sweden, Denmark, Finland, and Norway, all countries where alluvion has marketing approval for both DME and posterior uveitis. In the first quarter of 2021, we announced the publication of pricing for living in Denmark for both the DME and posterior UVA syndication. And we recently saw the first end-user demand in both Finland and Denmark and expect the lubricant to be commercialized throughout the Nordic region in 2021.

In the first quarter of 2021, we announced the publication of pricing for ILUVIEN in Denmark from both the <unk> and post your EBIT Syndications and we recently saw the first end user demand in both Finland, and Denmark and expect ILUVIEN to be commercially commercialized throughout the Nordic region during 2021.

We are continuing to work with our French partner Horus pharma to expand into the Benelux region recently, we announced the launch of ILUVIEN for both indications in the Netherlands and earlier in the quarter Luxembourg Ministry of Health approved ILUVIEN reimbursement for do you mean.

Richard S. Eiswirth: We are continuing to work with our French partner, Horace Pharma, to expand into the Benelux region. Recently, we announced the launch of Alluvion for both indications in the Netherlands, and earlier in the quarter, Luxembourg's Ministry of Health approved Alluvion reimbursement for DME. In Ireland, the three largest private insurers, which together represent approximately 50% of covered lives in Ireland, recently approved a Louvain reimbursement for the prevention of relapse and recurrent non-infectious heviitis affecting the posterior segment of the eye in private hospitals under its plan. And in Scotland, we achieve reimbursement for leave-in for non-infectious posterior uveitis.

In Ireland, the three largest private insurers, which together represent approximately 50% of covered lives in Ireland recently approved ILUVIEN reimbursement for the prevention of relapse in recurrent non infectious uveitis affecting the post to your segment of the eye and private hospitals under its plans.

And in Scotland, we achieve reimbursement for leaving for non infectious posterior uveitis.

Our district part distribution partner in Austria Medicine medical commenced sales of ILUVIEN in October of last year and is currently awaiting reimbursement in the Czech Republic and.

Richard S. Eiswirth: Our distribution partner in Austria, Metis Medical, commenced sales of aluvium in October of last year and is currently awaiting reimbursement in the Czech Republic. Additionally, we are continuing to work with our distribution partners to achieve reimbursement approval for the posterior uveitis indication in Italy, Spain, and France this year. As Europe begins to open up again, we believe that this indication will provide a significant contribution to our sales growth in the future.

And Additionally, we are continuing to work with our distribution partners to achieve reimbursement approval for the posterior uveitis indication in Italy, Spain, and France. This year as Europeans to open back up we believe that this indication will provide a significant contribution to our sales growth in the future.

We also continue to advance our new day trial, which is 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.

Richard S. Eiswirth: We also continue to advance our New Day trial, which is 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. 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 the current standard of care therapy in naive and near-naive patients.

New day is a randomized controlled multi center study designed to demonstrate reduced reduced disease recurrence a reduction in treatment frequency.

Better disease control and reduced retinal damaged compared to the current standard of care therapy in naive and near naive patients.

Enrollment in the New site day study has been adversely affected by the pandemic with fewer patient visits in general and some facilities not yet seeing new patients who are our target patient population.

Richard S. Eiswirth: Enrollment in the New Year's Day study has been adversely affected by the pandemic, with fewer patient visits in general and some facilities not yet seeing new patients, who are our target patient population. Currently, we have 32 patients randomized to the study and an additional 5 in the steroid screening phase. In an effort to speed up enrollment, we are evaluating several changes to the protocol to make it easier for clinical sites to identify and enroll patients in this environment.

Currently we have 32 patients randomized in the study and an additional five and the storage screening phase and.

In an effort to speed up enrollment we are evaluating several changes to the protocol to make it easier for clinical sites to identify and enroll patients in this environment and we expect to introduce these changes to sites next month in order to accelerate enrollment over the rest of the year.

It is important to remember that ILUVIEN has now been utilized to treat over 37000 eyes globally. This significant real world experience as well as the results from our prior clinical trials support the New day study design and give us confidence that we can achieve a successful outcome.

Richard S. Eiswirth: And we expect to introduce these changes to sites next month in order to accelerate enrollment over the rest of the year. It is important to remember that Illuvin has now been utilized to treat over 37,000 eyes globally.

Richard S. Eiswirth: This significant real-world experience, as well as the results from our prior clinical trials, support the New Day study design and give us confidence that we can achieve a successful outcome. We believe that positive results from the New Day study would position Illuvian as a formidable competitor to the $7.5 billion standard of care and provide a significantly greater revenue opportunity for Alimera. For 2021, we remain focused on three core goals, which are:

We believe that the positive results from the New day study with position of ILUVIEN as a formidable competitor to the $7 $5 billion standard of care and to provide a significantly greater revenue opportunity for almere.

For 2021, we remain focused on three core goals, which are.

Number one restoring ILUVIEN sales growth to rates, we experienced before the pandemic absent. The COVID-19 challenges we remain confident we can grow our business organically in all our markets increasing both the number of physicians using ILUVIEN and the frequency of use.

Richard S. Eiswirth: Number one, restoring alluvium sales growth to rates we experienced before the pandemic. Absent the COVID-19 challenges, we remain confident we can grow our business organically in all our markets, increasing both the number of physicians using alluvium and the frequency of use. Second, expanding the number of international territories in which Alluvion is approved, reimbursed, and launched with our direct sales organization and through our distribution partners. This includes both diabetic macular edema and the approval and uptake of Allugan's non-infectious posterior uveitis indication in new and existing territories. 3.

Number two expanding the number of international territories in which ILUVIEN is approved reimbursed and launched with our direct sales organization and through our distribution partners. This includes both diabetic macular edema, and the approval and uptake of ILUVIEN as non infectious posterior uveitis indication in new and existing territories and.

And number three advancing the new day study by driving patient enrollment.

We do remain focused on the management of our resources and our financial performance, while the pandemic continues which we believe we have done well with.

Richard S. Eiswirth: Advancing the New Day Study by Driving Patient Enrollment We do remain focused on the management of our resources and our financial performance while the pandemic continues, which we believe we have done well. With the Akimension transaction, we have significantly strengthened our balance sheet, which gives us more flexibility to drive growth in Illumina utilization as physician offices increase capacity and patient flows return around the world. And with that, I'll turn the call over to Phil, who will review our financial results for the quarter. Thanks Rick and hello everyone.

With the Aachen mentioned transaction, we have significantly strengthened our balance sheet, which gives us more flexibility to drive growth in ILUVIEN utilization as physician offices increased capacity and patient flows return around the world and with that I'll turn the call over to Phil who will review our financial results for the quarter.

Thanks, Rick and Hello, everyone. During the first quarter of 2021, our consolidated net revenue was down approximately 23% to $11 2 million compared to $14 5 million from the first quarter of 2020. This comparison reflects pre pandemic performance for almost all of the first quarter of 2020 versus the current.

Phil Jones: During the first quarter of 2021, Arkansas' net revenue was down approximately 23% to $11.2 million compared to $14.5 million in the first quarter of 2020. This comparison reflects pre-pandemic performance for almost all of the first quarter of 2020 versus the current ongoing COVID-19 environment. U.S. net revenue was approximately $5.6 million for the first quarter of 2021, a decline of approximately 21% from the $7.1 million reported in the 2020 period. U.S. end-user demand, which represents units purchased by physicians and pharmacies from our distributors, was down 14% in the first quarter of 2021 to 737 units compared to 855 units in the first quarter of 2020.

Ongoing COVID-19 environment.

U S. Net revenue was approximately $5 6 million for the first quarter of 2021, a decline of approximately 21% from the $7 $1 million reported in the 2020 period.

U S end user demand, which represents units purchased by physicians and pharmacies from our distributors was down 14% in the first quarter of 2021% to 737 units compared to 855 units in the first quarter of 2020. The decrease was due primarily to the continued impact of COVID-19 other patients.

<unk> returned to retina offices.

Phil Jones: The decrease was due primarily to the continued impact of COVID-19 on the patient's ability to return to the retina office. 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. For example, in the first quarter of 2021, Alimera's U.S. distributors purchased approximately 10% fewer units than they actually sold to end users.

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 first quarter of 2021, <unk> U S distributors purchase approximately 10% fewer units than they actually sold to end users.

This difference is unusually high and it represents approximately $550000 more end user demand then we reported as GAAP revenue for the U S segment in the quarter.

Phil Jones: This difference is unusually high, and it represents approximately $550,000 more end-user demand than we were reporting as gap revenue for the U.S. segment in the quarter. Net revenue from our international segment decreased approximately 25% to $5.6 million for the first quarter of 2021. This compares to $7.5 million reported for the same period last year. The decrease was due to the impact of COVID-19 on both our direct and distributor markets. Consistent with our U.S. demand, end-user demand in both our international direct and distributor markets improved over the course of the quarter. However, currently, all of our international distribution partners are holding higher levels of inventory associated with slow demand in 2020. Total operating expenses were approximately $12.1 million in the first quarter of 2021.

Net revenue from our international segment decreased approximately 25% to $5 6 million for the first quarter of 2021.

This compares to $7 $5 million reported for the same period last year. The decrease was due to the impact of COVID-19 on both our direct and distributor markets consistent with our U S demand end user demand in both our international direct and distributor markets improve over the course of the quarter. However.

However, currently all of our international distribution partners are holding higher levels of inventory associated with the slow demand in 2020.

Total operating expenses were approximately $12 $1 million in the first quarter of 2021, a reduction of approximately 2% compared to $12 $4 million reported in the first quarter of 2020.

The increase in overall operating expense over the.

Phil Jones: A reduction of approximately 2% compared to $12.4 million reported in the first quarter of 2020. The increase in overall operating expense over the prior COVID-19-impacted quarters represented our desire to drive more engagement with physicians in anticipation of a return to more normal operating activities. In Q1 2021, we reported a net loss of approximately $3.6 million compared to a net loss of approximately $1.2 million in Q1 2020. Basic and diluted net loss per share for the first quarter of 2021 was $0.63 on approximately 5.8 million weighted average shares outstanding.

Over the prior COVID-19 impact the quarters represented our desire to drive more engagement with physicians and anticipation of a return to more normal operating activities.

In Q1, 2021, we reported a net loss of approximately $3 6 million compared to a net loss of approximately $1 2 million in Q1 2020.

Basic and diluted net loss per share for the first quarter of 2021 was <unk> 63 on approximately $5 8 million weighted average shares outstanding. This compares to base to a basic and diluted net loss per share for the first quarter of 2020 of 24 on approximately 5 million weighted average shares outstanding.

Phil Jones: This compares to a basic and diluted net loss per share for the first quarter of 2020 of 24 cents on approximately 5 million weighted average shares outstanding. We reported an adjusted EBITDA loss of $1.3 million in the first quarter of 2021 compared to a positive adjusted EBITDA of $1.3 million in Q1 of 2020. On March 31, 2021, we had cash and cash equivalents of approximately $8.3 million, compared to $11.2 million in cash and cash equivalents that we reported on December 31, 2020.

We reported an adjusted EBITDA loss of $1 $3 million in the first quarter of 2021 compared to positive adjusted EBITDA of $1 $3 million from Q1 2020.

Our March 31, 2021, we had cash and cash equivalents of approximately $8 3 million compared to $11 $2 million in cash and cash equivalents that we reported on December 31 2020.

As Rick mentioned earlier, our cash and cash equivalents increased by $20 million per for the cash we received from the occupation licensed and equity transactions that we announced in early April as a result, we believe that we are in a strong financial position going forward.

Phil Jones: As Rick mentioned earlier, our cash and cash equivalents increased by $20 million due to the cash we received from the occupancy license and equity transactions that we announced in early April. As a result, we believe that we are in a strong financial position going forward. We also received confirmation from our lender that our PPP loan of $1.8 million was completely forgiven. And with that, I'll turn the call over to the operator to open up the call for questions.

We also received confirmation from our lender that our PPP loans of $1 $8 million was completely forgiven.

And with that I'll turn the call over to the operator to open up the call for questions operator.

Ladies and gentlemen, if you wish to ask a question on today's call you will need to press the star from the number one on your telephone. If your question has been answered and you wish to withdraw your request you may do so by pressing the star key fin too if youre using a speakerphone. Please pick up your headset before entering your request and speaking on the call one moment. Please for the <unk>.

Phil Jones: Ladies and gentlemen, if you wish to ask a question on today's call, you will need to press the star key, then the number 1 on your telephone. If your question has been answered and you wish to withdraw your request, you may do so by pressing the star key, then 2.

First question.

Operator: If you are using a speakerphone, please pick up your headset before entering your request and speaking on the call. One moment, please for the first question. The first question comes from Alex Nowak of Craig Hallam Capital. Great, good morning everyone. I hope you guys are doing well. Can you just give us a breakdown of what you're seeing month to month, specifically in April? Are you seeing a month-over-month trend continuing into April? Are you pleased with the recovery that you are seeing at the retinal clinics in April? And then just how does that compare in the U.S. versus the rest of the world?

Our first question comes from Alex Nowak of Craig Hallum Capital.

Great. Good morning, everyone. I Hope you guys are doing well can you just give us a breakdown of what youre seeing month to month specifically in April.

Are you seeing a month over month trend continuing into April are you pleased with that recovery that you are seeing at the retinal clinics in April and then just how does that compare in the U S versus O U S.

Yeah sure Alex I mean, I would say, it's it's still remains inconsistent.

We've had some good weeks in April and we've had some tough ones I think that we experienced a little bit of a slowdown over the Easter holiday and it feels to me like it did back at Christmas people more aggressively taken breaks at holiday time, So we saw a little bit of a slowdown over the Easter holiday, but.

Richard S. Eiswirth: Yes, Alex, I mean I would say it still remains inconsistent. You know, we've had some good weeks in April, and we've had some tough ones. I think that we experienced a little bit of a slowdown over the Easter holiday, and it feels to me like it did back at Christmas, people more aggressively taking breaks at holiday time. So we saw a little bit of a slowdown over the Easter holiday, but generally, daily sales continue to improve, and I would say that's pretty consistent across all the markets, absent the Easter week.

Generally the daily sales continue to improve.

And I would say that's pretty consistent across all the markets absent the Easter week.

Okay. That's great and then just speaking to the inventory sitting in the channel outside the U S.

Richard S. Eiswirth: Okay, that's great. And then speaking to the inventory sitting in the show outside the U.S., you know, Phil mentioned there's still some high inventory out there, but is it as high as it was in Q4, or did you see inventory draw down a bit here in Q1? Yeah, I mean, it's definitely beginning to draw down some.

Phil mentioned, there is still some high inventory out there, but is it as high as it was in Q4 or did you see inventory draw down a bit here in Q1.

Yes, it's I mean, it's definitely it's definitely beginning to draw down some.

We saw we saw some good sales picking up over the course of the quarter in France, which is one of our largest distributor market. As we've said we've seen sales start to pick up in Spain, but we continue to see pockets of shutdowns pop up in some of those countries as well. So I think it is going to continue to be inconsistent for a little bit longer but certainly they are.

Richard S. Eiswirth: You know, we saw some good sales picking up over the course of the quarter in France, which is one of our largest distributor markets, as we've said. We've seen sales start to pick up in Spain, but we continue to see pockets of, you know, shutdowns pop up in some of those countries as well.

Leading down some of that inventory they held at the end of the year.

Richard S. Eiswirth: So I think it's going to continue to be inconsistent for a little bit longer, but, you know, certainly they are bleeding down some of that inventory they held at the end of the year. I was just going to say, overall, we do see improvements in end-user demand in all of those countries. That's great.

And I would now when you speak with them.

Yeah go ahead go ahead, Rick I was just going to say overall, we do see improvements in end user demand in all of those countries.

That's great. Okay. That's good I guess, when you speak with the rental clinics.

Are they hearing about a pent up demand or theres, a backlog of patients that you either need to get anti VEGF or ILUVIEN and that's going to ultimately benefit as these at these clinics start to reopen patients come back yeah. I think so I think that we're doing are the clinics. The clinics are much much more open and in fact, our face to face access with.

Richard S. Eiswirth: Okay, that's good. I guess when you speak with the renal clinics... Are they hearing about pent-up demand, or there's a backlog of patients that either need to get anti-VEGFs or Allovian, and that's going to ultimately benefit as these clinics start to reopen and patients come back? Yeah, I think so.

The physicians steadily improved over the quarter and continues to be pretty good pretty good in April I think the challenges the diabetic patients specifically retreat had been a little bit slower to come back I mentioned this on our February call because they were waiting in the queue to get their vaccine.

Richard S. Eiswirth: I think that we're doing a good job. The clinics are much, much more open. And, in fact, our face-to-face access with physicians steadily improved over the quarter and continues to be pretty good in April. I think the challenge is that the diabetic patients that we specifically treat have been a little bit slower to come back. I mentioned this on our February call because they were waiting in the queue to get their vaccine, and they didn't want to take a chance of losing the spot to get the vaccine.

They didn't want to take a chance of losing the spot to get the vaccine and frankly, that's something that we underestimated we didn't really didnt really foresee that happening.

We planned out the quarter.

But we do think that is getting better and some of those patients are coming.

Richard S. Eiswirth: And, frankly, that's something that we underestimated. We didn't really foresee that happening as we planned out the quarter. But we do think that is getting better, and some of those patients are coming. I have talked to physicians.

I've talked to physicians had dinner with physician just two days ago and they are seeing quite a bit of patients because of that pent up demand I think one of the channel and as we've got to fight through as when they're seeing this this huge volume of patients is theyre very quickly going back to the habit of doing anti VEGF anti VEGF right. So we've got a we've got to get more and more.

Richard S. Eiswirth: I had dinner with a physician just two days ago, and they're seeing quite a lot of patients because of that pent-up demand. I think one of the challenges we've got to fight through is when they're seeing this huge volume of patients, they're very quickly going back to the habit of doing anti-VEGF or anti-VEGF. So we've got to get more and more face time to try to break through that. So I think trying to deal with the backlog, they're sort of settling into some of the old habits, and we've got to get back to breaking that.

Facetime to try to break through that so I think trying to deal with the backlog there is sort of settling into some of the old habits, and we've got to get back to breaking that.

Yes, absolutely not that makes sense just on the act you mentioned deal obviously that helps bring in some additional capital do you expect to invest more aggressively specifically if you look at the P&L would you expect your.

Richard S. Eiswirth: Yes, absolutely. I hope that makes sense. Just on the AccuMention deal, obviously, that helps bring in some additional capital. Do you expect to invest more aggressively? Specifically, if you look at the P&L, would you expect your operating expenses to go up here over 2021 now that you have the capital? And really, what are going to be the primary areas you'd like to target? Is it more R&D and more real-world studies, or is it building out a bigger sales force?

Operating expenses to go up here over 2021, now that you have the capital and really what are going to be the primary areas you'd like to target is it more R&D and more real world studies or is it building out a bigger sales force so any thoughts there yes.

So.

Alex It's a great question and we are taking a hard look at that right now it's hard to give specifics on that but we do think one other things. We always felt like is that ILUVIEN was underfunded even from day, one as a small company and so with a little bit more cushion on the balance sheet. We are evaluating ways that we can invest to try to drive revenue a little bit faster in the second half of the year as things open up.

Richard S. Eiswirth: Any thoughts there? Yeah, so, you know, Alex, that's a great question, and we are taking a hard look at that right now. It's hard to give specifics on that, but we do think, you know, one of the things we've always felt like is that, you know, Alluvion was underfunded even from day one, you know, as a small company.

Richard S. Eiswirth: And so, with a little bit more cushion on the balance sheet, we are evaluating ways that we can invest to try to drive revenue a little bit faster in the second half of the year as things open up. I don't know exactly what that's going to be, but I'll tell you that it's probably not an increased sales force. It's probably more cover for the sales team in various ways, like more advocacy support around having that higher-level medical science conversation at the advocacy level to get more peer-to-peer conversation going out there.

I don't know exactly what that's going to be but I will tell you that it's probably not increased sales force is probably more air cover for the sales team in various ways like more advocacy support around having that higher level medical science conversation.

At the advocacy level or get more peer to peer conversation going out there. So we're looking at that probably something we'll be prepared to talk about as we as we end the second quarter moving to the third quarter.

That's great that makes that makes a ton of sense and then just last question. Just what is the current penetration of uveitis in Europe, if I remember back to that day.

Richard S. Eiswirth: So, we're looking at that. It's probably something we'll be prepared to talk about, you know, as we end the second quarter and move into the third quarter. That's great; that makes a ton of sense.

Last call really uveitis is only within a handful of hospitals in the UK and Germany, you mentioned, Denmark in the prepared remarks, but where the near term opportunities within Europe, and then also expanding within UK and Germany.

Richard S. Eiswirth: And then just last question: just what is the current penetration of uveitis in Europe? If I remember back to the last call, really, uveitis is only in a handful of hospitals in the UK and Germany. You mentioned Denmark in your prepared remarks, but where are the near-term opportunities within Europe and then also expanding within the UK and Germany? Yeah, so I think, I think, you know, it's still low penetration because it's been hard to get and convert new hospitals, you know, during the pandemic. It's only been launched in Germany and the UK.

Yes, so I think I think.

It's still low penetration because it's been hard to get and convert new hospitals during the pandemic and its only been launched in Germany. The U K. So we think as things open up and we can get into more of those hospitals in Europe, we will be able to see more uptake in uveitis in those markets I would say the biggest opportunities for us are going to be the rest of the big five getting the approval and reimbursement.

Richard S. Eiswirth: So we think as things open up, and we can get into more of those hospitals in Europe, we will be able to see more uptake of uveitis in those markets. I would say the biggest opportunities for us are going to be the rest of the big five, you know, getting approval and reimbursement in Spain, Italy, and France for uveitis, we believe will make a big difference. You know, candidly, our French launch has been the most successful of any of our European launches.

In Spain, Italy, and France for Uveitis, we believe will make a big difference.

Candidly, our French launch has been the most successful with any of our European launches and my expectation would be that we would see the most most rapid uptake there.

We have pricing and reimbursement.

Richard S. Eiswirth: And, you know, my expectation would be that we would see the most rapid uptake there, you know, once we have pricing and reimbursement. That's great. I appreciate the update. Thank you. Okay. No problem, Alex. Good to speak with you. Our next question comes from Yi Chen of HC Wainwright. Thank you for taking my questions. My first question is, has Alkmaar Nation provided any guidance on how quickly they can get illusions? Good morning, Yi.

That's great I appreciate the update thank you.

Okay No problem, Alex good to speak with you.

Our next question comes from <unk> Chen of H C Wainwright.

Thank you for taking my questions. My first question is Oh.

Cash and provided any guidance on how quickly they can get.

Yeah.

Market.

Yes, good morning.

Sure.

At this point in time, we're expecting it to be about three years to four years, because the current expectations that they will have to run some clinical trials locally.

Richard S. Eiswirth: At this point in time, we're expecting it to be about three to four years because the current expectation is that they will have to run some clinical trials locally, and they're looking at how to do that. However, we do believe that they will continue to look for ways to get there faster, and the situation with the Chinese FDA, I would say, is evolving on a regular basis. So there may be some upside to that, but at this point, we're suggesting it's probably going to be three to four years.

And they're looking at how to do that however.

We do believe that they will continue to look for ways to get there faster and the situation with the Chinese FDA is I would say is evolving on a regular basis and so there may be some upside to that but at this point, we're suggesting is probably going to be three years to four years.

Got it.

And do you still believe at this point the new day trial can complete enrollment in early 2022.

Richard S. Eiswirth: And do you still believe at this point that the New Day trial can complete enrollment in early 2022? That's our goal at this point in time, but, you know, certainly we hope that some of these changes will speed things up, you know, because we need to improve the pace, you know, based on where we are now with a lack of access to some of these new patients. It's been challenging to date, but, you know, we hope some of the changes we plan to make over the next month or so will speed that up.

That's our goal at this point in time, but certainly we hope that some of these changes will speed things up because we need to we need to improve the pace based on where we are now with a lack of access to some of these new patients it's been challenging to date, but we hope some of the changes we plan to make over the next month or so and we will speed that up.

Okay got it thank you.

Yes, absolutely thanks Heath.

Again, if you have a question. Please press Star then one day.

Richard S. Eiswirth: Okay, got it. Thank you. Yep, absolutely. Thanks, Yi. Again, if you have a question, please press star, then 1. The next question comes from James Molloy of Alliance Global Partners.

Next question comes from James Molloy of Alliance Global Partners.

Hi, Good morning, Thank you for taking my questions Rick.

Quick question on the auction the excellent excellent deal Nick you mentioned, bringing in a good chunk of cash are there additional like you mentioned type deals out there that you guys are working on that you see what is it sort of the market for additional geographies.

James Francis Molloy: Hi, good morning. Thank you for taking my questions, Rick. I had a quick question on the Occumentation. Excellent, excellent deal on the Occumentation, bringing in a good chunk of cash. Are there additional Occumentation-type deals out there that you guys are working on that you can see? What is the market for additional geography?

So Jim Theres, nothing Thats eminent out there, but we do believe that the geographic expansion is a key part of our strategy going forward and there are some big markets. We would certainly be interested in trying to access the Indian market, where we already have quite a bit of data on ILUVIEN potentially the Russian territories, and maybe even South America. So.

Richard S. Eiswirth: So, you know, Jim, there's nothing that's eminent out there, but we do believe that geographic expansion is a key part of our strategy going forward, and there are some big markets. We would certainly be interested in, you know, trying to access the Indian market, where we already have quite a bit of data on alluvion, potentially the Russian territories, and maybe even South America. So we don't have anything eminent at this point, but, you know, we are always looking for other places to make alluvion available because, you know, we do think it is a very valuable product for patients.

Don't have anything imminent at this point, but we are always looking for other places to make ILUVIEN available because we do think it is a very valuable patient.

Product for patients.

And so we are aware of which the latest going on with India. The absolute disaster that COVID-19 there any thoughts on how that May impact you said that bleeds over into Europe at all.

Richard S. Eiswirth: Absolutely, you're aware of the latest that's been going on with India, the absolute disaster of COVID there. Any thoughts on how that may impact Europe if that bleeds over into Europe?

No not at this point, Jim now now.

And then any guidance here in the second quarter on what the year looks like I mean, you guys. You guys are almost triple the stock here year to date in the T cells.

Richard S. Eiswirth: Not at this point, Jim, no.

Richard S. Eiswirth: And then, any suggested guidance here in the second quarter on what the year looks like? I mean, you guys have almost tripled the stock here year-to-date in the teeth of a first quarter that was, as you guys guided, down 20%, so I think your messaging has been excellent. Any thoughts on what 2020 may, or 2021 may be looking like?

First quarter was as you guys guided down 20%. So I think your messaging has been to date has been excellent.

Any thoughts on what.

2020 'twenty.

2021 may be looking like.

You know Jim we always have typically said mid to high teens growth.

Don't think we'll be at would it be quite back back to that but I E.

Richard S. Eiswirth: You know, Jim, we typically have said mid- to high-teens growth. I don't think we'll be able to be quite back to that, but, you know... It's hard to say at this point, but I don't think we'll be back to the normal mid- to high-teens growth, but I think you'll definitely see some growth over the second quarter of last year and some sequential growth as well.

It's hard to say at this point, but I don't think it will be back to the normal mid to high teens growth, but I think youll definitely see some growth over over the second quarter of last year.

And some sequential growth as well.

Okay.

Maybe last question.

The Opex numbers, you guys posted in the R&D, G&A and sales and marketing and these kind of in line, where she expected maybe the sales marketing going up a little as net sales hopefully kick into the rest of the year.

Richard S. Eiswirth: Okay, maybe last question. The OPEX numbers you guys posted for R&D, G&A, and sales and marketing, are these kind of in line with where you expect them to be, and maybe sales and marketing is going to go up a little as sales hopefully kick in through the rest of the year? Yeah, Jim, that is correct.

Go ahead, yes, yes, Jim that is correct. We do what we are putting a little bit of money behind things net he will know people are being able to get out a little bit more so that traveled a lot of other things that were kind of hampered our previously.

Richard S. Eiswirth: We are putting a little bit of money behind things, and as you well know, people are being able to get out a little bit more, so that travel, a lot of those things that were kind of hampered previously are opening up. And we see our salespeople doing more traveling, more engagement with doctors, and we will bring the number back up to what I would think would be more along the lines of that Q4 2019, Q1 2020 overall spending level.

Our opening up and we see our salespeople doing more traveling more engagement with the doctors and we will bring.

Bringing the number of backup to what I would think would be more along the lines of that.

That Q4 2019 Q1.

2020 overall spending levels.

Got it and then last question Rick.

To answer the question on the calls it's hard to hard question to answer of course, but any potential acquisitions or opportunities coming in now with I guess 38 million pro forma on the books.

Richard S. Eiswirth: And then last question, Rick, I know I typically ask this question on the calls, and it's hard to answer, of course, but any potential acquisitions or opportunities coming in now with, I guess, $38 million pro forma on the books that are looking attractive? Yeah, so, you know, Jim, we're out there looking.

Theyre looking attractive.

Yeah, So Jim we're out there looking the one thing I would say about the aka mentioned transaction as it frankly, it does give us some dry powder to have a bigger seat at the table and some of those conversations right. So I think there are.

Richard S. Eiswirth: Yes, so, you know, Jim, we're out there looking. The one thing I would say about the Akimension transaction is that, frankly, it does give us some dry powder to have a bigger seat at the table in some of those conversations, right? So I think there are parties out there that we've talked to in the past that, you know, frankly, with that currency in the bank, it just allows us to have a little more serious conversation. So, you know, we plan to look a little bit more aggressively at the balance sheet.

There are parties out there that we've talked in the past that frankly with that currency in the bank.

It just allows us to have a little more serious conversation. So we plan to look up a little bit more aggressively with the balance sheet strengthened.

Thank you for taking the questions.

Absolutely Thanks, Jim.

This concludes our question and answer session I would like to turn the conference back over to Rick <unk> for closing remarks.

Richard S. Eiswirth: Thank you for taking the question. Absolutely. Thanks, Jim. That concludes our question and answer session. I would like to turn the conference back over to Rick Eiswirth for closing remarks. Thank you, and thank all of you for participating in today's call and for your continued interest in Alimera. We do look forward to sharing our progress at our next quarterly conference call when we report our second quarter results, and we expect that to be in late July or early August. Thank you all very much, and have a wonderful day. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Thank you and thank all of you for participating on today's call and for your continued interest in <unk> we.

We do look forward to sharing our progress at our next quarterly conference call. When we report our second quarter results and we expect that to be in late July or early August. Thank you all very much and have a wonderful day.

The conference has now concluded. Thank you for attending today's presentation you may now disconnect.