Q1 2021 Oyster Point Pharma Inc Earnings Call
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Good evening and welcome to the Oyster point pharma first quarter 2021 earnings conference call. My name is Sarah and I'll be your operator today.
After the company's formal remarks, there will be a question and answer session.
At this time I would.
I'd like to turn the call over to Mr. Daniel Lochner, Oyster point pharma Chief Financial Officer.
Please go ahead.
Good evening, everyone and welcome to the Oyster point Pharma first quarter earnings conference call for the three months in the March 31, 2021 day.
The <unk> issued a press release containing our first quarter financial results and recent business highlights. In addition, our earnings press release and our form 10-Q that was filed with the SEC. After the close of market today are available on our website under the Investor and news section at Www, Mr Point Rx Dot com.
Joining us on the call today are Dr. Jeffrey now President and Chief Executive Officer of Oyster point pharma and Johnson and his rank of Chief commercial officer. Following Dr. Now Ms. Mr Mitchell Rinko and.
My prepared remarks, we will open up the line for questions.
During the call we will make forward looking statements regarding future events and the future of Oyster point pharma forward. Looking statements include statements regarding oyster point possible or assumed future results of operations.
<unk> and financial position and business strategies, and plans research development and commercial plans or expectations trends market sizing competitive position, our belief regarding our clinical trial outcomes, including secondary end point analysis.
And regarding product approvals or FDA decision, making all our efforts to manage the impact of COVID-19, and the industry environment and potential growth opportunities. Among other things. These statements are based upon the information available to the company each day and Oyster point and assumes no obligation to update these statements as circumstances change future.
Events and actual results could differ materially projected and the company's forward looking statements additional information.
Information concerning factors that could cause results to differ materially from our forward looking statements are described in greater detail on the caption risk factors and the company's filings with the SEC and quoting our quarterly report on form 10-Q for the quarter ended March 31, and 2021 filed with the SEC on May six 2000.
And our annual report on form 10-K for the year ended December 31, 2021, which was filed with the SEC and February 18 2021.
In addition, this conference call discusses products that are under clinical investigation, which have not yet been approved for marketing by the U S food and drug administration. They are currently limited quality of investigational use and no representation is made as to their safety or effectiveness for the purposes for which they are being investigated.
I will now turn the call over to Dr. Jeffrey now President and Chief Executive Officer of what's your point and pharma.
Thank you Dan Good evening, everyone and thank you for joining us on our call to discuss our first quarter 2021 financial results and recent business highlights.
And as you May know on March 2nd 2021, we announced that the FDA and accepted for filing the NDA for <unk> radical and nasal spray for the treatment of signs and symptoms of dry eye disease, and the Paducah of target action date for Oc <unk> nasal spray is set for October 17th 2021.
In addition to our development of Oc <unk> nasal spray for dry eye disease, we filed and I M D and November to evaluate the potential of <unk> for the treatment of stage, one and stage two neurotrophic Keratopathy, we believe that OCR <unk> unique mechanism of action of stimulating natural tear film by the trigeminal parasympathetic pathway.
As seen in preclinical and clinical studies may be beneficial for patients with corneal epithelium of hyperplasia, and or punctate keratopathy as well as those with persistent epithelium defects, we plan to begin enrollment and the phase two Olympia credits of clinical trial this quarter.
As we prepare for a potential launch there are a number of major ophthalmology meetings important for oyster point to attend either virtually or live during the summer of 2021, depending on the environment in light of the current pandemic, the 2020 One Association for research and vision and the Ophthalmology was held on May 1st two of the seventh.
Oyster point phase III onset two data was presented by Dr. Michael Raceman and the dry eye clinical treatment section on may 1st the.
And the American Society of cataract and refractive surgeons <unk> Crs.
Crs is scheduled for July 23rd through the 27th and Las Vegas, Dr. Ed Holland will have a podium presentation, where the date and time to be determined and finally, Dr. Cynthia and Metopion, we'll be presenting data during the session at the women and Ophthalmology 2021 Summer Symposium August 20.
During the 29th.
We expect 2021 to be a pivotal year for the company as we evolve from a clinical development company to a commercial organization. The remains committed to the research and development of therapies to treat diseases of the ocular surface, while launching Oc <unk> nasal spray.
If approved by the FDA.
Our vision and focus on bringing innovative and transformative ocular disease treatments to patients and building Oyster point pharma into a best in class Ophthalmology company remains steadfast.
I would like to now turn the call over to Johnson as Aramco Oyster Point's Chief commercial officer to discuss our ongoing preparations for the potential commercial launch of <unk> nasal spray in dry eye disease, and Q4 of 2021.
Thank you Jeff the dry ice segment is the large market with over 17 million people diagnosed and the United States alone.
Only a small proportion of these patients approximately $2 million are currently being treated with the branded therapeutic.
Over 7 million people diagnosed with dry eye disease have tried and abandoned the currently available options.
We believe that OCR, one radical and nasal spray as a compelling therapeutic profile does that if approved may address the unmet needs of patients with mild moderate and severe dry eye disease, and the eye care practitioners, who provide care for these patients.
This product has been developed with the patient in mind.
And it has the potential to provide a preservative free nasal formulation that naturally spares the ocular surface from hartzell preservatives and common ocular side effects associated with topical eye drops.
From a commercial perspective launch preparations are underway and we are progressing on the three key prelaunch initiatives that we outlined last quarter.
In Q1, 'twenty, one we introduced our disease state awareness campaign the.
The website for this program can be found at Www Dot dry island Dot com, that's spelled D. R Y E Y E L a and D dot com.
The goal of this disease state awareness campaign is to reframe the narrative around dry eye disease and to educate practitioners on the importance of tear film homeostasis and how tear film instability impacts dry eye disease.
Historically education has been focused primarily on later stage disease and the inflammatory component of the disease, which in our opinion is the long term sequela of of disruption and tear film homeostasis.
The second phase and our launch preparation is and the area of market access and reimbursement.
We are finalizing the preapproval product dossier and compiling the information needed in order to start the dialogue with payers about OCC of one's therapeutic profile and value proposition.
Plans are being put in place to meet with many of the key payers and the next two quarters.
We've done quite a bit of research with payors, including a number of advisory boards and we remain extremely focused on obtaining the best possible positioning of Oc of one post approval.
The third stage is continuing to build out our sales team throughout the upcoming year.
As we mentioned previously we plan on the hiring between 150 to 200, representatives, which would target greater than 90% of the current prescriber base and therapeutic dry eye disease products.
In Q1, 'twenty, one we hired sales leadership and are continuing to build of the sales team with the hiring of sales managers, followed by sales representatives and our goal is to have the entire sales team hired on boarded trained and certified and we're gonna be ready for two large ophthalmology and Optometry Congress just out of schedule could take place.
Shortly after our particular day.
At the launch post FDA approval and our focus will be on broad eye care professional and patient education and marketing with the planned toward direct to patient DTP campaigns, leveraging <unk> novel, MLA and nasal spray route of administration.
Has the potential first in class nasal spray to treat the signs and symptoms of dry eye disease, <unk> product profile may be compelling to both prescribers as well the space as patients.
I will now turn the call back over to Dan Lochner, Oyster Point's, Chief Financial officer to discuss our first quarter financial results.
Thank you, Jim and I'll provide a brief overview of Oyster point pharma first quarter financial results additional details about our first quarter as well as our quarterly financial results can be found in our form 10-Q that was filed with the SEC the season for.
For the first quarter of 2021, Oyster point pharma reported a net loss of $18 9 million or <unk> 73 per share net.
Net loss of $60 5 million or <unk> 77 per share for the same period from 2020 as of March 31, 2021, cash and cash equivalents were $175 9 million compared to $192 6 million as of December 31, 2020.
Total research and development expenses for the first quarter of 2021 were $5 8 million compared to $11 3 million for the same period and 2020.
The companys expenditures for preclinical and clinical programs were $4 2 million lower during the first quarter of 2021, and the same period and 2020, primarily due to the completion of the onset two phase III clinical trial in May 2020.
The company incurred higher CMT expense of $1 8 million, primarily due to the continued advancement of <unk>, one and if approved by the FDA anticipated commercial launch.
And the $3 1 million decrease and other research and development expenses was primarily due to the company's recording of of $2 $9 million gain and the first quarter of 2021 and connection with the small business waiver granted by the FDA for the NDA application fee and February 2021.
The NDA application fee was paid and expense and December 2020, and subsequently refunded by the FDA and April 2021.
Selling general and administrative expenses for the first quarter of 2021 were $13 1 million compared to $5 6 million for the same period and 2021. The increase was primarily driven by additional payroll and related expense of $4 6 million due to the increase in head count as well as higher commercial planning and.
<unk> of one point and.
In anticipation of the U S launch of <unk>, if approved and the fourth quarter of 2021. Additionally, there was an increase and other general and administrative expenses of $1 2 million due to an increase and cost for administrative and professional services fees and increase spending and medical affairs.
With that overview of our financials I will now all of them.
The operator to open up the line for questions.
Thank you.
And I asked the question you would need the press Star then one on your telephone to withdraw your question. Please press the pound key.
Our first question comes from the line of Ken Cacciatore.
What's the Cowen and company. Your line is now open.
Oh, Thanks, so much hey, guys. Just a couple of question and Jeff wondered if you would just comment on the review process. So far I know, it's still early but anything that.
And that you could give us any color on kind of the interaction that you're having with the agency and then John maybe.
Give us a sense of the pricing environment right now for the branded products Restasis and collateral is there any reason to believe we could be at a premium or just any commentary around that and then also.
You're in a bit of a unique position that desired draw. The initial rollout wasn't too long ago. So was wondering if you could talk about some of the learnings there some things that could have been done maybe differently more efficiently I know part D. You've already previewed two is part D is going to take a little bit of time, so maybe how that might impact the.
And the pacing to make this the kind of most efficient launch that you can make thank you.
Thanks, a lot for the question, Ken and I hope you're doing well.
With regards to the FDA review as you know.
And we had our Paducah date set in October of this year and.
And the.
To compound it doesn't go through the same pathway of new chemical entity, so a little bit different than having your formal mid cycle review process that you would expect with a new chemical entity.
We have received some information requests from the agency to clarify some things and the filing I would I would characterize them as minor often things around temperatures and settings and.
Code of federal regulations documents for components and the CMC process. So nothing that's of concern and we expect that the FDA will continue to ask those question does the review continues. So today, we just wait patiently for the FDA to do the review and we're happy that they have begun that process.
Great. Thanks, Jeff and thanks for your question.
Start with the the pricing of the branded product.
From a kind of of monthly lack of wholesale acquisition cost basis.
Most of the branded products kind of range between the.
The low five hundreds into the low six hundreds and we plan to introduce those tier one win of proved to be very competitive with that range. So we haven't announced the exact pricing, but the rest assured we want to be competitive in the branded price range.
I think Ken your second question was around learnings around the <unk> launch.
One of the things that we did realize quickly and I think the learnings are transferable into this dry eye segment is that this category. This disclaimer Cape is very very promotional and sensitive whether its skilled force detailing the eyecare prescribers or investment and direct to patient direct to consumer.
And the market the therapeutic dry eye market prior to the doctor of launches probably growing at low single digits per annum, but the investment of DTC and those efforts on education.
Really drove that market that the double digit growth and the first of call it year and a half two years. So those are some learnings we want to take we wanted to be very precise and our direct to patient efforts once we do get approval and.
And we want to be able to definitely expand and grow that market as we feel our therapeutic product profile is very compelling and can be used for mild moderate and severe patients not just kind of reserve. The later stage disease. So that'll take some education and it'll take some some market expansion.
Efforts and activities as well.
Great. Thanks, so much.
Thank you. Our next question comes from the line of our new Panorama with J P. Morgan. Your line is now open.
Hi, guys. This is tessa on the call on behalf of any time and thanks for taking our question.
And just one from US can you outline the key payer considerations for O C O one.
And when is the expectation that you will have formulary coverage post approval.
And from a pair of perspective, well you require of stepped through in order to use of gel one thanks so much.
Yes, Thanks for your question Tessa.
From a payer perspective.
Started doing a lot of the homework right now and building that dossier on.
And the value proposition along with the starting to get some of those meetings and the books kind of in the next couple of quarters.
The key part of our efforts there is really to show that this is a very differentiated product not just and it's MLA, but also and this route of administration.
As well as being very competitive from a contracting perspective, so with those two considerations.
We do plan on some pretty good commercial coverage during the first 12 months range.
The ranging by the end of the first year to be kind of the 80% plus covered lives and seen the commercial space.
In the same aspect will be starting the dialogue and negotiations with Medicare part D as well.
And again and.
And speaking with some of the Payors differentiation is going to be key here as well as being very competitive from a contracting perspective. So we do expect coverage from Medicare to come later.
Probably a good year after we get our approval. So we're targeting kind of the 2023 time frame to get Medicare cut.
Coverage.
Yeah.
Thank you.
Our next question comes from the line of Joe Catanzaro with Piper Sandler Your line is now open.
Hey, guys. Thanks, so much for taking my questions here I have two for you and maybe both the long sort of similar of line of thought, but if we think about launch preparations and and raising physician awareness around the oce of one dataset I was just wondering if you could speak to the level of engagement you have at the ophthalmology meetings that are still virtual with.
Physicians and and whether there are opportunities that such meetings to have more one on one like conversations around the <unk> one data and if so how would you characterize those discussions and then similarly in terms of the disease State awareness campaign, just curious how you're currently driving traffic to the website and what the.
The what the.
Patients are getting.
Getting the traffic to the website could be for the longer term picture of both deal alone.
Yeah, Great, Joe and so I'm going to I'll take the first part of your question.
And it over to John.
One of the things that I think and I'm sure. This is also happening on the on the investor side of the industry and it's.
Happened with US is we have this virtual platform in order to share our data talk about the product the and the the sheer number of people that are often able to of 10 of those talks and engage and those talks has gone up exponentially as compared to if we were at and in person meeting.
On a podium presentation. Obviously, there are some big rooms at some of the meetings that we go to but in many cases, we're seeing sometimes as many as hundreds of thousands of people on our presentation and in ophthalmology, and optometry meeting and the ability to engage and ask questions and this digital world.
I think and the beginning of the pandemic, we are all trying to figure it out trying to figure out the platforms.
But many meetings are doing it really well now and we've had some great engagement up until this point. We obviously continue to look forward to going back to meetings very soon and it is our intention to do that the summer maybe because of that that in person engagement. That's just so important with us but.
But across the company, even outside of talking about our clinical data and engaging with our.
The program our clinical development program, we have been able to keep that going rather robustly throughout this virtual.
The time period, and so I'll turn it over to John to talk a little bit about some of the other parts of the question.
Yeah, Thanks, Jeff and Joe. Thank you for your question.
And regards to the disease state awareness campaign, the calling out our DSA dry island Dotcom campaign at the.
I'd start with the website that we launched just literally about a month month and the little bit of go.
And the traffic has been very very good and that's without the effort stuck.
And we're just about to undertake to start to.
And you get more traffic to that website, so definitely we're targeting.
Kind of of the digital way to get there through through working with the Congresses and associations kind of banner advertising, where we have very targeted efforts.
And with different partners and specifically the Congresses that are coming out and we're going to be looking at even symposia to drive that education of disease state awareness, which in turn by the pushes pushes the the Ikea provider to the website to get more information so symposia of whether they are virtual or whether they are live towards.
Of the back half of the year, we're gonna be flexible and nimble to address both of those.
And the media channels and.
And with these efforts and we feel that we'll be able to drive quite a bit of of awareness and the start to two.
And to reclaim the dialogue and narrowed of around the approach the treating dry eye.
Okay, great. Thanks, so much for taking my question.
Thank you.
As a reminder to ask a question you would need the press Star then one of your telephone.
Our next question comes from the line of Patrick Dolezal with lifestyle capital. Your line is now open.
Hi, Thanks for taking the questions can you just remind us of the mechanistic rationale for OCR wanted to address the dry eye and a more holistic manner relative to some of the existing dry therapeutics and more specifically do you foresee a broader population being accessed potentially the income.
And so there's multiple subsets of dry eye patients versus big and the east and kind of the inflammatory dry segment. For example, and then the second question is.
Besides neurotrophic keratitis do you all have additional plans to potentially pursue label expansion and other indications for OCR, one such as contact lens intolerance, where China has been mentioned previously or related indications like allergic conjunctivitis and perhaps in a more general sense you could just speak to how you're thinking about pipeline expansion. Thanks.
Okay.
Yeah. Thanks, Patrick for the question, we appreciate that.
And as it pertains to the mechanistic action of OCR, one and I think this is one of the reasons why.
And when we initially started the company we were so excited about the not only the route of administration of the mechanism of action, we've shown and a number of trials that we can clearly increased lacrimal fluid from the lacrimal gland. We've shown in our Imperial study that weekend Degranulate goblets cells on the <unk>.
Perfect for the eye to release those nuisance one of the things that I think is really important to also understand is not only do we released Musa and from the goblet cells and the surface of the eye, but we also released them from the lacrimal gland and so are the human lacrimal gland is the serum mucus Glenn.
And so all of those beneficial components of placing the various proteins growth factors nuisance onto the eye. The lacrimal gland is really and important.
Oregon to keep our eyes healthy even when we injure the ocular surface. If we were to scratch. It for example, we get up regulation of transcriptional factors inside of that lacrimal gland that will heal the cornea and.
The concept of harnessing.
And that pathway that the nervous pathway with the trigeminal parasympathetic pathway and its been.
Something that we're very interested and we do know from animal models and also from electrical stimulation that that pathway and the nasal cavity can also stimulate those might go me and glands. Unfortunately for many dry eye patients and myeloma and glands are atrophic and they may not be able to produce my boom, and that's where that newco aqueous gel.
That we put up onto the ocular surface with the goblet cells and the lacrimal gland come into play.
As you mentioned, we do think that this product has benefits to other disease states such as neurotrophic keratopathy within retrofit Keratopathy, we know that and.
And there is damage to that sub basal nerve plexus, and the cornea and because we are bypassing.
That the route of stimulation.
And we're actually able to stimulate.
Tier film that has been put onto the ocular surface and so we think for certain disease States and this is gonna be very important we know that with no retrofit keratopathy as well that there is some overlap with the dry ice space, many patients that have either hepatic infections or.
And diabetes.
Are often diagnosed with dry eye disease, but in fact, it may be and K and we're very interested and increasing awareness around diagnosis, but also having a product that we think has a mechanism. That's suitable for this disease. There are other indications that we are very interested in obviously.
And we do think that things like contact lens intolerance.
<unk> other uses around the ocular surgeries. The all interesting we plan to begin a robust investigator initiated trials program as we get closer.
And to launch and.
And we are continues.
Continuing to want to.
And expand indications on the label. So one of the things that I think that I'm very proud of Oyster point for US. We are focused on science. We are focused on continuing to bring therapies the patients where there is unmet.
Clinical need and so we will continue to develop and and will continue to.
The expand our indications for various different diseases of the ocular surface. We do have a very robust R&D program and we hope to be able to talk about some of those programs as we move forward.
But we are continuing to be a R&D focused clinical focused and then hopefully with the FDA approval of commercial focused organization that is very very.
Targeted to ocular surface disease, so more to come on the pipeline hopefully soon but at the moment we have.
<unk> per.
Plans to begin the Olympia and K trial of this quarter.
And you know very busy inside with all of the commercial preparations.
Great that's super helpful. Thanks.
Thank you and no further questions I will now turn the call back over the Doctor now for any closing comments.
Yeah.
Thank you operator.
The Oyster point and team has continued to build our commercial capabilities and the strategic fashion, including plans for a competitively sized ophthalmic sales force the launch of Oc <unk> nasal spray and the fourth quarter of 2021 if approved.
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