Q2 2021 EyePoint Pharmaceuticals Inc Earnings Call

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Norma: Good morning. My name is Norma, and I'll be your conference operator today. At this time, I would like to welcome everyone to iPart Pharmaceuticals' second quarter 2021 financial results and recent corporate developments conference call. There will be a question and answer session to follow at the completion of the prepared remarks. Please be advised that the call is being recorded at the company's request. I would now like to turn the conference over to George Elston, C.F., Financial Officer of Ipoint Pharmaceutical. Thank you.

Good morning, My name is normal and.

And I'll be your conference operator today assets.

And I would like to welcome everyone to I pod Pharmaceuticals second quarter 2021 financial results and recent corporate developments conference call and there'll be a question and answer session will follow at the completion of the prepared remarks. Please be advised of the call is being recorded at the company's request I would now like to turn the call.

Conference over to George Ellison, Chief Financial Officer of I point Pharmaceuticals.

Thank you and thank you all for joining us on today's conference call to discuss <unk> Pharmaceuticals second quarter 2021 financial results and recent.

George O. Elston: Thank you, and thank you all for joining us on today's conference call to discuss IPoint Pharmaceuticals' second quarter 2021 financial results and recent corporate developments. With me today is Nancy Lurker, President and Chief Executive Officer, Dr. J. Duker, Chief Strategic Scientific Officer, and Scott Jones, Chief Commercial Officer. Nancy will begin with a review of recent corporate updates.

Corporate developments.

With me today is Nancy Lurker, President and Chief Executive Officer, Dr. Jay Duker, the Chief Strategic Scientific Officer, and Scott Jones, Chief Commercial Officer.

Nancy will begin with the review of recent corporate updates Dr. <unk> will then discuss pipeline developments for E Y P and 19 of 1 and Scott will comment on recent progress made on our commercial activities I will close with commentary on the second quarter 2021 financial results. We will then open up the call for your questions.

George O. Elston: Dr. Duker will then discuss pipeline developments for EYP 1901, and Scott will comment on recent progress made in our commercial activities. I will close with commentary on the second quarter, 2021 financial results. We will then open up the call to your question.

George O. Elston: 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.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, regulatory matters, and timelines, the potential success of our products and product candidates, financial projections, and our plans and prospects.

Earlier. This morning, we issued a press release detailing our financial results as well as commercial and operational developments and a copy of the release can be found and the Investor Relations tab on the corporate website Www Dot I point and form of 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 product candidates financial projections, and our plans and prospects.

George O. Elston: 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 10K, which is filed and is on file 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.

<unk> results may differ materially from those indicated by these forward looking statements as a result of various important factors, including those discussed and the risk factors section of our most recent annual report on form 10-K, which is filed and is on file with the SEC.

And and other filings that we may make with the SEC and 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 and 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 on the.

George O. Elston: 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 I Point Pharmaceutical. Thank you, George.

Now I'll turn the call over to Nancy Lurker, President and Chief Executive Officer of <unk> Pharmaceuticals.

Thank you George Good morning, everyone and thank you for joining us the second quarter was another productive 1 for <unk> pharmaceuticals, as we continue to create a kit of products.

Nancy S. Lurker: Good morning, everyone, and thank you for joining us. The second quarter was another productive one for IPoint Pharmaceuticals, as we continue to create ocular products that prevent blindness and disrupt the current, often difficult treatment paradigms, helping patients see life longer, as well as grow demand for our commercial products, delivering on our overarching mission of bringing innovation to patients with serious ophthalmic diseases. Before turning the call over to my colleagues, I'd like to discuss our most recent achievements from the quarter.

That prevent blindness and disrupt the current often difficult treatment paradigm, helping patients to the life longer as well as growing demand for our commercial products delivering on our overarching mission of bringing innovation to patients with serious ophthalmic diseases before turning the call over to my colleagues I'd like to discuss our most recent achieved.

And then from the quarter.

Nancy S. Lurker: First and foremost, our team continues to execute on our Phase 1 Dobio trial for our lead pipeline asset, EYP 1901, a potential twice-yearly treatment for wet age-related macular degeneration, or otherwise known as wet AMD. And we remain on track to report interim data in the fourth quarter of this year.

First and foremost our team continues to execute on our phase 1 <unk> trial for our lead pipeline assets E. VIP and 19 O..1 a potential twice yearly treatment for wet age related macular degeneration or otherwise known as wet AMD and we remain on track to report interim data in the fourth quarter of this year.

Nancy S. Lurker: In just the first six months of 2021 alone, we initiated our phase one trial, dosed the first patient, and completed trial enrollment. Notably, this quarter, we reported very encouraging 30-day safety data for all cohorts from the Davio trial, citing no serious adverse events. We remain very pleased with our progress, and we are looking forward to reporting interim six-month safety and efficacy results when we have a complete top-line data set in the fourth quarter of this year.

And just the first 6 months of 2021 alone we initiated our phase 1 trial dosed, the first patient and completed trial enrollment.

Notably this quarter, we reported very encouraging 30 day safety data for all cohorts from the top of your trial, citing no serious adverse events.

We remain very pleased with our progress and we are looking forward to reporting interim 6 month safety and efficacy results. When we have the complete top line dataset in the fourth quarter of this year.

Nancy S. Lurker: In addition, based on the Davio trial results, we anticipate initiating phase two trials next year for diabetic retinopathy and retinolvane occlusion. We also expect to start a phase three trial for UTIC-5-0 in the fourth quarter of this year. Utique-5-0 is a potential twice-yearly sustained delivery treatment for chronic uveitis, affecting the posterior segment of the eye. Utique-5-O will be filed as an SMDA upon completion of this single phase-3 clinical trial.

In addition, based on the Derby O trial results, we anticipate initiating phase III trials next year for diabetic retinopathy and retinal vein occlusion.

We also expect to start of phase III trial for <unk> 5.1 in the fourth quarter of this year you take 5 O is of potential twice yearly sustained delivery treatment for chronic UV items affecting the posterior segment of the eye you.

5 O will be filed as an S. N D E and upon completion of this single phase III clinical trial.

On the commercial front, we are thrilled to have recently announced the acceptance of the new category III CPT code for injecting medicines like the execute approved by the American Medical Association. The code becomes effective January 1st and provides an exciting opportunity to improve treatment options for both patients and ophthalmologists alike.

Nancy S. Lurker: On the commercial front, we are thrilled to have recently announced the acceptance of a new Category 3 CPT code for injecting medicines like DECQ, approved by the American Medical Association. The code becomes effective on January 1st and provides an exciting opportunity to improve treatment options for both patients and ophthalmologists alike. We are pleased to be able to offer additional pathways for reimbursement for the administration of Dexecu starting in the first quarter of next year.

We are pleased to be able to offer additional pathways for reimbursement for the administration of the execute starting in the first quarter of next year.

Nancy S. Lurker: We have seen significant increases in customer demand for both of our commercial products this quarter, and we're pleased to report another quarter of strong growth in net product revenues. Additionally, as discussed last quarter, we introduced a new siliconized needle for UTIC, which we believe has driven new customer demand and is providing an enhanced experience for patients and physicians in administering UTIC.

We have seen significant increases and customer demand for both of our commercial products. This quarter and we're pleased to report another quarter of strong growth and net product revenues of.

Additionally, as discussed last quarter, we introduced a new silicon ice needle for Utica, which we believe has driven new customer demand and just providing an enhanced experience for patients and physicians in administering Utica.

We also recently announced the initiation of our executive Scientific Advisory Board to help guide the company as we bring E Y P 19 O 1 through the clinic.

Nancy S. Lurker: We also recently announced the initiation of our Executive Scientific Advisory Board to help guide the company as we bring EYP1901 through the clinic and build our pipeline with new innovative and sight-saving products. We're honored to have this prestigious group of retinal surgeons advise us, and their involvement on the Scientific Advisory Board is a testament to the quality of our product pipeline and the potential that our duracer delivery technology represents. Finally, this quarter, I-Point Pharmaceuticals was included in the Russell 2000 and 3,000 indices, an important signal of IPoint's financial strength throughout this year.

And build our pipeline with new innovative and eyesight saving products.

We're honored to have this prestigious group of retinal surgeons advisors and their involvement in the scientific Advisory Board is a testament to the quality of our product pipeline and the potential that our tourists or delivery technology represents.

Finally, this quarter I point Pharmaceuticals was included in the Russell 2003 thousand indices and important signal of buy points financial strength throughout this year.

And I points inclusion on each index is an exciting the indicator of the market's confidence and the company we continue to build.

Nancy S. Lurker: IPoint's inclusion on each index is an exciting indicator of the market's confidence in the company we continue to build. I'd like to personally thank the incredible team at Eye Point for our company's clinical and financial success, and we are excited to carry our positive momentum forward as we enter the third quarter of 20-2-21. As mentioned, we are eager to report data for a phase one trial of EYP-1901 in the fourth quarter of this year, drive continuous growth for our commercial products, and maintain our strong balance sheet. I'll now turn the call over to Dr. Jay Duker, our chief strategic scientific officer, to provide an update on our lead program, EYP-1901, as well as other pipeline initiatives. Jay?

I'd like to personally thank the incredible team and I point for our company's clinical and financial success and we are excited to carry our positive momentum forward as we ended the third quarter of 2021as.

As mentioned, we are eager to report data from E Y P 19 of 1 phase 1 trial in the fourth quarter of this year drive continuous growth for our commercial products and maintain our strong balance sheet.

I'll now turn the call over to Dr. Jay Duker, our chief of strategic scientific officer to provide and update on our lead program E. P 19 O 1 as well as other pipeline initiatives Jay.

Thank you Nancy and good morning, everyone as Nancy stated earlier and the call. We are quite pleased with the progress thus far on our phase <unk> trial for our lead pipeline asset the white P..19 of 1 of potential twice yearly treatment for wet age related macular degeneration, we are especially proud of and grateful.

Jay S. Duker: Thank you, Nancy, and good morning, everyone. As Nancy stated earlier in the call, we are quite pleased with the progress thus far on our Phase 1 Davio trial for our lead pipeline asset, EYP 1901, a potential twice-yearly treatment for wet age-related macular degeneration. We are especially proud of and grateful to our clinical and regulatory teams for the rapid execution of the Phase 1 trial to date, including initiation, dosing, and completion of enrollment in under- and more recently, a very encouraging positive 30-day safety data report.

To our clinical and regulatory teams for the rapid execution of the phase 1 trial to date, including initiation of dosing and completion of enrollment and under 4 months and more recently, a very encouraging positive 30 day safety debt out of report we are pleased that our study remains on track to read.

Jay S. Duker: We are pleased that our study remains on track to read out top-line data in the fourth quarter of the year. WET AMD is a chronic, progressive, and potentially devastating eye disorder. Its hallmark is the development of abnormal blood vessels that leak fluid in the blood into the macula. It typically presents as blurred vision and can result in a permanent central blind spot in the central vision.

<unk> top line data in the fourth quarter of the year.

Wet AMD is a chronic progressive and potentially devastating eye disorder. It's hallmark is the development of abnormal blood vessels that leak fluid and blood into the macula.

It typically presents as blurred vision and can result in a permanent central blind spot and the central vision. It is the leading cause of vision loss and people over 65 years of age boats and the United States and other developed countries, despite safe and effective FDA approved medications on the market to treat wet AMD there was of.

Jay S. Duker: It is the leading cause of vision loss in people over 65 years of age, both in the United States and other developed countries. Despite safe and effective FDA-approved medications on the market to treat wet AMD, there is a significant opportunity for longer-lasting therapies than those currently available. IPoint seeks to provide a reliable, long-term, sustained-release treatment option that requires fewer visits to the doctor's office. Our lead pipeline asset, EYP 1901, is a potential twice-yearly sustained delivery, intravitrial anti-vege-tept treatment for wet AMD.

Significant opportunity for longer lasting therapies and those currently available.

I point to seeks to provide a reliable long term sustained release treatment option that requires fewer visits to the doctor's office.

Our lead pipeline asset <unk> and 19 O..1 is the potential twice yearly sustained delivery intra vitriol anti VEGF treatment for wet AMD E.

E. P 19 of 1 combines a bio erodible formulation of <unk> points per proprietary <unk> sustained release technology, which has been utilized and 4 FDA approved products with Verona nib of tyrosine kinase inhibitor.

Jay S. Duker: EYP1901 combines a bioerodable formulation of IPoint's proprietary duracert-sustain release technology, which has been utilized in four FDA-approved products, with Vorolinib, a tyrosine kinase inhibitor. The Phase 1-Davio trial is an open-label dose escalation trial of 17 patients across three cohorts. All enrolled patients were previously treated with standard of care anti-vege-f therapy. To reiterate, the positive safety data we reported last month for the Phase 1 Dobrio trial for EYP 1901 showed key safety observations through a minimum of 30-day post-dosing follow-up for all the patients.

The phase 1 <unk> trial is an open label dose escalation trial of 17 patients across 3 cohorts all enrolled patients were previously treated with standard of care anti VEGF therapy.

To reiterate the positive safety data, we reported last month for the Phase 1 David you of trial for E. P..19 of 1 shows key safety observations through a minimum of 30 day post dosing follow up for all of the patients.

To begin with there were no serious adverse events, either ocular or systemic as well as no reported adverse events related to intra ocular inflammation best corrected visual acuity reduction or any elevation of intraocular pressure in any of the 17 patients enrolled and the trial.

Jay S. Duker: To begin with, there were no serious adverse events, either ocular or systemic, as well as no reported adverse events related to intraocular inflammation, best corrected visual acuity reduction, or any elevation of intraocular pressure in any of the 17 patients enrolled in the trials. The post-dosing follow-up also showed no events of endophthalmitis and no retinal detachment or implant migration into the interchamber.

The post dosing follow up also showed no events of endophthalmitis, and no retinal detachment or implant and migration into the inter chamber.

Lastly, the 3 subjects in cohort 1 and have now been followed for a minimum of 5 months with no reported yesterday EPS.

This confirmatory safety data in hand, we remain very excited about the potential of B Y P..19 of 1 for the treatment of wet AMD as well as its application to other severe eye disorders, including diabetic retinopathy and retinal vein occlusion.

Jay S. Duker: Lastly, the three subjects in cohort one have now been followed for a minimum of five months with no reported SAEs. With this confirmatory safety data in hand, we remain very excited about the potential of YP-1901 for the treatment of wet AMD, as well as its application to other severe eye disorders, including diabetic retinopathy and retinal vein occlusion. As discussed last quarter, we are on track to initiate a phase three, 60-person, six-month clinical trial for UTIC-50, a potential twice-yearly sustained delivery treatment for chronic uveitis affecting the poster segment of the eye.

As we discussed last quarter, we are on track to initiate a phase III 60 person 6 months clinical trial for Utica 50 of potential twice yearly sustained delivery treatment for chronic uveitis affecting the post your segment of the eye later this year with results expected in late 2022.

<unk> 50 will use the same non erodible Juris heard formulation and corticosteroid is what is currently in boutique boutique fifties design offers an introvert true insert with of shorter duration of action that provides physicians with the flexibility to dose over shorter intervals compared to the 3 year interval debt Utica currently.

Jay S. Duker: Later this year, with results expected in late 2022, Utique 50 will use the same non-erodable durcert formulation and corticosteroid as what is currently in Utique. Utique 50's design offers an intravitral insert with a shorter duration of action that provides physicians with the flexibility to dose over shorter intervals compared to the three-year interval that Utec currently provides.

<unk>, we plan to file and S. NDA with the FDA and we expect to initiate our phase III trial and the fourth quarter of this year.

We look forward to providing an update on E Y P 19 of 1 as well as our other pipeline initiatives over the upcoming quarters I will now turn the call over to Scott Jones, Chief Commercial officer for the commercial update Scott.

Scott Jones: We plan to file an SNDA with the FDA, and we expect to initiate our phase three trial in the fourth quarter of this year. We look forward to providing an update on EYP 1901, as well as our other pipeline initiatives in the upcoming quarters. I will now turn the call over to Scott Jones, Chief Commercial Officer, for the commercial update.

Thank you Jay this quarter, we are pleased to report a significant rise and customer demand and the product revenues across both of our commercial products the execute on Youtube like many commercial companies, our net product sales and underlying customer demand were negatively impacted by the COVID-19, pandemic and 2020 and into 2020.1 where.

Pleased to see patients returned to doctors' offices and schedule. Their previously delayed surgeries are Q2 net product revenues of $8.7 million. It was 136% increase from Q2.2020. This includes net product revenues of $4.6 million and $4, 1 moving predicts the Q and Youtube respectively.

Scott Jones: Thank you, Jay. This quarter, we are pleased to report a significant rise in customer demand and net product revenues across both of our commercial products, Dex Q and UT. Like many commercial companies, our net product sales and underlying customer demand were negatively impacted by the COVID-19 pandemic in 2020 and into 2021. However, we're pleased to see patients return to doctors' offices and schedule their previously delayed surgery.

Customer demand was approximately 10900 units of the execute 540 units of boutique compared to approximately 7000 units and 400 units respectively for Q1, 2021customer demand.

Record customer demand for the execute as a result of strong performance by our sales and marketing team and our collaboration with our commercial alliance partner and from the <unk>. We're also pleased with the recent announcement of the new category III CPT code for injecting medicines like the execute which we believe will provide physicians with both on opportunity for.

Scott Jones: Our Q2 net product revenues of 8.7 million is a 136% increase from Q2 2020. This includes net product revenues of 4.6 million and 4.1 million for Dexecue and Utique, respectively. Customer demand was approximately 10,900 units of Dexecu and 540 units of Utique, compared to approximately 7,000 units and 400 units, respectively for Q1, 2021 customer demand. This record customer demand for DECQ is a result of strong performance by the buyer sales and marketing team and our collaboration with our commercial alliance partner, Infimus RX.

From a pathway for ocular pursuit of juice and an additional way for I point to serve patients suffering from severe eye disorders.

We believe this accept and should have the positive impact on demand once the COVID-19 becomes effective January 1.2020 2.

Turning to U T demand levels were strong throughout the quarter, resulting from the expansion of our sales and marketing efforts and the rental space last quarter, we successfully rolled out of Siliconized needle for you too and where.

We're very pleased with the physician uptake today, adding to the demand and creating a significantly better procedural experience for patients and physicians. We are incredibly pleased by the progress that we've made during the second quarter to return to execute and you take to increasing demand levels. We believe both products provide a unique sustained delivery.

System that requires fewer visits to the doctor's office of focal point of each product's value proposition the both patients and doctors rely on and we are grateful to both patients and doctors and their continued use and supportive of our products.

Scott Jones: We are also pleased with the recent announcement of a new Category 3 CPT code for injecting medicines like Dexecke, which we believe will provide physicians with both an opportunity for reimbursement pathway for ocular procedures and an additional way for eye care centers to serve patients suffering from severe eye disorders.

We look forward to updating you on revenues and demand and the quarters to come and 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 3 months ended June 30th 'twenty 'twenty..1 were included in the press release issued this morning. My comments today will be focused on a high level review for the quarter.

Scott Jones: We believe this acceptance should have a positive impact on demand once the code becomes effective on January 1st, 2022. Turning to Utique, demand levels were strong throughout the quarter, resulting from the expansion of our sales and marketing efforts in the retinal space. Last quarter, we successfully rolled out a siliconized needle for Utique, and we're very pleased with the physician uptake today, adding to demand and creating a significantly better procedural experience for patients and physicians.

For the 3 months ended June 30th 2021, total net revenue was 9 million compared to $4.1 million for the 3 months ended June 30th 2020. This includes net product revenue for the second quarter of $8.7 million compared to net product revenues for the second quarter ended June 30th 2020 of 3 points.

$7 million.

Net revenue from royalties and collaborations for the second quarter ended June 30 of 2021 totaled <unk> 3 million compared to point $4 million and the corresponding period in 2020.

Operating expenses for the quarter ended June 30th 'twenty, 'twenty, 1 totaled $20 million versus $15.3 million and the prior year period.

Scott Jones: We are incredibly pleased by the progress that we've made during the second quarter to return DECQ and Utique to increasing demand levels. We believe both products provide a unique sustained delivery system that requires fewer visits to the doctor's office, a focal point of each product's value proposition that both patients and doctors rely on, and we are grateful to both patients and doctors for their continued use and support of our products.

This increase was primarily due to a $2.3 million increase and R&D expense, a 1.4 million increase and cost of sales a point $4 million increase and G&A expense and the point $6 million increase and sales and marketing expense.

Non operating income net totaled $1 million and net loss was 10 million or <unk> 35 per cent per share compared to a net loss of $13 million or of $1.4 per share from the prior year period.

Cash and cash equivalents at June 30 of 2021 totaled $127.6 million compared to $44.9 million at December 31, 2020 we.

George O. Elston: We look forward to updating you on revenues and demand in the quarters to come. I would now like to turn the call over to George to review the financials. George?

We expect that cash on hand at June 30 of 2021 and expected net cash inflows from our product sales will enable us to fund our current and planned operations through the end of 2020.2.

George O. Elston: Thank you, Scott. As the financial results for the three months ended June 30th, 2021 were included in the press release issued this morning, my comments today will be focused on a high-level review of the quarter. For the three months ended June 30th, 2021, total net revenue was $9 million compared to $4.1 million for the three months ended June 30th, 2020. This includes net product revenue for the second quarter of $8.7 million compared to net product revenues for the second quarter ended June 30th, 2020, of $3.7 million.

In conclusion, we are thrilled with I points progress and the second quarter and first 6 months of 2021 and are well capitalized to advance our product pipeline to key value inflection points.

Thank you all very much for listening this morning, and I'll now turn the call over to the operator for questions.

Thank you as a reminder to ask a question you will need to press star 1 on your telephone to withdraw your question. Please press the pound key.

Our first question comes from Jennifer <unk> with Cantor Fitzgerald. Your line is now open.

Hey, everyone and thanks for taking the question and congrats on a very positive quarter I have a few questions here maybe first.

And the PR you you noted that you've continued to see momentum for Utica Index. Q I was just wondering where are we on that road to cross the the profitability that you've talked about a breakeven and that you've talked about and then on.

George O. Elston: Net revenue from royalties and collaborations for the second quarter ended June 30th, 2021, totaled 0.3 million compared to 0.4 million in the corresponding period in 2020. Operating expenses for the quarter ended June 30th, 2021, totaled 20 million versus 15.3 million in the prior year period. This increase was primarily due to a 2.3 million increase in R&D expense, a 1.4 million increase in cost of sales, a 0.4 million increase in GNA expense, and a 0.6 million increase in sales and marketing expense.

And the recovery of cataract procedures and I'm wondering have you seen any impact from the variants that have been going round and then my next question is with the executive S. A b on board what is the latest update on I guess, where you're thinking about in terms of a pipeline beyond E Y P 1901 and.

What are you thinking about it yet on how to leverage the the tourists or technology.

<unk>.

Okay. Thank you Jennifer.

As to profitability, we actually do expect to potentially hit profitability with you take the.

This year, though I want to put a caveat. It also is highly dependent on the impact of the Delta variant, but right now we seem to be and a very good spot and.

George O. Elston: Non-operating income net totaled $1 million, and the net loss was $10 million or 35 cents per share compared to a net loss of $13 million or $1.4 per share for the prior year period. Cash-in-Cash equivalents at June 30, 2021, totaled 127.6 million compared to 44.9 million at December 31, 2020. We expect that cash on hand at June 30th, 2021, and expected net cash inflows from our product sales will enable us to fund our current and planned operations through the end of 2022.

Should expect to turn profitable.

The execution will take a little longer just because it's the though it's coming back very very nicely we.

We expect that it will probably be some time.

And potentially in the first half of next year, maybe maybe around that timeframe or later, but again, it's very dependent right now on the Delta variant as to the variance. Let me just say, we're not seen an impact yet.

But however, as some of the listeners May know, Florida. As an example has just asked in a number of counties for the hospitals to not do any more of elective procedures.

So, we're just watching and waiting and seeing if the impact if there is an impact and right now again, we're not seen it but there.

George O. Elston: In conclusion, we are thrilled with iPoint's progress in the second quarter of the first six months of 2021 and are well capitalized to advance our product pipeline to key value inflection points. Thank you all very much for listening this morning, and I'll now turn the call over to the operator for questions. Thank you. As a reminder, to ask a question, you'll need to pass.

And there very well could be so hopefully we will get through this delta of surge.

Minimal impact, but we don't know.

For the F B and.

And actually just just repeat that question on the SCB I'm, sorry, I didn't quite fully understand what you're asking on that.

Oh, Yeah sure I'm just wondering you know what the latest is in terms of of your thinking.

Operator: you'll need to press start on your telephone. To withdraw your question, please press the pound key.

On the pipeline on building out of pipeline with the director of technology.

Jennifer M. Kim: Our first question comes from Jennifer Kim with Cancer Fitzgerl. Your line is now open.

Could we see like updates on on where Youre thinking about okay on when I'm in and actually have Dr. Jay Duker answer that question and I believe J J.

Nancy S. Lurker: Hey everyone, thanks for taking the question and congrats on a very positive quarter. I have a few questions here. Maybe first, in the PR, you noted that you've continued to see momentum for you to conduct Q. I was just wondering where we are on that road to profitability that you've talked about, or the break-even that you've talked about? And then on the recovery of cataract procedures, I'm wondering, have you seen any impact from the variants that have been going around?

Thanks, Nancy I'm here.

So thanks for the question Jennifer I think at a very high level. What we're thinking about now is is there a sort of has been around for many years. It's 50 approved and 4 products, but that was the non erodible form of the research and our current RVO study at least and the short term I think we're very comfortable with the <unk>.

Nancy S. Lurker: And then my next question is, with the executive SAB on board, what is the latest update on, I guess, where you're thinking about in terms of a pipeline beyond EYP-1901, and what are you thinking about how to leverage the DURRSEAR technology? Thanks.

50 of the erodible form of the research.

Of which makes us confident that we'll be able to put other small molecules into the erodible form of the research for other on met post your segment diseases.

We have a whole litany of indications that we're looking at we have some molecules that we're very excited about.

Nancy S. Lurker: Okay, thank you, Jennifer. As to profitability, we actually do expect to potentially hit profitability with Utique this year. Though I want to put a caveat, it also is highly dependent on the impact of the Delta variant. But right now, we seem to be in a very good spot and should expect to turn profitable. Dexecule will take a little longer just because it's coming back very, very nicely. We expect that it will probably be sometime in the potentially first half of next year, maybe around that time frame or later.

And I think debt.

You will see over the next.

A couple of quarters, how our thinking is evolving with respect to market size and need for long term drug delivery with various mechanisms of action.

And in the longer run with respect to the pipeline we're looking at.

Different technology, that's going to enable us to deliver small molecules large molecules as well as small molecules of <unk>.

<unk> currently has limited the small molecules, but where.

Nancy S. Lurker: But again, it's very dependent right now on the Delta variant. As to the variants, let me just say, we're not seeing an impact yet, but, however, as some of the listeners may know, Florida, as an example, has just asked in a number of counties for the hospitals to not do any more elective procedures. So we're just watching and waiting and seeing if there is an impact. And right now, again, we're not seeing it, but it could very well be. So hopefully, we'll get through this delta surge with minimal impact, but we don't know. For the SAB, and actually just repeat that question on the SAB, I'm sorry; I didn't quite fully understand what you're asking.

Thinking longer term about large molecule delivery.

So without <unk>.

Going into specific diseases of Moh, because we actually haven't announced those yet I think that's how we're at a high level thinking about the pipeline.

Okay. That's that's really interesting. Thank you everyone and congrats again.

Thank you Jennifer.

Thank you and <unk>.

Next question comes from Georgia, Giordano with Cowen and company. Your line is now open.

Hey, Thank you so much for taking our questions and congratulations on all of the progress. So I guess to start with on the safety update for 19 on Ducks.

Duke or maybe if you could comment on how critical that initial 30 day periods for the incidents of any ease of entrance based on your experience.

And that's when the majority of ocular as of.

Jennifer M. Kim: Oh, yeah, sure. I'm just wondering what the latest is in terms of your thinking on a pipeline, on building out a pipeline with the Dura Cert technology. Could we see, like, updates on where you're thinking about? Okay. Yeah, I'm going to actually have Dr. Jay Duker answer that question. I believe Jay... Yeah, thanks, Nancy.

Occur with other treatments.

And just help us understand.

Kind of like that initial safety data.

And then just the follow up on that you indicated that you had not observed and you'd be CVA and reduction as an AE could you clarify the number of letter of reduction and BCD and needed to classify it as the knee share.

Thanks for the questions George and I'll go back does the your second question is the quickest to answer so I'll do that 1 first.

Jay S. Duker: I'm here. So, thanks for the question, Jennifer. I think at a very high level, what we're thinking about now is, you know, DuraCert has been around for many years. It's FDA-approved for products, but that was the non-erodible form of DuraCert.

And the <unk> trial, it was 15 letters or 3 lines to be and AE.

So we have not observed anybody at that level so far.

With respect to the timing.

Jay S. Duker: In our current Dauvio study, at least in the short term, I think we're very comfortable with the safety of the erodible form of DuraCert, which makes us confident that we'll be able to put other small molecules into the erodible form of DuraCert for other unmet posture segment diseases. We have a whole litany of indications that we're looking at. We have some molecules that we're very excited about, and I think that you will see in the next couple of lessons.

The.

The.

Injection procedure itself, regardless of needle size or method or whatever drug you're delivering the injection itself can have.

Side effects, you can get and adult from Midas you.

You can have trauma to the retina you can create a detached retina vitreous hemorrhage any of those things can happen right around the time of the injection and so with 30 days data with the last injection.

Jay S. Duker: orders, how our thinking is evolving with respect to market size and the need for long-term drug delivery with various mechanisms of action. In the longer run, with respect to the pipeline, we're looking at different technologies that will enable us to deliver small molecules, large molecules, as well as small molecules. DuraC currently is limited to small molecules, but we're thinking longer term about large molecule delivery. So without going into specific diseases or MOAs, because we actually haven't announced those yet, I think that's how we at a high level are thinking about, Okay, that's really interesting. Thank you, everyone, and congrats again.

Confident debt injection related ftes were not a problem and this study.

And longer term.

Worry.

A little bit more about your API, causing a problem now that's the safer rolling it has been studied as an oral drug and wet AMD and never showed any signs of any ocular problems.

We delivered orally the.

Doses, we're using we don't believe or of 1 it would have any enough systemic absorption to cause any systemic problems, but theres always until you do it there's always the question will there be.

Any type of problem from a long term drug release of of Teekay on and again that has not been reported and has not been reported by any of our competitors are.

Jennifer M. Kim: Thank you. Our next question comes from Georgie Jordanov with Tewan and Company. Your line is not open.

But when you look more towards the long term.

All of their visual acuity problems over 6 months.

Georgie Jordanov: Hey, thank you so much for taking our questions and congratulations on all the progress. So I guess to start with on the safety update for 1901, Dr. Duker, maybe if you could comment on how critical that initial 30-day period is for the incidence of any AE's of interest based on your experience. It is when the majority of ocular adverse events occur with other treatments and just help us understand kind of like that initial safety data.

That might be ascribable to not the underlying disease state, but rather to the drug itself and again. So that's the difference between short term and long term.

We never anticipated having issues you know you don't know till you do it in the human but because the experience with the Dura search non erodible was so extensive we really we're comfortable that this drug delivery was going to be well tolerated with the eye and I would say so far and the 17th.

Georgie Jordanov: And then just to follow up on that, you indicated that you have not observed any BCVA reduction as an AE. Could you clarify the number of letter reduction in BCVA needed to classify it as an AE? Sure. Thanks for the questions, Georgie. And I'll go back. Your second question is the quickest to answer, so I'll do that one first.

Patients, it's been very well tolerated.

That is great and then I only you presented some recently presented some animal model data on the kinetics of Friendly's for 19, no on really demonstrating that zero or the kinetics reduce debt even when you have multiple implants. So maybe could you discuss how you selected the doses.

Jay S. Duker: In the Davio trial, it was 15 letters or three lines to be an AE. So we have not observed anybody at that level so far. With respect to the timing, the injection procedure itself, regardless of needle size or method or whatever drug you're delivering, the injection itself can have side effects. You can get endophthalmitis, you can have trauma to the retina, you can create a detached retina, or vitreous hemorrhage, any of those things can happen.

You decided to bring forward and the <unk> trial share them.

And with that.

Do you of any plans for any further reformulation of the current clinical doses.

So the first question is of little bit complicated.

Jay S. Duker: right around the time of the injection. And so with 30 days' data on the last injection, we're confident that injection-related SEEs were not a problem in this study. Longer term, you'd worry a little bit more about your API causing a problem.

There are multiple ways, we can formulate the actual implant multiple ways, we can change it theres needle size needle bore the lengths of the implant.

Jay S. Duker: Now, that's to say, Varolinib has been studied as an oral drug in wet AMD and never showed any sign of any ocular problems when delivered orally. At the doses we're using, we don't believe Erlin would have enough systemic absorption to cause any systemic problems. But there's always, until you do it, there's always a question, will there be any type of problem from a long-term drug release of a TKI? And again, that has not been reported, has not been reported by any of our competitors.

And.

The number of implants are 1 of the things that you should all realize is that we have the ability to inject up to 3 implants for the single injection.

And we did that and the high dose of the <unk> trial.

Multiple injections to achieve certain drug levels is not favorable for patients or physicians and so the ability to put 3 implants into the eye not only safely, but effectively it's as we hope to see and the aveo and also in the long term when you talk about pipeline brings up the possibility of using multiple drugs and a singer.

Jay S. Duker: But when you look more towards the long term, are there, you know, visual acuity problems over six months that might be ascribable to not the underlying disease state but rather to the drug itself? We never anticipated having issues.

<unk> injection with different implants.

Going off of the question a little bit there, but I did want to mention that so back to the question.

Sure.

The limited by the FDA and the safety issues to not be able to have of tissue exposure above what we showed was safe and animals.

Jay S. Duker: You know, you don't know until you do it in a human, but because the experience with the DuraCERT non-erodable was so extensive, we really were comfortable that this drug delivery was going to be well-tolerated in the eye. And I would say, so far, in the 17 patients, it's been very well tolerated. That is great.

So 1 of the limitations, we had in <unk> was the ability of using a rabbit eye to put enough implants and the scale to the equivalent of of human and showed it was safe.

On the rebate hi, yes at the highest dose we could achieve was using 6 implants via 2 injections and we did show that was safe but.

Jay S. Duker: And then, finally, you recently presented some animal model data on the kinetics of release for 1901, really demonstrating that zero-order kinetics for DuraCert, even when you have multiple implants. So maybe you could discuss how you selected the doses you decided to bring forward in the Dabus trial? Sure.

Scalable that was the 3 implants and the human eye, So that was our high dose.

Theoretically 1 could go higher.

And that would require another set of preclinical studies to show that that again that tissue exposure was safe and animals before he went and humans, but at the present time.

Jay S. Duker: And related to that, do you have any plans for any further reformulation of the current clinical doses? So the first question is a little bit complicated because there are multiple ways we can formulate the actual implant, and multiple ways we can change it. There's needle size, needle bore, the length of the implant, and the number of implants. One of the things that you should all realize is that we have the ability to inject up to three implants with a single injection, and we did that at the high dose in the Davio trial.

We are sticking with the 3 doses that we used and David.

And.

Against the Uretic Lee, we could go higher but there was no and.

Now some of that at this point that we're going to.

Got it and then do you have any plans to reformulate it into a single implant or do you think the just given the.

Great and <unk> seen so far you don't really need that as well the.

Jay S. Duker: Multiple injections to achieve certain drug levels are not favorable for patients or physicians. And so the ability to put three implants into the eye, not only safely but effectively, as we hope to see in Davio, also in the long term when you talk about pipeline, brings up the possibility of using multiple drugs in a single injection with different implants. I'm going off the question a little bit there, but I did want to mention that.

The low dose and the the RVO was the single implant.

And until we have some efficacy data.

It's certainly conceivable that of single implant will be efficacious in which case that may be the dose.

There are other indications as well and since longevity of the implant and the ability to treat every 6 months versus every year may make a difference for different indications, we're exploring those thoughts about about.

The actual dosage, perhaps being different and different disease states, depending on the verge of levels et cetera. So we've we've had thoughts around those hands, but but at this 0.0, what I can state is 1.2 or 3 implants in the short term appears to be very well tolerated by the eye and until we've got some F.

Jay S. Duker: So back to the question, we're limited by the FDA and the safety issues to not be able to have a tissue exposure above what we showed was safe in animals. So one of the limitations we had in Davio was the ability to use a rabbit eye to put enough implants in that scaled to the equivalent of a human and show that it was safe. So in the rabbit eye, the highest dose we could achieve was using six implants via two injections, and we did show that was safe, but scalable; that was three implants in the human eye. So that was our high dose.

The cacique data to really look at.

It's it's not clear, which dose or which number of implants will be going forward with.

Jay let me kind of add to that as well, which is that these implants as you know dissolve and they release drug so that right now.

Jay S. Duker: Theoretically, one could go higher, and that would require another set of preclinical studies to show that, again, that tissue exposure was safe in animals before we went to humans. But at the present time, we are sticking with the three doses that we used in Davio and And, you know, again, theoretically, we could go higher, but there is no announcement at this point that we're going to. And then, do you have any points for reformulating it into a single implant, or do you think that, just given the great safety you've seen so far, you don't really need that?

They the implant itself seems to last about 6 months after it depletes its core, but it's already shrunk considerably by.

By the time the drug is all depleted so even though you might have the implants, there they become incredibly small overtime and so by the time of the remaining implant is totally dissolved its hardly any of the left at all so even if you have 2 or 3 implants, it's just not that much left and the eye.

The overdone.

Over time, yes.

Thank you. So much. This is this is super helpful. Thank you.

Thank you. Our next question comes from Yadkin, The Ninja with Guggenheim Partners. Your line is open.

Hey, guys congrats on a good quarter and thank you for taking my question just a couple from me so with.

Jay S. Duker: Well, the low dose in Davio was a single implant. And until we have some efficacy data, you know, it's certainly conceivable that a single implant will be efficacious, in which case that may be the dose. There are other indications as well, and since longevity of the implant and the ability to treat every six months versus every year may make a difference for different indications, we're exploring those thoughts about, you know, the actual dosage, perhaps being different in different disease states, depending on the VEGF levels, et cetera.

With regard to the Davita readout could you maybe comment on how much follow up you need before you will disclose the data and just laid out for us and what the expectations are for that study what you need to show in order to move forward and then I have a follow up sure I'd be happy to answer that your team we.

We've said all along that.

We're going to talk publicly about 6 months data.

From an efficacy perspective.

We think that's important.

But from a perspective of.

Jay S. Duker: So we've had thoughts around those ends, but at this point, what I can state is one, two, or three implants in the short term appear to be very well tolerated by the eye. And until we've got some efficacy data to really look at, it's not clear which dose or which number of implants will be used. Jay, let me just add to that as well, which is that these implants, as you know, dissolve as they release the drug, so that right now, the implant itself seems to last about six months after it depletes its core, but it's already shrunken considerably by the time the drug is all depleted.

On a efficacy in the sense of and the marketplace.

<unk>.

And while we're not planning on announcing 4 months data.

We believe that really at a minimum of any of of the sustained release products out there has to show sufficient efficacy over at least 4 months because the injectable drugs that are available now or soon to be available like first of the map. If it's the FDA approved is showing some signs that it can be efficacious from.

For 4 months and a significant number of patients so and in order to be successful and the marketplace. We think that's the minimum.

Jay S. Duker: So even though you might have the implants there, they become incredibly small over time. And so by the time the remaining implant is totally dissolved, hardly any is left at all. So even if you have two or three implants, there's just not that much left in the eye. Over time.

But 6 months, it's really been our target and we're targeting a the implants to last that long and so our plan is to talk about efficacy data. When we have a full 6 month top line data for for the set now what we expect is remember these are all previously treated patients patients with wet AMD when the.

Georgie Jordanov: Thank you so much. This is super helpful. Thank you.

Operator: Thank you. Our next question comes from Yat and Sunidja with...

The first get diagnosed and the first get treated with standard of care. They gain really all deficient and the first 2 to 3 months of injection and so the patients who entered the study we don't really believe there's much room to improve their vision.

Yatin Suneja: comes from Yance and Seneja with Duchenheim Partners. Your line is open. Hey, guys, congratulations on a good quarter, and thank you for, mean. So with regard to Davia readout, could you maybe comment on how much follow-up you need before you disclose the data and just lay it out for us what the expectations are for that study, what you need to show in order to move forward, and then I have a question. Sure, I'd be happy to answer that, Yudin.

So we expect the visual acuity used to be roughly the same at 6 months and I say, roughly there's always variability and visual acuity visual acuity surprisingly isn't really that quantitative and.

And so there is always a little noise and the system 3 letters of 3 letters day on and that's just that's noise and the system, but visual acuity should be stable, we'd love to see a little bit of improvement, but at the partially depends on what type of patients. We actually enrolled what we don't want to see is the significant reduction in the vision across all of the cohorts, which would suggest that either were not <unk>.

Jay S. Duker: We've said all along that we're going to talk publicly about six-month data from an efficacy perspective. We think that's important, but from a perspective of efficacy in the sense of the marketplace, while we're not planning on announcing four-month data, we believe that really, at a minimum, any of the sustained release products out there has to show sufficient efficacy for at least four months. Because the injectable drugs that are available now or soon to be available, like Verisimab, if it's FDA-approved, So in order to be successful in the marketplace, we think that's just a few. That's the minimum requirement.

<unk> or we may be having some toxicity problem, so with visual acuity look for rough stability.

I'd say the same thing for OTT subfield thickness octu's of nice biomarker for <unk> activity and we.

We expect that the patient should essentially remained stable.

Relatively speaking.

Jay S. Duker: But six months is really our target, and we're targeting the implants to last that long. And so our plan is to talk about efficacy data when we have a full six-month top-line data for the set. Now, what we expect is, remember, these are all previously treated patients. Patients with wet AMD, when they first get diagnosed, and they first get treated with standard of care, they gain really all their vision in the first two to three months of injection.

So you may have fluctuations and the OCC thickness of 2030, 40, microns up or down again that can be a little bit of noise. There can be a little bit of sub retinal fluids, it forms which doesn't necessarily affect division.

And so we look overall for OCD stability also.

And then.

1 of the other measures is is the rescue rate for all of these are sustained release and in the phase 1 and there was a ability for the investigator to rescue.

Patient, who appears to have increasing fluid and or decreasing vision due to wet AMD activity and so.

Jay S. Duker: And so the patients who entered the study, we don't really believe there's much room to improve their vision. So we expect visual acuities to be roughly the same at six months. And I say roughly because there's always variability in visual acuity. Visual acuity, surprisingly, isn't really that quantitative. And so there is always a little noise in the system, you know, three letters up, three letters down.

And we hope that the rescue rate is over the first 6 months is kind of again a reasonable amount.

And there's no real target here I would say, but if the ice.

Or are showing rescue rates of less than 50% I think that we have the very successful potential product and I'd also add to that the end of our study is low which is a problem. It's the only 17 with 3 cohorts and so it's gonna be a little bit hard to draw efficacy conclusions based on.

Jay S. Duker: But visual acuity should be stable. We'd love to see a little bit of improvement, but it partially depends on what type of patients we actually enrolled. What we don't want to see is a significant reduction in vision across all the cohorts, which would suggest that either we're not efficacious or we may be having some toxicity problem. So with visual acuity, look for rough stability. I'd say the same thing about OCT subfield thickness.

On that.

But if we are able to identify the patients who.

And they have done well with the implant.

And that will really help guide us for the entry criteria and upcoming studies and and I do believe strongly that we should be able to do that and there'll be patients whose characteristics on photographs or vision, where OCD going into the study may predict how they do in which case.

Jay S. Duker: OCT is a nice biomarker for VEF activity, and we expect that the patient should essentially remain stable, you know, relatively speaking. So you may have fluctuations in the OCT thickness of 20, 30, 40 microns up or down. Again, that can be a little bit of noise. There can be a little bit of subretinal fluid that forms, which doesn't necessarily affect the vision.

Efficacy and the sense of rescue free rates and the phase 1 we believe that we'll be able to improve on that and upcoming trials, because we will have data on who did well and who didn't.

Yeah, and let me just add to that as well, which is remember that the FTA criteria in a pivotal trial.

For your endpoint in these drugs and in these diseases. They should say is always best corrected visual acuity. So that is going to be the primary endpoint secondary endpoints and youre looking at.

Jay S. Duker: And so we look overall for OCT stability also. And then one of the other measures is the rescue rate. For all of these sustained release in phase one, there is the ability for the investigator to rescue a patient who appears to have increasing fluid and or decreasing vision due to wet AMD activity. And so we hope that the rescue rate over the first six months is, again, a reasonable amount. There's no real target here, I would say.

Central subfield thickness and fluid levels and rescue rates. Nevertheless, as Jay said right now we're looking at all 3 and it's the compilation of all 3 that will help guide us as we move into our next stage of studies.

Got it very helpful. And then maybe 2 more questions from US day. So you provided the 30 day safety update do you plan to provide additional lots of 60 months.

Jay S. Duker: But if the eyes, you know, are showing rescue rates of less than 50%, I think that we have a very successful potential product. And I'd also add to that. The number of patients at the end of our study is low, which is a problem. It's only 17 with, you know, three cohorts.

Before you disclosed the interim data and then the second part is you mentioned for the lowest dose most of the patients or the patients have been through 5 months and no reported SAE do you have any similar up debt for the second the other 2 doses.

Jay S. Duker: And so it's going to be a little bit hard to draw efficacy conclusions based on that. But if we're able to identify the patients who have done well with the impact, that will really help guide us for the entry criteria in upcoming studies. And I do believe strongly that we should be able to do that.

Yeah, Jay actually let me get the answer the latter part of that question and then you take the first part of the question. So.

We actually can announce that we're actually through 6 months on cohort, 1 and we've seen no SAE and so.

And we're very pleased and as for cohort 2 and 3 obviously of course, you you titrate up.

Jay S. Duker: And there will be patients whose characteristics on photographs or vision or OCT going into the study may predict how they do, in which case efficacy in the sense of rescue-free rates in phase one, we believe that we'll be able to improve on that in upcoming trials because we'll have downed add on who did well, Yeah, and let me just add to that as well, which is to remember that the FDA criteria in a pivotal trial for your endpoint in these drugs and in these diseases, I should say, are always best corrected visual acuity.

Ensuring that each dose cohort and safe. So you expect the this can be a lag between each cohort and should go up and dose. So we're still waiting to see on a full cohort 4 months for <unk> in.

And the other cohorts, so we very well could announce I'm not sure. It adds a whole lot of at this point, we are out pretty far already and we're really happy with what we're seeing.

Got it and then the final question and on the commercial products and obviously you saw a very nice rebound of very good performance in Q2 can you maybe give a little bit.

Jay S. Duker: So that is going to be the primary endpoint. Secondary endpoints, then, you're looking at, you know, central subfield thickness, fluid levels, and rescue rates. Nevertheless, as Jay said, right now, we're looking at all three, and it's the compilation of all three that will help guide us as we move into our next stage of studies.

And how the last 5 weeks of Q3 is looking relative to Q2. Thank you.

George do you want to take that.

Okay.

And we're talking.

Beginning of the.

Beginning of the re of 3 so yes July and August right.

And we don't we don't guide quarter to quarter, but.

I think the momentum that we saw from Q3 as Nancy pointed out I'm sorry in Q2.

Yatin Suneja: Then maybe two more questions. First, you provided the 30-day safety update. Do you plan to provide additional, let's say, 60 months before you disclose the interim data? And then the second part is you mentioned that for the lowest dose, most of the patients, or patients have been through five months and no reported adverse events. Do you have any similar update for the other two?

So far we haven't seen any impact from the Delta variant and the space. Obviously, we're watching that closely because it's really you know some states for example, and we're starting to hear some noise.

About slowdowns.

At least so far into Q3.

It's tracking at our expectations.

Great. Thank you so much.

Nancy S. Lurker: Yeah, Jay, actually, let me just answer the last part of that question, and then you take the first part. So we can actually announce that we're actually through six months on cohort one, and we've seen no SAEs. So we're very pleased, and as for cohort two and three, obviously, of course, you titrate up to ensure that each dose cohort is safe. So you expect that there's going to be a lag between each cohort as you go up in dose.

Thank you. Our next question comes from <unk> Chen with H C. Wainwright. Your line is now open.

Thank you for taking my questions, so with respect to U T O.

The.

The phase III trial, that's going to start in the first quarter on how many patients you wouldn't have to growth of this call.

We're expecting 60 total debt will be a positive.

Control or basically it's a channel that gets injected so that is of controlled study with a total of 60 patients.

Nancy S. Lurker: We're still waiting to see a full cohort for month four in the other cohort, so we could very well announce it. I'm not sure it adds a whole lot at this point. You know, we're out pretty far already, and we're really happy with what we're seeing. And then the final question is on the commercial product. Obviously, you saw a very nice rebound or a very good performance. Can you maybe give a little bit of color, you know, how the last five years are looking relatively? George, do you want ice cream?

And do you expect to have the results top line results by the end of 2020.2.

Potentially it depends on.

How long it takes us to enroll those patients you T. Remember posterior segment uveitis is an orphan disease. So sometimes it can take a little longer to enroll but that is our target.

Okay and Youtube.

<unk> hundred 50 will be based on the power erodible tourists or technology right.

No and the reason for that is that we want to be able to file an S and da to file and F&B EBITDA and get it on the market sooner. We only have to do 1 study and as a result, we have to piggyback off of the current U T. N D E and that is with the non erodible. However, let me just say this it is.

George O. Elston: We're talking beginning of 2-3, sir, yeah, July and August, right? Yeah, so, you know, again, we don't guide quarter to quarter, but, you know, I think the momentum that we saw in Q3, as Nancy pointed out, I'm sorry, in Q2, we haven't seen any impact from the Delta variant in space. You know, obviously, we're watching that closely because it's really, you know, in some states, for example, we're starting to hear some noise about slowdowns, but you know, at least so far into Q3, it's tracking at our expectations. Great.

1 third the size so its 1 third the length of the actually I'm sorry.

Yeah, It's 1 third of the length of the current Utica 180, that's on the market today, so it's even smaller and.

And again recall this is an extremely small implant already particularly relative to the volume of the vitreous, we've seen no problems whatsoever with multiple injections of boutique.

Yatin Suneja: And the next question comes from Yi-10 with H.C. Wainwright. Your line is now open. Thank you for taking my questions. So with respect to UT 50, the phase three trial that's going to start in the first quarter, how many people?

And I might even add as you know.

The.

There are other drugs on the market that are non of Rotable that also have not seen any problems and I will just mentioned of ILUVIEN. So we don't expect.

And to see any issues with it being non erodible because it's so small.

Okay. So theres no change.

The injection of device so all of the pursuit of yourself right.

No there.

And there are not and I will say, we are working on of new.

What I would call of high Tech delivery device that that takes time that requires its own separate filing with the FDA, but right now the current delivery device. We've made some enhancements to it over the last 18 months, we of the silicon the silicon items needle.

Yi-10: How many patients would you have to enroll for this? We're expected

Nancy S. Lurker: We're expecting 60 total that will be a positive control, or basically, it's a sham that gets injected. So that is a controlled study with a total of 60 patients. And you expect to have the results, though my results by the end of 20. Possibly, it depends on how long it takes us to enroll those patients. Remember, posterior segment uveitis is an orphan disease, so sometimes it can take a little longer to enroll, but that is our target.

And that improved the packaging so right now we're pleased with how it's performing in the marketplace.

Got it got it.

With respect to the royalty income do you expect any going forward.

And I can answer that so yes, so you on that.

Call that in December of last year, we monetize the ILUVIEN and royalty.

Nancy S. Lurker: Okay, and UTIC 50 will be based on the bowel erodible zero, No. And the reason for that is that we want to be able to file an SNDA to file an S&A and get it on the market sooner. We only have to do one study.

And received $16.5 million upfront payment for the most of which we applied to pay down our debt.

And so what you see coming through from royalty income.

Is the accounting treatment of debt prepayments and so that's going to be a fairly standard number each quarter and.

Nancy S. Lurker: And as a result, we have to piggyback off of the current Utique NDA, and that is with the non-erodable. However, let me just say this. It is one-third the size, so it's one-third the length of the, actually, I'm sorry, yeah, it's one-third the length of the current Utique 180 that's on the market today.

And it's non cash so I think you should look at royalty income for the U S are the the ILUVIEN sales.

And that regard, it's just the non cash accounting entry and that comes through every quarter.

We will ultimately receive royalties from our partner and China Hakim mentioned.

Nancy S. Lurker: So it's even smaller. And again, recall, this is an extremely small implant already, particularly relative to the volume of the vitreous. We've seen no problems whatsoever with multiple injections of Utique. And I might even add, as you know, there are other drugs on the market that are non-erodible that also have not seen any problems. I'll just mention alluvian.

The they have their version of Youtube on file with the regulatory agencies, there and we could start seeing royalty income as early as next year from from those programs and we're not guiding on what those numbers would be but that's when it will change is when some of the China steel sales start kicking in.

Got it thank you.

Nancy S. Lurker: So we don't expect to see any issues with it being non-erodable because it's so small. So there's no change in the injection. No, there is not.

Thank you. The next question comes from Yale Jen with Laidlaw. Your line is now open.

<unk>.

Good morning, and thanks for taking the questions.

Yi-10: Now, I will say we are working on a new, what I would call a high-tech delivery device, but that takes time and requires its own separate filing with the FDA. But right now, the current delivery device, we've made some enhancements to it over the last 18 months. We have a siliconized needle.

My first question and ask you to above the technology, you'll have the erode the boat tour of cells.

Just curious debt.

Is that.

The ERO ability on the timing for that can be.

Nancy S. Lurker: We've improved the packaging. So right now, we're pleased with how it's performing in the marketplace. With respect to the royalty income, do you expect any going forward? Yeah, I can answer that.

Debt going forward.

And I assume you'll have something longer than 6 bonds and eventually developed.

Go ahead Jay.

I'm happy to answer that.

George O. Elston: So, yeah, so, yeah, on that, remember, I recall that, in December of last year, we monetized the Alluvian royalty and received $16.5 million up-front payment for that, most of which we applied to pay down our debt. And so what you see coming through for royalty income is the accounting treatment of that prepayment. And so that's going to be a fairly standard number each quarter, and it's non-catch

Yes.

There are ways that we can alter the matrix of the erodible form of duress shirt to make it last longer or shorter now some of that is really dependent on the solubility of the drug and so whatever the drug is there are brackets around fast versus slower.

The lease and remember also we need to get drug levels and the eye that will treat the underlying disease effectively and safely.

Yi-10: So, you know, I think you should look at royalty income for the U.S. or Alluvian sales in that regard. It's just a non-cash accounting entry that comes through every quarter. We will ultimately receive royalties from our partner in China Occumption. They have their version of UT on file with the regulatory agencies there, and we could start seeing royalty income as early as next year from these programs. We're not guiding on what those numbers will be, but that's when they will change when some of the Chinese sales start kicking in. Got it.

So we can alter many things about the implants as I mentioned earlier size of number.

And board of the needle and the way, we prepare the drug matrix to alter the release rate.

Does that answer the question yes.

Yes, absolutely and maybe of 2 more here. The first is the housekeeping 1 debt you will happen your line.

And I and the P&L call of gain on extinguishment of debt.

And is it just a 1 time event.

Situations.

Yeah George.

Neil Jim: Thank you. Thank you. The next question comes from Neil Jim with Laidlaw. Your line is now open.

George Yes, so and during the second quarter.

We had you may recall, we had of a.

Payroll protection plan loan.

Neil Jim: Good morning, and thanks for taking the question. My first question is actually about the technology. You have the erodable duress cells.

Granted to us last year that was forgiven.

Second quarter of this year and so thats a 1 time.

Gain on extinguishment of debt of a little over $2 million.

Jay S. Duker: I'm just curious if your erobility or the timing for that can be adjusted going forward. Let's assume you have something longer than six months eventually developed. Go ahead, Jay. Yeah, so I'm happy to answer that. Yes, there are ways that we can alter the matrix of the erodable form of durassert to make it last longer or shorter.

Okay and maybe.

And I repeat.

Okay, Yeah that's.

That's helpful and then maybe the last question here.

Is that the.

This quarter over the last quarter seems to be the best I've seen quarterly in terms of the revenue for both Utica and.

That's the cute.

Jay S. Duker: Now, some of that is really dependent on the solubility of the drug. And so whatever the drug is, there are brackets around fast versus slow release. And remember also that we need to get drug levels in the eye that will treat the underlying disease effectively and safely.

Uh huh.

I understand there is potentially some delta.

The very and situations, but would you guys continue to fill debt.

And this is the revenue will likely to grow quarter over quarter and.

And at least in the near term the next 2 quarters.

Neil Jim: So we can alter many things about the implants, as I mentioned earlier, size and number, and bore of the needle and the way we prepare the drug matrix to alter the release rate. Does that answer the question? Yes, absolutely. And maybe two more here.

I'm going to actually have Scott answer that as you know discuss the chief commercial officer.

Has tremendous visibility into the business condition Scott.

Thank you Nancy and thanks for the question and.

George O. Elston: The first is a housekeeping one that you have a new line on the P&L called Gain to distinguish between the debt. Is this a one-time event situation? Yeah, hi, IEL, George.

Obviously, we don't advise on the revenues for future quarters, but we can say that as George mentioned earlier, we've been pleased with the progress that we've made and the first and second quarter of this year and we're continuing to see that momentum early in Q3, and obviously, it's being driven by on the Utica side, we've made a significant.

George O. Elston: Yeah, so during the second quarter, we had, you may recall, we had a Payroll Protection Plan loan granted to us last year that was forgiven in the second quarter of this year, and so that's a one-time gain on extinguishment of debt of a little over $2 million. Okay, maybe that question. That will repeat. Okay, yeah, that's helpful. And maybe the last question here is that this quarter or the last one seems to be the best I've seen in terms of revenue for both Utique and the tax.

Expansion into the rental market.

In terms of our sales and marketing activities and then on the execute we're continuing to see an uptick based on.

Some of the recent customer contracts that we've been able the sun as well as the activity being.

And being driven by our partner and permits and so I think we feel very confident about the progress that's been made and the first half of the year and certainly we're continuing to see that early in Q3, and we're bullish that the world.

Neil Jim: I understand there's potentially some Delta variant situations, but would you guys continue to feel that this is the revenue that is likely to grow quarter over quarter, at least in the near term of the next few quarters? I'm going to actually have Scott answer that. As you know, Scott's our chief commercial officer, so he has tremendous visibility into the business conditions. Scott. Thank you, Nancy, and thanks for the question. And, you know, obviously, we don't advise on revenues for future quarters, but we can say that, as George mentioned earlier, we've been pleased with the progress that we made in the first and second quarters of this year, and we're continuing to see that momentum early in Q3.

We will continue to see that kind of activity, but again and.

Many many factors are going into.

Kind of tracking the Delta variant and as Nancy mentioned earlier.

While we haven't seen the significant shutdowns that we saw early in 2020, we are starting to see 1 or 2 states that are having significant activity and starting to make some adjustments and we will certainly keep you updated on that.

Okay, Great that's very helpful and of.

And congrats on the great quarter, and look forward and see the tabular data.

Neil Jim: And obviously, it's being driven by, you know, on the unique side, we've made a significant expansion into the retinal market in terms of our sales marketing activities. And then on Dex EQ, we're continuing to see an uptick based on some of the recent customer contracts that we've been able to sign, as well as the activity being driven by our partner imprimus. And so I think, you know, we feel very confident about the progress that has been made in the first half of the year.

And thank.

Thank you Yale.

Thank you.

Question comes from Andrew Desilva with P value Securities. Your line is now open.

Yeah, and good morning, Thanks for taking my questions I have a few.

I'll start with just a couple of quick book keeping questions.

You could just let me know what stock based comp cash flow from operations and Capex was for the quarter that'd be much appreciated.

And I was also curious why there was a sequential decline in gross margins so product mix look like of favorite.

Scott Jones: And certainly, we're continuing to see that early in Q3. And, you know, we're bullish that we'll continue to see that kind of activity. But again, many, many factors are going into kind of tracking the Delta variant. And as Nancy mentioned earlier, you know, we, while we haven't seen the significant shutdowns that we saw early in 2020, we are starting to see one or two states that are, you know, having significant activity and are starting to make some adjustments.

<unk>.

Gross margins would've traded updated debt or are there any additional costs incurred to.

The Q4.

Or were there any 1 time charges that were in.

Yes.

And.

Yeah, Hi, Andy George So actually on margin this I think and.

And is the first time that we actually sold more execute the Utica, So certainly product mix and.

The execute comes in it.

And it's much lower margin than Youtube. So that was the big contributor. There you may recall in Q1, we had.

Neil Jim: And we'll certainly keep you updated on that. Okay, great, that's very helpful, and again, congrats on a great quarter and look forward to that video data for a year. Thank you, Yale.

Some 1 time write offs for your cheek needle change and things like that so I think Q2 is largely product mix.

Because of the blend between the teeth and to execute.

Andrew De Silva: Thank you. Our next question comes from Andrew De Silva with B. Raleigh Securities. Your line is now open. Yeah, good morning. Thanks for taking my questions. I have a few.

Q2 stock comp and noncash stock comp and total was about $1.2 million.

And I think we had modest if any PPE investment and Q2 and.

Andrew De Silva: So I'll start with just a couple of quick bookkeeping questions. If you could, just let me know what stock-based comp and cash flow from operations in CAPX was for the quarter. That would be much appreciated.

And that'll be in the.

The cash flow when we file the Q later this week.

Okay. Thank you for that.

So.

And I just also wanted to get a better understanding of what our pricing dynamics could look like for <unk> and administration.

George O. Elston: And I was also curious why there was a sequential decline in gross margins. Product mix looked like Utique was favored this quarter. I figured gross margins would have credited higher due to that. Were there any additional costs tied to Utique or Dexacue or were there any one-time charges that were in the cost of sale? Yeah, hi, Andy, George.

Yeah.

Is $80 to of $100 kind of the right range.

And the.

And was around there before the category III code and moved to a category 1.

So that's where I'm kind of tentatively modeling the injection of Kodak.

I wanted to make sure that aligns with that with your range. Yeah. So Scott will answer that but let me just reiterate for the audience that we are very pleased that we got this code and just so everyone understands what that allows for is for people the physicians to get an extra fee for using execute in addition to.

George O. Elston: So actually, on margin, this, I think, and is the first time that we actually sold more Dexecute than Utique. So, certainly, product mix. And, you know, Dexsuku comes in at a much lower margin than Utique.

The.

The money on the on the drug itself so.

George O. Elston: So that was a big contributor there. You may recall in Q1, we had some one-time write-offs for Utique needle change and things like that. So I think Q2 is largely product mix because of the blend between the teeth and Dexs. For Q2, stock comp, non-cash stock comp, was about $1.2 million.

It is an incentive for physicians because it does take a little bit more time.

Versus just writing a prescription for eyedrops, though not much but nevertheless, it's enough debt. The Ami felt that physicians deserved compensation for their time to inject execute so it's got once you go ahead and the answer the question specific to what the reimbursement rate will be.

Sure and thanks for the question.

Andrew De Silva: And I think we had a modest PPE investment in Q2. And that'll be in the cash flow when we file the Q later. Thank you for that. So I just also want to get a better understanding of what pricing dynamics could look like for Dexecute's upcoming administration code. Is $80 to $100 kind of the right range?

So as you will recall 1 of the differences between the category 1 code and the category III code is the category III codes. Unlike category, 1 code and do not go through the the national process from pricing, meaning going through the resource utilization and committed to develop word values. So the price locally which means the.

Scott Jones: I think the Extenza was around there before the category three CPC code moved to category one. So that's where I'm kind of tentatively modeling the injection code at, but I want to make sure that aligns with the, Yeah, Scott will answer that, but let me just reiterate for the audience that we are very pleased that we got this code, and just so everyone understands what that allows for is for people, physicians, to get an extra fee for using Dexecue, in addition to the money on the drug itself.

And each Medicare contractor will price that reimbursement rate locally.

While we can't give specific guidance yet until we have had and completed discussions with all of the Medicare contractors, I think you're generally and a range that we feel would be consistent with the the value. We believe we would be bringing but again I can't really give any guidance on that until we.

Formerly have those discussions with the contractors.

Scott Jones: So it is an incentive for physicians because it does take a little bit more time versus just writing a prescription for eyedrops, though not much, but nevertheless, it's enough that the AMA felt that physicians deserved compensation for their time to inject DXEQ. Scott, want you to go ahead and answer the question specific to what the reimbursement rate will be. Sure, and thanks for the question. So, as you will recall, one of the differences between a Category 1 code and a Category 3 code is that Category 3 codes, unlike Category 1 codes, do not go through the national process for pricing, meaning they go through the resource utilization committee to develop word values.

Okay useful thank you.

And then the.

All of capture stats extension.

And I remember there were a couple of timeframe that's being discussed earlier.

<unk>.

And at 9 months.

And final link once the final rules or cash or.

Do you see the potential.

And there would be a 2 year or.

The greater increase and I'm, just kind of looking back at what happened with the imagery on here.

Yes, let me comment and then Scott you can add and so first of all in this draft rules as you mentioned Andy There is a 9 month extension for the executed now to go out until December 31.2022.

And we probably expect more than likely the fts excuse me CMS will issue that in the final rules and so the final rules as you know come out and November and you can never predict but we do expect that will probably hold firm now the other thing, though that they put in the draft rules was the comment in there about <unk>.

Scott Jones: So they're priced locally, which means that each Medicare contractor will price that reimbursement rate locally. So while we can't give specific guidance yet until we have had and completed discussions with all of the Medicare contractors, I think you're generally in a range that we feel would be consistent with the value we believe we would be bringing. But again, I can't really give any guidance on that until we formally have those discussions with the contractors. Okay, useful, thank you.

And that.

They are open to considering permanent reimbursement for these non opioid drugs that either have the pain indication or had pain like attributes that are recognized by the medical society and they're asking for comment on that now with the raging opioid epidemic and as again you may know the number up.

Opioid.

Andrew De Silva: And then the potential for past your status extension. I remember there were a couple of timeframes being discussed earlier. Do you expect nine months to be the final length once final rules are set, or do you see the potential to have there be a two-year or greater increase? I'm just kind of looking back at what happened with the midrillo.

Unfortunate deaths.

Guy rocketed during the pandemic. They went up another 30% in total it's approximately 100000 people died of opioid overdoses. Just this year in the past 12 months of terrible tragedy, and so CMS and I applaud them now for starting to consider.

Nancy S. Lurker: Yeah, let me comment, and then Scott, you can add in. So, first of all, in this draft rule, as you mentioned, Andy, there is a nine-month extension for Dexecute now to go out until December 31, 2022. And we expect, more than likely, the CMS will issue that in the final rules, though the final rules, as you know, come out in November, and you can never predict, but we do expect that will probably hold firm. Now, the other thing, though, that they put in.

They have to get non opioid alternatives available to physicians and patients we have of crisis on our hands. So they are now open to considering getting permanent reimbursement to these non opioid pain like drugs <unk> and certainly fit in that category of dexamethasone at the well known pain reliever many.

Drugs, who have VIX index, or who are dexamethasone drugs, maybe delivered different vehicles have pain indications. We just don't we didn't pursue when we in licensed from icon on the pain indication per se, but we do have studies that show, we substantially reduce pain. So we're somewhat optimistic though there's never a guarantee.

Nancy S. Lurker: In the draft rules, there was a comment about stating that they are open to considering permanent reimbursement for these non-opioid drugs that either have a pain indication or have pain-like attributes that are recognized by the medical society, and they're asking for comment on that. Now, with the raging opioid epidemic, and as, again, you may know the number of opioid unfortunate deaths skyrocketed during the pandemic. They went up another 30%. In total, approximately 100,000 people have died of opioid overdoses just this year in the past 12 months. It's a terrible tragedy.

And <unk> that we could get permanent reimbursement Scott do you want to add anything to that.

I think that was well certainly answered and covered most of the key selling points.

Great Yeah, So that's interesting and the casino north of the theory.

And we have perpetual pass through of my memory serves me correct that's correct.

Okay and last question from me I'm just curious.

And just kind of reverting back of the Catholic installed.

Are you able to get the cost materially down predict the Q. So I'm just trying to dial in 2.

Nancy S. Lurker: And so CMS, and I applaud them now for starting to consider. They have to get non-opioid alternatives available to physicians and to patients. We have a crisis on our hands. So they are now open to considering giving permanent reimbursement to these non-opioid pain-like drugs. Dexciccuse certainly fits in that category. Dexamethosone is a well-known pain reliever. Many drugs who are dexamethosone drugs maybe deliver different vehicles have pain indications.

2023 estimate and beyond right now and why.

Assuming the 9 month is what's final whats after it falls off.

It seems like it'll be challenging charge and much more and the injection code of Mt was the execute falls back into the bundle.

Are you able to drive cost of goods down to predict the here and given the.

Success.

And your co marketing and commercialization initiatives.

Nancy S. Lurker: We just don't, we didn't pursue when we ended our licenses from ICOM, the pain indication per se, but we do have studies that show we substantially reduce pain. So we're somewhat optimistic, though there's never a guarantee, that we could give permanent reimbursement. Scott, do you want to add anything to that? I think that was well said, Nancy, and covered most of the key salient points.

Does it make sense.

Internally, Oh, and you asked and commercializing the offering given the potential of reimbursement dynamics that could take place.

We started 2023.

And then also and you just have a very clear focus on retinal specialist with the <unk>.

101, and your T cells, just curious on how you'd executed long over the long term.

Particularly missing.

And the assumption that debt.

Passenger falls off of 2020.

Scott Jones: Great, yeah, so that's interesting, kind of similar to what the Sierra has for its product, and we have a perpetual passage certified, certainly correct. Okay, and last question for me, I'm just curious, just kind of reverting back to the cost that gets sold. Are you able to get the costs maturely down for DXAQ? So I'm just trying to dial in 20, 23 estimates and beyond right now. And once, assuming the nine month is what's final, once pass-through falls off.

Okay.

I'm actually going on on Cogs, George you want to tackle that sure.

Sure, Yes, and any of the way to think of that cost is really 2 components. We do have the royalties.

Components that we pay.

Okay.

Which is tied to revenue. So obviously, that's going to toggle with price over time, and then on the actual cost of.

The unit itself clearly with higher volumes.

We can certainly move to move that cost down over time, obviously, these products and never going to get down to that single digit price debt Eyedrops command, but there certainly is upside opportunity to reduce costs with higher volumes, which we're now starting to see.

Scott Jones: It seems like it'll be challenging to charge much more than the injection code amount once DECQ falls back into the bundle. However, are you able to drive the costs of goods down for DXQ? you referenced in your co-marking commercialization initiatives, does it make sense to internally invest in commercializing the offering given the potential reimbursement dynamics that could place at the start of 2023? And then also, you just have a very clear focus on retinal specialists with 901 and Utique.

Yeah, and and <unk>.

And these strategically with regards to to execute let me just say this.

We're really pleased with where we are right now and you mentioned, we have our co promotion.

Relationship with implements Rx and they've been doing a great job.

Driving utilization so we're actually very pleased with their performance.

And with <unk>, we remain committed to the brand.

Andrew De Silva: So just curious about how you view Dexacue over the long term, particularly missing the assumption that a pasture falls off at the end of 2020. I'm actually going to add on COGS. George, do you want to tackle that? Sure. Yes, Andy, the way to think about COGS is really two components.

But like with any product, we're always evaluating I don't care, if it's the pipeline product.

In line product, you're always evaluating different options I think it would be premature right now until the final rules come out and we have more clarity from CMS on how serious they are about permanent reimbursement, we do want it and see what happens there because as you can imagine if we get permanent reimbursement that materially changes the dynamics of this.

George O. Elston: We do have a royalty, components that we pay, which is tied to revenue. So obviously, that's going to fluctuate with price over time. And then on the actual cost of the unit itself, you know, clearly with higher volume and scale, we can certainly move to move that cost down over time. Obviously, these products are never going to get down to that single-digit price that I drops come in, but, you know, there's certainly an upside opportunity to reduce costs with higher volumes, which we're now starting. Yeah, and, Andy, strategically with regard to DECQ, let me just say this.

And long term so we're.

We'll see what happens.

Okay, great. Thanks for taking my questions.

The luck going forward.

Thank you.

Thank you.

And I'm currently showing no further questions in the Chile at this time, ladies and gentlemen, thank you for participating on today's conference. This does conclude your program. You may now disconnect everyone have a wonderful day.

Nancy S. Lurker: We're really pleased with where we are right now, and you mentioned our co-promotion relationship with Impermence RX, and they've been doing a great job driving utilization, so we're actually very pleased with their performance. With DeXecue, we remain committed to the brand. But like with any product, we're always evaluating. I don't care if it's a pipeline product, or an in-line product; you're always evaluating different options. I think it would be premature right now until the final rules come out.

Okay.

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Nancy S. Lurker: We have more clarity from CMS on how serious they are about permanent reimbursement. We do want to see what happens there, because, as you can imagine, if we get permanent reimbursement, that materially changes the dynamics of this brand long term. So we'll see what happens. Okay, great. Thanks for taking my questions and really taking the time to look at it.

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Andrew De Silva: Thank you. And I'm currently showing no further questions for you at this time. Ladies and gentlemen, thank you for participating in today's conference. This does conclude your program. You may now disconnect. Everyone, have a wonderful day.

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Operator: Thank you. Thank you. Thank you. Thank you.

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