Q3 2021 Alimera Sciences Inc Earnings Call

[music].

It is a gentleman. Thank you for standing by good morning, and welcome to the album Earth Sciences third quarter of 2021 financial results and corporate update conference call.

Operator: Ladies and gentlemen, thank you for standing by. Good morning, and welcome to the Alimera Sciences third quarter 2021 financial results and corporate update conference call.

Operator: At this time, all participants are in listen-only mode. If you need assistance, please signal the conference specialist by pressing a star followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then 1 on your telephone keypad. To withdraw your question, please press star then 2. Participants of this call are advised that the audio of this conference call is being broadcast live over the Internet and is also being recorded for playback purposes.

At this time, all participants are in listen only mode.

Did you need assistance. Please signal conference specialists by pressing star followed by zero.

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Operator: A webcast replay of the call will be available approximately one hour after the end of the call through January 28th, 2022. I would now like to turn over the call to Mr. Scott Gordon of CoreIR, the company's investor relations firm. Please go ahead, sir.

A webcast replay of the call will be available approximately one hour. After the end of the call through January 28th 2022.

I would now like to turn off their the call to Mr. Scott Gordon of core I or the companies Investor Relations firm. Please go ahead Sir.

[noise]. Thank you up later good morning, and thank you for participating in today's conference call. Joining me from Alabama is leadership team Ah, Rick <unk>, President and Chief Executive Officer.

Scott Gordon: Thank you, operator. Good morning, and thank you for participating in today's conference call. Joining me on the call are Rick Eiswirth, President and Chief Executive Officer, and Phil Jones, Chief Financial Officer. During this call, management will be making forward-looking statements, including statements that address Alimera's expectations for future performance or operational results. Forward-looking statements involve risks and other factors that may cause actual results to differ materially from those expressed.

And Phil Jones, Chief Financial Officer during his call management will be making forward looking statements, including statements that address Ala marriage expectations for future procurements or operational results.

Forward looking statements involve risks and other factors that may cause the actual results differ materially from those statements for more information about these risks. Please refer to cautionary statements in Alamitos press release to get today.

Scott Gordon: For more information about these risks, please refer to the cautionary statements in Alimera's press release today. Also, today's conference call includes adjusted EBITDA, a non-GAAP financial measure that Alimera believes can be useful in evaluating its performance. You should not consider this additional information in isolation or as a substitute for results prepared in accordance with GAAP. For reconciliation of this non-GAAP financial measure to net income, its most directly comparable GAAP financial measure, please see the reconciliation table located in Alimera's earnings press release.

Today's conference call includes adjusted EBITDA, a non-GAAP financial measures put aloe Vera believes can be useful in evaluating his performance you should not consider this additional information in isolation or as a substitute for results prepared in accordance with gap.

For a reconciliation of this non-GAAP financial measure to net income falls.

It's most directly comparable GAAP financial measure P. C. Reconciliation table located in your element was furnished press release.

Scott Gordon: The content of this call contains time-sensitive information that is accurate only as of today, October 28, 2021, except as required by law Alimera disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call. It is now my pleasure to turn the call over to Rick Eiswirth. Rick, please.

The content of this call contains time sensitive information.

That is accurate only as of today October 20th 2021, except as required by law L America disclaims any obligation to publicly update will advise any information to reflect events or circumstances that occur. After this call is.

Cause it's now my pleasure to turn the call over to <unk> <unk>. Please go ahead.

[noise]. Thank you Scott and good morning to everyone on the call.

Richard S. Eiswirth: Thank you, Scott, and good morning to everyone on the call. The third quarter marked continued recovery from the challenges of the COVID pandemic, as we saw net revenue grow sequentially over the second quarter in both our U.S. and international segments. Our U.S. GAAP revenue of $7 million was unchanged on a year-over-year basis due to the timing of distributor orders, but end-user demand continues to improve. Our U.S. distributors replenished their inventories in the third quarter of 2020 when the pandemic temporarily subsided, while their purchases in this current quarter were more consistent with demand. Importantly, our third-quarter U.S. end-user demand was up 15 percent over both the third quarter of last year and the recently completed second quarter.

The third quarter, Mark continued recovery from the challenges of the Kobe pandemic as we saw net revenue grow sequentially over the second quarter in both R U S and international segments.

R. U S gap revenue of $7 million was unchanged on a year over year basis due to the timing of distributed orders but.

End user demand continue to improve.

R U S distributors had replenish the inventories in the third quarter of 2020, when the pandemic temporarily subsided while their purchases in this current quarter were more consistent with demand.

Importantly at third quarter U S end user demand was up 15%.

We're both the third quarter of last year, and the recently completed second quarter.

Richard S. Eiswirth: We believe we are finally bending the curve as our access to physicians and patients continues to improve. Further, we believe the investments we discussed on our second quarter call and initiated in Q3 to re-establish the awareness of Elluvian, increase our share of voice, and Strength in Advocacy are already starting to achieve results. Since August 1st, we've been able to engage more than 130 physicians in non-clinical settings.

We believe we were finally bending the curve as our access to physicians and patients continues to improve.

Further we believe the investments we discussed on our second quarter call.

And initiated in Q3 to reestablish the awareness of ILUVIEN increase our share voice and strength and advocacy are already starting to achieve results.

Since August 1st we've been able to engage more than 130 physician and non clinical settings.

Richard S. Eiswirth: And year-to-date end-user demand in the U.S. is up 4% for the nine months ended September 30th versus the same period last year, after being down at the end of the first and second quarter. As a result, we expect to report positive U.S. unit volume and revenue growth for the full year of 2021. Our international segment continues to lag U.S. performance in terms of the pace of recovery. Gap revenue in our international segment was down slightly to $5.2 million for the quarter, as access to hospitals and physicians remains inconsistent in Europe.

And year to date and user demand and the U S is up 4% for the nine months ended September 30th versus the same period last year after being down at the end of the first and second quarters.

As a result, we expect to report positive B U S unit volume and revenue growth for the full year of 2021.

Our international segment continues to lag U S performance in terms of the patient recovery gap.

<unk> revenue in international segment was down slightly to $5.2 million for the quarter, that's access to hospitals and physicians remains inconsistent in Europe.

Richard S. Eiswirth: However, we are seeing positive trends. In Germany, where a surge in COVID-19 cases occurred in Q2, we saw sequential improvement in lubion utilization in Q3. Additionally, our distributor partners sold much of their built-up inventory due to the prolonged pandemic and began taking new deliveries in Q3. As a result, we did see our international product revenue grow 37% sequentially over the recently completed second quarter, a shining return of demand and recovery.

However, we are seeing positive trends in.

In Germany, where a surge in COVID-19 cases occurred in Q2, we saw sequential improvement in the living utilization in Q3.

Additionally, added distribute partners sold much of their builds up inventory due to the prolonged pandemic and began taking your deliveries in two three.

As a result, we did see our international product revenue grow 37% sequentially over the recently completed second quarter.

Shining return of demand and recovery.

To provide a broader perspective on our business. The global end user demand for the month of September was within approximately 10% of what we saw back in Q4 2019 at Q1, 2020th prior to the <unk> impact with the pandemic.

Richard S. Eiswirth: To provide a broader perspective on our business, global end-user demand for the month of September was within approximately 10% of what we saw back in Q4 2019 and Q1 2020, prior to the impact of the pandemic. Geographic expansion continues to be a critical part of our strategy. At the end of 2020, Elluvian will be commercialized in eight European countries.

Geographic expansion continues to be a <unk> a critical part of our strategy at the end of 2020 living with commercialized and eight European countries.

Richard S. Eiswirth: In the first nine months of this year, we opened six new markets, with units being sold despite little promotional support due to the pandemic. We expect to see growth from the Nordic Territories and the Benelux region in 2022 with greater access and active promotion. As I mentioned on last quarter's call, we are increasing our spend to re-establish our shared voice and drive advocacy for Illumia. A critical element of our spend is engaging more with physicians outside their offices, increasing our advocacy efforts and our communication.

In the first nine months of this year, we've I've opened six new markets with units being sold despite little promotional support due to the pandemic.

We expect to see growth from the northern territories and the Benelux region in 2022 with greater access enacted promotion.

As I mentioned on last quarter's call, we are increasing our spend to reestablish our share voice and drive advocacy for lithium a.

A critical element of our spend as engaging more with physicians outside do all sins, increasing our advocacy efforts and our communications.

Richard S. Eiswirth: As noted earlier, we believe these initial investments in the U.S. have yielded better access to positions, and that has led to increased utilization. As countries continue to open in Europe, as the pandemic subsides, we expect to obtain similar additional access to our European customers behind our spending plans there. As you probably know, there are numerous companies out there attempting to develop more durable therapies for retinitis with the goal of reducing the recurrence of disease and treatment burdens like alluvium.

As noted earlier, we believe these initial investments in the U S have yielded better access to physicians and that led to increased utilization.

As countries continue to open in Europe at the pandemic suicides, we expect to obtain similar additional access to our European customers behind our spending plans there.

As you probably know there are numerous companies out there attempting to develop more durable therapies for rent and disease with the goal to reduce the current so disease and treatment burden like Luke.

Richard S. Eiswirth: Their messaging further highlights our core message of maintaining vision longer with fewer injections. We expect this noise level will increase in publications, presentations, and educational programs, as well as advertising, which should benefit people in the future.

Their messaging further highlights our core message of maintaining vision longer with fewer injections. We expect this noise level will increase in publications presentations and educational programs as well as advertising, which had been living in the future.

Richard S. Eiswirth: At the recent American Society of Specialist Annual Meeting, we presented an analysis from the Phase 4 Palliative Study demonstrating a significant reduction in the number of treatments needed by patients with DMA after receiving Illuvian. The real-world data showed that patients receiving one or less total injections per year for their DME after the Alevein injection increased threefold from prior to the Alevein injection. The data also showed that the percentage of patients who needed more than four DME treatments per year was reduced by 50% with lubrication on board. This data provides additional support for our claim that alubium clearly reduces the recurrence of DME and keeps the retina dry longer with fewer injections.

At the recent American Society Retina specialist annual meeting we presented an analysis from the phase four Pouted studies, demonstrating a significant reduction in the number of treatments needed by patients with deeming.

After receiving ILUVIEN.

The real world data showed that patients receiving one or less total injections per year for their D. M. A after the ILUVIEN injection increased threefold from prior to leaving injection.

The data also showed that the percentage of patients who needed more than four Jamie treatment per year was reduced about 50% with looping envoy.

This data provides additional support for our claims that ILUVIEN clearly reduces the recurrence D me and keeps the retina dryer longer with fewer injections.

Richard S. Eiswirth: These results from the Phase IV Paladin study support the premise of our landmark New Day study, our head-to-head comparison of alluvium and ilea in the treatment of naive and near-naive patients. We continue to screen and randomize additional patients, and September has been our highest screening month to date, bringing us to 75 patients randomized in the study, with an additional 16 in the screening phase. Furthermore, we've seen additional and renewed interest in the study from clinicians as they are inquiring about the study and coming on board as new clinical sites.

These results from the Baseboard Paladin studies support the premise of our landmark New date study or head to head comparison of <unk> and Eylea and the treatment of naive and you're naive patients.

We continue to screen in randomized additional patients in September has been our highest screening months of date, bringing up to 75 patients randomized in the study with an additional 16 and the screening things.

Further we've seen additional and renewed interest in the study from clinicians they enquiring about the study and coming on board is new clinical sites.

We're pleased to see this trial gaining momentum and we're looking forward to reporting results, which we believe will establish ILUVIEN as baseline treatment for domain.

Richard S. Eiswirth: We're pleased to see this trial gaining momentum, and we are looking forward to reporting results, which we believe will establish lupine as the baseline treatment for DME. We also still believe in the value of our message with patients and their caregivers that Alluvion maintains vision longer with fewer injections and remain on track to restart our direct-to-patient campaign in the U.S. as we move into 2022. Before I turn the call over to Phil, I want you to know that we are very confident in our ability to return to growth and significantly expand the utilization of the looping network in 2022 and beyond. We believe we will do this with solid execution of our corporate priorities, which are as follows. 1.

We also still believe in the value of our message with patients and their caregivers that ILUVIEN maintains vision longer with fewer injections and remain on track to restart our direct to patient campaign and the U S. As we move into 2022.

Before I turn the call over to Phil I want you to know that we are very confident in our ability to return to growth and significantly expand the utilization blooming in 2022 and beyond we.

We believe we will do this with solid execution of our corporate priorities, which are as follows.

One restoring ILUVIEN sales to prepandemic growth rates.

Richard S. Eiswirth: Restoring Alluvian sales to pre-pandemic growth rates. Absent the COVID-19 challenges, we remain confident we can grow our business organically, increasing both the number of physicians using Alluvium and the frequency of use in our market. 2. Executing on our strategy to expand the number of international territories in which Illumina is approved, reimbursed, and launched with our direct sales organization and direct distributor partner. This includes both DME and the approval and uptake of Olivian's non-infectious uveitis indication in new and existing parakeets.

Absolutely COVID-19 challenges, we remain confident we can draw business organically, increasing both the number of physicians using ILUVIEN and the frequency of use in our markets.

To executing on our strategy to expand the number of international territories, and which ILUVIEN is approved reimbursed and launched with our direct sales organization Android distributor partners. This.

This includes both D M. A N the equivalent uptake of Bolivians, Noninfectious, uveitis syndication and new and existing territories.

Richard S. Eiswirth: 3. Advancing the New Day Study by Driving Patient Enrollment and Completion of that Trial. Recall that we plan to enroll 300 DME patients across the 45 active centers participating in this landmark, head-to-head clinical study. And with that, Phil will now review the financial results for the quarter.

And three advancing the new day study by driving patient enrollment and completion of that trial <unk>.

Recall that we plan to enroll 300 D V patients across the 45 active centers participating this landmark head to head clinical study.

And with that until now review the financial results for the corner Bill.

Phil Jones: Thanks, Rick. Hello, everyone. For the third quarter of 2021, we reported consolidated net revenue of $12.2 million, down approximately 2% compared to the $12.5 million that we reported in the third quarter of 2020. U.S. net revenue was approximately $7 million for the third quarter of 2021, which is unchanged from the $7 million reported in the 2020 comparable period. U.S. end-user demand, which represents units purchased by physicians and pharmacies from our distributors, rose 15 percent in the third quarter of 2021 to 837 units compared to 728 units in the third quarter of 2020. As we have previously shared, our gap revenues in the U.S. do not always correlate with in-user demand due to the time delay between in-app purchases by our specialty distributors.

Hello, everyone for the third quarter of 2021, we reported consolidated net revenue of $12.2 million down approximately 2% compared to the $12.5 million that we reported in the third quarter of 2020.

U S. Net revenue was approximately $7 million for the third quarter of 2021, which is unchanged from the $7 million reported and the 2020 comparable period.

U S and you should demand, which represent units purchase by physician said pharmacies from our distributors rose 15% in the third quarter of 2021 to 837 units compared to 728 units in the third quarter of 2020 as.

As we have previously share our GAAP revenues in the U S do not always correlate with amnesia demand due to the time in a purchases by our specialty distributors.

Phil Jones: In the third quarter of 2021, our distributors purchased approximately the same number of units as they sold to end users, while in Q3 2020, our U.S. distributors purchased 19% more units than they sold to end users as the pandemic appeared to be subsiding. Net revenue from our international segment decreased by approximately 5% to $5.2 million for the third quarter of 2021 compared to $5.5 million reported for the same period last year.

In the third quarter of 2021 I'll just have it is purchased possibly the same number of units at they sold to end users.

While in Q3 2020 R. U S distributors purchased 19 per cent more units than they salt the end users at the pandemic appears to be subsiding.

Net revenue for my International segment decreased by approximately five per cent to $5.2 million for the third quarter of 2021 compared to $5.5 million reported for the same period last year.

Phil Jones: The decrease in product revenue was driven by two factors. 1, fewer orders from our distributor partners who continue to reduce inventory required in 2020. And two, a decrease in end-user demand in Germany in Q3 2021 compared to Q3 2020. This is due to continued restricted access to healthcare facilities associated with the COVID-19 pandemic.

The decrease in product revenue was driven by two factors one fewer.

Fewer orders from Oxford of your partners, who continued to reduce inventory acquired in 2020.

And two a decrease in English to demand in Germany in Q3, 2021 compared to Q3 2020.

This was due to continued restricted access to health care facilities associated with COVID-19, and.

Eric mentioned and you should demand continues to pick up in our distributor partner Margaret Leighton.

Phil Jones: As Rick mentioned, end user demand continues to pick up in our distributor partner markets, leading to new stocking orders in the third quarter. We anticipate that our partners will be back to regular ordering patterns over the next three to six months. Total operating expenses were approximately $12.5 million in the third quarter of 2021, an increase of approximately 19% compared to $10.5 million reported in the third quarter of 2020. We are spending to support our key initiatives to drive sales recovery and growth in the fourth quarter of 2022. Additionally... We have resumed our travel and sales engagements as we continue to regain access to accounts.

And the third quarter, we anticipate that are part for me that regular ordering patterns over the next three to six months.

Total operating expenses, where approximately $12.5 million from the third quarter of 2021, an increase of approximately 19% compared to $10.5 million reported in the third quarter of 2020.

We are spinach support a key initiatives to drive the sales recovery and growth in the fourth quarter 2022.

Additionally.

We have resumed our travel a sales engagement as we continue to regain access to the account.

We reported and adjusted EBITDA loss of $1.1 million in the third quarter of 2021 compared to a positive adjusted EBITDA of $1.4 million in Q3 2020.

Phil Jones: We reported an adjusted EBITDA loss of $1.1 million in the third quarter of 2021 compared to a positive adjusted EBITDA of $1.4 million in Q3 2020, when we benefited from our restricted level of spending due to the lockdown seen in many of our markets and our efforts to conserve cash. For the third quarter of 2021, we reported a net loss of approximately $4.1 million compared to a net loss of approximately $600,000 for the third quarter of 2020.

When we benefited from a restricted level of spending due to the lot down seen in many of our markets and our efforts to conserve cash.

For the third quarter of 2021, we reported a net loss of approximately $4.1 million compared to a net loss of <unk> of approximately $600000 for the third quarter of 2020.

Phil Jones: The net loss was impacted unfavorably by the downward revaluation of our warrant that gives us the right to purchase OccuMention common shares. The unfavorable amount associated with the revaluation amounted to $1.1 million. This warrant will be evaluated on a quarterly basis until exercised and could generate quarterly gains and losses affecting the overall financial results. On the other hand, the license that we granted to Occupy Michigan in Q2 for the rights to develop and commercialize our alluvium formulation in the Greater China Territory and other Western Pacific countries, along with Occupy Michigan's equity investment in Alimera, has significantly improved our balance sheet.

The net loss is impacted unfavourably by the downward revaluation of a warrant that gives us the right to purchase occupation common shares.

Unfavorable amount associated with the revaluation amounted to $1.1 million.

This war will be evaluated on a quarterly basis until exercise and could generate quarterly gains and losses affecting the overall financial result.

On the other hand, the license that we granted the occupation in queue to for the rights to develop and commercialize our ILUVIEN formulation in the greater China territory and other western Pacific countries, along with documents just equity investment in Almere at significantly improved a balance sheet.

Phil Jones: Basic and diluted net loss per share for the third quarter was $0.60 on possibly 6.92 million weighted average shares outstanding. This compares to basic and diluted net loss per share for the third quarter of 2020 of $0.12 on approximately 5.1 million weighted average shares outstanding. On September 30, 2021, we had cash and cash equivalents of approximately $21.5 million compared to $11.2 million in cash and cash equivalents that we reported on December 31, 2020. With that, I'll now turn the call over to the operator to begin the Q&A.

Basic and diluted net loss per share for the third quarter with 60 cents on approximately 6.92 million weighted average shares outstanding.

This compares to basic and diluted net loss per share for the third quarter of 2020 or 12 cents on approximately 5.1 million weighted average shares outstanding.

On September 30th 2021, we had cash and cash equivalents of possibly $21.5 million compared to $11.2 million in cash and cash equivalents that we reported on December 31st 2020.

With that I will now come to call over to the operator to begin to Q&A.

Ladies and gentlemen, if you wish to ask a question on today's call you will need to press Star then the number one on your telephone. If your question has been answered you wish to draw you. A question you may do so by pressing start then too.

You're using a speaker phone please pick up the handset before entering your Sarah class and speaking on the call.

The first question is from Alex Gonna Walk of Craig Hallum Catholics out. Please go ahead.

Great. Good morning, everyone. Rick you spoke a lot about the inventory sitting out and distributors I I really just wanted to kind of summarize it here. So am I correct in saying that the level of inventory sitting out there is more normalize exiting two three and you're either going to see some stock in going forward or at least sales tracking closer to demand.

Operator: Great, good morning everyone. Rick, you spoke a lot about the inventory sitting out in distributors. I really just wanted to kind of summarize it here. So am I correct in saying that the level of inventory sitting out there is more normalized exiting Q3 and you're either going to see some stocking going forward or at least sales tracking closer to demand, or do you think you still have another quarter to go on the destocking front? Yeah, so, Alex, great question.

Or do you think you still have another quarter to go on the Destocking crime.

Yeah, So uhm Alex Great. Great question, you know in general we think they're stocking levels are back to normal you know the majority of distributors I would say you'll see you are seeing orders come in there were orders in Q3 as I said on the queue to call. We already had orders for Q3 Q4, and Q1 of next year, So you're gonna start to see some more regularity there.

Richard S. Eiswirth: You know, in general, we think their stocking levels are back to normal. You know, the majority of distributors, I would say, you'll see, you are seeing orders come in. There were orders in Q3, as I said on the Q2 call. We already had orders for Q3, Q4, and Q1 of next year, so you're going to start to see some more regularity there. I think it will still be a little bit, you know, rocky over the next, I guess, you know, four quarters or so until that demand gets to a level where they can justify orders on a quarterly basis and get more consistency, but you're going to start to see them come back more like you saw in 2019. All right, that's helpful.

I think it will still be a little bit you know rocky over the next I guess, you know four quarters or so until that demand and gets to a level, where they can justify orders on a quarterly basis and get more consistency, but you're gonna see starting to see him come back more like you saw in 2019.

Alright, that's helpful can you detail what you saw with rap access in the U S clinics and also patient flow going into the practice throughout cute three just with the Delta virus, increasing and then and then waiting.

Richard S. Eiswirth: Can you detail what you saw with rep access in the U.S. clinics and also patient flow going into the practice throughout Q3, just with the Delta virus increasing and then waiting? Yeah, so our access in the U.S. has definitely continued to get better. You know, our face-to-face office visits grew from Q1 to Q2 and continue to go higher in Q3. So we're getting more access.

Yeah. So our access in the U S is is definitely continue to get better you know our face to face office visits you know grew from two wanted to Q2 and continue to go higher than two free so we're getting more access and as we alluded to on the call. We're also getting more access to physicians and non clinic.

Richard S. Eiswirth: And as we alluded to on the call, we're also getting more access to physicians in, you know, non-clinical settings, like advisory boards. We're getting more and more face time with those doctors, and I think that's having a big impact because we're able to deliver more quality content or get just a longer period of time with the doctors if we're outside of the clinic lane, so that's helping I would say you're also seeing an improvement in the flows back into the clinics as well.

Settings advisory boards Uhm.

Uhm dinners with practices.

Et cetera, so we're getting more and more faith sounded those doctors and I think that's having a big impact you know because we're able to deliver.

More quality content or get uhm, just a longer period of time with the Doctor's report outside of the clinic Lane. So that's helping a lot I would say you know you also see an improvement in the flows back in the the clinics as well.

Richard S. Eiswirth: More and more doctors tell us things are back to normal. My gut feels that it's still a little bit short, that they're not quite seeing the volumes that they used to just because of the social distancing rules and everything, but I would say more feel like they're getting back to normal, which tells you there's more flow coming through, and we think that's apparent also in what we're seeing from end-user demand.

More and more of the doctors you know tell us things are back to normal you know my.

My gut feel is that it's still a little bit short that they're not quite seeing the volume that they used to just because of the social distancing rules and everything but I would say more feel like you're getting back to normal which tells you there's more blood coming through and you know we think that's apparent also and and what we're seeing from end user demand too.

That's great where are you where you sit today with inventory and then obviously the delta virus waning and we are getting back to a somewhat normal.

Richard S. Eiswirth: That's great. We're used to today with inventory and then obviously the Delta virus waning, and we are getting back to a somewhat normal. Can you maybe provide an outlook for 2022, growth into 2022, but also, do you think we could get back to the pre-COVID run rate in 2022? If there are any comments there, I do.

Can you may be provided outlook for 2022 grows into 2022, but also do you think we could get back to the the pre Covid run rate in 2022 does any comments there.

No I do I mean, that's our goal is to get back to that you know sort of end of 2019 first couple of months of of 2020, you know run rate as fast as we can and as you know that puts us in the in the low to mid sixties. So I mean, it's a little bit early to give give guidance, but are trends are definitely going in the right direction and we.

Richard S. Eiswirth: I mean, that's our goal is to get back to that, you know, sort of the end of 2019, first couple of months of 2020, run rate as fast as we can. And as you know, that puts us in the low to mid-60s. So, I mean, it's a little bit early to give guidance, but our trends are definitely going in the right direction, and we feel like 2022 can be a pretty strong year and, you know, get us back to the kind of growth we expect. That's great!

Feel like 2022, it can be a pretty strong year and you know get us back to that kind of growth we expect.

That's great and then just last question for me just with kept on the balance sheet are there any specific areas you'd like to invest in to help you go faster coming out of Covid and then any update on expanding the pipeline within the original space.

Richard S. Eiswirth: And then just last question for me, just with capital on the balance sheet, are there any specific areas you'd like to invest in to help you go faster coming out of COVID? And then any update on expanding the pipeline within the retinal space? Yeah, so, you know, we are committed to spending some of that money that we put on the balance sheet with Acumen. We felt like we managed the balance sheet really well and were able to do that and strengthen the balance sheet. We want to take advantage of that to drive things faster as we come out of code.

Yeah. So you know we are we are committed to spending some of that money that we put on the balance sheet with documents and you know we felt like we manage the balance sheet really well and being able to do that and strength of the balance sheet. We want to take advantage of that to drive you know things faster as we come out of Covid, primarily it's been being spent on <unk>.

Richard S. Eiswirth: Primarily, it's been spent on developing advocacy and finding other avenues outside the clinic to engage those doctors. As we've talked about on this call, as well as in the US, trying to take a little bit broader look at that direct patient campaign technique. We do believe that alluvium, you know, because it's 1 injection or a significantly reduced number of injections is really beneficial to that patient and the caregiver. And, you know, we want to try to motivate those patients to be pushing the doctors for alluvium. We saw good results. When we tested that in 2019, you know, we think we can refine our approach and do even better with it in 2022 and, you know, in an increased number of markets.

Helping advocacy and finding other avenues outside the clinic to engage those doctors as we talk about on this call as well as in the U S trying to take a little bit broader look at that direct patient you know campaign technique, we do believe that ILUVIEN, because it's one injection or a significantly reduced number of injections is really benefit.

But that patient in the care giver and you know we want to try to motivate those patients to be pushing the doctors you know for ILUVIEN. We saw good results. When we tested that in 2019, you know we think we can refine approach and do have been better with it 2022, and you know and and an increased number markets.

And then alright, especially thank you.

Richard S. Eiswirth: All right. Thank you. I was just going to say, with respect to the pipeline, we are continuing to look. We've been pretty active in looking and talking to companies, but, you know, nothing to announce yet. We're going to make sure we find the right thing to add to the pipeline. Perfect. Appreciate the update. Thank you.

Oh, Yeah, Yeah. My pipeline I was just gonna say with respect to the pipeline. You know we are continuing to look we've been pretty active and looking and talking to companies, but you know nothing to announce yet we're gonna make sure. We found the right thing to add to the pipeline.

Perfect I appreciate the update thank you.

Operator: The next question is from Yi Chen of H.C. Wainwright. Please go ahead. Thank you for taking my question.

Absolutely thanks out.

The next question is N E Chen and H C. Wainwright. Please go ahead.

Richard S. Eiswirth: Thank you for taking my questions. My first question is, could you please remind us how many new Elluvian launches you plan to have during the remainder of this year and in 2022? especially in Europe. Yeah, so the primary activity is really focusing on launches in the Benelux territories, so Belgium, Luxembourg, and the Netherlands, as well as the Nordic territories, you know, so Finland, Denmark, Sweden, and Norway are where those launches will be.

Thank you for taking my questions Uhm. My first question is could you. Please remind us how many you can move your lunches do you plan to have during the remainder of this year 2022.

Especially in Europe.

Yeah. So the primary activity is around really focusing on launches in the Benelux territories, So, Belgium, Luxembourg in the Netherlands, as well as the Nordic Territory's you know sort of Finland, Denmark, Uhm, Sweden, Norway is where those watches will will be you know, we actually have product available and all those markets right now, but it is weird.

Richard S. Eiswirth: You know, we actually have product available on all those markets right now, but as we alluded to on the call, there's been very little spending simply because of access. So, you know, we will start investing in the Nordic territories a little bit more, and our partner, Horace, who manages the product in France, will be focusing on the efforts in the Benelux region. Do you have any information as of now regarding prescription for DME versus prescription for UV Abbots? No, I mean, it's, you know, the majority of it is still DME.

Alluded to on the call has been very little spending simply because access. So you know we will start investing in the mortgage territory's a little bit more in our partner horse, who manage the product in in France will be you know focusing on the upwards in the dental X territories.

Okay do you have any information as of now regarding prescription for D. M V versus prescription for <unk>.

No I mean, it's you know the majority of it is still D. Me you know we're still waiting on some final you know reimbursement decisions from the regulatory authorities across you know most of Europe. So that you guys syndication is still only been really launched in Germany, and the UK uhm. So most of this rebound globally is this.

Richard S. Eiswirth: You know, we're still waiting for some final reimbursement decisions from the regulatory authorities across, you know, most of Europe. So, the uveitis indication has still only really been launched in Germany and the UK. So, most of this rebound, you know, globally is related to improvements in DME sales, and uveitis is still out there in the future. But we hope to be able to get through all those negotiations and everything this year so we can launch it in the rest of Europe for UVM.

Related to improvements in the in the sales and you know that you'd be out it's just still out there in the future, but we hope to be able to get through all those negotiations and everything this year. So we can launching the rest of Europe next year.

Yes.

And then could you tell us how many patients have being brought into the UK trial so far.

Richard S. Eiswirth: And then, could you tell us how many patients have enrolled in the new day trial so far? Yeah, so right now, about 75 are in the study, and there were 16 that were at an active screening at the last update that we had. So we're definitely picking up momentum there. As I said, September was the highest volume screening month we've had. So it feels like with things opening up from COVID greater patient access, more of these naive and near naive patients are coming into the office and making it into the trial as well.

Yeah. So right now the it's about 75 or in the study and there were 16 that are at an active screening at the last update that that we had so we definitely picking up momentum there as I said you know September was the highest volume screening month, we've had so it feels like you with things opening up from Covid greater patient access.

More these not even your night patients are coming to the office and make it into the trial as well so hopefully that will continue to improve over the rest of the year.

Richard S. Eiswirth: So, hopefully, that will continue to improve over the rest of the year. And lastly, has AlkiMation provided you with an update regarding the development status of Illuvia in China? No, right now they're working on trying to get approval and access in some of the smaller markets, so there may be some availability of alluvium in Hong Kong and Taiwan next year, but there's a little bit more work to do, as you mentioned. Okay, thank you. Sure, absolutely. Thank you, Yi.

Got it and lastly has all commission provided <unk> was an update regarding the development status of their lives in China.

No right now, they're trying to they're working on trying to get approval and access and some of the the smaller markets. So there may be some availability of ILUVIEN in Hong Kong and Taiwan next year, but there's a little bit more to do with like you mentioned on that.

Okay. Thank you.

Sure absolutely. Thank you.

My next question is send Jamie alright.

Operator: The next question is from James Molloy of Alliance Global Partners. Please go ahead, sir.

Alright, and I answered all the appointment. Please go ahead.

James Francis Molloy: Hey guys, thanks for taking my question. I had a quick question on the relative profitability between the U.S. and the EU. Could you speak a little bit about it? I assume the COGS is probably the same between the two. Could you talk a little bit about the profitability, how much you can make on operating margin versus the U.S. versus ex-U.S., please?

Hey, guys. Thanks for taking my question I had a quick question on the relative culpability between the U S and you could you speak a little bit too seem to cause it's probably the same between the two could you talk a little bit about you know the profitability of how much how much you can make an operating margin versus the U S. First <unk>. Please.

Yeah, Jim I mean, the the gross margin is is definitely going to be higher than in the U S cause we have higher pricing and the and the U S. With the exception of of Germany. You know we've talked about this before I list price in the U S is about eight $800 uhm on average the pricing is probably around 6000 euros occur.

Richard S. Eiswirth: Yeah, Jim, I mean, the gross margin is definitely going to be higher in the U.S. because we have higher prices in the U.S. with the exception of Germany. You know, we've talked about this before.

Richard S. Eiswirth: Our list price in the U.S. is about $8,800. On average, the price is probably around 6,000 Euros across Europe, so the gross margin is definitely going to be smaller. You know, Phil, you can comment on the operating margins, but certainly, we get a little bit more leverage on our operating costs in Europe at times below the gross margin line because, you know, we're relying on distributors to do some of the work there.

Ross Europe, so the Mardi gross margins definitely gonna be smaller you know bill I don't you can comment on the operating margins, but certainly we'd get a little bit more leverage of our operating costs in Europe tons below the gross margin line because you know we're relying on distributors to do some other work there.

Richard S. Eiswirth: Yeah, I would just comment on what Rick said, Jim, to point out that again, with these partnerships that we have over there, we get more of a revenue share, not a full price. Therefore, you know, the margins on those are going to be less than we see in some of our other markets just based on that lower price. But, as Rick mentioned, the cost associated with that is minimal.

Yeah, I I would just comment on with Rick said, Jim to point out that it again, you Gotta remember with these <unk>. These partnerships that we have over there we get a more of a revenue share not a full price. Therefore, the margins on those are going to be left and we would then we see in some of our other markets just based on on that lower lower price, but as <unk> mentioned the cost associated with.

That is minimal.

Richard S. Eiswirth: I'm just trying to think of the relative importance of pushing more, driving more through the U.S. versus opening up more to the EU and Benelux Territories. Walk us through sort of the thinking on that.

Just trying to figure out what the relative importance of pushing more driving more through the U S versus opening more you.

Benelux territories, good walk us through sort of thinking on that.

I I, Yeah G. M. I think they're you know they're equally important to the to the future of the company you know right, we certainly want to capitalize and grilled on the U S and we realize that you know a lot of the the investors are focused on the U S markets and we need to grow that but you know Europe and European expansion continues to be a big part of our strategy going forward you know.

Richard S. Eiswirth: Yeah, Jim, I think they're equally important to the future of the company. We certainly want to capitalize on and grow in the U.S., and we realize that a lot of investors are focused on the U.S. markets, and we need to grow that. But Europe and European expansion continues to be a big part of our strategy going forward. As I've said before, I would like to be one of the few companies out there, or the first company with multiple products in the retina space.

I as I've said before I would like to be you know you know one of the few companies out there or the first company with multiple products in the space and I think you know having the network in the region Europe that we have you know makes us an attractive partner for working together with us to do that drug because most most companies that are small companies in the U S don't have a plan or strategy junior.

Richard S. Eiswirth: And I think having the network and the reach in Europe that we have makes us an attractive partner for working together with us to make that drug, because most companies that are small companies in the U.S. don't have a plan or strategy in Europe, do they? And we've demonstrated the ability to make money there, and the bigger that network gets to be, the more value we create. So it's a big focus going forward, and I think over the long haul, you're going to continue to see about a 50-50 split in revenue between the two. It's such an important part of our future.

Right and we've demonstrated the ability to make money there and the bigger that network gets to be the more value. We're creating so you know it's a big focus going forward and I think you know over the long haul you're gonna continue to see about a 50 50 split revenue you know between the two so important part of our future.

Understood. Thank you it looks like a couple of questions I'm looking at the top line is about the same for third quarter last year. If it does you know lost 16, this quarter versus making 36 30.

Richard S. Eiswirth: Last couple of questions. The top line is about the same for the third quarter last year. EBITDA has lost 16 this quarter versus making 36 in the third quarter last year. Can you walk through the EBITDA and the change in Niveta for the quarter and then should we still be thinking around $60 million top line annually for profitability overall for the company?

Third quarter last year can you walk you sort of <unk> if it.

The changes in if it off with a quarter and then should we still be thinking around 60 million topline annually.

For profitability overall for the company.

Yeah, So Jim I mean remember two three of of last year things were pretty much you know shut down right. You know we were not travelling at all Uhm, we did when making big investments because we'd made the decision that we wanted to protect the team and their relationships and so we weren't spending a lot of promotional dollars out there and you want advisory boards meetings et cetera, because we just didn't have access.

Richard S. Eiswirth: Yeah, so, Jim, I mean, remember Q3 of last year? Things were pretty much, you know, shut down, right? We were not traveling at all.

Richard S. Eiswirth: We weren't making big investments because we made the decision that we wanted to protect the team and their relationships. And so we weren't spending a lot of promotional dollars out there at the advisory board meetings, et cetera, because we just didn't have access to the doctors. So the spending was really controlled by the environment somewhat but was well below what we were spending to operate the company back in 2019. So we've got to move back in that direction in the 4th quarter of 2019. I believe we spent about 13 and a half million on operating expenditures.

So the doctor so the spending was really controlled by the environment somewhat but was well below you know what we were spending the operating company back in 2019. So we've got to move back in that direction you know in in the fourth quarter 2019, I believe we spent about 13 and a half million in operating expenditures were still sure that we expect to grow back to that.

Richard S. Eiswirth: We're still short of that, but we expect to grow back to that. That's why you see the shortage now because we made that decision at the beginning of the 3rd quarter to start spending a little bit more to rebuild that advocacy. So, I think we'll get back there. I think that 14, 15 million dollars, 15 million dollars a quarter run rate is what gets us to break even and even up, and we think we'll be back there before.

But that's why you see the a bit of sorted now cause made that decision you know at the beginning of the third quarter to start spending a little bit more to rebuild that advocacy. So I think we'll get back. There you know think that 14 $15 million $50 million a quarter run rate is what gives us to break even at EBITDA Uhm, and we think will be back before too long.

Great. Thank you for taking my questions.

Richard S. Eiswirth: Great, thank you for taking the question.

Sure.

And if you have a question. Please press by then one.

Operator: Again, if you have a question, please press star then 1. This concludes our question and answer session. I'd like to turn the conference back over to Mr. Rick Eiswirth for any closing remarks. Thank you all for joining us today and talking about our progress in Q3 and our expectations for next year. We do look forward to sharing.

This concludes that question and answer session I'd like to turn the conference back over to Mr. Vick password for any closing remarks.

Thank you all for joining us today and talking about our progress in two three and our expectations for next year. We do look forward to you know sharing results on the fourth quarter Uhm early in in 2022. Thank you very much and have a great day.

Richard S. Eiswirth: Thank you all for joining us today and talking about our progress in Q3 and our expectations for next year. We do look forward to sharing results for the fourth quarter early in 2022. Thank you very much and have a great day.

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