Q3 2021 Oyster Point Pharma Inc Earnings Call
Good evening and welcome to Oyster point pharma third quarter 2021 earnings conference call.
My name is Jeff and I'll be the operator today.
After the company's formal remarks, there will be a question and answer session.
At this time I would.
Like to turn the call over to Mr. Daniel Lochner Oyster point Pharma Chief Financial Officer. Please go ahead.
Good evening, everyone and welcome to the Oyster point Pharma third quarter earnings conference call for the three months ending September 32021.
We issued a press release containing our third quarter financial results and recent business highlights. In addition, our press release and our Form 10-Q that was filed with the ICC. After the close of market today are available on our website under the Investor News section at Www Dot voice your points are ex stock comp.
Joining us on our call today are Dr. Jeffrey NAU, President and Chief Executive Officer of Oyster point Pharma and Johnson as Aramco, Chief Commercial officer falling Doctor now Mr. Schnitzer Rinko in my prepared remarks.
The line for questions.
During the call today, we will be making forward looking statements regarding potential future events, including statements regarding oyster point pharma as potential future financial status and results of operations and our plans and potential for success related to commercialize into your bought these forward looking statements involve known and unknown risks uncertainties and other factors.
Or is that may cause our actual results to differ materially from our future results performance and achievements expressed or implied by such statements for a description of these factors. Please see our quarterly report on Form 10-Q for the quarters in the September 30th June 30th and March 31, 2021, and our annual report on form.
<unk> 10-K for the year ended December 31, 2020 as filed with SEC.
I will now turn the call over the Doctor Geoffrey now President and Chief Executive Officer of what's your point for them.
Dan Good evening, everyone and thank you for joining us on our call today to discuss our third quarter 2021 financial results and recent business highlights.
As you may have seen in our Q3 earnings press release, we have achieved several important milestones during this quarter.
Important of which is the October 15th FDA approval, a peer via nasal spray for the treatment of the signs and symptoms of dry eye disease.
Turbine nasal spray is the first and only nasal spray and the first and only cholinergic agonist indicated for the treatment of the signs and symptoms of dry eye disease.
The on boarding of our field force was completed during Q3 and we are proud to have one of the leading U S. Eyecare focused field forces in the industry.
Last week, we hosted our national sales meeting and had the opportunity to gather our talented group of territory representatives to prepare for our launch I couldn't be more excited and impressed by the caliber of our field force that we have assembled here at Oyster point pharma. This is a team that is motivated to make this launch a success.
Following our national sales meeting we are now pleased to announce that as of this past Monday, we have initiated the U S launch of turbine nasal spray for the treatment of the signs and symptoms of dry eye disease.
This is an exciting time for patients and their eye care providers to have a new option to address the signs and symptoms of dry eye disease terabytes nasal sprays differentiated mechanism of action is believed to activate the trigeminal parasympathetic pathway, resulting in increased production of basal tear film as a treatment for dry eye disease.
Basal tear film is responsible for lubricating nursing and protecting the cornea. What's your point sales teams are launching tier via nasal spray during the season, when the signs and symptoms of dry eye disease can be further exacerbated by cold weather for living and working in dry environment, we look forward to supporting patients and allowing them to.
A experienced turbine nasal spray when they may need it the most.
As we have previously highlighted our commercial strategy includes promoting accelerated payer adoption through early introduction of oyster point and tier by up to the top payer organization.
John will share more details around our progress with payers later in the call.
As we launched hereby out there are a number of major ophthalmology meetings that are important for oyster point's with 10 for the remainder of 2021.
This week, we are attending the 2020, One American Academy of a preliminary meeting in Boston.
Started on November 3rd and will go until November six.
Your point pharma will have three accepted abstracts presented at this meeting later this month at the 2021 American Academy of Ophthalmology meeting that will be held in New Orleans in November or talk to the 15th Oyster point has an additional three accepted abstracts that will be presented at this meeting as well.
Our vision and focus on bringing innovative and transformative ophthalmic disease treatments to patients.
And building Oyster point pharma into a best in class Ophthalmology company remains our primary goal as a company I.
I would like to turn the call over to John Smith, Ranco, Oyster Point's, Chief commercial officer to discuss our ongoing efforts for the commercial launch of <unk> nasal spray for the treatment of signs and symptoms of dry eye disease in Q4 of 2021.
Thank you Jeff.
We have previously communicated the dry eye disease segment is a large market with over 17 million people diagnosed in the United States alone.
Only a small proportion of these patients approximately 2 million are currently being treated with a branded therapeutic.
Over 7 million people diagnosed with dry eye disease have tried and abandoned the currently available options.
We purposefully designed our trials to target a broad subject population to achieve clinical study results and subjects reflective of dry eye disease patients visiting and eye care practitioner.
We also allowed trial subjects to utilize artificial tears as we believe this would occur once you buy a nasal spray entered the commercial marketplace.
As a result, we believe our trial designs should allow the clinical trial experience via nasal spray to translate into clinical practice and enable access to a potentially larger addressable patient population.
Survey, a nasal spray will be a new treatment option for the large refractory patient population that exists in the dry eye disease marketplace as well as those patients who are newly diagnosed.
As Jeff highlighted previously we are incredibly excited to have initiated the U S launch it to you by a nasal spray on the member first.
Last week, we hosted our national sales meeting, where our sales representatives received the last phase of their extensive training and are now fully prepared to call on the eye care practitioner and pharmacy communities there.
They are currently detailing to your value to customers.
We have previously highlighted our commercial strategy that includes promoting accelerated payer adoption through the early introduction of oyster point in tier buyer to the top payer organizations.
We recognize the importance of developing strong market access in the dry eye market place.
We have continued our dialogue with payers throughout Q3 via the process of Preapproval information exchange.
To date Oyster point has had preapproval interactions with 16 payers, representing approximately 77% of commercial lives.
And we will continue to meet with many of the key payers any upcoming quarters now that's here by a nasal spray is approved.
We remain extremely focused on obtaining the best possible positioning for tier by a nasal spray.
Our pricing strategy has been to reflect the value of the product and to be competitively priced with the existing chronic dry eye disease therapeutic leaders.
Dubai has been launched with a list price of $592.29 per package, which reflects the value it brings to patients, including the demonstrated reduction in the signs and symptoms of dry eye disease.
Oyster point, that's very committed to supporting the dry eye disease community by supporting access to medication for appropriate patients.
We have launched a comprehensive set of patient services offerings to ensure patients can successfully navigate the patient journey and procure turbine upon a prescription being written by their eye care practitioner.
Our patient support program is called team tier buyer and for more information on this program and how to enroll please visit the website to your buyer Dash Pro dotcom.
Our drug distribution strategy includes both wholesalers distributing to retail pharmacies broadly across the United States and the digital pharmacy partner, which provides electronic prescribing an automatic enrollment and the patient savings program for eligible commercially insured patients without the need of our patient assistance offering.
Patients with commercial insurance, who have enrolled in our savings program can receive survivor as little as zero dollars out of pocket.
I would like to emphasize.
That as of November 3rd Tier buyer is available in the wholesaler distribution channel for distribution to pharmacies.
Sure via nasal spray is available in a carton containing two nasal spray bottles.
Each bottle consists of a wife nasal pump and the blue desk cover delivering 0.03 milligrams varenicline per spray.
Which equals 0.05 ml.
Each bottle delivers one spray in each nostril twice daily for 15 days.
Two nasal spray bottles will be supplied in each carton containing 60 sprays per bottle equivalent to 30 day supply with one spray in each nostril twice daily.
Survive nasal spray samples are also now available as a single multi dose nasal spray bottle.
Each bottle delivers one spray in each nostril twice daily for 15 days.
The samples are critical part of our patient an eye care provider experience and will allow appropriate patients to start treatment immediately.
We've been quite diligent with the sizing of our field force with our field force, we're able to target 20007 hundred 50 eye care practitioners, covering both optometrists and ophthalmologists, which represent approximately 94% of dry eye disease prescriptions in the markets today, helping.
Helping us in our efforts to achieve the full commercial potential of survival.
The sizing of the field force was informed by our collective experience with how to most efficiently cover the territorial map of the United States, while providing our representative with well constructed territories to drive motivation. So we can achieve success together to.
To put this into perspective Oyster point pharma now has a leading front of the eye commercial operations.
With our launch now underway our focus is on broad eye care professional and patient education and marketing.
With targeted direct to patient digital campaigns, leveraging Tobias new MLA and nasal spray route of administration.
During the initial phase of launch we are leveraging digital social media and search and once we have good payer coverage, we will broaden our reach with more extensive DTP and DTC efforts.
As Jeff mentioned, there are a number of major eye care meetings that are important for us to point to attend for the remainder of 2021.
This week, we are attending the American Academy of Optometry meeting, which is being held in Boston and with our first commercial exhibit we have had many interactions with attending up how much was to introduce tier buyer.
Next week at the American Academy of Ophthalmology meeting in New Orleans.
Oyster point plans to have substantial commercial presence, including a Tobias symposium.
We believe that with our label our clinical data and the new approach to treating dry eye disease to finance nasal spray has a very compelling therapeutic profile.
The following.
In U M away that is believed to stimulate the body's own ability to produce natural tears and restore tear film homeostasis.
As a nasal spray the route of administration spares, the ocular surface to Avaya had a well tolerated safety profile in clinical studies and the most common side effects of Dubai included sneezing cough throat and those irritation.
Improving the basal tear production was demonstrated in the majority and then a broad population of dry eye disease patients and we have a convenient tid dosing delivered in the form of a nasal spray.
I will now turn the call back over to Dan Lochner, Oyster Point's, Chief Financial officer to discuss our third quarter financial results.
Thank you John I will now provide a brief overview of oyster point pharma as third quarter financial results additional detail about our third quarter as well as our quarterly financial results can be found in our Form 10-Q that was filed with the SEC. This evening.
As a reminder, last month, we entered into a waiver and amendment to our August 2021 credit agreement with orbit to waive certain label requirements required to permit the.
Ability of the second $50 million tranche of funding as of this afternoon. We have received the proceeds from our second tranche.
For the third quarter of 2021, Oyster point pharma reported a net loss of $17 7 million compared to a net loss of $16 3 million for the same period in 2020.
As of September 32021, cash and cash equivalents were $184 2 million compared to $192 6 million as of December 31, 2020.
Based on our current business plan, we believe the company has available cash and cash equivalents will be sufficient to fund the companys planned operations for at least 12 months from our 10-Q filing.
Evening.
Total research and development expenses for the third quarter of 2021 were $6 2 million compared to $8 2 million for the same periods. In 2020. The decrease was primarily driven by lower CMC expenses incurred by the company in the third quarter of 2021 compared to the third quarter of 2020, which concluded.
Significant preapproval inventory costs as well as expenses related to the preparation of the NDA filing in December 2020.
Selling general and administrative expenses for the third quarter of 2021 were $28 5 million compared to $8 1 million for the same period in 2020.
The increase was driven by higher payroll related expenses of $11 2 million inclusive of an increase in stock based compensation of <unk> 8 million due to the additional head count as well as higher commercial planning expenses of $5 2 million in anticipation of a U S launch of to your buying a nasal spray in the fourth quarter of 2021.
In addition, the company incurred higher other general and administrative expenses of $3 1 million related to accounting legal facilities and information technology costs. The company also incurred an increase in medical affairs costs and the amount of <unk> 9 million during the third quarter of 2021 compared to the third quarter of 2020.
Now as we turn to our financial outlook at launch our goal is to achieve broad ECP and patient experience with tier via and both the optometry and ophthalmology offices in order to reach the total addressable dry eye disease market opportunity of tier via nasal spray, we anticipate the large.
<unk> National commercial plans will start to make their coverage determinations beginning at the end of Q2 'twenty two as.
As commercial payer coverage builds throughout 2022, we will provide patient assistant programs to assist eligible commercial patients in gaining access to Dubai, while we await such coverage determinations. During Q4 'twenty one and 2022. This strategy can do you expect to place pressure on our gross to net.
Not dissimilar to other biopharmaceutical companies launching a new branded pharmaceutical.
Over time, though we believe this dynamic will subside and become more normalized in the out years as volume grows strategically positioning tier buyer to achieve its full potential.
For Q4 'twenty. One in addition to the growth in that considerations mentioned I would note that as our field force engaged with Ecp's. They will only have a partial quarter to market to your buyer.
With that overview of our financials I will now turn the call back over to the operator to open up the line for questions.
Thank you.
As a reminder to ask a question you will need to press star one on your telephone to Joe Your question press. The pound key please standby, we compile the Q&A roster and once again that is star one.
Our first question comes from Ken Cacciatore Cowen <unk> Company. Your line is now.
Hey, guys couple of questions. Just wondering how would you characterize the reps that you've been able to hire or are they very experienced and try out your general ophthalmology and then Dan that was great commentary about pacing would you want to give a little bit of sense.
Some of us are around $35 million to $40 million in revenue.
Sounds like obviously, it would be back half weighted around the coverage decisions, but maybe just give a little bit of a sense. What you. All would you have six SaaS. If you don't want to talk about revenues, maybe talk about share expectations exiting 2022.
Would be helpful. And then lastly, the patient support system clearly is going to be critical in the first six to nine months. So understanding that we could go to the to the webpage and take a look at it but maybe a little bit more nuance around co pay assistance.
Works.
So what degree E C or maybe was there any.
<unk> or best practices that you saw that others did that did you are trying to implement here that that would be wonderful to hear about thanks. So much.
Yeah.
Great Ken. Thank you so much for your question I'll address the first and third one.
The two commercial questions and then.
I'll hand that over to you in regards to our representatives that we've hired and trained and they're now in the field.
We were trying to find the right mindset. These are reps that have been working in competitive environments in their past.
And I would say close to 40% to 45% of our Rep population has had previous eyecare experience.
Both front of the eye as well as back of the eye and medical devices pharmaceutical. So we feel we have quite a tenured field force.
And quite a motivated field force based on our National sales meeting last year last year last week I'm sorry.
In regards to the patient support program. So we did announced literally a couple of days ago that.
How it will work is that for eligible patients.
That are commercially insured if they are insured, but the product is not covered.
He will go into our bridge program.
So they will pay as little as $10 for that.
Prescription and we will be making sure that that prescription is filled put that patient until they get in until Tobias gets insured in their plan.
For patients that are insured and covered the co pay will be zero dollars out of pocket for those eligible patients. So how it works is that if they go into Dar team turbine site or if the practitioner actually enrolls them on the spot they will receive it.
Text right of way that they are enrolled and they are in that savings program.
And then our patient services hub does behind the scenes all the the work to make sure that.
That script is still with the appropriate co pay out of pocket to the patient.
I think you mentioned.
Best practice from our previous experiences.
We did look at the landscape both in ophthalmology as well as outside of ophthalmology to see what really works well and we took some of the best aspects of.
What we've seen so its really.
Automation is a key thing technology, so that patients and physicians theres not a lot of faxing and paperwork. It actually is more electronic its more streamlined and hopefully an easier experience for the patients as well. So we've taken examples from the migraine space. We've also looked at what worked well with XI dry and other.
Like product from that perspective, and we we feel we've packaged kind of one of the most comprehensive patient services programs.
We hope that will support your Biopharma launch great jump before we turn it over to Dan I was just wondering about part D and just kind of setting our expectations and to what degree it's important here in this patient population.
It is very important.
We've mentioned before that almost.
If you look at the patient population, 40% of commercially insured 40 per center.
Medicare part D. And then the remainder are cash in Medicaid and so on so forth. So it is important for us to eventually get Medicare D listings.
We've already started dialogue with payers, we know the contracting cycle four.
For the following year is always closing in mid June time period. So we missed the med D contracting.
Contracting for 2022, but we are starting the dialogue and we'll start that contracting cycle to be lifted hopefully in 2023 from a commercial insurance perspective, we've had many interactions with payers in a preapproval setting to date and now that were approved were meeting with them again and expanding that to date.
Had very good interactions and a lot of interest in.
Specifically the differentiation that different MLA in regard of administration, which payers have been very.
Excited about and interested in so now we're meeting with them over the next couple of quarters too.
To try to get.
Sure via listed really as quickly as we can.
We're hoping 12 months post launch we have approximately 80% of commercial lives covered.
Yeah, and then on the on the revenue side the way we're thinking about it is very early on we're focused on really trying to get.
The experienced that tier buyer with not just the <unk>, but also with.
Patients themselves and so there's that.
<unk> strategic focus, which is really based off of driving share.
Of mind and share of voice as well.
<unk> and so on the first quarter out which would be Q4 as well as partly in Q1 were really trying to cover those those 20750 targets that are <unk> or our sales force is really targeting and it will take time to really get into a physician offices talk.
About the product.
Cover them once or twice and then really start seeing the pull through in terms of the patients and then we would anticipate that to be kind of on a sequential basis as you walk through the quarters.
And then of course.
Once you start seeing the Interac, then start seeing the refills pull through and the ratios of interacts with Trs will change over time as that persists and starts to pull through then of course the other dynamics that we we did touch on that is really a consequence of payer coverage is the gross to net which is really a consequent.
Once of the period of coverage at launch and then of course.
When we believe those national commercial payers will begin to have your coverage determinations.
We're currently looking at the later part of Q2, 'twenty, two and that of course as they come on has a positive impact to the gross to net but in those earlier quarters.
There is that patient assistant programs in place to really ensure that.
Patients can get on product they can get filled.
And are able to really benefit from from the from a product itself, but that of course has that kind of a temporary dynamic at play.
Okay. Thanks, so much excited to watch the launch thanks.
Thank you.
And our next question comes from Joe Catanzaro from Piper Sandler.
Your line is now open.
Great. Thanks, so much thanks for taking my questions. Maybe just two couple of quick ones for me. So you guys have emphasize sort of the the prevalent pool of patients who have tried other options and failed and I'm wondering if there's any way to have lead on those patients who have tried and abandoned other options like restasis inside.
And if those patients believe they have exhausted all options.
How frequently are they returning to.
So their position how easy is it to get them back into the office and just a quick follow up I know, it's early days, but I'm wondering if you have a sense around the level of in person engagement.
That your sales force is having with physicians.
Thanks, Joe.
In regards to the prevalent patients and the once that are abandoned treatments over the years.
We see that pool is approximately approximately $7 million.
And they do come in regularly to get their eye exams in ophthalmic.
Nick.
Examinations for diseases and so on.
And.
I know.
Heard from our physicians is that they have a pool of patients that they are waiting to try something new on and to your bias in our initial interactions this week already.
We were hoping to at least hit on those on those physicians in the top tiers are at least once introduced your buyer. So.
That is our goal for this year. So it's an ambitious one but we were on track from a cost perspective to hit them all.
Okay perfect. That's helpful. Congrats again and thanks for taking my question.
And thank you and our next question comes from a <unk> Rama from J P. Morgan.
Your line is now okay.
Hey, guys. Thanks, so much for taking the question I think I think if I heard correct me.
And your pair discussions you you talk gotten some pre approvals from 15 payers, which covers 75% of commercial lives in those discussions.
Have there been any indication that there may be any step edits or anything like that before you get them.
You know reimbursed for the product thanks, so much.
Thanks Ana Paula.
To describe our preapproval information exchange.
These exchanges are definitely with the medical side of the payers.
Along with the business side.
Part of it is presenting to PMT committees and we we've covered those 16 payers Scott.
You know cover approximately 77% of commercial lives prior to our approval now that we do have approval. That's when you come in and start talking about the contracting and so on.
Our goal is to get the best possible listings without any step edits through our.
<unk> products.
No. The majority of payers do have some prior authorizations or with artificial tears said patients I should try artificial tears before going onto a prescription. So we feel that's going to be table Stakes for all the products that are incumbent as well as ourselves in any new products that come but we do want to make sure that we're on a level playing for.
And we don't have the step edits.
Well when we do come to the contracting discussions that will happen over the next couple of quarters.
Thanks, so much for taking my question.
Yeah.
Continuing to do development. So as you know we continue to work on neurotrophic Keratopathy in stage. One patients. We are also engaged with our partner in China, where we'll continue to do some clinical development.
Attain approval in China, So there's always the possibility that we will.
Continue to expand the label and add additional clinical data to the label what I would say is that we think that it's incredibly.
Important that we were able to obtain that signs and symptoms.
Indication statement and so that's important for us as.
As we stated before the FDA has.
Consistently landed on primary or co primary endpoints and the efficacy section and although we would've liked that in there.
We do think that we will.
Be able to use that information from our clinical trials.
We are talking to clinicians and I'll, let John talk a little bit more about that but I would just stress that we are continuing to develop this product. This is the first indication we look to bring on additional indications and expand the label to other patient populations and there will be additional dry eye.
Disease data that we will be developing as we move into other parts of the world as well.
Any of you know dry eye diseases handled differently.
In other parts of the world with different endpoints in different requirements and so.
We expect as we move into those other areas, including China being the first one that we will continue to expand our dataset and the amount of clinical information that we're able to then bring back to the agency John will talk a little bit about how that data will be able to be used in the marketplace.
Yes, Thanks, Jeff.
To get initial trial very quickly.
We have we feel very competitive share of voice in regards to the number of territory managers that are calling on the eye care practitioners were targeting 94% of the prescriber base that that I mentioned earlier.
And.
Over the years we've observed.
Some of the aspects of the launches that are that have been done very well. We feel this is very promotion really sensitive segment. So our.
<unk> as we get commercial insurance listings in direct to consumer direct to patient advertising is going to ramp up because we do see that this market does respond to investment.
C N DTP so.
We're going to invest in all of these levers and hopefully the combination of them is what's going to.
Provide a stellar launch for us.
Excellent congrats and thanks again for taking our questions.
I would now like to turn the call back over to Jeff with Doctor Geoffrey now for closing remarks.
Thank you operator, and thanks to all of you for joining our call today as I mentioned in my opening remarks, we're extremely pleased to announce that <unk> nasal spray indicated for the treatment of the signs and symptoms of dry eye disease is now available to eye care providers in the U S. Our vision and focus on bringing innovative and transformative ophthalmic disease.
Treatments to patients and building Oyster point pharma into a best in class Ophthalmology company remains our primary goal. We look forward to seeing everyone next week in New Orleans at the American Academy of Ophthalmology meeting, where we will continue to interface with the art care community regarding to your by a nasal spray in closing I want to thank everybody for joining us Tonight and to have.
Have a great evening.
This concludes today's conference call. Thank you for participating you may now disconnect.
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