Q4 2021 Alimera Sciences Inc Earnings Call

Operator: Ladies and gentlemen, thank you for standing by. Good morning and welcome to the Alimera Sciences fourth quarter and full year 2021 Financial Results and Corporate Update conference call. At this time, all participants are in a listen-only mode.

Ladies and gentlemen, thank you for standing by good morning, and welcome to the Alley marrow Sciences fourth quarter and full year 2021 financial results and corporate update conference call. At this time, all participants are in a listen only mode.

Need assistance. Please signal a conference specialist by pressing the star key followed by zero. After today's presentation there'll be an opportunity to ask questions to ask a question you May Press Star then one on your telephone keypad to withdraw your question. Please press Star then two.

Operator: After today's presentation, there will be an opportunity to ask questions. If you have 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. A webcast replay of the call will be available approximately one hour after the end of the call through May 24th, 2012. I would now like to turn the call over to Scott Gordon of CoreIR, the company's investor relations firm. Please go ahead.

Participants of this call are advised that the audio of this conference call is being broadcast live over the Internet and is also being recorded for playback purposes. A webcast replay of the call will be available approximately one hour. After the end of the call through may 24th 2022.

I'd like to turn the call over to Scott Gordon of core IR, The company's Investor Relations firm. Please go ahead Sir.

Thank you Gary Good morning, and thank you for participating in today's conference call. Joining me from <unk> leadership team are Rick Iceberg, President and Chief Executive Officer, Phil Jones, Chief Financial Officer.

Scott Gordon: Thank you, Kerry. Good morning, and thank you for participating in today's conference. 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. Poor-looking statements involve risks and other factors that may cause actual results to differ materially from those statements.

Scott Gordon: For more information about these risks, please refer to the risk factors, and Alimera's most recently found periodic reports, 1.10k, 1.10q, will perform a kink pop of the SEC today and Alimera's press release that accompanies this call, particularly the cautionary statements in it. Today's conference call contains adjusted EBITDA, a non-GAAP financial measure that Alimera believes can be useful in evaluating its performance. However, should not consider this additional information in isolation or as a substitute for results prepared in accordance with CAP. For a reconciliation of this non-GAAP financial measure to net loss, its most directly comparable GAAP financial measure, please see the reconciliation table located in Alimera's earnings press release.

During this call management will be making forward looking statements, including statements that address element as expectations.

Your performance or operational results.

Forward looking statements involve risks and other factors that may cause actual results to differ materially from those statements for more information about these risks please refer to the risk factors.

Scribing Alamos most recently filed periodic reports on Form 10-K Form 10-Q .

Form 8-K filed with the FCC today and Alan There is press release that accompanies this call, particularly cautionary statements in it.

Today's conference call contains adjusted EBITDA, a non-GAAP financial measure that Allomap I believe can be useful in evaluating its performance you should not consider this additional information in isolation or as a substitute for results prepared.

Yeah.

For a reconciliation of this non-GAAP financial measure to net loss its most directly comparable GAAP financial measure. Please see the reconciliation table located in our earnings press release. The content of this call contains time sensitive information that is accurate only as of today February 20.

Scott Gordon: The content of this call contains time-sensitive information that is accurate only as of today, February 24, 2022. 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.

2022, except as required by law.

<unk> disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur. After this call.

It's now my pleasure to turn the call over to brick house with Rick. Please go ahead.

Thank you Scott and good morning to everyone on the call I'm very pleased to report that we continued our revenue growth in the second half of the year a sign about recovering from the pandemic. We're now positioned to return to more consistent growth in 2022 is access to physicians continues to improve.

Rick Eiswirth: Thank you, Scott, and good morning to everyone on the call. I'm very pleased to report that we continued our revenue growth in the second half of the year, a sign of our recovery from the pandemic. We are now positioned to return to more consistent growth in 2022 as access to positions continues to improve. We reported net revenue of $59 million in 2021, up 16% compared to the full year of 2020, driven by a strong finish to the year in our U.S. business and the OccuMention license deed that we received in the second quarter for registering our Alluvion formulation in the Western Pacific.

We reported net revenue of $59 million in 2021 up 16% compared to the full year of 2020, driven by a strong finish to the year in our U S business and the Ark you mentioned license fee that we received in the second quarter breakthrough ILUVIEN formulation and the Western Pacific.

Rick Eiswirth: We delivered adjusted EBITDA of $3.6 million in 2021, which compares to adjusted EBITDA of $3.5 million in 2020. Importantly, we took the initiative mid-year to increase our investments in connecting with physicians and driving growth in 2022. We believe we've seen early returns on these investments in the U.S. as end-user demand was up in the second half of 2021, with the fourth quarter being our best quarter since the onset of the

We delivered adjusted EBITDA of $3 $6 million in 2021, which compares to adjusted EBITDA of $3 $5 million in 2020.

Importantly, we took the initiative mid year to increase our investments in connecting with physicians and driving growth in 2022.

We believe we have seen early returns on these investments in the U S. As end user demand was up in the second half of 2021 with the fourth quarter being our best quarter since the onset of the pandemic.

Rick Eiswirth: We've bent the curve over the year, with U.S. end-user demand for alluvium finishing up 7% over 2020, despite being down almost 14% at the end of the first quarter of 2021. In the fourth quarter, we generated 982 units of end-user demand for alluvium in the U.S., up 13% year-over-year, despite the surge of the Omicron variant. And on a sequential basis, our unit volume was up 17% compared to the third quarter of 2021, indicating an acceleration of our growth rate.

We bent the curve over the year with U S end user demand for 2021, finishing up 7% over 2020, despite being down almost 14% at the end of the first quarter of 2021.

In the fourth quarter, we generated 982 units in end user demand for ILUVIEN in the U S up 13% year over year. Despite the surge of the omicron bearing and on a sequential basis. Our unit volume was up 17% compared to the third quarter of 2021, indicating acceleration of our growth rate.

Rick Eiswirth: We also had a strong fourth quarter in the U.S. from a gap perspective, reporting U.S. sales of $8.4 million, 14% growth compared to the fourth quarter of 2020, and 20% growth sequentially from the third quarter of 2021. Our strong performance was driven by increased face-to-face interactions, both inside and outside of the clinic, and our advocacy efforts.

We also had a strong fourth quarter in the U S from a GAAP perspective reporting U S sales of $8 4 million, 14% growth compared to the fourth quarter of 2020, and 20% growth sequentially from the third quarter of 2021.

Our strong performance was driven by increased face to face interactions both inside and outside of the clinic and our advocacy efforts.

We are excited to have launched our U S direct to patient or DTP can't marketing campaign in mid January . This campaign is designed to reach potential ILUVIEN patients in areas, where we have high prescribing practices.

Rick Eiswirth: We are excited to have launched our U.S. Direct-to-Patient, or DTP, marketing campaign in mid-January. This campaign is designed to reach potential Alluvian patients in areas where we have high prescribing practices. We believe there is a significant opportunity to appeal to patients who desire to see better, longer, with fewer injections. And we believe the pandemic has highlighted the need for alluvium for both patients and physicians. You may recall that we ran a successful pilot DTP campaign in selected markets in 2019.

We believe there is a significant opportunity to appeal to a patients who desire to see better longer with fewer injections and we believe the pandemic has highlighted the need for ILUVIEN for both patients and physicians.

You may recall that we ran a successful pilot DTP campaign in selected markets in 2019.

Rick Eiswirth: Our 2022 campaign consists of streaming video and display ads on social and other digital media, as well as a non-branded educational site. The campaign spans 10 regional markets in the U.S. that have a high prevalence of diabetes, and targets are based on behavioral and demographic qualifications. Early in the campaign, we're already trending above our weekly impression goals with our DPP tactics.

2022 campaign consists of streaming video and display ads on social and other digital media as well as a non branded educational site.

The campaign spans 10 regional markets in the U S that have a large prevalence of diabetes and targets are based on behavioral and demographic qualifications.

Early in the campaign, we're already trending above our weekly impression goals with our DTP tactics in our website traffic to a living dot com has increased more than two and a half times since the D. T. P launch began.

Rick Eiswirth: And our website traffic to alluvion.com has increased more than two and a half times since the DTP launch began. We believe that this campaign will help us maintain sales and wellness in our U.S. business by reminding patients and physicians of the alleviating benefits, namely the ability to see better longer with fewer injections. Turning to our international business, we note that it was challenged throughout the year due to the severe access restrictions in Europe caused by the COVID-19 variant. Fortunately, we are seeing these restrictions removed in our markets in February and March.

We believe that this campaign will help us maintain the sales in women than in our U S business by reminding patients and physicians of ILUVIEN benefits, namely the ability to see better longer with fewer injections.

Turning to our international business. We note that it was challenged throughout the year due to the severe access restrictions in Europe caused by the COVID-19 virus.

Namely we are seeing these restrictions removed in our markets during February and March <unk>.

Rick Eiswirth: International sales for full year 2021 were up 24% year over year to $32.3 million, including the $11 million upfront license fee that we received from OccuMention for living in the western Pacific. Excluding the Occupation License Fee, our full year 2021 international lubing sales declined 18% from $26 million in 2020 to $21.3 million in 2021. As we previously shared, this was primarily a result of our international distributor partners building inventory in late 2020, only to see limited demand in the first half of 2021 due to the variants and restrictions.

International sales for full year, 2021 were up 24% year over year to $32 3 million.

Including the $11 million upfront license fee that we received for marquee mentioned for ILUVIEN in the western presented excluding.

Excluding the Aki mentioned license fee, our full year 2021 International ILUVIEN sales declined 18% from $26 million in 2020 to $21 3 million in 2021 as.

As we previously shared this was primarily a result of our international distributor partners building inventory in late 2020, only to see limited demand in the first half of 2021 due to the variance and restrictions.

Rick Eiswirth: However, we did see some positive trends in our international segment in the fourth quarter, despite stay-at-home mandates and other continuing restrictions. We were pleased to see sequential revenue growth of 8% in the fourth quarter over the recently completed third quarter. And importantly, end user demand across our entire international segment, including both direct and indirect markets, was the highest since before the impact of COVID-19 in the first quarter of 2020. Despite the challenges of the pandemic, we continue to execute on our expansion of the global markets in which lubing is available for the treatment of both DME and non-infectious posterior UVIs.

However, we did see some positive trends in our international segment in the fourth quarter. Despite the stay at home mandates and other contingent restrictions.

We were pleased to see sequential revenue growth of 8% in the fourth quarter over the recently completed third quarter.

And importantly, the end user demand across our entire international segment, including both direct and indirect markets was the highest since before the impact of COVID-19 in the first quarter of 2020.

Despite the challenges of the pandemic, we continue to execute on our expansion of the global markets I'm going to leave me is available for the treatment of both tami and non infectious posterior uveitis.

Rick Eiswirth: At the end of 2021, Bolivian was approved and available for the treatment of DME and in non-infectious posterior uveitis in 16 European countries, compared to only nine at the end of 2020. In late 2019 and over the course of 2021, we added the Nordic countries, the Benelux countries, and the Czech Republic from an availability standpoint.

At the end of 2021, ILUVIEN was approved and available for the treatment of D Mi and non infectious posterior uveitis in 16 European countries compared to only nine at the end of 2020.

In late 2019 and over the course of 2021, we added the Nordic countries, the Benelux countries and the Czech Republic from an availability standpoint.

Rick Eiswirth: However, neither we nor our partners provided significant commercial support in 2021 due to the restrictions of the pandemic. We're excited for the opportunity to grow our DME business in these markets as restrictions elapse and access improve. Further, we are anticipating the opportunity for growth from the posterior uveitis indication.

However, neither we nor our partners provided significant commercial support in 2021 due to the restrictions of the pandemic.

We're excited for the opportunity to grow our <unk> business in these markets as restrictions are labs and access improves.

Further we are anticipating the opportunity for growth from the post your uveitis indication you may recall that earlier this month, we announced pricing approval for this indication in Spain. Our partner Brill pharma is now launching into this market where treatment options are limited.

Rick Eiswirth: You may recall that earlier this month we announced pricing approval for this indication in Spain. Our partner Brill Pharma is now launching into this market where treatment options are limited. Prior to this, Elluvian had only been marketed for posterior uveitis in Germany and the UK.

Prior to this ILUVIEN has only been marketed for push here in Germany, and the U K, we're working on obtaining reimbursement for the additional markets and expect to launch in a few of these in 2022.

Rick Eiswirth: We're working on obtaining reimbursement for the additional markets and expect to launch a few of these in 2022. Access to care appears to be improving in Europe, as evidenced by lockdowns being lifted. We believe this improved access, increased commercial activities in our new markets, reimbursement for posterior units in new markets, and normalized inventory levels with our distributor partners will lead to growth in 2022 in our international second. And with that, I'll now turn the call over to Phil, who will review our financial results for the quarter and the full year. Thanks, Rick, and hello, everyone.

Access to care appears to be improving in Europe , as evidenced by Lockdowns being lifted.

We believe this improved access increased commercial activities in our new markets reimbursement for post theory, you added some new markets and normalized inventory levels with our distributor partners will lead to growth in 2022 and international segment.

And with that I'll now turn the call over to Phil who will review our financial results for the quarter and the full year.

Thanks, Rick and Hello, everyone. During the fourth quarter of 2021, our consolidated net revenue was up approximately 1% to $14 million compared to $13 $8 million in the fourth quarter of 2020, our consolidated net revenue was up 15% sequentially compared to the third quarter of 2021, driven by higher sales in our U S.

Phil Jones: During the fourth quarter of 2021, our consolidated net revenue was up approximately 1% to $14 million, compared to $13.8 million in the fourth quarter of 2020. Our consolidated net revenue was up 15% sequentially compared to the third quarter of 2021, driven by higher sales in our U.S. business sector. U.S. net revenue was approximately $8.4 million for the fourth quarter of 2021, an increase of only 14% from the $7.4 million reported in the 2020 period. However, US net revenue was up 20% sequentially compared to the third quarter of 2021.

Business segment U.

U S. Net revenue was approximately $8 $4 million for the fourth quarter of 2021, an increase of 14% from the $7 $4 million reported in the 2020 period.

U S. Net revenue was up 20% sequentially compared to the third quarter of 2021.

U S end user demand, which represents units purchased by our physicians and pharmacies from our distributors increased 13% in the fourth quarter of 2021 to 982 units compared to 867 units in the fourth quarter of 2020, However end user demand grew 17% sequentially versus the third quarter of 2021 and.

Phil Jones: U.S. end-user demand, which represents units purchased by our physicians and pharmacies from our distributors, increased 13% in the fourth quarter of 2021 to 982 units compared to 867 units in the fourth quarter of 2020. However, end-user demand grew 17% sequentially versus the third quarter of 2021, an indication of a recovery in U.S. treatment. As we have previously shared, our gap revenues in the U.S. do not always correlate with end-user demand due to the timing of purchases by our specialty distributors. For example, in the fourth quarter of 2021, Alimera's U.S. distributors purchased approximately 6% more units than were sold to end-users. Net revenue from our international segment decreased by approximately 13% to $5.6 million for the fourth quarter of 2021.

Patient recovery in U S treatment.

As we've previously shared our GAAP revenues in the U S do not always correlate with end user demand due to the timing of purchases by our specialty distributors in the fourth quarter of 2021, Ala mirrors U S distributors purchased approximately 6% more units than were sold to end users.

Net revenue from our international segment decreased approximately 13% to $5 $6 million for the fourth quarter of 2021.

Phil Jones: This compares to $6.4 million reported for the same period last year. The decrease in our international net revenue was due to the impact of COVID-19 variants, which limited our ability to come face-to-face with our customers and kept patients from going to hospitals for their DME and posterior uveitis treatment in both our direct and distributor markets. Total consolidated operating expenses were approximately $14.7 million in the fourth quarter of 2021, an increase of 26.7% compared to $11.6 million reported in the fourth quarter of 2020. The higher operating expenses were due to our decision to increase investment in promotional and medical expenses to accelerate growth as COVID-19 becomes better managed.

This compares to $6 $4 million reported for the same period last year.

The decrease in our international net revenue was due to the impact of COVID-19, variance, which limited our ability to come based on pace with our customers and kept patients from going to hospitals for their dnb plus theory posterior uveitis treatment in both our direct and distributor markets total consolidated operating expenses were approximately $14 7 million.

In the fourth quarter of 2021, an increase of 26, 7% compared to $11 $6 million reported in the fourth quarter of 2020.

The higher operating expenses were due to our decision to increase investment in promotional and medical expenses to accelerate growth as ILUVIEN as COVID-19 becomes better managed.

We reported an adjusted EBITDA loss of $1 $9 million in the fourth quarter of 2021 compared to positive adjusted EBITDA of $1 $1 million in Q4 2020.

Phil Jones: We report an adjusted EBITDA loss of $1.9 million in the fourth quarter of 2021 compared to a positive adjusted EBITDA of $1.1 million in Q4 2020. This is due to the increases in promotional and medical spend mentioned earlier. For the three months ended December 31, 2021, we reported a net loss of approximately $4.1 million compared to a net loss of approximately $1 million for the three months ended December 31, 2020. Basic and diluted net loss per share for the fourth quarter of 2021 was $0.59 on approximately 6.9 million weighted average shares outstanding.

This was due to the increases in promotional and medical spend mentioned earlier.

For the three months ended December 31, 2021, we reported a net loss of approximately $4 $1 million compared to a net loss of approximately $1 million for the three months ended December 31 2020.

Basic and diluted net loss per share for the fourth quarter of 2021 was 59.

On approximately $6 9 million weighted average shares outstanding. This compares to basic and diluted net loss per share for the fourth quarter of 2020 of 18 cents on approximately $5 4 million weighted average shares outstanding.

Phil Jones: This compares the basic and diluted net loss per share for the fourth quarter of 2020 of $0.18 on approximately 5.4 million weighted average shares outstanding. Looking to our results for the full year, consolidated net revenues for 2021 were $59 million, an increase of approximately 16% from the $50.8 million that we reported in 2020. Our revenue in 2021 included $11 million that we received from our license agreement with Aki mentioned above for the marketing rights to alluvium formulation technology in China and the Western Pacific. Total operating expenses in 2021 were $52.2 million, an increase of 17.6% compared to the $44.4 million reported in 2020.

Phil Jones: The year-over-year increase in total operating expenses was primarily due to our decision to increase investment in our commercial and medical activities in the second half of 2021 to drive sales recovery and growth post-pandemic. For the full year 2021, we reported just a DBDOT of $3.6 million compared to $3.5 million in 2020. For the year ended December 31st, 2021, we reported a net loss of $4.4 million compared to a net loss of $5.3 million for the year ended December 31st, 2020. Basic and diluted net loss per share for 2021 was $0.66 on approximately 6.6 million weighted average shares outstanding.

Turning to our results for the full year consolidated net revenues for 2021 were $59 million, an increase of approximately 16% from the $58 million that we reported in 2020.

Our revenue in 2021 included $11 million that we received from our license agreement with Archie mentioned for the marketing rights to ILUVIEN formulation technology in China and the Western Pacific.

Total operating expenses in 2021 were $52 $2 million, an increase of 17, 6% compared to the $44 $4 million reported in 2020.

The year over year increase in total operating expenses was primarily due to our decision to increase investment in our commercial and medical activities in the second half of 2021 to drive sales recovery and growth post pandemic.

For the full year 2021, we reported adjusted EBITDA of $3 $6 million compared to $3 $5 million in 2020.

For the year ended December 31, 2021, we reported net loss of $4 $4 million compared to a net loss of $5 $3 million for the year ended December 31 2020.

Basic and diluted net loss per share for 2021 with 66 cents on approximately $6 6 million weighted average shares outstanding. This compares to basic and diluted net loss per share for 2020 of $1.04 on approximately $5 1 million weighted average shares outstanding on December 31.

Rick Eiswirth: This compares to a basic and diluted net loss per share for 2020 of $1.04 on approximately 5.1 million weighted average shares outstanding. As of December 31st, 2021, we had cash and cash equivalents of approximately $16.5 million compared to $11.2 million in cash and cash equivalents that we reported on December 31st, 2020. And with that, I'll turn it back over to Rick. Thank you, Phil. Before we open up for questions, I'm excited to share a little bit of new data on alluvium. Yesterday, we announced the publication of favorable three-year results from our Paladin study in the medical journal Ophthalmology. We believe these results once again confirm the safety and efficacy of alluvium in the treatment of DME.

2021, we had cash and cash equivalents of approximately $16 5 million compared to $11 $2 million in cash and cash equivalents that we reported on December 31 2020.

And with that I'll turn it back over to Rick.

Thank you Phil before we open up for questions I'm excited to share a little bit of new data on ILUVIEN yesterday, we announced the publication of a favorable three year results from our Paladin study in the medical Journal Ophthalmology.

We believe these results once again confirm the safety and efficacy of ILUVIEN in the treatment of D Me.

Rick Eiswirth: Paladin was a Phase IV, three-year perspective observational study that was conducted in the U.S. across 41 clinical sites. The study was designed and developed to confirm the benefit of using a prior course of corticosteroid, as indicated on the U.S. label, to mitigate the risk of IOP-lowering surgery. Importantly, 2.97% of eyes required IOP-lowering surgery, but only half of these were due to steroid-induced ocular hypertension following the administration of aluvium in accordance with the U.S. label.

Paladin was a phase four three year perspective observational study it was cut conducted in the U S across 41 clinical sites. The study was designed and developed to confirm the benefit of using a prior course of corticosteroid as indicated in the U S label to mitigate the risk of IOP lowering surgery.

Importantly, 297% of eyes required IOP lowering surgery, but only half of these were due to steroid induced ocular hypertension. Following the administration of ILUVIEN in accordance with U S label.

Rick Eiswirth: This compares favorably to the 4.8% seen in the Pivotal Fame study. The study, however, also looked at several other outcomes. I've completed 36 months of treatment with oblivion and achieved statistically significant outcomes in two key parameters. Functionally, patients experienced a mean 3.6 letter increase in visual acuity three years post-treatment, a statistically significant improvement. But importantly, this was after these same study eyes had experienced a mean 6.7 letter loss of visual acuity in the three years prior to the treatment of lutein while receiving other therapy.

This compares favorably to the four 8% seen in the pivotal Fame study.

The study however, also looked at several other outcomes.

<unk> completed 36 months of the treatment of malignant achieved statistically significant outcomes in two key parameters.

Functionally patients experienced a mean three six letter increase in visual acuity three years post treatment.

A statistically significant improvement, but importantly, this was after these same study eyes had experienced a mean six seven letter loss of visual acuity in the three years prior to the treatment of ILUVIEN, while receiving other therapies.

Rick Eiswirth: Anatomically, patients achieved a statistically significant decrease in central retinal subfield thickness, a measure of edema, at all time points measured in the study when compared to baseline, and Illuvian again demonstrated a significant decrease in the required number of treatments.

And it's all likely patients reached a statistically significant decrease in central retinal subfield thickness, a measure of edema at all time points measured in this study when compared to baseline.

And ILUVIEN again demonstrated a significant decrease in the required number of treatments.

Rick Eiswirth: In the three-year period prior to alluvium, study eyes received a median of 3.4 treatments per year. And during the three-year follow-up period with the alluvium implant in place, the median treatment frequency declined to just one treatment per year. This represents a 70.5% reduction in treatment burden for patients, demonstrating that Alluvion already provides the durability that many companies are searching for. And furthermore, a post-hoc analysis of the 36-month paladin data suggests that the use of alluvium earlier in the treatment algorithm for DME could lead to more desirable digital acuity outcomes. Study eyes that had received six or fewer treatments for DME before Leuvian administration demonstrated an improvement of 5.7 letters in digital acuity.

And the three year period prior to ILUVIEN study eyes received a median of three four treatments per year and during the three year follow up period with ILUVIEN implant in place the medium treatment frequency declined to just one treatment per year.

This represents a 75% reduction in treatment burden for patients.

Demonstrating that ILUVIEN already provides the durability that many companies are searching for.

And further our post hoc analysis of the 36 month Palatin data suggest that the use of ILUVIEN earlier in the treatment algorithm for D me could lead to more desirable visual acuity outcomes study.

Study is that it received six four fewer treatments for D me before Luwian administration demonstrated an improvement of $5 seven letters and visual acuity.

It was significantly better than the more heavily treated patients who received seven or more treatments before receiving live in as those patients only gained one eight letters in visual acuity.

Rick Eiswirth: This was significantly better than the more heavily treated patients who received seven or more treatments before receiving Olivine, as those patients only gained 1.8 letters in visual acuity. This is exactly what we expect to see in the New Day study. Reducing treatment frequency and a benefit from earlier alluvian intervention. As a reminder, our landmark New Day study is our ongoing head-to-head clinical trial designed to demonstrate the advantages of alluvium as baseline therapy over repeated anti-VEGF injections in the treatment of naive and near-naive patients suffering from DMA. We believe there is strong evidence that Illuvian's long-term durability and anti-inflammatory properties significantly reduce the need for frequent and recurring injections and improve patient outcomes compared to the leading anti-vegetative therapies.

This is exactly what we expect to see in the New day study.

Reduce treatment frequency and a benefit from earlier ILUVIEN intervention as a reminder, our landmark new days study is our ongoing head to head clinical trial designed to demonstrate the advantages of ILUVIEN as baseline therapy over repeated anti VEGF injections in the treatment of naive and near 90 patients suffering from deeming.

We believe there is strong evidence that <unk> long term durability.

Durability, and anti inflammatory properties significantly reduced the need for frequent and recurring injections and can prove improved patient outcomes compared to the leading anti VEGF therapies.

Operator: And with that, I will now turn the call over to the operator for questions. Thank you. We will now begin the question and answer session. To ask a question, you may press star, then 1 on your touchtone phone.

And with that I will now turn the call over to the operator for questions. Thank you.

We will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone.

Operator: If you are using a speakerphone, please pick up your handset before pressing. If you would like to withdraw your question, please press star. At this time, we will pause for a moment to assemble our rock. The first question will come from Alex Nowak of Craig Hallam Capital Group. Good morning, everyone.

If you are using a speakerphone. Please pick up your handset before pressing the keys withdraw. Your question. Please press Star then two at this time, we will pause momentarily.

Mr.

The first question will come from Alex Nowak of Craig Hallum Capital Group. Please go ahead.

Alexander Nowak: Rick, let's start with the last piece there about the New Day study. I'm just curious how enrollment is progressing there. And then just on New Day, from what you're hearing in the rental community, is there a buzz essentially forming around New Day, kind of combining it with the Paladin study, that there might be this renewed interest in Alluvion, maybe already before the study's even begun to read out? Yeah, great. Alex, thanks for your questions and good morning.

Great. Good morning, everyone, let's start on the last piece there about the new day study just curious how enrollment is progressing there and then just on the new day from what Youre hearing in the retinal community is there is there a pause essentially forming around the new day kind of combining a with the Paladin study that there might create this renewed.

The interest in ILUVIEN, maybe are right before the study.

They've gone to readout.

Yeah, great Alex Thanks for your questions and good morning, So a new day study enrollment is progressing we're probably between 35 and 40% enrolled as we as we speak in that study, we definitely saw an uptick over the fall and.

Rick Eiswirth: So, enrollment in the New Day study is progressing. We're probably between 35 and 40 percent enrolled as we speak in that study. We definitely saw an uptick in enrollment during the fall semester as things started to open up a little bit. It did slow down a little bit over the holiday season, but we have seen it start to pick up a little bit again once we got past the holidays and past the Omicron variant.

In enrolment as as things started to open up a little bit it did slow down a little bit over.

Over the over the holiday season, but we have seen it start to pick up a little bit again, once we got past the holidays and got past the home crowd bearings. So.

Rick Eiswirth: So, you know, we're still trying to get the study enrolled this year and doing everything we can to push it. To your comment on the noise around the study, I've actually reached out to quite a few of the investigators myself this week to see where they are in enrollment and ask them to, you know, keep pushing it. And I've actually got, you know, pretty enthusiastic responses back about, you know, interest in seeing what these results are. You know, several of these doctors also participated in the Paladin study and have seen those results. And I think that's fueled a little bit of excitement as well. Now that's great.

We're still trying to get the study enrolled this year and doing everything we can to push it up.

To your comment on you know noise around the study I've actually reached out to quite a few of the investigators myself. This week.

To see where they are enrollment and ask them to keep pushing it and I've actually got pretty enthusiastic responses enthusiastic responses back about interest in seeing what these results are in.

Several of these doctors also participated in the Paladin study and I've seen those results and I think that's fueled a little bit of excitement as well.

Rick Eiswirth: And then maybe comment on some of the growth here that you expect for 2022. I know 60 million run rate was kind of the base that we wanted to get back to. Is the run rate, or excuse me, the sales that we saw here in Q4, is that a good run rate to start off from? Was there any kind of puts and takes there as we had throughout the year? Yeah, so I think we're in a really good place and it's building from there.

No that's great and then maybe comment on some of the growth here that you expect for 2022, I know $60 million run rate was kind of the base that we wanted to get back to is the run rate or excuse me. The sales that we saw here in Q4 is that a is that a good run rate to start off prime was there any kind of puts and takes there as we have throughout the year.

Yeah, So I think that's it.

I think we're in a real good place that is building from there as I said you know the U S. You know, we're generally doing pretty well, we do typically experience a little bit of seasonality early in the first quarter as you know and we're still dealing with some restrictions coming off in Europe . Some of the restrictions lapsed in Ireland and the U K for example at the end of January .

Rick Eiswirth: As I said, the U.S., we're generally doing pretty well. We do typically experience a little bit of seasonality early in the first quarter, as you know, and we're still dealing with some restrictions coming off in Europe. Some of the restrictions last in Ireland and the U.K., for example, at the end of January; I believe the restrictions are coming off as we speak. In France, March 20th is a pretty significant day in Germany.

January I believe the restrictions are coming off as we speak in France.

March 20th there's a pretty significant de in Germany. So we're still dealing with a few of those restrictions, but we feel pretty good about that.

Rick Eiswirth: So we're still dealing with a few of those restrictions, but we feel pretty good about the way we ended the year and that, you know, we can expect to continue the growth in the U.S. and return to growth in Europe. So I think we're in a good spot to deliver, you know, I don't know that we'll deliver numbers where we did in the fourth quarter of 2019, until we get toward the end of this year and can grow through that year without those restrictions, but we certainly expect to get back there at some point this year. Okay, that's great.

We ended the year and that we can expect to continue the growth in the U S and return to growth in Europe . So I think we're in a good spot to deliver you know.

I don't I don't I.

I don't know that we'll deliver numbers, where we did in the fourth quarter of 2019, you know until we get towards the end of this year and can grow through that the year without those restrictions, but we certainly expect to get back there at some point this year.

Rick Eiswirth: And then beyond the direct-to-patient program, just maybe some more details on this U.S. sales growth plan, just new marketing, new sales programs, what else can be done to change kind of the marketing tactics here as you think about growth for 2021? Yeah, well, we did add some MSLs and some medical science liaisons, thought leader liaisons, you know, over the course of 2021 to increase the engagement in different ways outside the clinic.

Okay, that's great and then beyond the direct to patient program just maybe some more details on this U S sales growth plan, just new marketing new sales programs, what else can be done to change kind of marketing tactics here as you're thinking about growth for 2021.

Yeah, well, we did add we did add some msl's and some medical science liaison thought leader liaisons you know over the course of 2021 to increase the engagement in different ways is about the client at the clinic.

Rick Eiswirth: You know, as I've always said, lubing is a, it's a high-profit sale as well, because we are trying to get doctors to think about changing the way they treat these patients, using it earlier in the paradigm. And that we think that, you know, there are a lot of characteristics of the disease that make you need something more than an anti-BGF.

I've always said ILUVIEN is a it's a high medical sale as well because we are trying to get the doctors to think about changing the way. They treat these patients use it earlier in the paradigm and we think that there's a lot of.

Characteristics of the disease that make you need something more than an anti VEGF so were.

Rick Eiswirth: So, increasing the medical education component, you know, around the drug as well, holding a lot of advisory boards and those types of things. I think that's probably the most significant thing we've done is find ways to engage doctors in these educational programs or advisory board situations to discuss the, you know, science and medicine behind the drug. All right, helpful.

Increasing the medical education component, you know around around the drug as well holding a lot of advisory boards and those types of things I think that's probably the most significant thing. We've done is find ways to engage the doctors in these educational programs, our advisory board situations to discuss the science and medicine behind the drug.

Alexander Nowak: And then last question, it's a little bit of a two-parter, but just on the cost side, the sales and marketing spend here was up in Q4. Is that a good run rate, or is that going to be a starting run rate for the rest of the year in 2022? And then we don't have a balance sheet yet, so what was the net cash usage in the quarter?

Alright, that's helpful. And then last question is a little bit of a two parter, but just on the cost side, just the sales and marketing spend here was up in Q4 is that a good run rate or is that going to be a starting run rate for the rest of the year for 2022, and then we don't have a balance sheet yet. So what was the net cash usage in the quarter were just cash stand at the end of the year.

Phil Jones: Where does cash stand at the end of the year? And then think about managing the growth and then cash burn going forward. Yeah, Alex, if you look at the cash burn for the fourth quarter, we burned about $4.6 million in the fourth quarter, and a lot of that was due to the investment that we mentioned throughout the call. We would suggest that the fourth-quarter expense run rate is probably a pretty good run rate to use to model out for the 2022 timeframe, although slightly north of what we did this year.

And then thinking about managing the growth and then cash burn going forward.

Yes, Alex just to if you look at the cash burn for the for the fourth quarter, we burned about $4 6 million for the fourth quarter and a lot of that was due to the investment that we mentioned throughout the call.

We would we would suggest that the fourth quarter.

Expense run rate is probably a pretty good run rate to use to model out for four.

The 2022 time frame.

Again looking at.

Somewhere north of what we did this year slightly.

Phil Jones: And again, just as we get back into the mode of travel and everything, just understand that there will be more of those normal things that return, such as travel within Europe and some of the other places that have been stymied to some degree by the pandemic. If I missed anything there, let me know, and I'll come back to it and answer the question. No, I think that's good.

And again, just as we get back into the into the mode of travel and everything just to understand that there will be more of those normal items that the return as well such as travel within Europe and some of the other places that have been stymied to some degree by the by the pandemic if I'm missing anything there, let me know and I'll come back to it and answer the <unk>.

Nope I think that's good I appreciate the update thank you.

Alexander Nowak: I appreciate the update. Thank you. The next question will be from Jim Molloy of Alliance Global Partners. Hi, good morning, guys.

The next question will be from Jim Malloy of Alliance Global partners.

Hi, Good morning, guys. Thanks for taking my question I was wondering if could talk a little bit about your reps currently how many reps you guys have currently what the what the turnover was if any I know in the past sometimes experienced turnover as can happen in these businesses, but how are you going to stand that up through the first part of this year with the reps.

James Molloy: Thanks for taking my question. I was wondering if you could talk a little bit about your reps currently, how many reps you guys have currently, and what the turnover was, if any. I know in the past you sometimes experienced turnovers that can happen in these businesses, but how are you guys standing up through the first part of this year with the reps? You know, Jim, so far, our retention's been pretty good. You know, I think, you know, last year, we probably turned over 10 to 15% of the territories, which I think is a pretty normal situation. You know, and frankly, sometimes that's driven by the rep having another better opportunity, and sometimes that's driven by us trying to find the right rep for the territory.

You know Jim so far our retention has been pretty good I think you know last year, we probably turned over 10% to 15%.

Rick Eiswirth: So, it's been pretty good so far. You know, no significant changes in the first part of this year to those trends. How many reps are there currently?

The territories.

Which I think is a pretty normal.

Normal situation and frankly, sometimes that's driven by the rep, having another better opportunity and sometimes that's driven by us trying to find the right rep for the territory. So it's been pretty good so far no significant changes in the first part of this year to those trends.

How many reps are there currently.

Rick Eiswirth: We've got 30 territories out there, you know, right now, and I believe we've got one vacancy at this point. And then excellent sales in the fourth quarter, and Alluvion obviously remains a very high touchpoint sale item, as you hit on with the MSLs. How much of the sales and marketing, how much of that goes to these advisory boards or to having these KOLs, I presume, you know, doing these advisory boards? And is there a way to sort of decouple? I mean, looking at sales and marketing for 21, it's about 50% of sales and... And it's harder for the last couple of years with COVID, like in 2018. The last, right around this number as well, you had about 50% of sales.

We've got 30 territories out there right now and I believe if we got one vacancy at this point.

Great. Thank you and then.

Let's see excellent sales in the fourth quarter.

<unk> and ILUVIEN, obviously remains a very high touch point sale items, you hit upon with M. S cells, how much of the of the sales and marketing.

Hum.

Goes to these advisory boards are to have any having these cables.

Do you mean.

Doing these advisory boards.

Is there a way to sort of decouple I mean looking at our.

Sales and marketing for 'twenty, one is about 50% of sales.

And it's harder for the last couple of years with a COVID-19 go back to 2018.

Last we are right around this number as well you had about 56% of sales.

James Molloy: Is there a way to sort of decouple to get the alluvium sales sort of on an upward trajectory X the heavy, you know, person-to-person spend you need to do, you've had to do through COVID and a little bit before? So, a couple of questions there, Jim, you asked, so, you know, on the amount of the spend, and frankly, where the advisory boards are, and the type of the advisory boards depends on where they are, right?

Is there a way to sort of decouple.

To get to get the ILUVIEN sales that are on it.

What trajectory ex the heavy.

Oh yeah.

Person to person spend you need to do to you'd have to do that through COVID-19 and a little bit.

Before.

So a couple of questions there Jamie Yeah. So you know on the on the amount of the spend frankly worthy advisory boards are and the type of the advisory board's depends on where they are right. So if they're more medical or scientific educational advisory boards, they're gonna I'm sitting a lot of our medical affairs effort, there and frankly.

James Molloy: So, if they're more medical, scientific, educational advisory boards, they're going to sit on a lot of our medical affairs effort there. And frankly, that is where most of the medical affairs spend goes at this point in time. We also do commercial advisory boards where we sit with doctors and evaluate some of our commercial messaging, right, to see how that resonates as well. And that's another touch point with the doctor.

That is where most of the medical affairs.

Spend goes at this point in time.

We also do commercial advisory boards, where we sit with the doctors and evaluate some of our commercial messaging <unk> see how that resonates as well.

That's another touch point with a doctor so.

Rick Eiswirth: So, it's hard to quantify and break out each piece, and frankly, that's probably a lot of granularity we don't want to get into. I will tell you that if you tried to look at where our growth rates were, I'd probably refer back to our growth rates as far as your decoupling question goes. Back to our growth in, you know, in 17, 18, 18 to 19, right? I think over the course of 19, we reported quite a few quarters where the comparative growth was in that 15% range organically.

To.

Quantifying breakout each piece and frankly, that's probably a lot of granularity.

We don't want to get into.

I will tell you that if you if you tried to look at where our growth rates, where I would probably refer back to our growth rates as far as your decoupling question back to our growth in you know in 17 to 18 18 to 19 right I think over the course of 19, we reported quite a few quarters, where the comparative growth was in that 15% range.

We think we can get back to that and the hope is that things like TTP.

James Molloy: We think we can get back to that, and the hope is that things like DTP and the New Day study results can ultimately drive that number higher once we get out of sort of the restrictions of the pandemic completely. Final question: the fact that they're shooting at each other in Europe, does that impact EU sales at all? I'd say it's probably a little bit too early to tell. You know, I think the one place I would start to worry about is, you know, the cost of fuel and things like that, if that impacts people's ability to move around the countries and visit doctors in person or patients to get in touch with officers or things like that. But it's probably a little bit too early to tell at this point.

The new data study results can ultimately drive that number higher once we get out of sort of the restrictions of the pandemic completely.

And final question.

A shooting at each other in Europe has that impacted your sales at all.

I'd say, it's probably a little bit too, it's probably a little bit too early to tell.

I think I guess, the one place I would start to worry about as you know the cost of fuel and things like that if that impacts people's ability to you know move around the countries and visit the doctors in person of our patients to get any officers or things like that but it's probably a little bit too early to tell at this point.

Thanks for taking the questions.

Rick Eiswirth: Thank you for taking the question. Yes, this question will be from Yi Chen of H.C. Wainwright.

Yep.

The next question will be from.

Yi Chen: Please go ahead. Thank you for taking my questions. Could you comment on whether you have any patient feedback for your direct-to-patient market campaign and whether you plan to have a Director of Patient and Rocket Camping in Europe as well? I'm sorry, I didn't hear the end of that question. So whether or not... So, yeah. In Europe... So, yeah. Yeah. Yeah, so yeah, I can answer the first one. Well, first of all, good morning, and thanks for the question. I can answer the first question, the second half of that question first.

<unk> of H C. Wainwright. Please go ahead.

Thank you for taking my questions could.

Could you comment on.

Whether you have any patient feedback from four at your direct to patient market campaign, and whether you plan to have.

Direct to patient market can be in Europe as well.

I'm, sorry, I didn't hear the end of that question sorry.

Weather.

And in Europe .

Yeah.

Yeah. So yeah I can answer the first well first of all good morning, and thanks for the question I can answer the first question. The second half of that question first in Europe , we're not able we're not allowed to under the regulations to market directly to the patients right. So there is no direct to.

Yi Chen: In Europe, you know, we're not able, we're not allowed to, under the regulations, to market directly to patients, right? So there is no direct marketing campaign in Europe at this time. In the U.S., it's very early.

Patient campaign.

In Europe at this time.

In the U S. It's very early we started this in mid January so we don't have direct patient feedback yet, but what I can tell you is that we do have increased traffic on our ILUVIEN Dotcom site, you know coming from those patients right. So we saw more than a 250% increase in traffic on a leaving dot com since we started that and I think we started.

Rick Eiswirth: We started this in mid-January, so we don't have direct patient feedback yet, but what I can tell you is that we do have increased traffic on our Illubin.com site coming from those patients, right? So, you know, we saw more than a 250% increase in traffic on Illubin.com since we started that, and I think we started it around January 19th or so. So it's, you know; it's very early.

Around January 19th or so so it's.

Rick Eiswirth: It is important, though, to actually drive that traffic there, because that's where we ultimately have the find a doctor site, where a patient can go find a doctor that is, you know, already treating patients with Illubin that would be amenable to that usage and try to, you know, funnel through there to an appointment at some point. The other thing I can tell you is we also believe we're ahead of our internal goals on, you know, impressions for our advertisements as well.

It's it's.

You know it's very early it is.

It is important though to actually drive that traffic in there because that's where we ultimately have the find a doctor site, where a patient can go find a doctor that has already treating patients that ILUVIEN that would be amenable to that usage and try to funnel through there too to an appointment at some point.

The thing I can tell you is we also believe we're ahead of our internal goals on.

Rick Eiswirth: So the advertisements and videos and things like that are definitely being looked at and seen, you know, frankly, by more people than we expected to this early on in the rollout, both on our branded and our non-branded sites. And which European countries will have the immediate launch of UVI this year?

Impressions for our advertisements as well so the advertisements and videos and things like that are definitely being looked at and seen frankly by more people than we expect it to this early on and they are in the rollout.

Both both to our branded and our.

Non branded site.

Okay, and what's your European countries, we will have.

ILUVIEN launch for uveitis.

Well so as we release, we expect the launch is ongoing in Spain, right now and our French and Italian partners are working on reimbursement there right now we hope to get reimbursement by the middle of the year in both of those countries.

Rick Eiswirth: Well, as we have announced, we expect the launch is ongoing in Spain right now, and our French and Italian partners are working on reimbursement there right now. We hope to get reimbursement by the middle of the year in both of those countries. It has been delayed by a lot of stops and starts as they've continued to open and close, you know, various offices and everything due to the pandemic. Portugal, we expect to get reimbursement in the first half of the year.

It has been delayed by a lot of stops and starts as they continue to open and close.

You know various offices and everything due to the pandemic, Portugal, we expect to get reimbursement in the first half of the year, we have reimbursement in the Netherlands at this point and we expect our French partner that is commercializing the product in the Benelux territories to put a little bit more effort behind that now that things are opening up there as well so we.

Rick Eiswirth: We have reimbursement in the Netherlands at this point, and we expect our French partner that is commercializing the product in the Benelux territories to put a little bit more effort behind that now that things are opening up there as well.

Rick Eiswirth: So, you know, we expect to see uveitis pushed pretty hard in quite a few countries before the end of the year. And could you comment on the inventory level at the distributor level and whether you see the inventory level could remain stable going forward? The inventory level of the distributors in the U.S. was pretty stable throughout the year. I think there was less than a 1 or 2 percent difference in the amount of product that was ordered by the distributors versus what we sold through from an end-user demand standpoint.

To see uveitis pushed pretty hard and quite a few countries before the end of the year.

Got it.

And could you comment on the.

In the U S at the inventory level at the distributor level and whether you see inventory level.

Stable going forward.

The inventory level the distributors in the U S was pretty stable throughout the year. There was I think there was less than a one or 2% difference in the amount of product that was ordered by the distributors.

And versus what we sold through from end user demand standpoint, so that was pretty that was pretty steady.

Rick Eiswirth: So that was pretty steady. You know, you always get this little bit of a phenomenon in the first couple months of the year where because end-user demand drops off a little bit because of the seasonality, they slow down some of the buying, and then they sort of pick up again in March and April as the volume returns.

You know you always get this a little bit of a phenomenon in the first couple months of the year were.

The end user man drops off a little bit because of the seasonality they slow down some of the buying and then they start to pick up again and you know in March and April as the as the volume returns. So you know we'll have to see what that looks like over the quarter, but it was pretty steady over the course of 2021 as a whole.

Rick Eiswirth: So, you know, we'll have to see what that looks like over the quarter, but it was pretty steady over the course of 2021 as a whole. Okay, thank you. Yep, thank you. And this concludes our question and answer session. I would now like to turn the conference back over to Rick Eiswirth for any closing remarks. Thank you all for joining us today and participating in the call, and we appreciate your continued interest in Alimera. We are looking forward to sharing our ongoing progress when we report our first quarter results later in May.

Okay. Thank you.

Yep. Thank you.

Rick Eiswirth: Thank you very much, and have a wonderful day. Thank you. The conference is now concluded. Thank you all for attending today's presentation. You may now disconnect your lines. Have a great day. [music]

And this concludes our question and answer session I would now like to turn the conference back over to Rick is worth for any closing remarks.

Thank you all for joining us today and participating on the call and we appreciate your continued interest in Almere. We are looking forward to sharing our ongoing progress when we report our first quarter results later on in May. Thank you very much and have a wonderful day.

Thank you. The conference has now concluded. Thank you all for attending today's presentation. You may now disconnect your lines have a great day.

Yeah.

Okay.

Thanks.

Okay.

Okay.

Okay.

[music].

Okay.

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