Q4 2021 Ocular Therapeutix Inc Earnings Call

February 28, 2022

Yeah.

Operator: Good afternoon, ladies and gentlemen. Thank you for standing by and welcome to the Ocular Therapeutix fourth quarter and year-end 2021 earnings conference call. At this time, all participants are in a listen-only mode.

Good afternoon, ladies and gentlemen, thank you for standing by and welcome to the ocular Therapeutics fourth quarter and year end 2021 earnings conference call. At this time all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will follow at that time. It is now my.

Operator: Later, we will conduct a question-and-answer session, and instructions will follow at that time. It is now my pleasure to turn the call over to Donald Notman, Chief Financial Officer of Ocular Therapeutix.

Pleasure to turn the call over to Donald Buckman, Chief Financial Officer of Ocular Therapeutics. Please go ahead Sir.

Donald Notman: Thank you, Catherine. Good afternoon, everyone, and thank you for joining us on our fourth quarter in year-end 2021 financial results and business update conference call. This afternoon after the close, we should have press release providing an update on the company's product development program and details of the company's financial results for the quarter and fiscal year and is December 31, 2021. The press release can be accessed on the investors portion of our website at investors.ocutx.com, Leading the call today will be Antony Mattessich, our President and Chief Executive Officer, who will provide a summary of our corporate developments and an update on the commercial progress of Dextenva.

Thank you Catherine and good afternoon, everyone and thank you for joining us on our fourth quarter and year end 2021 financial results and business update conference call.

Afternoon. After the close we issued a press release, providing an update on the company's product development programs and details of the company's financial results for the quarter and fiscal year ended December 31 2021.

Press release can be accessed on the investors portion of our website.

Sure Scott.

Sure.

Donald Notman: Also speaking on the call today will be Dr. Michael Goldstein, our President, Ophthalmology, and Chief Medical Officer, who will give an update on our clinical developments and pipeline. Following Michael's remarks, I will provide an overview of the financial highlights for the quarter and the fiscal year before turning the call back over to Antony for a summary and question. For the Q&A, we will be joined by Scott Corning, our Senior Vice President, Commercial, and Chris White, our Chief Business Officer.

Leading the call today, we will be asking about dosage, our president and Chief Executive Officer, who will provide a summary of our corporate developments and an update on the <unk>.

Progress with DEXTENZA also speaking on the call today will be Dr. Michael Goldstein, our president Ophthalmology, and Chief Medical Officer, who will give an update on our clinical development pipeline.

Following Michael's remarks, I will provide an overview of the financial highlights for the quarter and the fiscal year before turning the call back over to Anthony for a summary of the question.

For Q&A, we'll be joined by Scott Corning, Our senior Vice President commercial.

Chris White, our Chief business Officer.

Donald Notman: As a reminder, on today's call, certain statements we will be making may be considered forward-looking for the purposes of the Private Securities Litigation Reform Act, 1995. In particular, any statements regarding our regulatory and product development plans, as well as our research activities, our forward-looking statements. These statements are subject to a variety of risks and uncertainties that may cause actual results to differ from those forecasted, including those risks described in our most recent annual report on Form 10-K filed this afternoon with the FCC. I will now turn the call over to Antony.

As a reminder, today's call certain statements, we will be making maybe considered forward looking for purposes of the private Securities Litigation Reform Act.

Spot and.

In particular any.

Statements regarding our regulatory and product development plans as well as our research activities are forward looking statements. These statements are subject to a variety of risks and uncertainties that may cause actual results to differ from those forecasted including those risks described in our most recent annual report on Form 10-K filed this afternoon.

The SEC I will now turn the call over to Anthony.

Antony Mattessich: Thank you, Donald, and welcome, everyone, to the Ocular Therapeutix fourth quarter and year-end 2021 earnings report. Ocular Therapeutix had another strong quarter in a productive year. Commercial, they seem to expend the continues to rap. We achieved $12.3 million in total net product revenues in the fourth quarter and $43.5 million for 2021. This represents a 66% growth over the comparable quarter in 2020 and 150% growth in 2021 on a full year basis. I'm pleased with our commercial efforts and our team's ability to grow product revenues in each quarter of 2021, despite lower than expected cataract surgery volumes. Attributed to the COVID panic, pandemic.

Thank you Tom and welcome everyone to the ocular therapeutics fourth quarter and year end 2021 earnings report.

<unk> had another strong quarter and a productive year.

The addition of extensive continues to ramp.

We achieved $12 3 million in total net product revenues in the fourth quarter $43 5 million for 2021.

This represents a 66% growth over the comparable quarter in 2020, and 150% growth in 2021 on a full year basis.

I'm pleased with our commercial efforts and our team's ability to grow product revenues in each quarter of 2021, despite lower than expected cataract surgery volumes attributable.

Attributable attributed to the Covid panic.

Pandemics.

Antony Mattessich: Xtensa represents a tremendous growth driver for oculars. We continue to put ourselves in the best possible position to grow the product. We've made significant progress on reimbursement as we enter 2022 with the expense of currently maintaining transfer payment status through 2022, and then very importantly, being eligible for separate payment, beginning in 2023, and potentially beyond, there's a non-opioid Paying Management Supply Provision in ASC. In addition, physician reimbursement for the insertion of the extends that is now broadly available under our category 1 code, which became effective January 1, 2022, ensuring reliable payment to physicians for the extends of placement across all payer types and in all settings of care.

It extends it represents a tremendous growth driver for ocular as we continue to put ourselves in the best possible position to grow the product.

Made significant progress on reimbursement as we enter 2022 with DEXTENZA currently maintaining pass through payment status through 2022, and then very importantly, being eligible for separate payment beginning in 2023 and potentially beyond as a non opioid pain management supply provision and ASC.

In addition physician reimbursement for the insertion of DEXTENZA is now broadly available under our category One code, which became effective January one 2022, ensuring reliable payments to physicians with extensive placement across all payer types and in all settings of care.

Antony Mattessich: In October, we received FDA approval of our SNDA, expanding the use of it extensively for the treatment of ocular itching associated with allergic conjunctivitis. This approval represents an important strategic milestone. Not to seek out that it expands the market opportunity for it to do so, but because we believe it opens up growth potential in a new side of care, the ophthalmology and ophthalmologic office environment. Allergic nephrodivitis is treated in the office environment as opposed to the ASC and HOPD, where it extends against the vast majority of its current use in the treatment of post-surgical inflammation and pain.

In October we received FDA approval of our NDA extending the use of DEXTENZA for the treatment of ocular itching associated with allergic conjunctivitis.

This approval represents an important strategic milestone.

Not just because it expands the market opportunity for DEXTENZA.

We believe it opens up growth potential in a new site of care, the ophthalmology and Optometry office environments.

Allergic conjunctivitis is treated in the office environment as opposed to the ASC in Ethiopia, where it extends it gets the vast majority of its current views and the treatment of post surgical inflammation and pain.

Antony Mattessich: Ocular's strategic goal is to expand its presence into ophthalmology and optometric offices by providing customers with numerous, Innovative Buying Bill Products, including those developed internally and potentially those in license from other companies in the future. The approval of this NDA gives us the opportunity to take the first step in doing that. While the strategic potential of the office environment is exciting, it represents an almost entirely new space for ocular therapeutics with a unique set of challenges and opportunities.

Ocular surgery strategical is to expand its presence into ophthalmology and optometry offices on providing customers with numerous.

Innovative buy and bill products, including those developed internally and potentially there was in licensed from other companies in the future.

The approval of this NDA gives us the opportunity to take the first step in doing that.

The strategic potential of the office environment is exciting it represented almost entirely new space for ocular therapeutics, a unique set of challenges and opportunities we.

Antony Mattessich: We discovered at the launch of Xtensa that the primary barriers of entry were the logistics associated with ASC and HOPD administration. Setting up accounts in ophthalmology and optometric offices will be analogous, but with different drivers that require bespoke solutions.

We discovered in the launch with extensive primary barriers of entry for the logistics associated with ASC <unk> administration.

So think of accounts in ophthalmology, and optometry offices will be analogous to a couple of different drivers.

They require bespoke solutions.

Antony Mattessich: As a result, in 2022, we are establishing a separate business unit consisting of key account managers and field reimbursement managers who will be tasked exclusively with filling into the office setting. This effort will expand our commercial footprint and provide the opportunity to further enhance the growth of Dextenza and may also facilitate longer term, commercialization of any of the product candidates in our pipeline that may be approved including potentially OTX-PKI and WET-AMD, OTX-TIC and glaucoma, and our dry eye products, all of which are designed to be used predominantly in the office setting.

As a result in 2022, we are establishing a separate business unit consisting of key account managers and field reimbursement managers, who will be passed exclusively with selling into the office setting.

This effort will expand our commercial footprint and provide the opportunity to further enhance the growth of DEXTENZA and may also facilitate longer term.

<unk> of any other product candidates in our pipeline that may be approved including potentially <unk> PKI in wet AMD.

<unk> seen glaucoma and dry eye products, all of which are designed to be used predominantly in the office setting.

Antony Mattessich: Shifting to our pipeline, we've also made great progress advancing our key programs. We recently provided updates on OTX-TKI for the treatment of wet AMD at the Angiogenesis, Exudation, and Degeneration meeting, and on OTX-TIC for the treatment of glaucoma at the Glaucoma 360 meeting. Both updates continue to demonstrate drought product profiles that we believe are compelling and could dramatically improve upon the standard of care in these billion-dollar markets. We anticipate to give him milestones in both programs over the course of 2022.

Shifting to our pipeline. We have also made great progress advancing our key programs. We recently provided updates on <unk> PKI for the treatment of wet AMD at the angiogenesis explanation and degeneration meeting.

<unk> for the treatment of glaucoma at the glaucoma 360 million.

Both updates continue to demonstrate drug product profile, we believe are compelling and could dramatically improve upon the standard of care in the $1 billion market.

We anticipate significant milestones both programs over the course of 2022.

Antony Mattessich: Clearly, we believe our pipeline remains a source of tremendous potential value. We continue to advance the portfolio of product candidates that are hardly differentiated clinically, that lend themselves to efficient commercialization, and have the potential for long periods of, With that, I would now like to hand a call over to our President of Ophthalmology and Chief Medical Officer, Dr. Michael Goldstein, who provided an in-depth look at our pilot. Thanks, Antony.

Clearly, we believe our pipeline remains a source of tremendous potential value. We continue to advance our portfolio of product candidates that are highly differentiated clinically that lend themselves sufficient commercialization and have the potential for long periods of exclusivity.

With that I would now like to hand, the call over to our president of ophthalmology.

Chief Medical Officer, Dr. Michael Goldstein, who will provide an in depth look at our pipeline.

Dr. Michael Goldstein: Let me begin with an update on our Back of the Eye program, OTxPKI. We are pleased to have recently completed enrollment in the U.S.-based multi-center prospective randomized control trial that is evaluating a single 600-microgram OTX-TKI implant containing exfitinib compared to a Fliversep administered every eight weeks in subjects previously treated with anti-VEGF therapy. This U.S.-based Phase I clinical trial of OCX-TKI is being conducted under an exploratory IND application at five sites targeting a total of 20 randomized subjects, 3-1 Randomization Weighted Toward OTX-PKI Treated Subjects, We plan to report interim six-month data in the second half of the year.

Thanks, Anthony let me begin with an update on our back of the eye program <unk>.

We are pleased to have recently completed enrollment in the U S. Based multicenter prospective randomized controlled trial that is evaluating a single 600 microgram <unk> impact okay.

Compared to a <unk> administered every eight weeks and subjects previously treated with anti VEGF therapy.

This U S based phase one clinical trial of <unk>.

<unk> is being conducted under an exploratory R&D application at five sites targeting a total of 20 randomized subjects with three to walk our amortization weighted toward <unk> CPI treated subjects.

We plan to report interim six month data in the second half of the year.

Dr. Michael Goldstein: This trial is designed to assess the safety, durability, and tolerability of OTIS-PKI as well as to assess preliminary biological activity in subjects by measuring anatomical and functional changes of the retina. Critical to remember is that the population being studied here is different than the population being studied in our ongoing Phase I clinical trial of OTX-TTI in Australia. In this trial, we are including only subjects who have been previously treated with anti-VEGF therapy and asking the question, how long can we maintain subjects without need for re-treatment?

This trial is designed to assess the safety durability and Tolerability of <unk>.

GTI as well as to assess preliminary biological activities in subjects by measuring anatomical and functional changes of the retina.

Critical to remember is that the population being studied here is different from the population being studied in our ongoing phase one clinical trial of <unk> in Australia.

In this trial, we are including only subjects, who have been previously treated with anti VEGF therapy and asking the question how long can we maintain subjects without need for re treatment.

Dr. Michael Goldstein: Whereas in the Australian trial, we studied subjects who had pre-existing inter-retinal and or sub-retinal fluid and asked the question, could we get rid of the fluid with a TKI? We recently presented the interim data on OTX-PKI from the Australia-based Phase I trial at the ENJOY genesis, excitation and degeneration, 2022 meeting held on February 11th and 12th. This latest analysis of interim data in subjects with subretinal and or intraretinal fluid due to wet AMD continues to support the product safety profile and preliminary evidence of biological activity.

Whereas in the Australia trial, we study subjects with preexisting interest both in our separate hopefully would.

And asked the question could we get rid of the fluid with DTI.

We recently presented interim data at <unk> from the Australia based phase one trial at the <unk>.

Answer Joseph excavation and degeneration 2022 meeting held on February 11, and 12.

This latest analysis of interim data in subjects with sub retinal <unk> into wrap up fluid due to wet AMD continues to support the product safety profile and preliminary evidence of biological activity.

Dr. Michael Goldstein: In this trial, we found a clinically meaningful decrease in intraretinal and or subretinal fluid in many subjects. Extended duration of activity of six months or more was observed in over 60% of subjects across all cohorts, and over 80% of subjects in Cohort 3A, a 600-microgram cohort, which could represent a compelling drug product profile. Moving to our glaucoma program, OTX-TIC, we recently presented data from the completed US-based phase one clinical trial evaluating the safety, biological activity, durability, and tolerability of OTX-TIC, and Subjects with Primary Open Angle Glaucoma or Ocular Hypertension at the Glaucoma 360 meeting on February 11.

In this trial, we found a clinically meaningful decrease in intra <unk> sub retinal fluid and many subjects.

Extended duration of activity of six months or more was observed in over 60% of subjects across all cohorts and over 80% of subjects in cohort 386 hundred microgram cohort, which could represent a compelling drug product profile.

Moving to our glaucoma program <unk> CIC, we recently presented data from a completed U S based phase <unk> clinical trial evaluating safety and biological activity.

Durability tolerability of checks TICC.

In subjects with primary open angle glaucoma or ocular hypertension.

From a 360 meeting on February 11th.

Dr. Michael Goldstein: The phase one data presented highlights OTX-TIC's ability to provide a clinically meaningful decrease in intraocular pressure comparable to travopress as early as two days following administration and for as long as six months or more with a single implant while preserving corneal health representing its potential for a unique and differentiated drug product profile. With this data in hand, we've initiated a U.S.-based two-critical trial or actively screened subject. This trial is a prospective, multi-sensor, randomized controlled trial evaluating the safety, tolerability, and efficacy of OTX-TIC for the treatment of patients with primary open-angle glaucoma or ocular hypertension.

Phase one data presented highlights <unk> CIC is ability to provide a clinically meaningful.

Clinically meaningful decreases.

In intraocular pressure.

Parallel to Travoprost as early as two days following administration and for as long as six months or more with a single implant, while preserving corneal health representing its potential for our unique and differentiated drug product profile.

With this data in hand, we have initiated a U S based phase II clinical trials are actively screening subjects.

This trial is a prospective multicenter randomized controlled trial evaluating the safety tolerability and efficacy of <unk> for the treatment of patients with primary open angle glaucoma or ocular hypertension.

Dr. Michael Goldstein: The trial will enroll approximately 105 subjects in three different arms, 35 subjects per arm, randomized one-to-one-to-one, in which the subjects will receive a single OTX-TIC implant containing a 5-microgram or 26-microgram dosotravoprost compared with an injection of Durasta. The trial of certain changes in diurnals and track their pressure [inaudible] changes from baseline at 8 a.m., 10 a.m., 4 p.m., at 2, 6, and 12 weeks and follow duration of IOP response over time.

The trial overall, approximately 105 subjects in three different arms.

35 subjects per arm randomized one to one to one in which the subjects will receive a single <unk> CIC implant containing a five microgram or 'twenty six microgram dose travoprost compared with an injection of <unk>.

Trial observed changes in viral and trucker pressure.

Changes from baseline at eight am 10 am or PM at two six and 12 weeks and follow duration of IOP response over time.

Dr. Michael Goldstein: Regarding our ocular surface disease programs, we remain committed to the development of our two dry eye programs, OTX-BED, a low-dose intercanellicular insert, a preservative-free dexamethasone for the short-term treatment of the signs and symptoms of dry eye disease, and OTX-TSI for the Chronic Treatment of Patients with Dry Eye Disease. In December 2021, we announced positive top-line results from our Phase 2 clinical trial of OTX-BEC. The Phase 2 clinical trial was a U.S.-based, randomized, double-masked, vehicle-controlled, multi-center trial evaluating two different formulations of OTX-CED, a 0.2-milligram group and a 0.3-milligram group in 166 subjects with dry disease.

Regarding our ocular surface disease programs, we remain committed to the development of our two dry eye programs Ots VEB, a low dose and for kind of like color and sort of preservative free dexamethasone for the short term treatment of the signs and symptoms of dry eye disease.

As <unk> CFO for the chronic treatment of patients with dry eye disease.

In December 2021, we announced positive topline results from our phase II clinical trial of <unk>.

The phase II clinical trial with a U S based randomized double masked vehicle controlled multicenter trial evaluating two different formulations of <unk> <unk>.

<unk> two milligram group at a <unk> three milligram group and 166 subjects with dry disease.

Dr. Michael Goldstein: While not powered for statistical significance, the clinical trial achieved its pre-specified primary endpoint demonstrating a statistically significant change of bolvar conjunctival hyperemia from baseline to day 15 compared to the vehicle hydrogel using a central reading photographic assessment in the modified ITT population at both doses. P-value of 0.004 in the 2mg group and P-value of 0.028 in the 0.3mg group.

While not powered for statistical significance, the clinical trial achieved its pre specified primary endpoint demonstrating a statistically significant change of all of our content type of hyperemia from baseline to day 15 compared to the vehicle hydrogel using a central reading photographic assessments and the modified <unk>.

Population at both doses P value of <unk>.

Four and the two milligram group and P value of <unk> <unk>, eight and the <unk> three milligram group.

Dr. Michael Goldstein: OTX-DED was observed to be generally well-tolerated with a favorable safety profile. Overall, we are pleased with the OTS-BED results and we continue to see a large treatment effect from the punctal occlusion used in the control arm. We are currently reviewing an appropriate clinical regulatory development and manufacturing plan. This plan will include some additional formulation work for the OTX-DED insert and the development of an appropriate vehicle comparator.

<unk> was observed to be generally well tolerated with a favorable safety profile.

Overall, we are pleased with the <unk> results and we continue to see a large treatment effect from the punctual occlusion using the controller.

Currently reviewing an appropriate clinical regulatory development and manufacturing plants.

This plan will include some additional formulation work for the <unk> and the development of an appropriate vehicle comparator.

Dr. Michael Goldstein: In late October of 2021, we reported top-line data from a US-based space to randomized, double-masked, multi-center, clinical trial to evaluate the safety, efficacy, durability, and tolerability of two different formulations of OTX CSI versus hydrogen cell vehicle insert. The Phase 2 study shows that OTX-CFI-Truth subjects got a clinically meaningful improvement from baseline for both bias and sense of the This trial, however, did not show separation between the OTX-DSI-treated subjects, both formulations, and the vehicle-treated subjects, both formulations, on symptoms or the primary endpoint of increased tear production at 12 weeks as measured by the Shermer's test.

In late October of 2021, we reported topline data from the U S based phase II randomized double masked multicenter clinical trial to evaluate the safety efficacy durability and tolerability of two different formulations of ots CSI versus hydrogel vehicle in Sir.

Phase III studies showed <unk> CFO two subjects had a clinically meaningful improvement from baseline for <unk>.

Both signs and symptoms of dry eye disease for both formulations.

This trial however, it did not show separation between the <unk> treated subjects, both formulation in the vehicle treated subjects both formulations.

The primary endpoint of increased tier production at 12 weeks as measured by the Schirmer test.

Donald Notman: We are currently reviewing an appropriate clinical regulatory development and manufacturing plan. This plan will include additional formulation work for the OTX-TSI insert to allow improved retention and the development of an appropriate vehicle comparator. I would now like to turn the call back over to Donald to review our fourth quarter and year-end financial results. Thanks, Mike.

We are currently reviewing an appropriate clinical regulatory development and manufacturing plan.

This plan will include additional formulation work <unk> CFO items start to allow improved retention and the development of an appropriate vehicle comparator.

I would now like to turn the call back over to Donald to review, our fourth quarter and year end financial results.

Donald Notman: Cross-product revenue is net of discounts, rebates, and returns, which the company refers to as total net product revenue, with $12.3 million for the fourth quarter and represented a 66% increase over the same period in 2020, that product revenue of Dextenz in the fourth quarter was $12.2 million versus $6.9 million in the comparable quarter of 2020, reflecting a 77% increase. Total net product revenue for the fourth quarter of 2021 also includes net product revenue of $58,000 from Reshure Sealant.

Thanks, Mike gross product revenue net of discounts rebates and returns, which the company refers to as total net product revenue was $12 3 million for the fourth quarter and represented 66% increase over the same period in 2020.

Net product revenue to extend in the fourth quarter was $12 2 million.

Six.

And the.

<unk> quarter of 2020, reflecting a 77% increase.

Total net product revenue for the fourth quarter of 2021 also includes net product revenue of 58000 from mature sealant.

Donald Notman: Overall, net product revenue for the year was $43.5 million, versus $17.4 million for 2020, reflecting a strong uptake in the extended sale. Research and development expenses for the fourth quarter were $12.6 million versus $7.6 million for the comparable period in 2020, driven primarily by an increase in unallocated expenses, predominantly personnel costs, and increased clinical trial costs associated with the initiation of the U.S.-based Phase I clinical trial of OTX-TKI and the initiation of the U.S.-based Phase II clinical trial for OTX-TIC.

Overall net product revenue for the year was $43 5 million versus $17 4 million for 2020, reflecting a strong uptake and extended the sales.

Research and development expenses for the fourth quarter were $12 6 million versus $7 6 million for the comparable period in 2020.

Driven primarily by an increase in unallocated expenses predominantly personnel cost and increased clinical trial costs associated with the initiation of the U S. Based phase one clinical trial of <unk> and the initiation of the U S based phase II clinical trial for <unk>.

Donald Notman: Phase II Clinical Trials for OTX-CSI and OTX-PED, and the ongoing Phase 1 clinical trial of OTX-PKI in Australia, and the ongoing post-approval clinical trial for Dextenza for post-surgical inflammation and pain in pediatric subjects. Overall, R&D expenses for the full year increased $21.4 million to $50.1 million from $28.7 million in 2020, reflecting the trends identified above. Selling and marketing expenses in the quarter were $9.1 million as compared to $6.8 million for the same quarter in 2020.

Phase II clinical trials for Oti's, CSI and MTX CE.

The ongoing phase one clinical trial of <unk> in Australia.

And the ongoing post approval clinical trial for DEXTENZA for post surgical inflammation and pain in pediatric subjects.

Overall R&D expenses for the full year increased $21 $4 million to $50 1 million.

$28 $7 million in 2020, reflecting the trends identified above.

Selling and marketing expenses in the quarter were $9 1 million.

Compared to $6 8 billion for the same quarter in 2020.

Donald Notman: Overall, selling and marketing expenses for the full year increased to $35.2 million from $26.6 million in 2020, driven primarily by increased personnel costs and increased spending on consulting, trade shows, and conferences. Finally, general and administrative expenses were $7.5 million for the fourth quarter versus $6.6 million in the comparable quarter of 2020. The increase in expenses stems primarily from increased personnel expenses and professional fees.

Primarily reflecting increased personnel costs associated with an expansion of the field field force.

Overall, selling and marketing expenses for the full year increased to $35 $2 million from $26 6 million in 2020, driven primarily by increased personnel costs and increased spending on consulting trade shows and conferences.

Finally general and administrative expenses were $7 5 million for the fourth quarter purchased $6 $6 million in the comparable quarter of 2020.

The increase in expenses stemmed primarily from increased personnel expenses and professional fees overall G&A expenses for the full year increased $9 million.

Donald Notman: Overall, G&A expenses for the full year increased $9 million to $31.9 million from $22.9 million in 2020, again reflecting primarily increased personnel and professionals. With respect to the financial results for the fourth quarter, the company reported a net loss of $3.9 million, or a loss of $0.05 per share on a basic basis, and a loss of $0.23 per share on a diluted basis for the three months ended December 31, 2021, compared to a net loss of $85.6 million or a loss of $1.21 per share on a basic and diluted basis for the same period in 2020.

To $31 $9 million from $22 $9 million in 2020, again, reflecting primarily increased personnel and professional fees.

With respect to the financial results for the fourth quarter. The company reported a net loss of $3 9 million.

Or a loss of $5 per share on a basic basis and a loss of <unk> <unk> per share on a diluted basis for the three months ended December 31 2021.

This compares to a net loss of $85 6 million or a loss of $1 21 per share on a basic and.

And diluted basis for the same period in 2020.

Donald Notman: Net income in the fourth quarter of 2021 included a $15.9 million non-cash gain in the fair value of the derivative liability associated with our convertible notes, driven by a decrease in the price of our common stock during the quarter. Non-cash charges for stock-based compensation and depreciation and amortization were $4.4 million in the fourth quarter versus $2.8 million for the same quarter in 2020. Overall, the company reported a net loss of $6.6 million or a loss of $0.09 per share on a basic and a loss of $0.98 per share on a diluted basis for the full year ended December 31, 2021 versus a net loss of $155.6 million or a loss of $2.56 per share on both a basic and diluted basis in 2020. As of February 24, 2022, the company had 76.8 million shares outstanding. As of December 31, 2021, the company had $164.2 million in cash and cash equivalents versus $179.3 million at September 30, 2021.

Net income in the fourth quarter of 2021 included a $15 $9 million noncash.

Non cash gain in the fair value derivative liability associated with our convertible notes driven.

Driven by a decrease in the price of our common stock during the quarter.

Noncash charges for stock based compensation and depreciation and amortization.

$4 $4 million in the fourth quarter.

$2 $8 million for the same quarter in 2021.

Overall, the company reported a net loss of $6 6 million or a loss of <unk> <unk> per share on a basic and <unk> 98 per share on a diluted basis for the.

The full year ended December 31, 2021 versus a net loss of $155 6 million or a loss of $2 50.

<unk> per share.

Eight basic and diluted basis in 2020.

As of February 24, 2022, the company had $76 8 million shares outstanding.

As of December 31, 2021, the company had $164 2 million in cash and cash equivalents.

This is the $179 3 million at September 32021.

Antony Mattessich: Based on our current plans and related estimates of anticipated cash inflows from Dexenta and anticipated cash outflows from operating expenses, the company believes that existing cash and cash equivalents, as of December 31, 2021, will enable the company to fund planned operating expenses, debt service obligations, and capital expenditure requirements through 2023. This cast guidance is subject to a number of assumptions, including those related to the severity of the COVID-19 pandemic. The revenues expenses and reimbursement associated with extanza and the pace of research and clinical development programs among other aspects of the business. This concludes my comment on our fourth quarter of 2021 and year end financial results, and I would like to turn the call back to Antony for some final thoughts. Thanks, Tom.

Based on our current plans and related estimates of anticipated cash inflows from DEXTENZA.

And anticipated cash outflows from operating expenses the company believes that existing cash cash equivalents as of December 31, 2021 will enable the company to fund planned operating expenses debt service obligations and capital expenditure requirements through 2023.

This cash guidance is subject to a number of assumptions, including those related to the severity and duration of the COVID-19 pandemic the.

The revenues expenses and reimbursement associated with extend that.

And the pace of research and clinical development programs among other aspects of the business.

This concludes my comments on our fourth quarter 2021, and year end financial results and I would like to turn the call back to Anthony for some final thoughts.

Thanks, Tom.

Antony Mattessich: So before opening the call up for questions, let me do a quick summary. The company demonstrated solid performance, growing total net revenue 66% over the comparable quarter of 2020 and approximately 150% in 2021 on a full year basis. With FDA's approval of our SNDA to include ocular itching associated with allergic conjunctivitis and to extend the label, we are establishing a separate commercial business unit consisting of key account managers and field reimbursement managers to focus exclusively on the office setting, while the main sales team continues to focus on maximizing the opportunity for it to extend it in surgical settings, with the recent OPPS final rules. CMS has laid out a path for the continued separate payment for Dixbenza in the ASC environment after the path-through expiration.

Before opening the call up for questions. Let me do a quick summary.

The company demonstrated solid performance growing total net revenue was 66% over the comparable quarter of 2020 and approximately 150% in 2021 on a full year basis.

With FDA approval of our NDA to include ocular itching associated with allergic conjunctivitis and extend the label we are establishing a separate commercial business unit, consisting of key account managers and field reimbursement managers to focus exclusively on the office setting while the main sales team continues to focus on maximizing the opportunity for an extended.

Okay.

With the recent <unk> PPS final rules CMS.

CMS has laid out a path for the continued separate payment for an extend that in the ASC environment. After the pass through exploration. This can allow us to maintain and strengthen our surgical business as we build a new source of growth in the office environment.

Operator: This could allow us to maintain and strengthen our surgical business as we build a new source of growth in the office environment. The U.S.-based trial of OTX-TKI, evaluating a single 600-microgram implant versus anti-VEGF injection versus standard of care every eight-week ILEA, is now fully enrolled, and we expect to announce interim data in the second half of 2022. We recently initiated our Phase 2 clinical trial, OTX-TIC, for the treatment of glaucoma and our actively screening subjects.

The U S based trial of <unk> PKI evaluating a single 600 microgram implant versus anti VEGF injection versus standard of care every eight week Eylea is now fully enrolled and we expect to announce interim data in the second half of 2022.

We recently initiated our phase II clinical trial of <unk> for the treatment of glaucoma and are actively screening subjects.

Operator: In dry eye disease, we remain dedicated to developing this key market and we are conducting work to find the best formulations and vehicle control to use as we look to advance, And finally, the company entered the quarter with $164.2 million in cash on the balance sheet as of December 31st, an expected cash runway through 2023. We look forward to a strong 2022, and with that, I'll turn the call over for questions. Thank you. To ask a question, you'll need to press star 1 on your telephone.

In dry eye disease, we remain dedicated to developing this key market and we are conducting work to find the best formulations and vehicle control to use as we look to advance both boutiques DSI and boutique CEB.

And finally, the company ended the quarter with $164 2 million in cash on the balance sheet as of December 31, an expected cash runway through 2023.

We look forward to a strong 2022 and with that I'll turn the call over for questions.

Thank you to ask a question you will need to press star one on your telephone to withdraw your question press the pound key.

Operator: To withdraw your question, press the pound key. Our first question comes from Joe Cantencaro with Piper Sandler. Your line is open. Hey, guys. Thanks. Thanks so much for taking my questions here and congrats on the progress. Maybe the first one for me, I had on Dextenza and expectations for 2022 and whether you would expect to provide billable unit data on a monthly basis in the absence of any firm revenue guidance and what we should think about as we think about modeling Dextenza, if you could walk through some of the maybe tailwind, in headwinds that we should keep in mind for the year. Thanks, and I have a follow-up. Yeah, we have consistently given the monthly in-market insert numbers. I mean, that number is also in the earnings report.

Our first question comes from Joe <unk>.

Karl with Piper Sandler Your line is open.

Hey, guys. Thanks. Thanks.

Thanks, so much for taking my questions here and congrats on the progress maybe the first one for me ahead on DEXTENZA and expectations for 2022, and whether you would expect to provide billable unit data on a monthly basis in the absence of any firm revenue guidance.

What we should think about as we think about modeling DEXTENZA. If you could walk through some of them maybe tailwind.

Headwinds that we should keep in mind for the year, Thanks, and I have a follow up.

Yes, we are.

Consistently given the.

The monthly in market in certain numbers.

<unk> also.

The earnings report.

Antony Mattessich: So until we start giving guidance going forward, we'll continue to give those numbers. I mean, essentially, the real headwind is the questions around the ability of ASCs to be able to staff up appropriately to handle the backlog of cataract surgeries that we understand are very much out there and going to come back into the market at some point. We mentioned before that we had a really good October and November, really strong uptake in sales, and we saw the slowdown in December that followed the lower than expected number of cataract surgeries due to the Omicron upswing.

So until we give start giving guidance going forward, we will continue to give those numbers.

Essentially the real headwind is the questions around the ability of <unk> to be able to staff up appropriately to handle the backlog of cataract surgeries that are we understand are very much out there and going to come back into the market at some point.

We've mentioned before that we had a really good October and November really strong uptake in sales and we saw the slowdown in December that follows the lower than expected number of cataract surgeries due to the omicron.

Upswing.

Antony Mattessich: We saw that continue into January, but we have seen in February a bounce back starting in the market as well. So if we understand that going forward, we're not only going to get a normal flow of cataract volume, but can in fact see that some of those delayed surgeries re-enter the market. We're actually looking forward to a very, very good 2022.

We saw that continue into January but we have seen in February a bounce back starting in the market as well.

So if we understand that going forward, we're not only going to get a normal flow of cataract volume, but can in fact see that some of those.

Delayed surgeries reenter the market.

Looking forward to a very very good 2022, once we have some some transparency of what that market is going to look like and we will revisit the idea about giving guidance.

Dr. Michael Goldstein: Once we have some transparency of what that market is gonna look like, we'll revisit the idea about giving guidance. Okay, got it. Thanks. That's helpful. And then maybe if I could ask one to Mike, and I know there was a recent Phase 3 extended VEGF, wet AMD study that recently read out, and wondering if you see any learnings there, whether it be on trial design, enrollment criteria, or even how ILEA performs. Any thoughts you have there would be great.

Okay got it. Thanks, that's helpful and then maybe if I could ask one.

To Mike and I know there was a recent phase III extended VEGF wet AMD study that recently read out and wondering if you see any learnings there whether it be on trial design enrollment criteria or even how.

Leah performs any thoughts you have there would be great.

Dr. Michael Goldstein: Thanks, Joe. I think you're talking about the recent Kodiak trial. And I guess the key learning is that getting longer duration, Therapy with an Anti-FEDJAP. Monoclonal Antibody is challenging and continues to be challenging and I think if someone can, you know, get that to work, then that's a huge opportunity. So I think one of the biggest learnings is, and we've always believed this, that it's really, really tough to get a monoclonal antibody to have an extended duration beyond two or three months.

Yeah. Thanks, Joe I think you were talking about the recent the Kodiak trial.

<unk>.

I guess, the key learning is that getting longer duration.

Therapy with an anti <unk> monoclonal antibody is challenging.

It continues to be challenging, but I think if someone can.

Got that.

I've got to work, but thats a huge opportunity. So I think one of the biggest learnings and we've always believed that it's really really tough together to get a monoclonal antibody to have an extended duration of beyond two or three months.

Dr. Michael Goldstein: And, you know, we're committed, we believe that having a potent small molecule, TKI, you know, is a really interesting approach. And based on the data we've already shown from the Australian trial where we really enrolled some of the more challenging patients and were able to show, you know, essentially with monotherapy that we could get rid of fluid and we can maintain that for six or more months. It's super exciting for us.

We're committed and we believe that having a potent small molecule TGI.

It's a really interesting approach based on the data we've already shown.

From the Australia and trial, where we really have rolled some of the more challenging patients and we're able to show so essentially with monotherapy that we could get rid of fluid and we can maintain that for six or more months.

It's super exciting for us.

Operator: And then we have the US trial now, which is, you know, really enrolling a more similar population to what you see with other US trials where you're coming in with patients who are either getting three injections up front as they did in the cardiac trial. But in our case, they're coming in free treatment. And then you're asking the question, can you maintain that?

And then we have the U S trial, now, which is really enrolling a more similar population to what you've seen with other U S trials, where youre coming in with patients who are either getting three injections I privately doing the cardiac trial or in our case, we're coming in pre treated and then you are asking the question can you maintain that we think thats a much slower.

Bar than we've already shown in the Australia trial.

Okay got it thanks.

Its helpful and thanks for taking my questions again.

Operator: We think that's a much lower bar than we've already shown in the Australian trial. [inaudible] Okay, got it, thanks, that's helpful, thanks for taking my question. Thanks, Joe. Thanks, Joe.

Thanks, Rob Thanks, Jeff.

Operator: Thank you. Our next question comes from John Wuden with JMP Securities. Your line is open.

Thank you. Our next question comes from John <unk> with JMP Securities. Your line is open.

Antony Mattessich: Hey guys, thanks for taking the questions and congrats on the progress. Just wondering for a little more color on the Ligic and Junctivitis business unit. First, just want to confirm whether or not there are any sales in AC and that's 12.2, deducted number for the fourth quarter, and then hoping to give us a little more color on the size of this business unit and what your expectations might be for the contribution to the top line in AC this year. We don't expect there have been many or any AC sales in that 12.3 number that we put in.

Hey, guys. Thanks for taking the questions and congrats on the progress just wondering for a little more color on the allergic conjunctivitis business unit.

First just wanted to confirm whether or not there is any sales in AUC in the 12 to the extent that number for the fourth quarter and then hoping you could give us a little more color on the size of this business unit and what your expectations might be for the contribution to the top line.

This year.

Sure I mean, we don't expect.

Many or any AC sales in that $12 three number that we put in.

Antony Mattessich: What we're doing, initiating this quarter, and we'll start next quarter, is a fully dedicated team in the office environment. That team initially is going to be very small, so we're talking about five key account managers, probably one dedicated field reimbursement manager, and then a leader of that team. What we would like to do in that environment is to understand what the drivers are in the office environment, how we need to adjust our programs to make sure that they're fit for purpose.

The last quarter.

What we're doing initiating this quarter and we will start starting next quarter.

Fully dedicated team and the office environment.

<unk> initially is going to be very small so we're talking about five key account managers, probably one dedicated field reimbursement manager and then a leader of that team.

What we would like to do in that environment is to understand what the drivers are in the office environment, how do we need to adjust our programs to make sure that they're fit for purpose.

Antony Mattessich: And as we start to understand what that opportunity is, we will invest behind that opportunity. So rather than set forth a number that we expect to hit and then resource to hit that number, we've done what we did with the launch of Dextensa, which is get in the market, get to understand what drives the market, and then invest once we have the formula correct. And we're gonna do exactly that in the office and optometric environment as well. So there's not really a number that we're chasing, but we're trying to decode the system, and then once we understand it, we will clog it.

And as we start to understand what that opportunity is we will invest behind that opportunity. So.

Rather than set forth a number that we expect to hit and then resource to hit that number.

We've done that we did with the launch of DEXTENZA, which is get in the market just to understand what drives the market and then invest once we have the formula correct and I'm going to do exactly that in the office not the metric environment as well. So there is not really a number that we're chasing but we're trying to decode the system and then once once we understand that we will we will fall again.

Antony Mattessich: Got it, that's helpful. And just one on OTX-TKI, I know you're enrolling a cohort for in Australia. That could be a nice sneak peek of what to expect in the second half of this year from the U.S. study. Given that's open label, will you be releasing any of that data ahead of the U.S. data? That's a good question.

Got it Thats helpful.

And just one on <unk> I know you are enrolling a cohort four in Australia that could be a nice sneak peek of what to expect in the second half of this year from the U S study.

That is open label will you be releasing any of that data ahead of the U S data.

Antony Mattessich: So we are enrolling a cohort four, which has a single implant, 600 micrograms. You know, as you know, at the angiogenesis meeting, we revealed the results from the cohort three, which is the 600 micrograms, but it was the three 200 microgram implants to get there. We actually don't think it's going to be meaningfully different. It could be, but we don't think it will be.

That's a good question. So we are enrolling a cohort four which has the single implant 600 microgram.

Antony Mattessich: And, you know, I think if we've got something meaningful to say in terms of Cohort 4 in Australia, then there is an opportunity to give an update, you know, on the open-label trial. As you mentioned, the U.S. trial, because it's a mass trial, we really need to wait the time. Now, we do have the opportunity for protocols to do an interim analysis, which as I mentioned, we anticipate to do after all or most of the subjects have hit six months or longer, which we think would be a meaningful time to take a look at that. Got it.

A mass trial.

We really need to wait time that we do have the opportunity for protocols do an interim analysis.

Which as I mentioned, we anticipate to do after all or most of the subjects of his six months or longer or do you think would be a meaningful time to take a look at that.

Yeah, Thanks for taking the questions.

Okay. Thanks.

Operator: Thanks for taking the question. Thanks for joining us. Thank you. Our next question comes from Dame Leon with Raymond James. Your line is open. Hi, thank you for taking the questions and congratulations on the updates and outlook for 2022. Two questions from me, please.

Thank you. Our next question comes from game meal with Raymond James Your line is open.

Hi, Thank you for taking my questions and congratulations on the.

The updates an outlet for 2022.

Two questions for me please firstly.

Operator: Firstly, As you get closer to having that six-month data from the 600-microgram single insert in the U.S. study, what's been the feedback coming out of angiogenesis in terms of where you think the hurdle is clinically for that six-month duration of re-treatment, needed re-treatment, or standard of care? Is it a percentage of patients, is it defined by the type of patient and the prior treatment history? Because that's been one of the major points of debate.

As you get closer to having that six month data from the.

600, microgram single insert in the U S study.

What's been the feedback looming angiogenesis in terms of where you think the hurdle is clinically for that six months duration.

Retreatment needed retreat, most standard of care.

Is it a percentage of patients that are defined by the type of patient in the prior treatment history.

Because that's been one of the major points of debate. So any thought there would be appreciated and then secondly, it does seem like you're trying to <unk>.

Dr. Michael Goldstein: So, any thoughts there would be appreciated. And then, secondly, it does seem like you're trying to rework the dry eye program a bit, both with the cyclosporine and low-dose DEX. Is there kind of a timeline where you think you might be able to re-engage some Phase II studies with that program? Thank you. Thanks, Dane.

Rework the dry program a bit both with the cyclosporin and load of stacks.

Is there is there a kind of a timeline, where you think you might be able to re engage some phase two studies with that program. Thank you.

Dr. Michael Goldstein: Good questions, as always. In terms of OTX TKI, I think it's a, So I think the number is really a trade-off, depending on the safety signal you're seeing. And given that, you know, today we've been pleased with the strong safety signal we've shown with OTX-TKI, you know, we think something around 50% of subjects getting to six months or longer is a reasonable clinical target. Now, if you look at our 600 microgram data from COVID-3, we actually were up around 80% of subjects.

They have good questions as always.

In terms of objects.

I think it says.

So I think the number is really a tradeoff depending on the safety signal you are saying.

And given the today.

I've been pleased with the strong basically signal, we've shown with Ots PKI.

Think something around 50% of the subjects day to six months or longer.

As a reasonable clinical target now if you look at our 600 microgram data from cover three we actually were up around 80% of subjects. So if we can replicate that in the U S trial or something like that would be it would be really happy and again just to point out what I, what I said.

Dr. Michael Goldstein: So if we can replicate that in the U.S. trial or something like that, we'd be really happy. And again, just to point out what I've said before, the Australian trial started with patients who had a lot of fluid, and we were trying to get rid of that fluid with the TKI. That's something that no one else has done that we know of, and no one else continues to show.

Before the Australian trial started with patients who have a lot of fluid and we're trying to get rid of that fluid with the tech Guy that's something that no. One else does done that we know of and no. One else continues to show. So we think that's a much higher bar and we've actually been able to show some subjects for the food has gone away completely we've maintained that out to six months or longer.

Dr. Michael Goldstein: So we think that's a much higher bar, and we've actually been able to show some subjects where the fluid's gone away completely, and we've maintained that out to six months or longer. The U.S. trial, more similar to what others are doing, is starting with patients who are treated, or who, you know, in other cases where people have gotten loading deposits, and seeing if you can maintain people in that dry state for a longer period of time.

The U S trial more similar to what others are doing is starting with patients were treated or.

Other cases, where people have gotten floating doses.

And seeing if you can maintain people in that dry state for a longer period of time.

Dr. Michael Goldstein: So, you know, frankly, we'd be pretty disappointed if we don't hit 60% or higher when we go to the 600-microgram single implant in the U.S. trial, but we will, I guess we'll find out in the near future. But I think if we hit that target, that's a blockbuster, given the safety profile.

So frankly, we'd be pretty disappointed if we don't have 660% or higher when we go to the 600 micrograms.

Single implant in the U S trial, but we will I guess, we'll find out in the near future.

But I think if we hit that target that the blockbuster given the safety profile and if we had a lot of information if you had a lot of <unk>.

Dr. Michael Goldstein: Now, if we had a lot of inflammation, if you had a lot of endophthalmitis, if you had vasculitis, the equation changes. But assuming you have a strong safety profile, we think, you know, being north of 50% is a very compelling, you know, potential option. The other point I should make, and not to be lost here, is that the implants go away completely without the need for removal.

Related to the equation changes, but assuming you have a strong safety profile, we think being north of 50% is a very compelling potential option. The other question make and not be lost here is that the implants go away completely without the need for removal.

Dr. Michael Goldstein: So, you know, one of the concerns that people have with long-duration therapy is that they can hang around for a long period of time. And that's something we've shown consistently across all our programs is that the hydrogel goes away in a consistent pattern, and we've seen that with TKI. So if you have something that's safe and you know it's gonna go away, it gives you a lot of leeway in terms of the efficacy side of things to answer your dry eye questions. So they're a little bit different but a little bit similar.

So what are the concerns that people have with long duration therapy.

Is that they can hang around for a long period of time.

And.

That's something we've shown that consistently across all our programs that that the hydrogel goes away and a consistent pattern that we've seen that with Ti. So so if you have the safe and you know it's gonna go away. It gives you a lot of leeway in terms of the efficacy side of things.

To answer your dry questions.

There are a little bit different but a little bit similar so full C D.

Dr. Michael Goldstein: So both the DED and, you know, and the CSI show some interesting information that we showed from the phase two trials. I think in both cases there's some reworking that needs to be done, some very mild formulation tweaks in DED, some larger formulation tweaks with CSI. But the real work for both of those is thinking about the comparator. And what we know is that you can't use a sham as the comparator.

And the CSI some interesting information that we showed from the phase two trial I think in both cases, there is some we've reworking that needs to be done some some very mild formulation tweaks and did you see some some larger formulation tweaks CSI.

But the real work for both of those just thinking about the comparator.

And what we know is that you can't use a sham as the comparator.

Dr. Michael Goldstein: But there are different options in terms of the hydrogel that we use. And there's some work that needs to be done to optimize the comparator. Because from a regulatory perspective, it's really about the separation between the active and the comparator.

But there are different options in terms of the hydrogel that we used and there's some work that needs to be done to optimize the comparator.

Cause from a regulatory perspective, it's really about the separation between the active and the comparator.

Dr. Michael Goldstein: So those are plans that are on the way. We're committed to revealing what that plan will look like sometime in the second quarter. But, you know, we wouldn't anticipate phase two trials starting in either program anytime in the real near future. I mean, thank you very much.

Those are plans that are on the way, we're committed to revealing what that will lay it what that plan will look like sometime in the second quarter, but we wouldn't anticipate phase two trials starting in either program anytime in the near future.

Antony Mattessich: Thanks for point on that. I mean, the one thing we understand in this area is that these trials dry eye, particularly a very high-risk trial, and we want to make sure that we thoroughly mine the data that we have from our phase two, and also understand the process by which we can scale up on both the vehicle and the active drug size, with an eye toward the preservation of our cash runway.

Let me. Thank you very much please point on that I mean, the one thing we understand in this area is that these trials dry I, particularly were very high risk trial, and we want to make sure that we thoroughly mine the data that we have from our phase two and also understand the the process by which we can scale up.

On the on both the vehicle and the active drug size with an eye toward the preservation of our of our cash runway.

Antony Mattessich: [inaudible] So there are ways that we can always bring that forward, which will obviously increase the risk of those trials. What we'd rather do is we'd rather do it absolutely the right way and make sure that we have the appropriate vehicle and we have the appropriate actives in both CSI and DED and SART trials that we have full confidence are going to be able to yield results that can lead to registrable products. So we could go one of two ways.

So there are ways that we can always bring that forward, which were always the increase the risk of those trials.

What we'd rather do is we'd rather do it absolutely the right way and make sure that we have the appropriate vehicle and we have the appropriate.

Active most CSI in D D and start trials that we have full confidence are going to be able to yield results that can lead to range of of products.

So so we could we could go one of two ways that we can either go very very very short term and get into.

Antony Mattessich: We could either go very, very short term and get into the clinic as quickly as possible, or we could take a longer road and lower risk with lower cash burn. We are definitely leaning toward the lower risk and lower cash burn side. Thank you. Thank you. And our next question comes from Yi Chen with HSC Wainwright. Your line is open.

Clinic as quickly as possible or we can take a longer road in lower risk with lower cash burn we are definitely leaning for the lower risk in lower Casper inside.

Thank you.

Thank you and our next question comes from E 10, with HC Wainwright. Your line is open.

Operator: Thank you for taking my questions. First question is regarding the new sales unit for the office setting use of Textenza, are those people new hires or they are existing reps and they are just being allocated to the new team? They will likely be a mix.

Thank you for taking my questions first question is regarding the then.

Then you sales unit for the office setting us off DEXTENZA.

Those people you hire insurers D or your existing reps than just being allocated to the U P.

They will likely be a next we don't have the team in place yet, but what we've done is we've opened up vacancies that our team. The surgical team is allowed to apply for.

Antony Mattessich: We don't have the team in place yet, but what we've done is we've opened up vacancies that the surgical team is allowed to apply for. My guess is in the end, it'll turn out to be a mix of new hires and existing people within the surgical team. Okay, so do you expect revenue, the company to start recognizing revenue from, that's tens of four AC in the current quarter or the second? I think it'll ramp slowly in the second quarter.

My guess is in the end it will turn out to be a mix of new hires an existing people within the surgical team.

Okay. So do you expect uhm revenue the company to start recognizing revenue from that depends on for a C. In the current quarter or the second quarter.

I think it will ramp slowly in the second quarter and once we once we cracked the code about the proper way to sell DEXTENZA in the office environment.

Antony Mattessich: And once we crack the code about the proper way to sell Dexbenza in the office environment, we will layer on resources as needed. And I would expect in the latter part of the year, and certainly in the beginning of 2023, to really start to see the ramp up in that office environment. I mean, assuming there's a there there, because once again, we're starting with a small team that's trying to look for the pressure points in that environment.

We will layer on resources as as needed and I would expect in the latter part of the year and certainly at the beginning of 2023 to really starting to see the ramp up in that office environment. I mean, assuming there is a there there once again, we're starting with a small team that's trying to look for the pressure points in that environment. We believe that it's there there's a tremendous random.

Antony Mattessich: We believe that it's there. There's a tremendous reservoir of unsatisfied patients. And there's a great need in the office environment for a buy and build product for the front of the eye that has a procedure code attached. So the ingredients are right. We just need to figure out what the right alchemy is. Okay, and for the, uh, what in the indication, uh, [inaudible] For those patients who do not respond well to anti-VEGF therapy, do you think there's a chance they can possibly respond to LTX-TKI? Yeah, I think I think there is.

Are are unsatisfied patients and there's a great need in the office environment for for buying Bill product for the front of the line.

It has a procedure code attached so the ingredients are right, we just need to figure out what the right outcome units.

Okay and for the what in the indication.

For those patients who do not respond well to anti vengeance therapy do you think there's a chance that you can possibly respond to L. T X T K.

Dr. Michael Goldstein: I mean, as you know, TKIs have a broader spectrum of activity compared with currently available anti-VEGF drugs. So it is certainly possible that those patients who don't respond well to anti-VEGF drugs will respond well to TKIs. That said, you know, the U.S. trial is enrolling patients who are responding well to anti-VEGF drugs, but we're not selecting for those patients who don't respond. The Australian trial is a bit of a mix, and, you know, we've got some patients who are naïve, some who responded well to anti-VEGF, and some who didn't have great responses to anti-VEGF. Got it.

Yeah, I think I think there is something that is <unk>.

Water spectrum of activities.

Compared with currently available.

Betcha drugs.

So so it is certainly possible that those patients who don't respond well to ft, VEGF drugs will respond well to PKI.

That said.

The U S trial is enrolling patients who are responding well to to empty by Jeff trucks. So we're not we're not collecting for those patients don't respond, yes, Australia and trials a bit of a mix and we've got some patients who are naive some who responded well to empty VEGF and some who didn't have great responses to empty beds.

Got it.

Operator: And for the glaucoma trial, do you still expect the trial to complete enrollment in the second half of this year? Um, so we haven't given guidance on when we expect enrollment to finish. I think, It's, you know, about 105 patients over. So, finishing this year, I think, would be an aggressive target. I think we'll see how enrollment goes, and as we go, we'll give an update at some point with appropriate guidance. But I think it would be unrealistic to expect enrollment to fully enroll this year.

And for the Coca Cola trial do you still expect the trial to complete enrollment in the second half of this year.

So we haven't given guidance.

On when we expect enrollment to finish I think.

It's it's about 105 patients over.

So so finishing this year I think it would be an aggressive target.

I think we'll we'll get we'll see how enrollment goes I'm as we go will give an update at some point.

With appropriate guidance, but I think it would be unrealistic to expect enrollment to fully over all of this year.

Okay. Thank you.

Thanks Jake.

Dr. Michael Goldstein: Okay, thank you. Thank you. Thank you. As a reminder, if you would like to ask a question, press the star then one key on your touch-tone telephone. Our next question comes from Anita Duyanis with Barenburg Capital. Your line is open.

Thank you as a reminder, if you would like to ask a question press. The Star then one key on your Touchtone telephone. Our next question comes from Anita Deanna with Banbury capital. Your line is open.

Operator: Hi, good afternoon. Thanks for taking my question and congrats on the progress. This is Tu from me here. I know you spoke about the next steps in the DED and CSI candidates. Could you please talk about maybe the timelines associated with the development, especially now that you are working internally to develop a comparator? Yeah, so, as I mentioned, as I mentioned, we will develop the appropriate, we'll repeal the appropriate clinical regulatory and manufacturing plans in the second quarter of this year, until that will be the time to give, we'll give it an update on guidance. But we don't anticipate starting a phase two trial and either program in the near future for the reasons they have to be mentioned previously. Thank you, bye. Okay, thank you.

Hi, good afternoon, Thanks for taking my <unk> for them to call.

Okay.

Okay, Let me get I need to talk about.

Ooh.

<unk> full time work.

Would you please talk about maybe about crawling.

Balance named it thankful now that's what I like can you tell me to them at all.

Oh.

Okay.

Yes.

I mentioned.

As I mentioned, we will develop the appropriate will repeal the appropriate clinical or regulatory.

And manufacturing plants in the second quarter of this year.

And so that will be the time to give will give an update on guidance, but we don't anticipate starting a phase two trial in either program in the near future for the for the reasons assay mentioned previously.

Antony Mattessich: And then what are some of the metrics that, you probably look at in terms of the backlog that will be addressed with the surgical procedures that we use at Dexenza. Well, the metrics are essentially that there's usually in a normal year around 4 million cataract surgeries that are done in the United States. We believe that in 2021, that number was closer to 3 million.

Okay. Thank you and one why don't sound like a natural.

Ooh Ooh.

Ooh.

Look at 10.

Backlog that will be it will be thank you for <unk> <unk>, yeah that'd be it.

Well.

Metrics are essentially there's usually in a normal year around 4 million cataract surgery.

Since.

We believe that in 2021 that number was closer to $3 million.

Antony Mattessich: Because cataracts don't spontaneously resolve, and you at some point are going to need these to get the cataract done, the assumption is that those million or so cataracts that weren't done in 2021 will sprinkle themselves in the latter half of 2022 and early 2023. So just giving rough numbers, you would expect four and a half million this year and probably another four and a half or more million next year, which would give us a really nice bump on a basis of what we saw in 2021. Okay, thank you, that was helpful. And then the last question is, did you, are there any updates from the collaboration with Muta'i Bioscience? A good question.

Because counteracts don't spontaneously resolved and you you at some point are going to need this to get to counteract gun.

The assumption is that those million or so cataracts that weren't done in 2021 well.

We will sprinkle themselves in the latter half of 2022 and early 2023.

So just giving Robert rough number as you would expect for four and $5 million this year and probably another four and a half or more million next year, which will give us a really nice bumps on a basis of.

What we saw in 2021.

Antony Mattessich: So that collaboration is to develop a longer duration drug in the dry AMD space, and it's going extremely well. And it's on target. And, you know, we hope to develop a, you know, a new candidate, you know, at some point in the near future. Okay, thank you for that. Thanks for the questions. Thank you, and that's all the questions we have. This concludes today's conference call. Thank you for participating. You may now disconnect.

Apple. Thank you I got that cancelled and the last question.

Mm no collaboration right okay.

Okay.

Good good question.

So so that collaborations to develop.

Yeah.

Longer duration drug and the dry AMD space.

That is going extremely well.

And it's on targets.

We hope to develop a.

A new candidate.

Some points in the near future.

Okay. Okay. Thank you for that.

Each of the questions.

Antony Mattessich: Everyone have a great day. Thank you. [music] Thanks for watching! Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music, [music] Good afternoon, ladies and gentlemen.

Thank you and that's all the questions. We have this concludes today's conference call. Thank you for participating you may now disconnect everyone have a great day.

Operator: Thank you for standing by and welcome to the Ocular Therapeutix fourth quarter and year-end 2021 earnings conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. It is now my pleasure to turn the call over to Donald Notman, Chief Financial Officer of Ocular Therapeutix. Please go ahead, sir.

At Castle.

[music].

Mhm.

[music].

Donald Notman: Thank you, Catherine. Good afternoon, everyone. And thank you for joining us on our fourth quarter and year end 2021 financial results and business update conference call. This afternoon, after the close, we issued a press release providing an update on the company's product development programs and details of the company's financial results for the quarter and fiscal year ended December 31, 2021. The press release can be accessed on the investors portion of our website at investors.ocutx.com, Leading the call today will be Antony Mattessich, our President and Chief Executive Officer, who will provide a summary of our corporate development and an update on the commercial progress of Dextenva.

Good afternoon, ladies and gentlemen, thank you for standing by and welcome to the Ark ocular Therapeutics fourth quarter and year end 2021 earnings conference call. At this time all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will follow at that time. It is now my pleasure to turn the call over to.

Donald Notman: Also speaking on the call today will be Dr. Michael Goldstein, our President, Ophthalmology, and Chief Medical Officer, who will give an update on our clinical development and pipeline. Following Michael's remarks, I will provide an overview of the financial highlights for the quarter and the fiscal year before turning the call back over to Antony for a summary and question. For the Q&A, we will be joined by Scott Corning, our Senior Vice President of Commercial, and Chris White, our Chief Business Officer.

Donald Buckman, Chief Financial Officer of ocular Therapeutics. Please go ahead Sir.

Thank you Catherine good luck.

Hello, everyone and thank you for joining us on our fourth quarter and year end 2021 financial results.

This update conference call.

This afternoon. After the close we issued a press release, providing an update on the company's product development programs and details of the company's financial results for the quarter and fiscal year ended December 31 2021.

The press release can be accessed on the investors portion of our website.

Sure Scott those C U E.

Leading the call today will be <unk>, our president and Chief Executive Officer.

We will provide a summary of our corporate developments and an update on that.

Progress with DEXTENZA.

Also speaking on the call today will be Dr. Michael Goldstein, our president Ophthalmology, and Chief Medical Officer, who will give an update on our clinical development pipeline.

Following Michael's remarks, I will provide an overview of the financial highlights for the quarter and the fiscal year before turning the call back over to Anthony for a summary of the question.

For Q&A, we'll be joined by Scott Corning, Our senior Vice President commercial and Chris <unk>, Our Chief business Officer.

Donald Notman: As a reminder, on today's call, certain statements we will be making may be considered forward-looking for the purposes of the Private Securities Litigation Reform Act, 1995. In particular, any statements regarding our regulatory and product development plans, as well as our research activities, are forward-looking statements. These statements are subject to a variety of risks and uncertainties that may cause actual results to differ from those forecasted, including those risks described in our most recent annual report on Form 10-K filed this afternoon with the FCC. I will now turn the call over to Antony.

As a reminder, today's call certain statements, we will be making maybe considered forward looking for purposes of the private Securities Litigation Reform Act 90 95.

In particular any.

With the SEC I will now turn the call over to Anthony.

Antony Mattessich: Thank you, Donald, and welcome, everyone, to the Ocular Therapeutix fourth quarter and year-end 2021 earnings report. Ocular Therapeutix had another strong quarter in the productive year. Commercialization of Expenza continues to wrap. We achieved $12.3 million in total net product revenues in the fourth quarter and $43.5 million for 2021. This represents a 66% growth over the comparable quarter in 2020 and 150% growth in 2021 on a full year basis. I'm pleased with our commercial efforts and our team's ability to grow product revenues in each quarter of 2021, despite lower than expected cataract surgery volumes. Attributed to the COVID panic, pandemic.

Thank you Tom and welcome everyone to the ocular therapeutics fourth quarter and year end 2021 earnings report.

<unk> had another strong quarter and a productive year.

Relation of extensive continues to ramp.

We achieved $12 3 million in total net product revenues in the fourth quarter $43 5 billion for 2021.

This represents a 66% growth over the comparable quarter in 2020, and 150% growth in 2021 on a full year basis.

I am pleased with our commercial efforts and our team's ability to grow product revenues in each quarter of 2021, despite lower than expected cataract surgery volumes.

<unk> attributed to the Covid panic.

Pandemics.

Antony Mattessich: Extensa represents a tremendous growth driver for Ocular as we continue to put ourselves in the best possible position to grow the product. We've made significant progress on reimbursement as we enter 2022, with Extensa currently maintaining pass-through payment status through 2022, and then, very importantly, being eligible for separate payment beginning in 2023, and potentially beyond, as a non-opioid pain management supply provision in ASC. In addition, physician reimbursement for the insertion of the extends that is now broadly available under our Category 1 code, which became effective January 1, 2022, ensuring reliable payment to physicians for the extends of placement across all payer types and in all settings of care. In October, we received FDA approval of our SNDA, expanding the use of Dextenza for the treatment of ocular itching associated with allergic conjunctivitis.

<unk> represents a tremendous growth driver for <unk> as we continue to put ourselves in the best possible position to grow the product we've.

We have made significant progress on reimbursement as we enter 2022 with DEXTENZA currently maintaining pass through payment status through 2022, and then very importantly, being eligible for separate payment beginning in 2023 and potentially beyond as a non opioid pain management supply provision in afcs.

In addition, <unk>.

Additional reimbursement for the insertion of DEXTENZA is now broadly available under our category One code, which became effective January one 2022.

<unk> reliable payment to physicians for DEXTENZA placement across all payer types and in all settings of care.

In October we received FDA approval of our NDA extending the use of an extensive for the treatment of ocular itching associated with allergic conjunctivitis.

Antony Mattessich: This approval represents an important strategic milestone, not just because it expands the market opportunity for TENSA but because we believe it opens up growth potential in a new side of care, the ophthalmology and optometric office environment. Allergic encephalitis is treated in the office environment as opposed to the AFC and HOPD where it extends against the vast majority of its current use in the treatment of post-surgical inflammation and pain. Ocular's strategic goal is to expand its presence in ophthalmology and optometric offices by providing customers with numerous, and David R.

This approval represents an important strategic milestone.

Not just because it expands the market opportunity for DEXTENZA, but because we believe it opens up growth potential in a new site of care.

Ophthalmology and Optometry office environments.

Allergic conjunctivitis is treated in the office environment as opposed to the ASC in HBV, where it extends it gets the vast majority of its current views and the treatment of post surgical inflammation and pain.

<unk> strategic goal is to expand its presence into ophthalmology and optometry offices on providing customers with numerous.

Innovative buy and bill products, including those developed internally and potentially there was in licensed from other companies in the future.

Antony Mattessich: The approval of this NDA gives us the opportunity to take the first step in doing that. While the strategic potential of the office environment is exciting, it represents an almost entirely new space for ocular therapeutics with a unique set of challenges and opportunities. We discovered in the launch of Xtensa that the primary barriers of entry were the logistics associated with ASC and HOPD administration. Setting up accounts in ophthalmology and optometric offices will be analogous but with different drivers, that require a bespoke solution.

The approval of this NDA gives us the opportunity to take the first step in doing that while the strategic potential for the office environment is exciting it represented almost entirely new space for ocular therapeutics with unique set of challenges and opportunities.

We discovered and the launch of DEXTENZA with the primary barriers of entry and logistics associated with ASC <unk> administration.

So think of accounts in ophthalmology, and optometry offices will be analogous but with different drivers.

<unk> solutions.

Antony Mattessich: As a result, in 2022, we are establishing a separate business unit consisting of key account managers and field reimbursement managers who will be tasked exclusively with selling into the office setting. This effort will expand our commercial footprint and provide the opportunity to further enhance the growth of Xtenza and may also facilitate longer term, commercialization of any of the product candidates in our pipeline that may be approved including potentially OTX TKI and wet AMD, OTX TIC and glaucoma, and our dry eye products, all of which are designed to be used predominantly in the office setting.

This effort will expand our commercial footprint and provide the opportunity to further enhance the growth of DEXTENZA and may also facilitate longer term and the commercialization of any other product candidates in our pipeline that may be approved including potentially <unk> PKI in wet AMD.

<unk> TICC in glaucoma and dry eye products, all of which are designed to be used predominantly in the office setting.

Antony Mattessich: Shifting to our pipeline, we've also made great progress advancing our key programs. We recently provided updates on OTX-TKI for the treatment of wet AMD at the Angiogenesis, Exudation, and Degeneration meeting, and on OTX-TIC for the treatment of glaucoma at the Glaucoma 360 meeting. Both updates continue to demonstrate drug product profiles that we believe are compelling and could dramatically improve upon the standard of care in these billion-dollar markets. We anticipate significant milestones in both programs over the course of 2022. Clearly, we believe our pipeline remains a source of tremendous potential value.

And on <unk> for the treatment of glaucoma at the glaucoma 360 million Boes.

Both updates continue to demonstrate drug product profiles that we believe are compelling and could dramatically improve upon the standard of care in the $1 billion market.

We anticipate significant milestones in both programs over the course of 2022.

Clearly, we believe our pipeline remains a source of tremendous potential value. We continue to advance the portfolio of product candidates that are highly differentiated clinically that lend themselves sufficient commercialization and have the potential for long periods of exclusivity.

Dr. Michael Goldstein: We continue to advance the portfolio of product candidates that are highly differentiated clinically, that lend themselves to efficient commercialization, and that have the potential for long periods of exclusivity. With that, I would now like to hand the call over to our president of ophthalmology and chief medical officer, Dr. Michael Goldstein, who will provide an in-depth look at our pipeline. Thanks, Antony.

With that I would now like to hand, the call over to our president of ophthalmology.

And Chief Medical Officer, Dr. Michael Goldstein, who will provide an in depth look at our pipeline.

Dr. Michael Goldstein: Let me begin with an update on our Back of the Eye program, OTxPKI. We are pleased to have recently completed enrollment in the U.S.-based, multi-center, prospective, randomized controlled trial that is evaluating a single 600-microgram OTX-TKI implant containing exfitinib compared to a Fliversep administered every eight weeks in subjects previously treated with anti-VEGF therapy. This U.S.-based Phase I clinical trial of OTX-TKI is being conducted under an exploratory IND application at five sites targeting a total of 20 randomized subjects, 3-1 Randomization Weighted Toward OTX-TPI Treated Subjects, We plan to report interim six-month data in the second half of the year. This trial is designed to assess the safety, durability, and tolerability of OTPKI as well as to assess preliminary biological activity in subjects by measuring anatomical and functional changes of the retina.

Thanks, Matt.

Let me begin with an update on our back of the eye program <unk>.

We are pleased to have recently completed enrollment in the U S. Based multicenter prospective randomized controlled trial that is evaluating a single 600 microgram ots implants.

Okay.

Compared to a flavor self administered every eight weeks and subjects previously treated with anti VEGF therapy.

This U S based phase one clinical trial of <unk> <unk>.

<unk> conducted under a exploratory R&D application at five sites targeting a total of 20 randomized subjects.

Three to one randomization weighted toward <unk> treated subjects.

We plan to report interim six month data in the second half of the year.

This trial is designed to assess the safety durability and Tolerability of <unk> <unk>.

As well as to assess preliminary biological activities in subjects by measuring anatomical and functional changes on the robot.

Dr. Michael Goldstein: Critical to remember is that the population being studied here is different than the population being studied in our ongoing Phase I clinical trial of OTX-TKI in Australia. In this trial, we are including only subjects who have been previously treated with anti-VEGF therapy and asking the question, how long can we maintain subjects without need for re-treatment? Whereas, in the Australian trial, we study subjects who had pre-existing inter-retinal and or sub-retinal fluid and ask the question, could we get rid of the fluid with a TKI?

Critical to remember is that the population being studied here is different from the population being studied in our ongoing phase one clinical trial of <unk> <unk> Australia.

In this trial, we are including only subjects, who have been previously treated with anti VEGF therapy and asking the question how long can we maintain subjects without need for a retreat book.

Whereas in the Australia and trial study subjects with preexisting interact well in our sub retinal fluid.

Ask the question could we get rid of the fluid with DTI.

Dr. Michael Goldstein: We recently presented the interim data on OTX-PKI from the Australia-based Phase 1 trial at the Angiogenesis, Exudation, and Degeneration 2022 meeting held on February 11th and 12th. This latest analysis of interim data in subjects with subretinal and or intraretinal fluid due to wet AMD continues to support the product safety profile and preliminary evidence of biological activity.

We recently presented the interim data on <unk> from the Australia based phase one trial at the angiogenesis Exudation and degeneration in 2022 meeting held on February 11 and 12.

This latest analysis of interim data in subjects with sub retinal <unk> <unk> lower due to wet AMD continues to support the product safety profile and preliminary evidence of biological activity.

In this trial, we filed a clinically meaningful decrease in <unk> and our sub retinal fluid and very subject.

Extended duration of activity of six months or more was observed in over 60% of subjects across all cohorts at over 80% of subjects in cohort 386 hundred microgram cohort, which could represent a compelling drug product profile.

Dr. Michael Goldstein: In this trial, we found a clinically meaningful decrease in intraretinal and or subretinal fluid in many subjects. Extended duration of activity of six months or more was observed in over 60% of subjects across all cohorts, and over 80% of subjects in cohort 3A, the 600-microgram cohort, which could represent a compelling drug product profile. Moving to our glaucoma program, OTX-TIC, we recently presented data from the completed U.S.-based Phase I clinical trial evaluating the safety, biological activity, durability, and tolerability of OTX-TIC, with Primary Opening Glaucoma or Ocular Hypertension at the Glaucoma 360 meeting on February 11.

Moving to our glaucoma program <unk> TSA.

We recently presented data from a completed U S based phase <unk> clinical trial evaluating safety biological activity durability, and Tolerability of <unk> <unk>.

Subjects with primary open angle glaucoma or ocular hypertension glaucoma 360 meeting on February 11th.

Dr. Michael Goldstein: The phase one data presented highlights OTX-TIC's ability to provide a clinically meaningful decrease in intraocular pressure comparable to trauma process as early as two days following administration and for as long as six months or more with a single implant while preserving corneal health representing its potential for a unique and differentiated drug product profile. With this data in hand, we've initiated a U.S.-based Phase II clinical trial for actively screening subjects. This trial is a prospective, multi-sensor, randomized controlled trial evaluating the safety, tolerability, and efficacy of OTX-TIC for the treatment of patients with primary open-angle glaucoma or ocular hypertension.

The phase one data presented highlights <unk> ability to provide a clinically meaningful.

Meaningful decrease.

In intraocular pressure.

Apparel Travoprost as early as two days volume administration and for as long as six months or more with a single implant, while preserving corneal health representing its potential for our unique and differentiated drug product profile.

With this data in hand, we have initiated a U S based phase II clinical trial of our actively screening subjects.

Dr. Michael Goldstein: The trial will enroll approximately 105 subjects in three different arms, 35 subjects per arm, randomized one-to-one-to-one, in which the subjects will receive a single OTX-TIC implant containing a 5-microgram or 26-microgram dosotravacrost compared with an injection of Durasta. The trial observed changes in diurnal intraocular pressure.

The trial overall, approximately 105 subjects in three different arms.

Trial will observe changes in viral and trucker pressure.

Dr. Michael Goldstein: Changes from baseline at 8 a.m., 10 a.m., 4 p.m., at 2, 6, and 12 weeks, and follow duration of IOP response over time. Regarding our ocular surface disease programs, we remain committed to the development of our two dry eye programs, OTX-BED, a low-dose intracanalicular insert of preservative-free dexamethasone for the short-term treatment of the signs and symptoms of dry eye disease, and the PXC-SI for the chronic treatment of patients with dry eye disease.

Changes from baseline at eight a M.

<unk> RPM at two six and 12 weeks and follow duration of IOP response over time.

Regarding our ocular surface disease programs, we remain committed to the development of our two dry eye programs Ots VEB, a low dose and for kind of like Taylor and insert of preservative free dexamethasone for the short term treatment of assignment and symptoms of dry eye disease.

As <unk> CFO for the chronic treatment of patients with dry eye disease.

Dr. Michael Goldstein: In December 2021, we announced positive top-line results from our Phase 2 clinical trial of OTX-DC. The Phase 2 clinical trial was a U.S.-based, randomized, double-masked, vehicle-controlled, multi-center trial evaluating two different formulations of OTX-DED, a 0.2 mg group and a 0.3 mg group in 166 subjects with dry disease. While not powered for statistical significance, the clinical trial achieved its pre-specified primary endpoint, demonstrating a statistically significant change of vulvar conjunctival hyperemia from baseline to day 15, compared to the vehicle hydrogel using a central reading photographic assessment in the modified ITT population at both doses. P-value of 0.004 in the 2mg group and P-value of 0.028 in the 0.3mg group.

In December 2021, we announced positive topline results from our phase II clinical trial of <unk>.

The phase II clinical trial with a U S based randomized double masked vehicle controlled multicenter trial evaluating two different formulations of <unk> <unk>.

Two milligram group at <unk>, three milligram group and 166 subjects with dry disease.

While not powered for statistical significance, the clinical trial achieved its prespecified primary endpoint demonstrating a statistically significant change of all of our conjunctiva hyperemia from baseline to day 15 compared to the vehicle hydrogel using a central reading photographic assessments and the modified <unk>.

<unk> population at both doses P value of <unk>, four and the two milligram group and P value of <unk> <unk> eight and the <unk> three milligram group.

<unk> was observed to be generally well tolerated with a favorable safety profile.

Overall, we are pleased with the <unk> results and we continue to see a large treatment effect from the <unk> occlusion using the controller.

We are currently reviewing an appropriate clinical regulatory development and manufacturing plants.

This plan will include some additional formulation work for the <unk> and the development of an appropriate vehicle comparator.

Dr. Michael Goldstein: OTX-DED was observed to be generally well-tolerated with a favorable safety profile. Overall, we are pleased with the OTS-BED results, and we continue to see a large treatment effect from the punctal occlusion used in the control arm. We are currently reviewing an appropriate clinical regulatory development and manufacturing plan. This plan will include some additional formulation work for the OTX-DED insert and the development of an appropriate vehicle comparator. In late October of 2021, we reported top-line data from the U.S.-based Phase II randomized, double-masked, multi-sensor clinical trial to evaluate the safety, efficacy, durability, and tolerability of two different formulations of OTX-CSI versus hydrogel vehicle insert. The Phase II studies showed that OTX-CFI treated subjects got a clinically meaningful improvement from baseline for both signs and symptoms of dry eye disease for both formulations.

In late October 2021, we reported topline data from the U S based phase II randomized double masked multicenter clinical trial to evaluate the safety efficacy durability and tolerability of two different formulations of ots CSI versus hydrogel vehicle observe.

The phase II study showed that <unk> CFO two subjects had a clinically meaningful improvement from baseline.

For both signs and symptoms of dry eye disease for both formulation.

Dr. Michael Goldstein: This trial, however, did not show separation between the OTX-DSI-treated subjects, full formulations, and the vehicle-treated subjects, full formulations, on symptoms or the primary endpoint of increased tear production at 12 weeks as measured by the Shermer's test. We are currently reviewing an appropriate clinical regulatory development and manufacturing plan. This plan will include additional formulation work for the OTX-TSI insert to allow improved retention and the development of an appropriate vehicle comparator. I would now like to turn the call back over to Donald to review our fourth quarter and year end financial results.

This trial however, it did not show a separation between the <unk> CSI treated subjects, both formulations in the vehicle treated subjects both formulations.

So those are the primary endpoint of increased tier production at 12 weeks as measured by the Schirmer test.

We are currently reviewing an appropriate clinical regulatory development and manufacturing plants.

This plan will include additional formulation work for the <unk> CFO items are to allow improved retention and the development of an appropriate vehicle comparator.

I would now like to turn the call back over to Donald to review, our fourth quarter and year end financial results.

Dr. Michael Goldstein: Thanks, Mike. Gross product revenue is net of discounts, rebates, and returns, which the company refers to as total net product revenue, with $12.3 million for the fourth quarter and represented a 66% increase over the same period in 2020. Gross product revenue of Dextenz in the fourth quarter was $12.2 million versus $6.9 million in the comparable quarter of 2020, reflecting a 77% increase.

Thanks, Mike gross product revenue net of discounts rebates and returns, which the company refers to as total net product revenue was $12 $3 million for the fourth quarter and represented 66% increase over the same period in 2020.

Net product revenue of DEXTENZA in the fourth quarter was $12 2 million versus $6 $9 million in the comparable quarter of 2020, reflecting a 77% increase.

Donald Notman: Total net product revenue for the fourth quarter of 2021 also includes net product revenue of $58,000 from Reshure Sealant. Overall, Net Product Revenue for the year was $43.5 million versus $17.4 million for 2020, reflecting a strong uptick in extended sales. Research and development expenses for the fourth quarter were $12.6 million versus $7.6 million for the comparable period in 2020, driven primarily by an increase in unallocated expenses. Predominantly personnel costs and increased clinical trial costs associated with the initiation of the U.S.-based Phase I clinical trial of OTX-TKI and the initiation of the U.S.-based Phase II clinical trial for OTX-TIC. Phase II Clinical Trials for OTX-CSI and OTX-CED, and the ongoing Phase 1 clinical trial of OTX-PKI in Australia, and the ongoing post-approval clinical trial for Dixzenza for post-surgical inflammation and pain in pediatric subjects.

Total net product revenue for the fourth quarter of 2021 also includes net product revenue of 58000 from ensure CLEC.

Overall net product revenues for the year was $43 5 million versus $17 4 million for 2020, reflecting a strong uptake and extended the sales.

Research and development expenses for the fourth quarter were $12 6 million.

Versus $7 6 million for the comparable period in 2020.

Driven primarily by an increase in unallocated expenses predominantly personnel costs and increased clinical trial costs associated with the initiation of the U S. Based phase one clinical trial of <unk> and the initiation of the U S based phase II clinical trial for <unk>.

The phase III clinical trials for <unk>, CSI and MTX CE.

The ongoing phase one clinical trial of <unk> in Australia.

And the ongoing post approval clinical trial for DEXTENZA for post surgical inflammation and pain in pediatric subjects.

Donald Notman: Overall, R&D expenses for the full year increased $21.4 million to $50.1 million from $28.7 million in 2020, reflecting the trends identified above. Selling and marketing expenses in the quarter were $9.1 million as compared to $6.8 million for the same quarter in 2020, primarily reflecting increased personnel costs associated with an expansion of the field force. Overall, selling and marketing expenses for the full year increased to $35.2 million from $26.6 million in 2020, driven primarily by increased personnel costs and increased spending on consulting, trade shows, and conferences. Finally, general and administrative expenses were $7.5 million for the fourth quarter versus $6.6 million in the comparable quarter of 2020. The increase in expenses stem primarily from increased personnel expenses and professional fees.

Overall R&D expenses for the full year increased $21 $4 million to $50 1 million from $28 $7 million in 2020, reflecting the trends identified above.

Selling and marketing expenses in the quarter were $9 1 million as compared to $6 $8 billion for the same quarter in 2020.

Primarily reflecting increased personnel costs associated with an expansion of the field field force.

Overall, selling and marketing expenses for the full year increased to $35 $2 million from $26 6 million in 2020, driven.

Not only by increased personnel costs and increased spending on consulting trade shows and conferences.

Finally general and administrative expenses were $7 $5 million for the fourth quarter purchased $6 $6 million in the comparable quarter of 2020.

The increase in expenses stemmed primarily from increased personnel expenses and professional fees.

Overall G&A expenses for the full year increased $9 million.

To $31 9 million from $22 $9 million in 2020, again, reflecting primarily increased personnel and professional fees.

With respect to the financial results for the fourth quarter accompanying reported a net loss of $3 9 million.

Or a loss of $5 per share on a basic basis and a loss of 23 per share on a diluted basis for the three months ended December 31 2021.

This compares to a net loss of $85 6 million or a loss of $1 21 per share on a basic and diluted basis for the same period in 2020.

Net income in the fourth quarter of 2021 included a $15 $9 million noncash.

Noncash gain in the fair value derivative liability associated with our convertible notes driven by a decrease in the price of our common stock during the quarter.

Noncash charges for stock based compensation and depreciation and amortization were $4 4 million in the fourth quarter versus $2 $8 million for the same quarter in 2020.

Overall, the company reported a net loss of $6 6 million or a loss of <unk> nine per share on a basic and a loss of 98 per share diluted basis.

For the full year ended December 31 2021.

Donald Notman: Versus a net loss of $155.6 million, or a loss of $2.57, 56 cents per share on both a basic and a diluted basis in 2020. As of February 24, 2022, the company had 76.8 million shares outstanding.

A net loss of $155 6 million.

Our loss of $2 50, <unk> 56 per share.

Both a basic and diluted basis in 2020.

As of February 24, 2022, the company had $76 8 million shares outstanding.

Donald Notman: As of December 31, 2021, the company had $164.2 million in cash and cash equivalents versus $179.3 million at September 30, 2021, based on our current plans and related estimates of anticipated cash inflows from Dexenta and anticipated cash outflows from operating expenses. The company believes that existing cash and cash equivalents as of December 31, 2021, will enable the company to fund planned operating expenses, debt service obligations, and capital expenditure requirements through 2023.

As of December 31, 2021, the company had $164 2 million in cash and cash equivalents.

First is the $179 3 million at September 32021 based.

Based on our current plans and related estimates of anticipated cash inflows from DEXTENZA.

Donald Notman: This CAHPS guidance is subject to a number of assumptions, including those related to the severity and duration of the COVID-19 pandemic, the revenues, expenses, and reimbursement associated with Extensa, and the pace of research and clinical development programs, among other aspects of the business. This concludes my comments on our fourth quarter of 2021 and year-end financial results, and I would like to turn the call back to Antony for some final thoughts. Thanks, Tom.

This cash guidance is subject to a number of assumptions, including those related to the severity and duration of the COVID-19 pandemic the.

The revenues expenses and reimbursement associated with extend that in.

And the pace of research and clinical development programs among other aspects of the business.

This concludes my comments on our fourth quarter 2021, and year end financial results and I would like to turn the call back to Anthony for some final thoughts.

Thanks, Tom.

Antony Mattessich: So before opening the call up for questions, let me do a quick summary. The company demonstrated solid performance, growing total net revenue 66% over the comparable quarter of 2020 and approximately 150% in 2021 on a full year basis. With FDA's approval of our SNDA to include ocular itching associated with allergic conjunctivitis and to extend the label, we are establishing a separate commercial business unit consisting of key account managers and field reimbursement managers to focus exclusively on the office setting, while the main sales team continues to focus on maximizing the opportunity for it to extend in surgical settings, with the recent OPPS final rules. CMS has laid out a path for the continued separate payment for Dextenza in the ASC environment after the path-through expiration.

Before opening the call up for questions. Let me do a quick summary.

The company demonstrated solid performance growing total net revenue, 66% over the comparable quarter of 2020 and approximately 150% in 2021 on a full year basis.

Okay.

With the recent our PPS final rules CMS.

Antony Mattessich: This could allow us to maintain and strengthen our surgical business as we build a new source of growth in the office environment. The U.S.-based trial of OTX-TKI, evaluating a single 600-microgram implant versus anti-VEGF injection versus standard of care every eight-week ILEA, is now fully enrolled, and we expect to announce interim data in the second half of 2022. We recently initiated our Phase 2 clinical trial, OTX-TIC, for the treatment of glaucoma and our actively screening subjects.

The U S based trial <unk> PKI evaluating a single 600 microgram implant versus anti VEGF injection versus standard of care every eight week Eylea is now fully enrolled and we expect to announce interim data in the second half of 2022.

We recently initiated our phase II clinical trial of <unk> for the treatment of glaucoma and are actively screening subjects.

Antony Mattessich: In dry eye disease, we remain dedicated to developing this key market and we are conducting work to find the best formulations and vehicle control to use as we look to advance both OTX-BSI and OTX-BED. And finally, the company entered the quarter with $164.2 million in cash on the balance sheet as of December 31st, an expected cash runway through 2023.

In dry eye disease, we remain dedicated to developing this key market and we are conducting work to find the best formulations and vehicle control to use as we look to advance multiple gx DSI and <unk>.

And finally, the company ended the quarter with $164 2 million in cash on the balance sheet as of December 31, and an expected cash runway through 2023.

Antony Mattessich: We look forward to a strong 2022, and with that, I'll turn the call over for questions. Thank you. To ask a question, you'll need to press star 1 on your telephone.

We look forward to a strong 2022 and with that I'll turn the call over for questions.

Yes.

Thank you to ask a question you will need to press star one on your telephone to withdraw your question press the pound key.

Operator: To withdraw your question, press the pound key. Our first question comes from Joe Cantencaro with Piper Sandler, your line is open. Hey guys, thanks so much for taking my questions here and congrats on the progress. Maybe the first one for me, I had on Dextensa and expectations for 2022 and whether you would expect to provide billable unit data on a monthly basis in the absence of any firm revenue guidance. And what we should think about as we think about modeling Dextensa, if you could walk through some of the maybe tailwind, and Edwin that we should keep in mind for the year. Thanks, and I have a follow-up. Yeah, we have consistently given the monthly in-market insert numbers. I mean, that number is also in the earnings report.

Our first question comes from Joe <unk>.

Karl with Piper Sandler Your line is open.

Hey, guys. Thanks. Thanks.

What we should think about as we think about modeling DEXTENZA. If you could walk through some of them may be tailwind.

Headwinds that we should keep in mind for the year, Thanks, and I have a follow up.

Yes, we have consistently given the monthly in market in certain numbers.

That number is also in.

The earnings report.

So until we give start giving guidance going forward, we will continue to give those numbers.

I mean, essentially the real headwind is the questions around the ability of <unk> to be able to staff up appropriately to handle the backlog of cataract surgeries that are that we understand are very much out there and going to come back into the market at some point.

We've mentioned before that we had a really good October and November really strong uptick in sales and we saw the slowdown in December that followed the lower than expected number of cataract surgeries due to the <unk>.

Swing, we saw that continue into January but we have seen in February a bounce back starting in the market as well.

Antony Mattessich: So if we understand that going forward, we're not only going to get a normal flow of cataract volume, but can in fact see that some of those delayed surgeries re-enter the market, we're actually looking forward to a very, very good 2022. Once we have some transparency of what that market is gonna look like, we'll revisit the idea about giving guidance. Okay, got it.

So if we understand that going forward, we're not only going to get a normal flow of cataract volume, but can in fact see that some of those those delayed surgeries reenter the market.

We're actually looking to our port to a very very good 2022. Once we have some some transparency of what that market is going to look like and we will revisit the idea about giving guidance.

Operator: Thanks. That's helpful. And then maybe if I could ask one to Mike, and I know there was a recent Phase 3 extended VEGF, wet AMD study that recently read out, and wondering if you see any learning there, whether it be on trial design, enrollment criteria, or even how ILEA performs. Any thoughts you have there would be great.

Okay got it. Thanks, that's helpful and then maybe if I could ask one.

Mike and I know there was a recent phase III extended that Jeff wet AMD study that recently read out and wondering if you see any learnings there whether it be on trial design enrollment criteria or even how eylea.

Leah performs any thoughts you had there would be great.

Dr. Michael Goldstein: Thanks, Joe. I think you're talking about the recent Kodiak trial. And I guess the key learning is that getting longer duration, therapy with an anti-VEGF. Monoclonal Antibody is challenging and continues to be challenging and I think if someone can, you know, get that to work, then that's a huge opportunity. So I think one of the biggest learnings is, and we've always believed this, but it's really, really tough to get a monoclonal antibody to have an extended duration beyond two or three months.

Yes.

So I think youre talking about the recent the Kodiak trial.

And I guess, the key learning is that getting longer duration.

Therapy with an <unk> Jeff.

<unk> monoclonal antibody is challenging.

It continues to be challenging, but I think if someone can.

Got that got back to work. So that's a huge opportunity. So I think one of the biggest learnings and we've always believed that it's really really tough together to get a monoclonal antibody to have an extended duration of beyond two or three months.

Dr. Michael Goldstein: And, you know, we're committed; we believe that having a potent small molecule TKI is a really interesting approach. And based on the data we've already shown from the Australian trial, we really enrolled some of the more challenging patients and were able to show, you know, essentially with monotherapy that we could get rid of fluid, and we could maintain that for six or more months. It's super exciting for us, and then we have the U.S. trial now, which is, you know, really enrolling a more similar population to what you see with other U.S. trials, where you're coming in with patients who are either getting three injections up front, as they did in the Kodiak trial, or, in our case, are coming in pretreated.

We're committed and we believe that having a potent small molecule TGI.

It's a really interesting approach based on the data we've already shown.

From the Australia and trial over it really overall some of the more challenging patients and we're able to show essentially with monotherapy that we could get rid of fluid and we can maintain that for six or more months.

We are exciting for us.

And then we have the U S trial, now, which is really enrolling a more similar population to what you've seen with other U S trials, where you are coming in with patients who are either getting three injections upfront as they did in the cardiac trial or in our case are coming in pre treated and then you're asking the question can you maintain that we think thats a much lower bar.

Operator: We think that's a much lower bar than we've already shown in the Australian trial. Okay, got it, thanks, that's helpful and thanks for taking my question. Thanks, Joe. Thanks, Joe.

And we've already shown in the Australia and trial.

Okay.

Okay got it. Thanks, that's helpful and thanks for taking my questions again.

Thanks, Rob Thanks, Jeff.

Operator: Thank you. Our next question comes from John Wooten with JMP Securities. Your line is open.

Thank you. Our next question comes from John <unk> with JMP Securities. Your line is open.

Operator: Hey guys, thanks for taking the questions and congrats on the progress. Just wondering for a little more color on the allergic conjunctivitis business unit. First, just wanted to confirm whether or not there is any sales in AC in this 12.2 decadent number for the fourth quarter. And then hoping you could give us a little more color on the size of this business unit and what your expectations might be for the contribution to the top line in AC this year. We don't expect there have been many or any AC sales in that 12.3 number that we put in.

Hey, guys. Thanks for taking the questions and congrats on the progress just wondering for a little more color on the allergic conjunctivitis business unit.

First just wanted to confirm whether or not there is any sales and AAC and that's 12 to extend the number for the fourth quarter and then hoping you could give us a little more color on the size of this business unit and what your expectations might be for the contribution to the top line this year.

Sure I mean, we don't expect.

<unk> been many or any AC sales in that $12 three number that we put in.

And the last quarter.

What we're doing initiating this quarter and we will start starting next quarter is a.

Fully dedicated team and the office environment and that team initially it's going to be very small. So we're talking about five key account managers, probably one in dedicated field reimbursement manager and then a leader of that team.

We would like to do in that environment is to understand what the drivers are in the office environment, how do we need to adjust our programs to make sure that they're fit for purpose.

And as we start to understand what that opportunity is we will invest behind that opportunity sorry.

So rather than set forth a number that we expect to hit and then resource to hit that number we've done what we did with the launch of DEXTENZA, which is get in the market just to understand what drives the market and then invest once we have the formula correct.

Are going to do exactly that in the office not the metric environment as well. So there is not really a number that we're chasing but we're trying to decode the system and then once once we understand that we will we will forget.

Operator: I know you're enrolling a cohort for in Australia. That could be a nice sneak peek of what to expect in the second half of this year from the U.S. study. Given that's open label, will you be releasing any of that data ahead of the U.S. data? That's a good question.

Got it that's helpful and just one on <unk> I know you are enrolling a cohort four in Australia that could be a nice sneak peek of what to expect in the second half of this year from the U S study.

Given that its open label will you be releasing any of that data ahead of the U S data.

Dr. Michael Goldstein: So we are enrolling a cohort four, which has a single implant, 600 micrograms. You know, as you know, at the angiogenesis meeting, we revealed the results from the cohort three, which is the 600 microgram, but it was the three 200 microgram implants to get there. We actually don't think it's going to be meaningfully different. It could be, but we don't think it will be.

That's a good question. So we are enrolling a cohort four which is the single implants 600 microgram.

As you know the angiogenesis meeting we revealed the results from the cohort three which is the 600 microgram, but it was the three 200 microgram.

To get there.

We actually don't think its going to be meaningfully differentiate that way, but we don't think it will be.

Dr. Michael Goldstein: And, you know, I think if we've got something meaningful to say in terms of cohort 4 in Australia, then there is an opportunity to give an update, you know, on the open-label trial. As you mentioned, the U.S. trial, because it's a mass trial, we really need to wait the time. Now, we do have the opportunity for protocols to do an interim analysis, which, as I mentioned, we anticipate to do after all or most of the subjects have hit six months or longer, which we think would be a meaningful time to take a look at that. You got it. Thanks for taking the question. Thanks a lot.

I think if we've got something meaningfully to say in terms of cohort or in Australia. Then there is an opportunity to give us an update on the open label trial.

As you mentioned in the U S trial, because it's a mass trial.

We really need to wait at the time that we do have the opportunity per protocols do an interim analysis.

Which as I mentioned, we anticipate to do after all or most of the subjects at six months or longer which we think could be a meaningful side. We can take a look at that.

Got it thanks for taking the questions.

Thanks Scott.

Operator: Thank you. Our next question comes from Dame Leon with Raymond James. Your line is open.

Thank you. Our next question comes from Dane Leone with Raymond James Your line is open.

Operator: Hi, thank you for taking the questions and congratulations on the updates and outlook for 2022. Two questions from me, please. As you get closer to having that six-month data from the 600-microgram single insert in the U.S. study, what's been the feedback coming out of angiogenesis in terms of where you think the hurdle is clinically for that six-month duration of retreatment, needed retreatment with a standard of care? Is it a percentage of patients, is it defined by the type of patient and the prior treatment history? Because that's been one of the major points of debate.

Alright, Thank you for taking my questions and congratulations on the.

The updates and outlook for 2022.

Two questions for me please firstly.

As you get closer to having that six month data from the.

600, microgram single insert in the U S study.

What's been the feedback looming at angiogenesis in terms of where you think the hurdle is clinically for that six months duration.

Re treatment needed retreat in the standard of care.

Is it a percentage of patients that are defined by the type of patient in the prior treatment history.

Because that's been one of the major points of debate. So any thoughts there would be appreciated and then secondly, it does seem like you're trying to.

Dr. Michael Goldstein: So, any thoughts there would be appreciated. And then, secondly, it does seem like you're trying to rework the DRY program a bit, both with the cyclosporine and low-dose DEX. Is there kind of a timeline where you think you might be able to reengage some Phase II studies with that program? Thank you. Thanks, Dane.

Rework the dry eye program of debt.

With the cyclosporin and low dose dex.

Is there kind of a timeline, where you think you might be able to re engage some phase III studies with that program. Thank you.

Dr. Michael Goldstein: That's good questions, as always. In terms of OTX TKI, I think it's a, So I think the number is really a trade-off depending on the safety signal you're seeing. And given that, you know, to date we've been pleased with the strong safety signal we've shown with OTX-TKI, you know, we think something around 50% of subjects getting to six months or longer is a reasonable clinical target. Now if you look at our 600 microgram data from cohort three, we actually were up around 80% of subjects.

Thanks, Pam has good questions as always.

In terms of <unk> I think.

So I think the number is really a tradeoff depending on the safety signal that youre seeing and given that to date.

<unk> been pleased with the strong safety signal, we've shown with Ots PKI.

Something around 50% of subjects with six months or longer.

It's a reasonable clinical target.

Now if you look at our 600 microgram data from cohort three we actually were up around 80% of subjects. So if we can replicate that in the U S trial or something like that would be really happy.

And again just to point out what I said before the Australian trials started with patients who had a lot of fluid.

And we're trying to get rid of that fluid with the tech Guy that's something that no. One else has done that we know of no. One else continues to show. So we think thats a much higher bar and we've actually been able to show some subjects with a bullet has gone away completely and we've maintained that out to six months or longer.

Dr. Michael Goldstein: So we think that's a much higher bar, and we've actually been able to show some subjects where the fluid has gone away completely, and we've maintained that out to six months or longer. The U.S. trial, more similar to what others are doing, is starting with patients who are treated or who, you know, in other cases where people have gotten cloning doses, and seeing if you can maintain people in that dry state for a longer period of time.

U S trial more similar to what others are doing or starting with patients who are treated or.

In other cases, where people have gotten loading doses.

If you can maintain people in that Tri state for a longer period of time, so frankly, we'd be pretty disappointed if we don't have a 60% or higher when we go to the 600 microgram.

Dr. Michael Goldstein: So, you know, frankly, we'd be pretty disappointed if we don't hit 60% or higher when we go to the 600-microgram single implant in the U.S. trial, but I guess we'll find out in the near future. But I think if we hit that target, that's a blockbuster, given the safety profile.

Single and flat in the U S trial, but we will I guess, we'll find out in the near future.

But I think if we hit that target that's the blockbuster given the safety profile and if we had a lot of information. If you had a lot of Midas. If you have escalated the equation changes, but assuming you have a strong safety profile, we think being north of 50% is a very compelling potential option. The other point I should make.

Dr. Michael Goldstein: And if we had a lot of inflammation, if you had a lot of endophthalmitis, if you had vasculitis, the equation changes. But assuming you have a strong safety profile, we think, you know, being north of 50% is a very compelling, you know, potential option. The other point I should make, and not to be lost here, is that the implants go away completely without the need for removal. So, you know, one of the concerns that people have with long-duration therapy is that they can hang around for a long period of time.

And not to be lost here is that the implants go away completely without the need for removal. So what are the concerns that people have with long duration therapy.

Is that they can hang around for a long period of time.

Dr. Michael Goldstein: And, you know, that's something, you know, we've shown that consistently across all our programs is that the hydrogel goes away in a consistent pattern, and we've seen that with TKI. So if you have something that's safe and you know it's going to go away, it gives you a lot of leeway in terms of the efficacy side of things. To answer your dry eye questions, so they're a little bit different, but a little bit similar.

That's something we've shown that consistently across all our programs is that the hydrogel goes away and a consistent pattern that we've seen that with CPI. So so if you'd have said we have safe and you know what's going to go away. It gives you a lot of leeway in terms of the efficacy side effects.

To answer your dry eye questions.

So, they're a little bit different but a little bit similar so Paul.

Dr. Michael Goldstein: So both the DED and the CSI have some interesting information that we showed from the phase two trials. I think in both cases, there's some reworking that needs to be done, some very mild formulation tweaks in DED, some larger formulation tweaks of CSI. But the real work for both of those is thinking about the comparator. And what we know is that you can't use a sham as the comparator, but there are different options in terms of the hydrogel that we use, and there's some work that needs to be done to optimize the comparator. Because from a regulatory perspective, it's really about the separation between the active and the comparator.

<unk>.

And the CSI showed some interesting information that we show from the phase II trials.

I think in both cases, there are some we reworking that needs to be done some some very mild formulation tweaks and DDG. Some some larger formulation tweaks with CSI.

But the real work for both of those just thinking about the comparator.

And what we know is that you can't use a sham as the comparator.

But there are different options in terms of the hydrogel that we use and there's some work that needs to be done to optimize the comparator.

Because from a regulatory perspective, it's really about the separation between the active comparator.

Dr. Michael Goldstein: So those are plans that are on the way. We're committed to revealing what that plan will look like. Sometime in the second quarter, but, you know, we wouldn't anticipate phase two trials starting in either program anytime in the real near future. I mean to add to Alex's point on that, the one thing we understand in this area is that these trials in dry eye particularly are very high risk trials and what we want to make sure is that we thoroughly mine the data that we have from our phase 2 and also understand the process by which we can scale up on both the vehicle and the active drug size with an eye toward the preservation of our cash runway.

So those are plans that are on the way we're committed to revealing what that will lay out what that plan will look like sometime in the second quarter.

But we wouldn't anticipate phase III trials, starting with either program anytime in the near future.

Thank you very much.

On that I mean.

One thing we understand in this areas that these trials in dry eye, particularly a very high risk trial, and we want to make sure that we thoroughly mine the data that we have from our phase two and also understand the process by which we can scale up on the on both the vehicle and the active drug size with an <unk>.

For the preservation of our of our cash runway.

Dr. Michael Goldstein: So there are ways that we can always bring that forward, which will obviously increase the risk of those trials. But what we'd rather do is we'd rather do it absolutely the right way and make sure that we have the appropriate vehicle and we have the appropriate actives in both CSI and DED and start trials that we have full confidence are going to be able to yield results that can lead to registrable products. So we could go one of two ways.

So there are ways that we can always bring that forward, which will obviously increase the risk of those trials.

What we'd rather do is we'd rather do is absolutely the right way and make sure that we have the appropriate vehicle we have the appropriate.

Active both CSI and DVD and start trials that we have full confidence in are going to be able to yield results that could lead to register all products. So.

And so we could we could go one of two ways that we can really go very very very short term and get them.

The clinic as quickly as possible or we can take a longer road than lower risk with lower cash burn.

We are definitely leaning toward the lower risk and lower cash burn side.

Thank you.

Thank you and our next question comes from E. Chen with H C. Wainwright Your line is open.

Operator: Thank you for taking my questions. My first question is regarding the new sales unit for the office setting use of Texas TENSA. Are those people new hires, or are they existing reps and they are just being allocated to the new team? They will likely be a mix.

Thank you for taking my questions first.

First question is regarding the.

The new sales unit for the office setting gives us after extensive.

Most people new hires for D R.

Existing reps just being allocated to the <unk> team.

They will likely be a mix.

Antony Mattessich: We don't have the team in place yet, but what we've done is we've opened up vacancies that the surgical team is allowed to apply for. My guess is, in the end, it'll turn out to be a mix of new hires and existing people within the surgical team. Okay, so do you expect revenue, the company to start recognizing revenue from DexTenso for AC in the current quarter or the second quarter? I think it'll ramp slowly in the second quarter.

Have the team in place yet, but what we've done is we've opened up vacancies that our team the surgical team is allowed to apply for.

My guess is in the end it will turn out to be a mix of new hires and existing people within the surgical team.

Okay. So do you expect.

Revenue the company to start recognizing revenue from tens of for AUC in the current quarter or the second quarter.

I think it will ramp slowly in the second quarter and once we once we crack the code about the proper way to sell DEXTENZA in the office environment.

Antony Mattessich: And once we crack the code about the proper way to spell Dex Pensa in the office environment, we will layer on resources as needed. And I would expect in the latter part of the year, and certainly in the beginning of 2023, to really start to see the ramp up in that office environment. I mean, assuming there's a there there, because once again, we're starting with a small team that's trying to look for the pressure points in that environment.

We will layer on resources as.

As needed and I would expect in the latter part of the year and certainly at the beginning of 2023 to really start to see the ramp up in that office environment. I mean, assuming there is a there there is once again, we're starting with a small team that is trying to look for the pressure points in that environment. We believe that its there there is a tremendous reservoir of unsatisfied patients and Theres a great.

Antony Mattessich: We believe that it's there. There is a tremendous reservoir of unsatisfied patients. And there's a great need in the office environment for a buy and build product for the front of the eye that has a procedure code attached. So the ingredients are right.

<unk> in the office environment.

Our buy and build product for the front of the eye.

It has a procedure code attached so the ingredients are right, we just need to figure out what the right outcome yet.

Dr. Michael Goldstein: Okay. And for the what AMD indication, For those patients who do not respond well to anti-VEGF therapy, do you think there's a chance they can possibly respond to LTX-TKI? Yeah, I think I think there is.

Okay.

When AMD indication.

For those patients who do not respond well to anti VEGF therapy do you think there's a chance they can possibly respond to <unk>.

Dr. Michael Goldstein: I mean, as you know, TKIs have a broader spectrum of activity compared with currently available anti-VEGF drugs. So, it is certainly possible that those patients who don't respond well to anti-VEGF drugs will respond well to TKIs. That said, you know, the U.S. trial is enrolling patients who are responding well to anti-VEGF drugs, so we're not selecting for those patients who don't respond. The Australian trial is a bit of a mix, and, you know, we've got some patients who are naïve, some who responded well to anti-VEGF, and some who didn't have great responses to anti-VEGF.

Yeah, I think I think there is something that <unk> have a broader spectrum of activity.

Compared with currently available.

You bet, Jeff drugs.

So so it is certainly possible that those patients who don't respond well to anti VEGF drugs will respond well to <unk>.

That said.

The U S trial is enrolling patients who are responding well to anti VEGF drugs. So we're not we're not selecting for those patients don't respond the Australia and the trial is a bit of a mix.

Got some patients who are naive study, who responded well to anti VEGF in some.

Who didn't have great responses to FDA about Jeff.

Got it.

Dr. Michael Goldstein: Um, so we haven't given guidance on when we expect enrollment to finish. I think it's, you know, about 105 patients over. So, finishing this year, I think, would be an aggressive target. I think we'll see how enrollment goes, and as we go, we'll give an update at some point with appropriate guidance. But I think it would be unrealistic to expect enrollment to fully enroll this year.

And for the glaucoma trial do you still expect the trial to complete enrollment in the second half of this year.

So we haven't given guidance on.

When we expect enrollment to finish I think.

It's it's.

About 105 patients.

Ofer.

So, finishing this year I think it would be an aggressive target.

I think we'll get we'll see how enrollment goes on as we go we'll give an update at some point.

With appropriate guidance, but I think it would be unrealistic to expect enrollment to fully over all of the share.

Okay. Thank you.

Thanks, Nick.

Operator: Okay, thank you. Thank you. Thank you. As a reminder, if you would like to ask a question, press the star then one key on your touch-tone telephone. Our next question comes from Anita Duyanis with Barenburg Capital. Your line is open.

As a reminder, if you would like to ask a question press. The Star then one key on your Touchtone telephone. Our next question comes from Anita DNS with Bahrenburg capital. Your line is open.

Operator: Hi, good afternoon. Thanks for taking my question and congrats on the progress. This is Tu from me here.

Hi, good afternoon, Thanks for taking my question.

Congrats on the progress.

Operator: I know you spoke about the next steps in the DED and CSI candidates. Could you please talk about maybe the timelines associated with the development, especially now that you are working internally to develop a comparator? Yeah, as I mentioned, we will reveal the appropriate clinical regulatory and manufacturing plans in the second quarter of this year, and so that will be the time to give an update on guidance. But we don't anticipate starting a Phase 2 trial in either program in the near future for the reasons Antony mentioned previously.

This is Paul from media.

Talk about the net.

Google Campbell.

Could you please talk about maybe the timeline associated with the Delavan. This destiny now.

Turning to Delaware.

Oh Wow.

Okay. Okay.

Yes, as I mentioned.

I mentioned, we will develop the appropriate will repeal the appropriate clinical regulatory and.

And manufacturing plans in the second quarter of this year.

And so that'll be the time to Gary who will give an update on guidance, but we don't anticipate starting a phase two trial in either program in the near future for this for the reasons yesterday mentioning previously.

Operator: Okay, thank you. And then what are some of the metrics that, you probably look at in terms of the backlog that will be addressed with the surgical procedures that we use Dexenza. Well, the metrics are essentially that there's usually in a normal year around 4 million cataract surgeries that are done in the United States. We believe that in 2021, that number was closer to 3 million. Because cataracts don't spontaneously resolve, and you at some point are going to need these to get the cataract done, the assumption is that those million or so cataracts that weren't done in 2021 will sprinkle themselves in the latter half of 2022 and early 2023.

Okay. Thank you and then.

What are some of the math.

Hum.

When you.

Looked at in terms of that.

<unk> backlog that will be correct.

Thank you for thank you Christina.

Thanks Sanjay.

The metrics are essentially there is usually in a normal year around 4 million cataract surgeries.

Cash.

We believe that in 2021 that number was closer to $3 million.

Because cataracts don't spontaneously resolved and youre.

At some point are going to need these to get the counteract gun.

The assumption is that those million or so cataracts that werent done.

2021, well.

We will sprinkle themselves in the latter half of 2022 in early 2023.

Operator: So just giving rough numbers, you would expect four and a half million this year and probably another four and a half or more million next year, which would give us a really nice bump on a basis of what we saw in 2021.

So just giving a rough numbers you would expect a $4 $5 million this year and probably another four and a half or more million dollars next year, which would give us a really nice bump on a basis.

<unk>.

What we saw in 2021.

Antony Mattessich: And then the last question is, did you, are there any updates from the collaboration with Mosaic Bioscience? That's a good question. So that collaboration is to develop a longer duration drug in the dry AMD space, and it's going extremely well. And it's on target.

Okay. Thank you that does helpful. And then the last question is.

Thank you.

Thanks Randy.

The collaboration with Merck.

Thank you.

Antony Mattessich: And, you know, we hope to develop a, you know, a new candidate, You know, at some point in the near future. Okay, thank you for that. Thanks for the questions. Thanks. Thank you. And that's all the questions we have.

That's a good question.

So that collaboration to develop.

Longer duration drug and the drug.

AMD space.

It's going extremely well.

And it's on target.

We hope to develop.

A new candidate.

At some point in the near future.

Okay. Okay. Thank you for that.

Thanks for the questions.

Operator: This concludes today's conference call. Thank you for participating. You may now disconnect. Everyone have a great day.

Thank you and Thats all the questions. We have this concludes today's conference call. Thank you for participating you may now disconnect everyone have a great day.

Q4 2021 Ocular Therapeutix Inc Earnings Call

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