Q1 2022 Alimera Sciences Inc Earnings Call
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Operator: FRIENDS Ladies and gentlemen, thank you for standing by. Good morning and welcome to the Alimera Sciences first quarter 2022 financial results and corporate update conference call. At this time, all participants are in a listen-only mode.
Ladies and gentlemen, thank you for standing by good morning, and welcome to the element of Sciences first quarter 2022 financial results and corporate update conference call. At this time, all participants are in a listen only mode.
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Participants of this call are advised that the audio of this conference call is being broadcast live theater.
It is also being recorded for playback.
A webcast replay of the call will be available approximately one hour. After the end of the call through August two.
2022.
I would now like to turn the conference Scott Gordon of core IR, The company's Investor Relations. Please go ahead.
Yeah.
Scott Gordon: Good morning, and thank you for participating in today's conference call. Joining me from Alimera's leadership team are Rick Eiswirth, President and Chief Executive Officer, and Phil Jones, Chief Financial Officer. During this call, management will be making forward-looking statements, including statements that address Alimera's expectations for future performance or operational results. Forward-looking statements involve risks and other factors that may cause actual results to differ materially from those statements.
Good morning, and thank you for participating in today's conference call. Joining me from <unk> leadership team are Rick is worth President and Chief Executive Officer.
Scott Gordon: For more information about these risks, please refer to the risk factors described in Alimera's most recently filed periodic reports of Form 10-K and Form 10-Q, the Form 8-K filed with the SEC today, and Alimera's press release that accompanies this call, particularly the cautionary statements in it. Adjusted EBIT, a non-GAAP financial measure, is included in today's conference call. For the definition of this non-GAAP financial measure and the reconciliation to net loss, its most directly comparable GAAP financial measure, please see the reconciliation table located in Alimera's earnings press release.
Phil Jones, Chief Financial Officer.
During this call management will be making forward looking statements, including statements that address <unk> expectations for future performance or operational results.
Forward looking statements involve risks and other factors that may cause actual results to differ materially from those statements.
For more information about these risks please refer to the risk factors described in our marriage. Most recently filed periodic reports on Form 10-K, and Form 10-Q or form 8-K filed with the SEC today and our press release that accompanies this call, particularly the cautionary statements in it.
Today's conference call includes adjusted EBITDA, a non-GAAP financial measures for the definition of these non-GAAP financial measure and a reconciliation to net loss its most.
It's directly comparable GAAP financial measure please see the reconciliation table located in Ala Maris earnings press release.
This call contains time sensitive information that is accurate only as of today may nine 2022.
Except as required by law element or disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur. After this call.
Scott Gordon: The content of this call contains time-sensitive information, but is accurate only as of today, May 9, 2022. Except as required by law, Alimera disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after the call. With that, it is now my pleasure to turn the call over to Rick Eiswirth. Rick, please go ahead.
With that it is now my pleasure to turn the call over to Rick as Rick. Please go ahead.
Rick Eiswirth: Thank you, Scott, and good morning to everyone on the call. I'm very pleased to report that we continue to see ongoing recovery from the pandemic across most of our markets. In the first quarter of this year, consolidated revenue was $11.9 million, up 6% compared to Q1 of 2021. However, looking at revenue on a consolidated basis does not provide a complete picture of the progress we are seeing due to the stage of recovery in certain markets.
Thank you Scott and good morning to everyone on the call.
I'm very pleased to report that we continue to see ongoing recovery from the pandemic across most of our markets.
In the first quarter of this year consolidated revenue was 11 $9 million up 6% compared to Q1 of 2021.
However, looking at revenue on a consolidated basis does not provide a complete picture of the progress we are seeing due to the stage of a recovery in certain markets.
Rick Eiswirth: Let's focus on the U.S. market, our largest market, first. End user demand in the U.S. has continued to steadily improve since we returned to growth in the second quarter of last year. And since that time, our trailing 12 months end user demand at the end of the first quarter is up 18% over the previous trailing 12 months. Specifically, in the first quarter, end-user demand grew 25% to 918 units compared to 737 units in the first quarter of 2021, and this fueled a 23% improvement in reported GAAP U.S. revenue, with domestic sales of $6.9 million versus $5.6 million in the same period last year.
Let's focus on the U S market, our largest market first.
End user demand in the U S has continued to steadily improve since we returned to growth in the second quarter of last year.
And since that time, our trailing 12 months end user demand at the end of the first quarter is up 18% over the previous trailing 12 months specifically.
Specifically in the first quarter end user demand grew 25% to 918 units compared to 737 units in the first quarter of 2021.
And this fueled a 23% improvement in reported GAAP U S revenue with domestic sales of $6 $9 million versus $5 6 million in the same period last year.
Rick Eiswirth: We believe this trend is a result of improved patient flows in and out of the clinic, our ability to have more face-to-face interactions with customers inside the clinic, and our investments in engaging with retina specialists in alternate settings outside of the clinic to drive advocacy. Further, we believe the data from our Paladin study strengthens our message on both the safety and efficacy of a loop, including the case for earlier utilization, and is being well received by physicians. A paper summarizing the data was accepted by Ophthalmology, the journal of the American Academy of Ophthalmology.
We believe this trend as a result of improved patient flows clinics, our ability to have more face to face interactions with customers inside the clinic.
Our investments in engaging with retina specialists and alternate settings outside of the clinics to drive that.
Further we believe the data from our Paladin study strengthens our message on both the safety and efficacy of <unk>, including the case for earlier utilization and it's being well received by physicians.
Our paper summarizing the data was accepted by Ophthalmology The journal of the American Academy of Ophthalmology and some of the data was recently presented at ARVO, where the annual meeting of Association for research and vision in Ophthalmology and Denver.
Rick Eiswirth: And some of the data was recently presented at ARBO, the annual meeting of the Association for Research in Vision and Optimology, in Denver. More data has been accepted for presentation at several upcoming meetings as well, indicating great interest in the study data by the Alabama community. And importantly, we see the positive trends in the U.S. continuing early in the second quarter, as end-user demand for Leuvene is now up over 30% year-to-date through the end of April compared to the same period in 2021.
More data has been accepted for presentation at several upcoming meetings as well, indicating great interest in the study data by the ophthalmic community.
And importantly, we see the positive trends in the U S. Continuing early in the second quarter as end user demand for ILUVIEN is now up over 30% year to date through the end of April versus the same period in 2021.
Rick Eiswirth: You're probably aware that Roche Genentech has recently launched furosemab, an alternate form of anti-VEGF with possible durability of one to four months. Obviously, durable exoskeleton remains an objective in the retina space, and it's something that Alluvion provides.
You're probably aware that Roche Genentech has recently launched first the mab and alternate form of anti VEGF counting possible durability of one to four months.
Obviously durable excess game remains an objective in the retina space and it's something that ILUVIEN provides.
Rick Eiswirth: We believe that the possibility of one injection every three years or a significantly reduced injection frequency is being sought out by retina specialists today more than ever before and, as always, is very attractive to patients. As we announced on our last earnings call, we restarted a direct-to-patient, or DTP, campaign in mid-January in the U.S. to support our growth. As a reminder, we're conducting this campaign in 10 regional markets where there is a high prevalence of diabetes, or we have high prescribing practices, or both.
We believe that the possibility one injection every three years or significantly reduced injection frequency is being more sought out by retina specialists today than ever before and as always it's very attractive to patients.
Rick Eiswirth: The DTP campaign is designed to target potential alluding patients in those markets based on behavioral and demographic qualifications. The campaign consists of streaming video and display ads on social and other digital media, as well as a non-branded educational site labeled DME and Me.
As we announced on our last earnings call, we restarted a direct to patient or DTP campaign in mid January and the U S to support our growth.
As a reminder, we're conducting this campaign and 10 regional markets, where there was a large prevalence of diabetes or <unk>.
Have high prescribing practices or both.
The D. T. P campaign is designed to target potential ILUVIEN patients in those markets based on behavioral and demographic qualifications.
The campaign consists of streaming video and display ads on social and other digital media as well as a non branded educational site labeled the yummy and me.
Rick Eiswirth: After three months of the campaign, we are encouraged by the response we have seen, including achieving over 50% of our annual impression goal by the end of the first quarter and increasing our alluvion.com site traffic by over 200% over the quarter prior to the launch of this campaign. One of the tools we make available for potential patients on our website is called Find-a-Doctor, a tool that helps patients locate a physician who is fully trained and utilizes Alluvium.
After three months of that campaign, we are encouraged by the response, we have seen including achieving over 50% of our annual impression goal by the end of the first quarter.
Increasing our ILUVIEN dotcom site traffic by over 200% over the quarter prior to the launch of this campaign.
One of the tools, we make available for potential patients on our website is called find a doctor.
So all that helps patients located position was fully trained and utilizes ILUVIEN.
Rick Eiswirth: This campaign has led to a significant increase in the interactions with that section of our website, indicating patients have a desire to discuss alluvium for DME with a retina specialist. However, we were reminded during the pandemic that Illumina is very promotionally sensitive. The more we can get the brand in front of physicians, the better chance we have of building utilization and loyalty. Therefore, we have increased our communications with doctors to include email campaigns in addition to our ongoing digital media campaigns.
This campaign has led to a significant increase in the interactions with that section of our website, indicating patients have a desire to discuss ILUVIEN forgive me with the retina specialists.
We were reminded during the pandemic that'll even it's very promotional sensitive.
The more we can get the brand in front of physicians the better chance, we have of building utilization and loyalty.
Therefore, we have increased our communications with doctors to include email campaigns. In addition to our ongoing digital media campaign.
Rick Eiswirth: We're very pleased that the open rates and click rates of these campaigns are significantly above typical health care rates for this type of content, indicating, again, that the information is relevant to our customers. Ultimately, we believe the DTP campaign and our increased digital communication with our customers will help us maintain the recent sales momentum in our U.S. business by reminding patients and physicians of the benefits of Louise, namely, the ability to see better, longer, with fewer injections.
Been very pleased that the open rates and click rates. These campaigns are significantly above typical health care rates for this type of content.
Indicating again, the information is relevant to our customers.
Ultimately, we believe the D D D campaign, and our increased communication with our customers will help us maintain our recent sales momentum in our U S business by reminding patients and physicians of the benefits of ILUVIEN name.
Namely the ability to see better longer with fewer injections.
Rick Eiswirth: Now let's turn to our international business. Although our international segment sales for Q1 2022 were down 11% year-over-year to $5 million, we are starting to see some signs of progress in recovery. The outbreaks of the Omicron variant across Europe during the fourth quarter of 2021 and the first quarter of 2022 resulted in both limited access to physicians by our team and high levels of clinic staff absence due to the requirement to isolate patients. Limited staffing had a significant effect on clinic capacity, which resulted in limited patient visits and opportunities for looping utilization.
Now, let's turn to our international business.
Although our international segment sales for Q1, 2022 we're down 11% year over year to $5 million, we are starting to see some signs of progress of recovery.
The outbreaks of the omicron variance across Europe during the fourth quarter of 2021, and the first quarter of 2022 resulted in both limited access to physicians by our team and high levels of clinic staff absence due to the requirement to isolate.
A limited staffing had a significant effect on plenty capacity, which resulted in limited patient visits and opportunities for it but we've been utilization.
Rick Eiswirth: However, at various times during the first quarter, we saw government restrictions due to COVID-19 and its variants relaxed in the United Kingdom, Ireland, Portugal, and other countries, which has allowed us to begin to increase our face-to-face visits with physicians. As these restrictions have lapsed, we are already seeing better access to customers and improving patient books. As Q1 ended and Q2 began, we are seeing improving demand trends. Importantly, in our international distributor markets, both end-user demand and gap demand, or stocking orders, are improving. End-user demand in our distributor markets was up 9% in the first quarter of 2022 versus the first quarter of 2021, and this trend also continued in April, with year-to-date end-user demand improving by 12% over the prior year.
However at various times during the first quarter, we saw government restrictions due to COVID-19, and its variance relax and the United Kingdom, Ireland, Portugal, and other countries, which has allowed us to begin to increase our face to face visits with physicians.
As these restrictions have lapsed, we are already seeing better access to customers and improving patient plus.
That's Q1 ended in Q2 began we are seeing improving demand trends.
Importantly in our international distributor markets, both end user demand and gap demand or stocking orders are improving.
End user demand in our distributor markets was up 9% in the first quarter of 2022 versus the first quarter of 2021 and this trend also continued into April with year to date end user demand improving by 12% over the prior year.
Rick Eiswirth: This is fueling increased stocking order volume from all of our distributor partners. As of the end of April, we have already received orders for deliveries in 2022 for approximately 2,300 units with a value of more than $6 million to us. This compares to total international distributor shipments of approximately 1,600 units and $5 million in revenue for Alimera in all of 2021. Coming out of the pandemic, we expect to realize more of the opportunity to grow Libyan's non-infectious posterior uveitis indication. Our partner Brill Pharma is now launching a syndication after receiving pricing approval in Spain in the first quarter.
This is fueling increased stocking order volume from all of our distributor partners.
As of the end of April we have already received orders for deliveries in 2022 for approximately 2300 units with a value of more than $6 million to us.
This compares to total international distributor shipments of approximately 600 units and $5 million in revenue for Ala mirror in all of 2021.
Coming out of the pandemic, we expect to realize more of the opportunity to grow the beans, non infectious posterior uveitis indication.
Our partner Brill pharma is now launching this indication after receiving pricing approval in Spain in the first quarter.
Rick Eiswirth: This new indication is helping create momentum coming out of COVID-19 restrictions as Spain is achieving positive overall sales results, with end-user demand up over 31% year-over-year in the first quarter. We are now anticipating the formalization of reimbursement for the uveitis indication in France, Italy, and Portugal in the next few months, with launches for the indication to follow. The first quarter of this year demonstrated the positive impact of distributors renewing commercial support in our distributor markets, and we're excited for the opportunity to continue growing our international segment as the environment improves. Although they are lagging our overall recovery, we are seeing some positive trends in our direct markets as well. Demand in Portugal was up 35% in Q1 over the prior year.
This new indication is helping create momentum coming out of COVID-19 restrictions as Spain is achieving positive overall sales results with end user demand up over 31% year over year in the first quarter.
We are now anticipating the formalization of reimbursement for the uveitis indication in France, Italy, and Portugal in the next few months with launches for the indication that follow.
The first quarter of this year demonstrated the positive impact of distributors, we're doing commercial support in our distributor markets and we're excited for the opportunity to continue growing our international segment as the environment improves.
Although they are lagging our overall recovery, we are seeing some positive trends in our direct markets as well.
Demand in Portugal was up 35% in Q1 over the prior year.
Rick Eiswirth: The UK, which returned to growth today, growth year to date at the end of April in a year-over-year comparison, and monthly face-to-face visits in Germany in March were the highest they've been since 2020. To sum up, in Europe, access to care has improved in our distributor markets, and a significant turnaround in unit growth in the first quarter was evident in these countries. Distributor inventories have normalized, and we expect more consistent ordering patterns going forward, which should better align demand growth in these markets with our reported sales.
U K returned to growth.
To date growth year to date at the end of April and a year over year comparison.
And monthly face to face visits in Germany in March were the highest they've been since 2020.
To sum up in Europe access to care has improved in our distributor markets and a significant turnaround in unit growth in the first quarter was evident in these countries.
Distributor inventories have normalized and we expect more consistent ordering patterns going forward, which should better align demand growth in these markets with our reported sales.
Rick Eiswirth: In our direct markets, we believe that improved access, increased patient flows, and increased commercial activities in new and existing markets will lead to the same recovery trends we've seen in the U.S. and our distributed markets. That said, we do realize that incremental investments made in our European markets have not yet resulted in the growth trends we are seeing in the U.S., and we are controlling our spending in those markets to better align with current revenue levels.
And then our direct markets, we believe that improved access increased patient flows and increased commercial activities in new and existing markets will lead to the same recovery trends, we've seen in the U S in our distributor markets.
That said, we do realize that incremental investments made in our European markets have not yet resulted in the growth trends, we were seeing in the U S. And we are controlling our spending in those markets to better align with current revenue levels.
Rick Eiswirth: And finally, we continue to enroll patients in our landmark New Day study. And as you may recall, the goal of this study is to demonstrate the utilization of olivine as baseline therapy for all patients diagnosed with dementia.
And finally, we continue to enroll patients in our landmark New day study.
Recall the goal of this study is to demonstrate the utilization of ILUVIEN as baseline therapy for all patients diagnosed with DMA.
Phil Jones: I'm pleased to report that this head-to-head trial against the current standard of care is now over 50% enrolled. I personally have engaged with several of the sites and continue to see more buy-in to our concept of living units based on therapy. I'll now turn the call over to Phil to review our financial results for the first... Thanks, Rick, and hello, everyone.
I'm pleased to report that this head to head trial against the current standard of care is now where it should be now over 50% enrolled.
I personally have engaged with several of the sites and continue to see more buy into our concept and believe me it's based on therapy.
Phil Jones: During the first quarter of 2022, our consolidated net revenue increased 6% to $11.9 million compared to $11.2 million in the first quarter of 2021. U.S. net revenue was $6.9 million for the first quarter of 2022, an increase of 23% from the $5.6 million reported in the 2021 period. As Rick shared, U.S. in-use demand, which represents units purchased by physicians and pharmacies from higher distributors, increased 25% in the first quarter of 2022 to 918 units, compared to 737 units in the first quarter of 2021.
Now I'll turn the call over to Phil to review, our financial results for the first quarter.
Thanks, Rick and Hello, everyone. During the first quarter of 2022, our consolidated net revenue increased 6% to 11 pointed out $1 million compared to $11 $2 million in the first quarter of 2021.
U S. Net revenue was $6 $9 million for the first quarter of 2022, an increase of 23% from the $5 $6 million reported in the 2021 period.
As rich shared U S end user demand, which represents units purchased by physicians and pharmacies from our distributors increased 25% in the first quarter of 2020 to 908 918 units compared to 737 units in the first quarter of 2021.
Phil Jones: As we have previously discussed, our gap revenues in the U.S. do not always correlate with end-user demand due to timing of purchases by our specialty distributors. For example, in the first quarter of 2022, Alimera's U.S. distributors sold approximately 8% more units to end-users than they purchased from Alimera. Reducing inventory during the typically seasonal slowdown of January and February. As we have historically seen, we expect distributed orders to catch up with end-user demand over the year. Net revenue from our international segment in the first quarter of 2022 decreased to $5 million compared to $5.6 million that we reported in the first quarter of 2021.
As we have previously discussed our GAAP revenues in the U S do not always correlate with end user demand due to the timing of purchases by our specialty distributors.
In the first quarter of 2022, Alan mirrors U S distributors sold approximately 8% more units to end users that they purchased Melanie era.
Reducing inventory during the typically seasonal slowdown of January and February .
As we have historically seen we expect distributor orders to catch up with the end user demand over the year.
Net revenue from our international segment in the first quarter of 2022 decreased $5 million compared to $5 $6 million that we reported in the first quarter of 2021.
Phil Jones: The 11% decline in our international net revenue was due primarily to the impact of COVID-19 and its variance on our two key direct markets of Germany and the UK, which led to high levels of clinic staff sickness and reduced patient visits to clinics for their DMV and non-infectious posterior uveitis treatment. The recent COVID-19 resurgence also limited our ability to interact face-to-face with our customers. As Rick noticed, and I want to emphasize, international distributor orders were up 55% to $1.7 million, driven by end-user demand returning in those marks.
The 11% decline in our international net revenue was due primarily to the impact of COVID-19, and its variance.
Our two key direct markets of Germany, and the U K, which led to high levels of clinic staff sickness and reduced patient visits to clinics.
For their D&B and non infectious posterior uveitis treatment.
The recent COVID-19 resurgence also limited our ability to interact face to face with our customers as Rick noticed and I wanted to emphasize international distributor orders were up 55% to $1 $7 million.
Driven by end user demand returning in those markets.
Phil Jones: Through the end of April, we have already received orders for deliveries totaling more than $6 million for 2022, 20% more than total distributor shipments in 2021. Total consolidated operating expenses were $14.4 million in the first quarter of 2022, an increase of 19% compared to $12.1 million reported in the first quarter of 2021.
At the end of April we have already received orders for deliveries totaled $4 $6 million for 2020% to 20% more total distributor shipments in 2021.
Total consolidated operating expenses were $14 $4 million.
In the first quarter of 2022, an increase of 19% compared to $12 $1 million reported in the first quarter of 2021.
Phil Jones: The higher operating expenses were driven by an increase in promotional and medical program investment intended to accelerate growth as we and our customers expect COVID-19 to become better managed globally in the second half of 2022. However, we are curtailing some of our spending in our international markets to address the slower than expected revenue growth in Europe coming out of the pandemic in order to manage or mitigate the cash burn as we have done in the past.
Higher operating expenses were driven by an increase in promotional and medical program investment intended to accelerate growth as we and our customers expect COVID-19 to become better manage globally in the second half of 2022. However, we are curtailing some of our spending in our international markets to address the slower than expected revenue growth.
In Europe coming out of the pandemic in order to manage or mitigate the cash burn as we have done in the past.
Phil Jones: We reported an adjusted EBITDA loss of $3.1 million in the first quarter of 2022, compared to an adjusted EBITDA loss of $1.3 million in Q1 2021. For the three months ended March 31, 2022, we reported a net loss of $6 million, compared to a net loss of $3.6 million for the three months ended March 31, 2021. The loss in Q1 2022 was impacted negatively by approximately $552,000 or 9% of the net loss associated with the change in the fair value of our warrant asset as the value of Occupancy and Therapeutics spot price declined.
We reported an adjusted EBITDA loss of $3 $1 million in the first quarter of 2022 compared to adjusted EBITDA loss of $1 $3 million in Q1, 2021.
For the three months ended March 31, 2022, we reported a net loss of $6 million compared to a net loss of $3 $6 million for the three months ended March 31 2021.
The loss in Q1, 2022 was impacted negatively by approximately 552000 or 9% of the net loss associated with the change in the fair value of our warrant asset as the value of Aki mentioned therapeutic stock price has declined this asset did not exist as of Q1 2021. Therefore.
Phil Jones: This asset did not exist as of Q1 2021, so there is no comparative change for that period. Basic and diluted net loss per share for the first quarter of 2022 was $0.85 on 7 million weighted average shares outstanding.
Or there's no comparative change for that period.
Basic and diluted net loss per share for the first quarter of 2022 was 85 cents on 7 million weighted average shares outstanding. This compares to basic and diluted net loss per share for the first quarter of 2021 at 63.
Phil Jones: This compares the basic and diluted net loss per share for the first quarter of 2021 at $0.63 on 5.8 million weighted average shares outstanding. On March 31st, 2022, we had cash and cash equivalents of $9.9 million compared to $8.3 million in cash and cash equivalents that we reported on March 31st, 2021. As we've indicated during the quarterly calls in the second half of 2022, we've invested in target spending programs both in the U.S. and international markets to drive re-engagement with physicians and regain the share of voice that had been lost during the COVID lockdown.
$5 8 million weighted average shares outstanding.
On March 31, 2022, we had cash and cash equivalents of $9 $9 million compared to $8 $3 million in cash and cash equivalents that we reported on March 31 2021.
As we've indicated during the quarterly call for the second half of 2022 we've invested in targeted spending programs. Both in the U S and international markets to drive Reengagement with physicians and regained the share of voice. They had this loss during the Covid lockdowns, while we believe many of these investments have proven to be successful. We also realized that continuing to.
Phil Jones: While we believe many of these investments have proven to be successful, we also realize that continuing to spend at those levels in certain markets is not sustainable without the offsetting top-line performance. To that end, we have reviewed our spending programs in those markets and eliminated those items that are not generating targeted results. Moving forward, our target each quarter will be to achieve adjusted EBITDA break-even or better, which should help mitigate future operating cash burn and successive orders. And with that, I'll turn it back to Rick.
Spend at those levels in certain markets was not sustainable without the offsetting topline performance to that end, we have reviewed our spending programs in those markets and have eliminated those items that are not generating targeted results. This is Bob.
Toward our target.
Each quarter will be to achieve adjusted EBITDA breakeven or better which should help mitigate future operating cash burn in successive quarters and with that I'll turn it back to Rick.
Rick Eiswirth: Thank you, Phil. We are very pleased with our performance in the U.S., with 25% year-over-year unit growth, as well as the unit volume inflection that we saw in our International Distributor Territory. We expect the strong performance in these markets to continue throughout the year and that sales in our direct markets will also begin to recover this quarter and contribute to our overall growth toward the middle of the year. We expect that our anticipated launches for non-infectious posterior uveitis in Portugal and France, in addition to the recent launch of the syndication in Spain, will add to the growth that we plan for our existing territory.
Thank you Phil.
We're very pleased with our performance in the U S with 25% year over year unit growth as well as the unit volume inflection that we saw in her international distributor territories. We expect the strong performance in these markets to continue throughout the year and net sales in our direct markets in Europe will also begin to recover this quarter and contribute to our overall growth towards the middle of the year.
We expect that our anticipated launches for non infectious posterior uveitis in Portugal, and France. In addition to the recent launch of syndication in Spain will add to the growth that we plan for our existing territories.
Rick Eiswirth: I'm pleased with the progress we're making on the New Day study, where the reopening of access to care and our focus on increasing enrollment have been paying off, so that we can complete this important trial as soon as possible. In summary, we believe 2022 has the potential to be a significant growth year for Alimera as COVID-19 becomes more manageable in all territories.
I am pleased with the progress we're making on the new day study, where the reopening of access to care and our focus on increasing enrollment had been paying off so that we can complete this important trial as soon as possible and.
In summary, we believe 2022 has the potential to be a significant growth year for Albemarle as COVID-19 becomes more manageable in all territories.
Operator: That concludes our prepared remarks. I'll now turn the call over to the operator for questions. Thank you. Ladies and gentlemen, if you wish to ask a question on today's call, you will need to press star, then the number one on your telephone. If your question has been answered and you wish to withdraw your request, you may do so by pressing star, then two.
That concludes our prepared remarks, I'll now turn the call over to the operator for questions.
Thank you.
Ladies and gentlemen, if you wish to ask a question on today's call you will need to press Star then the number one on your telephone.
Your question has been answered or you wish to withdraw your request you may do so by pressing Star then two.
Operator: If you're using a speakerphone, please pick up your handset before entering your request and speaking on the call. One moment, please, for the first question. And the first question is from Alex Nowak with Craig Hallam Capital Group. Please go ahead. Good morning, everyone.
If youre using a speakerphone please pick up your handset before entering your request and speaking on the call.
One moment please for the first question.
Yeah.
And the first question is from Alex Nowak with Craig Hallum Capital Group. Please go ahead.
Great Good morning, everyone.
Alex Nowak: With the Paladin data, I would say pretty good enrollment in the New Day study so far, all the previous data you have here, plus with the pandemic reducing procedure volume. Do you think the value of a three-year implant is beginning to resonate more, you know, more with physicians, and potentially they're changing their habits a little bit more quickly now as we come out of the pandemic? And maybe speak to the reception so far you're seeing at the ARVO conference compared to something like in 2019, when it was last seen in person. Yeah, a lot there to address, Alex.
With the power and data I would say pretty good enrollment on the new day studies. So far all the previous data you have your costs with the pandemic, reducing procedure volume do you think the value of a three year implant is beginning to resonate more.
More with physicians and potentially they are changing their habits, a little bit more quickly now as we come out of the pandemic and maybe speak to the reception so far you're seeing at the a or B O conference compared to something like a 2019 on a lot of in person.
Yeah.
A lot there to address Alex I think that certainly the the shift in what is needed to treat diabetic macular edema is occurring bright and has been occurring I think one of the most important thing. There is the recognition that <unk> is more of an inflammatory disease and not just a vascular disease right. So that the anti VEGF by themselves.
Rick Eiswirth: I think that certainly the shift in what is needed to treat diabetic macular edema is occurring, right? And has been occurring. I think one of the most important things there is the recognition that DME is more of an inflammatory disease and not just a vascular disease, right? So anti-VEGFs by themselves are not necessarily sufficient to treat it, and you've got to incorporate steroids and anti-inflammatories into the treatment earlier. An example of that would be Faricimab, right?
Not necessarily sufficient to treat it and you've got incorporate steroids and anti inflammatories in in the disease earlier, an example that would be Bruce or Matt right. So Roche and Genentech are promoting an anti inflammatory component of that drug but.
Rick Eiswirth: So Roche and Genentech are promoting an anti-inflammatory component of that drug, but it is only one small mechanism in the inflammatory cascade, right? But we think there's a shift in the need and a lot more discussion about that going on out there. Obviously, durability continues to be critical in this space. You've seen companies like Kodiak, Atbarium, Roche, and Genentech trying to deliver anti-VEGF therapy in a much more durable way. Nobody has a great answer for that yet.
But it is only one small mechanism the inflammatory cascade right, but we think there's a shift in the need and a lot more discussion about that going on out there obviously durability as main continues to be critical in this space you've looked at companies like Kodiak at bear him, a Roche genentech trying to deliver.
Anti VEGF therapy in a much more durable way you know nobody has a great answer on that yet.
Rick Eiswirth: We'll see how Faricimab is adopted, but we think the need for something like Illuvian that provides that very consistent and durable therapy, gets better control of the disease, is becoming more and more well-received and was certainly highlighted during the pandemic. These modified, and others. You know, I think it's more of a shuffling of the deck chairs for anti-VEGF therapy, right? I think, you know, people continue to try to figure out what the next best anti-VEGF is.
See how first fab is adopted but we think you know the need for something like ILUVIEN that provides that very consistent and durable therapy gets better control of the zebra as more and more well received.
Certainly highlighted during the during the pandemic.
These modified.
Anti digest is what I'm, calling them the ones from Genentech. For example is that more of a competitive threat to the existing that Jeff. So that's your three extend the patent life on those or are you seen that trickle down to you know.
They've started stage do you have any drugs.
I think it's more of a shuffling of the deck chairs for the anti VEGF therapy myself right I think people continue to try to figure out what the next best day, and so I bet. You are it certainly gives them more patent extension life over you know.
Rick Eiswirth: It certainly gives them more patent extension life than they have with Lucentis. But more and more doctors that I talk to aren't seeing the need to shift between multiple anti-VEGFs before they incorporate a steroid into the DME paradigm. Okay, no, that's good to hear. This one's a bit harder one to answer, but it is important for determining capital allocation and the growth experience in the US now coming out of the pandemic.
What they have with lucentis, but more and more doctors that I talked to you arent seeing the need to shift between multiple anti bad yes, before they incorporate a steroid into the CME paradigm.
Okay. No. That's good to hear this one's a bit harder one to answer but it is important for determining that capital allocation to growth you experienced in the U S. Now coming out of the pandemic. How much do you think is that associated with just pure COVID-19 recovery and procedures now happening again patients coming back and how much is that coming from the new sales force.
Rick Eiswirth: How much do you think is associated with just pure COVID recovery and procedures now happening again, patients coming back? And how much is that coming from the new Salesforce, the marketing investment that you've made? I mean, that's hard, as you said, it's hard to quantify how much is just a natural recovery, but I will tell you that I think we have done a very good job of finding new ways to engage with physicians, you know, outside of the clinic, right?
The marketing investments that you've made.
I mean, that's it's hard as you said, it's hard to quantify you know how much is just the natural occurring a recovery, but I will tell you that I think we have done a very good job of finding new ways to engage with physicians outside of the clinic right and I think I think that's made a made a big difference.
Rick Eiswirth: And I think, I think that's made a big difference in the push to do it that way. You know, there's nothing that I'll ever substitute, frankly, for the effectiveness of our sales team, right, in the day-to-day and comments out there in the clinics as well. So, I think it's a combination of both.
And the push to do it that way.
No, there's nothing that I'll ever subsea frankly for the effectiveness of our sales team right.
Day to day in and comment out there in the clinics as well. So I think it's a combination of both you know I will say that some of the modeling we put back that we put together back in late.
Rick Eiswirth: You know, I will say that some of the modeling we put back, that we put together back in, you know, late spring or summer of last year, we're within two or three percentage points of the trajectory we had projected for our U.S. operations with those investments. So, we think we're on track with what we intended to do and that they're working so far. That's good. And then, just two questions here: maybe expand on the investments you were making outside the US and, ultimately, why you're curtailing those; just why do you think the market hasn't responded there?
Late spring summer of last year.
We're within two to three percentage points of the trajectory we had projected for our U S operations of those investments. So we think we're on track with what we intended to do and that they're working so far.
Oh, that's good and then just final two questions here and maybe expand on the investments you were making outside the U S and ultimately why you're curtailing that was just why don't you think the market respond there and then so far what you've seen in the April here do you think getting 2022 back to that pre Covid run rate is still achievable.
Rick Eiswirth: And then so far, what you see in April here, do you think getting 2022 back to that pre-COVID run rate is still achievable? So, you know, with respect to Europe, I think we have... You know, to some extent, we got out of our skis. I mean, some of it was unperceivable, right?
Yeah.
So you know with respect to Europe I think we.
To some extent, we got out over our skis I mean, some of it was unforeseeable right. We saw a lot of stops and starts with the different variance in Europe , and specifically in a bigger and bigger markets like Germany, and the U K.
Rick Eiswirth: We saw a lot of stops and starts with the different variants in Europe, and specifically in bigger markets like Germany and the UK. And we just got ahead of it. And we think, you know, until we see more stability for several months at a time, it doesn't make sense to make the more aggressive investments to get in front of doctors and find those clinical settings, right? Because even if we get in front of doctors, then they don't have the patient flow.
And we just got ahead of it and we think you know until we see more stability for several months at a time it doesn't make sense to make them more aggressive investments to get in front of doctors and find this clinical settings right because even if we're getting in front of doctors that they don't have the patient flow and so we've got to make sure that we see more consistent patient flow you know for a good two quarters before it makes sense.
Rick Eiswirth: And so we've got to make sure that we see more consistent patient flow for a good two quarters before it makes sense to really push the European markets hard. And then just on the pre-COVID run, right?
To really push the European market is hard.
And then just on the pre Covid run rate.
Rick Eiswirth: Oh, I'm sorry. Yeah, I feel, you know, I feel very good about that. I think, you know, I do expect us to have a very strong second quarter, as we alluded to in our prepared comments. We had a very, very strong start in April, and we're seeing that continue in early May.
Oh, I'm, sorry, yeah, I still I feel very good about that I think you know I do expect us to have a very strong second quarter as we alluded to in our prepared comments you know we've had a very very strong start in April we're seeing that continue in early may and you know our goal is to be back to the pre COVID-19 run rates you know by middle to end of the third quarter. This year.
That's great I appreciate the update thank you.
Rick Eiswirth: And, you know, our goal is to be back to the pre-COVID run rates by the middle to end of the third quarter this year. That's great. Appreciate the update. Thank you. Okay, thank you, Al. The next question is from Yi Chen with H.C. Wainwright. Please go ahead.
Okay. Thank you Alex.
The next question is from <unk> Chen with H C. Wainwright. Please go ahead.
Yeah.
Kate (on behalf of Yi Chen): Hey guys, this is Kate on behalf of Yi. Just a couple of quick questions. I know recently iPoint has decided to pause development of UTIC-50 for posterior segment uveitis based on the FDA's new requirements for drug-device combination. Do you anticipate any broader implications in this space based on the FDA's new requirement? I believe it's... seeking more additional data for such combinations.
Hey, guys just tape on behalf of <unk>.
Just a couple of quick questions I know recently I point has decided to pause development of you take 54 upholstery segment uveitis based on the Fda's requirement for drug device combinations.
Do you anticipate any broader implications in this space based on the Fda's requirement I believe it's a it's seeking more additional data.
For such combinations.
Kate (on behalf of Yi Chen): And then, in the same context, you know, this treatment was being developed as a twice-yearly option. So do you also have any plans or do you see the need to develop a six-month version of Alluvion for DME or uveitis? Thank you. So, you know, with respect to the changing regulations for the FDA, we're continuing to monitor what's going on there right now. We don't anticipate it having any impact on, you know, the commercialization or utilization of alluvion.
And then in the same context.
This treatment was being developed as a twice a your option. So do you do you also have any plants or do you see the need to develop a six month version of ILUVIEN for.
You'll be I guess, thank you.
So you know with respect to the changing regulations. The F. D. A we're continuing to monitor what's going on there right now we don't anticipate it to have any impact on you know the commercialization or utilization of ILUVIEN. It may lead to some additional filing requirements for us in the future, but we're not aware of anything yet and as I said, we continue to monitor that situation.
Rick Eiswirth: It may lead to some additional filing requirements for us in the future, but we're not aware of anything yet. And, as I said, we continue to monitor that situation. As far as the short-term, you know, alluvion, we have looked at that ourselves and considered the possibility of that. Frankly, we think that the idea of a non-erodible drug for six months in the eye may create some additional safety issues that you may have to be concerned about, and maybe more erodible options for a shorter duration would make more sense in the long term.
As far as the short term you know ILUVIEN.
We have we have looked at that ourselves and considered the possibility that you know frankly, we think.
The idea of a non erodible drug for four six months in the I may create some additional safety issues is.
That you may have to be concerned about that and maybe more dirt more erodible options for a shorter duration make more sense for the long term, we're really pleased with the delivery we have and the data that we have on the three three year version.
Rick Eiswirth: We're really pleased with the delivery we have and the data that we have on the three-year version. You know, we think it's safe and efficacious, and we don't really see a need to shorten it. Excellent, thank you so much and congratulations on all the progress. Thank you. Hey, good morning.
We think it's safe and efficacious and we don't really see a need to shorten it.
Excellent. Thank you so much and congrats on all the progress.
Thank you.
And once again, if you'd like to ask a question. Please press Star then one.
The next question is from Jim Malloy with Alliance Global Partners. Please go ahead.
Unnamed Questioner: Thank you for taking my questions. Phil, you mentioned that you eliminated some items that weren't performing. Can you address that a little more directly? What were those items and sort of how did they not perform to expectations?
Hey, good morning. Thank you for taking my questions Phil mentioned minimum was eliminated.
Some items that weren't performing.
For me can you address that a little more directly what were those items instead of.
How did they did not perform to expectations.
Rick Eiswirth: So the challenge is really just trying to, you know, spend money the same way, trying to get in front of doctors in different formats, the advisory boards, maybe some additional personnel, get out there, find new ways to see them, even some standalone meetings. And we've postponed some of those things until we feel like, as I said, that the patient flow justifies making that, making those investments with the doctors, right?
So the challenge is really just trying to you know we were spending money the same way of trying to get in front of doctors in different formats. The advisory boards, maybe some additional personnel and get out there find new ways to see them.
Even some standalone meetings and we postponed some of those things until we feel like as I said that the patient flow justifies, making that are making those investments with the doctors right. It's it's similar to frankly, what we saw you know a year or two ago with when Covid first started as we cut back on all the travel spending from all of our reps in the U S.
Rick Eiswirth: It's, it's similar to, frankly, what we saw a year or two ago when COVID first started as we cut back on all the travel spending from all of our reps in the U.S. And, you know, really engaged the doctors more remotely because even if we were out there trying to get into the clinics, they did not have the patient flows there. So it's really trying to give it a chance to catch up there.
You know really engaged with the doctor can more readily because even if we were out there trying to get into the clinics. They did not have the patient flows. There. So it's really trying to give it a chance to catch up there you know we've looked at some investigator sponsored studies and you know a little bit of phase four work in Europe as well to drive demand over there similar to what we saw with new date, but it just doesn't make sense to make investments in those things out.
Rick Eiswirth: You know, we've looked at some investigator-sponsored studies, and a little bit of phase four work in Europe as well to drive demand over there, similar to what we saw with New Day, but it just doesn't make sense to make investments in those things now.
Unnamed Questioner: Thank you. Yeah, I think I'm on the fourth quarter call this last month. I guess gosh You mentioned being able to get back to the 15% year-over-year growth Range that still seems good Looks like you guys are pretty good, pretty much on track to where you thought you'd be Back on the fourth quarter call here through the first quarter, Yeah, we still feel good about that. You know, one of the issues we've seen with the pandemic is a little bit of an issue in some of the supply chain. You know, nothing that's impacting the product available for sale, but a little bit of delays in shipping and some things like that.
Got it. Thank you yeah, I think on the on the fourth quarter call. It was last month I guess gosh.
You mentioned, you're going to get back to sort of 15% year over year growth.
Range is that still still seem good looks like you guys are pretty good pretty much on track to where you thought you'd be back on the fourth quarter calls here through the first quarter.
Yeah, we still we still feel good about that you know one of the one of the issues. We've seen when the pandemic is a little bit of issue and some of the supply chain nothing thats impacting the product available for sale, but a little bit of delays in shipping and things like that and there were a few distributor orders that didn't get shifted in the first quarter, we would've liked got in the first quarter.
Rick Eiswirth: And there were a few distributor orders that didn't get shipped at the end of the first quarter that we would have liked to have gotten in the first quarter. But I think as you look at the year as a whole, based on the demand numbers that, you know, we quoted up 25 to 30% in the U.S., up 12% in the distributor markets. And, you know, we returned to growth in the UK at the end of April, so we feel pretty good about achieving that level for the full year. Maybe last question.
I think if you look at the year as a whole based on the demand numbers that we quoted up 20% to 30% in the U S up 12% in the distributor markets and we've returned to growth in the U K at the end of April that we feel pretty good about achieving that level for the full year.
Okay.
Unnamed Questioner: I know that historically, I guess a couple years ago, the first quarter was tough on reps. How was retention during the quarter, and how is the profitability by rep looking? Is it in line with where you guys expect it to be? You know, we feel very good about the size of the sales team in the US and the reforms there. They're doing a fantastic job, very close to hitting targets, month after month, you know, for the last several quarters.
Maybe last question I know that historically I guess, a couple of years ago.
Quarter with cell phone on reps, how was retention during the quarter and how does it sort of profitability by rep.
Is it in line with where you guys expect it to be.
We feel we feel very good about the size of the sales team in the U S and informs their they're doing a fantastic job very close to hitting targets. You know month. After month, you know for the for the last several quarters you know in Europe , we were very happy with the sales team, but the patient flow is not there right now so we.
Unnamed Questioner: You know, in Europe, we were very happy with the sales team, but the patient flow is not there right now, so we continue to look at, you know, geographically how we set up those territories to make the best use of that patient flow.
When you look at you know geographically, we set up those territories that can make the best use of that patient flow, but we're happy with their team have not had a lot of turnover in the sales team I think generally people are pretty happy working here at Allomap.
Rick Eiswirth: But, you know, we're happy with our team, and we have not had a lot of turnover in the sales team. I think, generally, people are pretty happy working here at Alimera. Outstanding! You sound very happy as well. Thank you, Richard, for taking the questions. And thank you. Ladies and gentlemen, this concludes our question and answer session. I would like to turn the conference back over to Rick Eiswirth for any closing remarks. Great, thank you, and thank you all for participating in today's call.
Outstanding you sound very happy as well thank you taking the questions.
And thank you ladies and gentlemen. This concludes our question and answer session I would like to turn the conference back over to Rick is worth for any closing remarks.
Great. Thank you and thank you all for participating on today's call. We are looking forward to reporting our second quarter results and other results today yesterday or as we hope. This expect this recovery to continue thank you very much.
Rick Eiswirth: We're looking forward to reporting our second quarter results and other results to the SDS. We hope to expect this recovery to continue. Thank you very much. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
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