Q2 2023 Eyenovia Inc Earnings Call

Greetings and welcome to the I know would be a second quarter 2023 earnings call. At this time all participants are in a listen only mode.

Question and answer session will follow the formal presentation.

What should require operator assistance during the call. Please press star zero on your telephone keypad. As a reminder, this conference is being recorded at this time I would like to hand, the call over to your moderator, Eric repair of Investor Relations. Thank you you may begin.

Good afternoon, everyone and welcome to eye Nokia's second quarter 2023 earnings call earnings Conference call and audio webcast.

With me today are <unk>, Chief Executive Officer, Michael Rowe, Chief Financial Officer, John Gandolfo, and Chief operating Officer, Brent currently.

Afternoon, we issued a press release announcing financial results for the three and six month period ending June 32023.

We encourage everyone to read today's press release as well as <unk> quarterly report on Form 10-Q for the quarter ended June 30th 2023, which will be filed with the SEC Tomorrow August 11th.

And our most recent filed 10-K the.

The company's press release and annual report are also available on our website at Www Dot I know via Dot com.

In addition, this conference call is being webcast at the company's website and will be archived for future reference.

Please note that on today's call, we will be discussing products product concepts and candidates some of which have yet to receive FDA approval.

Also note that certain information discussed on the call today is covered under the safe Harbor provision of the private Securities Litigation Reform Act.

We caution listeners that during the call I know <unk> management will be making forward looking statements actual results could differ materially from those stated or implied by those forward looking statements due to risks and uncertainties associated with the Companys business. Please.

These forward looking statements are subject to a number of risks which are described in more detail in our annual report on Form 10-K, and other SEC filings.

This conference call contains time sensitive information that is accurate only as of the date of this live broadcast August 10 2023.

<unk> undertakes no obligation to revise or update any forward looking statements to reflect events or circumstances. After the date of this conference call, except as may be required by applicable securities law.

That said I'd like to turn the call over to Michael Rowe <unk>, Chief Executive Officer Michael.

Thank you, Eric and welcome everyone to our second quarter 2023 financial results conference call with.

We have an extremely productive second quarter and I am excited to share with you our progress this afternoon.

During our last conference call, we spoke of our efforts to begin our targeted launch a bit combi and our goal of partnering with other companies to leverage and monetize the off to jet technology beyond our own development programs.

Today, we will provide an update for both of these topics starting with bid Combi and our recent first commercial sale.

As Youll recall in May we received FDA approval up mid Kaabi, the first and only fixed combination of Tropicamide and phenylephrine and the only up <unk> spray for and do see might drive assist for diagnostic procedures and then you can get with short term pupil dilation is desired.

We are proud to have delivered the first FDA approved product that leverages, our <unk> dispensing device.

This important advancement was featured at the annual Octane Ophthalmology Tech Forum in June where we highlighted the innovative nature of <unk> coffee and the future of the <unk> technology to the ophthalmic community, including potential industry partners thought leaders and investors.

We're thrilled to have initiated sales have been coffee to a targeted group of professional offices ophthalmologists optometrists technicians and patients are now experiencing the benefits have been combi themselves and together we are learning how the product can streamline practices and help with patient management.

As we announced last week upon receipt of our New York Pharmacy license, we achieved our first commercial sale of <unk> coffee the world renowned board certified ophthalmologist, Dr. Nathan Ratcliffe, who becomes first to incorporate Maccabi Intuit daily practice last week, we conducted training at Oc Radnet in Orange, California and is.

Soon as our California pharmacy licenses received we anticipate initiating cells in this state.

We're already receiving positive feedback from doctors technicians in patients and we anticipate this will only increase with additional sales and marketing wrap up.

That and we are in the process of formally adding additional commercial manufacturing sites to support mid combi, including our Redwood city facility as well as coastline manufacturing as a secondary site rent.

Brandon will provide additional details during his manufacturing overview. Please.

These additional sites provide us with increased capacity to meet and anticipate demand not only at the combi, but potential future of ophthalmic therapies utilizing the op to jet.

If you would like to find out more about mid kabi track, our launch progress and hear what doctors and patients are saying about the product you can go to the website at mid Combi Dot com.

Now I'd like to talk a bit more about our efforts to leverage and monetize the optical technology through partnerships with other companies we.

We are engaged in active discussions in this area with no fewer than four companies across a variety of topical ophthalmic markets.

Some of these discussions take longer than would be assume because we need to first determine if a products under discussion are compatible with the optics. Yet. This is something that is true for any container closure system. Unusually those tests include both spray performance as well as material compatibility.

We anticipate being able to announce the first of these arrangements very shortly our goal with all of these discussions is to marry our leading.

Delivery technology, with a new or unique drug asset to bring the best of both worlds to patients and prescribers, while providing near term revenue <unk> capital opportunities for the company.

I'll now provide an update on <unk>, our intended brand name for the micro line project <unk>, our proprietary topical on demand pilocarpine based therapeutic candidate that we are developing for the temporary improvement in near vision associated with COPD.

As you May know presbyopia is the age related hardening of the Icelandic, causing blurred near vision. This.

This addressable market represents over 18 million people in the United States alone between the ages of $40 55, who otherwise net reward glasses and have the resources for a cash pay product.

Our proprietary market research suggests this could be nearly $1 billion annual market in the U S alone.

As we discussed last quarter, we received feedback from the FDA outlining a clear path forward for this program towards a new drug application or NDA and we continue to make progress on this front.

<unk> is being designed for use with our more advanced Gen <unk> device, which has been optimized for in home use.

These will be manufactured in our Redwood city facility and we anticipate that manufacturing of registration batches will commence in the fourth quarter of this year.

Based on the FDA requirements at 12 months of real time stability data on the final package product before filing an NDA we plan to file the NDA approximately 12 months. After we run those batches the late 2024.

<unk> differs from the current topical drug treatment option for presbyopia on the market and those in development and that is a drug device combination.

As such many optometrists would be able to include <unk> as an offering to patients along with eyeglasses aperture has been described by some in market research is a second pair of invisible glasses or the way the gain full vision for those times when wearing glasses is not desirable we tested this concept with 100.

Optometrists, who founded <unk>.

Meet the needs of both themselves and their patients better than any other pharmaceutical option that they have I believe we will have available destock.

These doctors estimated that aperture ophthalmic spray could capture as much as one third of the presbyopia farms co market with them.

Other five products all eyedrops competing for the remaining two thirds of that market.

If approved we believe that aperture administered using the <unk> jet will stand out as one as the one and only spray distinguished by its ergonomic design ease of use and potentially advantageous side effect profile.

At this point I'd like to turn the call over to our Chief operating officer, Brent curve for our manufacturing update Fran.

Thank you Michael as Michael mentioned, we continue to expeditiously build out our manufacturing capabilities and supportive mccombie and registration batches for Azure to.

To expand upon the mccombie targeted launch we have filed with the FDA and request for approved the use of an additional manufacturing site coastline internationally.

They haven't given us a producer date of mid November 2023 for the site to be approved for use <unk> has already been manufacturing clinical supply for us for over a year and has extensive experience with the following.

Following the Paducah, we anticipate this can be a smooth ramp up and the team at cruise line as eager to support commercial manufacturing needs.

We also submitted our Redwood city facility to the FDA as an additional manufacturing sites and anticipate hearing from the FDA soon without <unk> dates.

Our Redwood City facility has made significant progress in qualifying our gen to fill and finish line.

The team is scheduled to begin media fills this month, a monumental step in qualifying this production equipment to support <unk> and the remainder of the idea of your drug product lines as Michael mentioned, we are targeting the initiation of registration batches in the fourth quarter of 2023.

Additionally, our Reno facility continues to make significant progress in establishing police can reject manufactured.

On our last earnings call. We noted that the facility construction has been completed and the staff has taken occupancy.

Since then production equipment has been received installations is currently underway and qualification activities are in the final planning stages.

Continue to be excited about the progress we've made to enhance our manufacturing with an.

Chris manufacturing capacity will be better positioned to meet the anticipated growth in demand of <unk>, particularly with the approval and commercial availability of mid continent.

We'd now like to turn the call over to our Chief Financial Officer, John <unk> to provide a financial update Jon.

Thanks, Brian .

For the second quarter of 2023, net loss was approximately $6 $2 million or <unk> 16 per share compared to a net loss of approximately $7 2 million or 22 per share for the second quarter of 2022.

Research and development expenses totaled approximately $2 8 million for the second quarter of 2023 as compared to $3 6 million for the second quarter of 2022.

For the second quarter of 2023, G&A expenses were approximately $3 1 million compared to $3 5 million.

For the second quarter of 2022.

Total operating expenses for the second quarter of 2023 were approximately $6 million compared to $7 1 million for the second quarter of 2022.

As of June 32023, company's cash and cash equivalents were approximately $17 5 million.

Compared to $22 9 million as of December 31, 2022.

This includes an additional $5 million drawdown on that credit line with Avenue capital that was triggered by the FDA approval of <unk>.

For a brief update on our licensing revenues. In addition to the cash balance noted above we have receivable from our license partners of approximately 430000 as of June 32023, and expect a reimbursement payment of approximately $2 million from Arctic vision for product development expenses in the second half of <unk>.

23.

I'll now update I'll now provide an update on our existing licensing programs with our shelf for micro <unk> in the U S and Canada and Arctic vision for all three of our products in China and South Korea.

Fashion loan was continuing to enroll in the ongoing phase III chaperone trial of <unk>, our proprietary atropine formulation for the reduction of pediatric myopia progression.

It has been shown in clinical studies to slow myopia progression by 60% or more.

There are currently no FDA approved drug therapies for this indication.

And if left untreated discount results in retinal detachment myopic retinopathy as well as patient loss, our agreement with oxy patient coverage, greater China, and South Korea and covers micro <unk> micro line and Mcafee and provides us sales royalties. In addition to development milestones micro pain.

In particular as a significant opportunity in China for pediatric myopia.

Approved micro paint could be a significant source of non dilutive funding for our company over the long term.

To date, our license agreements have generated approximately $16 million on license fees with the potential to earn an additional $60 million and net license and development milestones as well as reimbursable expenses over the next four years.

Upon commercialization if our products are approved <unk> is also allowed to bulk to our significant sales royalties.

We are also continuing to assess potential pipeline expansion opportunities.

<unk> to our promotion agreement and we will continue to leverage the optic jet technology to address unmet needs in additional large ophthalmic indications.

Finally, <unk> was added to the small cap Russell 2000, and broad market Russell 3000 indices effective in June as part of the annual Russell indexes reconstitution.

The reconstitution captures the fourth apps on largest U S stocks as of April 28, 2023 ranked by total market capitalization.

So in conclusion, we are very pleased with our performance through the first half of 2023 summary.

To summarize some of the key highlights we received FDA approval of <unk>, Combi and initiated sales to select professional offices.

Registration batches tour after share Presbyopia program are expected to initiate in the fourth quarter of 2023.

We continue to advance discussions with multiple potential partners to leverage the app these yet and additional ophthalmic indications.

We're continuing to build out our manufacturing capabilities with <unk> manufacturing and our Redwood city facilities anticipated to come to support mid Con production in late 2023 in early 2024, respectively.

In our licensing agreements with the Arctic patient and bashing loan are progressing well and remains a promising avenue for significant development and regulatory milestones as well as the potential for sales royalties.

That concludes our prepared remarks today, we would now like to open the call up to questions operator.

Thank you we will now be conducting a question and answer session. If you would.

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One moment, please while we poll for your questions.

Okay.

Our first questions come from the line of Matthew Coffield with H C. Wainwright. Please proceed with your questions.

Yeah, Hey, guys can you hear me okay.

Yes, yes.

Great Michael and team thanks for taking our questions and congrats obviously on the ongoing progress this quarter.

So first a two questions regarding development of the Gen. Two device, particularly for on demand Presbyopia is there a point in the future where all devices will be gen. Two both prospectively from micro line or <unk> as well as for mid Combi just.

Kind of wondering if theres any sort of manufacturing streamlining if all off to gesture based on the Gen. Two design.

Thank you Matt for that question. The answer is ultimately, yes, and the reason we're going from Gen. One to Gen. Two is not just because gen. Two economically and aesthetically. We believe is a nicer product, but it has far fewer parts than the gen. One does so while b.

The system that you use the spray is identical.

Within the Gen, two and make it a lot easier and simpler and less costly to actually build so in the long term, we do want to get everything onto that platform.

Got it very helpful. And then just one kind of follow up on on the Presbyopia progress.

So have the generation two studies for microbial challenge human factor electronic safety and any drug stability data and have those all been completed or are any of those efforts kind of still ongoing presently.

Some of those are completed some are ongoing but they will all be done.

Probably by the end of this year, so they're not a rate limiting step and there is nothing in there that causes us any pause because a lot of this is very similar to what we did with the gen. One so really the rate limiting step is the 12 month stability.

Okay.

Got it very helpful. Alright, Thank you very much guys and congrats again on the progress this quarter.

Thank you Matt.

Thank you our next questions come from the line of Matt Kaplan with Ladenburg Thalmann. Please proceed with your questions.

Hi, This is Raymond <unk>. Thanks for taking our question congrats on all the progress I am proud to see the company being used.

I guess related to that I was wondering.

How should we think about kind of the state of the launches.

As it progresses in terms of licensing uptake and so forth.

And a follow up thanks.

John you want to take this or I can that's up to you.

No. It's okay. So I think that the with respect to make Combi, we're focusing initially as Michael mentioned on a targeted launch program.

We feel that with the with the coastline manufacturing coming up towards the end of this year will.

We will be able to give better visibility to the investor community as to guidance of mid Combi. Once we have that in place. So we expect probably with that third quarter earnings call, which will be in November we'll be able to give guidance for.

Okay.

Obviously 2024, probably beyond as well.

With respect to licenses or partnership opportunities.

They remain a key focus of ours as Michael highlighted that that we're speaking to no less than four parties. At this time. So that continues to be a major focus for the company.

Okay, Yeah, no definitely I appreciate that color.

I was wondering.

Okay.

There are any.

Early feedback from getting in.

Can you see how you would like to incorporate that.

Our.

Getting ready for a national launch next year.

Yes.

It's funny that you asked this question because we just we're speaking.

With some of the technicians at one of the offices in New York. They now use the product for a week and what.

What they what they are finding out is they started by usually about a few patients. They told us today they use it on every patient.

40 patients stay dilated today.

And the more they use it the more they like what they are also finding is that the duration of dilation is less than it is with eye drops which is actually a positive because one of the reasons people don't like to get dilated as they end up being dilated for hours and hours and hours through the rest of the day and its look.

Like with mid Combi, you get the efficacy that you need and then it it may very well not last as long, which is a positive you get back to normal. So we're definitely looking into that some more.

I appreciate that detail very helpful.

I'll jump back in the queue. Thanks.

Thank you.

Thank you I'm showing no further questions at this time I'd like to hand, the floor back to management for any closing comments.

Thank you.

Thanks, everybody for joining us today and that concludes today's call. We're very pleased with the year. We have had so far we've had our first FDA approval and commercial sale of <unk> Combi. Our aperture Presbyopia program is progressing and our manufacturing capabilities capabilities are continuing to grow we look forward to continued momentum through the rest.

2023, and beyond Thank you again for joining US we look forward to the third quarter Akshay.

Thank you. This does conclude today's teleconference. We appreciate your participation you may disconnect your lines at this time.

Enjoy the rest of your day.