Q3 2023 Alimera Sciences Inc Earnings Call

[music].

Okay.

Ladies and gentlemen, thank you for standing by.

And welcome to the Lam ever Sciences third quarter, 2022 financial results and corporate update conference call.

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I'd like to turn the call over to Scott Gordon of core IR The company Investor Relations. Please.

Please go ahead Sir.

Good morning, Thank you Nick and thank you all for participating in today's conference call joining.

Joining me from Allamerican leadership team are Rick is worth President and Chief Executive Officer, and Russell skips that Keith.

Financial Officer.

During this call management will be making forward looking statements, including statements that address <unk> expectations for future performance or operational results future financial position outlook and guidance.

Timeline for achieving positive cash flow.

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 <unk>. Most recently filed periodic reports on Form 10-K and Form 10-Q, the form 8-K filed with the SEC today.

In <unk> press release that accompanies this call, particularly the cautionary statements in it.

Today's conference call will include references to adjusted EBITDA, which is a non-GAAP financial measures.

We see the explanatory language and reconciliation table located in Allen Maris earnings press release.

Content of this call contains time sensitive information that is accurate only as of today cover 26 2023.

As required by law polymeric disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur.

After this call.

It is now my pleasure to turn the call over to Rick <unk>. Rick. Please go ahead.

Right.

Thank you Scott and good morning to everyone on the call.

I am excited to share our third quarter results, which demonstrate the leverage created by adding your cheek to our portfolio earlier this year.

We achieved record net revenue in the quarter of $23 $4 million.

Up 72% over the third quarter of last year.

And by the sales growth of our two brands the Libyan EG.

And importantly, we achieved positive $5 $4 million and adjusted EBITDA in the third quarter.

In the U S segment, we saw third quarter net revenue increases of 103% to approximately $18 $1 million year over year U T contributed $8 $9 million to the quarter and continues to demonstrate significant growth with end user demand, reaching 1045 units an increase of 20%.

Q3 of 2022.

ILUVIEN returned to growth with end user demand of 1146 units for the quarter, an increase of 8% year over year.

We believe there is a significant opportunity to grow sales are both leaving any cheap moving toward in the U S behind our expanded sales force detailing both products and our other additional field personnel.

As we shared in August are long.

Her team, which represents over an 80% increase in reps detailing your cheek.

Over a 20% increase in reps detailing ILUVIEN began promoting both products in late July.

We're still in the learning curve for our team all of who have taken on a new product.

<unk> training for both products is very important to our success.

We held a launch meeting in July with all field employees.

And follow up training in September and.

And we plan to continue to provide more medical and sales education to the field, so further than knowledge and to increase their value to our customers.

I think we will continue to get better across both indications.

And this is important because we believe there is a significant opportunity to cross sell the second product to many physicians that use only one of the two products today.

For example, in the third quarter, only 27% of the accounts ordering either unique or live in the third quarter ordered both your cheek in ILUVIEN.

Creates a significant opportunity for us moving forward.

Turning to our international segment, we reported $5 3 million in net revenue during the third quarter and.

An increase of approximately 13% year over year, driven by a return to growth in Germany and continued strong performance in our other direct markets.

In our direct European markets, you saw significant end user demand growth of 24, 24% over Q3 of 2022.

However end user demand in our international segment was down 2% for the quarter caused by the rationing of stock by our distributor partners during the quarter.

As you May have seen we were pleased to have Jason Warner who has an extensive background in ophthalmic and significant experience in previous roles in commercial development and corporate strategy.

Joining us as Chief operating officer early last month.

We're already increasing our investment in this area and Jason is working with our distributor partners and our manufacturers to improve inventory levels.

We do expect to have stocking levels at the distributor partners addressed early in Q1 next year with improvement over the course of Q4.

As we continue to pursue the increased utilization of ILUVIEN NTT.

We expect that the sharing and discussion of additional data with physicians will be a significant driver.

We continue to believe that the pallet and data set <unk>.

<unk> improvement in visual outcomes reduce treatment burden and control of retinal thickness variability is an excellent marker for a new day study outcomes.

As a reminder, the Paladin study demonstrated that patients with diabetic macular edema to.

Who received a single dose of ILUVIEN demonstrated statistically significant improvements in best corrected visual acuity central subfield thickness and treatment burden at 36 months.

As well as demonstrating that the side effect risk of inter ocular pressure can be effectively mitigated when ILUVIEN is used in accordance with its FDA label.

This month alone at the recent your retina meeting in Amsterdam, We had four presentations of this data.

And in New York at the Retina Society, we had an additional four presentations.

Next month at the American Academy of Ophthalmology in San Francisco, Another presentation, and three posters will highlight the efficacy and safety of Elysium from this study.

From a clinical standpoint, we have several ongoing trials designed to further demonstrate the effectiveness of ILUVIEN in your teeth.

Our over enrolled new day study.

Are you, making ILUVIEN utility as baseline therapy head to head versus the leading anti VEGF in the treatment of diabetic macular edema has completed enrollment of 306 patients and remains on track with top line data anticipated in the first quarter of 2025.

We are actively enrolling patients in our synchronicity study, which is a prospective open label clinical study evaluating the safety and efficacy of U T for the treatment of modular edema associated with chronic non infectious uveitis affecting the post your segment of the eye and related interact inflammation.

This is a two year follow up study with an interim top line six month efficacy readout anticipated in the third quarter of 2024.

Additionally, we've completed enrollment in the U T calm study with 240 is the.

Calm study as a registry study conducted in collaboration with the Cleveland clinic collecting.

Collecting real world data to better understand the variety of conditions treated the D. T for non infectious uveitis affecting the prestige segment of the eye.

We expect efficacy outcomes on individual and combined patient cohorts to be presented at medical conferences in 2024.

Also with ILUVIEN, we were working with Dr. Whitney network to support protocol a L.

Protocol a L. A is a randomized clinical trial evaluating either interdigital for Isabella injections.

For ILUVIEN interdigital implants versus observation in the prevention of visual acuity loss due to radiation retinopathy following plaque breakthrough therapy.

Looking to the future we are actively evaluating indication expansion opportunities to broaden the number of patients that either ILUVIEN or U T. As long acting stereo and clients can help treat we look forward to sharing further details in the coming months.

And with that update I will turn the call over to Russell to review, our third quarter financial results in greater detail.

Thanks, Rick and Hello, everyone. Thanks for joining us today.

I am also very happy to report that net revenue was up 72% to approximately $23 $4 million in Q3, 2023, which was almost $10 million more than the $13 6 million. We reported in the third quarter of 2022. The increase was due to the addition of <unk>.

Your teeth into our U S portfolio combined with organic growth in ILUVIEN sales in both our U S and international markets.

Total end user demand for ILUVIEN and U T. During the quarter was up 233 units to 3400 56 units over the 3223 units for the same period last year.

Net revenue in the U S increased 103% to approximately $18 $1 million in Q3 twenty-three.

This compared to U S net revenue of $8 $9 million in Q3 22.

The growth was attributable.

Excuse me the growth was attributable to growth in ILUVIEN sales year over year as well as the addition of few tick.

U S end user demand for ILUVIEN and <unk> during the quarter was up 260 units.

<unk> 2191 units over the 1931 units for the same period last year.

International net revenue also performed well increasing 13% to approximately $5 $3 million in Q3, 23, this compared to approximately $4 $7 million in the third quarter of last year.

Growth in revenue was due to the increased sales in our direct markets as Rick alluded to.

We received higher net revenue per unit.

International end user demand for ILUVIEN during the quarter was down 27 units to 265 units over the 295 units for the same period last year.

Total operating expenses were approximately $18 8 million for Q3, 'twenty, three which compared to $15.1 million in the same period last year.

This increase was primarily due to the increased operating costs associated with the addition of your tea in the U S segment, and depreciation and amortization associated with the assets acquired.

We achieved record adjusted EBITDA of $5 $4 million in the quarter this compared to an adjusted EBITDA loss of $2.5 million in Q3 23.

As of September 30th 2023, we had cash and cash equivalents of approximately $8 $3 million compared to $18 8 million on June 30th twenty-three.

Cash burn during the quarter was primarily a result of working capital investments required to support. The addition of beauty during the quarter.

What this means is that in May we began paying all of the expenses for U T, but because of the payment terms with the distributors. We did not begin collecting on those sales that we made until this month.

We expect to generate positive cash flow in the fourth quarter of 'twenty three and in 2024.

With that.

I will now hand, the call over to Rick. So he can give his closing comments Rick thank.

Thank you Russell.

I'll comment on our last call that we are committed to leveraging our existing U S commercial infrastructure to achieve sustainable positive EBITDA beyond this year. This quarter was solid evidence that our strategy is working.

We're also committed to growth.

And to support the significant rather than opportunities provided by both ILUVIEN any cheap.

In 2024, we will look to leverage our broader commercial team and stronger financial position to increase our engagement with retina specialists.

Leverage the cross selling opportunity presented by having two products and indications and drive utilization of both products.

As I noted earlier, we will evaluate indication expansion opportunities for our long acting steroid implant to help more patients.

This quarter was the first step in establishing a foundation to achieve our goals next year and we are reiterating our expectation to generate more than $100 million in revenue next year and at least $20 million of adjusted EBITDA in 2024.

We will endeavor to update our revenue and EBITDA guidance as we progress through the integration and planning for 2024 with a goal to improve these targets.

This concludes our prepared remarks, and I'll now turn the call over to the operator for questions.

Thank you, ladies and gentlemen, if you wish to ask a question there is called you'll need to press the star.

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One moment please for the first question.

First question will be Alex Nowak, Craig Hallum. Please go ahead.

Alright, great. Good morning, everyone. Thanks for doing the call here.

27% Cross sell number that you mentioned in the prepared remarks, where can that realistically go by the end of the year I think that's a really important metric here as you complete the combination of two assets.

Yeah.

Yeah, Alex I mean, that's a really hard one to project I mean, I will say it is up a point or two since we took over the both products. So I think you're certainly seeing some.

Impact there early but I wouldn't expect to see major strides to that until we get into next year as we continue.

Continue to get the entire team cross trained you know really well across both products.

Okay. So next year with all that you're kind of training in place that we can start to see that number climb up.

Alright makes sense.

Maybe expand a little bit on the O U S weakness there I know you.

You touched on it during the prepared remarks, but I was surprised seeing the O U S units declined quarter over quarter in such a dramatic fashion just expand on what was happening in that you know over in Europe.

This quarter.

Yeah sure. So you know as we've talked a little bit about on the second quarter call.

You know, we have been a little bit behind in supplying some of the distributors in Europe.

That's a factor of demand increasing in our other markets and frankly, the the early forecasting in the first part of the year from the distributor partners was was in late last year was lower than expected and we just have a long lead time product for manufacturing.

So we actually we're really pleased with the demand growth in the direct markets as we noted.

They were up over 20% I think 24%.

What happens in some of the markets in Europe as if they are a loved one stock they have to ration the units going out so that they don't go out of stock and so our partners in.

And in France, specifically has had two based on working some things out with the regulatory authorities lowered the number of units that they're shipping each quarter.

Order to just maintain an in stock position and so that's what I mean by rationing that so we do expect that to have a significant uptick back to levels. They were at before once there their stock has built up and as I said in my prepared comments, we're working closely with them to rebuild stock over the course of the fourth quarter and I think we'll be back to the point, where they'd be fully stocked and.

Q1.

Okay that makes sense with regards to the U S. We had some choppiness in the past couple of quarters with docs Trialing, new drugs and that was essentially slowing the rate that they were moving to ILUVIEN just thoughts on the longer lasting anti VEGF drugs.

How docs are trailing retina docs are trialing, new drugs out there. It seems like that has reversed this quarter is that fair to assume.

Yeah, a little bit of a I mean I do think.

The trial of <unk>.

Of <unk> out there you know is still a formidable.

The challenge to us as we go forward, but I think the reality is doctors are learning as they trial for us to map that it is.

And this isn't saying anything about it it is anti bad debts are a class of drug right and the reality is that there are patients out there that need something more than an anti VEGF therapy. It's been demonstrated in DRC, our protocols that theres persistent edema in these patients when they receive.

Recurring and barely tightly space doses of anti VEGF therapy. So I think we will work through that but.

The use of first Mab is still pretty aggressive now, but there's still a need for the steroid to take the place of those anti <unk> in certain patients.

Okay got it and then just two more questions. If I can just the first one on <unk>.

Yeah. The New day study I think we all know that's a very important study for ILUVIEN, maybe expand a little bit on the differences between the two you take studies and just how those outcomes there how would that start to change adoption in the market like is it the same level of new day or these more confirmatory studies.

Yes so.

I'll start with column, so calm as a registry study to collect real world evidence on the use of of Utica in treating non infectious posterior uveitis.

One of the one of the I guess one of the challenges of the pivotal studies was there were no cohorts defined to look at specific types and specific cases of uveitis and theres, probably 25% to 30 different types of uveitis that are studied and treated in the back of the eye right. So the idea is to hopefully develop some cohorts in.

The more specific types, where ILUVIEN or in an anti inflammatory steroid would be used locally more effectively and we hope to get that out of the calm study.

And we should we should continue to be able to produce some of that next year. There are also some.

Consensus papers.

Coming out of Europe that will talk about specific types of uveitis, where our long term acting steroid as you know no more applicable as well so I think it will help doctors with patient identification.

Earlier in their evaluation of you guys in those patients. The synchronicity study is really.

It is very very similar to the pivotal studies. However, the focus is around the more traditional retina specialists and the type of you guys that they may treat.

That doesn't get referred out to the uveitis specialists.

So one example that is.

Post operative inflammation, a lot of times when physicians look at that there are characteristics of uveitis and that right and that's maybe a direct result of a vitrectomy surgery or cataract surgery, and a patient with postoperative inflammation is refer to that retina specialists and so it is to identify the types, where you guide us as president of <unk>.

Because they've developed some sort of long term information you know in the in those types of situations or maybe less severe type of uveitis as I said that is just going to be treated typically by the retina specialists.

Okay very helpful last question.

Got it to $20 million adjusted EBITDA I confirm that again this morning for 2024.

But it also looks like Youre almost at that run rate to begin with in Q3, when do we start to up that target for next year.

As I said we are.

Alex we are we're very bullish on next year, you know, we do want to work through some of the rest of the pieces of the integration as I said, we've made a lot of progress there.

Some of our plans for 2024 before we update that guidance.

I do think there are some places where we have been very conservative in spending in Q3.

To make sure we could get the integration right and waiting for the working capital to turn as Russell alluded to but we do want to make sure. We maximize the effort next year and getting in front of doctors in this cross sell opportunity as well as looking so looking at some.

Opportunities to expand that label with potentially other indications. So right now we're going to stick with over $100 million in over $20 million, but we'll give you updates on that as we move into the next year.

Please go ahead, sir.

Scott Gordon: Morning, thank you Nick, and thank you all for participating in today's conference call. Joining me from Alimera's leadership team are Rick Eiswirth, President and Chief Executive Officer, and Russell Skibsted, 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, future financial position, outlook and guidance. Timeline for achieving positive cash flow. Forward looking statements involve risks and other factors that may cause actual results to differ materially from those statements.

All right excellent. Thanks for the update appreciate and congrats on all the progress. Thanks.

Thanks, Alex and we appreciate your support.

Thank you next question will be from Ken of H C. Wainwright. Please go ahead.

Thank you for taking my questions. My first question is do you plan to add additional sales.

Sales reps throughout 2024.

Yeah. Thanks, Good morning to you that's a good question I mean right now we are only.

Scott Gordon: For more information about these risks, please refer to the risk factors described in Alimera's most recently filed periodic reports on form 10K and form 10Q, the form 8K filed with the FCC today. In Alimera's press release, that accompanies this call, particularly the cautionary statements in it. Today's conference call will include references to adjusted epita, which is a non-gap financial measure. Please see the explanatory language and reconciliation table located in Alimera's earnings press release.

Three or four months into having the team of 35 out there. So we want to see how productive and effective they are.

First obviously you know if if more face to face time at the Rep level does yield positive benefits in 2024, I think we will continue to evaluate the potential to expand the sales force, but no decision has been made on that at this time.

Got it got it.

And could you come in.

The percentage of international revenue that's represented by your direct sales force.

Scott Gordon: The content of this call contains time-sensing information that is accurate only as of today, October 26, 2023. Except as required by law, Alimera disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call.

So deanna.

Yes.

Tonnage was we're looking at.

I'm going to say direct is is roughly two thirds of our total and distributors as roughly one third.

Richard Eiswirth: It is now my pleasure to turn the call over to Rick Eisworth. Rick, please go ahead. Thank you Scott, and good morning to everyone on the call. I'm excited to share our third quarter results, which demonstrate the leverage created by adding you to our portfolio earlier this year. We achieved record net revenue in the quarter of $23.4 million, up 72% over the third quarter of last year, driven by the sales growth of our two brands, Alimera and E.T.

Got it however international sales.

Okay.

Got it.

And lastly in the coming quarters do you expect any seasonality in terms of boutique sales.

Either in the U S.

Yes.

Sure Yeah, I think youre going to continue to have seasonality.

Richard Eiswirth: And importantly, we achieved positive $5.4 million in adjusted epita in the third quarter. In the US segment, we saw third quarter net revenue increase 103% to approximately $18.1 million year-over-year. E.T, contributed $8.9 million to the quarter and continues to demonstrate significant growth with end-user demand reaching 1,045 units, an increase of 20% over Q3 of 2022. Illusion returned to growth with end-user demand of 1,146 units per the quarter, an increase of 8% year-over-year.

In the first quarter related to these are both high priced products. So in the U S.

Vast majority of patients start their deductible years over as of January one with new insurance plans or slight modifications in insurance claims. So we always see quite a delay in January and February as doctors, you know try to reevaluate or excuse me.

Redo benefit investigations to make sure the insurance coverages there I think that's pretty typical with some higher price products. In this space, you'll also see a little bit of seasonality in the first quarter some of the budgets in Europe a reset.

As they reset their budgets and then we often do you see seasonality in Q3 as well.

Richard Eiswirth: We believe there is a significant opportunity to grow sales of both Alimera and E.T, moving forward in the US, behind our expanded sales force detailing both products and our other additional field personnel. As we shared in August, our larger team, which represents over an 80% increase in reps detailing E.T, and over a 20% increase in reps detailing Alimera began promoting both products in late July. We're still in a learning curve for our team, all who have taken on a new product.

Related to European holiday season, and also holiday season in the U S. In the third quarter also seems to impact it as well.

Thank you very much.

Yeah, absolutely. Thank you.

Thank you. Our next question will be from James Molloy, all almost all of it.

Global Partners. Please go ahead.

Well. This is why I say, we're all calling in for James on the line. Thank you for taking my questions.

Richard Eiswirth: Grant, continued training for both products is very important to our success. We held a launch meeting in July with all field employees and follow-out training in September, and we plan to continue to provide more medical and sales education in the field so further than knowledge and to increase their value to our customers. I think we will continue to get better across both indications. And this is important because we believe there is a significant opportunity to cross sell the second product to many physicians that use only one of the two products today.

Stuff, where you're not drive any of this past quarter I reported.

$23 5 million what is the specific breakdown of the Sally between bulk boutique kind of lithium product that means.

Well I think we are in and Russell's comments. He noted that it's about $8 9 million of that was for music.

Okay got it and then I'll start looking ahead, you mentioned that you're on track to look back over 100 million in net revenue for next year. Thanks, Nick Why don't you just provided my guidance on harvest and how it would be broken up again between both products both in the U S and internationally.

Richard Eiswirth: For example, in the third quarter, only 27% of the accounts ordering either UT or Louvian in the third quarter ordered both UT and Louvian. This creates a significant opportunity for us moving forward. Turns to our international segment, we reported 5.3 million in net revenue during the third quarter. An increase of approximately 13% year-to-year driven by return to growth in Germany and continued strong performance in our other direct markets. In our direct European markets, we saw significant end user demand growth of 20.4% over Q3 of 2022. However, end user demand in our international segment was down 2% for the quarter, caused by the rashing of stock by our distributor partners during the quarter.

As we noted in the AR as we noted in the in the release and some of the comments you know our plan going forward is to really report the fleece Standalone Acetonide franchise on a combined basis. So we're not going to break out specific guidance on that I mean frankly, we.

We benefit.

From increased usage of a long term low dose steroid and any indication and ER and we're still working out where the focus of the promotion would be next year on that but but overall, we were very confident with the $100 million number.

Got it and then lastly, your share count now at 32 million for this past quarter.

Can you just provide a bit might be telling them. The Jonathan I remember hearing comparison this past second quarter.

Richard Eiswirth: As you may have seen, we were pleased to have Jason Warner, who has an extensive background in ophthalmics and significant experience in previous roles in commercial development and corporate strategy. Join us as chief operating officer early last month. We're already increasing our investment in this area and Jason is working with our distributor partners and our manufacturers to improve inventory levels. We do expect to have stocking levels at the distributor partners addressed early in Q1 next year with improvement over the course of Q4.

Yeah.

Yeah, we're right now we're at.

About 53 4 million shares of common outstanding.

Alright, and then.

Richard Eiswirth: As we continue to pursue the increased utilization of illusion and unique, we expect that the sharing and discussion of additional data with physicians will be a significant driver. We continue to believe that the paladin data set, including improvement in visual outcomes, reduced treatment burden, and control of retinal thickens variability, did an excellent marker for our new day study outcomes. As a reminder, the paladin study demonstrated the patience, the diabetic mangalorezema to receive the single dose of alluvian demonstrated statistically significant improvements in best corrected visual acuity, central subfield thickness, and treatment burden in 36 months.

Yeah.

Last question from US just any updates on the ongoing protocol al childhood.

Just a question left into the data on when that might come out.

That's a pretty lengthy trial I mean, that's that's a it's the target the DRC, Arizona trials about 600 patients.

We're hoping that they will start enrolment in the <unk> in the late in the fourth quarter of this year.

But it's probably a multiyear trial before you'd see any readout.

Alright.

So yes, it's being run by the D. C area. So we don't control the time line on that trial.

Yeah understood. Okay. So that locks for a spin out thank you for taking the question.

Richard Eiswirth: As well as demonstrating that the side effect risk of interactive repressor can be effectively mitigated when alluvian is used in accordance with its FDA label. This month alone, at the recent Retina meeting in Amsterdam, we had four presentations of this data. And in New York, at the Retina Society, we had an additional four presentations. Next month, at the American Academy of Ophthalmology and San Francisco, another presentation and three posters will highlight the efficacy and safety of alluvian from this study.

Thank you Laura.

Thank you and again you can have a question. Please press star then one.

This concludes our question and answer session I would like to return the call to Mr. Work I've worked for closing remarks.

Thank you I want to thank everybody for participating on today's call and for your interest and support of <unk>. We do look forward to sharing our ongoing progress when we report fourth quarter and full year 2023 results. Early next year. Thank you all very much and have a great day.

Richard Eiswirth: From a clinical standpoint, we have several ongoing trials designed to further demonstrate the effectiveness of alluvian amut. Our over-enrolled new day study, evaluating alluvian's utility as baseline therapy head-to-head versus the leading anti-VHS in the treatment of diabetic mangalorezema has completed enrollment 306 patients and remains on track with top line data anticipated in the first quarter of 2025. We are actively enrolling patients in our Synchronicity Study, which is a prospective, open label clinical study evaluating the safety and efficacy of UTQ for the treatment of matular ZEMA, associated with chronic, non-infectious UVitis affecting the posterior segment of the eye, and related interocular inflammation.

Conference has now concluded. Thank you for attending today's presentation you may now disconnect.

Richard Eiswirth: This is a two-year follow-up study within your interim top lines, six months efficacy read out and anticipated in the third quarter of 2024. Additionally, we've completed enrollment in the UTQALM study with 240Is. The QALM study is a registry study conducted in collaboration with the Cleveland Clinic, collecting real-world data to better understand the variety of conditions treated with UTQ for non-infectious UVitis affecting the posterior segment of the eye. We expect efficacy outcomes on individual and combined patient cohorts to be presented at medical conferences in 2024.

Richard Eiswirth: Also with Oluvian, we are working with the DRCR Retin Network to support protocol AL. Protocol AL is a randomized clinical trial, evaluating either individual ferrisome of injections for Oluvian individual implants versus observation and the prevention of visual acuity loss due to radiation retinopathy following plaque bradyotherapy. Looking to the future, we are actively evaluating invitation expansion opportunities to broaden the number of patients that either Oluvian or UTQALM as long-acting stereo implants can help treat.

Richard Eiswirth: We look forward to sharing further details in the coming months.

Russell Skibsted: And with that update, I'll turn the call over to Russell to review our third quarter financial results in greater detail. Thanks Rick, and hello everyone. Thanks for joining us today.

Russell Skibsted: I am also very happy to report that net revenue was up 72 percent to approximately $23.4 million in Q3 2023, which was almost $10 million more than the $13.6 million we reported in the third quarter of 2022. The increase was due to the addition of UTQ into our US portfolio combined with organic growth in Oluvian sales in both our US and international markets. Total end user demand for Oluvian and UT during the quarter was up 233 units to 3456 units over the 3,223 units for the same period last year.

Russell Skibsted: Net revenue in the US increased 103 percent to approximately $18.1 million in Q3 2023. This compared to US net revenue of $8.9 million in Q3 2022. The growth was attributable to growth in Oluvian sales year over year as well as the addition of UTQ. US end user demand for Oluvian and UTQ during the quarter was up 260 units to 2,191 units over the 1,931 units for the same period last year.

Russell Skibsted: International net revenue also performed well, increasing 13 percent to approximately $5.3 million in Q3 2020. III. This compared to approximately $4.7 million in the third quarter of last year. Growth in revenue was due to the increased sales in our direct markets, as recommended to, where we receive higher net revenue per unit. International end user demand for alluvian during the quarter was down 27 units to 1265 units over the 1295 units for the same period last year.

Russell Skibsted: Total operating expenses were approximately $18.8 million for Q323, which compared to $15.0 million in the same period last year. This increase was primarily due to the increased operating costs associated with the addition of U.T, in the U.S, segment, and depreciation and amortization associated with the assets acquired.

Russell Skibsted: We received record adjusted EBITDA, a $5.4 million in the quarter. This compared to an adjusted EBITDA loss of $2.5 million in Q323.

Russell Skibsted: As of September 30, 2023, we had cash and cash equivalents of approximately $8.3 million compared to $18.8 million on June 30, 23. Cash burned during the quarter was primarily a result of working capital investments required to support the addition of U.T, during the quarter. What this means is that in May, we began paying all of the expenses for U.T., but because of the payment terms with the distributors, we did not begin collecting on those sales that we made until this month. We expect to generate positive cash flow in the fourth quarter of 23 and in 2024.

Richard Eiswirth: With that, it will now hand it call over to Rick, so he can give us closing comments.

Richard Eiswirth: Rick, thank you, Russell. I comment on our last call that we are committed to leveraging our existing U.S, commercial infrastructure to achieve sustainable positive EBITDA beyond this year. This quarter was solid evidence that our strategy is working. We are also committed to growth and to support the significant revenue opportunities provided by both Olivier and Anie Teeq. In 2024, we will look to leverage our broader commercial team in stronger financial position to increase our engagement with right and specialist, leverage the cross-standing opportunity presented by having two products and indications and drive utilization of both products.

Richard Eiswirth: As I noted earlier, we will evaluate indication expansion opportunities for our long acting steroid implant to help more patients. This quarter was the first step in establishing a foundation to achieve our goals next year, and we are reiterating our expectation to generate more than $100 million in revenue next year, and at least 20 million of adjusted EBITDA in 2024. We will endeavor to update our revenue and EBITDA guidance as we progress through the integration and planning for 2024 with a goal to improve these targets.

Operator: This concludes our prepared remarks, and I'll now turn the call over to the operator for questions. Thank you. Ladies and gentlemen, if you're going to need to press the star, number one on your telephone. Your question has been answered and you wish to withdraw your request. You may do so by pressing star and then the number two. Here's in a speaker phone, please pick up your handset before ending your request and speaking on the call.

Alex Nalek: Alma, please, for the first question. First question will be Alex Nalek, Craig Allen, please go ahead. All right, great. Good morning, everyone. Thanks for doing the call here. You know, that 27% process number that you mentioned in the prepared mark. We're going to realistically go by the end of the year. I think that's a really important measure here as you complete the combination of the two assets. You know, Alex, I mean, that's a really hard one to project.

Alex Nalek: I mean, I will say it's up a point or two, you know, since we took over the both products. So I think you're certainly seeing some, you know, impact there early, but I wouldn't expect to see major strides of that until we get in the next year as we, you know, continue to get the entire team cross-trained, you know, really well across both products. Okay. The next year with all those kind of training in place, then we can start to see that number climb up.

Alex Nalek: It makes sense. Maybe expand a little bit on the OUS weakness there. I know you touched on it during the prepared remarks, though, surprising the OUS units decline quarter over quarter such a dramatic fashion. Just expand on what was happening in that, you know, over in Europe this quarter. Yeah, sure. So, you know, as we talked a little bit about on the second quarter call, you know, we have been a little bit behind in supplying some of the distributors in Europe.

Alex Nalek: You know, that's a factor of demand increasing in our other markets, and, you know, frankly, the early forecasting in the first part of the year from the distributor partners was, was, and late last year was lower than expected. And we just have a long lead time product for manufacturing. So we actually were really pleased with the demand growth in the direct markets. As we noted, they were up over 20%, I think 20.4%.

Alex Nalek: What happens in some of the markets in Europe is if they are low on stock, they have to, you know, ration the units going out so that they don't go out of stock. And so our partners in, in France specifically, you know, has had to based on working some things out with the regulatory authorities, you know, lower the number of units that they're shipping each quarter in order to just maintain an in stock position.

Alex Nalek: And so that's what I mean by rationing that. So we do expect that to, you know, have a significant uptake back to levels they were up before, you know, once their stock is built up. And as I said in my, you know, prepared comments, you know, working closely with them to rebuild stock over the course of the fourth quarter and think we'll move back to the point where they'll be fully stocked in Q1.

Alex Nalek: Okay, that makes sense. With regards to the US, we had some sharpness in the past couple quarters with docs traveling new drugs. And that was essentially slowing the rate that they're moving up to a little bit. And just thought it's a longer lasting venture, venture drugs. The thought on how docs are traveling, right now docs are traveling new drugs out there. It seems like that has reversed this quarter. Is that fair to to assume?

Alex Nalek: Yeah, a little bit of it. I mean, I do think, you know, the trial of, of, of ferrisomab out there, you know, is still a formidable, you know, it's a challenge to us as we go forward. But, you know, I think the reality is doctors are learning as they trial ferrisomab that it is, and this isn't saying anything about it, it is anti-vegetist or class of drugs, right? And the reality is that there are patients out there that need something more than anti-veget therapy.

Alex Nalek: It's been demonstrated in, you know, DRCR protocols that there's persistent and the demon these patients, even they receive, you know, recurring and barely tightly spaced doses of anti-veget therapy. So I think we, you know, we will work through that. But, you know, the use of ferrisomab is still pretty aggressive now. But there's still a need for the to take the place of this anti-vegetist in certain patients. Okay, got it. And then just two more questions if I can.

Alex Nalek: This is the first one on the, you know, the New Day study I think we all know that's a very important study for a Lovian. Maybe expand a little bit on the differences between the two eutics studies and just how can those outcomes there? How would that start to change adoption in the market? Like is it the same level as New Day or these more confirmatory studies? Yeah, so I'll start with calm.

Alex Nalek: You know, so calm is a registry study to collect real world evidence on the use of of you teak and, you know, treating non-infectious posterior uveitis. One of the one of the I guess one of the challenges of the pivotal studies was there were no cohorts defined to look at specific types and specific cases of uveitis. And there's probably 25 to 30 different types of uveitis that are studied and treated in the back of the eye, right?

Alex Nalek: So the idea is to hopefully develop some cohorts in, you know, the more specific types where alluvian or anti-inflammatory steroid would be used, you know, locally more effectively. And we hope to get that out of the calm study. And we should we should continue to be able to produce some of that next year. There are also some consensus papers, you know, coming out of Europe that will talk about specific types of uveitis where a long term acting steroid is, you know, more applicable as well.

Alex Nalek: So I think it'll help doctors with patient identification, you know, earlier in their evaluation of uveitis in those patients. The synchronicity study is really, it is very, very similar to the pivotal studies. However, the focus is around the more traditional retina specialist and the type of uveitis that they may treat that doesn't get referred out to the uveitis specialist. So one example that is, you know, post-operative inflammation, a lot of times when physicians look at that, there are characteristics of uveitis in that, right?

Alex Nalek: And that's maybe a direct result of the tractomy surgery or cataract surgery and a patient with post-operative inflammation is referred to that retina specialist. And so it's to identify the types where uveitis is present in those eyes because they've developed some sort of long-term inflammation, you know, in those types of situations or maybe a less severe type of uveitis, as I said, that it's just going to be treated typically by the retina specialist.

Alex Nalek: Okay, very helpful. Last question. Guided to 20 million, adjusted EBITDA. You confirmed that again this morning for 2024, but it also looks like you're almost at that run rate to begin with in Q3. When did we start the up that target for next year? As I said, we are, Alex, we are, we're very bullish on next year, you know, we do want to work through some of the rest of the pieces of the integrations, I said, we made a lot of progress there in some of our plans for 2024 before we update that guidance.

Alex Nalek: I do think there are some places where we have been very conservative in, you know, spending in Q3 to make sure we could get the integration right and waiting for, you know, the working capital to turn as Russell alluded to. But we do want to make sure we maximize the effort next year and getting in front of doctors and this cross sell opportunity, as well as looking at some opportunities to expand that label with potentially other indications.

Alex Nalek: So, you know, right now we're going to stick with, you know, over 100 million and over 20 million, but we'll give you updates on that, you know, as we move into the next year. All right, Axon. Thanks for the update. Appreciate congrats on all the progress. Thanks. Thanks, Alex. We appreciate your sport. Thank you.

Operator: Next question will be from the IGM of HC Wingride. Please go ahead. Thank you for picking my questions.

Operator: My first question is, do you plan to add additional sales reps throughout 2024? Yeah, thanks. Good morning to you. That's a good question. I mean, right now we're only, you know, three or four months into having the team of 35 out there. So we want to see how productive and effective they are. You know, first, obviously, you know, if more faith to FaceTime at the rep level, you know, does yield positive benefits in 2024. I think we will continue to evaluate, you know, the potential to expand the sales force. But no decisions been made on that at this time. Got it, got it.

Operator: And could you come the percentage of international revenue that's represented by your direct sales force? Yeah, I've got that. I'm going to say direct is, is roughly two thirds of our total and distributors is roughly one third. Over international sales.

Operator: And lastly, in a common quarters, do you expect any seasonality in terms of the kick sales? Yeah, I think sure, yeah, I think you're going to continue to have seasonality in the first quarter related to, you know, these are both high price products. So in the US, you know, the vast majority of patients start their deductible years over as of January one with, you know, new, new insurance plans or slight modifications and insurance plans.

Operator: So we always see quite a delay in January and February as doctors, you know, try to reevaluate or excuse me, redo benefit investigations to make sure the insurance coverage is there. I think that's pretty typical with, you know, some higher price products in the space. You also see a little bit of seasonality in the first quarter, some of the budgets in Europe are reset, you know, as they reset their budgets. And then we often do see seasonality in Q3 as well related to, you know, European holiday season and also holiday season in the US, you know, in the third quarter also seems to impact it as well.

Operator: Thank you very much. Yeah, absolutely. Thank you.

Laura Suriel: Our next question will be from James Malloy of Alice Alliance Global Partners. Please go ahead.

Laura Suriel: Well, this is Laura Cerelle calling in for James Malloy. Thank you for taking our questions. So for your not revenue, this past quarter reported at, you know, 23.4 million. What's the specific breakdown of this value between both UT and the Libyan product revenues? Well, I think we, in Russell's comments, he noted that it's about 8.9 million of that was from UT. Okay, got it. And then also looking ahead, you mentioned that you're on track to deliver over 100 million in that revenue for next year, 2024.

Laura Suriel: Maybe just provide a bit more guidance on how this would be broken up again between both products, both in the US and internationally. As we noted in the release in some of the comments, our plan going forward is to really report the flu similar in a set and I franchise on a combined basis. So we're not going to break out specific guidance on that. I mean, frankly, we benefit from increased usage of the long-term low-to-steroid in any indication, and we're still working out where the folks of the promotion would be next year on that.

Laura Suriel: But overall, we're very confident with the 100 million dollar number. Got it. And then lastly, your share count now at 32 million for this past quarter. Can you just provide a bit more detail on the jump in the number here in comparison to, you know, this past second quarter at 8 million? Yeah, we're right now we're at about 53.4 million shares of common outstanding. All right.

Laura Suriel: And then also, all right, last question for much. Just any more updates on the ongoing protocol, AL trial that you had, and then just of course, work into the data when that might come out. That's a pretty lengthy trial. I mean, it's the target that the DRCA has on the trials, about 600 patients. You know, we're hoping that they will start enrollment in the late in the fourth quarter of this year. But it's probably a multi-year trial before you'd see any readout. That's being run by the DRCA. Yeah, it's okay.

Operator: So that's all for us for now. Thank you for taking the question. Great. Thank you, Laura. I do. And again, if you have a question, please press star than one.

Operator: This concludes our question and for session.

Richard Eiswirth: I'll like to return to call the Mr. Work. I've worked for closing remarks. Thank you. I want to thank everybody for participating on today's call and for your interest in support of Alamara. We do look forward to sharing our ongoing progress when we report fourth quarter and full year 2023 results early next year. Thank you all very much and have a great day.

Operator: Conference is now concluded. Thank you for attending today's presentation. You may not