Q4 2023 Alimera Sciences Inc Earnings Call

[music].

Operator: Ladies and gentlemen, thank you for standing by. Good morning and welcome to the Alimera Sciences fourth quarter and fiscal year 2023 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 are sciences fourth quarter and fiscal year 2023 financial results and corporate update conference call.

At this time all participants are in a listen only mode.

Operator: Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then 1 on your telephone keypad.

Should you need assistance. Please signal a conference specialist by pressing the star key followed by zero.

After todays presentation, there will be an opportunity to ask questions.

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Operator: To withdraw your question, please press star then 2. Participants on this call are advised that the audio of this conference call is being broadcast live over the Internet and is also being recorded for playback purposes. A webcast replay of the call will be available approximately one hour after the end of the call through June 7, 2024. I would now like to turn the call over to Scott Gordon of CoreIR, the company's investor relations firm. Please go ahead, Scott.

Withdraw your question. Please press Star then two.

Participants on this call are advised that audio of this conference call is being broadcast live over the Internet and is also being recorded for playback purposes. A webcast replay of the call will be available approximately one hour. After the end of the call through June seven 2024.

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

Scott Gordon: Thank you, Scott. Good morning, and thank you for participating in today's conference. Joining me from Alimera's leadership team are Rick Eiswirth, President and Chief Executive Officer, and Elliot Maltz, Chief Financial Officer, and Todd Wood, President of UBS Operations, will be joining us for the Q&A. 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, and 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 Alimera's most recently filed periodic report, 8K file 10-Q. Perform 8K file 10-Q.

Thank you Scott good morning, and thank you for participating in today's conference call join.

Joining me from <unk> leadership team are Rick <unk>, President and Chief Executive Officer, and Elliot malls, Chief Financial Officer, and Todd will be joining us President U S operations.

And the question and answer session today.

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 and outlook and guidance on 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-Q or form 8-K filed with the FCC today.

On the Form 10-K to be filed with the STC for the year ended December 31, 2023, as well as Alan mirrors 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. Please see the explanatory language in reconciliation table located in Allen merits earnings press release, the cockpit that this call contains time sensitive information that is.

Accurate only as of today March seven 2024, except as required by law All America 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.

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

2023 was a pivotal year for Almere, we exited 2003 much stronger than we came into it in 2023, we accomplished many goals, we completed a strategic and transformative transaction to obtain the commercial rights to <unk> and expand our product portfolio with.

We strengthened our balance sheet and simplified our capital structure.

Operator: Yeah, and Form 10-K to be filed with the SEC from 0-9. 2021-2023, as well as Alimera's press release that accompanies it, particularly the cautionary statements in it. Today's conference call will include references to adjusted EBITDA, which is a non-GAAP financial measure. Please see the explanatory language and reconciliation table located in Alimera's, The content of this call contains time-sensitive

We established the critical mass to drive positive adjusted EBITDA moving forward as well as operating cash flow in 2024.

We expanded our commercial team to drive growth and utilization of both products and we completed the enrollment in both our two phase III clinical studies New day in Synchronicity that we expect will drive increased utilization, but will be ended in Utica in future years.

We head into 2024, you see the benefits of these transactions to be completed in 2023.

We acquired <unk> to consolidate the rights to this with settlement of certain items cleaning technology in the U S and expand the indications available for us to serve patients with retinal conditions.

Richard S. Eiswirth: This is accurate only as of today, March 7, 2024. The update will revise any information to reflect events or circumstances that occur after. It is now my pleasure to turn the call over to Rick Eiswirth. Rick, please go ahead.

But what we would be and you take in the U S. We believe that there is significant opportunity to increase their utilization.

In 2023, we learned that fewer than 30% legacy ILUVIEN ete's accounts utilize both products.

With our expanded sales force selling ILUVIEN in Utica in the U S and our marketing of the two indications at the same long term consistently delivered low dose technology provides durability that both are positioned to patients today in the product. We believe the opportunity to allow physicians to treat a broader array of patients is tremendous.

We spent the back half of the year incorporating <unk> into.

Richard S. Eiswirth: Thank you, Scott, and good morning to everyone on the call. 2023 was a pivotal year for Alimera. We exited 2023 much stronger than we came into it. In 2023, we accomplished many goals. We completed a strategic and transformative transaction to obtain the commercial rights critique and expand our product portfolio. We strengthened our balance sheet and simplified our capital structure.

So our U S business training, our commercial team to sell both products and promote both indications.

We made significant progress with utilization of our products in the second half of 2023 up 9% over the second half of 2022.

Basis.

The acquisition of beauty and the continued growth of ILUVIEN globally, our financial results have improved significantly in 2023.

In Q4, our consolidated global net revenue grew 88% over Q4 of 2022 to $26 $3 million.

And for the year, our net revenue grew 49% over the full year of 2022 to $8 $8 million.

Importantly, as we projected we are driving positive adjusted EBITDA and cash flow from operations now that we have critical mass with the larger portfolio.

Richard S. Eiswirth: We established the critical mass to drive positive adjusted EBITDA moving forward, as well as operating cash flow in 2024. We expanded our commercial team to drive growth and utilization of both products. And we completed enrollment in both our two Phase IV clinical studies, New Day and Synchronicity, that we expect will drive increased utilization of both the Lubyans and Utiques in future years. As we head into 2024, we see the benefits of these transactions to be completed in 2023. We acquired UT to consolidate the rights to the placenta monocytinide implant technology in the U.S. and expand the indications available for us to serve patients with retinal conditions. Now that we have both the Lubion and Utica in the U.S., we believe that there is a significant opportunity to increase their utilization. In 2023, we learned that fewer than 30% of legacy Alluvian and Utique accounts utilize both products.

Our adjusted EBITDA in the fourth quarter was $5 million a significant improvement over Q4 2022, when we had an adjusted EBITDA loss of $1 $2 million.

For the full year of 2023, we delivered positive adjusted EBITDA of $8 7 million compared to a loss of $7 9 million in 2022.

And our U S segment.

Net revenue in Q4, 2023 increased 104% to $19 $2 million versus $9 $4 million in Q4 of 2022.

This contributed to a 66% decrease in U S revenue for the full year of 2023.

<unk> to $56 $7 million.

U S end user demand for our products was up four 4% in Q4 versus the prior year and 11% on a pro forma basis for the full year.

Although we've made great commercial strides with the integration of <unk> and uveitis indication. We believe we still have a significant opportunity ahead of us to maximize the benefits of selling to high priority products.

To help accelerate growth in 2020 for Todd with joined our team in December as President of our U S operations.

He has a wealth of experience with the successful brands such as Botox, and then began and will be joining us on the call for the Q&A session.

We believe our international business, where ILUVIEN has both indications under one brand is a great leading indicator of what is possible in the U S.

Our international business grew significantly in both Q4 and for the full year.

In Q4, 2023 International net revenue grew 54% to $7 1 million and for the full year net revenue was up 21% to $24 million.

Richard S. Eiswirth: With our expanded sales force selling Illuvian and Neutique in the U.S., and our marketing of the two indications as the same long-term, consistently delivered, low-dose technology provides durability that both our physicians and patients want today in our product. We believe the opportunity to allow physicians to treat a broader array of patients is tremendous. We spent the back half of the year incorporating UT into our U.S. business, training our commercial team to sell both products and promote both indications. We made significant progress with utilization of our products in the second half of 2023, up 9% over the second half of 2022 on a pro-climate basis. Since the acquisition of Utique and the continued growth of Alluvion globally, our financial results have improved significantly in 2023.

We experienced a 16, 7% end user demand growth in Q4, and 11, 8% for the full year in the international segment, driven by increasing end user demand in our markets of the UK, Portugal, Ireland, Spain and France.

Revenue from our distributor partners was also up for both the quarter and the full year.

However, due to limited supply capacity, we were not able to fulfill all of the end user demand in the second half of the year.

After being up over 30% through the end of the second quarter.

Moving into 2024, we believe we will no longer be faced with these supply issues in Q4, Jason Warner joined our team as Chief operating officer, and we have made and continue to make additional investments to ensure available manufacturing capacity moving forward.

As a result, we made significant distributor shipments in the fourth quarter of 2023, and anticipate meeting end user demand in Europe and timely manner moving forward.

We expect the international business to continue to be a significant contributor to our growth.

And we anticipate growing utilization of the uveitis indication in those markets as we introduce some of the positioning that we've adopted following the acquisition of beauty in the U S.

When Jason joined US I was pleased to name Dr. Philip Ashman, who has been with US the past 10 years as the president of International operations.

I am thrilled to spend 100% of his time focused on execution and growth in the international segment.

Within our direct markets of Germany, the UK <unk>, Ireland, but also in supporting our distributor partners throughout Europe, and the Middle East.

Richard S. Eiswirth: In Q4, our consolidated global net revenue grew 88% over Q4 of 2022 to $26.3 million. And for the year, our net revenue grew 49% over the full year of 2022 to $80.8 million. Importantly, as we projected, we are driving positive adjustability in cash flow from operations now that we have critical mass with a larger portfolio. Our adjusted EBITDA in the fourth quarter was $5 million, a significant improvement over Q4 2022 when we had an adjusted EBITDA loss of $1.2 million. For the full year of 2023, we delivered positive adjusted EBITDA of $8.7 million, compared to a loss of $7.9 million in 2022. In our U.S. segment, net revenue in Q4 2023 increased 104% to $19.2 million versus $9.4 million in Q4 of 2022. This contributed to a 66% increase in U.S. revenue for the full year of 2023 to $56.7 million.

In February we announced that the U K.

National Institute for Health and care excellence or nice as issued final draft guidance recommending that chronic diabetic macular edema or do you mean patients with a natural lens also known as speed patients have access to ILUVIEN.

Nice reimbursement to date has been limited to only pseudo 50 patients defined as those who had undergone cataract surgery, which is less than a third of the population.

Now we have the potential to reach baked in patients who have advanced the chronic D D.

Expansion of our potential user base, we expect.

The availability of this wider reimbursement to positively impact utilization in the U K in the second half of 2024.

This limitation has historically impacted reimbursement in other countries as well, such as Spain, and Italy, which look to the nice guidance as a contributing factor in the reimbursement decisions.

We believe that this nice decision.

In other markets will broaden our potential patient base in these countries as well.

In previous calls.

Sure that our goal for 2024 following the transaction was to achieve 100 million in consolidated revenue.

And Angela annual EBITDA margin of 20%.

As a result of our success in the second half of 2023, we are revising our financial guidance for 2020 for revenue to exceed $105 million in revenue with an adjusted EBITDA margin of 20% for the year.

We do expect our business to fluctuate quarter to quarter due to the seasonality of our business.

Historically, we've seen low revenue in Q1, primarily primarily resulting from the new insurance year with the resetting of patient deductibles, which dampens utilization of high priced products like ILUVIEN EQT in January and February.

Historically Q1 revenue has been 10% to 15% below the previous quarter and we would anticipate the same impact in Q1 of this year.

Richard S. Eiswirth: US end-user demand for our products was up 4.4% in Q4 versus the prior year and 11% on a proforma basis for the full year. Although we have made great commercial strides with the integration of UTiq and the UVI syndication, we believe we still have a significant opportunity ahead of us to maximize the benefits of selling two high-priority products. To help accelerate growth in 2024, Todd Wood joined our team in December as president of our U.S. operations. He has a wealth of experience with successful brands such as Botox and Lumigan and will be joining us on the call for the Q&A session. We believe our international business, where Alluvium has both indications and a plum brand, is a great leading indicator of what is possible in the U.S. Our international business grew significantly in both Q4 and into the full year.

Adjusted EBITDA will also fluctuate quarter to quarter as a result of the seasonality, but we are confident in our ability to deliver 20% margins annually.

We are pleased to also having completed enrollment in two phase <unk> studies that we believe will provide impactful data and drive increased physician utilization in the future.

In June we finished enrollment in our landmark New day study with 368.

The new day studies evaluating the Libyans utility is early baseline therapy in naive or near nine patients in a head to head study versus the leading anti VEGF in the treatment of diabetic macular edema.

This study is the first head to head comparison long term low dose corticosteroid therapy versus anti VEGF therapy in the treatment of <unk>.

And we believe that if successful could change the treatment paradigm for do you mean by moving them long acting steroid implant earlier in the patient journey.

The last patient last visit in the study is projected for Q4 of this year and we anticipate having data in early 2025.

In January we announced the completion of enrollment in the Synchronicity study, which is a prospective open label clinical study evaluating the safety and efficacy of beauty for the treatment of macular edema associated with chronic non infectious uveitis affecting the posterior segment.

Richard S. Eiswirth: In Q4 2023, international net revenue grew 54% to $7.1 million, and for the full year, net revenue was up 21% to $24 million. We experienced 16.7% end-user demand growth in Q4 and 11.8% for the full year in the international segment, driven by increasing end-user demand in our markets of the UK, Portugal, Ireland, Spain, and France. Revenue from our distributor partners was also up for both the quarter and the full year.

And related interact with inflammation.

This study's purpose is to gain broader insight and abuse of boutique by the general retina specialists in real world clinical practice as opposed to those who practice <unk> uveitis specialists in a trial.

This is a two year follow up study with an interim top line six month efficacy readout anticipated in the second half of this year.

And with that update I will now turn the call over to Elliot to review, our fourth quarter and fiscal year financial results in greater detail.

Thanks, Rick and Hello, everyone I'm very pleased to have joined Alan there is such an exciting time look forward to continuing discussions with you all.

I'll take you through the numbers and then give a brief financing update.

Consolidated net revenue in Q4, 2023 was that 88% to approximately $26 3 million compared to $14 million in Q4 2022.

Richard S. Eiswirth: However, due to limited supply capacity, we were not able to fulfill all of the end-user demand in the second half of the year, after being up over 30% through the end of the second quarter. Moving into 2024, we believe we will no longer be faced with these supply issues. In Q4, Jason Warner joined our team as Chief Operating Officer, and we have made and continue to make additional investments to ensure available manufacturing capacity moving forward. As a result, we made significant distributor shipments in Q4 of 2023 and anticipate meeting end user demand in Europe in an autonomous manner moving forward. We expect the international business to continue to be a significant contributor to our growth, and we anticipate growing utilization of the UBI distribution in those markets as we introduce some of the positioning we've adopted following the acquisition of Utique in the US.

Looking at our operational segments U S. Net revenue increased 104% to approximately $19 2 million in Q4 2023 compared to $9 4 million in Q4 2022.

End user demand in the U S for our fluids sitting alone implants was 2065 units in Q4, 2023, which is up four 5% compared to Q4 2022 on a pro forma basis.

International net revenue increased 54% to approximately $7 1 million in Q4 2023 compared to approximately $4 6 million in Q4 2022.

The increase was driven primarily by end user demand growth of 17% in our direct markets and stopped shipments to our international distributors. There are more than double our Q4 2022 results.

Total end user demand for our international segment was 1464 units, which is down about six 5% compared to Q4 2022 due to limited inventory in our distributor markets of Spain, and France during the quarter.

However, as Rick noted this was a result of limited supply in the second half of the year that has been addressed prospectively.

Now looking at the full year 2023, consolidated net revenue increased 49% to approximately $80 8 million compared to approximately $54 1 million in 2022.

The increase in 2020 period was primarily attributable to one the acquisition of Utica in the United States in May in two strong growth throughout the year in our international segment.

Richard S. Eiswirth: When Jason joined us, I was pleased to name Dr. Philip Ashton, who has been with us for the past 10 years, as the President of International Operations, allowing Philip to spend 100% of his time focused on the execution and growth of the international segment, both in our direct markets of Germany, the UK, Portugal, and Ireland but also in supporting our distributor partners throughout Europe and the Middle East. In February, we announced that the U.K. National Institute for Health and Care Excellence, or NICE, has issued final draft guidance recommending that chronic diabetic macular edema or DME patients with a natural lens, also known as FACIC patients, have access to alluvium. NICE reimbursement has to date been limited to only pseudofacic patients, defined as those who have undergone cataract surgery, which is less than a third of the population.

U S. Net revenue increased 66% to $56 7 million in 2023 compared to $34 2 million in 2022 due to the acquisition of the U T can make as well as the continued growth of ILUVIEN.

In our international segment net revenue increased 21% to approximately $24 million in 2023 compared to approximately $19 9 million in 2022.

We saw notable growth throughout the year in the European markets, where we saw ILUVIEN directly specifically, the UK, Portugal, and Ireland, as well as Spain, and France, where ILUVIEN has sold through international distribution partners.

Overall International segment end user demand was up 7% to 5583 units compared to 5211 units in 2022.

Now looking at the rest of our P&L total operating expenses in the fourth quarter of 2023 were approximately $21 1 million compared to approximately $14 million in Q4 2020 to the.

The increase in the fourth quarter of 2023 with negatively impacted by one time charges of approximately $1 million for bad debt expense related to pre Covid say up to one of our European distributors and approximately half a million of severance expense.

Richard S. Eiswirth: Now we have the potential to reach fake patients who advance to chronic DME, a significant expansion of our potential user base. We expect the availability of this wider reimbursement to positively impact utilization in the UK in the second half of 2024. This limitation has historically impacted reimbursement in other countries as well, such as Spain and Italy, which look to NICE guidance as a contributing factor in reimbursement decisions.

When comparing Q4 2023 with the prior year. There was also an additional $2 4 million of amortization expense from the intangible assets that resulted from the Utica acquisition.

Total operating expenses for the full year 2023 were approximately $72 million compared to approximately $58 million in 2022.

The increase is due to the items I, just mentioned as well as the acquisition and staffing for Utica.

Net loss was approximately $3 8 million in both Q4 2023 in Q4 2022, despite additional $3 1 million of interest expense in the fourth quarter of 2023.

For the full year net loss was approximately $20 1 million in 2023 compared to a net loss of approximately $18 1 million in 2022.

Richard S. Eiswirth: We believe that this positive decision, if adopted in other markets, will broaden our potential patient base in these countries as well. In previous calls, I've shared that our goal for 2024, following the UT transaction, was to achieve $100 million in consolidated revenue and an annual even margin of 20%. As a result of our success in the second half of 2023, we are revising our financial guidance for 2024 revenue to exceed $105 million in revenue with an adjusted even margin of 20% for the year. We do expect our business to fluctuate quarter to quarter due to the seasonality of our business. Historically, we've seen lower revenue in Q1, primarily resulting from the new insurance year with the resetting of patient deductibles, which dampens utilization of high-priced products like Illumina Utique in January and February.

We are pleased to continue the trend of generating positive quarterly adjusted EBITDA in Q4, 2023, we generated approximately $5 million adjusted EBITDA compared to an adjusted EBITDA loss of approximately $1 2 million in Q4 2022.

For the full year, we generated approximately $8 7 million of adjusted EBITDA 2023, compared to an adjusted EBITDA loss of approximately $7 9 million in 2022.

As a result of posting this adjusted EBITDA for the full year, we have met and important trigger in the term loan agreement with our lender SLR capital partners.

This will allow for a 12 month extension of the interest only period and defer the start with amortization payments to may of 2026, So long as we remain in compliance with the other terms of the loan facility.

Yeah.

As of December 31, 2023, we had cash and cash equivalents of approximately $12 1 million compared to $5 3 million at the end of 2022.

In addition to the effects of generating positive adjusted EBITDA. This year, our cash position was improved by the strategic financing transactions in 2023.

As a result of the revenue growth. This year in December we triggered $1 3 million of revenue based milestone fees included in our term loans with SLR and we expect to trigger the remaining $2 4 million in 2024.

SLR continues to be a great partner and in order to preserve cash for working capital as we continue to grow the utilization of ILUVIEN in Utica yesterday, we increased the size of our loan facility for an additional $5 million in cash.

Richard S. Eiswirth: Historically, Q1 revenue has been 10-15% below the previous quarter, and we would anticipate the same impact in Q1 of this year. Adjusted EBITDA will also fluctuate quarter to quarter as a result of this seasonality, but we are confident in our ability to deliver 20% margins annually. We are pleased to also have completed enrollment in two phase four studies that we believe will provide impactful data and drive increased physician utilization in the future. In June, we finished enrollment in our landmark New Day study, which has 306 pages. The New Day study is evaluating lupine's utility as early baseline therapy in naive or near-naive patients, in a head-to-head study versus the leading anti-VEGF in the treatment of diabetic macular edema. This study is the first head-to-head comparison of long-term low-dose corticosteroid therapy versus anti-VEGF therapy in the treatment of DME.

This provides us with more operating flexibility and defray the impact of some of upcoming contractual obligations.

Now I'll turn it back over to Rick to give his closing comments.

Yeah.

Okay.

Thank you Elliot as.

As I mentioned.

23 was a pivotal year for <unk> with the acquisition boutique, providing the necessary critical mass to establish our financial stability for the future.

Think that the second half of 2023 is a great demonstration of our ability to leverage the infrastructure. We built in the retina space in the U S and in Europe.

However, there is a significant opportunity to grow the utilization of ILUVIEN at the living in Utica in 2024 and beyond.

We believe that calling on physicians and promoting two indications.

Greater recall value for retina specialist as they make treatment decisions.

We believe that reach and frequency are critical and promote any Bolivian and fatigue, and we will be able to speak with more physicians more often in 2024 with our larger salesforce being fully trained and in the field for a full year.

We believe that carrying both ILUVIEN in Utica in one bag will grow both brands as we were able to cross sell the benefits of long term low dose delivery for both indications to the same customer increasing the likelihood of a customer considering using our products on more patients.

We believe that the numerous studies we've conducted around the world with ILUVIEN are good indicators that knew they study what a successful outcome and support the use of ILUVIEN earlier in the treatment paradigm for do you mean.

We believe the Synchronicity study will highlight increased utility boutique in the general retina retina specialist practice.

Richard S. Eiswirth: And we believe that it's successful to change the treatment paradigm for DME by moving a long-acting steroid implant earlier in the patient journey. The last patient's last visit in this study is projected for Q4 of this year, and we anticipate having data in early 2025. In January, we announced the completion of enrollment in the Synchronicity Study, which is a prospective, open-label clinical study evaluating the safety and efficacy of UT for the treatment of macular edema associated with chronic, non-infectious uveitis affecting the posterior segment of the eye and related interocular inflammation. This study's purpose is to gain broader insight into the use of UTE by general retina specialists in real-world clinical practice, as opposed to those who practice solely as UVI specialists in a trial.

And for those and more reasons, we are bullish about 2024, and our ability to exceed $105 million revenue with an adjusted EBITDA margin of 20% for the full year.

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

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One moment please for the first question.

Sure.

And the first question today comes from Alex Nowak with Craig Hallum Capital. Please go ahead.

Okay, great good morning, everyone and very transformational 2023.

The cross sell I think last quarter. It was decided at 27% right now it's around the less than 30 per cent worker that realistically go here over the next several years and then maybe.

Our first question out there for Todd.

You think about utilization within the existing retinal specialists, how how much can macro as well.

So I guess that would come in first first of all Alex Thanks for the comments and your support first of all I can say that with respect to the cross sell.

You're never going to get 100% overlap there because do you have a population of a specialist the tree on the uveitis.

Elliot Maltz: This is a two-year follow-up study with an interim top-line six-month efficacy readout anticipated in the second half of this year. And with that update, I will now turn the call over to Elliot to review our fourth quarter and fiscal year financial results in greater detail. Thanks, Rick, and hello, everyone. I'm very pleased to have joined Alimera at such an exciting time.

Certainly I think we internally aspired to get that number up over 50% in the next 12 months. If we can we can do that to drive revenue.

Todd do you want to comment on the other questions.

Yeah, Yeah, Rick and Hi, Alex how are you. Thanks for the question.

Yeah, the the crossover I agree with Rick right, we're not going to get all of it because they are a little bit different in terms of the focus of the specialty where we're looking at UBI. This specialists, but if we can expand in the post surgical inflammation.

With you teak and get retina specialists looking at post surgical inflammation as it is uveitis and Theres a crossover there so it's going to be a little bit of work to do in that.

Elliot Maltz: I look forward to continuing discussions with you all. I'll take you through the numbers and then give you a brief financing update. Consolidated net revenue in Q4 2023 was up 88% to approximately $26.3 million, compared to $14 million in Q4 2022. Looking at our operational segments, U.S. net revenue increased 104% to approximately $19.2 million in Q4 2023, compared to $9.4 million in Q4 2022. End-user demand in the U.S. for our fluacinolone implants was 2,065 units in Q4 2023, which is up 4.5% compared to Q4 2022 on a pro forma basis.

But I agree with Rick that 50% seems like a good number to get to.

We won't get all of it but there is opportunity for crossover.

And in the past we've talked about there was trialing of new drugs in the DMA and then likely the uveitis market as well just what's the latest on I guess more or less the competitive environment out there for both <unk> and uveitis.

Yeah, I think in <unk>, you are seeing some of the competitive aspect of a new entrant into this space and the.

Second half of the year last year.

Competing with another strong rival and you are seeing.

Some sampling that occurred in the second half of it was pretty aggressive. So I think that has impacted us a little bit but consistent with what we've seen in the past you know when a new anti VEGF comes along although theres trial in the end there still seems to be that block of patients.

Comes through.

It's really a corticosteroids to treat the broader inflammation in the either the enzyme that just can't address so although we lose patients for a period of time, maybe the trial other stronger anti VEGF those patients ultimately worked their way through to us.

Yeah, absolutely and when can we expect top line data for the New day study.

Elliot Maltz: International net revenue increased 54% to approximately $7.1 million in Q4 2023, compared to approximately $4.6 million in Q4 2022. The increase was driven primarily by end-user demand growth of 17% in our direct markets and stocking shipments to our international distributors that were more than double our Q4 2022 results. Total end-user demand in our international segment was 1,464 units, which is down about 6.5% compared to Q4 2022 due to limited inventory in our distributor markets of Spain and France during the quarter.

It'll be it'll be sometime in early 2025 last patient last visit in the fourth quarter. So.

Probably toward the end of the first quarter early second quarter and 2025.

Okay got it and then just two more questions.

First one really around now that you have the global rights here to the product portfolio.

Just the expansion on the R&D line moving this into additional indication maybe increasing the size of your current indications what are your thoughts there.

Yeah look I think as we've talked about on last call.

Today, we are continuing to look at places, where we can do some indication expansion I think corticosteroids mean, using Oxford, where you're 50 years you guys have heard me say that before because they work right and there are other indications we have the protocol.

With the DRC are when we're looking at radiation retinopathy, and we've been having some advisory boards with doctors looking at some other potential indications that we could develop.

The New day study of the Synchronicity study roll off we would probably redeploy that capital rather than see a big increase in our costs.

Okay got it and then just lastly kind of a clarification around the interest expense. It looked like it came in pretty high here for Q4, which is the normal interest rate expense to assume for 2024 with.

Elliot Maltz: However, as Rick noted, this was a result of limited supply in the second half of the year that has been addressed prospectively. Now looking at the full year 2023, consolidated net revenue increased 49% to approximately $80.8 million, compared to approximately $54.1 million in 2022. The increase in 2023 was primarily attributable to one, the acquisition of Utique in the United States in May, and two, strong growth throughout the year in our international segment. U.S. net revenue increased 66% to $56.7 million in 2023, compared to $34.2 million in 2022 due to the acquisition of Utique in May, as well as the continued growth of Alluvion. In our international segment, net revenue increased 21% to approximately $24 million in 2023, compared to approximately $19.9 million in 2022. We saw notable growth throughout the year in the European markets where we sell alluvium directly, specifically in the UK, Portugal, and Ireland, as well as Spain and France, where alluvium is sold through international distribution partners. Overall, international segment end-user demand was up 7% to 5,583 units compared to 5,211 units in 2022.

With the addition of a 5 million now on top of it.

Yes.

I can take that question.

So we would expect a typical run rate.

Be around.

You know ballpark.

Ballpark, let's call it.

Yes, three and a half million dollars on a quarterly basis, but this was adjusted in Q4, because we met the one of the exit fee milestones with our loan agreement with SLR that triggered one 3 million of additional interest expense and we do anticipate triggering an additional $2 4 million.

Such contingent interest related payments during 2024, so we do anticipate that over the first.

Six to nine months of the year and then interest expense will again begin to normalize.

Okay got it I appreciate the update thank you.

Thank you Alan.

Next question comes from the line of James Molloy with Alliance Global Partners. Please go ahead.

Hey, good morning, guys. Thank you very much for taking my questions.

I was wondering if you could walk through sort of the what message.

<unk> has resonated best with the docs here in the fourth quarter going forward and how is that sort of change over the year. If at all and can you walk through how many how many reps currently have are working and other retention has been through the year.

Yes. She taught me want to comment on this as well I think.

We know where the big opportunity for us, especially now that we can talk about two indications inflammatory diseases uveitis and for DNA.

A lot of the patients that are easy for us to go after those that are already on <unk> right because.

<unk> is our Allergan has been promoting against uveitis and <unk> for a while as well and so there's just a broader group of patients where do we go after and he says I think those conversations are.

Successful opportunity for for Us as we.

Move forward and continue to be in 2024, while we await the new day data and the synchronicity data we have about we have 35 territories.

Across the country right now.

We've had sort of I would call the normal attrition, we have some of the people that we have.

Decided to turn it over on the sales force, we have not had too many people, leaving to go to competitors or anything like that this year, because I think we've got pretty strong culture here, but we'll always have some turnover in the back half of that sales team.

Elliot Maltz: Now looking at the rest of our P&L, total operating expenses in the fourth quarter of 2023 were approximately $21.1 million compared to approximately $14 million in Q4 2022. The increase in the fourth quarter of 2023 was negatively impacted by one-time charges of approximately $1 million for bad debt expense related to pre-COVID sales to one of our European distributors and approximately half a million for severance expense. When comparing Q4 2023 with the prior year, there was also an additional $2.4 million of amortization expense from the intangible assets that resulted from the UTiC acquisition. Total operating expenses for the full year 2023 were approximately $72 million, compared to approximately $58 million in 2022. The increase is due to the items I just mentioned, as well as the acquisition and staffing for UT. The net loss was approximately $3.8 million in both Q4 2023 and Q4 2022, despite an additional $3.1 million of interest expense in the fourth quarter of 2023. For the full year, the net loss was approximately $20.1 million in 2023 compared to a net loss of approximately $18.1 million in 2022.

Todd I don't know if you have anything you want to add to that.

Yeah, Yeah, I'll add to that Rick and as Rick said Osred axes.

The target there is opportunity to displace that competitively and when we look at messaging.

And we look at our advocates abuse, they viewed the disease a little bit differently earlier, some more severe earlier and then they linked the effectiveness of our product to preserving vision and Loren your risk of losing vision. So we really need to leverage those two items and then really clarify where.

To position it so it gets positioned earlier in the treatment paradigm.

Alright, great. Thank you then maybe a quick housekeeping maybe touched on it in the prepared comments already what was the jump in G&A in the fourth quarter.

So there are a few items one off events during the fourth quarter, there was about $1 million of that.

Bad debt expense that we recognized in the fourth quarter that was related to pre COVID-19 sales in one of our European distributors.

And then there was another half a million of severance expense that we recognized during the fourth quarter. Additionally, we had higher stock based compensation expense and this was a result of an equity grant to certain employees during the fourth quarter, which also drove.

The higher G&A balance when you look at things quarter over quarter.

Okay.

Okay, Yeah, so about $2 million or so of one timers in the quarter.

Approximately a little bit higher when you factor in G&A, but youre in the right ballpark.

Great. Thank you very much taking the questions.

Thanks, Jim.

This concludes the question and answer session I would like to turn the conference back over to Rick Hi, its works for any closing remarks.

Thank you. Thank you all for participating on today's call and for your continued interest and support of Almere, We look forward to sharing our ongoing progress when we report our first quarter results in late April. Thank you all very much and have a wonderful day.

Elliot Maltz: We are pleased to continue the trend of generating positive quarterly adjusted EBITDA, and in Q4 2023, we generated approximately $5 million of adjusted EBITDA compared to an adjusted EBITDA loss of approximately $1.2 million in Q4 2022. For the full year, we generated approximately $8.7 million of adjusted EBITDA in 2023, compared to an adjusted EBITDA loss of approximately $7.9 million in 2022. As a result of posting the suggested EBITDA for the full year, we have met an important trigger in the term loan agreement with our lender, SLR Capital Partners. This will allow for a 12-month extension of the interest-only period and defer the start of amortization payments to May of 2026, so long as you remain in compliance with the other terms of the loan facility. As of December 31, 2023, we had cash and cash equivalents of approximately $12.1 million, compared to $5.3 million at the end of 2022.

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

This is Greg here.

[music].

Yeah.

Okay.

Yeah.

[music].

Yeah.

[music].

Okay.

[music].

Yeah.

[music].

Elliot Maltz: In addition to the effects of generating positive adjusted EBITDA this year, our cash position was improved by the strategic financing transactions of 2023. As a result of the revenue growth this year, in December, we triggered 1.3 million of revenue-based milestone fees included in our term loans with SLR, and we expect to trigger the remaining 2.4 million in 2024. SLR continues to be a great partner, and in order to preserve cash for working capital as we continue to grow the utilization of Alluvion and Utique Yesterday, we increased the size of our loan facility for an additional $5 million in cash.

Yeah.

[music].

Richard S. Eiswirth: This provides us with more operating flexibility and defrays the impact of some upcoming contractual obligations. Now I'll turn it back over to Rick to give his closing comments. Thank you, Elliot. As I mentioned, 2023 was a pivotal year for Alimera, with the acquisition of UT providing the necessary critical mass to establish our financial stability for the future. And we think that the second half of 2023 is a great demonstration of our ability to leverage the infrastructure we've built in the retina space in the U.S. and in Europe. However, there is a significant opportunity to grow the utilization of the Leuven MUT in 2024 and beyond.

Yeah.

[music].

Richard S. Eiswirth: We believe that calling on physicians and promoting two medications will provide greater recall value for retina specialists as they make treatment decisions. We believe that reach and frequency are critical in promoting Bolivian and UTIP and that we will be able to speak with more people more often in 2024 with our larger sales force being fully trained and in the field for a full year. We believe that carrying both Illumine and Utique in one bag will help grow both brands as we are able to cross-sell the benefits of long-term, low-dose delivery for both indications to the same customer, increasing the likelihood of a customer considering using our products on more patients.

Yes.

Yeah.

Yes.

[music].

Yeah.

Okay.

[music].

Okay.

Okay.

Okay.

Uh huh.

Operator: We believe that the numerous studies we've conducted around the world with alluvium are a good indicator that the New Day study will report a successful outcome and support the use of alluvium earlier in the treatment paradigm for DME. We believe the Synchronicity study will highlight the increased utility of UT in the general retina specialist practice. And for those and more reasons, we are bullish about 2024 and our ability to exceed $105 million in revenue with an adjusted EBITDA margin of 20% for the full year. Thank you. That concludes our prepared remarks, and I will now turn the call over to the operator for questions. Ladies and gentlemen, if you wish to ask a question on today's call, you will need to press star and then one on your telephone keypad. If your question has been answered and you wish to withdraw your request, you may do so by pressing the pound key.

[music].

Yeah.

Yes.

Yeah.

Okay.

Yeah.

Yeah.

[music].

Alexander David Nowak: If you are using a speakerphone, please pick up your handset before entering your request and speaking on the phone. One moment, please, for the first question. The first question today comes from Alex Nowak with Craig Helm Capital. Please go ahead. Okay, great. Good morning, everyone. And a very transformational 2023. You know, that cross starting last quarter is cited at 27% right now; it's around less than 30%. We're going to realistically go here, you know, over the next several years, and then maybe for a question out there for Todd, just how do you think about utilization within the existing retinal specialist? How much should I macro as well?

Yeah.

Richard S. Eiswirth: So, I guess I'd comment first. First of all, Alex, thanks for the comments and your support. First of all, I'm going to say that, you know, with respect to the cross-cell analysis, you're never going to get 100% overlap there because you do have a population of specialists that treat only uveitis.

[music].

Richard S. Eiswirth: But certainly, you know, I think we internally aspire to get that number up over 50% in the next 12 months if we can do that to drive revenue. Todd, do you want to comment on the other questions? Yeah, yeah, Rick. And hi, Alex. How are you?

Okay.

Yeah.

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Todd Wood: Thanks for the question. Yeah, the crossover. I agree with Rick, right? We're not going to get all of it, because they are a little bit different in terms of the focus of the specialty when we're looking at uveitis specialists. But if we can expand into post-surgical inflammation with UTEQ and get retina specialists looking at post-surgical inflammation as it is uveitis, and there's a crossover there. So it's going to be a little bit of work to do that. But I agree with Rick that 50% seems like a good number to get to.

Yes.

Hum.

[music].

Yeah.

Yeah.

[music].

Hum.

[music].

Todd Wood: We won't get all of it, but there's opportunity for a crossover. And in the past, we talked about trialing new drugs in the DMV and likely the uveitis market as well. So just what's the latest on, I guess, more or less the competitive environment out there for both DMV and uveitis?

Yeah.

[music].

Richard S. Eiswirth: Yeah, I think in DME you are seeing, you know, some of the competitive aspect of, you know, a new entrant into the space in the second half of the year last year, you know, competing with another, you know, strong rival and you are seeing, you know, some sampling that occurred in the second half of the year that was pretty aggressive. So, I think that has impacted us a little bit, but, you know, consistent with what we've seen in the past, you know, when a new anti-BGF comes along, although there's trial, you know, in the end, there still seems to be that block of patients that comes through, you know, and needs really a corticosteroid, you know, to treat the broader inflammation in the eye that the anti-BGF can't address.

Okay.

[music].

Okay.

[music].

Yeah.

Richard S. Eiswirth: So, although we lose patients for a period of time, you know, if maybe the trial of a strong anti-BGF trial is successful, those patients ultimately work their way through to us. Yep, absolutely. And when can we expect top-line data for the New Day study? It'll be sometime in early 2025, you know; last patient, last visit is in the fourth quarter. So, you know, probably toward the end of the first quarter or early second quarter of 2025.

[music].

Hum.

Yes.

[music].

Okay.

[music].

Alexander David Nowak: Okay, I got it. And then there are just two more questions. The first one is really around, now that you have the global rights here to the product portfolio, just the expansion of the R&D line, moving this into additional indications, maybe increasing the size of the current indications. What are your thoughts there? Yeah, look, I think, as we talked about on the last call and said today, we are continuing to look at places where we can do some indication expansion. I think, you know, corticosteroids have been used for 40 or 50 years.

Hum.

[music].

Okay.

Yeah.

[music].

Yeah.

Richard S. Eiswirth: You guys have heard me say that before because they work, right? And there are other indications. You know, we have the protocol AL with the DRCR, where we're looking at radiation retinopathy, and we've been having some advisory boards with doctors looking at some other potential indications that we could develop. As the New Day study and the synchronicity study roll off, we would probably redeploy that capital rather than see a big increase in our costs. Okay, got it. And then, just lastly, kind of a clarification around the interest expense, it looked like it came in pretty high here for Q4, which is the normal interest rate expense to assume for 2024 with the addition of the 5 million now on top of it. Elliot Maltz, Richard Eiswirth, James Molloy, Scott Gordon, Alimera Sciences Inc. I can take that question, So we would expect a typical run rate to be around, you know, ballpark, let's call it $3.5 million on a quarterly basis.

[music].

Okay.

[music].

Yeah.

[music].

Yeah.

Elliot Maltz: But this was adjusted in Q4 because we met one of the exit fee milestones with our loan agreement with SLR that triggered $1.3 million of additional interest expense. And we do anticipate triggering an additional $2.4 million of such contingent interest-related payments during 2024. So we do anticipate that, over the first six to nine months of the year, interest expense will again begin to normalize.

[music].

Alexander David Nowak: Okay, got it. I appreciate the update. Thank you. Thank you, Alex. The next question comes from the line of James Molloy with Alliance Global Partners. Please go ahead.

James Francis Molloy: Hey, good morning, guys. Thank you very much for taking my questions. I was wondering if you could walk through what message has resonated best with the docs here in the fourth quarter going forward and how that sort of changed over the year, if at all? And can you walk through how many reps you currently have working and how retention has been through the year?

Richard S. Eiswirth: Yeah, so Todd may want to comment on that as well. I think, you know, we're a big opportunity for us, especially now that we can talk about, you know, two indications, you know, inflammatory diseases, uveitis, and DME, a lot of patients that are, you know, easy for us to go after those that are already on Osredex, right, because Osredex or Allergan has been promoting, you know, against uveitis And so, there's just a broader group of patients that we can go after. And so, I think those conversations are, you know, a successful opportunity for us as we move forward and will continue to be in 2024 while we await the new data and the synchronicity data. We have about We have 35 territories, you know, across the country right now.

Richard S. Eiswirth: We've had sort of what I would call normal attrition. You know, we have some people that we have decided to turn over in the sales force. We have not had too many people leave to go to competitors or anything like that this year because I think we've got a pretty strong culture here.

Okay.

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Todd Wood: But, you know, we'll always have some turnover in the back half of that sales team. Todd, I don't know if you have anything you want to add to that. Yeah, yeah, I'll add to that, Rick. And as Rick said, you know, Osredex is, you know, the target; there's opportunity to displace that competitively.

Todd Wood: And when we look at messaging, and we look at our advocates of use, you know, they view the disease a little bit differently earlier, some more severe earlier, and then they link the effectiveness of our product to preserving vision and lowering your risk of losing vision. So we really need to leverage those two things, and then really clarify where to position it so it gets positioned earlier in the treatment paradigm. All right, great. Thank you. Then maybe we could do a quick housekeeping.

Yeah.

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James Francis Molloy: Maybe you touched on it in the repair doc comments already. What was the jump in GNA in the fourth quarter? So there were a few items, one-off events, during the fourth quarter. There was about $ 1 million of bad debt expense that we recognized in the fourth quarter that was related to pre-COVID sales by one of our European distributors. And then there was another half a million dollars of severance expense that we recognized during the fourth quarter.

Elliot Maltz: Additionally, we had higher stock-based compensation expense, and this was a result of an equity grant to certain employees during the fourth quarter, which also drove a higher G&A bounce when you look at things quarter over quarter. Okay, there are about two million or so of one-timers in the quarter. Approximately a little bit higher when you factor in GNA, but you're in the right ballpark.

Elliot Maltz: I agree. Thank you very much. Thank you for the question. Thanks, Jim. This concludes the question and answer session. I would like to turn the conference back over to Rick Eiswirth for any closing remarks.

Richard S. Eiswirth: Thank you. Thank you all for participating in today's call and for your continued interest in supporting Alimera. We look forward to sharing our ongoing progress when we report our first quarter results in late April.

Operator: Thank you all very much, and have a wonderful day. The conference has now concluded. Thank you for attending today's presentation. www.alimera.com www.globalonenessproject.org No part of this recording may be reproduced without Mooji Media Ltd.'s express consent. BF-WATCH TV 2021, Copyright 2021 Mooji Media Ltd. All Rights Reserved. No part of this recording may be reproduced BF-WATCH TV 2021, www.globalonenessproject.org BF-WATCH TV 2021, www.globalonenessproject.org Midwestern Science Center www.utah.edu illegally www.utah.edu.au, www.globalonenessproject.org BF-WATCH TV 2021, A Film by G Coleman Cast Editing by G.S. Coleman Music by G.S. Coleman Sound by G.S. Coleman Music by G.S. Coleman, directed by G.S. Coleman, directed by G.S. Coleman Music by G.S. Coleman Starring G.S. Coleman, G.S. Coleman, G.S. Coleman, G.S. Coleman, G.S.

Okay.

Okay.

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Unnamed: Coleman [inaudible] Coleman G.S. Coleman G.S., www.globalonenessproject.org BF-WATCH TV 2021, transcript Emily Beynon The Ultimate Parody Site! www. TheUltimateParodySite.com, www.globalonenessproject.org BF-WATCH TV 2021, https://www.youtube.com.au, The Ultimate Parody Site! www.globalonenessproject.org THE END, BF-WATCH TV 2021 BF-WATCH TV 2021 www.globalonenessproject.org transcript Emily Beynon, www.alimera.com BF-WATCH TV 2021, The Ultimate Parody Site!

Yeah.

Yes.

[music].

Yeah.

Yeah.

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Hum.

Hum.

Uh huh.

Uh huh.

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[music].

Yeah.

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Unnamed: No part of this recording may be reproduced without Mooji Media Ltd.'s express consent. www.globalonenessproject.org www.elliswirth.com, Copyright 2019 Mooji Media Ltd. All Rights Reserved. No part of this recording may be reproduced without Mooji Media Ltd.'s express consent. BF-WATCH TV 2021 BF-WATCH TV 2021 BF-WATCH TV 2021 Nowak, Richard Eiswirth, James Molloy, Scott Gordon, Alimera Sciences Inc Nowak, Richard Eiswirth, James Molloy, Scott Gordon, Alimera Sciences Inc Copyright 2020 Mooji Media Ltd. All Rights Reserved.

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Yeah.

Yeah.

[music].

Yeah.

[music].

Unnamed: Nowak, Richard Eiswirth, James Molloy, Russell Skibsted, Laura Suriel, Elliot Maltz, Scott Gordon, Alimera Sciences Inc., Copyright 2020 Mooji Media Ltd. All Rights Reserved. No part of this recording may be reproduced without Mooji Media Ltd.'s express consent. Copyright 2019 Mooji Media Ltd. All Rights Reserved. No part of this recording may be reproduced without Mooji Media Ltd.'s express consent. Copyright 2019 Mooji Media Ltd. All Rights Reserved. www.globalonenessproject.org No part of this recording may be reproduced without Mooji Media Ltd.'s express consent. BF-WATCH TV 2021