Q1 2024 Eyenovia Inc Earnings Call
Okay.
Good afternoon, ladies and gentlemen, and welcome to the first quarter 'twenty 'twenty four earnings conference call. At this time all lines are in listen only mode. Following the presentation. We will conduct a question and answer session. If at any time. During this call you really quiet and you get this.
Please press star zero for operator, this call is being weak.
I would now like to turn the conference over to Mr. Eric with Naples Investor Relations. Please go ahead.
Good afternoon, and welcome to <unk> first quarter 2024 earnings conference call and audio webcast with me today are Chief Executive Officer, and Michael Rowe, Chief Financial Officer, John Gandolfo, and Chief operating Officer, Brent current.
This afternoon, we issued a press release announcing financial results for the three months ended March 31, 2024, we encourage everyone to read today's press.
Courage, everyone to read today's press release as well as I know its quarterly report on Form 10-Q.
For the quarter March 31, 2024, which will be filed with the SEC tomorrow.
The company's press release is available on our website at <unk> Dot Com. In addition, this conference call is being webcast to the company's website and will be archived there for future reference.
Please note that on today's call, we will be discussing products product concepts and candidates some of which have yet to receive FDA approval.
Also note that certain information discussed on the call today is covered under the safe Harbor provision of the private Securities Litigation Reform Act.
We caution listeners that during the call are nobody as management will make forward looking statements actual results could differ materially from those stated or implied by these forward looking statements.
Risks and uncertainties associated with the company's business.
Forward looking statements are subject to a number of risks which are described in more detail on our annual report on.
Form 10-K.
The conference call contains time sensitive information that is accurate only as of the date of this live broadcast May 15 2024.
<unk> undertakes no obligation to revise or update any forward looking statements to reflect events or circumstances. After the date of this conference call.
That doesn't they required by the applicable securities law.
That said I'd like to turn the call over to Michael Rowe Adobe as Chief Executive Officer Michael.
Thank you, Eric and welcome everyone to our first quarter 2024 financial results Conference call.
During the first quarter, we took several meaningful steps to strengthen the inherent value of our company.
Which currently includes our novel off the jet dispensing technology, two FDA approved products with coffee and Clobetasol and a third micropyle late stage III development.
Together these products address the U S market worth more than $3 3 billion annually.
Speaker Change: By being able to address a broad range of patient needs with a portfolio of novel technologies and products. We believe we are building a solid foundation upon which to drive accelerating sales growth in 2025 and beyond.
Our main focus is on the successful commercialization of big Combi in Clobetasol in the expedited development took micropyle.
We are in the process of establishing a solid foundation for our portfolio with a second FDA approved product to be launched by our sales force in the next few months and the potential blockbuster microbiome in the next couple of years at the same time, our finance and business development teams are diligently executing on an overall strategy.
To ensure that I know that he is well positioned for success.
The immediate near term and through these challenging times and the capital markets for small cap Lifesciences companies, yes.
Now, let's take some time to provide an update on our Micropump program, which is our phase III candidate for progressive myopia.
Pediatric progressive myopia has been called an epidemic in the United States and China, where we have licensed the rights to micropyle to our partner Arctic vision.
S alone approximately 5 million children are at higher risk of losing functional vision due to this disease in which the eye elongate and can result in separation of the retinal tissues from the back of the eye.
Third party sources have estimated the value of this market, which currently has no FDA approved drug treatment options at $1 $8 billion annually with a similar opportunity in China.
Speaker Change: The present standard of care involves glasses and contact lenses, which can reduce progression, but does not stop it and these are often not appropriate or well tolerated by the youngest children who are most at risk.
And this is where microbiome can make a significant difference addressing this unmet medical need.
As a reminder, microclimates, our investigational eight micro either ophthalmic spray of Astral plane delivered by the Okta jet currently being evaluated as a potential treatment for pediatric progressive myopia in the chaperone study.
The results of this study are positive the FDA has agreed that the single for your evaluation could be sufficient for an NDA filing or approval.
This is based upon several prior atropine studies in children in Asia, which demonstrated efficacy in slowing myopia progression by as much as 60%.
[noise] Micropyle may also offer benefits far beyond what would be obtained with an eye drop for the optical technology children on our in our clinical study as young as six years old are dosing themselves every evening without parental involvement.
They can do this because the after jet doesn't require any head tilting orben emulation of Eyedropper bottles that makes Amy easier with a built in there. So that children can see exactly where they are spurring the side effects of atropine, which have overwhelmingly been mild and transient in our study have been consistent with what we have come to expect with ours.
The bus.
And its commercial forum, we plan to have micropyle equipped with our optic care system, which can notify patients and their parents want to administer their spray dose as well as communicate important compliance or adherence information for the treating physician.
We are continuing to advance the phase III chaperone study and our clinical team is exploring a potential protocol amendments that could greatly expedite the study timelines and registration of microclimates.
The protocol Amendment will include a planned limited review of the chaperone data by an independent data safety monitoring Committee later in the fourth quarter of this year when approximately two thirds of chaperone patients well have reached the study efficacy endpoint.
If recommended by the committee, we could potentially be looking at a substantially derisk program, enabling a potential NDA submission as soon as late 2025 or early 2026 as you can imagine we believe this program would that would be a very attractive opportunity for commercialization by us or a larger partner.
We are eager to reach that milestone this micropyle, if approved with anchor our commercial portfolio.
Speaker Change: Perfectly complement both the combi and clobetasol, providing significant value to eye doctors patients and payors by addressing a broad spectrum of unmet needs.
Speaker Change: Now, let's talk about what that is all for Playa de Palmas suspension, 0.05% U S rights to which we acquired from Taiwan based for most of the Pharmaceuticals last August Borgata.
It's always approved by the FDA on March 4th and in rapid succession, the new drug application or NDA was transferred to us from Formosa.
There have been no new ophthalmic steroid approved in the U S. In over 15 years. The last one was doors, all my outcome, which for many years was selling well over $100 billion annually.
That is all addresses many of the unmet needs for an ophthalmic steroid with a highly differentiated clinical and pharmacologic profile, including twice a day dosing and from a safety standpoint fewer than 1% of patients experiencing southern eye pressure increases that may be more common with other steroids.
Speaker Change: Intra ocular inflammation in the eye pressure spikes are the two main safety issues that I surgeons want to avoid and are paying particular attention to.
Can lead to significant clinical consequences complications and non reimbursable costs to the providers. We believe that clobetasol has the potential to become the leading option in the post surgical space.
Unlike conventional steroid drugs Clobetasol was developed using a breakthrough innovation in ophthalmic formulation and active ingredients development.
Speaker Change: This unique post ocular surgery steroid is the first product developed using for most proprietary E. T N T nano particle formulation platform, which.
Which reduces an active pharmaceutical ingredients particle size with high uniformity impurity, thereby allowing penetration to rollout relevant compartment in the eye.
Ultimately enhancing bioavailability.
The nanotechnology is so effective that essentially makes the suspension act like a solution in.
In fact patients don't even have to shake the product prior to use.
It's just one of the unique elements of our approved label.
While this might not seem like a big deal. It does point to a difference between cabela's and other ophthalmic steroids.
Speaker Change: Well that is all efficacy and previously discussed safety profile, it's another point of differentiation.
Clinical studies nearly nine out of 10 patients achieved complete absence of post surgical pain.
Six out of 10 achieved complete absence of inflammation within 15 days post ocular surgery.
And the incidence of all side effects was below 2%.
Moreover, twice a day dosing without titration, there's a benefit all patients can understand especially versus other treatments, which require dosing up to four times. A day. This is particularly important as eye surgery patients are often on multiple drugs during recovery, so any advancement, which simplifies the treatment regimen would be welcomed by ice.
Doctors and patients alike.
Speaker Change: It is estimated that there are more than 7 million ocular surgeries in the U S. Each year.
Topical ocular steroids in steroid combinations currently totaling $1 $3 billion in sales. So this is a very significant market opportunity for us and one that we think we can capture a mid single digit market share over the next three to four years.
We continue to prepare for a robust commercial launch of cobalt installed later this summer and longer term, we see a potential opportunity to develop a formulation of clobetasol per hour off to get the Spencer as a treatment for acute try on.
And we plan to engage with the FDA in the coming months discuss a path forward in that indication.
Lastly, some of you have asked me about the brand name for Clobetasol that trade name is currently being reviewed by the FDA and we expect a decision from the agency later in June for our launch.
Staying on the topic of dry eyes for a moment and late February we entered into a collaboration agreement with SPN Nano pharma innovation led clinical stage Nello pharmaceutical company, focusing on creating impactful best in class nano therapeutics targeting large unmet medical needs SPN proprietary myself.
Critical platform, the N and M and P platform allows for the distribution of an active pharmaceutical ingredient into three or four phases, thereby improving its bioavailability bio distribution and pharmacokinetics for the terms of the agreement <unk> will conduct feasibility and process manufacturing testing pedestrians.
Phase III ready ophthalmic cyclosporin formulation SPN 101 in combination with the Gen. Two after jet device as a potential treatment for chronic dry eye.
Dry eye is a very significant market opportunity with some external sources valuing it at $3 6 billion annually in the U S.
Combination of our faster working cyclosporin I'm the opposite yet.
Speaker Change: A powerful addition into this large and underserved market.
Speaker Change: But the SPN collaboration we may have a phase III ready asset next year and product priorities as part of our collaboration SPN will seek independent funding towards advancing the development of this candidate.
And now I'll provide an update on the Combi first and only FDA approved fixed combination of two popular pupil dilation drugs Tropicamide and people effort and the first approved ophthalmic spray using the <unk> platform.
We are midway through the hiring and training of our 12 person sales force and we have satisfied state licensure requirements and states covering over two thirds of the U S population with a distribution strategy to reach offices in those states, where we do not yet have a license.
The sales force has been out for five weeks now since their training and they're making inroads into this market. The sales process requires demonstrating in training. The office staff on the use of big coffee, which is not difficult, but it's important to make sure that these offices have a great initial experience I realize all of the benefits of the technology.
To date, they have traded converted about 50 offices, many of whom you'll see in our social media stream as they talk about their experience with the product. We have also partnered with these offices in a waiting room promotional campaign, showing how they use with coffee because they care about their patients and we plan on collecting market research information.
From these same offices, so that they can both bolster their own practice satisfaction scores.
There are a number of reasons why offices and institutions like the University of California, and Premier buying groups like vision source have turned to mccamey, we'd been combi. They dilation process is neither since the spray of mouth is a fraction of Watson and Eyedrop, it's comfortable with virtually no stinging report them in clinical studies, it's hygienic with no protruding tips.
Speaker Change: That could accidentally touch one patient.
When using the same bottle and it works reliably and quickly.
To further demonstrate the potential benefits of the Combi. We recently completed a phase four study to characterize the lowest effective dose to achieve my drives us for certain eye care patients. The current standard of care My drive supply drops could present safety and tolerability risks, including potential systemic cardiovascular side effects in older patients.
Speaker Change: Particularly those with high blood pressure in this phase four study 29 subjects were treated with a half dose have been copied or eight micro liters per eye.
We won't recap all of the positive results again, but two thirds of subjects achieved clinically relevant pupil dilation within 30 minutes post dose and 83% achieved relevant pupil dilation at 60 minutes post dose importantly, the lower dose have been coffee was safe well tolerated with only three subjects reported mild installation site trade pain.
And one with mild dry eye upon installation and interestingly enough. Most patients returned to a functional pupil size as soon as three and a half hours. After the drug was used the duration of pupil dilation is sometimes an issue for patients, especially those that may need to get back to work. So this funding should help by Doc.
Determined what might be best for an individual patient.
Turning now to our overall sales and marketing and marketing initiatives complement the efforts of our sales team we entered into a co promotion agreement with Novabay Pharmaceuticals. The cross promote coke that is all the hundreds of eyecare professionals through its telephone based sales force at the same time, our skilled sales force will promote their prescription.
I've been over anti microbial live and lash solution to our doctors who can include this product in their suite of pre and post surgical offerings.
In addition to the benefit of a big promotional and potential sales for both sides. Each party will also get a percentage of the sales that they generate this is an extremely cost effective way to boost our commercial sales reach and we believe this agreement will be very beneficial to both parties.
This agreement with Novabay complements our recent announcement with vision source that patient is they haven't been coffee as an approved product for its membership with more than 3000 locally owned optometry offices. So while our own sales force is targeted this agreement allows us to significantly expand our commercial reach particularly in more.
We're all areas, where we may not be providing direct sales coverage. Currently we are already gene cells have been comic division source member offices.
Before turning the call over to Brent to provide a manufacturing update I will conclude with a recap of recent national ophthalmology medical meetings that we participate in but the first was the American society of cataract and refractive surgery annual meeting or <unk> in Boston during NASS Crs, we featured our entire suite of commercial products.
Speaker Change: The Combi clobetasol in Avenova, both our sales and medical affairs teams will present to demonstrate the products reviewed data answer questions and provide the 10 days with the opportunity to purchase these products on site.
We also attended vision source exchange in Orlando.
As you source exchange is the country's largest gathering of private practice optometrists with more than a thousand of the most successful loadings in the nation.
The event featured continuing education keynote speakers exchange only pricing for more than 100 vendors and opportunities to network with colleagues who were on hand to demonstrate and sell them. It can be there as well and just recently we deliver the presentation at the association for research in vision and Ophthalmology 2024 annual meeting.
Speaker Change: ARVO presentation detailed results from a study demonstrating that for most of this AT&T technology on which the development of a club that's always base improve the solubility and bioavailability of topical ophthalmic medications a T N T. Much like our <unk> dispenser represents an exciting new ophthalmic technology and we are thrilled to feature both.
Speaker Change: Our product profile of our portfolio.
Our presence at National medical and commercial meetings like these are key the ratio awareness of the breadth of our product portfolio and are a critical component of our commercialization strategy.
We plan to attend more such meetings later this year.
At this point I'd like to turn the call over to our Chief operating Officer, Brent turn for a manufacturing update Brian.
Thank you Michael.
As previously mentioned by Michael with our sales staff considering their screening.
<unk> seen an uptick in the economy feels orders our operations team is working closely with our commercial team to ensure that our growing customer base is being provided with best in class customer service.
Enabled by the procurement of state licensing covering two thirds of the U S population are women at city facility serves as our primary distribution center from new comedy Redwood.
Redwood city supported by manufacturing engineering supply chain quality and regulatory professionals, all of whom are laser focused on order fulfillment recognize were integrally in tourist customer satisfaction and our fuel. So the excitement is providing critical practices across the country with our ground breaking technology manufacturing operations have.
<unk> been performing to expectations and supply of the Columbia remains sufficient to fulfill print sales.
In addition to distributing mid Combi Redwood City will also be leveraged as the initial distribution hub for Clobetasol.
Our operations team is actively optimizing distribution processes and preparation of product receipts for most of the pharmaceuticals has initiated the manufacturer club that is old and is on schedule for delivery and our subsequent shipments later this summer. These preparatory activities for currently progressing as planned.
Our facility in Reno wasn't perched selected to support the future distribution of new via products as you can teens warehousing infrastructure conducive to the proper storage and handling of drug product.
Our operations team also comprised of manufacturing engineering supply chain and quality are actively installing invalidating systems similar to those in Redwood city, but a larger scale.
When complete this increased storage capacity will be complementary to Redwood city and provides us with the flexibility to handle future consumer needs.
Speaker Change: And we're also establishing internal logistics capabilities alumni transportation of materials between the two locations unbridled my large promotions shipping companies.
<unk> is also progressing with plans to introduce Jimmy Choo into the commercial market, our Redwood City facility, which houses studios urge clean rooms, and use of fixed fill and finish operations is currently preparing for the prediction of registration batches required for future <unk> submission.
These preparations include marked improvements aimed at increasing performance inefficiencies. Our engineering team is also hard at work planning testing refining and generating documentation to support the Gen. Two platform. These activities bear significant similarities to our June one platform and our FDA inspection successes, which in one combined with.
And ever increasing technological knowledge base suggested successes with Gen. One will be Russell Cubic's region too.
Speaker Change: Further to the expansion of our capacity to read a facility has optimized our new injector manufacturing process, culminating in executing process validation builds the product generated during this field is being prepared for performance testing. He's ability test results suggested products should be should perform as expected.
I classify these achievements was impressive.
He has entered into the commercial market and is being well received demonstrating the RTG platform is capable and both the technology and our processes are able to fulfill the rigorous standards established by regulatory bodies and scale.
I'd now like to turn the call over to our Chief Financial Officer, John Gandolfo to provided foundational to June.
Thanks, Brian.
But the first quarter of 2024, we reported net loss of approximately $10 9 million or 23 per share on approximately $46 6 million weighted average shares outstanding.
This includes a five cent loss related to the $2 $5 million of course.
Bring them micra being back to I know <unk>.
First quarter 2024, net loss compares to a net loss of $5 7 million or <unk> 15 per share and approximately 37 4 million weighted average shares outstanding for the <unk>.
Speaker Change: First quarter of 2023.
Research and development expenses totaled approximately $4 $4 million for the first quarter of 2024, and this compares to $2 $5 million for the first quarter of 2023, an increase of 75, 7%.
In the first quarter of 2020 for G&A expenses were approximately $3 $8 million as compared to $2 9 million for the first quarter of 2023, an increase of 36%.
Speaker Change: Total operating expenses for the first quarter of 2024 were approximately $10 $3 million, including the previously mentioned $2 $5 million and repatriation costs for bringing micro being back to where I know yes.
This compares to $5 $5 million for the same period in 2023 and represents an increase of approximately 88%. Our first quarter 2020 for operating expense figure also included approximately $1 5 million of noncash expenses.
At March 31, 2024, we reported unrestricted cash of approximately $8 million.
And this does not include the $2 $2 million of additional capital the company raised in April of 2024.
We have reduced our planned spending by approximately $800000 per quarter compared to the first quarter of 2024 cash based operating expense levels and we're focusing our resources on validating our gen two device with the FDA.
Marshals inmates combi in Clobetasol and the completion of the microbial chaperone study.
We are also exploring several options and structures to ensure we have sufficient capital to support these programs and continued to execute that growth strategy.
I'll now provide an update on our existing licensing programs with Arctic vision, which covers all three of our products in China, and South Korea, Microplane micro line of rapid share and met Combi and provides a sales royalties in addition to development milestones.
<unk> in particular is a significant opportunity in China for pediatric myopia.
If approved <unk> could be a potentially meaningful source of non dilutive funding for our company over the long term.
To date, our license agreements have generated approximately $16 million in license fees and we have the potential to earn an additional $25 million and non dilutive net license of development milestones from Arctic vision over the next three to four years.
Our products are approved upon commercialization. We also are eligible to earn significant sales royalties as well.
We are also continuing to assess potential pipeline expansion opportunities similar to our for most of the agreements and we will continue to leverage the <unk> technology to address unmet needs in additional large ophthalmic indications beginning with dry eye.
As Michael indicated earlier, we believe the steps that we've taken to date to create a solid foundation upon which we will drive meaningful sales growth in 2025 and beyond.
In conclusion, we are very pleased with our performance in the first quarter of 2024.
And to summarize the key highlights today we.
We announced FDA approval of Clobetasol.
For the treatment of pain and inflammation following ocular surgery, we reacquired the development and commercial rights to micro paying for the U S and Canada.
Entered into a co promotion agreement with Novabay pharmaceuticals, whereby novabay when market clobetasol through its U S physician defense channel. The agreement also gives us access to their prescription avenova anti microbial live and lash solution.
Speaker Change: We announced that our second manufacturing facility in Redwood City, California has been approved by the FDA as a commercial manufacturing facility.
We participated in three important national ophthalmology medical meetings.
Crs fishing source exchange and <unk>, which provides excellent platforms for us to demonstrate our commercial products and educate doctors on their use.
And finally, our licensing agreement with Arctic vision is progressing well and remains a promising avenue for significant development and regulatory milestones as well as the potential for sales royalties in the future.
That concludes our prepared remarks, we would like to now open the call to questions operator.
Speaker Change: Thank you ladies and gentlemen, we will now begin the question and answer session. So do you have a question. Please press star followed by one year.
Yeah.
Has been nice.
Thank you Alicia declining from the polling process. Please press star followed by two and if you are using a speaker phone. Please.
The handset.
Pressing Amit.
Yeah.
Speaker Change: We have a question from Matt Kaplan.
Matthew Lee Kaplan: From Ladenburg. Please go ahead.
Hey, guys. Thanks for taking the question and congrats on the progress during the quarter.
Can you talk a little bit more about the.
Transition that you're planning to the Gen two device and for your portfolio of products and what you think it will take to get the thumbs up from FTA for that site.
Yes, Hi, Matthew and take care for calling in.
There's basically two things we need to do the first is we have to demonstrate that the gen. Two <unk>.
Looks like the Gen. One in terms of performance how much drug it delivers how it delivers the drug and so on and Brett and his team is deep in doing that.
The second thing that we believe the FDA is going to ask for is a very small bridging study that we can essentially do in three days.
Just to give them the additional.
Matthew Lee Kaplan: The knowledge that when people actually use us in real life. They get the same result, and like I said, that's literally a three day study.
That could be done while we are manufacturing a gen two supply.
Matthew Lee Kaplan: So at this point our plan as we've already submitted for the FDA meeting, we would like but likely have that meeting in mid July.
Assuming that goes as we believe it will we will make the gen. Two supply shortly thereafter, while that supply is.
He is up for stability, which is 12 months, we will complete a small bridging study and then basically we take all of that information and file an S. N D. A which I believe has a six month turnaround.
So that by the end of next year.
Matthew Lee Kaplan: May be ready to go into the market with the Gen. Two but the good news is that I believe we've got all the boxes checked and I'm feeling very confident that we're going to be able to do this and it's not going to be anything that's going to be difficult for us.
Brent did I Miss anything.
Hello, Michael.
Thank you.
Okay, Great and then and then just a second question.
On a micro <unk>.
Do you plan to meet with the FDA soon.
When do you think you'll have that squared away in terms of the protocol amendment and be able to do that analysis in the fourth quarter.
Right well my clinical and regulatory team tells me that we can do the protocol amendment without missing without meeting with the FDA because we are putting into place a data monitoring committee. So we at I know where to go do not actually see the results and so the DMC will then look at the data.
Probably in mid October.
And basically they come out of that meeting with a thumbs up that everything looks great for for example in the very rare case that nothing is happening and there'll be a thumbs down.
Tell us that but basically they gave us the indication of whether or not there is something there now from looking at the masks data my team certainly thinks theres a very very good signal one that's why we're optimistic about this and the DMC would then confirm that and then once they do confirm that that's when we meet with the FDA and we say look this is what we have this.
With the DMC said, we have the statistical power at this point. This is why would we would like to stop the study and go right to the analysis, so that would probably happen.
Matthew Lee Kaplan: The DMC meets in October it would be one or two months after that.
Matthew Lee Kaplan: Yeah.
Okay, Okay that makes sense great.
Thanks for taking the questions.
Thank you Matt.
Our next question comes from the line of Mike <unk> from <unk>.
Please go ahead.
Thank you, Yeah, Hi, Michael and team thanks for taking our questions and exciting to see the new commercial opportunities here in the near term.
So actually for thank you so for after just development in presbyopia with App for sure I believe its a racist pharma that's planning their pillow car pine launch for first half 'twenty four.
Curious what you'd want to see just in the near term kind of what you'd like to see from that from the overall presbyopia market to have app for sure it'd be more of a top strategic priority.
Matthew Lee Kaplan: I just had one follow up on the Gen two device.
Great Matthew Thank you. It's a great question. So right now I believe beauty, which is the only product approved in the market is selling somewhere between 15 and $18 million a year, which.
Obviously, it was underperforming with everybody had hoped for so if or assess or anybody can go out there and we start seeing a market that starts to grow and get to 50 or $100 million that would obviously.
Obviously, it would be very attractive to us.
Theres two things going on here. One is that you know people are looking at the efficacy and side effects of these products, but the other thing is also people like the after Jeff. So the eye drops that are going to be out there will likely all compete on who last the longest and who has the fewer side effects, we are completely different by having the optic.
Which end market research.
Majority of potential users. They just like the device for all sorts of reasons its need it doesn't mess up makeup. It's discrete it's socially acceptable lots of reasons to use that but to go into this market right now and the spend 20 or $30 million doesn't make sense to make not in the market of this size.
Matthew Lee Kaplan: So we are very comfortable with letting other people go in their spend the resources build this up to a point, where we can say okay, great you've done a great job with the eye drops we can come in with something completely different completely differentiated that we know people like and you've done the heavy lifting for us. So that's what we'll be looking for.
Very helpful and I think that definitely makes sense strategically.
So then just one question on the Gen. Two device so for the Gen. Two after jet can you remind us if that focus is squarely on the pediatric myopia program or is there any chance that the gen. Two device could be relevant for the current mid Combi mydriasis approval.
So gen. Two ultimately will be our only platform.
The reason that we had forced yes first in Mckamie is because thats. The only approved product. So we have to we have to measure it and validated against an approved product, which has been copied but what it does Matt is by doing it against Smith Combi all of the stuff we have to do with performance testing and validation it's basically.
Michael for all the other programs. So we basically have the recipe that we FDA has accepted so that when we get to the other products. The other one would be micropyle, we just follow the same recipe.
Speaker Change: Gotcha understood. Thank you very much guidance and congrats again.
Thank you.
Our next question comes from the line of Ken <unk>.
Brooke claim.
Markets. Please go ahead.
Yeah.
Thanks.
Good evening.
First is you.
How should we think about the runway situation given.
Speaker Change: The.
Reductions in spending and other adaptations to your plan.
Speaker Change: Okay.
John do you want to take that.
Speaker Change: Sure.
So.
The way we're looking at is that we feel our current cash plus reimbursement from our partners for <unk>.
Speaker Change: Two product development expenses as well as the launch of Clobetasol, 60% gross margin.
Speaker Change: It gives us cash resources.
There are sufficient that we get that data readout on micro opinion, which Michael mentioned.
Towards the latter part of the fourth quarter of 2024.
In addition, as I mentioned in our prepared remarks, we're exploring various options and structures to ensure that we have enough capital and support passed that point.
So yeah, I think that's probably the best way to look at it.
In terms of the reduced cash spending that we've put in place I think that was just sound business principles that we felt like we should reduce wherever we could.
One final comment with respect to our cash based expenses is that a large amount of our expenses are project base.
If needed we could defer some of that spending on some of those longer term projects now we don't believe that that's necessary or and we haven't planned for it but it is important to note that we do have flexibility with our spending going forward too.
Thank you I would also add to that in my comments about SPN. For example that we are getting partners now that when they come in they basically also come in with the funding to do the development rather than us having to come up with that so that opportunity without advanced Quik app.
Cyclosporin for dry eye.
<unk> is doing a great job in raising that money. So that we can do our work, which is the sweat work to get it done, but they're gonna be able to bring much of that cash in.
Great. Thank you and with regard to Gen. Two.
Are we still dependent upon gen two to get a cost of goods structure that.
We'll help you achieve profitability.
John Yes exactly.
Speaker Change: So to give you an idea at the one of the main main reasons why we we looked for FDA approval of them economy with Jim. One is we wanted to go through the regulatory process and get approval with.
With the product was had never been done before.
And.
Our our focus was always going to be to develop a commercial product, which is gen. Two as you stated at a much more efficient cost of goods sold.
Speaker Change: So to give you. An example, the cost of goods sold on the Gen. Two.
Speaker Change: <unk> delivery system.
Speaker Change: He is probably about 20% of the cost of goods sold of of the Gen. One system.
So it makes all of our programs generate.
Gross margins between.
At the low end, probably 60% to 70% at the high end, what micra paying north of 90% so.
That is going to be the key driver that gets the company to profitability.
Okay, great and.
How is.
Speaker Change: We're mostly doing with getting the export approval work out.
Well, it's funny you asked that so.
Taiwanese FDA was in there doing their inspections, they're now.
Waiting for their final report.
I have been told by my partners in Taiwan that you can push them too.
Too hard so we don't do that but in the meantime, we have labeling ready we have all the other preparations rather and we're doing everything we can so the minute they get that permit.
Speaker Change: They can drop the pallets off at the airport and send them over to US right now we're counting on that happening somewhere in <unk>.
Early to mid July so that our plan is we want to be on the street by.
By August 1st.
Great.
Speaker Change: Thanks, so much.
Thank you okay.
There are no further question at this time I would now like to hand, the call over to Mr. Matthew. Please go ahead.
Thank you operator, and thanks to everybody on the call today and through the development of <unk>. Our company now has two FDA approved products, both very differentiated and well positioned in the eye care space.
Our platform technology. The after Jeff is going to be presented to the FDA. This summer and it's most technologically advanced form and we look forward to rolling it out next year and micropyle a potential blockbuster in the very underserved pediatric progressive myopia market is well positioned to be substantially derisked later this year.
I encourage everyone to keep up to date with our progress on that and there will be a dot com or through our social media links.
This concludes our call and we look forward to talking with you again in August Thank you.
Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.
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