On May 8, 2020 EyePoint Pharmaceuticals, Inc. (NASDAQ: EYPT), a pharmaceutical company committed to developing and commercializing innovative ophthalmic products, reported financial results for the first quarter ended March 31, 2020 and highlighted recent corporate developments (Press release, pSivida, MAY 6, 2020, View Source [SID1234557087]).
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"We are pleased with product revenue performance in the first quarter, despite the negative impact on customer demand caused by COVID-19 pandemic-related closures of customer facilities beginning in March. We are encouraged that certain regions across the country are now starting to reopen for business, allowing us to begin resupplying physicians and ambulatory surgery centers with our innovative products," said Nancy Lurker, President and Chief Executive Officer of EyePoint Pharmaceuticals. "We believe that both YUTIQ and DEXYCU are well-positioned to support physicians and patients in this COVID-19 era, as both products deliver extended duration therapeutic treatment from a single injection, which may reduce the frequency of in-person follow-up visits and contact with the patient’s face and eyes."
Ms. Lurker continued, "We remain committed to our mission of delivering innovative ophthalmic products to patients in need and continue to advance our lead development asset EYP-1901 toward clinical trials. EYP-1901 is an anti-VEGF, tyrosine kinase inhibitor (TKI) six-month sustained release potential therapy using our bioerodible Durasert technology initially targeting wet age-related macular degeneration. Good laboratory practice (GLP) toxicology studies were initiated in March and we remain on schedule to file an Investigational New Drug (IND) application later this year with a Phase 1 clinical trial to follow."
Commercial Performance in First Quarter 2020
Customer demand trended strong for both products during the quarter prior to the emergence of the COVID-19 pandemic in the U.S. causing demand deterioration beginning in March.
During the quarter, public health authorities and government agencies including the Centers for Medicare & Medicaid Services (CMS), recommended the postponement of all
non-essential elective surgeries, including cataract surgery, for an extended period of time during the COVID-19 pandemic. As a result, ambulatory surgery centers (ASCs) closed or limited operations, decreasing DEXYCU product demand and orders. Our sales organization has maintained contact with customers during the pandemic by providing virtual support and education with regard to DEXYCU.
Uveitis and retinal specialist office visits continued to be conducted for YUTIQ, though at reduced frequency, as chronic non-infectious uveitis affecting the posterior segment of the eye can lead to blindness if left untreated.
There have been no disruptions to the supply chains for YUTIQ and DEXYCU and the Company continues to produce finished product for commercial sale.
In April, the Company announced a reorganization of its commercial operations including cancellation or deferral of planned spending to conserve cash due to the COVID-19 pandemic impact on expected revenue. This reorganization was primarily focused on a reduction in the external contract sales organization for DEXYCU. The Company plans to allocate its remaining DEXYCU commercial resources to high-volume ASCs in key U.S. regions.
The Company expects product demand to continue at current decreased levels until COVID-19 related restrictions on elective surgeries and office visits are lifted.
R&D Highlights
In March, the Company initiated GLP toxicology studies for EYP-1901, an anti-VEGF, TKI six-month sustained release product candidate using our bioerodible Durasert technology. EYP-1901 is being developed as a potential treatment for wet age-related macular degeneration, with the potential for future indications in diabetic retinopathy and retinal vein occlusion, all of which are diseases representing attractive market opportunities in need of long-lasting treatments to improve treatment compliance. The Company expects to file an IND with the U.S. Food and Drug Administration (FDA) in the fourth quarter of 2020 with a Phase 1 clinical trial to commence shortly thereafter.
Operations Update
In April, the Company received a $2 million loan through the Small Business Administration’s Paycheck Protection Program (PPP) under the Coronavirus Aid, Relief and Economic Security Act of 2020 (the CARES Act). The PPP loan will enable the Company to retain key commercial infrastructure and employees and avoid furloughs as product demand and revenues remain significantly reduced due to ASC and physician office closures necessitated by the COVID-19 pandemic. The Company plans to use the proceeds of the PPP loan to cover payroll costs, rent and utilities in accordance with the CARES Act.
The reorganization announced in April is expected to result in annual savings of approximately $7 million and one-time savings of approximately $10 million from other planned expenditure cancellations and deferrals.
Review of First Quarter Results Ended March 31, 2020
For the three months ended March 31, 2020, total net revenue was $7.5 million compared to $2.0 million for the three months ended March 31, 2019. Net product revenue for the three months
ended March 31, 2020 was $4.7 million, with $3.6 million for YUTIQ and $1.1 million for DEXYCU, compared to net revenue for three months ended March 31, 2019 of $1.2 million, with $543,000 for YUTIQ and $684,000 for DEXYCU.
Net revenue from royalties and collaborations for the three months ended March 31, 2020 totaled $2.8 million compared to $785,000 in the corresponding quarter in 2019.
Operating expenses for the three months ended March 31, 2020 increased to $18.9 million from $16.7 million in the prior year period, due primarily to increased sales and marketing costs and research and development costs. Non-operating expense, net, for the three months ended March 31, 2020 totaled $1.7 million of net interest expense. Net loss for the three months ended March 31, 2020 was $13.2 million, or $0.11 per share, compared to a net loss of $19.2 million, or $0.20 per share, for the prior year quarter.
Cash and cash equivalents at March 31, 2020 totaled $26.3 million compared to $22.2 million at December 31, 2019.
Financial Outlook
We expect that the Company’s cash and cash equivalents combined with projected cash inflows from anticipated YUTIQ and DEXYCU product sales can fund the Company’s operating plan into 2021 under current assumptions for the duration of the COVID-19-related closures across the U.S.
The Company continues to assess additional cash conservation measures to support its operation through the COVID-19 pandemic.
Conference Call Information
EyePoint will host a conference call today, Wednesday, May 6, 2020, at 8:30 AM ET to discuss the results for the first quarter ended March 31 and recent operational developments. To access the conference call, please dial (877) 312-7507 from the U.S. and Canada or (631) 813-4828 (international) at least 10 minutes prior to the start time and refer to conference ID 7972168. A live webcast will be available on the Investor Relations section of the corporate website at View Source A replay of the webcast will also be available on the corporate website.