EYP-1901 Pipeline Program - EYP-1901 is a key pipeline program utilizing Durasert drug delivery technology[4] - Phase 2 "DAVIO 2" clinical trial in wet AMD is underway, and the NPDR "PAVIA" trial is expected to begin in September 2022[4] - Phase 1 "DAVIO" clinical trial demonstrated positive safety and efficacy data for EYP-1901[4] - EYP-1901 utilizes a bioerodible formulation of Durasert for sustained, zero-order kinetics drug release over 6-9 months[8] - In the DAVIO Phase 1 clinical trial, 53% of patients did not require supplemental anti-VEGF treatment at 6 months[18, 20] - The DAVIO Phase 1 clinical trial demonstrated a clinically significant reduction in treatment burden of 73% at 12 months[17] Financial Position - The company had $171 million in cash and investments as of June 30, 2022, providing a cash runway into the second half of 2024[5, 42] - Net product revenues in Q2 2022 were $11.3 million, a 30% increase over Q2 2021[42] - The commercial franchise is projected to break even in 2022[5, 42] YUTIQ Product - YUTIQ (fluocinolone acetonide intravitreal implant) 0.18 mg is approved for the treatment of posterior segment uveitis[36] - Customer demand for YUTIQ increased by 43% in Q2 2022 compared to Q1 2022[41]

[Report Information](index=1&type=section&id=Report%20Information) - This is a Quarterly Report on Form 10-Q for the period ended June 30, 2022, filed by EyePoint Pharmaceuticals, Inc. (Trading Symbol: EYPT) with Commission File Number 000-51122[1](index=1&type=chunk)[2](index=2&type=chunk)[3](index=3&type=chunk) - The registrant is classified as a **Non-accelerated filer** and a **Smaller reporting company**[4](index=4&type=chunk)[5](index=5&type=chunk) - As of August 1, 2022, **34,071,899 shares** of common stock were outstanding[5](index=5&type=chunk) [PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Unaudited Financial Statements](index=3&type=section&id=Item%201.%20Unaudited%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for periods ended June 30, 2022, and December 31, 2021, prepared in accordance with GAAP [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) | Metric | June 30, 2022 (in thousands of USD) | December 31, 2021 (in thousands of USD) | Change (in thousands of USD) | | :------------------------------------ | :----------------------------- | :------------------------------- | :-------------------- | | **Assets** | | | | | Cash and cash equivalents | $82,134 | $178,593 | $(96,459) | | Marketable securities | $89,033 | $32,965 | $56,068 | | Total current assets | $205,866 | $237,745 | $(31,879) | | Total assets | $233,433 | $263,372 | $(29,939) | | **Liabilities** | | | | | Total current liabilities | $33,390 | $23,658 | $9,732 | | Total liabilities | $82,067 | $78,992 | $3,075 | | **Stockholders' Equity** | | | | | Total stockholders' equity | $151,366 | $184,380 | $(33,014) | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) | Metric | Three Months Ended June 30, 2022 (in thousands of USD) | Three Months Ended June 30, 2021 (in thousands of USD) | Six Months Ended June 30, 2022 (in thousands of USD) | Six Months Ended June 30, 2021 (in thousands of USD) | | :---------------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | :------------------------------------------ | :------------------------------------------ | | Product sales, net | $11,318 | $8,738 | $20,328 | $15,540 | | Total revenues | $11,565 | $9,013 | $20,859 | $16,336 | | Total operating expenses | $30,781 | $19,992 | $58,360 | $38,250 | | Loss from operations | $(19,216) | $(10,979) | $(37,501) | $(21,914) | | Net loss | $(19,406) | $(10,010) | $(40,382) | $(22,290) | | Net loss per share - basic and diluted | $(0.52) | $(0.35) | $(1.08) | $(0.83) | | Comprehensive loss | $(19,592) | $(10,010) | $(40,621) | $(22,290) | [Condensed Consolidated Statements of Stockholders' Equity](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) | Metric | Balance at April 1, 2022 (in thousands of USD) | Balance at June 30, 2022 (in thousands of USD) | Balance at January 1, 2022 (in thousands of USD) | Balance at June 30, 2022 (in thousands of USD) | | :------------------------------------ | :------------------------------------ | :------------------------------------ | :------------------------------------ | :------------------------------------ | | Common Stock Par Value Amount | $34 | $34 | $34 | $34 | | Additional Paid-In Capital | $756,070 | $760,209 | $752,602 | $760,209 | | Accumulated Deficit | $(590,073) | $(609,479) | $(569,097) | $(609,479) | | Total Stockholders' Equity | $166,819 | $151,366 | $184,380 | $151,366 | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) | Metric | Six Months Ended June 30, 2022 (in thousands of USD) | Six Months Ended June 30, 2021 (in thousands of USD) | | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | | Net cash used in operating activities | $(39,281) | $(25,642) | | Net cash used in investing activities | $(56,454) | $(25) | | Net cash (used in) provided by financing activities | $(724) | $108,388 | | Net increase (decrease) in cash, cash equivalents and restricted cash | $(96,459) | $82,721 | | Cash, cash equivalents and restricted cash at end of period | $82,284 | $127,780 | [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [Note 1. Operations](index=7&type=section&id=Note%201.%20Operations) - EyePoint Pharmaceuticals develops and commercializes innovative therapeutics for serious eye disorders using its proprietary Durasert® technology[23](index=23&type=chunk) - Commercial products include **YUTIQ®** for chronic non-infectious uveitis and **DEXYCU®** for postoperative inflammation, both sold in the U.S.[23](index=23&type=chunk) - As of June 30, 2022, the company held **$171.2 million** in cash, cash equivalents, and marketable securities, expected to fund operations for at least the next twelve months[26](index=26&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=8&type=section&id=Note%202.%20Summary%20of%20Significant%20Accounting%20Policies) - Revenue is recognized when customers obtain control of promised goods or services, reflecting expected consideration, following the five-step model under ASC 606[30](index=30&type=chunk) - Product sales (YUTIQ and DEXYCU) are recorded at wholesale acquisition costs, net of reserves for variable consideration including discounts, chargebacks, rebates, and returns[31](index=31&type=chunk)[32](index=32&type=chunk) - License and collaboration revenue is recognized based on agreement terms, with upfront payments upon IP delivery and sales-based milestones upon cumulative sales achievement[39](index=39&type=chunk)[41](index=41&type=chunk) [Note 3. Revenue](index=10&type=section&id=Note%203.%20Revenue) | Product | Three Months Ended June 30, 2022 (in thousands of USD) | Three Months Ended June 30, 2021 (in thousands of USD) | Six Months Ended June 30, 2022 (in thousands of USD) | Six Months Ended June 30, 2021 (in thousands of USD) | | :------ | :-------------------------------------------- | :-------------------------------------------- | :------------------------------------------ | :------------------------------------------ | | YUTIQ | $7,421 | $4,166 | $12,032 | $7,196 | | DEXYCU | $3,897 | $4,572 | $8,296 | $8,344 | | **Total Product Sales, net** | **$11,318** | **$8,738** | **$20,328** | **$15,540** | | Category | Beginning Balance Jan 1, 2022 (in thousands of USD) | Provision Current Year Sales (in thousands of USD) | Deductions/Payments Made (in thousands of USD) | Ending Balance June 30, 2022 (in thousands of USD) | | :------------------------------------ | :----------------------------------------- | :---------------------------------------- | :-------------------------------------- | :---------------------------------------- | | Chargebacks, Discounts and Fees | $1,153 | $6,580 | $(5,698) | $2,035 | | Government and Other Rebates | $1,821 | $3,554 | $(3,490) | $1,885 | | Returns | $379 | $329 | $(198) | $510 | | **Total** | **$3,353** | **$10,463** | **$(9,386)** | **$4,430** | - An Exclusive License Agreement with Betta Pharmaceuticals in May 2022 granted an exclusive, royalty-bearing license for **EYP-1901** in Greater China for tiered mid-to-high single-digit royalties on net sales[72](index=72&type=chunk)[73](index=73&type=chunk) [Note 4. Inventory](index=14&type=section&id=Note%204.%20Inventory) | Category | June 30, 2022 (in thousands of USD) | December 31, 2021 (in thousands of USD) | | :------------- | :--------------------------- | :------------------------------- | | Raw materials | $1,946 | $2,727 | | Work in process | $595 | $405 | | Finished goods | $713 | $484 | | **Total inventory** | **$3,254** | **$3,616** | [Note 5. Intangible Assets](index=14&type=section&id=Note%205.%20Intangible%20Assets) | Metric | June 30, 2022 (in thousands of USD) | June 30, 2021 (in thousands of USD) | | :------------------------------------ | :--------------------------- | :--------------------------- | | Patented technologies (Gross carrying amount) | $68,322 | $68,322 | | Accumulated amortization | $(46,803) | $(44,343) | | **Net book value** | **$21,519** | **$23,979** | - Amortization expense for intangible assets was **$615 thousand** for both three-month periods and **$1.2 million** for both six-month periods ended June 30, 2022 and 2021[78](index=78&type=chunk) [Note 6. Accrued Expenses](index=14&type=section&id=Note%206.%20Accrued%20Expenses) | Category | June 30, 2022 (in thousands of USD) | December 31, 2021 (in thousands of USD) | | :------------------------------------ | :--------------------------- | :------------------------------- | | Personnel costs | $4,881 | $7,321 | | Clinical trial costs | $2,243 | $753 | | Sales chargebacks, rebates and other revenue reserves | $3,920 | $2,974 | | Commissions due to DEXYCU commercial partner | $1,837 | $1,518 | | **Total accrued expenses** | **$14,312** | **$14,422** | [Note 7. Leases](index=15&type=section&id=Note%207.%20Leases) - The company amended its headquarters lease in March 2022, extending 13,650 square feet of lab/manufacturing space to May 2028 and adding 11,999 square feet of office space[83](index=83&type=chunk) - An out-of-period adjustment of **$2.9 million** increased lease liabilities and ROU assets due to the lease amendment, with no impact on operations or cash flows[84](index=84&type=chunk) | Category | June 30, 2022 (in thousands of USD) | December 31, 2021 (in thousands of USD) | | :---------------------------------------- | :--------------------------- | :------------------------------- | | Operating lease current portion | $301 | $645 | | Operating lease noncurrent portion | $4,826 | $1,860 | | **Total operating lease liabilities** | **$5,127** | **$2,505** | [Note 8. Loan Agreements](index=17&type=section&id=Note%208.%20Loan%20Agreements) - The company repaid the remaining **$41.4 million** CRG Loan balance on March 9, 2022, resulting in a **$1.6 million** loss on extinguishment of debt[98](index=98&type=chunk) - On March 9, 2022, a new SVB Loan Agreement was executed for a **$30.0 million** Term Facility and a **$15.0 million** Revolving Credit Facility, due January 1, 2027[99](index=99&type=chunk)[101](index=101&type=chunk) | Year | Amount (in thousands of USD) | | :--- | :-------------------- | | 2024 | $9,167 | | 2025 | $10,000 | | 2026 | $10,000 | | Thereafter | $833 | | **Total** | **$30,000** | [Note 9. Stockholders' Equity](index=19&type=section&id=Note%209.%20Stockholders'%20Equity) - In February 2021, the company sold **10,465,000 shares** of common stock in a public offering, generating approximately **$115.1 million** in gross proceeds[108](index=108&type=chunk) - No shares of common stock were sold under the ATM Facility during the three and six months ended June 30, 2022[110](index=110&type=chunk) | Metric | Number of Warrants | Weighted Average Exercise Price (USD) | | :------------------------------------ | :----------------- | :------------------------------ | | Balance and exercisable at June 30, 2022 | 48,683 | $12.33 | [Note 10. Share-Based Payment Awards](index=20&type=section&id=Note%2010.%20Share-Based%20Payment%20Awards) - As of June 30, 2022, approximately **82,000 shares** were available for new awards under the 2016 Long-Term Incentive Plan[114](index=114&type=chunk) | Metric | Number of Options | Weighted Average Exercise Price (USD) | | :------------------------------------ | :---------------- | :------------------------------ | | Outstanding at January 1, 2022 | 2,517,680 | $16.49 | | Granted | 1,643,300 | $10.43 | | Exercised | (4,223) | $9.44 | | Forfeited | (98,470) | $11.98 | | Expired | (6,000) | $21.00 | | **Outstanding at June 30, 2022** | **4,052,287** | **$14.14** | | Exercisable at June 30, 2022 | 1,306,830 | $19.82 | - Total stock-based compensation expense was **$4.14 million** for the three months and **$7.62 million** for the six months ended June 30, 2022, reflecting increased investment in new employees and organizational expansion[125](index=125&type=chunk)[166](index=166&type=chunk)[168](index=168&type=chunk)[179](index=179&type=chunk)[181](index=181&type=chunk) [Note 11. License and Asset Purchase Agreements](index=22&type=section&id=Note%2011.%20License%20and%20Asset%20Purchase%20Agreements) - The company holds an exclusive license with Equinox Sciences, LLC for vorolanib for local eye delivery, with potential milestone payments up to **$50 million** and tiered royalties[126](index=126&type=chunk)[127](index=127&type=chunk)[128](index=128&type=chunk) - A May 2022 amendment expanded the license field to cover all ophthalmology indications using the company's proprietary localized delivery technologies[129](index=129&type=chunk) [Note 12. Fair Value Measurements](index=23&type=section&id=Note%2012.%20Fair%20Value%20Measurements) | Category | Carrying Value (in thousands of USD) | Fair Value (in thousands of USD) | Cash Equivalents (in thousands of USD) | Marketable Securities (in thousands of USD) | | :----------------------- | :---------------------------- | :------------------------ | :------------------------------ | :----------------------------------- | | **Level 1:** | | | | | | Money market funds | $62,178 | $62,178 | $62,178 | — | | **Level 2:** | | | | | | Commercial paper | $30,926 | $30,926 | $4,999 | $25,927 | | U.S. treasury securities | $63,345 | $63,106 | — | $63,106 | | **Total** | **$156,449** | **$156,210** | **$67,177** | **$89,033** | - As of June 30, 2022, most interest-bearing cash equivalent balances were concentrated in one U.S. Government institutional money market fund[134](index=134&type=chunk) [Note 13. Contingencies](index=24&type=section&id=Note%2013.%20Contingencies) - The company is subject to routine legal proceedings and claims, which management believes will not materially affect its financial position, results of operations, or cash flows[139](index=139&type=chunk) [Note 14. Net Loss per Share](index=24&type=section&id=Note%2014.%20Net%20Loss%20per%20Share) - Basic net loss per share is calculated by dividing net loss by weighted average common shares outstanding; potentially dilutive shares were excluded as anti-dilutive[140](index=140&type=chunk) | Category | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :------------------- | :----------------------------- | :----------------------------- | | Stock options | 4,052,287 | 2,099,810 | | ESPP | 18,394 | 10,793 | | Warrants | 48,683 | 48,683 | | Restricted stock units | 541,880 | 290,917 | | **Total** | **4,661,244** | **2,450,203** | [Note 15. Subsequent Events](index=24&type=section&id=Note%2015.%20Subsequent%20Events) - CMS published a Proposed Rule in July 2022, which, if finalized, would result in **DEXYCU** losing pass-through separate payment status on December 31, 2022, and being bundled into the general cataract procedure reimbursement code[142](index=142&type=chunk) - The anticipated loss of **DEXYCU's** pass-through status is expected to significantly reduce product revenues and result in a material impairment of the related **$21.5 million** intangible asset[142](index=142&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial condition and operations, including forward-looking statements, R&D, accounting policies, performance, and liquidity [Note Regarding Forward-Looking Statements](index=25&type=section&id=Note%20Regarding%20Forward-Looking%20Statements) - The report contains forward-looking statements regarding future activities, including **EYP-1901** expectations, clinical trial timing, COVID-19 impact, cash flow, manufacturing, IP, and future expenses[145](index=145&type=chunk) - Actual results may differ materially due to factors like Pandemic impact, clinical trial effectiveness, capital access, operating fluctuations, manufacturing success, commercial infrastructure, side effects, collaborations, competition, market acceptance, and IP protection[147](index=147&type=chunk)[149](index=149&type=chunk) [Our Business](index=26&type=section&id=Our%20Business) - EyePoint Pharmaceuticals develops and commercializes innovative therapeutics for serious eye disorders using its **Durasert®** technology for sustained intraocular drug delivery[152](index=152&type=chunk) - Key products include **EYP-1901** (investigational anti-VEGF for wet AMD), **YUTIQ®** (chronic non-infectious uveitis), and **DEXYCU®** (postoperative inflammation)[152](index=152&type=chunk) - Recent developments include CMS's intention to remove **DEXYCU's** pass-through reimbursement status, new board appointments, China's **YUTIQ** approval, and an exclusive license agreement with Betta Pharmaceuticals for **EYP-1901** in Greater China[153](index=153&type=chunk)[154](index=154&type=chunk)[155](index=155&type=chunk) - R&D highlights include dosing the first patient in the Phase 2 **DAVIO2** clinical trial for **EYP-1901** (wet AMD), positive 12-month safety/efficacy data from Phase 1 **DAVIO** trial for **EYP-1901**, and pausing **YUTIQ 50** enrollment due to updated FDA requirements[156](index=156&type=chunk) [Critical Accounting Policies and Estimates](index=27&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - Financial statement preparation requires management estimates, judgments, and assumptions affecting reported amounts, particularly for revenue recognition, variable consideration reserves, and outsourced clinical trial agreements[157](index=157&type=chunk)[159](index=159&type=chunk) [Results of Operations](index=28&type=section&id=Results%20of%20Operations) [Three Months Ended June 30, 2022 Compared to Three Months Ended June 30, 2021](index=28&type=section&id=Three%20Months%20Ended%20June%2030,%202022%20Compared%20to%20Three%20Months%20Ended%20June%2030,%202021) | Metric | 2022 (in thousands of USD) | 2021 (in thousands of USD) | Change (in thousands of USD) | % Change | | :---------------------------------------------------- | :------------------ | :------------------ | :-------------------- | :--------- | | Product sales, net | $11,318 | $8,738 | $2,580 | 30% | | License and collaboration agreements | $49 | $94 | $(45) | -48% | | Royalty income | $198 | $181 | $17 | 9% | | **Total revenues** | **$11,565** | **$9,013** | **$2,552** | **28%** | | Cost of sales, excluding amortization of acquired intangible assets | $1,734 | $1,929 | $(195) | -10% | | Research and development | $12,992 | $5,605 | $7,387 | 132% | | Sales and marketing | $6,883 | $6,659 | $224 | 3% | | General and administrative | $8,557 | $5,184 | $3,373 | 65% | | **Total operating expenses** | **$30,781** | **$19,992** | **$10,789** | **54%** | | **Loss from operations** | **$(19,216)** | **$(10,979)** | **$(8,237)** | **75%** | | Interest expense | $(552) | $(1,376) | $824 | -60% | | Gain (loss) on extinguishment of debt | — | $2,065 | $(2,065) | -100% | | **Net loss** | **$(19,406)** | **$(10,010)** | **$(9,396)** | **94%** | - Net product sales increased by **$2.6 million (30%)** to **$11.3 million** due to higher customer demand, while license and collaboration revenue decreased by **48%**[161](index=161&type=chunk)[162](index=162&type=chunk) - Research and development expenses surged by **$7.4 million (132%)** to **$13.0 million**, primarily due to increased personnel costs (**$3.6 million**, including **$1.7 million** stock-based compensation) and **EYP-1901** clinical costs[166](index=166&type=chunk) - General and administrative expenses increased by **$3.4 million (65%)** to **$8.6 million**, mainly due to personnel expense (**$2.3 million**, including **$1.0 million** stock-based compensation) for organizational expansion and higher consulting fees[168](index=168&type=chunk) [Six Months Ended June 30, 2022 Compared to Six Months Ended June 30, 2021](index=30&type=section&id=Six%20Months%20Ended%20June%2030,%202022%20Compared%20to%20Six%20Months%20Ended%20June%2030,%202021) | Metric | 2022 (in thousands of USD) | 2021 (in thousands of USD) | Change (in thousands of USD) | % Change | | :---------------------------------------------------- | :------------------ | :------------------ | :-------------------- | :--------- | | Product sales, net | $20,328 | $15,540 | $4,788 | 31% | | License and collaboration agreements | $108 | $435 | $(327) | -75% | | Royalty income | $423 | $361 | $62 | 17% | | **Total revenues** | **$20,859** | **$16,336** | **$4,523** | **28%** | | Cost of sales, excluding amortization of acquired intangible assets | $3,511 | $3,319 | $192 | 6% | | Research and development | $22,937 | $11,084 | $11,853 | 107% | | Sales and marketing | $13,576 | $12,318 | $1,258 | 10% | | General and administrative | $17,106 | $10,299 | $6,807 | 66% | | **Total operating expenses** | **$58,360** | **$38,250** | **$20,110** | **53%** | | **Loss from operations** | **$(37,501)** | **$(21,914)** | **$(15,587)** | **71%** | | Interest expense | $(1,745) | $(2,722) | $977 | -36% | | Gain (loss) on extinguishment of debt | $(1,559) | $2,065 | $(3,624) | -175% | | **Net loss** | **$(40,382)** | **$(22,290)** | **$(18,092)** | **81%** | - Net product sales increased by **$4.8 million (31%)** to **$20.3 million**, driven by increased cataract surgeries, ASC re-openings, and ongoing sales efforts[174](index=174&type=chunk) - Research and development expenses increased by **$11.9 million (107%)** to **$22.9 million**, primarily due to personnel costs (**$6.9 million**, including **$2.9 million** stock-based compensation) and increased **EYP-1901** clinical costs[179](index=179&type=chunk) - General and administrative expenses increased by **$6.8 million (66%)** to **$17.1 million**, mainly due to personnel expense (**$4.8 million**, including **$2.1 million** stock-based compensation) for organizational expansion, and higher consulting, legal, and facilities costs[181](index=181&type=chunk) [Liquidity and Capital Resources](index=31&type=section&id=Liquidity%20and%20Capital%20Resources) - The company continues to experience operating losses, relying on equity sales and debt for financing, with an accumulated deficit of **$609.5 million** at June 30, 2022[185](index=185&type=chunk) - As of June 30, 2022, the company held **$171.2 million** in cash, cash equivalents, and marketable securities, projected to fund operations into the second half of 2024[193](index=193&type=chunk) - Future capital requirements are influenced by **EYP-1901** development, **YUTIQ** and **DEXYCU** commercialization costs, potential loss of **DEXYCU's** pass-through coverage, and the ongoing Pandemic impact[194](index=194&type=chunk)[197](index=197&type=chunk) | Metric | 2022 (in thousands of USD) | 2021 (in thousands of USD) | Change (in thousands of USD) | | :---------------------------------------------------- | :------------------ | :------------------ | :-------------------- | | Net cash used in operating activities | $(39,281) | $(25,642) | $(13,639) | | Net cash used in investing activities | $(56,454) | $(25) | $(56,429) | | Net cash (used in) provided by financing activities | $(724) | $108,388 | $(109,112) | [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) As a smaller reporting company, EyePoint Pharmaceuticals is not required to provide detailed market risk disclosures - The company is a **smaller reporting company** and is not required to provide quantitative and qualitative disclosures about market risk[205](index=205&type=chunk) [Item 4. Controls and Procedures](index=34&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of June 30, 2022, with no material changes in internal control [Evaluation of Disclosure Controls and Procedures](index=34&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) - Management concluded the company's disclosure controls and procedures were effective at a reasonable assurance level as of June 30, 2022[206](index=206&type=chunk) [Changes in Internal Control over Financial Reporting](index=34&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) - No material changes in internal control over financial reporting occurred or are reasonably likely to occur during the quarter ended June 30, 2022[207](index=207&type=chunk) [PART II: OTHER INFORMATION](index=35&type=section&id=PART%20II%3A%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=35&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in routine legal proceedings not expected to materially affect its financial position, results, or cash flows - The company is subject to routine legal proceedings and claims, which management believes will not materially affect its financial position, results of operations, or cash flows[210](index=210&type=chunk) [Item 1A. Risk Factors](index=35&type=section&id=Item%201A.%20Risk%20Factors) Updates risk factors, highlighting adverse impacts from pricing, reimbursement, healthcare reform, and DEXYCU's pass-through status loss - The company's products may face unfavorable pricing regulations, third-party reimbursement practices, or healthcare reform, including the potential loss of **DEXYCU's** pass-through status, which could harm the business[212](index=212&type=chunk)[214](index=214&type=chunk) - If the CMS Proposed Rule is finalized, **DEXYCU** will lose pass-through separate payment status on December 31, 2022, leading to bundled payment rates, significantly reduced revenues, and a material adverse effect on financial condition[214](index=214&type=chunk) - Delays in obtaining coverage and profitable reimbursement for new drugs, along with mandatory discounts or rebates from government programs (Medicaid, Medicare Part B, 340B, VA FSS), could adversely affect operating results and capital raising[215](index=215&type=chunk)[216](index=216&type=chunk)[217](index=217&type=chunk)[218](index=218&type=chunk)[220](index=220&type=chunk)[224](index=224&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=37&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered equity sales or use of proceeds occurred during the reporting period - No unregistered sales of equity securities or use of proceeds to report[227](index=227&type=chunk) [Item 3. Defaults Upon Senior Securities](index=37&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities occurred during the reporting period - No defaults upon senior securities to report[228](index=228&type=chunk) [Item 4. Mine Safety Disclosures](index=37&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) No mine safety disclosures are applicable or required for the company - No mine safety disclosures to report[229](index=229&type=chunk) [Item 5. Other Information](index=38&type=section&id=Item%205.%20Other%20Information) No other information is required to be disclosed under this item - No other information to report[231](index=231&type=chunk) [Item 6. Exhibits](index=39&type=section&id=Item%206.%20Exhibits) Lists all exhibits filed with the Form 10-Q, including corporate governance, stock, license, and loan agreements - Exhibits include corporate governance documents (Certificate of Incorporation, By-Laws), stock-related documents (Specimen Stock Certificate, Warrants, Registration Rights Agreements), and key commercial agreements (Amendment 1 to Exclusive License Agreement with Equinox, Exclusive License Agreement with Betta Pharmaceuticals, First Amendment to Loan and Security Agreement with Silicon Valley Bank)[234](index=234&type=chunk)[235](index=235&type=chunk)[236](index=236&type=chunk) [Signatures](index=41&type=section&id=Signatures) - The report was signed on August 5, 2022, by Nancy Lurker, President and CEO, and George O. Elston, CFO[242](index=242&type=chunk)

Financial Data and Key Metrics Changes - Total net revenue for Q2 2022 was $11.6 million, an increase from $9 million in Q2 2021, representing a 30% growth [38] - Net product revenue for Q2 2022 was $11.3 million compared to $8.7 million in the prior year period [38] - Net loss for Q2 2022 was $19.4 million or $0.52 per share, compared to a net loss of $10 million or $0.35 per share in the prior year [40] Business Line Data and Key Metrics Changes - YUTIQ generated $7.4 million in revenue for Q2 2022, while DEXYCU contributed $3.9 million [32] - Customer demand for YUTIQ increased by approximately 40% from Q1 2022, with 900 units sold [32] - Customer demand for DEXYCU remained consistent with Q1 2022, with 14,700 units sold [32] Market Data and Key Metrics Changes - YUTIQ received approval for commercial use in China, marking a significant milestone for the company in expanding its global reach [14] - The company anticipates continued growth in customer demand for YUTIQ, particularly among retina specialists [33] Company Strategy and Development Direction - The company aims to become a leader in sustained ocular delivery, focusing on improving retinal treatment and bringing therapies to patients globally [17] - EYP-1901 is positioned as a maintenance therapy for wet AMD, with the goal of extending treatment intervals to up to six months [21] - The company is exploring additional indications for EYP-1901, including non-proliferative diabetic retinopathy (NPDR) [27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the execution of clinical trials and the potential of EYP-1901 to address significant unmet needs in ocular therapies [18][31] - The company is well-capitalized to fund operations into the second half of 2024, supporting ongoing clinical and commercial initiatives [40] Other Important Information - The company hosted its first Investor Day, showcasing its Durasert drug delivery platform and clinical results [13] - Two new Board appointments were made to strengthen the leadership team, including experts in ophthalmology and biopharmaceuticals [15][16] Q&A Session Summary Question: Will the company provide quarterly enrollment updates for the Phase 2 DAVIO 2 trial? - Management stated that they do not plan to provide such updates, as clinical trial enrollments can fluctuate significantly [44] Question: What are the powering assumptions for the DAVIO 2 trial? - Management indicated that specific statistics around DAVIO 2 have not been publicly announced yet, as the study is not powered to a high enough level for confidence [46] Question: What testing work led to the choice of 2 and 3 milligram doses for the diabetic retinopathy study? - The decision was based on the highest doses used in the DAVIO trial, as the maximally tolerated dose has not been established [52] Question: When will the company know about the CMS pass-through decision for DEXYCU? - The final rules are expected to be released in November, which will clarify the pass-through status [55] Question: Are there other molecules being explored for potential partnerships? - The company is looking at various molecules, including complement inhibitors, and is interested in partnering with companies that have proven mechanisms of action [67][70]

1 | EYEPOINT PHARMACEUTICALS Delivering Innovation to the Eye Investor Presentation March 2022 Forward Looking Statements Various statements made in this presentation are forward-looking, within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, and are inherently subject to risks, uncertainties and potentially inaccurate assumptions. All statements that address activities, events or developments that we intend, expect, plan or believe may occur in the future, including but not limite ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to COMMISSION FILE NUMBER 000-51122 EyePoint Pharmaceuticals, Inc. (Exact name of registrant as specified in its charter) Delaware (State or other jurisdiction of incorp ...

Part I [Business](index=7&type=section&id=ITEM%201.%20BUSINESS) EyePoint Pharmaceuticals develops and commercializes eye disorder therapeutics using Durasert® technology, with lead candidate EYP-1901 and commercial products YUTIQ® and DEXYCU®, though COVID-19 has impacted revenues [Overview and Strategy](index=7&type=section&id=Overview%20and%20Strategy) The company's strategy focuses on advancing pipeline candidates EYP-1901 and YUTIQ 50, growing commercial product revenues, and leveraging its Durasert and Verisome technologies - Key strategic elements include: - Advancing EYP-1901 through clinical development for wet AMD, DR, and RVO - Advancing YUTIQ 50 for chronic non-infectious uveitis - Growing commercial revenues for YUTIQ and DEXYCU in the U.S - Leveraging Durasert and Verisome technologies through collaborations and out-licenses[34](index=34&type=chunk) [Our Pipeline and Commercial Products](index=8&type=section&id=Our%20Pipeline%20and%20Commercial%20Products) The company's portfolio features lead candidate EYP-1901 in Phase 1/2, commercial products YUTIQ and DEXYCU, and YUTIQ 50 in Phase 3, all leveraging Durasert technology Product and Pipeline Status | Program | Indication | Stage | | :--- | :--- | :--- | | **Pipeline** | | | | EYP-1901 | Wet AMD | Phase 1/2 | | EYP-1901 | Diabetic Retinopathy (DR) | Preclinical | | EYP-1901 | Retinal Vein Occlusion (RVO) | Preclinical | | YUTIQ 50 | Posterior Segment Uveitis | Phase 3 | | **Commercial** | | | | YUTIQ® | Posterior Segment Uveitis | Approved | | DEXYCU® | Post-Operative Inflammation | Approved | - EYP-1901, the lead product candidate, combines the bioerodible Durasert technology with vorolanib, a TKI, for a potential **six-month** sustained delivery treatment for wet AMD. Positive interim **six-month** data from the Phase 1 DAVIO trial was reported in November 2021, with a Phase 2 trial anticipated to start in Q3 2022[26](index=26&type=chunk)[43](index=43&type=chunk)[59](index=59&type=chunk) - YUTIQ is a **three-year** implant for chronic non-infectious uveitis, while DEXYCU is a single-dose treatment for post-operative inflammation. Effective January 1, 2022, commercial partner ImprimisRx assumed all sales and marketing for DEXYCU[27](index=27&type=chunk)[28](index=28&type=chunk)[81](index=81&type=chunk) [Manufacturing, Sales, and Distribution](index=14&type=section&id=Manufacturing%2C%20Sales%2C%20and%20Distribution) The company manufactures YUTIQ in-house and outsources DEXYCU production, utilizing Key Account Managers for YUTIQ and a partnership with ImprimisRx for DEXYCU sales and distribution - YUTIQ is manufactured in-house at the company's Watertown, MA facility, while DEXYCU manufacturing is outsourced to a contract manufacturing organization (CMO)[88](index=88&type=chunk)[89](index=89&type=chunk) - As of February 28, 2022, **19** Key Account Managers sell YUTIQ. Effective January 1, 2022, ImprimisRx assumed all sales and marketing responsibilities for DEXYCU in the U.S[91](index=91&type=chunk) - Both YUTIQ and DEXYCU have been granted permanent J-codes by CMS for reimbursement. DEXYCU's pass-through status, which provides for separate reimbursement, was extended through **December 31, 2022**[82](index=82&type=chunk)[95](index=95&type=chunk) [Intellectual Property and Competition](index=16&type=section&id=Intellectual%20Property%20and%20Competition) The company protects its technology with patents for YUTIQ (2027), DEXYCU (2034), and EYP-1901 (2037-2041), operating in a highly competitive eye disease treatment market Key Product Patent Expirations | Product/Candidate | U.S. Patent Expiration | | :--- | :--- | | YUTIQ® | At least August 2027 | | DEXYCU® | At least 2034 | | EYP-1901 (vorolanib compound) | September 2037 | | EYP-1901 (product) | Potentially until 2041 (if application issues) | - Competition in the wet AMD space includes established anti-VEGF biologics like EYLEA and LUCENTIS, as well as newer long-acting treatments and delivery systems from companies like Kodiak Sciences, Graybug Vision, and REGENXBIO[116](index=116&type=chunk)[117](index=117&type=chunk)[118](index=118&type=chunk) - Competitors for YUTIQ in posterior segment uveitis include Allergan's OZURDEX® and AbbVie's HUMIRA®. DEXYCU competes with topical treatments like Kala Pharmaceuticals' INVELTYS™ and Ocular Therapeutix's DEXTENZA®[123](index=123&type=chunk)[124](index=124&type=chunk)[128](index=128&type=chunk)[129](index=129&type=chunk) [Government Regulation](index=19&type=section&id=Government%20Regulation) The company faces extensive FDA regulation across product development and post-market activities, alongside complex healthcare laws, pricing programs, fraud and abuse statutes, and data privacy regulations - The FDA drug approval process requires extensive pre-clinical and clinical trials (Phase 1, 2, and 3) to demonstrate safety and efficacy before an NDA can be submitted and approved[134](index=134&type=chunk)[136](index=136&type=chunk)[139](index=139&type=chunk) - Post-approval, the company must adhere to cGMP for manufacturing, QSR for drug-device combination products, and strict regulations on advertising and promotion[153](index=153&type=chunk)[154](index=154&type=chunk)[155](index=155&type=chunk) - Sales and reimbursement are significantly impacted by U.S. healthcare reform (ACA) and government pricing programs, including the Medicaid Drug Rebate Program and the 340B drug pricing program, which require substantial discounts and rebates[184](index=184&type=chunk)[194](index=194&type=chunk)[195](index=195&type=chunk) - The company's relationships with healthcare providers and payors are governed by federal and state anti-kickback, fraud, and abuse laws, as well as data privacy laws like HIPAA in the U.S. and GDPR in the EU[219](index=219&type=chunk)[222](index=222&type=chunk)[231](index=231&type=chunk) - The company's core business revolves around its proprietary Durasert® technology for sustained intraocular drug delivery, with two commercial products (YUTIQ®, DEXYCU®) and a lead pipeline candidate (EYP-1901)[23](index=23&type=chunk)[24](index=24&type=chunk) - The COVID-19 pandemic has had a material adverse impact on the business, significantly affecting cash flows from revenues due to the reduction in physician office visits for YUTIQ and the closure of ambulatory surgery centers for DEXYCU[31](index=31&type=chunk)[33](index=33&type=chunk) [Risk Factors](index=33&type=section&id=ITEM%201A.%20RISK%20FACTORS) The company faces significant risks including financial losses, capital needs, clinical trial uncertainties for EYP-1901, commercialization challenges for YUTIQ and DEXYCU, intellectual property protection, and reliance on third-party partners [Risks Related To Our Financial Position and our Capital Resources](index=33&type=section&id=Risks%20Related%20To%20Our%20Financial%20Position%20and%20our%20Capital%20Resources) The company faces ongoing losses, requires additional capital, is impacted by COVID-19, and must comply with credit facility covenants and manage DEXYCU acquisition payment obligations - The company has a history of significant losses, with a net loss of **$58.4 million** in 2021 and an accumulated deficit of **$569.1 million** as of December 31, 2021[240](index=240&type=chunk) - Cash, cash equivalents, and investments of **$211.6 million** at year-end 2021, along with product sales, are expected to fund operations into the **second half of 2024**. However, the company will likely need to raise additional capital[237](index=237&type=chunk) - The company entered into a new loan agreement with Silicon Valley Bank in March 2022 which contains financial covenants, including minimum product revenue levels for YUTIQ and DEXYCU or a minimum cash balance[253](index=253&type=chunk)[256](index=256&type=chunk) [Risks Related To The Regulatory Approval And Clinical Development Of Our Product Candidates](index=39&type=section&id=Risks%20Related%20To%20The%20Regulatory%20Approval%20And%20Clinical%20Development%20Of%20Our%20Product%20Candidates) The company's success hinges on early-stage EYP-1901 development, facing inherent clinical trial uncertainties, potential delays, and risks of failing to demonstrate safety and efficacy - The company's success is highly dependent on its lead product candidate, EYP-1901, which is still in the early stages of development and faces the significant risks and uncertainties of clinical trials[275](index=275&type=chunk)[296](index=296&type=chunk) - Clinical trials are subject to numerous risks that can cause delays or failure, including difficulty enrolling patients, adverse side effects, and failure to demonstrate safety and efficacy[277](index=277&type=chunk)[291](index=291&type=chunk) - Success in early-stage clinical trials does not ensure success in later-stage trials, and data is subject to varying interpretations by regulatory authorities like the FDA[285](index=285&type=chunk)[288](index=288&type=chunk) [Risks Related To The Commercialization Of Our Products And Product Candidates](index=42&type=section&id=Risks%20Related%20To%20The%20Commercialization%20Of%20Our%20Products%20And%20Product%20Candidates) Commercial success for YUTIQ and DEXYCU is uncertain due to market acceptance, reimbursement challenges (especially DEXYCU's pass-through status), intense competition, and regulatory risks - A critical risk for DEXYCU is the potential loss of its Medicare Part B pass-through status after **December 31, 2022**. If payment for DEXYCU becomes bundled with the cataract procedure, it would materially decrease revenues[305](index=305&type=chunk)[316](index=316&type=chunk) - The company must comply with complex government pricing programs (Medicaid, 340B). Failure to comply with reporting and payment obligations could lead to significant penalties, sanctions, and fines[317](index=317&type=chunk)[321](index=321&type=chunk) - The company faces extensive ongoing FDA regulatory requirements for its approved products, including post-approval studies for DEXYCU under the Pediatric Research Equity Act (PREA)[323](index=323&type=chunk)[324](index=324&type=chunk) [Risks Related To Our Intellectual Property](index=52&type=section&id=Risks%20Related%20To%20Our%20Intellectual%20Property) Commercial success relies on robust intellectual property protection, but the patent process is uncertain, vulnerable to challenges, and may lead to costly infringement litigation - The company's ability to protect its products from competition is highly dependent on obtaining and maintaining patent protection, which is an uncertain, complex, and expensive process[368](index=368&type=chunk)[371](index=371&type=chunk) - The company may face lawsuits from third parties alleging patent infringement, which could be costly and force the company to cease commercialization or obtain licenses on unfavorable terms[387](index=387&type=chunk)[390](index=390&type=chunk) - Changes in U.S. or foreign patent law, such as the America Invents Act (AIA), could weaken the company's ability to enforce its patents[395](index=395&type=chunk)[396](index=396&type=chunk) [Risks Related To Our Reliance On Third Parties](index=57&type=section&id=Risks%20Related%20To%20Our%20Reliance%20On%20Third%20Parties) The company heavily relies on third parties for EYP-1901 development (Equinox), DEXYCU commercialization (ImprimisRx), and manufacturing/clinical trials, posing significant operational risks - The development and commercialization of EYP-1901 depend on a license and API supply agreement with Equinox Science. Termination of this agreement would materially harm the business[412](index=412&type=chunk)[414](index=414&type=chunk) - The company relies on its commercial alliance partner, ImprimisRx, for all sales and marketing of DEXYCU. Any failure in this partnership could materially reduce DEXYCU sales[415](index=415&type=chunk)[418](index=418&type=chunk) - The company depends on contract manufacturing organizations (CMOs) for DEXYCU supply and contract research organizations (CROs) for clinical trials. Issues with these third parties could impair supply and delay development[419](index=419&type=chunk)[434](index=434&type=chunk) [Properties](index=66&type=section&id=ITEM%202.%20PROPERTIES) The company leases its primary 21,649 sq ft Watertown, MA facility for office, lab, and manufacturing, with an extended lease to 2028 and planned expansion - The company's principal facility is leased space in Watertown, MA, which includes office, lab, and manufacturing operations. The lease was recently amended to extend the term to 2028 and expand the office space[474](index=474&type=chunk) [Legal Proceedings](index=66&type=section&id=ITEM%203.%20LEGAL%20PROCEEDINGS) The SEC concluded its investigation into the company on May 4, 2021, and does not intend to recommend an enforcement action - On May 4, 2021, the SEC Division of Enforcement concluded its investigation and does not intend to recommend an enforcement action against the company[478](index=478&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=67&type=section&id=ITEM%205.%20MARKET%20FOR%20REGISTRANT%27S%20COMMON%20EQUITY%2C%20RELATED%20STOCKHOLDER%20MATTERS%20AND%20ISSUER%20PURCHASES%20OF%20EQUITY%20SECURITIES) The company's common stock trades on the Nasdaq Global Market under "EYPT", with approximately 76 holders of record as of March 4, 2022 - The company's common stock trades on the Nasdaq Global Market under the symbol "EYPT"[482](index=482&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=68&type=section&id=ITEM%207.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) In 2021, net product sales grew **70%** to **$35.3 million**, but total revenues increased only **7%** to **$36.9 million** due to lower collaboration revenue, resulting in a **$58.4 million** net loss Results of Operations (2021 vs. 2020) | Metric | 2021 (in thousands) | 2020 (in thousands) | Change (%) | | :--- | :--- | :--- | :--- | | **Product sales, net** | $35,312 | $20,831 | 70% | | **Total revenues** | $36,939 | $34,437 | 7% | | Research and development | $28,500 | $17,424 | 64% | | Total operating expenses | $92,215 | $71,727 | 29% | | **Loss from operations** | ($55,276) | ($37,290) | 48% | | **Net loss** | ($58,417) | ($45,394) | (29)% | - Net product sales increased by **$14.5 million (70%)** in 2021, driven by a return of customer demand for YUTIQ and DEXYCU as pandemic-related restrictions eased[523](index=523&type=chunk) - Research and development expenses increased by **$11.1 million (64%)** in 2021, primarily due to clinical costs for the EYP-1901 Phase 1 trial and the YUTIQ 50 Phase 3 trial, as well as increased personnel expenses[528](index=528&type=chunk) - The company ended 2021 with **$211.6 million** in cash, cash equivalents, and marketable securities, which is expected to fund operations into the **second half of 2024**[543](index=543&type=chunk) [Controls and Procedures](index=78&type=section&id=ITEM%209A.%20CONTROLS%20AND%20PROCEDURES) Management concluded that disclosure controls and procedures, along with internal control over financial reporting, were effective at a reasonable assurance level as of December 31, 2021 - Management concluded that as of December 31, 2021, the company's disclosure controls and procedures were effective at the reasonable assurance level[559](index=559&type=chunk) - Based on an assessment using the COSO framework, management concluded that the company's internal control over financial reporting was effective as of December 31, 2021[562](index=562&type=chunk) [Other Information](index=78&type=section&id=ITEM%209B.%20OTHER%20INFORMATION) On March 9, 2022, the company refinanced its debt with a new **$45 million** credit facility from Silicon Valley Bank and amended its Watertown, MA lease to extend the term and expand space - On March 9, 2022, the company refinanced its debt by entering into a new **$45 million** credit facility with Silicon Valley Bank and terminating its previous agreement with CRG Servicing LLC[564](index=564&type=chunk)[577](index=577&type=chunk) - On March 8, 2022, the company amended its Watertown, MA lease to extend the term to **May 31, 2028** for its lab/manufacturing space and to rent an additional **11,999 square feet** of office space[579](index=579&type=chunk) Part III [Directors, Executive Officers, and Corporate Governance](index=81&type=section&id=ITEM%2010.%20DIRECTORS%2C%20EXECUTIVE%20OFFICERS%2C%20AND%20CORPORATE%20GOVERNANCE) Information on directors, executive officers, and corporate governance is incorporated by reference from the company's 2022 annual meeting proxy statement [Executive Compensation](index=81&type=section&id=ITEM%2011.%20EXECUTIVE%20COMPENSATION) Executive compensation information is incorporated by reference from the company's 2022 Proxy Statement [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=81&type=section&id=ITEM%2012.%20SECURITY%20OWNERSHIP%20OF%20CERTAIN%20BENEFICIAL%20OWNERS%20AND%20MANAGEMENT%20AND%20RELATED%20STOCKHOLDER%20MATTERS) Security ownership and related stockholder matters information is incorporated by reference from the company's 2022 Proxy Statement [Certain Relationships and Related Transactions, and Director Independence](index=81&type=section&id=ITEM%2013.%20CERTAIN%20RELATIONSHIPS%20AND%20RELATED%20TRANSACTIONS%2C%20AND%20DIRECTOR%20INDEPENDENCE) Information on certain relationships, related transactions, and director independence is incorporated by reference from the company's 2022 Proxy Statement [Principal Accounting Fees and Services](index=81&type=section&id=ITEM%2014.%20PRINCIPAL%20ACCOUNTING%20FEES%20AND%20SERVICES) Principal accounting fees and services information is incorporated by reference from the company's 2022 Proxy Statement Part IV [Exhibits and Financial Statement Schedules](index=82&type=section&id=ITEM%2015.%20EXHIBITS%20AND%20FINANCIAL%20STATEMENT%20SCHEDULES) This section presents the audited consolidated financial statements for 2021 and 2020, with Deloitte & Touche LLP identifying estimation of clinical trial expenses as a critical audit matter Consolidated Balance Sheet Highlights (as of Dec 31, 2021) | Account | Amount (in thousands) | | :--- | :--- | | Cash, cash equivalents, and marketable securities | $211,558 | | Total Assets | $263,372 | | Long-term debt | $36,562 | | Total Liabilities | $78,992 | | Total Stockholders' Equity | $184,380 | Consolidated Statement of Cash Flows Highlights (Year ended Dec 31, 2021) | Cash Flow Activity | Amount (in thousands) | | :--- | :--- | | Net cash used in operating activities | ($50,097) | | Net cash used in investing activities | ($33,121) | | Net cash provided by financing activities | $216,902 | - The independent auditor, Deloitte & Touche LLP, identified prepaid and accrued clinical trial expenses as a critical audit matter due to the significant management judgment required to estimate the stage of completion and costs incurred for research activities[621](index=621&type=chunk)[622](index=622&type=chunk)

EyePoint Pharmaceuticals, Inc. (EYPT Q4 2021 Earnings Conference Call March 3, 2022 8:30 AM ET Company Participants George Elston - CFO Nancy Lurker - President & CEO Jay Duker - COO Scott Jones - Chief Commercial Officer Conference Call Participants Jennifer Kim - Cantor Fitzgerald Georgi Yordanov - Cowen Eddie Hickman - Guggenheim Securities Yi Chen - H.C. Wainwright Yale Jen - Laidlaw & Company Operator Good morning. My name is Jonathan. And I will be your conference operator today. At this time, I wo ...

1 | EYEPOINT PHARMACEUTICALS Delivering Innovation to the Eye Investor Presentation November 2021 Forward looking statements Various statements made in this presentation are forward-looking, within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, and are inherently subject to risks, uncertainties and potentially inaccurate assumptions. All statements that address activities, events or developments that we intend, expect, plan or believe may occur in the future, including but not lim ...

PART I. FINANCIAL INFORMATION [Item 1. Unaudited Financial Statements](index=3&type=section&id=Item%201.%20Unaudited%20Financial%20Statements) Unaudited financial statements for Q3 2021 show significant cash and asset growth from equity financing, a revenue shift to product sales, and a widened net loss due to increased operating expenses [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) | Balance Sheet Items (In thousands) | Sep 30, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | Cash and cash equivalents | $119,710 | $44,909 | | Total current assets | $141,775 | $63,118 | | Total assets | $168,251 | $91,717 | | Total current liabilities | $19,933 | $14,888 | | Long-term debt | $36,396 | $37,977 | | Total liabilities | $75,503 | $73,176 | | Total stockholders' equity | $92,748 | $18,541 | - The significant increase in cash and cash equivalents from **$44.9 million** to **$119.7 million** was primarily driven by proceeds from equity financing activities during the first nine months of 2021[7](index=7&type=chunk)[204](index=204&type=chunk) [Condensed Consolidated Statements of Comprehensive Loss](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) | Metric (In thousands) | Q3 2021 | Q3 2020 | 9 Months 2021 | 9 Months 2020 | | :--- | :--- | :--- | :--- | :--- | | Product sales, net | $8,587 | $5,758 | $24,127 | $14,151 | | License & collaboration revenue | $159 | $9,535 | $594 | $11,590 | | Total revenues | $9,059 | $15,695 | $25,395 | $27,306 | | R&D Expenses | $8,498 | $4,090 | $19,582 | $12,219 | | Total operating expenses | $24,372 | $17,652 | $62,621 | $51,859 | | Net loss | $(16,695) | $(3,801) | $(38,985) | $(29,925) | | Net loss per share | $(0.58) | $(0.30) | $(1.42) | $(2.44) | - The net loss for Q3 2021 widened significantly to **$16.7 million** from **$3.8 million** in Q3 2020, primarily due to a sharp decrease in high-margin license and collaboration revenue and a more than doubling of R&D expenses[11](index=11&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) | Cash Flow Activity (In thousands) | Nine months ended Sep 30, 2021 | Nine months ended Sep 30, 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | $(33,429) | $(20,330) | | Net cash used in investing activities | $(156) | $(170) | | Net cash provided by financing activities | $108,386 | $27,012 | | Net increase in cash | $74,801 | $6,512 | - Financing activities provided **$108.4 million** in cash, primarily from the issuance of stock, which more than offset the **$33.4 million** cash used in operations, resulting in a substantial increase in the company's cash position[17](index=17&type=chunk)[222](index=222&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) - The company's lead product candidate is EYP-1901, a potential twice-yearly treatment for wet AMD, which is currently in a Phase 1 clinical trial (DAVIO)[20](index=20&type=chunk)[22](index=22&type=chunk) - Commercial products include YUTIQ® for chronic non-infectious uveitis and DEXYCU® for postoperative inflammation following ocular surgery[20](index=20&type=chunk)[24](index=24&type=chunk) - The company believes its cash and cash equivalents of **$119.7 million** as of September 30, 2021, are sufficient to fund operations for at least the next twelve months[30](index=30&type=chunk) - In June 2021, the company's **$2.0 million** Paycheck Protection Program (PPP) loan was fully forgiven by the SBA, resulting in a gain on extinguishment of debt of approximately **$2.1 million**[99](index=99&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes increased product sales to recovering demand, notes a total revenue decrease from a one-time license payment, and highlights rising R&D expenses, with liquidity bolstered by a **$115.1 million** public offering [Business Overview and Recent Developments](index=30&type=section&id=Business%20Overview%20and%20Recent%20Developments) - Customer demand for YUTIQ and DEXYCU was negatively impacted by the COVID-19 pandemic but saw a modest return beginning in June 2020, which continued through 2021, although uncertainty remains due to new variants[161](index=161&type=chunk) - In February 2021, the company raised gross proceeds of approximately **$115.1 million** through an underwritten public offering of common stock[162](index=162&type=chunk) - The company completed enrollment in its Phase 1 DAVIO clinical trial for EYP-1901 for wet AMD in May 2021 and reported positive 3-month safety data in October 2021[171](index=171&type=chunk)[172](index=172&type=chunk) [Results of Operations](index=32&type=section&id=Results%20of%20Operations) Q3 2021 vs Q3 2020 Performance (in thousands USD) | Metric | Q3 2021 (in thousands USD) | Q3 2020 (in thousands USD) | Change $ (in thousands USD) | Change % | | :--- | :--- | :--- | :--- | :--- | | Product sales, net | $8,587 | $5,758 | $2,829 | 49% | | License & collaboration | $159 | $9,535 | $(9,376) | (98)% | | Total revenues | $9,059 | $15,695 | $(6,636) | (42)% | | R&D Expenses | $8,498 | $4,090 | $4,408 | 108% | | Net loss | $(16,695) | $(3,801) | $(12,894) | (339)% | Nine Months 2021 vs 2020 Performance (in thousands USD) | Metric | 9M 2021 (in thousands USD) | 9M 2020 (in thousands USD) | Change $ (in thousands USD) | Change % | | :--- | :--- | :--- | :--- | :--- | | Product sales, net | $24,127 | $14,151 | $9,976 | 70% | | License & collaboration | $594 | $11,590 | $(10,996) | (95)% | | Total revenues | $25,395 | $27,306 | $(1,911) | (7)% | | R&D Expenses | $19,582 | $12,219 | $7,363 | 60% | | Net loss | $(38,985) | $(29,925) | $(9,060) | (30)% | - The **108%** increase in Q3 R&D expenses was primarily driven by **$1.6 million** in increased clinical costs for the EYP-1901 Phase 1 trial and planning for the YUTIQ 50 Phase 3 trial[182](index=182&type=chunk) [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) - As of September 30, 2021, the company had cash and cash equivalents of **$119.7 million**, a significant increase from year-end 2020[204](index=204&type=chunk) - The company believes its current cash, combined with anticipated product sales, will fund its operating plan through December 31, 2022[211](index=211&type=chunk) - The company has a senior secured term loan with CRG, with an outstanding balance of approximately **$40.5 million** as of September 30, 2021. The loan includes financial covenants, such as maintaining liquidity above **$5 million** and meeting minimum annual product revenue targets, which were amended to **$25 million** for 2021[207](index=207&type=chunk)[209](index=209&type=chunk)[210](index=210&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=39&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) As a smaller reporting company, the company is exempt from providing quantitative and qualitative disclosures about market risk - As a smaller reporting company, EyePoint Pharmaceuticals is exempt from the requirement to provide quantitative and qualitative disclosures about market risk[225](index=225&type=chunk) [Item 4. Controls and Procedures](index=39&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of September 30, 2021, with no material changes to internal control over financial reporting during the quarter - Based on an evaluation as of September 30, 2021, the company's principal executive officer and principal financial officer concluded that disclosure controls and procedures were effective[226](index=226&type=chunk) - There were no changes in internal control over financial reporting during the quarter ended September 30, 2021, that materially affected, or are reasonably likely to materially affect, internal controls[227](index=227&type=chunk) PART II: OTHER INFORMATION [Item 1. Legal Proceedings](index=40&type=section&id=Item%201.%20Legal%20Proceedings) The SEC's Division of Enforcement concluded its investigation into the company without recommending enforcement action, and other routine legal proceedings are not expected to have a material financial effect - On May 4, 2021, the SEC Division of Enforcement informed the company that it had concluded its investigation and did not intend to recommend an enforcement action[231](index=231&type=chunk)[148](index=148&type=chunk) [Item 1A. Risk Factors](index=40&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors from the 2020 Annual Report, except for a new disclosure concerning customer concentration for the DEXYCU product - A new risk factor was added regarding customer concentration, stating that a significant amount of DEXYCU is sold to a limited number of customers, and the loss of one or more could have a material adverse effect[233](index=233&type=chunk) [Other Items (Items 2, 3, 4, 5, 6)](index=40&type=section&id=Other%20Items%20%28Items%202%2C%203%2C%204%2C%205%2C%206%29) The company reported no unregistered equity sales, no defaults on senior securities, no mine safety disclosures, and no other material information, with Item 6 listing exhibits - The company reports 'None' for Unregistered Sales of Equity Securities, Defaults Upon Senior Securities, Mine Safety Disclosures, and Other Information[233](index=233&type=chunk)[234](index=234&type=chunk)[235](index=235&type=chunk)

EyePoint Pharmaceuticals, Inc. (NASDAQ:EYPT) Q3 2021 Earnings Conference Call November 3, 2021 8:30 AM ET Company Participants George O. Elston - CFO & Head, Corporate Development Nancy Lurker - President & CEO Jay Duker - COO Scott Jones - Chief Commercial Officer Conference Call Participants Unidentified Analyst - Cowen and Company Jennifer Kim - Cantor Fitzgerald Yatin Suneja - Guggenheim Partners Yale Jen - Laidlaw & Company Yi Chen - H.C. Wainwright Operator Good day and thank you for standing by. Welc ...