Ocular Therapeutix(OCUL) - 2020 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - DEXTENZA net sales to distributors increased to $5.4 million for Q3 2020, representing a 280% growth over the previous quarter [9][41] - Total net product revenue was $5.9 million for Q3 2020 compared to $1.6 million in Q2 2020 [41] - The company reported a net loss of $11.9 million or a loss of $0.19 per share on a basic basis for Q3 2020, an improvement from a net loss of $18.8 million or a loss of $0.40 per share in the same period in 2019 [46] Business Line Data and Key Metrics Changes - Net product revenue of DEXTENZA was $5.4 million in Q3 2020 versus $1.4 million in Q2 2020, while net product revenue of ReSure Sealant was $0.5 million compared to $0.2 million in Q2 2020 [41][42] - Research and development expenses decreased to $7 million in Q3 2020 from $10.2 million in the same period in 2019, reflecting a decrease in personnel and other costs due to organizational restructuring [43] - Sales and marketing expenses were $6.5 million in Q3 2020, slightly down from $6.8 million in the same quarter of 2019 [44] Market Data and Key Metrics Changes - The company noted that the significant increase in DEXTENZA sales was driven by the reopening of Ambulatory Surgery Centers (ASCs) and Hospital Outpatient Departments (HOPDs) as well as the impact of the DEXTENZA rebate program [42] - Over 4,000 billable units of DEXTENZA were purchased by ASCs and HOPDs in October, indicating strong demand [10] Company Strategy and Development Direction - The company aims to fully fund its four clinical stage pipeline assets through planned Phase 2 clinical trials, supported by a recent public offering that raised over $75 million [15] - A licensing agreement with AffaMed Therapeutics for rights to DEXTENZA and OTX-TIC in China and other Asian markets is expected to net $12 million in upfront payments and potential future milestones [16] - The company is focused on advancing its pipeline products, which address significant unmet needs in ophthalmology, with a combined market potential exceeding $20 billion [19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about DEXTENZA's commercial potential and the recent developments that position the company for growth, assuming a stable environment for elective surgeries [14] - The recognition of DEXTENZA's CPT code as a permanent Category I code is expected to enhance reimbursement and adoption rates [12][91] Other Important Information - The company had approximately $70.6 million in cash and cash equivalents as of September 30, 2020, down from $84.3 million at the end of Q2 2020, but this does not include the recent capital raised [48] - The company believes existing cash and cash equivalents, combined with anticipated cash inflows, will fund operations into 2023 [49] Q&A Session Summary Question: What are the key milestones for DEXTENZA's access and reimbursement in 2021? - Management indicated that there are no significant obstacles to access, but efforts will focus on training ASC personnel to effectively use the product [60] Question: What are the main focuses for the upcoming update on OTX-TKI? - The focus will be on safety, biological activity, and durability of the treatment [62] Question: What factors contributed to the growth in billable inserts for DEXTENZA in September? - The growth was attributed to a return to normal levels of cataract surgeries and the impact of the rebate program [67] Question: What additional work is needed regarding the CPT code and reimbursement? - Management noted that further work is needed to change the status indicator for the CPT code to ensure adequate facility payment [68] Question: What are the expectations for the vehicle insert in the dry eye program trials? - The trials will compare against hydrogel inserts designed to biodegrade in the same timeframe as the active treatment [81] Question: How does OTX-CSI differ from Restasis in terms of mechanism and tolerability? - OTX-CSI aims to provide a more rapid onset of action and reduce stinging issues associated with traditional cyclosporine products [86]