EyePoint Pharmaceuticals Inc

Previous wording

the success of current and future license and collaboration agreements, including our agreements with Alimera Sciences, Inc. (Alimera), Betta Pharmaceuticals Co., Ltd. (Betta), Equinox Science, LLC (Equinox), and Ocumension Therapeutics (Ocumension);

Current wording

the success of current and future license and collaboration agreements, including our agreements with ANI Pharmaceuticals, Inc. (ANI), Betta Pharmaceuticals Co., Ltd. (Betta), Equinox Science, LLC (Equinox), and Ocumension Therapeutics (Ocumension);

Previous wording

EYEPOINT®, DEXYCU®, YUTIQ®, DURASERT®, DURAVYU®, DELIVERING INNOVATION TO THE EYE®, and WITH AN EYE ON PATIENTS® are our trademarks. Retisert® and Vitrasert® are Bausch & Lomb’s trademarks. YUTIQ® is licensed to Alimera Sciences and Ocumension Therapeutics in their respective territories. ILUVIEN® is Alimera Sciences Inc.’s trademark. The reports we file or furnish with the SEC, including this Quarterly Report on Form 10-Q, also contain trademarks, trade names, and service marks of other companies, which are the property of their respective owners.

Current wording

EYEPOINT®, DEXYCU®, YUTIQ®, DURASERT®, DURAVYU®, DELIVERING INNOVATION TO THE EYE®, and WITH AN EYE ON PATIENTS® are our trademarks. Retisert® and Vitrasert® are Bausch & Lomb’s trademarks. YUTIQ® is licensed to ANI Pharmaceuticals, Inc. and Ocumension Therapeutics in their respective territories. ILUVIEN® is ANI Pharmaceuticals, Inc.’s trademark. The reports we file or furnish with the SEC, including this Quarterly Report on Form 10-Q, also contain trademarks, trade names, and service marks of other companies, which are the property of their respective owners.

Previous wording

We are a company committed to developing and commercializing innovative therapeutics to help improve the lives of patients with serious retinal diseases. Our pipeline leverages our proprietary bioerodible Durasert E™ technology for sustained intraocular drug delivery. The Company’s lead product candidate, DURAVYU™, is an investigational sustained delivery treatment for anti-vascular endothelial growth factor (anti-VEGF) -mediated retinal diseases combining vorolanib, a selective and patent-protected tyrosine kinase inhibitor with bioerodible Durasert E™. DURAVYU™ is presently in Phase 2 clinical trials as a sustained delivery treatment for wet age-related macular degeneration (wet AMD), the leading cause of vision loss among people 50 years of age and older in the United States, and diabetic macular edema (DME). We expect to randomize patients for inclusion in pivotal Phase 3 clinical trials in wet AMD in 2024.

Current wording

We are a company committed to developing and commercializing innovative therapeutics to help improve the lives of patients with serious retinal diseases. Our pipeline leverages our proprietary bioerodible Durasert E™ technology for sustained intraocular drug delivery. The Company’s lead product candidate, DURAVYU™, is an investigational sustained delivery treatment for anti-vascular endothelial growth factor (anti-VEGF) -mediated retinal diseases combining vorolanib, a selective and patent-protected tyrosine kinase inhibitor with bioerodible Durasert E™. DURAVYU™ is presently in Phase 3 clinical trials as a sustained delivery treatment for wet age-related macular degeneration (wet AMD), the leading cause of vision loss among people 50 years of age and older in the United States, and in Phase 2 clinical trial for diabetic macular edema (DME).

Previous wording

The preparation of consolidated financial statements in conformity with GAAP requires that we make certain estimates, judgments, and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. We base our estimates, judgments, and assumptions on historical experience, anticipated results, and trends, and on various other factors that we believe are reasonable under the circumstances at the time. By their nature, these estimates, judgments, and assumptions are subject to an inherent degree of uncertainty. Actual results may differ from our estimates under different assumptions or conditions. In our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, we set forth our critical accounting policies and estimates, which included revenue recognition, reserves for variable consideration associated with our commercial revenue and recognition of expense in outsourced clinical trial agreements. See Note 2 of the notes to our unaudited condensed consolidated financial statements contained in this Quarterly Report on Form 10-Q for a description of our accounting policies and estimates for reserves for variable consideration related to product sales.

Current wording

The preparation of consolidated financial statements in conformity with GAAP requires that we make certain estimates, judgments, and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. We base our estimates, judgments, and assumptions on historical experience, anticipated results, and trends, and on various other factors that we believe are reasonable under the circumstances at the time. By their nature, these estimates, judgments, and assumptions are subject to an inherent degree of uncertainty. Actual results may differ from our estimates under different assumptions or conditions. In our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, we set forth our critical accounting policies and estimates, which included revenue recognition, reserves for variable consideration associated with our commercial revenue and recognition of expense in outsourced clinical trial agreements. See Note 2 of the notes to our unaudited condensed consolidated financial statements contained in this Quarterly Report on Form 10-Q for a description of our accounting policies and estimates.

Previous wording

Product sales, net represents the gross sales of YUTIQ® and DEXYCU® less provisions for product sales allowances. Product sales, net decreased by $4.2 million, or 80%, to $1.1 million for the three months ended June 30, 2024 compared to the same period the prior year. This decrease was driven by the agreement that granted license and rights to YUTIQ® to Alimera in May 2023. For the three months ended June 30, 2024, product sales, net included $0.6 million of product supply under the existing commercial supply agreement (CSA) with Alimera of $0.6 million, as well as $0.5 million of product supply to Ocumension.

Current wording

Product sales, net represents the gross sales of YUTIQ® and DEXYCU® less provisions for product sales allowances. Product sales, net decreased by $0.2 million, or 19%, to $0.7 million for the three months ended September 30, 2024 compared to the same period the prior year. This decrease was driven by lower sales of YUTIQ® product supply to ANI. For the three months ended September 30, 2024, product sales, net included $0.7 million of product supply under the existing commercial supply agreement (CSA) with ANI.

Previous wording

License and collaboration agreement revenue increased by $4.1 million, or 116%, to $7.8 million for the three months ended June 30, 2024 compared to the same period the prior year. This increase was due to higher recognition of deferred revenue related to the agreement to license YUTIQ® product rights to Alimera.

Current wording

License and collaboration agreement revenue decreased by $4.6 million, or 32%, to $9.6 million for the three months ended September 30, 2024 compared to the same period the prior year. This decrease was due to lower recognition of deferred revenue related to the agreement to license YUTIQ® product rights to ANI due to lower product sales to ANI.

Previous wording

Royalty income increased by $0.6 million, or 122%, to $1.1 million for the six months ended June 30, 2024 compared to the same period the prior year. The increase was attributable to increased Ocumension Therapeutics royalties from YUTIQ® product sales in China.

Current wording

Royalty income increased by less than $0.1 million, or 20%, to $0.3 million for the three months ended September 30, 2024 compared to the same period the prior year. The increase was attributable to higher non-cash Alimera royalties payable to SWK Funding LLC.

Previous wording

Cost of sales decreased by $0.4 million, or 22%, to $1.4 million for the three months ended June 30, 2024 compared to the same period the prior year. This decrease was primarily due to lower commercial product sales year over year.

Current wording

Cost of sales decreased by $0.5 million, or 39%, to $0.7 million for the three months ended September 30, 2024 compared to the same period the prior year. This decrease was primarily due to lower commercial product sales year over year.

Previous wording

Research and development expenses increased by $14.1 million, or 90%, to $29.8 million for the three months ended June 30, 2024 compared to the same period the prior year. This increase was attributable primarily to (i) $5.0 million for a milestone payment for completion of our Phase 2 wet AMD (DAVIO2) clinical trial, (ii) $4.3 million higher personnel expense to support clinical trial activity and product development, including $2.7 million of non-cash stock compensation, (iii) $2.1 million higher DURAVYU™ non-clinical expenses, (iv) $1.3 million higher clinical trial material expense, (v) $0.7 million higher facility and IT expenses, and (vi) $0.5 million in increased clinical trial costs related to DURAVYU™ in Phase 2 clinical trials for wet AMD (DAVIO2), NPDR (PAVIA), and DME (VERONA).

Current wording

Research and development expenses increased by $12.2 million, or 70%, to $29.5 million for the three months ended September 30, 2024 compared to the same period the prior year. This increase was attributable primarily to (i) $4.0 million in increased clinical trial costs related to the initiation of DURAVYU™ in Phase 3 clinical trials (LUGANO and LUCIA) for wet AMD, (ii) $3.8 million higher personnel expense to support clinical trial activity and product development, including $2.1 million of non-cash stock compensation, (iii) $1.4 million higher clinical trial material expense to be used in phase 3 clinical trials for wet AMD, (iv) $1.3 million in higher professional services, (v) $1.0 million higher facility and IT expenses, and (vi) $0.7 million in other R&D expenses. We anticipate an increase in future periods of clinical trials expenses due to our continuing Phase 3 clinical trials.

Previous wording

Sales and marketing expenses decreased by $11.0 million, or 99%, to $0.1 million for the six months ended June 30, 2024 compared to the same period the prior year. This decrease was driven by discontinued YUTIQ® promotion due to the agreement that granted YUTIQ® license and rights to Alimera in Q2 2023 and the Company's exit from the commercial business. Expenses for the six months ended June 30, 2024 included support for ongoing government reporting requirements.

Current wording

Sales and marketing expenses decreased by $0.5 million, or 95%, for the three months ended September 30, 2024 compared to the same period the prior year. This decrease was driven by discontinued YUTIQ® promotion due to the agreement that granted YUTIQ® license and rights to ANI in the second quarter of 2023 and the Company's exit from the commercial business.

Previous wording

General and administrative expenses increased by $3.7 million, or 41%, to $12.8 million for the three months ended June 30, 2024 compared to the same period the prior year. This increase was primarily attributable to $4.0 million in stock-based compensation and $1.0 million in personnel costs, partially offset by lower legal and other administrative expenses.

Current wording

General and administrative expenses increased by $2.4 million, or 23%, to $13.0 million for the three months ended September 30, 2024 compared to the same period the prior year. This increase was primarily attributable to $1.8 million in stock-based compensation and $0.8 million in personnel costs, partially offset by lower legal and other administrative expenses.

Previous wording

Interest income from investments in marketable securities and institutional money market funds increased by $2.1 million, or 129%, to $3.7 million for the three months ended June 30, 2024 compared to the same period the prior year. This increase was due primarily to an increase in cash and marketable securities and higher interest rates in the current calendar quarter.

Current wording

Interest income from investments in marketable securities and institutional money market funds increased by $1.6 million, or 90%, to $3.4 million for the three months ended September 30, 2024 compared to the same period the prior year. This increase was due primarily to an increase in cash and marketable securities on hand.

Previous wording

Product sales, net represents the gross sales of YUTIQ® and DEXYCU® less provisions for product sales allowances. Product sales, net decreased by $10.9 million, or 86%, to $1.7 million for the six months ended June 30, 2024 compared to the same period the prior year. This decrease was driven by the agreement that granted license and rights to YUTIQ® to Alimera in May 2023 as the Company exited its commercial business. For the six months ended June 30, 2024, product sales, net were primarily from the sales of product supply under the existing commercial supply agreement (CSA) with Alimera of $1.2 million, as well as $0.5 million of product supply to Ocumension.

Current wording

Product sales, net represents the gross sales of YUTIQ® and DEXYCU® less provisions for product sales allowances. Product sales, net decreased by $11.1 million, or 82%, to $2.4 million for the nine months ended September 30, 2024 compared to the same period the prior year. This decrease was driven by the agreement that granted license and rights to YUTIQ® to ANI in May 2023 as the Company exited its commercial business. For the nine months ended September 30, 2024, product sales, net were primarily from the sales of product supply under the existing commercial supply agreement (CSA) with ANI of $1.9 million, as well as $0.5 million of product supply to Ocumension.

Previous wording

License and collaboration agreement revenue increased by $14.7 million, or 405%, to $18.3 million for the six months ended June 30, 2024 compared to the same period the prior year. This increase was due to higher recognition of deferred revenue related to the agreement to license YUTIQ® product rights to Alimera.

Current wording

License and collaboration agreement revenue increased by $10.1 million, or 57%, to $27.9 million for the nine months ended September 30, 2024 compared to the same period the prior year. This increase was due to higher recognition of deferred revenue related to the agreement to license YUTIQ® product rights to ANI from 9 months of revenue in 2024 compared to a partial year in 2023.

Previous wording

Royalty income increased by $0.4 million, or 167%, to $0.6 million for the three months ended June 30, 2024 compared to the same period the prior year. The increase was attributable to increased Ocumension Therapeutics royalties from YUTIQ® product sales in China.

Current wording

Royalty income increased by $0.7 million, or 88%, to $1.4 million for the nine months ended September 30, 2024 compared to the same period the prior year. The increase was primarily attributable to increased Ocumension Therapeutics royalties from YUTIQ® product sales in China.

Previous wording

Cost of sales decreased by $0.3 million, or 11%, to $2.2 million for the six months ended June 30, 2024 compared to the same period the prior year. This decrease was primarily due to lower commercial product sales year over year.

Current wording

Cost of sales decreased by $0.7 million, or 20%, to $2.9 million for the nine months ended September 30, 2024 compared to the same period the prior year. This decrease was primarily due to lower commercial product sales year over year.

Previous wording

Research and development expenses increased by $30.7 million, or 104%, to $60.0 million for the six months ended June 30, 2024 compared to the same period the prior year. This increase was attributable primarily to (i) $6.3 million higher personnel expense to support clinical trial activity and product development, including $3.7 million of non-cash stock compensation, (ii) $5.7 million associated with non-cash equity award modifications expense, (iii) $5.0 million for a milestone payment due for completion of our Phase 2 wet AMD (DAVIO2) clinical trial (iv) $4.8 million in increased clinical trial costs related to DURAVYU™ in Phase 2 clinical trials for wet AMD (DAVIO2), NPDR (PAVIA), and DME (VERONA), (v) $3.1 million in higher clinical trial material expense, (vi) $2.7 million higher DURAVYU™ non-clinical expenses, (vii) $1.5 million in severance related expense, and (viii) $1.1 million of other R&D expenses.

Current wording

Research and development expenses increased by $42.8 million, or 92%, to $89.6 million for the nine months ended September 30, 2024 compared to the same period the prior year. This increase was attributable primarily to (i) $10.0 million higher personnel expense to support clinical trial activity and product development, including $5.7 million of non-cash stock compensation, (ii) $8.8 million in increased clinical trial costs related to DURAVYU™ in Phase 2 (DAVIO2) and Phase 3 (LUGANO and LUCIA) clinical trials for wet AMD, NPDR (PAVIA), and DME (VERONA), (iii) $5.7 million associated with non-cash equity award modifications expense, (iv) $5.0 million for a milestone payment due for completion of our Phase 2 wet AMD (DAVIO2) clinical trial, (v) $4.4 million in higher clinical trial material expense, (vi) $3.2 million higher DURAVYU™ non-clinical expenses, (vii) $1.5 million in higher facility costs, (viii) $1.6 million in severance related expense, and (ix) $2.5 million of other R&D expenses. We anticipate an increase in future periods of clinical trials expenses due to our continuing Phase 3 clinical trials.

Previous wording

Sales and marketing expenses decreased by $5.2 million, or 99%, to $0.1 million for the three months ended June 30, 2024 compared to the same period the prior year. This decrease was driven by discontinued YUTIQ® promotion due to the agreement that granted YUTIQ® license and rights to Alimera in Q2 2023 and the Company's exit from the commercial business. Expenses for the three months ended June 30, 2024 included support for ongoing government reporting requirements.

Current wording

Sales and marketing expenses decreased by $11.4 million, or 99%, to $0.1 million for the nine months ended September 30, 2024 compared to the same period the prior year. This decrease was driven by discontinued YUTIQ® promotion due to the agreement that granted YUTIQ® license and rights to ANI in the second quarter of 2023 and the Company's exit from the commercial business. Expenses for the nine months ended September 30, 2024 included support for ongoing government reporting requirements.

Previous wording

General and administrative expenses increased by $8.5 million, or 46%, to $26.8 million for the six months ended June 30, 2024 compared to the same period the prior year. This increase was driven by (i) $7.5 million in stock-based compensation, (ii) $2.2 million in higher personnel costs, partially offset by $1.2 million in lower legal and other administrative expenses.

Current wording

General and administrative expenses increased by $10.9 million, or 38%, to $39.8 million for the nine months ended September 30, 2024 compared to the same period the prior year. This increase was driven by (i) $9.2 million in stock-based compensation, (ii) $3.0 million in higher personnel costs, partially offset by $1.4 million in lower legal and other administrative expenses.

Previous wording

Interest income from investments in marketable securities and institutional money market funds increased by $4.9 million, or 175%, to $7.8 million for the six months ended June 30, 2024 compared to the same period the prior year. This increase was due primarily to an increase in cash and marketable securities and higher interest rates in the current year to date period.

Current wording

Interest income from investments in marketable securities and institutional money market funds increased by $6.5 million, or 142%, to $11.1 million for the nine months ended September 30, 2024 compared to the same period the prior year. This increase was due primarily to an increase in cash and marketable securities and higher interest rates in the current year to date period.

Previous wording

There was no interest expense in the six months ended June 30, 2024 due to the repayment of the loan under the loan and security agreement with Silicon Valley Bank (SVB Loan Agreement) on May 17, 2023. Interest expense for the six months ended June 30, 2023 was $1.2 million.

Current wording

There was no interest expense in the nine months ended September 30, 2024 due to the repayment of the loan under the loan and security agreement with Silicon Valley Bank (SVB Loan Agreement) on May 17, 2023. Interest expense for the nine months ended September 30, 2023 was $1.2 million.

Previous wording

We have had a history of operating losses and an absence of significant recurring cash inflows from revenue, and at June 30, 2024 we had a total accumulated deficit of $802.3 million. Our operations have been financed primarily from sales of our equity securities, issuance of debt and a combination of license fees, milestone payments, royalty income and other fees received from collaboration partners.

Current wording

We have had a history of operating losses and an absence of significant recurring cash inflows from revenue, and at September 30, 2024 we had a total accumulated deficit of $831.6 million. Our operations have been financed primarily from sales of our equity securities, issuance of debt and a combination of license fees, milestone payments, royalty income and other fees received from collaboration partners.

Previous wording

During the six months ended June 30, 2024, we did not sell any shares of our common stock under our at-the-market offering facility. During July 2024, we sold 1,299,506 shares of our common stock under our at-the-market offering facility at a weighted average price of $9.36 per share for gross proceeds of approximately $12.2 million. Share issue costs, including sales agent commissions, totaled approximately $0.4 million.

Current wording

During the nine months ended September 30, 2024, we sold 1,299,506 shares of our common stock under the ATM facility at a weighted average price of $9.36 per share for gross proceeds of approximately $12.2 million. Share issue costs, including sales agent commissions, totaled approximately $0.4 million.

Previous wording

At June 30, 2024, we had cash, cash equivalents, and investments in marketable securities of $280.2 million. We expect that our cash and investments in marketable securities will enable us to fund our current operating plan through anticipated Phase 3 wet AMD topline data for DURAVYU™ in 2026. Due to the difficulty and uncertainty associated with the design and implementation of preclinical studies and clinical trials, we will continue to assess our cash and cash equivalents and future funding requirements. However, there is no assurance that additional funding will be achieved and that we will succeed in our future operations. We expect to continue to incur substantial additional operating losses for at least the next several years as we continue to develop our product candidates and seek marketing approval and, subject to obtaining such approval, the eventual commercialization of our product candidates. If we obtain marketing approval for any of our product candidates, we will incur significant sales, marketing, and manufacturing expenses. We also expect to continue to incur significant costs to comply with corporate governance, internal controls, and similar requirements associated with operating as a public reporting company.

Current wording

At September 30, 2024, we had cash, cash equivalents, and investments in marketable securities of $253.8 million. We expect the cash, cash equivalents and investments on September 30, 2024, along with the net proceeds from the October $161.0 million equity financing will enable us to fund operations into 2027. Due to the difficulty and uncertainty associated with the design and implementation of preclinical studies and clinical trials, we will continue to assess our cash and cash equivalents and future funding requirements. However, there is no assurance that additional funding will be achieved and that we will succeed in our future operations. We expect to continue to incur substantial additional operating losses for at least the next several years as we continue to develop our product candidates and seek marketing approval and, subject to obtaining such approval, the eventual commercialization of our product candidates. If we obtain marketing approval for any of our product candidates, we will incur significant sales, marketing, and manufacturing expenses. We also expect to continue to incur significant costs to comply with corporate governance, internal controls, and similar requirements associated with operating as a public reporting company.

Previous wording

the scope, progress, results, and costs of clinical trials of DURAVYU™, as a sustained delivery intravitreal treatment for wet AMD, NPDR, and DME

Current wording

the scope, progress, results, and costs of clinical trials of DURAVYU™, as a sustained delivery intravitreal treatment for wet AMD and DME;

Previous wording

Operating cash outflows for the six months ended June 30, 2024 totaled $51.4 million primarily due to our net loss of $60.1 million reduced by $19.8 million of non-cash expenses, which included $21.4 million of stock-based compensation, partially offset by $2.3 million for amortization of discount on available for sale of marketable securities. This was further offset by changes in working capital of $11.0 million, including $14.3 million of deferred revenue related to the agreement to license YUTIQ® product rights to Alimera.

Current wording

Operating cash outflows for the nine months ended September 30, 2024 totaled $90.4 million primarily due to our net loss of $89.5 million reduced by $25.8 million of non-cash expenses, which included $28.8 million of stock-based compensation, partially offset by $4.1 million for amortization of discount on available for sale of marketable securities. In addition, there was a change in working capital of $26.7 million, including $22.1 million of deferred revenue related to the agreement to license YUTIQ® product rights to ANI.

Previous wording

Operating cash inflows for the six months ended June 30, 2023 totaled $40.2 million, primarily due to our net loss of $44.1 million reduced by $6.8 million of non-cash expenses, which included $4.8 million of stock-based compensation, $1.3 million of loss on extinguishment of debt, $0.7 million for the provision of excess and obsolete inventory, and $0.06 million of other non-cash charges. This was further offset by changes in working capital of $77.5 million, including $71.3 million of deferred revenue related to the agreement to license YUTIQ® product rights to Alimera.

Current wording

Operating cash inflows for the nine months ended September 30, 2023 totaled $25.0 million, primarily due to our net loss of $56.7 million reduced by $10.5 million of non-cash expenses, which included $8.5 million of stock-based compensation, $1.3 million of loss on extinguishment of debt, $0.7 million for the provision of excess and obsolete inventory, and less than $0.1 million of other non-cash charges. This was further offset by changes in working capital of $71.2 million, including $57.4 million of deferred revenue related to the agreement to license YUTIQ® product rights to ANI, and $13.7 million of other working capital changes.

Previous wording

For the six months ended June 30, 2024, $137.5 million of net cash was used for the purchase of marketable securities, and $2.1 million was used for the purchase of property and equipment.

Current wording

For the nine months ended September 30, 2024, $119.7 million of net cash was used for the purchase of marketable securities, and $3.7 million was used for the purchase of property and equipment.

Previous wording

For the six months ended June 30, 2023, $46.4 million of net cash was provided by the sales of marketable securities, and $0.9 million was used for the purchase of property and equipment.

Current wording

For the nine months ended September 30, 2023, $46.4 million of net cash was provided by the sales of marketable securities, and $2.6 million was used for the purchase of property and equipment.

Previous wording

Net cash provided by financing activities for the six months ended June 30, 2024 totaled $0.4 million and consisted of the following:

Current wording

Net cash provided by financing activities for the nine months ended September 30, 2024 totaled $12.3 million and consisted of the following:

Previous wording

$5.2 million from the exercise of stock options

Current wording

$5.4 million from the exercise of stock options; and

Previous wording

$4.7 million used for the settlement of stock units and payment of equity issue costs

Current wording

$4.5 million used for the settlement of stock units and payment of equity issue costs

Previous wording

Net cash used in financing activities for the six months ended June 30, 2023 totaled $41.8 million and consisted of the following:

Current wording

Net cash used in financing activities for the nine months ended September 30, 2023 totaled $31.4 million and consisted of the following:

Previous wording

$1.4 million used to extinguish debt costs related to the SVB loan

Current wording

$1.4 million used to extinguish debt costs related to the SVB loan; and